Abstract
This chapter reviews and critically engages a variety of moral criticisms of the market. We argue that a common thread running through all of these arguments is the notion that markets are morally corrupting. This common concern – what we call the central moral criticism – is often discussed in the language of moral philosophy, and the most damning critiques along these lines are deontological claims that do not allow for the possibility that market exchange can be moral. But, we argue, this criticism of markets is at root an empirical, rather than a philosophical, claim. As such, we can evaluate whether or not it is true that markets are likely to be morally corrupting using our theoretical understanding of how markets can and should work, and on the basis of evidence regarding how markets do work.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Aquinas also believed that usury ought to be condemned. He (ST II-II, q. 78, a.1.) specified that “[t]o take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice.” Money, he (Ibid.) elaborated,
was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.
However, Aquinas (ST II-II, q. 78, a. 2.) clarified that,
there would be no sin in receiving something of the kind [e.g. benevolence, and love for the lender, and so forth], not as exacting it, nor yet as though it were due on account of some agreement tacit or expressed, but as a gratuity: since, even before lending the money, one could accept a gratuity, nor is one in a worse condition through lending.
- 2.
It is possible to read this as simply a condemnation of price gouging (e.g. raising the price of a needed good or service after something like a hurricane or flood). However, he also seems to be condemning what economists refer to as price discrimination, where a producer or a firm charges different prices to different consumers for the same product. As such, Aquinas seems to be denouncing price discrimination of the kind that is commonplace in markets.
- 3.
- 4.
According to Aquinas (ST II-II, q. 77, a. 4.),
trading, considered in itself, has a certain debasement attaching thereto, in so far as, by its very nature, it does not imply a virtuous or necessary end. Nevertheless gain which is the end of trading, though not implying, by its nature, anything virtuous or necessary, does not, in itself, connote anything sinful or contrary to virtue: wherefore nothing prevents gain from being directed to some necessary or even virtuous end, and thus trading becomes lawful. Thus, for instance, a man may intend the moderate gain which he seeks to acquire by trading for the upkeep of his household, or for the assistance of the needy: or again, a man may take to trade for some public advantage, for instance, lest his country lack the necessaries of life, and seek gain, not as an end, but as payment for his labor.
- 5.
Rousseau was deeply critical of the introduction of private property. While he thought the creation of private property was likely inevitable, and while he credited it with the creation of society, he nonetheless believed that property was the source of countless ills. According to Rousseau (Ibid.: 109),
The first man who, having enclosed a piece of land, thought of saying ‘This is mine’ and found people simple enough to believe him, was the true founder of civil society. How many crimes, wars, murders; how much misery and horror the human race would have been spared if someone had pulled up the stakes and filled in the ditch and cried out to his fellow men: ‘Beware of listening to this impostor. You are lost if you forget that the fruits of the earth belong to everyone and that the earth itself belongs to no one!’
- 6.
A version of this discussion of Marx has appeared on Liberty Matters (Storr 2018).
- 7.
Marx also argued, with Friedrich Engels, that the capitalist system had to be overturned and replaced with a socialist system in which the workers owned all the enterprises (see Marx and Engels [1848] 1967).
- 8.
See Marx and Engels ([1848] 1967) where they claimed that capitalism has evolved into a war between the bourgeoisie (i.e. the capitalist class that owns the means of production) and the proletariat (i.e. the working class).
- 9.
Admittedly, it is not always clear that Marx meant his discussions of exploitation and alienation to be “moral” critiques of markets. At various places in his writings (see, for instance, his “Critique of the Gotha Program”; Marx [1891] 1938), he seemed to explicitly reject that he is engaging in a moral argument. It is certainly the case that Marx did not believe that moral appeals from within the market system would ever lead to a correction of those moral ills (without, of course, a complete replacement of that system). Still, even if we were to accept that Marx was not ultimately engaged in a moral critique of the market system, his discussions of exploitation and alienation certainly have moral implications. As will be discussed, Marx believed that markets transformed us into a kind of monster. Human beings in a market system would not and could not flourish. Laborers in a market system had their labor stolen from them. There is a sense in which these are unavoidably moralized claims.
- 10.
Although our focus here is on the unjust extraction of surplus labor (i.e. the stealing of the laborer’s labor time), Cohen (1995) explained that there are at least two senses in which exploitation is unjust. According to Cohen (Ibid.: 195–208),
we can indeed say … both that the extraction is unjust because it reflects an unjust distribution and that the asset distribution is unjust because it generates that unjust extraction. … First, forced extraction of a surplus is wrong because of what it is, and not because it inherits the wrong of something else. Second, on our reasonable assumption that the sole purpose of means of production is to make product, a distribution of means of production is unjust only if and because it enables an unjust transfer of product.
- 11.
Admittedly, Marx ([1867] 1990) believed that there were circumstances where this wage might end up above subsistence levels.
- 12.
It might not be obvious from this account, but there is an issue with Marx’s exploitation thesis. Marx’s “proof” of exploitation under capitalism rested (in part) on the now-refuted labor theory of value. As Marx took pains to demonstrate, the only way that the capitalist can earn a profit is if he pays the worker less than the value that the worker creates. But, we should admit, Marx’s criticism of capitalism might still stand even if we jettison the labor theory of value. To modernize the claim, all we would have to do is define exploitation as occurring whenever an employee’s wage is lower than her marginal revenue product. In fact, one way to read Marx’s discussions in the 1844 manuscripts is as an expression of Marx’s hyper-concern with the differential power of employers and employees. Moreover, if neoclassical economic theory is correct, most workers in any profit-maximizing firm will be paid less than their marginal revenue product; in other words, most workers will be exploited according to a modernized version of Marx’s critique.
There have been several studies that have explored whether workers in particular industries or firms are paid their marginal products. Not surprisingly, the answer is that some workers are paid their marginal product, some are paid more, and some are paid less. Where we see workers being paid less it is because of wage compression in fields where wage disparities would disrupt collaboration or because workers lack bargaining power. Consider the study by Macdonald and Reynolds (1994) of salaries of Major League Baseball players. Their study did not challenge previous findings that baseball players were not paid commensurate with what they contributed to the team’s revenues before free agency. However, after free agency, veteran players appeared to be paid their marginal revenue product, while young players were still being “exploited,” that is, paid less on average than their marginal revenue products. The findings in this study suggest that Marx’s concern about some people getting less than they deserve could be a very real worry under some market structures. Moreover, as Wertheimer (1999: x) argued,
the important moral core of the Marxist view is not unique to Marxism. When Marxism claims that capitalist class exploits the proletariat, it employs the ordinary notion that one party exploits another when it gets unfair and underserved benefits from its transactions or relationships with others.
Note that rather than updating or modifying Marx, Wertheimer articulated a view of exploitation that does not rely on Marx.
- 13.
More fully,
Just as the mutual exchange of products of human activity appears as trading and bargaining, so does the mutual reintegration and exchange of the activity itself appear as the division of labor making man as far as possible an abstract being, an automaton, and transforming him into a spiritual and physical monster. (Marx [1844] 1994: 49)
- 14.
Another way to make this point is to claim that markets do not allow for the emergence of a truly human morality. According to Engels ([1878] 1959: 132), “a really human morality which stands above class antagonisms and above any recollection of them becomes possible only at a stage of society which has not only overcome class antagonisms but has even forgotten them in practical life.”
- 15.
Cohen (2009) pointed to greed and fear as being the two “values” that motivate market activity. According to Cohen (2009: 39),
The immediate motive to productive activity in a market society is (not always but) typically some mixture of greed and fear, in proportions that vary with the details of a person’s market position and personal character. It is true that people can engage in market activity under other inspirations, but the motives of greed and fear are what the market brings to prominence, and that includes greed on behalf of, and fear for the safety of, one’s family. Even when one’s concerns are thus wider than those of one’s mere self, the market posture is greedy and fearful in that one’s opposite-number marketeers are predominantly seen as possible sources of enrichment, and as threats to one’s success. These are horrible ways of seeing other people, however much we have become habituated and inured to them, as a result of centuries of capitalist civilization.
- 16.
For instance, we do not engage Karl Polanyi’s critique of market fundamentalism (see Block and Somers 2014). Similarly, we do not engage conservative objections to laissez-faire like the one advanced by Röpke ([1958] 2014), who worried that free markets could undermine the very moral foundations that they require to function well if we were not careful. We do, however, engage Schumpeter’s ([1942] 1950) similar claim that markets may contain the seeds to their own destruction in Chap. 6. Additionally, we do not engage a number of important virtue ethicists that have argued that the values of the market are at odds with traditional virtues (e.g. MacIntyre 1981). Like the critiques of the market that we do engage, however, many of these critiques are at root a charge that markets deliver the material goods but cannot deliver the moral or social goods. To the extent that the critics that we ignore offer additional or alternative criticisms of markets, nothing in our effort should be viewed as challenging or endorsing those critiques.
- 17.
As such, we do discuss Piketty (2014) in Chap. 4. Our concern there, however, is whether or not inequality is particularly a problem for market societies. While we present some of the most trenchant criticisms of Piketty’s findings, we agree with Piketty’s view that if inequality were peculiar to market societies that it would constitute a moral failing of market societies.
- 18.
As we clarify in Chap. 7, nothing we argue here challenges the possibility that some markets are noxious.
- 19.
Capitalist space is global in that “it abolishes distinctions and differences” (Lefebvre 1991: 355) and “its circulatory systems and networks may occupy space worldwide” (Ibid.: 341). It is fragmented and fractured because it “locates specificities, places or localities, both in order to control them and in order to make them negotiable” (Ibid.: 282). Interestingly, as Lefebvre (Ibid.: 355) explained, “it is not … as though one had global (or conceived) space to one side and fragmented (or directly experienced) space to the other – rather as one might have an intact glass here and a broken glass or mirror over there. For [capitalist] space ‘is’ whole and broken, global and fractured, at one and the same time.”
- 20.
In fact, alienation is a central concept of all of Lefebvre’s work from his writing on dialectical materialism where he casts Marx as primarily a theorist of alienation to his critique of everyday life and his discussion of the production of space (Elden 2004: 41).
- 21.
Gudeman “is one of the leading economic anthropologists of our time” (Löfving 2005: 8). His contribution to our understanding of local and universal models and the embeddedness of daily life and anthropological practice cannot be exaggerated.
- 22.
See Gudeman (2016) where he argued that economies are divided into five abstract spheres: the house, community, commerce, finance, and meta-finance.
- 23.
Admittedly, Gudeman was not wholly pessimistic about the potential of the communal sphere to survive capitalist expansion. As Gudeman (2001: 22) continued, “the creation, maintenance, and expansion of [the communal sphere] also may transform market life.”
- 24.
Sandel’s view is not all that different from the arguments advanced by MacIntyre in After Virtue (1981). According to MacIntyre (Ibid.: 254), “the tradition of virtues is at variance with central features of the modern economic order and more especially its individualism, its acquisitiveness, and its elevation of the market to a central social place.” McIntyre worried that the profit motive and competition, both essential elements of the market, undermine virtue.
- 25.
These temptations, he insisted, need to be guarded against, even if that means interfering with markets. “[C]anons of fair trading and conditions of employment have to be established and policed” (Sacks 2002: 89).
- 26.
The movie was adapted from a novel with the same name by James Clavell.
- 27.
See Radford (1945) for a discussion of economic activity in prisoner of war camps.
- 28.
This is a purposefully blunt empirical strategy. To be clear, societies are complex and other differences between them besides their marketness might explain any observed differences in measures of virtue and vice. But, if markets are really morally corrupting, we believe that we should see some hint of it in these comparisons. See Appendix for a discussion of our empirical strategy.
- 29.
Much of the evidence we present in subsequent chapters speaks directly to Proposition 1 and only indirectly to Propositions 2 and 3. We adopted this strategy for two reasons. First, the evidence for Proposition 1 is much easier to attain and interpret across a number of different measures of morality and immorality. Second, we believe that if Proposition 1 is proven to be incorrect then Propositions 2 and 3 are also likely to be incorrect. Admittedly, this is an untested belief. It is possible that market societies might outperform nonmarket societies on measures of morality but still be suffering from moral decline as they become more market-oriented (i.e. Proposition 1 might be false but Proposition 2 might be correct beyond some threshold). Additionally, it is possible that average morality is greater in market societies but that the individuals in market societies who are most enmeshed in the market are less virtuous (i.e. Proposition 1 might be false but Proposition 3 might be correct). (See the Appendix for further discussion.) If our belief about the relationship between the three propositions is not correct, then our effort here should be viewed as speaking only to Proposition 1. That said, where possible we reference social scientific studies and evidence that speak to all three propositions.
Bibliography
Aquinas, T. [1485] 1918. Summa Theologica. Trans. English Dominican Province. London: Burns, Oates & Washbourne.
Bell, D. 1976. The Cultural Contradictions of Capitalism. In Modernity: Critical Concepts, ed. M. Waters. London/New York: Routledge.
———. 1993. Communitarianism and Its Critics. Oxford: Clarendon Press.
Block, F., and M.R. Somers. 2014. The Power of Market Fundamentalism: Karl Polanyi’s Critique. Cambridge/London: Harvard University Press.
Cohen, G.A. 1995. Self-Ownership, Freedom, and Equality. Cambridge: Cambridge University Press.
———. 2009. Why Not Socialism? Princeton: Princeton University Press.
Elden, S. 2004. Understanding Henri Lefebvre: Theory and the Possible. London/New York: Stuart Elden.
Engels, F. [1878] 1959. Anti-D̈uhring: Herr D̈uhring’s Revolution in Science. Moscow: Foreign Languages Publishing House.
Etzioni, A. 1988. The Moral Dimension: Toward A New Economics. London/New York: Free Press Collier Macmillan.
Fisman, R., and T. Sullivan. 2016. The Inner Lives of Markets: How People Shape Them and They Shape Us. New York: Public Affairs.
Friedman, D.D. 1980. In Defense of Thomas Aquinas and the Just Price. History of Political Economy 12 (2): 234–242.
Gray, J. 1998. False Dawn: The Delusions of Global Capitalism. New York: New Press.
———. 2008. It Depends. In Does the Free Market Corrode Moral Character? Conshohocken: John Templeton Foundation. https://www.templeton.org/market
Gudeman, S. 1992. Remodeling the House of Economics: Culture and Innovation. American Ethnologist 19 (1): 141–154.
———. 2001. The Anthropology of Economy: Community, Market, and Culture. Hoboken: Blackwell Publishing.
———. 2016. Anthropology and Economy. Cambridge: Cambridge University Press.
Gudeman, S., and A. Rivera. 1990. Conversations in Colombia: The Domestic Economy in Life and Text. Cambridge: Cambridge University Press.
Guzmán, R.A., and M.C. Munger. 2014. Euvoluntariness and Just Market Exchange: Moral Dilemmas from Locke’s Venditio. Public Choice 158 (1–2): 39–49.
Harman, C. 2010. Zombie Capitalism: Global Crisis and the Relevance of Marx. Chicago: Haymarket Books.
Harvey, D. 2001. Spaces of Capital: Towards a Critical Geography. London/New York: Routledge.
Kennedy, P. 2016. Vampire Capitalism: Fractured Societies and Alternative Futures. London: Palgrave Macmillan.
Lefebvre, H. 1991. Critique of Everyday Life, Vol. 2: Foundations for a Sociology of the Everyday. Virginia: Verso.
Löfving, S. 2005. Introduction. In Peopled Economies: Conversations with Stephen Gudeman, ed. S. Löfvin. Uppsala: Uppsala University.
MacDonald, D.N., and M.O. Reynolds. 1994. Are Baseball Players Paid Their Marginal Products? Managerial and Decision Economics 15 (5): 443–457.
MacIntyre, A. 1981. After Virtue: A Study in Moral Theory. Notre Dame: University of Notre Dame Press.
Marx, K. [1867] 1915. Capital: A Critique of Political Economy, ed. F. Engels. Chicago: Charles H. Kerr & Company.
———. [1891] 1938. Critique of the Gotha Program. New York: International Publishers.
———. [1867] 1990. Capital. London: Penguin Books.
———. [1821] 1994. Karl Marx: Selected Writings, ed. L.H. Simon. Indianapolis: Hackett Publishing.
———. [1844] 1994. Excerpts – Notes of 1844. In Karl Marx: Selected Writings, ed. L.H. Simon, 40–53. Indianapolis: Hackett Publishing.
———. [1844] 2009. The Economic and Philosophic Manuscripts of 1844. In Philosophers on Shakespeare, ed. P.A. Kottman. Stanford: Stanford University Press.
Marx, K., and F. Engels. [1848] 1906. Manifesto of the Communist Party. Chicago: Charles H. Kerr & Company.
———. [1848] 1967. The Communist Manifesto. London: Penguin.
———. [1844, 1848] 2009. The Economic and Philosophic Manuscripts of 1844 and the Communist Manifesto. Amherst: Prometheus Books.
McNally, D. 2011. Monsters of the Market: Zombies, Vampires and Global Capitalism. Leiden: Brill Online Books and Journals.
Medley, J., and L. Carroll. 2004. The Hungry Ghost: IMP Policy, Global Capitalist Transformation, and Laboring Bodies in Southeast Asia. In Postcolonialism Meets Economics, ed. E. Zein-Elabdin and S. Charusheela, 145–164. London/New York: Routledge.
Piketty, T. 2014. Capital in the Twenty-First Century. Trans. A. Goldhammer. Cambridge: Harvard University Press.
Putnam, R.D. 2001. Bowling Alone: The Collapse and Revival of American Community. New York/Philadelphia: Simon and Schuster.
Radford, R.A. 1945. The Economic Organization of a P.O.W. Camp. Economica 12 (48): 189–201.
Rasmussen, D.C. 2008. The Problems and Promise of Commercial Society: Adam Smith’s Response to Rousseau. University Park: Pennsylvania State University Press.
Röpke, W. [1958] 2014. A Humane Economy: The Social Framework of the Free Market. New York City: Open Road Media.
Rousseau, J.J. [1754] 1984. A Discourse on Inequality. Trans. M. Cranston. New York: Penguin Random House.
Sacks, J. 2002. The Dignity of Difference: How to Avoid the Clash of Civilizations. London: Bloomsbury Publishing.
Sandel, M.J. 2012. What Money Can’t Buy: The Moral Limits of Markets. London: Macmillan.
Satz, D. 2010. Why Some Things Should Not Be for Sale: The Moral Limits of Markets. Oxford: Oxford University Press.
Schumpeter, J.A. [1942] 1950. Capitalism, Socialism, and Democracy. New York: Harper and Brothers.
Storr, V.H. 2009. Why the Market? Markets as Social and Moral Spaces. Journal of Markets and Morality 12 (2): 277–296.
———. 2018. Marx and the Morality of Capitalism. Liberty Matters: An Online Discussion Forum.
wa Thiong’o, N. 1982. Devil on the Cross. Portsmouth: Heinemann.
Wertheimer, A. 1999. Exploitation. Princeton: Princeton University Press.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Storr, V.H., Choi, G.S. (2019). Markets as Monsters. In: Do Markets Corrupt Our Morals?. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-18416-2_2
Download citation
DOI: https://doi.org/10.1007/978-3-030-18416-2_2
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-18415-5
Online ISBN: 978-3-030-18416-2
eBook Packages: Economics and FinanceEconomics and Finance (R0)