On Economic Men Bearing Gifts and Playing Fair

Abstract

Ever since each form of inquiry looked seriously at the thought patterns of the other, the relation between ethics and economics has been one of mutual suspicion. On the one hand, it has appeared to moral philosophers that the market practices favoured by orthodox economic theories were indifferent to the moral implications of such practices; on the other hand, it has often enough seemed to economists that the sort of moral commitments recommended by philosophers would only foster inefficient economic activities. However, since the early eighteenth century, in a paradoxical, but deeply significant turn on this perennial tension, economists have argued that economic actors can themselves secure the moral high ground, even though doing so by amoral means. Within the classical tradition of modern economics there is avowed nothing less than a “general frame” or “underlying vision” of a form of economic life wherein the “simple system of natural liberty” is taken to give expression to the natural harmony of each with all. In fundamental terms, private greed is understood to be the instrument of social harmony: free, but rational individuals, motivated solely by the concern to maximize the satisfaction of their self-interest, and interacting only through voluntary exchange, will, nevertheless, attain an aggregate outcome that is beneficial to all. Though such an outcome not be part of the intentions of the individual agents, nevertheless, the market forces of a perfectly competitive economy will so allocate resources as to lead participants, as if by an “invisible hand,” to a spontaneous economic order of mutual advantage. Any other form of economic organization is claimed to lead to a lesser common good.