Kruse Kronicle

The Market is Moral

—

by

mwkruse
in , ,

Growthology: The Market is Moral

Nobel laureate Edmund Phelps (also a Kauffman grantee) published this stellar essay last month, which I belatedly read today:

The definition of economics with which most textbooks begin—“the study of the allocation of scarce resources”—is accurate but misleading, for it leaves out the most interesting part of the problem.

In truth, we are forever innovating to stretch our resources. Transportation was one of the scarcest goods during the first half of America’s nineteenth century, but by the end of the century the railroads had made it so abundant that the face of America changed irreversibly. That could be said today about information. Innovation makes scarce goods abundant. This quest to do better, to go farther, to extend our reach is part of what makes us human. There is more to economics than the desire to consume and to avoid risk.

Which brings us a step closer to connecting morality and economics. Morality, after all, is more than obedience to the rules of social conduct; to be moral is to foster the betterment of humankind. If we place innovation at the center of economics, then we in effect make a sweeping assertion about human nature—for we claim, at some level, that man is an innovator.

Amen!

Comments

4 responses to “The Market is Moral”

  1. John Avatar
    John

    I beg to differ and would say that markets are completely amoral, or, put in another way, they reflect the common zeitgeist of any given culture in any time and place, and also help to create the common zeitgeist too.
    I do not know if it is true but during the Irish potato famine, when tens of thousands of people starved to death, there was a very strong market for grain in London and grain was thus exported from starving Ireland because of the market imperative.
    Over the years I have read similar stories re strong export markets in the midst of mass starvation. Millions once starved in India while massive amounts of grain were exported to Britain as commanded/demanded by the market “god”.
    Turn on your TV and you will find the now-time state of world (and “culture”) created in the image of the TV created “market”—give the people what they want (or what they have been propagandized into wanting)
    TV IS the market
    Amusing themselves to death, or Huxleys Brave New World (market created) titty-tainment for the unconscious masses
    Plus this paragraph describes the now-time “culture” created in the image of the market–it applies particularly to the USA.
    “The human world has become a kind of insane sporting event, at which people threaten one another and carry on in an insane manner—something like the gladiatorial contests in ancient Rome…… The TV created human world of nowtime is a lunatic asylum, a soap opera of mass delusion. That absurd soap opera actually controls the destiny and experience of the total world of human beings—and that world soap opera is, in its root disposition, totally indifferent to human life, and the world altogether.”

    Reply
  2. Michael W. Kruse Avatar
    Michael W. Kruse

    I’d agree the markets are essentially amoral in the sense you are describing. The tend to amplify what ever values … good or bad … are fed into them.
    Where I agree with the article is that markets are moral in that they facilitate so much good and contribute to human flourishing. So it isn’t indifferent if they exist versus alternatives.

    Reply
  3. Josh Rowley Avatar
    Josh Rowley

    “Morality, after all, is more than obedience to the rules of social conduct; to be moral is to foster the betterment of humankind.”
    This definition of morality is inadequate. Innovations “to foster the betterment of humankind” (who or what determines what is better?) have sometimes led to the devastation of creation.

    Reply
  4. Michael W. Kruse Avatar
    Michael W. Kruse

    All very true. But I think most people would agree that improved life expectancy, decline in infant mortality, safer work, better quality of health are betterment. I think one of the ways to speak of betterment is to look at the many facets of shalom. The equation of betterment with simple economic growth is faulty but economic growth does make possible things that genuinely better our lives.
    As long as markets are powerful amplifiers of the values people hold than they will amplify the destructive stuff too. That isn’t the fault of markets. It’s like blaming the internet for the existence of porn. Should we dismantle the internet because porn is distributed? Neither do we end markets because evil is done through them. The loss of markets also means the loss of the incredible good that happens as well.

    Reply

Leave a Reply

Discover more from Kruse Kronicle

Subscribe now to keep reading and get access to the full archive.

Continue reading