A recent article (1) proposes that the mere existence of markets substantially erodes moral value, subjectively defined as the willingness to save the life of a mouse (used in animal experiments) instead of receiving money by trading them. Further, the authors argue that multilateral markets adversely affect morality more than bilateral markets.
These are interesting observations. If one were to accept the definition of morality as the ability to reject money to save a life (of a mouse), then, lack of markets will certainly enhance it. For, without markets, one cannot transact and hence an individual with no access to markets will be unambiguously, the most moral. At the other extreme, with large multilateral markets – and at the limit, with instantaneous and unrestricted access to infinite markets, the proclivity of an individual to transact (for money or other such benefits) will be the highest. Such large markets will always reduce transaction costs and participants in these markets will always be less moral (according to the definition) than those with no or restricted access to markets.
The real question is how one should define morality. Is morality a property of the individual or does it depend on the environment presented to her? Does morality change with the context, space and time of the issue at hand? Is morality demonstrable and measurable? Is morality binary or continuous? Does morality differ across ethnic and geographical regions? Are moral people better and if so how? Is morality valuable to society, or is it costly?
It is always important to define what is being measured before setting out to measure it. Also, passive assertion of societal benefits from subjective constructs such as morality can lead to the wrong conclusions.
(1) Morals and Markets Armin Falk 1,*, Nora Szech 2,
1 Center for Economics and Neuroscience, University of Bonn, Bonn, Germany.
2 Department of Economics, University of Bamberg, Bamberg, Germany.