The Moralization of the Markets

Christoph Henning

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351479165
• Topic: Business
• Subtopic: Business General
• Index: Business

Nothing affects the modern economy (and society) more than decisions made in the market place, especially, but not only, decisions made by consumers. Although it is not startling to suggest that decisions made in production are affected by choices consumers make, consumers have long been viewed, not only by academic economists, as individual, isolated rational actors that make or refrain from purchases purely on the basis of narrow financial considerations. Markets are not and never were morally neutral. Market relations have always had an often taken-for-granted moral underpinning. The moralization of the markets refers to the dissolution and replacement of the conventional moral underpinnings of market conduct, for example, in the music market, financial markets, and corporate governance. It further implies not only the heightened importance of new ethical precepts, but the significant change in the role of moral ideals in market behavior. These profound transformations of economic conduct are accompanied and co-determined by societal conflicts. The moralization of markets represents thus a new stage in the social evolution of markets. The book is divided into four parts, in which the twelve chapters, written by contributors from different social science disciplines, deal with the context of the moralization of the markets; the major social institutions; and present case studies that examine European and American attitudes and behavior towards tobacco and GMO; expansion of the private and ethics in business; and how workers respond to the new corporate norms. This volume will be of interest to sociologists, economists, social scientists, and the general consumer alike.

I

Foundations

Introduction

Steve Fuller

The papers in Part I, all by British authors, are “foundational” in that they use the work of Adam Smith as a normative point of reference against which to judge the subsequent history of the market universalism that is capitalist political economy. Given Smith’s iconic status as the spiritual father of capitalism, this commonality is a striking sign of neo-liberalism’s ability to dictate the terms of engagement of its conscientious objectors. A generation ago, Marx would have been the preferred point of departure for people sharing the views of our authors. (Indeed, it had been, in the case of the older two of the three, Smart and Sayer.) While our authors do not all lean on Adam Smith’s moral authority to the same extent, nevertheless in each case the reader is led to believe that a time-travelling Smith would be less than pleased by the last two centuries of economic developments that he supposedly inspired. Barry Smart’s Smith would be displeased largely on political grounds, Paul du Gay’s Smith on largely intellectual grounds, and Andrew Sayer’s Smith on both grounds equally. The first paper, by Smart, is a convenient entry point to all three papers in this section.

Smart demonstrates wide reading in not only sociology and economics but also the popular critical literature on the globalized market economy. Moreover, his political sensibilities seem (at least to this reader) right on. In particular, he is properly sceptical of invisible hand explanations that mask what he calls, after Pierre Bourdieu, “the institution of insecurity,” specifically, the enticement of credit as a means to keep consumers hooked on the capitalist mode of production — in the sense of dependent on both the goods it supplies and the labor it requires to pay for them.¹ However, Smart exemplifies a tendency also found in the other papers to varying degrees, namely, a syncretistic view of history that collapses various times and places in the development of capitalism into a single topical discussion. In addition to Adam Smith and Bourdieu, Smart invokes Joseph Schumpeter, Karl Polanyi, Daniel Bell, and Naomi Klein as if they were part of the same conversation about the capitalist “demoralization” of social life. This can lead to some awkward and perhaps misinformed judgments. A good example is Smart’s interpretation of Bell’s periodization of the history of reflection on economic life into phases of moral economy, political economy, and finally economics.² It is clear from Smart’s gloss that he equates “moral economy” with the early Marx’s Rousseau-inflected “primitive communism,” whereby community members by virtue of their shared status recognize mutual obligations to the maintenance of each other’s lives. But there are two distinct problems with this gloss, which I shall consider briefly in turn: (1) This is probably not what Bell meant by “moral economy” (regardless of whether he got the history right³). (2) This is not what “moral economy” normally means.

In the same interview from which Smart seizes upon Bell’s usage of “moral economy,” Bell describes himself as “a liberal in politics, a socialist in economics, and a conservative in culture.” ⁴ This is something Durkheim could have said. More recently and completely, such a sentiment has been expressed by Amitai Etzioni as part of the “neo-communitarian” movement that was said to have had the ear of the Bill Clinton administration.⁵ The intellectual line-age here is ultimately traceable to Aristotle’s conception of oikonomikos as “householding,” which was essentially provision for one’s family and neighbors, a selective and extended version of which was re-invented in medieval feudalism. This conception was explored with renewed vigor in the late 19^th century by one of Durkheim’s teachers at the Sorbonne, the historian Numa Denis Fustel de Coulanges, who had identified the worship of ancestors of the constitutive families as a source of social cohesion in what he called the “ancient city.” ⁶ Given this lineage, Bell is perhaps better understood as presenting the trajectory from “moral economy” to “economics” in the spirit of showing how economics became abstracted and universalized from this original setting — indeed, in a sense, “disembedded,” to use Polanyi’s term. However, pace Smart, it is not clear that Bell (or Durkheim, for that matter), believed that a return to that setting was either possible or even desirable.

More generally, the expression “moral economy” is an historiographical mirage that means a lot more now to refer to something in the past than it did in the past to which the phrase purportedly refers. The actual phrase probably originates in a section of Andrew Ure’s 1835 opus, The Philosophy of Manufactures, entitled “The moral economy of the factory system,” which also contains one of earliest usages of the “factory system,” the phrase Marx later adopted to capture the unit of the capitalist mode of production.⁷ In this context, “moral economy” meant what we now call “ergonomics,” namely, the efficient use of time, space, and resources (not least labor) to maximize productivity. Ure was the Scottish pioneer of what might be called, with a bit of hindsight, “university-industry relations” or even “knowledge management.” ⁸ In particular, he argued that the polytechnics could train managers to cut waste that would eliminate the drudgery and inconvenience of the workplace, which in turn would benefit workers on a day-to-day basis, not to mention the profits reaped by their employers in the long term. Marx was quite scathing about Ure’s advocacy of moral economy because it ignored the power the employers ultimately held over the workers. Whereas Ure saw himself as injecting a measure of critical self-consciousness to workers who might otherwise perform in the workplace as their forefathers always had, his schemes only ended up justifying the scaling up of industry by replacing human labor with labor-saving technologies. At least, when Frederick Winslow Taylor re-incarnated Ure under the banner of “scientific management” in the 20^th century, there were no illusions of whose interests were of primary concern.

However, in the hands of such fashionable historians of early modern science as Steven Shapin and Lorraine Daston, “moral economy” means something much more genteel. Here it refers to the management of public affect, as inscribed in various theories and practices transacted in the emerging republics of science and letters of the 17^th and especially 18^th centuries, which in turn (allegedly) provided the groundwork for the social constitution of objectivity.⁹ Yet, the actual phrase “moral economy” does not figure prominently in these “originary” contexts. Nevertheless, the topic of Albert Hirschman’s minor classic, The Passions and the Interests, which provides the centrepiece of Paul du Gay’s paper, approximates — and anticipates by over a dozen years — the sense of “moral economy” so privileged by Shapin and Daston.¹⁰ Hirschman specifically refers to the role of the utilitarian conception of interest in disciplining our natural passions, which becomes the corresponding psychology to those twin forms of societal rationalization of the modern era, state bureaucracy and the capitalist economy. Du Gay extends the genealogy of this conception back to Hobbes, whom he portrays as the missing link between classical stoicism and German idealism (and classical sociology, especially Tönnies and Weber). Specifically, the Hobbesian social contract externalizes the stoic sense of rational freedom under self-legislated constraints that survives as the “constrained maximization” orientation of the rational agent in neo-classical economics. Du Gay reads Hobbes as an antidote to the nostalgic view of civic republicanism prevalent among 17^th century anti-monarchists in Britain. They sentimentally invested in some allegedly natural faculty of “virtue” what historically had required the artifice of the social contract — what by the 19^th century became regularly inscribed in national constitutions — namely, the well-bounded individual to whom the possession of interests, rights and duties could be discretely attributed.¹¹

What becomes clear from all this historiographical wrangling is that the phrase “moral economy” is more resonant now than ever before. The eclipse of socialism by neo-liberalism helps to explain the situation. Not surprisingly, bottom-up, grassroots, “self-organizing” politics becomes the calling card of self-avowed leftists. In this respect, it is telling that Shapin’s and Daston’s use of “moral economy” is indebted to E. P. Thompson, who re-invented the phrase in the early 1970s as part of an ongoing struggle with fellow New Left Review editor Perry Anderson over the actual role of the working class in the history of socialism and revolutionary politics more generally.¹² For Thompson, “moral economy” signified the cultural resources of the working class that enabled them to organize themselves as an effective political force without the help of elite intellectuals like Anderson. In this context, Thompson declared that the historian “rescues [the working class] from the enormous condescension of posterity,” an attitude that Shapin and Daston extend to the lost technicians and writers of the past, with grassroots politics now methodologically domesticated as “grounded theory.” In light of the previous discussion of Hobbes’ role in the original conceptualization of moral economy, what is perhaps most striking about the original Thompson-Anderson dispute is the absence of the agency of the state. This is especially striking, given that a figure common to most discussions of “moral economy,” Karl Polanyi, saw the development of capitalism in terms of what he called a “double movement,” only the first moment of which is recognized by all those concerned with moral economy today, namely, the replacement of reciprocity with market forces as the basic principle. Lacking is the compensatory nod to Hobbes, whereby the state enters to redress the maldistribution of wealth and other social dislocations caused by massive capitalization.

Thus, all that seems to remain of the historical conception of moral economy imagined by Shapin and Daston and excavated by Hirschman and Du Gay is its self-administered basis. Moreover, the political centre of gravity of the discussion has radically shifted from its 17^th and 18^th century sources. This is most evident from Andrew Sayer’s paper, which explicitly attempts to turn moral economy into a contemporary intellectual project. Drawing on the recent interest in “human capacities” by the welfare economist Amartya Sen and the classical philosopher Martha Nussbaum, tinged with what one suspects is a lingering appeal to Wittgenstein or ordinary language philosophy, Sayer wants to identify “moral economy” with the natural virtue that springs from everyday life uncontaminated by the ideology of the marketplace. This he associates with Adam Smith’s A Theory of Moral Sentiments, which foregrounds sympathy as a cognitive virtue and benevolence as a moral virtue that provides the natural foundations of the social order. On this basis, Sayer then wants to derive a robust conception of socio-economic responsibilities that can be used to check the morally blind workings of the market. It is clear that Sayer intends these “responsibilities” as a kind of naturalistic underpinning for the functions of the dearly departed welfare state. However, what remains unproven is that the Smithian crucible of sympathy and benevolence would be sufficiently powerful to provide such expansive coverage. After all, empirically speaking, there are a great many kinds of humans for which all societies have shown a distinct lack of spontaneous sympathy and benevolence — even without the intervention of market forces. Indeed, it was precisely this palpable inadequacy in Smith’s “moral economy” that led to the profound reassess...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• Preface
• Introduction
• Part I Foundations
• Part II The Moralization of the Market in Theoretical Context
• Part III Social Institutions
• Part IV Case Studies
• Contributors
• Name Index
• Subject Index