Even people who are typically sanguine about markets worry that we risk losing our souls when we engage in market activities. Specifically, the concern is that the more we engage in market activity, the more likely we are to become, at best, selfish and corrupt, and, at worst, rapacious and debased.
The same Adam Smith who famously celebrated the potential of markets to deliver material wealth believed that there were moral costs associated with life in market societies. Smith thought that markets could be alienating and corrupting of our morals. In The Wealth of Nations ([1776] 1981: 782), for instance, Smith argued that the typical laborer in market societies, because of the division of labor, spends his life performing a “few very simple operations” and, as a result, has “no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur.” Because most of our jobs are a monotonous drudgery, Smith (Ibid.) believed that the typical worker in a market society,
While the act of repeating the same task over and over leads a worker to develop dexterity in his appointed task, it “renders him incapable of exerting his strength with vigor and perseverance, in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues” (Ibid.). Life in market economies, according to Smith, can corrupt our morals.generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life.
Similarly, in The Theory of Moral Sentiments, Smith ([1759] 1982: 181) offered an account of the moral poverty that occasioned the poor man’s son’s pursuit of material prosperity and described how commercial society actually benefits from the poor man’s son’s moral degradation. The poor man’s son, Smith explained, is ambitious and envies the comforts enjoyed by the rich. He fools himself into believing that if he had more money he would be more content. So, he devotes “himself forever to the pursuit of wealth and greatness” (Ibid.). The irony, Smith described, is that in order to attain the tranquility and comfort that only money can buy, the poor man’s son disturbs the tranquility and comfort that he might have enjoyed all his life had he lacked ambition and not pursued wealth so doggedly. It is not until the end of his life that the poor man’s son realizes that his ambition misled him. “It is then, in the last dregs of life, his body wasted with toil and disease,” Smith (Ibid.) wrote, “that he begins at last to find that wealth and greatness are mere trinkets of frivolous utility, … more troublesome to the person who carries them with him than all the advantages they can afford him are commodious.” The poor man’s son’s envy and the efforts it inspired proved to be in vain.
While a personal tragedy of sorts, Smith explained that society benefits from the poor man’s son’s act of self-deception. The poor man’s son is not an enviable person. But, his turpitude inspires his labors which ultimately benefit society as a whole. In fact, Smith explained, many of us engage in this kind of useful self-deception, perhaps for different reasons than the poor man’s son. “The pleasures of wealth and greatness,” Smith (Ibid.: 183) explained, can “strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.” According to Smith (Ibid.: 183),
The industry, ingenuity, and innovation that drive economic progress would seem to depend on ambition, envy, and ultimately self-deception.It is this deception which rouses and keeps in continuous motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life.
While concluding that the benefits associated with markets outweigh the moral costs of engaging in market activity, even Adam Smith believed that there were potentially real moral costs associated with engaging in market activity. This concern is at the center of all serious criticisms of markets on moral grounds.
Is There Something Wrong with Markets?
Concerns about the potentially negative moral effects of engaging in market activity have a long history. Aristotle, for instance, argued that there were two types of wealth acquisition: one moral and the other immoral. According to Aristotle (Pol. I.10, 1258a38–1258b2), “There are two sorts of wealth-getting … one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another.” Household management is the practice of using household resources efficiently. It might involve increasing your wealth by working harder on the farm, or adopting new strategies for husbanding resources, or simply doing more than you have in the past while using less than you used in the past. It might also involve barter and potentially selling surplus produce. But, household management, which Aristotle thought was necessary, honorable, and natural, did not involve selling that surplus produce for a profit. Pursuing profit, for Aristotle, was unnatural and illegitimate because he believed it necessarily involved taking advantage of others. Aristotle (Pol. I.8, 1256b27–31) was particularly concerned with wealth-getting that went beyond providing “such things necessary to life, and useful for the community of the family or state.” And, he was especially critical of usury because it involved using money to make money rather than to facilitate exchange which is its natural function. For Aristotle, then, retail trade and usury, which arguably drive market economies, were justly censored.
St. Thomas Aquinas essentially shared Aristotle’s concerns about unchecked wealth acquisition through retail exchange. Although Aquinas (ST II-II, q. 77, a. 4) was not opposed to market exchange, he viewed it as neither virtuous nor opposed to virtue, and nonetheless worried that there was something illegitimate about gains from trade beyond a certain level. Aquinas (ST II-II, q. 77, a. 1) believed that there was a “just price” that sellers should charge buyers. According to Aquinas (Ibid.), “if someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price: because the usefulness that goes to the buyer comes not from the seller, but from the buyer’s needy condition.” Aquinas believed that this “just price” should not be determined by the buyer’s willingness to pay, as it typically is in market economies, but by the costs the seller incurred in producing the good (Ibid.).
Karl Marx was particularly concerned with the dehumanizing effects of markets. Most notably, he argued that money exchange and the division of labor necessarily led to exploitation and alienation. Workers in market economies are necessarily parties to inequitable wage-for-labor relationships where they typically receive less than their fair share of what they produce (i.e. their labor time is stolen by others). Workers in market economies also become estranged from themselves, their labor, the product of their labor, and one another. Workers in market societies are, thus, spiritually and physically transformed in negative ways by their market experiences. According to Marx ([1821] 1994: 49), the greater the scope of market exchange relations, “the more egoistic and asocial man becomes.”
Several contemporary scholars from several disciplines and from a variety of perspectives have echoed this concern that the greater our exposure to markets the more likely we are to lose our souls (e.g. Anderson 1995; Bowles 2016; Falk and Szech 2013; MacIntyre 1981, 1999; Roth 2007; Shleifer 2004). Michael Sandel in What Money Can’t Buy: The Moral Limits of Markets (2012), for instance, argued that markets undermine morality. Sandel (Ibid.: 7) was particularly worried about the expansion of markets and market values that has occurred over the last 30 or so years. Although he believed that an increase in greed has undoubtedly accompanied this “market triumphalism,” the most worrisome consequences of this growth of markets have been “the expansion of markets, and of market values, into spheres of life where they don’t belong” (Ibid.). There are perverse moral consequences, he said (Ibid.: 15), associated with becoming a world “where everything is up for sale.” Specifically, Sandel (Ibid.: 64) explained, “markets leave their mark on social norms. Often, market incentives erode or crowd out nonmarket incentives.”
Additionally, Sandel (Ibid.: 111) argued that markets in certain goods and services under certain scenarios are likely to be unfair; “the fairness objection points to the injustice that can arise when people buy and sell things under conditions of inequality or dire ec...