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Moral View of Market Society

Moral View of Market Society

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 Moral Views of Market Society 
 Marion Fourcade
1
and Kieran Healy 
2
1
Department of Sociology, University of California, Berkeley, California 94720-1980;email: fourcade@berkeley.edu
2
Department of Sociology, University of Arizona, Tucson, Arizona 85721;email: kjhealy@arizona.edu Annu. Rev. Sociol. 2007.33:285–311First published online as a Review in Advance on April 5, 2007 The
Annual Review of Sociology
is online at http://soc.annualreviews.org This article’s doi:10.1146/annurev.soc.33.040406.131642Copyright c
2007 by Annual Reviews. All rights reserved0360-0572/07/0811-0285$20.00
Key Words
markets, capitalism, moral order, culture, performativity,governmentality 
 Abstract 
Upon what kind of moral order does capitalism rest? Conversely,does the market give rise to a distinctive set of beliefs, habits, andsocial bonds? These questions are certainly as old as social scienceitself. In this review, we evaluate how today’s scholarship approachesthe relationship between markets and the moral order. We begin with Hirschman’s characterization of the three rival views of themarketascivilizing,destructive,orfeebleinitseffectsonsociety.Wereview recent work at the intersection of sociology, economics, andpolitical economy and show that these views persist both as theoriesof market society and moral arguments about it. We then arguethat a fourth view, which we call moralized markets, has becomeincreasingly prominent in economic sociology. This line of researchsees markets as cultural phenomena and moral projects in their ownright, and seeks to study the mechanisms and techniques by whichsuch projects are realized in practice.
285
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INTRODUCTION 
In 1982, a soft-spoken economist with a self-diagnosedpropensityforsubversion(andself-subversion) published a short article on a bigtopic (Hirschman 1982): How have intellec-tual elites understood and judged market so-cietythroughouthistory?Somewhatcontrary to his expectations, Hirschman (1977) foundthatthemarketwasinitiallyseenasacivilizingforce. For most of the eighteenth century, the
douxcommerce
thesisheldthatmarketrelationsmade people more cordial and less inclined tofight one another. By the late nineteenth cen-tury, however, this harmonious vision faced achallenge. Marx, among others, argued that capitalist society tends to undermine its ownmoral foundations, to the point at whichit will ultimately self-destruct. In responseto this gloomy prediction, the defenders of the market revised the
doux commerce
thesis. The market was still an essentially goodforce but a too feeble one. According to this“feudal shackles” thesis, the persistence of cultural and institutional legacies from thepast hampered the market’s beneficial effects.Conversely, the absence of such a heritagein the U.S. case was seen as a blessing anda critical element in explaining the country’smoral character and economic success. Markets, Hirschman suggested, have thusbeencastascivilizing,destructive,orfeebleintheir effects on society. In the 25 years sincethe publication of his article, there has beenan explosion of research on markets in sociol-ogy.Inthisarticle,webeginwithHirschman’sconceptual scheme and show how a good dealof this recent work fits within its categories.First, economists still endorse the
doux com-merce
thesis and generally emphasize the pos-itiveeffectofmarketinstitutionsoncivilsoci-ety, politics, and culture. We call the modern versionofthisviewtheliberaldream.Second,public intellectuals and critics from variousdisciplines continue to critique the market. The “autodestruction” thesis that Hirschmanidentified, however, has evolved into morespecific claims that markets undermine socialrelations, corrupt political life, and corrodecharacter. We call this view the commodi-fiednightmare.Finally,economicsociologistshave leaned toward Hirschman’s third cate-gory:marketsasrelativelyfeeblecomparedtoculture and society. The dominant paradigmof embeddedness implies that culture and in-stitutionsmediate,andoftentrump,themoralimplications (good or bad) of capitalist mar-kets.Inthisview,marketsdonothaveamoralnature outside the particular social and cog-nitive arrangements from which they emergeand that sustain them.Despite the value of Hirschman’s frame- work, we also seek to go beyond it. In hisscheme, the causal relationship between themarketandthemoralorderisstraightforward. Marketscanexertahugedirecteffectforgoodor do tremendous damage. Alternatively, thearrow points the other way, and fragile mar-kets are overwhelmed by the moral order (or,more rarely, nurtured by it). We argue that abody of important work, most of it quite re-cent, rejects this clean division between themoralorderandthemarket.Instead,researchontheclassificationofexchangerelations,theperformativity of economics, and the regula-tionofcountriesandcorporationsintheinter-national economy is united by a view of mar-kets as intensely moralized, and moralizing,entities. We suggest that this new emphasisreflects not simply a shift in scholarly fashion,but also trends in the public justification of the contemporary economic order itself.
CIVILIZING MARKETS: THE LIBERAL DREAM
Economists need no convincing that compet-itive markets constitute the best possible ar-rangement for the satisfaction of individualneedsandtheefficientallocationofresources.Both these arguments were made long ago by  Adam Smith and Leon Walras, respectively,and have generally withstood the test of time withinthediscipline.Atbothmicroandmacrolevels, so it seems, economic theory elevates
286 Fourcade
·
 Healy
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egoism to paradigmatic status. “It is not fromthe benevolence of the butcher, the brewer,or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their human-ity but to their self-love,” wrote Smith (1994,p. 15) in one of the most cited passages of the
Wealth of Nations 
. Today, the neoclassical ap-proachthatformalizedmoderneconomicthe-ory generally posits that individuals maximizetheir utility in all social relations. Principal-agent theory, for instance, is predicated onthe notion that actors will retain informa-tion and cheat organizational demands. Pub-lic choice theory hypothesizes that corrup-tion,ratherthanbenevolenceinsomedegree,is the natural condition of the government. And an infamous leaked World Bank memoabout the comparative advantage of develop-ing economies in attracting dirty industrieshas become a canonical example of the po-tential gap between moral questions of justiceand cold-blooded considerations of allocativeefficiency (
 Economist 
1992).If economists exclusively made narrow claimsabouttheallocationofresources,anar-ticle about markets and morals would featurethem only as a negative case. Yet the relation-ship of economic theory to morality is morecomplex than this. First, economic theory isbuilt on assumptions whose implicit moralcontent can be drawn out in detail (Hausman& McPherson 2006). Second, and more im-portantly for our purposes, there is a long tra-dition within economic discourse of explicit praiseforthemoralbenefitsofmarketsociety. The precise benefits vary. The
doux commerce
tradition is carried forward by arguments that the market nourishes personal virtues of hon-est behavior, civility, and cooperation. Oth-ers have seen markets as a necessary condi-tion for freedom in other aspects of life, most prominently in politics and in the culturalrealm. A final tradition, represented today by thebulkofprescriptivemacroeconomics,em-phasizes economic growth as a condition forhuman progress, and it is best encapsulatedby Keynes’s comment that economists are the“trustees, not of civilization, but of the possi-bility of civilization.”
 A Virtue Ethics of the Market 
 The reason morality seems a priori irrele- vant to economics is that, as Smith discov-ered, a system may be virtuous and harmo-niousasawholenomatterhowselfishitscon-stituent parts are. But here is the twist: Eachindividual’s hunger for profit will be kept incheck by a similar drive among other individ-uals. Rather than producing ruthless greed,self-interest will tend to make people polite,serviceable, and honest. Thus, Smith (1978,p. 538; cited in Stigler 1981, pp. 172–73) also wrotethat“whenevercommerceisintroducedinto any country, probity and punctuality al- ways accompany it 
. . .
. Of all the nations of Europe, the Dutch, the most commercial, arethe most faithful to their word.” Markets, then, not only produce eco-nomic harmony (the satisfaction of individ-uals’ desires and needs), they also createsocial harmony. McCloskey (2006) is today perhaps the most prominent defender of the view that markets encourage not onlpublic but also personal virtue. Like other virtue ethicists, she seeks to identify both the virtues that comprise good moral characterand the individual habits and social institu-tions that cultivate such virtues in people.In broad outline, we may contrast this ap-proach with the Kantian and consequential-ist traditions, which offer competing theoriesfor judging the morality of actions (whetherthroughtheapplicationofdeontologicalprin-ciples of moral duty or a utilitarian calcu-lation of the good and bad consequencesof one’s choices). For McCloskey, marketsnurture a long list of “bourgeois virtues,”including integrity, honesty, trustworthiness,enterprise, respect, modesty, and respon-sibility. Commerce teaches ethics mainly through its communicative dimension, that is, by promoting conversation among equalsand exchange between strangers. We canbring out the distinctive nature of this
www.annualreviews.org 
Moral Views of Market Society 287
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