Capitalism Kills Morality - And So Does Socialism, Say Economists

Do you support unions, a minimum wage, dislike business and hate child labor and then tell all of your friends on your iPhone?

People rationalize moral standards when it comes to their own lives, say economists writing in Science. It's easy to lament child labor and exploitation of the work force but if you are not willing to pay $2,000 for a phone, you are part of the problem and Tweeting about social issues on that phone helps precisely no one but corporate shareholders.

Markets are not about social justice, note?Professors Armin Falk from the University of Bonn and Nora Szech from the University of Bamberg, and so markets reduce moral concerns. They have found that,?in comparison to non-market decisions, moral standards are significantly lower if people participate in markets.?You're not more ethical if you buy one product, you are slightly less ethical if you buy anything at all.

"Our results show that market participants violate their own moral standards," says Falk.

In different experiments, several hundred people were confronted with the moral decision between receiving a monetary amount and killing a mouse versus saving the life of a mouse and foregoing the monetary amount.?In other words, they could kill a mouse or get paid.

The economists ironically invoke some moral superiority in their market choice to use the mice at all.? The animals involved in the study were "surplus mice" raised in laboratories - outside Germany, no German mice were harmed, they want us to know. Since the mice were no longer needed for research purposes, they would all have been killed. Hundreds of young mice that would otherwise all have died were saved, they note, which has to make 100 million dead laboratory mice per year a little jealous. If a person decided to save a mouse, the experimenters bought the animal to keep it in the lab.?

"To study immoral outcomes, we studied whether people are willing to harm a third party in exchange to receiving money. Harming others in an intentional and unjustified way is typically considered unethical," says Falk. ?

And a lot of people were.

Simple bilateral markets affect moral decisions

A subgroup of people decided between life and money in a non-market decision context (the individual condition). This condition allowed for eliciting moral standards held by individuals and was compared to two market conditions in which either only one buyer and one seller (bilateral market) or a larger number of buyers and sellers (multilateral market) could trade with each other.

If a market offer was accepted a trade was completed, resulting in the death of a mouse.

Compared to the individual condition, a significantly higher number of subjects were willing to accept the killing of a mouse in both market conditions.

Conclusion: markets result in an erosion of moral values. "In markets, people face several mechanisms that may lower their feelings of guilt and responsibility," explains Szech. In market situations, people focus on competition and profits rather than on moral concerns. Guilt can be shared with other traders. In addition, people see that others violate moral norms as well.?

"If I don't buy or sell, someone else will."

In addition, in markets with many buyers and sellers, subjects may justify their behavior by stressing that their impact on outcomes is negligible. "This logic is a general characteristic of markets," says Falk.

Excuses or justifications appeal to the saying, "If I don't buy or sell now, someone else will."

For morally neutral goods, however, such effects are of minor importance. Szech notes "For goods without moral relevance, differences in decisions between the individual and the market conditions are small. The reason is simply that in such cases the need to share guilt or excuse behavior is absent."?

Citation: Armin Falk and Nora Szech, 'Morals and Markets', Science 10 May 2013: 707-711. DOI:10.1126/science.1231566

Source: http://www.science20.com/news_articles/capitalism_kills_morality_and_so_does_socialism_say_economists-111691

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