Markets and Morality: Do Free Markets Corrode Moral Values?

TSE Working Paper No. 16-692

64 Pages Posted: 7 Mar 2017 Last revised: 28 Aug 2019

See all articles by Daniel L. Chen

Daniel L. Chen

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France

Date Written: August 2019

Abstract

Scholars since Hume and Smith have debated possible causal connections between market experiences and moral beliefs. Here, I study the impact of market interactions on utilitarian versus deontological values, other-regarding preferences, and charitable donations. Through a labor market intermediary, I randomly assign workers to different market conditions – competitive (tournament) versus commodifying (piece-rate). Competition increases deontological commitments, deontological commitments towards out-group members, productivity, and donations by productive workers but decreases donations by less productive workers. The effect of competition on deontological commitments reverses with income, consistent with the intellectual history of the doux commerce thesis. If utilitarian attitudes lead to market-oriented policies, multiple steady states arise where some countries sustain high utilitarianism, market-orientation, and economic growth.

Keywords: Normative Commitments, Deontological Value Choices, Other-Regarding Preferences, Charitable Donations, Moral Trolley Problem

JEL Classification: B51, C93, D63, D64, J15, K00

Suggested Citation

Chen, Daniel L., Markets and Morality: Do Free Markets Corrode Moral Values? (August 2019). TSE Working Paper No. 16-692, Available at SSRN: https://ssrn.com/abstract=2928143

Daniel L. Chen (Contact Author)

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France ( email )

Toulouse School of Economics
1, Esplanade de l'Université
Toulouse, 31080
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
122
Abstract Views
844
rank
250,893
PlumX Metrics