MORAL MARKETS: THE CRITICAL ROLE OF VALUES IN THE ECONOMY, Paul J. Zak, ed., Princeton University Press, 2007
27 Pages Posted: 11 Sep 2006
Rational choice analysis generally assumes that most people are both rational and selfish. Although self-interest is sometimes defined in a broad and tautological fashion to include a taste for altruism or ethics, most rational choice analyses implicitly equate self-interest with maximizing personal payoffs. This homo economicus approach is widely employed in part because it is so tractable: selfish behavior is easy to predict and model mathematically. There is a second important reason, however, why the homo economicus account is so widely accepted. In brief, people tend not to notice unselfish behavior. As a result they mistakenly view the homo economicus account as a good description of how most people behave most of the time.
The tendency to overlook unselfish behavior can be illustrated using a simple example. Imagine that you see a dozen pedestrians walk by a sleeping homeless man who is lying next to a sign that reads, "Please Help" and a cup that contains a few dollar bills. Many people might conclude they are observing selfish behavior when no one puts any money in the cup. Few would recognize that they are witnessing multiple acts of unselfishness as person after person walks by without stealing from the helpless homeless man.
This essay, prepared as a chapter for a book on free enterprise and values, argues that we should take conscience far more seriously. It explores how numerous influences work together to blind us to unselfish, conscience-driven behavior, even though it occurs repeatedly under our noses every day. These influences include certain ambiguities in the English language; cognitive biases that cause us to fixate our attention on selfish behavior while overlooking unselfishness; the common correlation between external legal, market and reputation sanctions and the internal sanctions of conscience; the belief that altruism cannot survive Darwinian pressures; and the possibility that studying certain fields, including law, economics, and business, can distort perceptions of the incidence of selfishness. Taken together, these factors conspire to make the homo economicus account appear more accurate and reliable than it actually is. They also blind us to the power and pervasiveness of conscience.
Suggested Citation: Suggested Citation
Stout, Lynn A., Taking Conscience Seriously. UCLA School of Law, Law-Econ Research Paper No. 06-20; Free Enterprise: Values in Action Conference Series, 2005-2006; MORAL MARKETS: THE CRITICAL ROLE OF VALUES IN THE ECONOMY, Paul J. Zak, ed., Princeton University Press, 2007. Available at SSRN: https://ssrn.com/abstract=929048
By Guy Mayraz