Foreword - Moral Markets: the Role of Values in Free Enterprise

5 Pages Posted: 9 Apr 2007 Last revised: 4 Apr 2015

See all articles by Michael C. Jensen

Michael C. Jensen

Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit


My congratulations and admiration to the Gruter Institute for Law and Behavioral Research and the scholars who have evidenced the courage to tackle a subject as difficult and opaque as the Gruter Institute Project on Values and Free Enterprise. With the support of the John Templeton Foundation, The UCLA-Sloan Research Foundation, and the Ann and Gordon Getty Foundation the volume they have produced, Moral Markets: The Critical Role of Values in the Economy, promises to be a landmark effort in bringing scientific inquiry and analysis to the normative world of values. Economics, being focused on the positive analysis of alternative institutional structures, has far too long ignored the normative world.

The positive analysis of normative values may sound like a non-sequitor, yet it is in my opinion among the major issues facing the world today. It does not take much reflection or study of history to begin to see the import of different judgments about normative values on the tensions and conflicts among human beings. There are of course many causes underlying the conflicts between humans in addition to those involving differing value systems, including for example, power, wealth, etc. Nevertheless, the power of values (that is deeply held personal beliefs about what is good and bad behavior, what is desirable versus undesirable, what is 'right' vs 'wrong') to cause (or at least to encourage) human beings to commit the most horrific crimes against their neighbors is amazing: Witness the multitudes of religious and civil conflicts ranging from the crusades of the middle ages, the holocaust, two world wars, 'ethnic cleansing' in Bosnia, the mass killings of the Tutsis in Rwanda, to the civil wars, brutal bombings, torture and televised beheadings associated with the current worldwide conflicts involving radical Islam.

A potentially valuable source of knowledge in discovering the source of these tensions and therefore in learning how to manage and reduce such tensions is a much deeper understanding of the role of values in shaping and guiding human action and interaction. And this clearly calls for a positive analysis of values, how they arise, how they change, how they interact across cultures, how they can be changed, and so on. Understanding how values are reflected in markets and how markets either reduce or increase their positive or negative effects on human welfare is clearly important. The work of the scholars represented in this volume makes important contributions to these issues and adds substantially to the foundations of analysis that will eventually lead to a richer and more complete understanding of these issues.

Keywords: Positive Analysys of Nomative Values

Suggested Citation

Jensen, Michael C., Foreword - Moral Markets: the Role of Values in Free Enterprise. Gruter Institute Project on Free Enterprise & Values. Available at SSRN:

Michael C. Jensen (Contact Author)

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