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Moral ambiguity

Reiner Grundmann

“The fate of our times is characterized by rationalization and intellectualisation and, above all, by the ‘disenchantment of the world’. Precisely the ultimate and most sublime values have retreated from public life either into the transcendental realm of mystic life or into the brotherliness of direct and personal human relations.”1 Max Weber

The purpose of this book seems to fly in the face of this Weber quote. If Weber were right, the moralization of markets is a topic that should have disappeared from public discourse. However, all authors that are gathered in this volume agree that ultimate values play an important role in contemporary societies.

In this collection we see a remarkable range of theoretical approaches, topics and empirical references. Although the title of the book is Moralization of Markets, only a few contributors address the issue of markets in the literal sense. Most interpret the topic in a broader sense of economic action. Contributors come from different social science disciplines (mainly Sociology and Political Science), make reference to various theoretical approaches and deal with diverse empirical problems. Let me try to simplify and organize these using a common typology.

Standing at two ends of a spectrum, on the one side we have the economists’ view that it is the social responsibility of business to make profits. On the other there is the sociological view that all economic action is socially embedded and thus no market can exist without ethics—each and every business decision and market transaction can be seen as adhering to some ethical principle. It is usually assumed that these two approaches could not be further apart. But are they really that different?

Let us start with the first position which was pronounced most famously by Milton Friedman.2 The slogan that it is business’s responsibility to make profits can be presented in the following

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stylised way: (1) Making profits ensures that business can pay for extras

(environmental protection, workers’ welfare, community concerns, etc.) and therefore profit making is ethical in itself; (2) other responsibilities are incompatible with, or detract from the major responsibility of making profits; (3) Because of 1 and 2, business does not (and should not) have other responsibilities than making profits (‘good doing’ is essentially voluntary).

Sayer rightly points out that ‘many economists would not even recognise the concept of economic responsibilities for others.’ (infra)

Turning to the second position, sociologists such as Polanyi and and Granovetter used the concept of embeddedness to describe the social structure of modern markets.3 Here the following proposals are made (again I use a stylised form to present them in the form of a syllogism):

(1) All economic action is social action; (2) All social action comprises an ethical dimension; (3) All economic action is ethical action.

Where Friedman argues that profit making and ethics are in a zero-sum relation, and that requiring business to obey ethical rules of responsibility would mean to undermine the foundations of a free society, sociologists argue that it is impossible to conceive of any economic action without an ethical dimension. This train of thought has a long tradition in Sociology, as Aspers (infra) states: ‘How the economy and society at large is permeated by values is analyzed in the writings of, for example, Durkheim and Weber. But even before Weber wrote on ethics and economy, Adam Smith (…) and Alfred Marshall argued that the economy is a sphere permeated by ethics. Ethics and values can, for example, be of religious origin, and may exist prior to, or simultaneously with, “pure” economic principles.’

Sayer (infra) points out that ‘it is now a commonplace to note the influence of rules, habits, norms, conventions and values on economic practices and institutions and how these vary across different societies’. And Beckert (infra) draws our attention to the fact that ‘Émile Durkheim’s notion of “non-contractual conditions of contract” stresses the need for exchange relations to be embedded in a system of moral obligations. It is through the moral code that actors abstain from exploiting their exchange partners through opportunistic behavior, which must

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be expected if decisions are exclusively based on self-interest. By reducing transaction costs, morality supports the functioning of markets. Several decades later, Talcott Parsons – using Durkheim’s insights – analyzed the function of normative role expectations for the integration of modern market economies, reaching similar conclusions.’

Functional morals

This functionalist interpretation of ethics is very much in line with Arrow’s reply to Friedman.4 As social inequality can be a moral problem, perceived or real inequalities may conflict with dominant notions of social justice. Inequality can also affect the efficiency of markets. Extreme levels of inequality lead to lower growth rates, to social unrest and could eventually undermine the working of perfect markets.

Applying a distinction from moral and political philosophy, we could ask if there is any space for deontological ethics here. The functionalist position roughly equals the teleological or consequentialist position where the moral value of an action is judged by the outcomes of the action. In contrast, in a deontological system of ethics the consequences of an action are generally irrelevant to moral assessment. The moral value of an action stems from the recognition of duties toward others. When we follow our duty, we are behaving morally. When we fail to follow our duty, we are behaving immorally.

While there are examples in politics where deontological approaches have taken root (basic rights, such as freedom of movement, freedom of speech, human rights, etc.)5, it is difficult to imagine the same for the business world (apart from the fundamental principle of profit-making). If business leaders were to adopt deontological principles they would in fact replace Friedman’s principle with something radically different. This could jeopardize the very existence of business. It is therefore not surprising that the range of influential business ethics usually is confined to one or other version of teleological principles, or what I call functional morals. Where business leaders profess to ‘do the right thing’ regardless of costs or profits, and unless they are ready to put the company’s existence in jeopardy, they will have some kind of strategy in place to

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exploit secondary effects that would make good business sense. Usually such a strategy aims at higher priced goods to pay for the ‘ethical surplus’. This presupposes a market segment willing to pay higher prices. Ethically ‘sound’ products may thus not be available to people with low purchasing power thus creating an ethical dilemma.

We also need to distinguish between two meanings of the term economic action, the profit principle and the principle of free markets. Looking at the history of capitalism it is probably true to say that the profit principle ranks higher than the market principle. Rather than touching the profit principle, politicians find it easier to regulate markets even to the extent of abolishing them and replacing them with other institutions (e.g. public sector provision in the case of education, transport, or health).6 Friedman conceives the market and the profit principle to be closely linked in a free society in which all market behavior is voluntary. For him, there is no problem with ‘ethical’ behavior of business leaders provided it is the result of voluntary decisions. As soon as political coordination or regulation interferes with these decisions, he objects to it.

Self-defeating markets

The problem with this approach is that it can lead to unintended side-effects which undermine the efficiency of the free market, or the very functioning of free markets and thereby the profit principle. The functionalist argument tries to rescue the basic logic of Friedman’s argument by pointing out that there exist ‘other factors’ which could impede the basic principles of capitalism, both the profit principle and the principle of free markets. Friedman and the functionalists thus share some common ground.

A similar alliance can be seen between today’s advocates of ecological modernization and proponents of economic growth. Environmental protection and economic performance are seen in a mutually reinforcing relationship. The only real difference between the ecomodernists’ argument and Friedman is the time horizon. Pure capitalist markets would undermine themselves in the long run. As Sayer (infra) notes, ‘many organisations in contemporary society are not primarily involved in the sale of

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commodities, and of those that are, many are involved in long-term relationships of dependency with customers. In taking on long-term service work, for example, a firm takes on a set of responsibilities which it has to discharge over time.’

Libertarian market optimists, of course, would argue that based on a system of property rights for natural resources and human values we would not need political intervention as the markets would react quickly to any critical issues of resource depletion or pollution. Opponents object that we cannot or should not put a price tag on everything since some goods are priceless. I will return to another variant of this argument below.

In his chapter on the importance of social capital for individual well-being, Osberg develops the argument that ‘standard economics has often suggested a set of economic policies that may be “auto-corrosive,” in the sense of tending to undermine the morality which underpins the efficiency of market processes.’ Such side-effects ‘can be highly threatening to personal identity. Economic mobility may also interfere with people’s ability to form lasting, meaningful relationships, since each job change means the loss of one set of co-workers, and the necessity to form new ties with one’s new colleagues, and each residential move depletes the “social capital” that individuals have built up in reciprocal relationships with their neighbours.’

If people have no one to play with because they are all busy at work and have no social groups to interact with outside work, they will eventually be less productive laborers. This is a plausible statement based on the assumption of widespread individualism and single person households. If people have a social reference group related to their families, this might be different. It is probably not by accident that many standard economists treat the ‘household’ and not the individual as the unit of analysis. The beneficial role of the family for the reproduction of the workforce is clearly seen. And conservative voices always entrust the traditional family with the task of providing social cohesion and moral glue to a disintegrating society. The unpaid labor that goes into the physical and mental reproduction of the individual through the social unit of the family is usually screened out in the standard economic models.

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Morals and ethics

Beckert departs from the general sociological definition of ethics given above (as a set of norms and values that guide social action) when he states that ‘actors in economic contexts act by moral conviction if they act in accordance with some principle that is oriented (also) toward the well being of others or the common good and is followed even if it demands to forgo additional personal profit or utility.’ In this view, there is a zero sum assumption between moral orientation and profit making activity. Ethics can be costly and profits unethical.7

Beckert goes on to argue that ‘morality plays a profoundly ambivalent role in market outcomes. It can be a social mechanism which helps to overcome market failure. It can, however, also have profoundly negative effects.’ Among the negative effects are ‘problems associated with initial endowments, monopoly structures, principal-agent problems and external effects.’ Beckert makes the case for social reform and intervention onto markets when he says that ‘There are situations in which individual utility maximizing behavior and initial endowments should be altered to achieve superior outcomes – the reason being that markets themselves are “morally unreliable.” However, reliance on morality cannot be the panacea for a more efficient and morally sound society as ‘morality might be discriminatory to outsiders, hinder the functional differentiation of the economy and block markets that would be beneficial for at least some market participants.’ These arguments relate directly to Friedman’s criterion of market efficiency. But the argument is decidedly functionalist, too. It arguably expects beneficial (economic) side-effects from the inclusion of outsiders, from increased functional differentiation of the economy, and from the creation of new markets. The problem of inherently immoral markets would need to be addressed here. For example, should we allow drugs and weapons markets since they are beneficial to some market participants? Immoral markets will increase the volume of trade and hence increase overall economic wealth.

Despite this common ground there is a difference between the free market advocates and the functionalists. Both employ a different use of the word ‘ethical’. While Friedman uses it in the

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sense of ‘good doing’, functionalists use it in a neutral and therefore more comprehensive sense. Making profits is one ethical orientation among others, such as giving to charity. Ever since Max Weber’s Protestant Work Ethic we know that making profit can be seen as linked to a specific system of values, for short ethics.

Both meanings of ethics appear regularly in discourses about business ethics. In the first view, ethics and profits are mutually exclusive as one of these can only thrive at the expense of the other. Ethics are costly. Are profits unethical? Not for Friedman and not for the sociologist traditions, not even for Marx. For Friedman good doing for the community is secondary to profit making and must be voluntary to business leaders. For sociologists every social action has an ethical dimension, profit making need not be unethical. It need not only be not unethical but can be ethical in the sense that it follows an ethical principle such as the Protestant work ethic. For Marx, capitalism was not necessarily unjust.8 The brunt of his criticism was that capitalism blocked the development of mankind’s productive forces (including the full individual potential, as duGay rightly notes). Regarding markets, he objected to them mainly on the grounds that they lead to a reification of human relations. It is the task to bring all exchange relations between humans under their rational control. They should not face their products (either artifacts or institutions) as alien forces, like natural events they cannot influence. Marx shows his enlightenment legacy clearly.9

Addressing the issue of freedom and equality, Fuller explores the contribution of two authors separated by one and half century, Condorcet and Schumpeter. Fuller explicitly addresses the question if the market as a social institution is inherently moral or not. He points to the eternal ideological debate between the political right which sees markets as embodiment of human freedom and the political left which sees inequality as major problem if markets are left to themselves. While not disputing the allocation efficiency of markets, and claiming that freedom and equality need not be incompatible, he clearly sides with the left when he advocates state control of markets.10 He follows both Condorcet and Schumpeter who ‘wanted to square the circle between state and market by treating the market as both an instrument and object of statecraft.’

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Commodification and the rise of consumer power

Apart from Fuller, other authors (Borgmann, Sayer, Campbell, Aspers) emphasize the importance of commodification as a process that led to a loss of moral authority. The more we turn goods into commodities which can be exchanged on markets the more we open up things for sale which could be seen as problematic.11 Borgmann traces the concept of commodification to Marx who criticized the fact that the capitalist mode of production tends to transform more and more goods into commodities, especially labor power. ‘For Marx, commodification was exploitation.’ This very condensed statement only makes sense when we take into account several things. First, for Marx a commodity is the unity of use value and exchange value. In capitalism, the purpose of production is not oriented towards use value but exchange value, especially exchange value that renders a profit. This is made possible, secondly, through the use of one specific type of commodity (labor power) that has a specific use value which is producing more exchange value than it costs. Thirdly, labor power is the only source of value in the capitalist mode of production. For Marx, therefore, exploitation means the pumping out of surplus from the laborer, and labor markets are the key to capitalism. Borgman’s claim is questionable that ‘in the advanced industrial countries, exploitation has been reduced in some areas and has disappeared in others. Globally, of course, it remains a calamity and a scandal.’

Maybe there is a potential misunderstanding of Marx as the quote seems to follow the use of the term exploitation in everyday language where it is associated with unethical work conditions even if labor productivity is comparatively low. For Marx, commodification is linked to exploitation via the consumption of labor power. In this sense, there has been no ‘reduction’ in exploitation—if anything, increasing labor productivity indicates an increase in exploitation.

Borgman makes fun of a contemporary Marxist statement that says that the ‘extension of commodification is a contradictory process: demeaning and dehumanizing, but at the same time liberating and progressive.’ This ambiguity about capitalism and its moral value is shared by many others, including Weber,

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Durkheim, and Simmel. Marx makes no difference here. He is known as the radical critic of capitalism but he also praised it for developing the productive forces and revolutionizing traditional forms of production and social relations. Capitalism thwarts the full development of the individuals, although it contributes to that development in so far as it enhances the variety (Vielseitigkeit) of work and creates the social-cooperative character of work. A society which enabled the release of all human powers would be ‘the human society’ also known as communism. Marx asserts that it is a ‘law of motion’ of human nature to develop new needs once an existing set of needs has been satisfied. Capital is propitious for this trend since it sets free labor in one branch and employs it in others. It develops human capacities in new directions.12 This is the ‘historical task’ of capitalism. For Marx, the rich human being is defined ‘as rich as possible in needs, because rich in qualities and relations--- … as the most total and universal possible social product.’13

Neither Marx nor the classical sociologists thought much of the consumer and their role for capitalist markets. Perhaps with the exception of Sombart and Simmel, they tended to assume that the core of modern society was in the process of production, either in terms of the acquisitive spirit and work ethic (Weber), or in terms of the location of the innermost secret of surplus production (Marx), or in terms of the industrial division of labor which leads to a loss in social solidarity (Durkheim).

De-professionalization is de-moralisation

Campbell draws our attention to the fact that ‘areas of human activity that were not subject to purely commercial pressures but were instead largely governed by ethical and moral norms’ are now governed by the marketplace. Campbell calls this ‘a significant de-moralisation of society.’ Examples are the traditional personal service professions of health and education. ‘Traditionally a professional occupation is one in which a service is provided by a highly skilled and officially qualified person to clients who, by definition, are not in a position to judge for themselves the quality (or even the necessity) of the service they receive. And in order that those in this privileged position should not abuse their power their activities are

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controlled by a code of ethics; a code that specifies how their conduct must at all times be governed by the value of altruistic service rather than that of self-interest. Correspondingly, the clients of these service-oriented professionals are meant to act in accord with a set of obligations that correspond to the professional’s duties, such as the obligation to defer to their greater expertise and to both accept and implement the advice and counsel provided.’ Compared to our discussion above, we note that Campbell uses the terms ethics and morals in yet another way when he refers to them as codes of conduct.

This model of professional authority is under attack as governments try to increase personal choice–‘largely as a consequence of an ideological commitment to a policy of “increasing choice” – [and] seek to wrest control away from the professionals.’14 In a world where clients become consumers professionals will lose their authority. However, Campbell is not as pessimistic as one might assume from this exposition. His source of optimism is the model of the ‘ethical shopper’ who has a repertoire of reasons (Campbell calls it a vocabulary) that legitimises their actions.

Here Campbell distinguishes between a vocabulary based on needs and another based wants. Needs ‘are objective states and as such can be determined by others… Wants on the other hand are purely subjective states and as such can only successfully be identified by the individual concerned… The rise of modern consumer societies, in which consumption is built almost entirely around the satisfaction of wants rather than the gratification of needs, creates a new set of problems in relation to the legitimation and motivation of consumer conduct. For while activity that is aimed at meeting one’s needs is easily legitimated – given that these are inter-subjectively determined it is relatively easy to appeal to agreed societal norms and understandings – wants cannot be legitimated in the same manner.’ It has to make ‘an appeal to the authority of “the self.” … Whereas previously moral conduct required the internalisation of obedience to an external source … now the equivalent source is an internal entity, usually identified with the “real,” “true” or “inner” self.’ In a curious way, this line of argument resonates with the Weber quote at the beginning of this chapter.

As Campbell points out, ‘this conception of “the self” is very

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different from that pictured in the conventional economist’s conception of “self-interested” conduct.’ This new self is not ‘an individual that engages in rational calculations concerning how to allot one’s scarce resources so as maximise satisfaction.’ On the contrary, it is ‘an inner god or goddess who demands that the individual acts in ways that ensure its “manifestation” or “release.” Generally speaking this means giving expression to powerful wants and desires, and is therefore more likely to take the form of impulsive or compulsive behavior than rational, calculating conduct.’ 15

Self-limitation

Here we need to pause and ponder the development of the self ever since theorists investigated the notion of interest. Paul duGay and Andrew Sayer in their chapters remind us that neo-classical economics has accustomed us to the image of human beings as rational maximisers of their own self-interest. The critics of capitalism, on the other hand, emphasized ‘the repressive, alienating, or otherwise inhibiting aspects of economic conducts on the development of … the full human personality.’ Following the well known argument by Hirschman, we need to remember that ‘for its early modern advocates, “self-interested” conduct appeared as a potential cultural counterweight to the menace posed by the world of the “full human personality”, replete with its destructive passions.’ (du Gay).16

Drawing on recent scholarship on Adam Smith, Smith appears as a Neo-Stoic, who stresses the need to self-constraint in defining self-interest.17 As the Stoics were centrally concerned with perturbations of the soul, they believed that passionate persons ‘were unable to pursue their own best interests in a coherent fashion being ungoverned by reason. Thus, rational choice was impossible until the individual had achieved a state of “apathy” or emotional serenity. … Liberty of action then, is not about freedom to do whatever the individual desires so to do, precisely because freedom for the Stoics “is not acquired by satisfying yourself with what you desire but by destroying your desire.” This state of freedom, then, is not a natural state of being as it has to be fastidiously worked at. The idea of a natural

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self-interest is a delusion, as is the idea of a naturalness of markets.

It is striking that Adam Smith, regarded as the arch defender of capitalist morals and markets, entertained such views which in today’s globalized capitalism must be seen as hopelessly out of tune. Seen from this perspective, Campbell’s celebration of the sovereign self as impulsive and compulsive could not be further from Smith’s vision of a moral society. Of course, the theme of self-restraint is also apparent in Weber’s Protestant Work Ethic and Durkheim’s search for moral integration of society. There is another sense in which these concerns have been put into sharp relief, this is the example of ‘wild capitalism’ where managers have lost not only all sense of self-restraint but also any sense of traditional ethics (chapter by Sales and Beschorner). Before we turn to this issue let us first have another look at an empirical example of consumers’ ethical orientations.

Consumer ethics and government regulations

In her comparative case study of risk perceptions and public policy on tobacco and GMOs in the US and EU Kurzer investigates the salience of environmental and health concerns in the EU and US. Contrary to expectations that consumer markets of advanced industrialized countries have become more homogenous she observes that some products are defined as unnatural or unacceptable in the United States but not in the European Union, and vice versa.

More specifically, she shows how ‘tobacco caught the attention of policy entrepreneurs in the US but not in the EU and why transgenic food became a hot issue in Europe, though failed to incite the American public.’ In comparison to Europeans, Americans are more technology-friendly, and do not have a particular national culinary tradition. What is more, the lack of labeling in the US has greatly reduced attention to GM products and depoliticized the debate. This was possible only on the basis of an institutional decision to define GM products as substantially equivalent to non-GM products and therefore not subject to strict testing (as would be the case for pharmaceutical or medical products).

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Kurzer speculates that the European resistance to GM products may lead to a consumer backlash in the U.S. She believes that ‘in spite of different political dynamics, policy processes and norms, tobacco as well as GM agriculture confront similar market situations and are treated in similar “moral” fashion.’

There remains some doubt about the claim that the US and EU are moving along similar trajectories. Kurzer claims that ‘tobacco control is now the received wisdom in the EU. At the same time, the reception of GM products has turned more hostile in the US.’ In a recent review of US and EU policies on risk regulation, David Vogel points out that

it is true that on balance Europe is not more precautionary than the United States, since virtually all the relatively risk-averse statutes enacted by the United States before 1991 are still in effect. Nor is it the case that all European regulations issued since 1990 are more stringent or comprehensive than in America. It is rather that the most powerful determinant for the relative stringency or innovativeness of consumer and environmental regulations in the United States and Europe is the time frame during which they were enacted. 18

According to Vogel, the US took the lead prior to the mid 1980s while the EU enacted a more stringent or comprehensive regulatory agenda after 1990. Here Vogel explicitly cites the case of approval and labelling of genetically modified foods and seeds. It seems that there are similar tendencies towards risk averse regulations in both jurisdictions but this happens in different decades. If there will be convergence remains to be seen.

Wild capitalism

Sociological wisdom has it that all social action is somehow ethical but this does not mean that it is moral. Being guided by ethical values does not mean to behave in morally acceptable ways. Although most authors (outside moral philosophy) use the terms ‘ethical’ and ‘moral’ synonymously, there are cases where this practice is not warranted. Following ethical values in the broad sociological sense may result in immoral behavior. Sales and Beschorner focus on this aspect in their analysis of

‘wild capitalism’. The term was used by Derber, according to

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whom ‘wilding is a degenerate form of individualism, an individualistic form of social behavior that advances or indulges the self by hurting others.’ Such behavior can result in damage to ‘reputation, image, share price, staff morale, business relations, and indeed the actual survival of the firm.’ Short-termism combined with corporate greed is dysfunctional for the long-term survival of business. Top management has come under intense pressure as a result of a much more competitive business environment marked by deregulation, liberalization and globalization. Driven by quarterly profits and short term contracts, managers have to perform and deliver the goods, i.e. shareholder value. Cutting corners and transgressing informal or formal rules and regulations can be the means to achieve such ends.

Sales and Beschorner state that ‘in the face of this totally new economic environment, there emerged, especially in the newly deregulated sectors, a new, more adventurous, and definitely greedier bourgeoisie characterized by a profound lack of ethics and a very short-term vision of the firm and its stakeholders.’ This statement does not take into account that the observed behavior may still follow a particular ethic, albeit not the Protestant ethic. Do we need to stretch Friedman’s definition of business responsibility in order to make such examples fit? These managers are still making profits. Of course, in the long term unsound practices might undermine the profitability of the firm. But maybe many from this ‘new bourgeoisie’ have got away with it. Do we know if the examples quoted by Sales and Beschorner are the exception or the rule? Campbell noted that in order for capitalism to flourish hedonistic consumers were needed. Puritan reluctance to engage in self-indulgence had to be overcome ‘as well as the associated tendency to be thrifty. In other words the remnants of the Protestant Ethic were standing in the way of further economic advance by inhibiting consumers’ inclinations to spend.’ If this is true, one would expect a similar tendency to transform the capitalists.

We are back at the argument that the loss of self-restraint could lead to dysfunctional outcomes in the long run. This will not be of concern to economic agents who are solely motivated by short-term incentives. Sales and Beschorner explore various institutional mechanisms to mend this state of affairs. They discuss compliance mechanisms favored by Institutional

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Economics (and dismiss them as not being sufficient) and Evolutionary Economics, where they see the potential for ‘a more proactive role of businesses in economies and societies…integrity and ethical learning processes need to be regarded as core competencies in the 21st century.’ Obviously, we need to learn more about processes that lead firms to go voluntarily beyond compliance. Prakash has argued that in order for business to go ‘beyond compliance’, they need top managers with a commitment to ‘doing the right thing’ even if this does not pay off in the short run.19 Marketing such an image could then reward the firm as ‘ethical’ on the market place. While this cannot be dismissed out of hand, I also agree with Fuller’s comment (in his introduction to part III of this book) that neo-institutional compliance based policies (‘coercive isomorphism’) are required as well.

Barry Smart takes a different tack: ‘For some analysts there is little prospect of any significant alternative to the prevailing form of market economy. Giddens has concluded that there is no prospect of saying “no” to markets and that the only option is to try to curb market excesses and domesticate “wild” capitalism, in short, make it work better for people by “modernizing social democracy”. Smart seems to be unhappy with the functional morals and looks for a more radical alternative. He finds it in critical analyses of free-market forms of life that have ‘proceeded to address the question of alternatives to the political economy of insecurity --but then he returns to the more modest line of criticism which exposes short term profit seeking as endemic in the ‘logic of the neo-liberal “free market” economic system, largely set today by “managers of the big institutions, the pension funds, the big insurance companies … money market funds or mutual funds who … dominate the field of financial capital.’ Here, too, the long-term viability is the touchstone of moral value.

Big business exercises domination by two main means, precariousness in the sphere of production and excessive consumption in the sphere of consumption. Regarding the first, Smart refers to Bourdieu who has described the economic system of the neo-liberal age as a mode of production relying on the institution of insecurity, in other words: domination through precariousness. Workers lose job security and are made to comply through short term and casual contracts. Regarding the

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second, he refers to Bauman and points out that credit card spending promises a better life: ‘in a market-led society of consumers it is through consumption that social inclusion is achieved, it is a case of “integration-through-seduction,” and for a growing number a rising level of indebtedness is the necessary price to be paid.’

Smart explores the role social movements can play to counter corporations who have become the most powerful political forces of our time. Social movements are pushing a different agenda, embracing globalization but seeking to wrest it from the grasp of the multinationals at the same time. The important distinction between ‘citizen’ and ‘consumer’ is made but the prospects of this political orientation are not examined. Instead, Smart looks at the consequences of the introduction of market mechanisms ‘into formerly non-market institutional spheres such as education’. In this process, social goods are transformed into commodities. ‘Conduct towards people, the treatment they receive, as well as the social meaning of relationships and social goods have been dramatically affected by the expansion of the culture of the market. Increasingly it is market logic that informs conduct and shapes social relationships.’ Here we are back to the issues of marketisation and commodification. No doubt that Smart is highly critical of these trends.

Working class heroes?

Vallas turns our attention away from macro-economic issues and looks at industrial relations, especially changes at the workplace resulting from new forms of work organization and new (‘Postfordist’) managerial regimes. Based on his own ethnographic fieldwork in five US paper mills he tries to provide answers to the question of ‘how workers perceive, respond to, and above all shape the new production concepts they confront.’ He distinguishes three ideal typical worker responses to the new production concepts, Proletarian Traditionalism, Populist Defiance and Participative Mobilization. The proletarian traditionalist response is found in work environments where workers move up very slowly the line of progression. They tend to ‘identify with their own narrow job categories, and to take the existence of job hierarchies for granted. Reinforcing these traits

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is the fact that the division of labor within traditional converting areas has been highly gendered, with men generally controlling more skilled positions … while women remained concentrated at less rewarding positions at the bottom of most job ladders.’

In response to new technologies and new work systems many workers have articulated a populist critique of the new production concepts, including ‘suspicion and distrust of formal knowledge and expertise – especially those which invoke the mantle of science’. An example are operators who have retained important parts of their former roles but now confront computer-based process control systems. These workers deeply resented the knowledge based personnel who came to dominate their workplace. While Vallas expresses some sympathy for this defiance he warns to adopt a romanticizing stance. The populist rejection also embodies ‘distrust toward all things urban and intellectual, and an abiding suspicion toward the members of racial (and gender) out-groups. Thus, it was not uncommon to find that workers who spoke with the greatest indignation at management’s behavior were also the most vigilant in policing the color line… Populist defiance thus tends to reproduce the very arrogant and dismissive authority relations that it protests.’

Participative Mobilization is a response ‘in which workers appropriated the language of participation on which team concept was based, using it as a lever with which to advance their own interests and capacities. Suitably redefined, it enabled workers to renegotiate managerial prerogatives, leading production areas down paths that management had not anticipated and in one case actively sought to avoid.’

In sum, Vallas warns against a tendency in the literature to overestimate management’s ability to control workplace relations. ‘Rather than enjoying the capacity to remake the workplace in their own image, the managers at these plants found their efforts constrained.’ Researchers should look instead for the presence of conflicting logics within work organizations undergoing rapid change. This indicates that there are surviving pockets of resistance against tendencies of flexibilization and de-regulation in the sphere of production.

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Where do we go from here?

These contributions have explored various crucial topics around the broad theme of moralization of markets. The theories and cases presented offer a tiny glimpse into an emerging discourse. The fact that a central expectation of one of the founding figures of modern social science has lost its prima facie appeal should be reason to rethink basic assumptions of the role of morals in contemporary society. Surely, this debate needs to be continued. I would imagine that there are challenging contributions to be expected from moral, legal and political theorists, from public goods economists, and from economic historians, to name some of the disciplines underrepresented in this reader.

Notes

1 Max Weber, “Science as a vocation,” in H.H. Gerth and C. Wright Mills (eds.),

From Max Weber. Essays in Sociology. (London: Routledge and Kegan Paul, 1919 /1948), p. 155.

2 Milton Friedman, “The Social Responsibility of Business is to Increase Its Profits,” Business Ethics, Corporate Values and Society, ed. Milton Snoeyenbos, Robert Almeder and James Humber (New York: Prometheus Books, 1973), pp. 73-83.

3 Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1944); Mark Granovetter, “Economic Action and Social Structure: The Problem of Embeddedness” American Journal of Sociology 91 (1985), pp. 481-510.

4 Kenneth Arrow, “Social Responsibility and Economic Efficiency,” Public Policy 21 (1973), pp. 303-317.

5 These are not to be taken for granted as recent discussions in advanced Western democracies exemplify. There have been suggestions that it should be allowed to torture terror suspects in order to prevent greater damage from potential future terrorist action.

6 To be sure, this trend is currently not very popular but has been the foundational principle of the Welfare State.

7 It is common to equate morals with ethics, but this can problematic. I will return below to this question.

8 Norman Geras, “The Controversy About Marx and Justice,” in Marxist Theory, ed. A Callinicos (Oxford: Oxford University Press, 1989); Marshal Cohen, Thomas Nagel, and Thomas Scanlon (1980) eds. Marx Justice and History, Princeton: Princeton University Press; Steven Lukes (1985) Marxism and Morality. Oxford: Oxford University Press.

Moral ambiguity

19

9 ‘Communism differs from all previous movements in that it overturns the basis of

all earlier relations of production and intercourse, and for the first time consciously treats all naturally evolved premises ['naturwüchsig'] as the creations of hitherto existing men, strips them of their natural character and subjugates them to the power of the united individuals... The reality which communism creates is precisely the true basis for rendering it impossible that anything should exist independently of individuals, insofar as reality is nevertheless only a product of the preceding intercourse of individuals.’ (Karl Marx and Friedrich Engels, The German Ideology, in Collected Works, vol 5, London: Lawrence and Wishart, 1975), p. 81, my emphasis).

10 See Steven Lukes, ‘Equality and Liberty: Must They Conflict?’ in D. Held (ed.) Political Theory Today (Cambridge: Polity Press, 1991), 48-66.

11 Of course, here the matter arises of which standards of moral criticism we should invoke when attacking capitalism for this ‘immoral’ tendency. Fuller rightly points out that a pure nostalgic position (as advanced by Condorcet) might not be convincing but he remains silent on how to address this problem.

12 Reiner Grundmann, Marxism and Ecology (Oxford: Oxford University Press, 1991).

13 Karl Marx, Grundrisse, transl. by M. Nicolaus, (Harmondsworth: Penguin, 1857 /1973), p. 409.

14 One would think that more than ideology is at play here. Governments want to rid themselves of responsibilities that could cost them dearly, both economically and politically. Failing and costly public services reflect badly on government and enable the opposition to score points. There are basically two options to avoid this, either privatise or boost resources. The latter strategy usually increases the risk of being exposed.

15 In a way reminiscent of Giddens’ or Beck’s optimism about the liberating effects of individualization in late modernity, Campbell states that ‘modern consumers have to accept responsibility for everything about themselves, from their choice of career, the way they look and dress, the accessories they carry with them, their choice of car, home and interior and exterior decoration down to their holiday destinations and choice of music. And the responsibility they must accept, if they are to fulfil the terms of their “covenant” with their inner self, is to make the choice that their inner self demands of them.’

16 Albert Hirschman, The Passions and the Interests (Princeton, NJ: Princeton University Press, 1977).

17 Vivienne Brown, Adam Smith’s Discourse (London: Routledge, 1994); Pierre Force, Self-Interest before Adam Smith (Cambridge: Cambridge University Press, 2003).

18 David Vogel, “The Hare and the Tortoise Revisited: The New Politics of Consumer and Environmental Regulation in Europe,” British Journal of Political Science 33(2003): 579.

19 Aseem Prakash, Greening the Firm. The Politics of Corporate Environmentalism (Cambridge, Cambridge University Press, 2000). Prakash refers to business policies that go beyond legal requirements and are not profit driven as ‘type 2’ policies. Other types are either legally mandatory, or profitable, or both.