Monday, January 28, 2013
Confusions about morality and commerce: we have them. Some seem to me like genuine confusions; others are more like fake-outs. Here are a few.
1. There's confusion in the false idea there's some magic harmony between the individual pursuit of self-interest and the collective good.
The idea of magic harmony seems to me an elementary confusion that tries to dissolve one of the deepest problems in morality by just assuming that two completely different things are actually the same -- that doing what's best for you is also, in some sense, doing what's best for everyone.
It's not true, but I think it gets a foothold because people take the metaphor of the "invisible hand" and run with it -- all the way to the end of rationality. Yes, in commerce there is an idea that if people, under certain particular circumstances, following particular rules, make exchanges with one another to get what they want, some good things can happen.
But A) that is commerce, not life in general; B) it's only in particular circumstances when people follow particular rules and C) in real life there are sometimes things like arms races where the pursuit of self-interest leads everyone down a rabbit-hole.
2. There's confusion about the role of morality in explaining the obligations of agreements in commerce.
Sometimes people talk as if individual people ought to keep their agreements in commerce for the same moral reasons that individuals ought to keep their personal agreements -- so that when they fail they are morally blameworthy.
One troubling manifestation that you see all the time is a real fake-out: when a company is considered "crafty" when they declare bankruptcy to avoid paying debts while a homeowner is an immoral "deadbeat" if they do the same with their mortgage. That's bizarre. I mean, it's supposed to be the lender's job to decide if the loan is a good business proposition. Banks aren't charities, as I'm sure they'd be the first to remind us.
I will say, however, that once you get into the fabric of life, the relationship of duty to playing by the rules of commerce seems to be genuinely confusing. In 2008 the Freakonomics blog observed that if you send mail in the US without a stamp, it will often get mailed, because the automated sorters don't catch it. The author notes that this is efficient, since most mail has stamps, and catching outliers would be costly.
Having noted this, would it be OK to start sending all your mail without stamps? It seems to me the answer is no: if only you do it, you're free-riding, and if everyone does it, the Post Office has to pay a fortune to start catching people.
The blog post asks readers to test out the system by mailing lots of mail without stamps and monitoring the results. One commentator said, "Are you using your blog to call for theft of service? I’m not against it, I was just curious." The matter seems to me genuinely confusing.
3. There's confusion about the limits of behavioral constraints in commerce.
I think there's a feeling out there that the appropriate pursuit of self-interest in commerce means doing what's needed to get ahead, where if that means lying, manipulating, and concealing uncomfortable facts, that's part of making a "good deal."
And since the appropriate pursuit of self-interest in commerce can, in certain particular situations and contexts, lead to the collective good, this leads to a feeling that the more the better, so constraining your actions to tell the truth and so on are "morals" -- or silly and unfair brakes on the process.
But any connection between the pursuit of self-interest and the collective good exists only in the presence of certain assumptions that people refrain from coercion, fraud, and -- duh -- theft.
So either you need some worked out set of rules in commerce that people actually follow, or your "commerce" quickly becomes the mafia.
Maybe some people are genuinely confused. But probably this is often a fake-out on the part of the perpetrators.
I'm sure there are also massive fake-outs when companies decide to "work together" or "cooperate" -- which every kindergardener knows are morally praiseworthy activities! -- when really what they're doing is "colluding." But I assume that's just a fake-out, and doesn't rise to the level of confusion.
By the way, it turns out Barbie said "Math class is tough." As Wikipedia explains, it's often misquoted as "Math is hard." God Bless the Internet.