What Good Markets Are Good ForTowards a Moral Justification of Free Markets
Free Markets and Human Flourishing
The Templeton-funded research project ‘What Good Markets Are Good For’ sets out to develop a new narrative about the morality of free markets and their contribution to human flourishing. This then can function as a background for addressing issues of morality and character formation in economics- and business-curricula, issues which are hitherto largely neglected due to the dominant neo-liberal narrative about the success of Western free-market economies.
The guiding hypothesis (the ‘Big Thesis’) that this project sets out to corroborate is:
societies with free market economies flourish because and in so far as the key market actors (states, businesses and individuals) respect morality, and act virtuously
The project aiming to test this hypothesis is an interdisciplinary project, drawing from various disciplines as (various branches of) economics, theology, philosophy, and social psychology. Consequently, many different methodologies are used, ranging from text-interpretation to statistical data analysis.
In recent years new insights have emerged regarding the inherent morality, both as a condition and as a consequence, of the free market and of market behavior. The general point that is made in this new literature is twofold:
- the free market is desirable, not primarily for reasons of efficiency (although that does not have to be neglected) but on moral grounds
- a moral defense of free markets also has moral implications for the way market parties should operate.
In short: the free market as a moral project requires the practice of moral virtues and thus contributes to human flourishing.
These new insights challenge one of the most influential assumptions in modern economic theory and education: the idea that markets are at odds with morality and virtues. This can be called the Mandeville-thesis, after the 18th-century author who stated that the ‘public benefits’ of markets are based on ‘private vices’. This thesis lies at the heart of the homo economicus- paradigm, which assumes that human beings are solely motivated by rationally calculated self-interest, excluding pro-social and moral considerations, which has become part and parcel of economics- and business-curricula.