By Daniel Friedman & Daniel McNeill
The Great Recession has colored global life for years, yet few grasp its deep causes and many worry it can happen again. In Morals and Markets; The Dangerous Balance economist Daniel Friedman and author Daniel McNeill reveal the underpinnings of such disasters. They arise when morals sabotage markets, or vice versa. Morals and markets exist in a dangerous balance that has deeply influenced corporate life, terrorism, the War on Drugs, and global warming, among other issues related to our happiness. It is a core dynamic of our world. It touches the lives of people everywhere.
The ethical compass is a poor guide to the market landscape. As Friedman and McNeill demonstrate, our moral sense developed over eons in tribes on the African savanna, yet markets are quite recent. This book traces the rise of markets from ancient moral straitjackets to the freewheeling semi-morality that led to the 2008 crash. It addresses issues such as the Greek riots, the agony of the eurozone, and the ethics of bailouts, as well as acid rain, the Russian Mafia, poker, and the rescue of the halibut fishery. China went through a moral whipsaw over the last century and this book describes how its astonishing rise as a world market paralleled that of Europe. Morals and Markets also profiles figures such as Bernie Madoff and Bo Xilai, the Icarus of recent Chinese politics.
Morals and Markets; The Dangerous Balance shows that we must understand the dangerous balance of morals and markets—or we're in for debacles again and again.
"A well-known economist and evolutionary game theorist, Friedman [...] has long grappled with the dynamics between ethics and economics. [...] Friedman and coauthor Daniel McNeil take a comprehensive intellectual and historical view of these issues, starting from about 2.5 million years ago, when the first member of the human genus, Homo habilis, appeared [...] Humans have been wired to rationalize behavior in terms of 'us versus them'; morals can essentially be defined as shared understandings among a group to control selfishness and smooth cooperation within the tribe itself. The point that Friedman emphasizes is that this moral code, developed over millennia of human existence, can also help understand the working of markets, most recently the debt crisis in Europe. [...] This is a cautionary tale in moral hazard—one that can be corrected by regulation based on sound morals. [...] The book does a fascinating job of connecting the dots through a vast array of topics such as Latino prison gangs, the green movement, the Al Qaeda network, the Chinese sprint to wealth, and the collapse of the cod industry, although one wonders along the way about certain examples—for instance, whether the modern world’s greatest defense against terrorism and gangs really is the market system itself. Nonetheless, in its depth and scope, the book demonstrates the key role played by the market in the modern world and how badly we need a moral infrastructure to balance it."
- Article on the book at the website of Friedman's university, 21 June 2013
Table of Contents of Morals and Markets
Prologue: A Tale of Two Tilts
- Prologue: A Tale of Two Tilts
Two Halves of the Balance
- The Savanna Code: What Good Are Morals?
- The Rise of Wealth: How We Became Civilized and Started Shopping
Worlds Out of Kilter
- From Melqart to Zombieworld: Adventures in Imbalance
- Madness, Lies, and Crashes: When Prices Run Free
- Blundering Back to Balance: TARP and Tear Gas
- China: Morals and the Rush to Wealth
Life Around Us
- From Hudson’s Bay to eBay: Why Some People Like Going to Work
- Markets and Sin: Murder, Megacasinos, and Drug Wars
- Underworlds: The Tao of Gangs
- Cooling the Earth: The Preservation Markets
- The World Ahead
About Daniel Friedman & Daniel McNeill
Daniel Friedman is a well-known economist and theorist who has published widely in leading academic journals in economics, finance, psychology, and politics. His sits on the editorial board of the American Economic Review, the premier academic economics journal, as well as the boards of three other leaders in their fields: The Journal of Evolutionary Economics, Games and Economic Behavior, and Experimental Economics. He has received 11 National Science Foundation grants. His books include Experimental Methods: A Primer for Economists (Cambridge University Press, 1994) with S. Sunder; The Double Auction Market: Institutions, Theories and Evidence (Addison Wesley/Santa Fe Institute, 1993), co-edited with J. Rust and Economics Lab: An Intensive Course in Experimental Economics, with Alessandra Cassar (Routledge, 2004). He is a professor of economics at his alma mater, the University of California, Santa Cruz.
Daniel McNeill is an author with an international reputation. His best-selling Fuzzy Logic (Simon & Schuster, 1993) won the Los Angeles Times Book Prize in Science and Technology. It was also a New York Times Notable Book of the Year, and has been translated into German, Italian, Dutch, Japanese, and Chinese. He is also the author of The Face (Little, Brown, 1998), a Book-of-the-Month Club selection which the Washington Post called 'downright beautiful' and the Frankfurter Allgemeine Zeitung termed 'extremely entertaining and knowledgeable.' The Face has appeared in German, Italian, Dutch, Spanish, Korean, and Chinese. Dan has ghostwritten numerous published books recently, including one for a Harvard scientist and another for the CEO of a Fortune 500 company. He has a degree from Harvard Law School.