They can -claims a recent experimental article published in Science Magazine (1).

City of London at twilightArmin Falk and Nora Szech from University of Bonn studied the effects of markets on moral values and their conclusion was categorical: “We have shown that market interaction displays a tendency to lower moral values, relative to individually stated preferences”

I am not a behavioural psychologist, but given the importance of the subject and that Science Magazine is one of the most prestigious scientific journals in the world, I felt compelled to read the paper.

The article’s opening statement seems out of a 19th century report by Friedrich Engels; it will make some chaps flinch:

Poor People - 19th century“Producing and trading goods often creates negative externalities, such as detrimental working conditions for workers, possibly associated with reduced life expectancy, child labour, suffering of animals, or environmental damage”

In the study -that will upset capitalists and animal rights activists alike- the authors presented participants with a clear moral dilemma: They had to choose between money and the life of a young, healthy, and adorable mouse*.

Participants were given the option of saving the life of one mouse, sending it to a luxurious life-long retirement (free food, enriched environment, temperature-controlled room, social interactions; the high life), or to have some money and allow the mouse to be killed. Researchers divided participants into 3 groups:

Group A: participants were offered €10 for the life of the mouse. There were no interactions with other participants, just a direct transaction measuring basal moral values.

Group B, bilateral market: One participant, “the seller”, had to negotiate with a second participant, “the buyer”, on how to split €20 between them. If they reached an agreement, the mouse assigned to the “seller” was killed. The money could be spitted in any proportion, for example: €10 + €10; €15 + €5; €1 + €19; etc; the “seller” had to negotiate his cut with the “buyer”. If there was no agreement, participants walked out without any money and the mouse was sent to the retirement home.

Group C, multilateral market: conditions were as in group B but with 9 “sellers” and 7 “buyers”. Here there was extra pressure on “sellers” to negotiate, as there was a scarcity of “buyers”.

The study found that people was more likely to exchange the life of their mouse for money in trading situations: Only 46% of the participants in group A took the money and surrendered the life of their mouse while in group B 72% of the sellers struck a deal, surrendering the life of their mouse. In multilateral markets (group C) the proportion of sellers striking a deal increased to 76%.

globe 1Only 46% of the participants in group A accepted €10 for the life of their mouse. To achieve levels of acceptance similar to those in trading situations (71.5%) participants in group A had to be offered €47.50 instead of €10. In contrast, sellers bargaining with buyers in markets were willing to accept on average as little as €6.40 -out of the total €20 at stake- to surrender the life of their mice.

It could be concluded that market interactions reduced the value of life by 8 folds. To confirm this, the authors replaced the mouse for a coupon from the University’s gift shop. In this case there was no moral variable and the direct-exchange price was similar to the market price.

The authors assert that: “Many people express objections against child labor, other forms of exploitation of the workforce, detrimental conditions for animals in meat production, or environmental damage. At the same time [they go for the cheaper option regardless of the origin of the goods]… We have shown that market interaction displays a tendency to lower moral values, relative to individually stated preferences”

The experimental results are clear. However, I wouldn’t have jumped to the conclusion that “the markets” are intrinsic forces for evil. In an interesting –and somehow overlooked- passage the authors mention: “Unless a seller cares specifically about his own mouse, he may argue that if he does not trade his mouse with some buyer, another seller may conclude the trade with that buyer, selling and killing his mouse. This common feature of markets may make subjects feel less responsible”. The authors also comment that “in markets, it takes [at least] two people who agree on trading to complete a trade, implying that responsibility and feelings of guilt may be shared and thus diminishedThese are two important points because “If I don’t do it, someone else will” and “shared responsibility” do not apply only to markets; they apply in any social context.

globe 2 copyIn the last passage the authors mention examples of upheavals caused by markets and how societies have reacted to deal with them; they mention the protestant reform against the “appalling” market of indulgencies; they mention Marx’s statement that capital stock should not be tradable; they also refer to the trade in human life that led to America’s civil war. Markets are just one form of social relation and any social interaction can provide the means to shared moral guilt. The justice of the mob is a clear example of social interactions -different from markets- allowing shared responsibility for atrocities; mob-styled justice was rampant in the times of Luther. Not many people would choose to go back to USSR’s type of arrangements. Yet, this cruel Marxist society did not have free markets. Finally it has been argued that the decision to suppress slavery was finally taken because it made economic sense and not the opposite.

The work by Falk and Szech succeeded in showing that there is an intrinsic erosion of theoretical values when social interactions are allowed but it failed in condemning “the markets” as an ultimate cause of moral decay.


* I will not explain much about the source of the animals. Just to provide peace of mind: Because of Mendel’s segregation laws (Remember the 1:2:1 ratios?), many of the animals generated in genetic studies are not useful and have to be humanly disposed of (that is unavoidable).

(1) Science (2013) vol.340 p.707-711


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  • LinkedIn member 21/05/2013 at 6:05 pm

    Can markets erode moral values?
    The following is in response to a research article suggesting that market interactions tend to lower moral standards among market participants, a synopsis of which can be read at the following URL.
    What are the underlying dimensions for ‘market behavior’?
    Is suggesting that market interactions tend to lower moral standards not the same as saying competition will erode moral values? Possibly the real insight lies deeper than either competition or the markets which are simply a kind of competition. That which underlies competition is desire and certainly desire cannot be considered a negative trait; it is the impetus behind our gaining what is needed for a comfortable life in this physical world. It is the unnatural excess of desire and its pursuit which tends to undermine the morality of individuals. And where does the excess of desire (which some may call ‘greed’) originate? An obvious answer is excess insecurity which itself may be a product of a society which restricts the availability of resources in the name of competition (e.g., neoliberalism).
    Another obvious source of desire is advertising, the driving engine behind the consumption society, which attempts to coerce people into buying things they really don’t need, in order to ‘be better’ in some obscure way. This ‘betterment’ is simply another form of competition, a social competition within which people have been programmed to believe self-esteem, security, self-confidence and other elements of ‘the good life’ may be had through purchasing the advertised product.
    Actually, competition can be a very good, useful exercise. It helps to develop and hone our natural abilities, and provides a measure, via competition with others, of how well we are doing. But competition used in a perverse way, of creating conflict, of creating win/lose situations instead of win/win situations is an abnormality in human experience that needs to be evolved to something more helpful for the gentle evolution of human kind toward a truly enlightened society.
    Thus, something that might be considered in this research article (cited above) is whether the problem lies not in market competition or competition in general, but in the erroneous beliefs that lead to excessive competition, primarily the belief that satisfaction in life can be achieved through the acquisition of material goods (including a ‘desirable self’ as a commodity) instead of the cultivation of inner character through learning, contemplation, meditation and a truly compassionate, caring attitude toward the other life that surrounds us, i.e., in truly caring, mutually rewarding relationships. In other words, being other-centered rather than self-centered may be what this article is really about.

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