Michael, we hardly knew ye

The Templeton Foundation has two major goals, promoting capitalism and blurring the line between science and faith. So it’s hardly surprising that their Big Questions online magazine would publish an article claiming that capitalism is an important source of human morality.  And it’s not that surprising that they’d also claim an evolutionary basis for this wonderfully fortuitous and Gekko-ish conjunction of greed and ethics.

What is surprising is that the argument is made by Michael Shermer.

Shermer is a well known—and well respected (including by me)—skeptic, author of several good books (Why Darwin Matters, Why People Believe Weird Things), columnist for Scientific American, and publisher of Skeptic magazine.  So it’s really, really sad to see him pushing the Templeton Thesis on the Templeton website.  Templeton is, after all, devoted to effacing the demarcation between science and woo, a demarcation that Shermer has vigorously defended for years.  And it’s disturbing to see him once again in the pay of the Templeton machine, making an argument that, while supporting their mission, seems pretty thin.

Here’s his thesis:

Given the economic roller-coaster ride of the past two years,  the idea that capitalism promotes morality might seem like an oxymoron. The imperfections of the market system, the wild swings of the boom-and-bust cycle, and the “animal spirits” of irrational investors have revealed the gulf between economic theory and financial reality — and have put the advocates of capitalism on the defensive.

But let’s not get carried away. As every economist knows, the market system, based on the free exchange of goods, is the greatest prosperity-generating machine ever invented. Nor are markets just a necessary evil that we must regretfully tolerate. To the contrary, trade itself leads directly and measurably to greater virtue — to higher levels of generosity, fairness, and trust. But don’t take my word for it. There is plenty of experimental evidence to back me up, and it points to the deep evolutionary foundations of the market’s moral effects.

Shermer then goes on to describe experiments with apes and monkeys showing that they seem to have an elementary sense of fairness.  A monkey trained to exchange a pebble for a cucumber slice, for instance, will suddenly go on strike if it sees another monkey getting a much tastier grape.  Humans, too, will turn down free money in a “split” with another person if that other person claims too much of the pie.  From this Shermer concludes (agreeing with the psychologist who did that study) that “we are naturally inclined to be fair and generous with our kin and kind because of genetic relatedness and reciprocal connectedness.”

I don’t have a problem with the idea that some part of human morality evolved in small bands of our ancestors as a way to enforce social harmony and hence reproductive output.  But I do have a problem with Shermer’s idea that fairness and virtue in general are not just promoted by the modern institution of free-market capitalism, but are inherent in them.

Shermer sees capitalism as simply the interactions of our hunter-gatherer ancestors writ large:

In short, important as it may be to figure out the causes of the current economic downturn, we should not lose sight of the big picture: trade makes people more trusting and trustworthy, which makes them more inclined to trade, which increases trust — and round and round it goes in a positive feedback loop that generates not just unprecedented prosperity but civilized virtue as well.

After all, don’t you have to trust people to do business?  Isn’t a good businessman one who earns his customers’ trust by behaving fairly?  Maybe, but is that really morality?  Isn’t morality something that you intuitively feel is the right thing to do, not just a way of behaving that helps you make money? Is it something you do—like driving below the speed limit—simply because you know you’ll be sanctioned if you don’t? Is Apple moral? Is General Motors moral? The questions make no sense.  These corporations may act morally by donating money to good causes and so on, but it’s ludicrous to claim that selling cars or computers promotes morality.

Capitalism is not in fact a simple scaling up of the interactions of our ancestors.  It makes sense to at least act ethically when you interact with someone every day and would be caught out if you cheated.  But many of those sanctions vanish in a free market where that kind of close interaction is diminished.  I need hardly point out that businesses and other bulwarks of capitalism often cheat, or fail to behave in ways we’d consider virtuous, when they think they can get away with it.  Tainted milk, tainted meat, salmonella-infected eggs, other kinds of cost-cutting that endangers consumers, putting antifreeze in wine, selling illegal knockoff handbags—these too are the fruits of capitalism.  So too is the exploitation of third-world countries for the profit of others. And let us not forget Bernie Madoff and his thieving, cheating ilk—the very efflorescence of capitalism. Yes, businesses usually have to treat their customers fairly to survive, but this is simply a necessity if they’re to prosper, not something that, by acting as a beacon of virtue, increases the sum total of morality in this world.  There’s a reason why the poster child for duplicity is the used car salesman.  And if the free market is so virtuous, why do we need federal inspections, the FDA, and consumer protection agencies?

I don’t see capitalism as innately conducive to morality. It is, at best, orthogonal to it. It may make us more prosperous, but it doesn’t make us better people.

I haven’t read Shermer’s latest book, The Mind of the Market, which appears to include this thesis, but I’m not convinced by his Templeton essay.  I note that the book was endorsed by Dinesh D’Souza.  Much as conservatives dislike evolution, they may accept it if they see it justifying capitalism and promoting virtue.  But that’s just another form of social Darwinism.