The Virtuous Citizen

August 1, 2012

Today, returning to blogging after a brief interval while I settle into my new job, I’d like to be a bit naughty and compare Chris’s two most recent posts, on Corporate Crime and the Rightness of Romney. The first concerns the role of incentives in law-breaking amongst our corporate friends, making the clear point that for any given legal enforcement framework there is a level of law-breaking for which the returns are greater than the costs (i.e. fines/imprisonment). We should therefore expect that level of law-breaking to obtain. Furthermore, this lesson applies to the whole of society too: criminals, like everyone else, take a rational approach to their law-breaking based on the costs and benefits of doing so. The Daily Mail assumption that criminals are simply evil is not particularly useful in understanding actual criminal behaviour.

The second covers the relationship between culture and economics, and briefly reviews a number of studies and arguments which link social virtues and cultural differences to economic growth. Certain norms, such as trust, individualism and wealth being seen as a good in itself appear to have a positive effect on long-term economic development. Culture is not simply the domain of politics, but flows from a variety of sources, including religion. This presents an interesting challenge to policy-makers, because as Chris says:

“On the one hand there are the (dwindling) number of economists who think that long-run growth is a matter of technocratic fixes, of establishing the right policies and institutions. On the other hand, there are politicians who think that culture can be changed by talk and wishful thinking. The truth is more interesting than either group realizes.”

Policy by itself has only limited impacts on culture, with other actors – and history itself – having a much stronger influence. This is interesting, because the implications of the findings mentioned above is that there is likely an ideal set or family of virtues that are conducive to economic growth if they are held as social norms; certainly, Chris refers to the claim that bourgeois values are conducive to growth.

For policy-makers or other actors looking to magnify growth, therefore, the promotion of this set of virtues would be helpful. Now, the constant advocacy of supply-side solutions to our current economic difficulties by a certain section of the debate – including those currently giving succour to Naomi Klein-esque conspiracy theories – would point to the peculiar bundle of virtues bound up with Ayn Rand-style libertarianism as being conducive to growth. In a world with little regulation beyond contracts between individuals, virtues which demand that one be proud of one’s own efforts and not engage in force or fraud to secure those of anyone else are most useful under such an understanding of economics; if markets are always the best way of delivering growth* then virtues most likely to lead to totally unfettered markets will help.

In contrast, virtues that include caring for others when one judges them to be incapable for caring for themselves will encourage the public advocacy of regulation on certain economic matters, as well as the setting aside of a portion of the wealth of individuals to non-productive uses, including, say, looking after the elderly. This will be less conducive to growth on this economic model.

However, what’s left out of this picture – and the reason I draw the contrast between Chris’s two posts – is that economic circumstances influence culture in turn. For example, for certain demographics file-sharing and piracy could be considered to be a norm. This is, effectively, the incorporation of crime into cultural mores because the benefits (free consumer goods) are much less than the cost (risk of being caught stealing). And so, you have a section of society actively agitating for their cultural norm to become legally recognised too.

Under Rand-style libertarianism, the ordinary worker is supposed to be content to be allowed to purchase goods and services from those with a greater capacity for production, to be content with a lowly lot in life and to be entirely dependent on their capacity to produce. In a hypothetical society in which everyone signed up to those norms, it is difficult to see how long those norms would last in the face of the overwhelmingly disadvantaged in that society agitating for a greater share of the wealth. Such agitation, even if illegal, would be rational: the benefits that may accrue would be far higher than the cost. Any libertarian society – or libertarian culture – would be fundamentally unstable as a result. Given the shift in attitudes towards the rich over the relatively small economic differences caused by the recession, it is difficult to see how anyone could claim otherwise.

Cultural norms both influence and are influenced by economic circumstances, and politics is influenced by and influences both. All three are deeply intertwined, and any useful understanding of society must consider them all.

*Tim does not claim this, but some of his fellow travellers certainly do.


One Response to “The Virtuous Citizen”

  1. chris said

    You’re right – economic circumstances do influence culture; but then, as a Marxist, I would agree. For some nice examples, see Jeremy Greenwood’s work on how technical change has affected sexual behaviour:
    I omitted from my discussion of corporate crime the possibility that there’s some performativity at work. Textbook economics might not merely describe amoral behaviour, but actually promote it as well.

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