Do markets need social conservatism?

Tim Montgomerie says:

Liberal capitalism requires social conservatism. It needs the virtue-generating institutions or there'll be no thrift, no duty, no honesty, no Protestant work ethic.

I half agree. I agree that, in order to work well, a market economy does need particular personal virtues, for example, it needs:

- a strong work ethic, so that labour supply will be high. One reason why early factories employed children was that adults did not have the habit of working long hours.

- temperance, so we save and accumulate capital; one cause of the crisis is that we offshored this one.

- trust, so that the invisible handshake (pdf) can be used to solve market for lemons-type problems.

- lawfulness, so businesses can invest in the confidence their profits won’t be stolen. It’s the lack of this that helps explain why poor areas stay poor.

Where I have my doubts is whether socially conservative policies really do generate virtues. For example:

- Can the state really legislate morality? It’s not obvious that laws against drug use have succeeded in promoting the virtue of abstemiousness.

- Should the state really promote “strong families”? Single parenthood - as distinct from poverty - is not a cause of crime or low employability. Given this, tax breaks to “promote marriage” would be more a deadweight handout to one’s favourite people, rather than a means of solving social problems. There’s nothing virtuous about this.

- Could it be that building virtues requires anti-conservative policies? Eric Uslaner (this pdf and this one) has shown that inequality breeds distrust. It also possible that it encourages thriftlessness as the poor borrow to keep up with the spending of the rich. If this is the case, then virtues might be promoted not by conservative policies but by egalitarian ones.

My point here is simple. Even if we accept - as we should - that a free market economy requires certain virtues to work well, it does not follow that those virtues are best promoted by conservative policies.

Comments

[BenSix]

The liberal would surely feel those virtues are inherent to us.

Then again, empiricists could surely say that they're not.

[Philip Walker]

Social conservatism or social authoritarianism? (Montgomerie's terms, and others'.) I know, the language is too far gone to save it now. But I think there's a very good case that social conservatism, at a personal level, can co-exist with social permissivism. Conservative/liberal for how one lives, and even how one thinks others /ought/ to live; authoritarian/permissive for how far one thinks the law should go.

We may not be many, but the permissive conservatives do exist!

[Roger]

A point made 40-odd years ago in various books by Daniel Bell, Christopher Lasch and Philip Rieff - all of whom pointed out the corrosive impact of possessive individualism not just on capitalism but on the foundations of any stable social order.

And now we reap the whirlwind...

[redpesto]

"Liberal capitalism requires social conservatism." - not if it's desperate for new markets it doesn't.

[UnlearningEcon]

'a strong work ethic, so that labour supply will be high. One reason why early factories employed children was that adults did not have the habit of working long hours.'

Interestingly, Michael Perelman contends that, far from being 'voluntary', workers initially had to be forced to work in factories by the state.:

http://amzn.to/t6bujF

[ortega]

There is an structural tension between moral and law in liberal societies.
In this way, we criticize Berlusconi for his private parties even if they are not illegal. The fact that we try to justify this criticism by calling to 'public interest' or 'right of information' means that we do not understand this fact quite well.
That moral criticism must be called so. It is the price we have to pay to keep moral out of parliaments.

[Keith]

Well I seem to recall that many Philosophers e.g. Hume, think people are naturally good. Virtue is the normal state of affairs and any social system must assume human virtue at some level. The problem with Capitalism as it is understood today is that it is amoral. Unlimited private greed inhibits our ability to show virtue. What conservatives believe in is a contradiction, where we should be good and greedy at the same time. Selfishness is valorised as efficient for the economy in the case of rich people but condemned in poor people as a lack of virtue. Social conservatism when you examine it in detail is just a class biased set of prejudices designed to maintain the social status que. So yes capitalism does require social conservatism namely what is known as false conciousness in Marx. Only by stigmatising the victims of the system as lacking virtue can the system keep going. Real people on the other hand practice virtue every day which is why society still exists. And they don't ask any one to valorise them for doing what is natural for a social animal.

[jameshigham]

Can the state really legislate morality? It’s not obvious that laws against drug use have succeeded in promoting the virtue of abstemiousness.

No, of course not. The State has no place in doing so anyway. Tim Montgomery is on the right track but even he does not get it. It was the Judaeo-Christian tradition in its entirety which kept people civil and doing a proper day's work. Bible verses were quoted all over the place and the lessons were biblically based.

Gone. All that is gone and it will take two generations to get back to it, assuming there is the political will to do it.

[Churm Rincewind]

"One reason why early factories employed children was that adults did not have the habit of working long hours." Eh? The predominantly agricultural workforce from which early factories drew their labour hadn't previously worked long hours?

I would have thought the reverse was true.

[robert weston]

see The Illusion of Free Markets by Bernard E. Harcourt

[Jim]

Forget the left vs. right pandering for a moment and consider that controlling for socioeconomic status, race, and place of residence, the strongest predictor of whether a person will end up in prison is that he was raised by a single parent.

For decades, studies have shown roughly the same statistics; children brought up in single-mother homes are five times more likely to commit suicide, nine times more likely to drop out of high school, 10 times more likely to abuse drugs, 14 times more likely to commit rape, 20 times more likely to end up in prison, and 32 times more likely to run away from home.

It is impossible to argue that single parent families do not put children at a serious disadvantage, especially if one attempts to argue poverty is the real cause. Because it just is not true although it makes the stats even worse.

Then there are the Marshmallow tests by Mishel which predict life success more ably than IQ tests, and unfortunately establish a very strong statistical inter-generational link.

IOW, we learn emotional stability from our families. It keeps our genitals in our pants, it helps us study when we really want to quit, and it helps us shut up when our boss is an idiot, but telling him so will get us fired.

Now, we can debate about what social or legal steps we should take to help actualize our children, but I suggest it requires a great deal of bending to argue that single parent families are not an issue.

In general we are enabling an generational under-class that is often too emotionally unprepared to stay in school. And yes, they are poor. And it is absolutely gut wrenching and sad. What to do about it?

I am not sure I am a conservative, but surely even economists must admit that welfare systems provide all the wrong incentives without nearly enough assimilation opportunities, sustained exposure to helpful role models, and other aid to be of significant help; we are pouring money into a system that merely sustains the problem, which of course enables it to grow larger.

So then again, what would we do to improve it, especially if decreasing divorce rates again is not an option? Certainly all my ideas would be haled as draconian by the Right, and too heavy handed by the Left.

Sometimes I wonder whether we should experiment with more multi-family living arrangements, where multiple adults might have a better chance at providing ongoing stability and supervision. What I do know is that the whole situation makes me weep, even while our politics prevents us from trying anything new.

[chris]

@ Jim - single parenthood might predict crime etc, but it doesn't necessarily cause it, for at least two reasons:
1. Single parents tend to be poorer, and poverty causes social problems. See this:
http://ideas.repec.org/p/ucd/wpaper/200722.html
2. The sort of dad who'll walk out on a young mother is (often) the sort of person who lacks discipline and might bequeath this fecklessness to his offspring via his genes.
Children who lose a parent without such a genetic effect (say through bereavement instead) tend not to do much worse at school:
http://www.iza.org/en/webcontent/publications/papers/viewAbstract?dp_id=5425
I stress this distinction because it matters for policy purposes. If family breakdown is not significantly causal of adverse child outcomes, then policies to reduce such breakdown won't be very effective.

[Paolo]

I'm ignorant on this subject, but since my parents where both working full time I was sent at nursery ("asilo" in Italian) at the age of 1, and stayed there until school age. Typical day would run from 8am to 6pm. The fact that it was run by nuns is irrelevant I believe. But being adult-monitored made sure the situation never escalated as could happen on the street. Nevertheless, I have learned a lot more about emotional intelligence and balance there than at home.
I couldn't believe how expensive and difficult to find a place in a nursery is here in the UK. That should be a no-brainer.

[Cathelyn Moving]

Yes, I quite agree with your statement! Because work ethics is so important for business even though most people don't realize that!

[ToisyMomy]

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