Good morals make for good markets is hardly a contentious claim. Reputations for honest dealing grease the wheels of commerce. But does it go the other way? Do markets foster good morals? The intuition of most people is that markets may do many positive things, but, no, they don’t cultivate ethically better people. If anything, people are moral in spite of the tendency of markets to corrupt their morals. In a recent paper published in Science, Armin Falk and Nora Szech set out to test whether participating in a market institution causally corrupts its participants.
In one treatment the instructions state (translated by the authors from the original German) that “the life of a mouse is entrusted to your care. It is a healthy, young mouse, living with some other mice together in a small group. The expected lifetime of this mouse is approximately two years.” The experimenters then ask the participants to choose one of two trivia quizzes. “In Quiz A, at the end of the experiment, you earn no additional money besides the 20 euros for participation and the mouse stays alive.” But “[i]n Quiz B, at the end of the experiment, you get 10 euros in addition. As another consequence, the mouse will get killed.” The instructions then explain how the mouse is gassed and the subjects are shown a 30-second video. Importantly, other researchers had already scheduled the mice to die, so it is only the experimental participants who could in fact save the mice from certain death.
There are two market treatments, one with a single buyer and a single seller and another with 7 buyers and 9 sellers. Buyers submit bids and sellers offers in continuous time for three minutes. A trade is finalized if a buyer accepts a seller’s offer or a seller accepts a buyer’s bid. The buyer’s payoff is €20 minus the price paid, and the seller’s payoff is the transaction price. The instructions state that “[i]n the market described above, a mouse is traded. This mouse is alive. It gets killed as soon as the trade, i.e., the selling, is finalized.”
The authors hypothesize that the two market treatments will “display a tendency to erode moral standards” relative to the quiz treatment for three reasons. First, by trading with each other a buyer and seller share the responsibility for the death of the mouse, which partially mitigates any moral guilt of the individual. Second, the existence of a market and observed participation of others in it legitimizes the killing of mice for profit. Finally, money and the competition for money overtake working access memory to crowd out the moral reasoning of imposing harm. In short, the last reason plays off the folk notion that money corrupts people, where the corruption in this case is gassing a mouse for more money.
Before reporting the results, I find it curious that gassing a mouse for money indicates a moral lapse for the participants, but that it is morally permissible for the authors in the pursuit of science to conduct such an experiment. A rejoinder might be that any moral corruption on the part of the authors equally legitimizes the erosion of morals in all treatments, so the question remains whether the market treatments comparatively erode morals. But this misses the point. If it is morally permissible for the authors to share the guilt of killing mice with others in the scientific community who kill mice, then it isn’t a peculiar feature of markets that causes people to mitigate moral guilt and legitimize “lower” moral standards. It is rather a human propensity to share moral guilt and agree with other humans when it is legitimate to harm other animals.
What do the authors find? 45.9% of the participants in the quiz treatment gas the mouse and take the additional €10, and in the market treatments 72.2% and 75.9% of the participants trade at prices of €10 or lower and kill the mouse.
From these and several other related treatments, the authors conclude that indeed “for a given population, markets erode moral values.” The unscientific and magic word here is erode, for it is in the transition from experimental observations to conclusions where preconceptions and political correctness lie in wait.
Science, people believe, is objective. The image of a scientist is someone who stands outside the laboratory looking in on his participants, disinterestedly seeking truth. “The facts are the facts,” we say, or, “let the facts speak for themselves.” What people, scientists included, do not notice is that not only do the facts not speak for themselves, but they speak with the voice of the scientist himself.
In this experiment, the word erode betrays the authors’ voice. The imagery of erode evokes waves crashing down upon a shoreline. As individuals outside the market, people in the quiz treatment are morally upstanding, beautiful white sandy beaches. But when subjected to the relentless pounding of competition, what is the beach to do but surrender its sands of morality to the vast sea of money. That is the voice with which the results of this experiment speak.
A Vulcan might ask, however, if facts are facts and treatments are treatments, then why is the logical conclusion that markets erode morals and not that offers of windfalls foster morals? The reader may not consider this alternative because, well, as a general rule money doesn’t fall like manna from heaven when we fail in our morals. So how to purify our morals can’t be what we learn from this experiment.
Why is this experiment being compelled to witness against the institution of markets? Because the authors presume from the outset, as the references in the opening sentences to Karl Marx, Karl Polanyi, and Michael Sandel testify, that markets corrupt people. Rather than consider human beings as flawed and moral failings as distinctly human failings, the motivation for the experiment is to show, with the shiny veneer of science, that markets objectively promote moral decay. Erosion is the narrative of this experiment because the aim of the authors is to question “where markets are appropriate–and where they are not;” because people aren’t responsible for their moral failings, markets are. We can take this experiment as objective evidence that markets erode morals, if, we also take it for objective evidence that offers of windfall money to fail in our morals causally foster our morals. The preferred and the absurd interpretation are one and the same.
READER COMMENTS
Tracy W
Sep 24 2013 at 4:46am
As someone who has spent her own money on purchasing mouse traps and has even removed the little corpses with my own, gloved, hands, I find the morality involved even more puzzling. I think the authors are even further removed from farming than I am.
I agree with you about the positioning too – the scientific community seems to encourage even more erosion of morals by the authors’ standards – the authors aren’t even getting paid to kill the mice.
Harold Cockerill
Sep 24 2013 at 5:09am
It has been my experience that markets also punish participants for moral failure. With no downside to taking the money (other than maybe feeling bad) how can this experiment tell us anything other than what the authors want us to see?
OneEyedMan
Sep 24 2013 at 8:49am
Do the experiments differ only in the market treatment? It seems like they differ in the payoffs. In the first, the payoff is either 20 + mouse or 30 + no mouse. In the second, the social payoff (sum for both participants) is 40 + mouse or 60 + no mouse. Maybe this simply tells us that avoiding killing a mouse is worth more than 10 euros but less than 20 to 27% of the population. To make the experiments more comparable, they should have killed two mice per trade in the second and third experiments — right?
gwern
Sep 24 2013 at 11:02am
This must be the most extended blog post I’ve ever read trying to avoid the obvious. Here we have people gassing mice for money, and you spend over a thousand words quibbling about ‘erode’ and talking about ‘Vulcans’ and abstract consequentialist considerations? Wow.
Patrick R. Sullivan
Sep 24 2013 at 11:13am
Herb Gintis, a confirmed Marxist, nonetheless is honest enough to admit that markets make people more cooperative;
Radford Neal
Sep 24 2013 at 12:22pm
“other researchers had already scheduled the mice to die” – for what purpose? Finding a cure for cancer? And if the mouse isn’t gassed, what exactly happens to it? An idyllic life in a nice meadow, or something a bit less fulfilling?
The whole setup is so excruciatingly artificial, I don’t see how one can draw any conclusions.
Tracy W
Sep 24 2013 at 12:27pm
Gwern – people every day accept money to kill mice, those people are called exterminators. Mice are pests.
Daublin
Sep 24 2013 at 3:10pm
Totally agreed about the narrative. They took a populist claim and then smeared a veneer of scientism over it.
I suspect you’d get about the same results if you said, one of you must vote the other to be the president. Once you decide who is president, the mouse dies.
MingoV
Sep 24 2013 at 6:53pm
I grew up on a farm. Mice are cute pests that we (or our cats) killed without remorse. If I had participated in this study, I’d have sought the biggest payment regardless of whether or when the mouse would be killed. I would not consider my action to be a moral lapse: it would be equivalent to swatting a mosquito. They need a better indicator of moral behavior.
John
Sep 24 2013 at 7:57pm
Gwern is right. After conducting an experiment in which you ask people to gas mice for money, the proper thing to do isn’t to step back, think about things objectively and rationally, and, god forbid, consider abstractions. The right thing to do is simply shout that markets make people into murderers. That’s how science is done!
John
Sep 24 2013 at 8:02pm
Forgot to mention–this is the first line of the paper:
Seriously? The very first example of negative externalities is “detrimental working conditions”? I can’t even… I have no words. Suffice to say that working conditions are very much internal to the labor market.
DougT
Sep 25 2013 at 6:07am
Isn’t this a good example of framing? I looked at this and said, what are these people buying? You’re asking students to pay money to save mice. Initially, a little more than half would do so. But then put them into a social context, and the number goes down to about a third. Add more sellers than buyers, and the number goes down even more.
Put people into a social context, and they become more rational. But I live in rural New Hampshire. Maybe Germans are sensitive about gassing animals and other living things and see that as a moral choice. Maybe that’s moral development for them?
The most telling data point came from the Science podcast, when the researcher said he was “pleased” that some students wouldn’t accept any amount of money to gas a mouse. Conclusion?
LD Bottorff
Sep 27 2013 at 1:22pm
It is difficult to treat this study seriously, but let me try. Many people view mice with disdain, similar to the way we view cockroaches. Others view mice as cute and keep them as pets. I have no idea how these two different views are represented in the general population. Obviously, to the mice=cockroaches crowd, getting extra money to kill mice is easy. For the mice=pets crowd, it should be easier to view the mice as worthy of preserving. Did the survey control for this bias?
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