Monday, April 5, 2010

Bailey on How Markets Make People Fairer

In this article Ronald Bailey discusses the scientific evidence on how market economies make people develop their sense of fairness:

Are people innately fair-minded or is it learned behavior? A fascinating new study, "Markets, Religion, Community Size, and the Evolution of Fairness and Punishment," that is a big step toward resolving this question is being published today in the journal Science. The researchers find strong evidence that market institutions cause people to treat each other, especially, strangers more fairly. ...

This is exactly the sort of argument that libertarian thinker and economics Nobelist Friedrich Hayek made, especially in his last book, The Fatal Conceit: The Errors of Socialism. Successful societies are those that adopt market norms and they tend over time to outcompete societies organized in more primitive top-down ways. The upshot is that efforts to extract people from markets (e.g., communism, socialism, fascism) encourage them to revert to the innate savagery of dealing fairly only with kin and fellow tribespeople.

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