Moral Markets: The Critical Role of Values in the Economy.

• Author: Wright, Jonathan B.

Moral Markets: The Critical Role of Values in the Economy

By Paul J. Zak, ed.

Princeton, N J: Princeton University Press, 2008. Pp. xli, 344. $26.95.

This volume contains the fruits of a two-year seminar on ethics and economics funded by the John Templeton Foundation and administered through the Gruter Institute for Law and Behavioral Research. Participants came from the social sciences, natural sciences, and humanities, and included Nobel Laureate Vernon Smith and other figures such as Frans de Waal, Herbert Gintis, Robert Frank, and Robert Solomon (for whom the book is dedicated in memoriam). The book's editor, Paul Zak, is a pioneer in the emerging field of neuroeconomics, which uses medical technology to discover the physiological manifestations of cooperative and altruistic behavior. A theme of the book is that human behaviors are moderated by biological realities that have important implications for the operation of society and markets. In particular, recent laboratory findings have uncovered the psychological interconnections between people that create organic interactions that do not fit neatly within the rational choice model.

The five sections in this collection address: (i) the philosophical foundations of values, (ii) the non-human origins of values, (iii) the evolution of values and society, (iv) values and the law, and (v) values and the economy. The 15 articles vary in length from 10 to 35 pages. Some authors entered the seminar with notable prior research on ethics and economics (such as Smith, Gintis, and Frank). Others dabbled for the first time, so there is an uneven quality to the essays. This review focuses on a subset of articles.

It would have been helpful had the book begun with a definition of values. Instead one has to wait until Chapter 11 to find a clear articulation. Oliver Goodenough defines values to mean "non-situational commitments to particular principles of character and action, which may require sacrifice and self-denial" (p. 238). Values are an institutional structure that promotes cooperative behavior as the dominant solution to economic games. Zak later elaborates that "Values can be thought of as the constituents of a person's character traits" (pp. 261-2). "Moral" values are those character traits that relate to interpersonal behaviors, and may evolve with experience. "Morality" is the "broad acceptance or prohibition of a behavior within or even across societies" and can change only slowly (p. 262). According to Zak, moral values constrain choices by producing positive physiological responses when the rules of sociability are followed. For example, expressions of trust (such as may be exhibited in economic exchanges) release the hormone oxytocin, which is associated with social recognition and bonding, and may also be triggered by hugging and orgasms.

One instinctual value economists emphasize is self-regarding behavior, and many essays in this book explore a parallel instinct that is other-regarding. Adam Smith's The Theory of Moral Sentiments (1982 [1759]) is at the heart of much of this modern analysis of the ethical...