Posts tagged with: Virgil Henry Storr

Does the free market encourage moral behavior? Virgil Henry Storr, Research Associate Professor in the Department of Economics at George Mason University, recently wrote a report called “The Impartial Spectator and The Moral Teachings of Markets.” He addresses critics’ concerns that the free market brings out and nurtures human vices.

Countless commentators have stated that “engaging in market activity can be corrupting.” Storr highlights two notable quotes. Aristotle “believed that there was something unnatural about the kind of wealth getting that occurred in the market.” Karl Marx “believed that the market could transform man into a ‘spiritual and physical monster.’”

Storr, who is also Director of Graduate Student Programs in the Mercatus Center, addresses these famous claims with quotes from those who have “made the point that markets are moral training grounds where virtues are rewarded and cultivated.” Michael Novak stated that engaging in trade “teaches care, discipline, frugality, clear accounting, providential forethought … fidelity to contracts, honesty in fair dealings, and concern for one’s moral reputation.” Deirdre McCloskey, Distinguished Professor of Economics at the University of Illinois at Chicago, says:

Capitalism has not corrupted the spirit. On the contrary, had capitalism not enriched the world by a cent nonetheless its bourgeois, antifuedal virtues would have made us better people than in the world we have lost. As a system it has been good for us.”

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Blog author: jballor
posted by on Wednesday, February 13, 2013

Jerk StoreIn “The Moral Meanings of Markets,” in the latest issue of the Journal of Markets & Morality, Ryan Langrill and Virgil Henry Storr argue that markets ought to be understood and defended not simply as amoral, or merely moral, but as robustly moral spaces. In exploring the contention that markets reward virtues besides prudence, Langrill and Storr illustrate how market exchanges tend to promote civility and politeness. “It makes sense for profit-seeking businessmen to invest in goodwill and good customer service,” they write.

A recent piece in the Harvard Business Review, however, underscores the reverse phenomenon, the costs of rudeness. As Christine Porath and Christine Pearson write in “The Price of Incivility,” the virtues required for good business are not merely oriented towards customers. “Rudeness at work is rampant, and it’s on the rise,” they write: “Nearly everybody who experiences workplace incivility responds in a negative way, in some cases overtly retaliating. Employees are less creative when they feel disrespected, and many get fed up and leave. About half deliberately decrease their effort or lower the quality of their work.”

But Porath and Pearson also note that “incivility damages customer relationships. Our research shows that people are less likely to buy from a company with an employee they perceive as rude, whether the rudeness is directed at them or at other employees. Witnessing just a single unpleasant interaction leads customers to generalize about other employees, the organization, and even the brand.”

The costs of rudeness are illustrated even more clearly outside the context of “competitive market settings,” as Langrill and Storr relate. They note John Mueller’s observation that “since enterprises like these cannot ration by price, they are inclined to ration by rudeness.” And even outside the context of “non-price competition,” as we observe in our own experiences everyday, there are costs associated with rudeness. Customers can certainly use rudeness as a rationing mechanism.

How much would it be worth to you to be treated rudely the next time you stop in at a McDonald’s or buy something from the supermarket? How cheap would things have to be for you to shop at the jerk store? Just how good would the lobster bisque have to be for you to buy it from the Soup Nazi?