Book Review of Samuel Bowles' The Moral Economy

I recently published a review of Samuel Bowles' fine new book, The Moral Economy: Why Good Incentives are No Substitute for Good Citizens. You can read the entire review at The New Rambler. Below is a slightly revised excerpt from the end of the piece:

Carrots and sticks must be part of a moralized judgment, not independent of competing conceptions of the good. In the words of the Victorian jurist, James Fitzjames Stephen, “the law is to the moral sentiments of the public … what a seal is to hot wax. It converts into a permanent judgment what might otherwise be a transient sentiment.” Incentives can’t be an alternative to social scripts for a life well lived; they must strengthen them.

Samuel Bowles formulates a critique of contemporary liberalism that is in many respects largely familiar. Richard Titmuss’ 1977 book, The Gift Relationship, sparked a fierce debate among economists and philosophers in arguing that altruism was far superior to markets in promoting blood donations. Kenneth Arrow replied with an influential critique, leveling two major objections: Titmuss failed to adequately theorize how market incentives crowd out moral motivations, and Titmuss failed to bring adequate evidence to bear in defense of the theoretical claim. Bowles’ contribution in this book is in many respects his response to both objections. The mechanisms of situation-dependent social cues and endogenous preference formation provide the theoretical account Titmuss lacked, and the major advances in experimental economics and game theory provide compelling evidence for the phenomenon’s empirical validity.

More importantly still, Bowles has demonstrated how Titmussian critiques of market economics apply just as powerfully to the philosophical doctrine of liberal neutrality. Perhaps not entirely comfortable with some of his conservative bedfellows on this latter point, Bowles is reluctant to appeal explicitly to the language of “soulcraft,” as George Will put it decades ago. He is happier lamenting the loss of altruism and other-oriented moral motivation. Yet his argument may prove more than he would like. For if it is true that political and economic institutions can’t help but shape our deepest assumptions about the world, Aristotelian Legislators can’t limit themselves merely to the cultivation of “social preferences.” They must recognize instead that sound policymaking requires a fairly thick underlying vision of the human good.

The Moral Economy appeals to an ancient truth. Incentives and self-interest are no substitute for moral motivation and altruism. The state cannot rudely impose laws on society with the alchemical hope that the right institutions, the right prices, and the right political form can successfully shape any people, any preferences, and any political matter. As Aristotle understood well, and which political economy has only recently recognized, the coercive power of the state depends on and is inextricably bound up with the character and culture of the community.

The entire piece can be read here.