Moral Economy

Although anthropologists and historians have often reserved the term moral economy for pre- or non-capitalist societies, there is a strong case for applying it to all societies, for economic practices always involve social relations that are structured by norms regarding what people are allowed or required to do, whether in terms of what they contribute or what they receive. These historically specific norms are constitutive of economic institutions and may sometimes be enshrined in law, as in the case of capitalist property rights. They may be contested, as those of usury have been and still are in some societies, though once they become established, they tend to be regarded as natural in popular thought. Second, actors' moral sentiments and commitments influence their economic behavior; thus, for example, Daniel Miller (1998) shows that far from being merely self-interested, shoppers' behavior is often strongly shaped by their moral commitment to their families. Third, whether intended or not, individual economic actions have moral consequences; for example, changes in consumption patterns affect the welfare of producers.

The term moral economy is also used to refer to the study of such matters, be it largely descriptive or normative. The classical political economy of the eighteenth and early nineteenth centuries exemplified this approach, but the cultural and moral content was progressively removed with the rise of a separate discipline of economics in the late-nineteenth century and is only now being restored (e.g., Etzioni 1988; Wolfe 1993). This attempted expulsion represents an uncritical reflection of the disembedding of economic processes from social regulation that has occurred with the rise of capitalism (Polanyi 1944).

Concerns with moral economy can be traced back to Aristotle: first, in his discussions of the production and consumption of use values as the proper goal of economic activity and his critique of money making as a vice based on the inversion of means and ends and second, in his critique of pleonaxia, or insatiable acquisitiveness. Adam Smith's work on moral sentiments and nascent capitalism exemplifies a moral economic approach. Although the former concern is most clearly set out in his Theory of Moral Sentiments and the latter in his Wealth of Nations, he clearly saw them as complementary and continued to work on both themes to the end of his life. The former book analyzes and evaluates the moral regulation of individual behavior in producing social order; the latter examines the difference that the rise of “commercial society” makes or ought to make to this order. In normative terms, Smith saw both good and bad in the new economy. Thus, with respect to consumption, he disapprovingly notes the role of vanity and the pursuit of envy in driving consumption, anticipating Thorstein Veblen's concept of conspicuous consumption, while simultaneously noting that this has the benefit of encouraging economic growth. Although he was clearly concerned about economic inequalities, he also thought the poorest had benefited from the rise of commercial society.

In the nineteenth century, this predisciplinary political and moral economy gave way to the discipline of economics, and normative concerns about economic life became the province of the discipline of political philosophy. Subsequently, a small number of ethical socialists, communitarians, and political philosophy writers, concerned primarily with the politics of distribution, kept alive the interests of moral economy as defined here. For Karl Polanyi, the most troubling feature of the rise of the self-regulating market was its threat to culture, though it was commodification of labor power rather than consumption matters that he seemed to have in mind.

...