Of Mice and Men, Morals and Markets

Under the shiny veneer of science

by Bart Wilson

Good morals make for good markets is hardly a contentious claim. Reputations for honest dealing grease the wheels of commerce. But does it go the other way? Do markets foster good morals? The intuition of most people is that markets may do many positive things, but, no, they don't cultivate ethically better people. If anything, people are moral in spite of the tendency of markets to corrupt their morals. In a recent paper published in Science, Armin Falk and Nora Szech set out to test whether participating in a market institution causally corrupts its participants.

In one treatment the instructions state (translated by the authors from the original German) that "the life of a mouse is entrusted to your care. It is a healthy, young mouse, living with some other mice together in a small group. The expected lifetime of this mouse is approximately two years." The experimenters then ask the participants to choose one of two trivia quizzes. "In Quiz A, at the end of the experiment, you earn no additional money besides the 20 euros for participation and the mouse stays alive." But "[i]n Quiz B, at the end of the experiment, you get 10 euros in addition. As another consequence, the mouse will get killed." The instructions then explain how the mouse is gassed and the subjects are shown a 30-second video. Importantly, other researchers had already scheduled the mice to die, so it is only the experimental participants who could in fact save the mice from certain death.

There are two market treatments, one with a single buyer and a single seller and another with 7 buyers and 9 sellers. Buyers submit bids and sellers offers in continuous time for three minutes. A trade is finalized if a buyer accepts a seller's offer or a seller accepts a buyer's bid. The buyer's payoff is €20 minus the price paid, and the seller's payoff is the transaction price. The instructions state that "[i]n the market described above, a mouse is traded. This mouse is alive. It gets killed as soon as the trade, i.e., the selling, is finalized."

The authors hypothesize that the two market treatments will "display a tendency to erode moral standards" relative to the quiz treatment for three reasons. First, by trading with each other a buyer and seller share the responsibility for the death of the mouse, which partially mitigates any moral guilt of the individual. Second, the existence of a market and observed participation of others in it legitimizes the killing of mice for profit. Finally, money and the competition for money overtake working access memory to crowd out the moral reasoning of imposing harm. In short, the last reason plays off the folk notion that money corrupts people, where the corruption in this case is gassing a mouse for more money.

Before reporting the results, I find it curious that gassing a mouse for money indicates a moral lapse for the participants, but that it is morally permissible for the authors in the pursuit of science to conduct such an experiment. A rejoinder might be that any moral corruption on the part of the authors equally legitimizes the erosion of morals in all treatments, so the question remains whether the market treatments comparatively erode morals. But this misses the point. If it is morally permissible for the authors to share the guilt of killing mice with others in the scientific community who kill mice, then it isn't a peculiar feature of markets that causes people to mitigate moral guilt and legitimize "lower" moral standards. It is rather a human propensity to share moral guilt and agree with other humans when it is legitimate to harm other animals.

What do the authors find? 45.9% of the participants in the quiz treatment gas the mouse and take the additional €10, and in the market treatments 72.2% and 75.9% of the participants trade at prices of €10 or lower and kill the mouse.

From these and several other related treatments, the authors conclude that indeed "for a given population, markets erode moral values." The unscientific and magic word here is erode, for it is in the transition from experimental observations to conclusions where preconceptions and political correctness lie in wait.

Science, people believe, is objective. The image of a scientist is someone who stands outside the laboratory looking in on his participants, disinterestedly seeking truth. "The facts are the facts," we say, or, "let the facts speak for themselves." What people, scientists included, do not notice is that not only do the facts not speak for themselves, but they speak with the voice of the scientist himself.

In this experiment, the word erode betrays the authors' voice. The imagery of erode evokes waves crashing down upon a shoreline. As individuals outside the market, people in the quiz treatment are morally upstanding, beautiful white sandy beaches. But when subjected to the relentless pounding of competition, what is the beach to do but surrender its sands of morality to the vast sea of money. That is the voice with which the results of this experiment speak.

A Vulcan might ask, however, if facts are facts and treatments are treatments, then why is the logical conclusion that markets erode morals and not that offers of windfalls foster morals? The reader may not consider this alternative because, well, as a general rule money doesn't fall like manna from heaven when we fail in our morals. So how to purify our morals can't be what we learn from this experiment.

Why is this experiment being compelled to witness against the institution of markets? Because the authors presume from the outset, as the references in the opening sentences to Karl Marx, Karl Polanyi, and Michael Sandel testify, that markets corrupt people. Rather than consider human beings as flawed and moral failings as distinctly human failings, the motivation for the experiment is to show, with the shiny veneer of science, that markets objectively promote moral decay. Erosion is the narrative of this experiment because the aim of the authors is to question "where markets are appropriate--and where they are not;" because people aren't responsible for their moral failings, markets are. We can take this experiment as objective evidence that markets erode morals, if, we also take it for objective evidence that offers of windfall money to fail in our morals causally foster our morals. The preferred and the absurd interpretation are one and the same.