Support for what they term "free markets" is almost de rigeur among conservatives. It is claimed not only that free markets are efficient, but that economic freedom promotes human freedom in general.
The desirability of free markets is further enhanced by the companion belief that free markets are fair markets. This belief was examined in a 2003 paper published online by Stanford's graduate business school. The paper was written by Jeffrey Pfeffer with three other collaborators including Dr. John Jost, who we've seen as a principal researcher or author in several of these essays. Their paper is titled, “Fair Market Ideology: Its Cognitive-Motivational Underpinnings."
Pfeffer defines ideology more broadly than I have:
“Ideologies are complex belief systems that incorporate, among other things, people’s theories about human nature, their philosophies concerning the appropriate use of social power, status and authority, and their moral and pragmatic convictions concerning the maximization of social and economic welfare.” [Pfeffer 2003, p. 3]
Fair market ideology is defined as “the tendency to view market-based processes and outcomes not simply as efficient, but inherently fair, legitimate, and just.” Classic economics as it's taught in colleges claims that free markets maximize economic efficiency and growth, but classic economic theory speaks to neither utility nor morality.
While wealth has steadily become more concentrated in the U. S., faith in the legitimacy of the markets has continued. This calls for some explanation, since it's happening in a society that is generally concerned with the general prosperity and frequently is concerned about equality. Real wages have been flat for the working classes for some five decades.
A Gallup poll in 1998 found that 68% of respondents agreed that the U. S. economic system is “basically fair,” while only 29% believed that it was unfair. A small majority of the lowest socioeconomic group, 52%, also believed that the economic system was fair. The income disparities that existed in 1998 were felt to be acceptable to 45% overall and to 32% of the lowest socioeconomic group. [Pfeffer 2003, p. 4]
Belief in the fairness of the market seems to be related to faith in government. A survey in 2002 found that belief in the fairness of the market system is correlated with favorable attitudes toward Congress and, paradoxically, with favor for government intervention. This suggests that these beliefs aren't based upon an understanding of economic theory, which is not a surprising idea. [Pfeffer 2003, p. 5]
Belief in a just world is, among other things, a belief that people get what they deserve. It can cause its believers to wonder aloud, “Why do bad things happen to good people?” Those who score high on belief in a just world tend to trust authorities and institutions and to derogate victims, including the so-called underprivileged. High believers also tend to believe that the rich deserve their emoluments and perquisites. Belief in a just world endorses the fairness of markets by its essential logic.
Pfeffer et al. suggest a number of known "over-generalizations and illusions" that may contribute to support for “free” markets:
People who are especially prone to endorse fair market ideology are more likely to believe in a just world, engage in [self-deceptive enhancement], accept power [inequalities], endorse economic system justification, oppose [economic and social] equality, and to be politically conservative and even authoritarian. [Pfeffer 2003, p. 29]
"Self-deceptive enhancement" is a tendency to accept unrealistically optimistic views about fairness.
In sum, Pfeffer and his co-authors, published under the banner of the Stanford Graduate School of Business, propose that belief in the fairness of free markets derives ultimately from a need to believe that the world we live in is just, and that the belief is facilitated by a poor understanding of economics.
In her 2012 book, “Envy Up, Scorn Down: How envy divides us,” Susan Fiske reports on a 1986 study in which James Klugel and Elliot Smith found that Americans agree on three beliefs about our economic system:
...ensuring opportunity itself matters to twice as many of us (66 percent) as reducing actual inequality (28 percent). Nearly everyone agrees (87 percent) that ‘our society should do what is necessary to ensure that everyone has an equal opportunity.’ [Fiske 2012, p. 8]
If people get what they deserve, effort determines economic fate. “About half of us (47 percent) blame people’s poverty on their lack of effort....[A]bout half of us (54 percent) say that people who make a lot of money deserve it....” Americans generally tolerate economic inequality.
Evidence from the field of anthropological theory provides some additional explanation for the contra-factual and contra-interest belief that our markets are free and fair and in everyone's interest. Anthropologist Alan Fiske published a paper in 1992, "The four elementary forms of sociality," which looked at systems of exchange world-wide. (Not global trade, that is, but cross-cultural systems of reciprocity.) He identified four distinct modes, which can occur separately or together. [Fiske 1992]
| Exchange Mode | Explanation |
|---|---|
| Communal Sharing | Occurs within nuclear families and sometimes among clans and groups. To each according to need, from each according to ability. |
| Authority Ranking | The Big Man (whoever has local power) takes first pick. |
| Equality Matching | Exchanges are balanced over time, as among friends, neighbors, or non-nuclear relatives. |
| Market Pricing | The capitalist or American way. |
Each of these exchange modes has its own psychology. They are not psychologically or politically interchangeable, and there are generally moderately strict rules about when each is appropriate.
My conjecture is that government taxation psychologically most resembles Authority Ranking, in which redistribution occurs under some level of duress. There seems to be ample evidence that many objections to many governmental actions could be on the basis of such an understanding. [Pinker 2002, p. 233-4]
Steven Pinker discusses another related idea, which he in turn takes from prolific conservative missionary Thomas Sowell. (I tried to read one of Sowell's books once, but I couldn't penetrate all the metaphor.) Sowell, according to Pinker, outlined a Utopian Vision and a Tragic Vision of human nature and history. In Pinker's words
...the Tragic Vision looks to systems that produce desirable outcomes even when no member of the system is particularly wise or virtuous. Market economies, in this vision, accomplish that goal....No mastermind has to understand the intricate flow of goods and services that make up an economy in order to anticipate who needs what, and when and where. Property rights give people an incentive to work and produce; contracts allow them to enjoy gains in trade. Prices convey information....The intelligence of the system is distributed across millions of...producers and consumers, and cannot be articulated by anyone in particular. [Pinker 2002, p. 290]
Or perhaps the advantage of market-based decisions is precisely that the market can’t be controlled by anyone in particular. Perhaps this is actually what is in people's minds when they think "free market." Perhaps this is what makes "free" markets fair in people's minds.
Actually, the above is also a description of desirable attributes for the regulation of complex systems from a cybernetics perspective. It doesn’t, however, follow that the design is optimal, whatever criteria you use.
Next: Disgust and Conservatism
More information:
[Fiske 1992] “The four elementary forms of sociality: Framework for a unified fheory of social relations,” Fiske, A. P., "Psychological Review, Vol. 99, pp. 689-723, 1992.
[Fiske 2012] “Envy Up, Scorn Down: How envy divides us,” Fiske, Susan T., Russell Sage, 2012.
[Pfeffer 2003] “Fair Market Ideology: Its Cognitive-Motivational Underpinnings,” Pfeffer, Jeffrey, Blount, Sally, Hyunyady, Gyorgy, and Jost, John, Research Paper Series, Stanford Graduate School of Business, 2003.
Belief in a just world: A Just World with Just Institutions
Motivated cognition: The Motivation for Conservatism
Wikipedia: Just-world hypothesis
© 2021, Ross A. Hangartner