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Moral Economies
Moral Economies L. McDowell, University of Oxford, Oxford, UK & 2009 Elsevier Ltd. All rights reserved.
Glossary Absolute and Relative Poverty Alternative ways of conceptualizing poverty. The former depends on an absolute definition such as the income needed to purchase a basket of goods or a particular income level below which people or households are poor. Common standards are, for example, falling below the average income or state benefit levels, plus 20%. Relative poverty as the term indicates is a more flexible concept. Poverty is defined in relation to what is an acceptable standard within a particular geographical area (be it nation, state, or city) at a particular moment in time. As societies become more affluent poverty lines also rise. Caring Labor/Ethics of Care This term captures the distinction between work undertaken for financial remuneration and work that is about caring for others, without expectations of reciprocity or payment. It is typically employed in feminist analyses of domestic labor. Ethics A system of moral values. Gendered Moral Rationalities The notion that men and women operate on the basis of different moral systems; expanded in the work of geographer Simon Duncan to refer to differences ‘between’ women, especially mothers, in the ways in which they assess the decision to combine waged employment and unpaid caring labors. Normative Standards An established standard that typically is universal, or is not dependent upon the context.
Introduction: Definitional Contradictions At first sight the juxtaposition of the terms moral and economy(ies) seems paradoxical, even farcical – surely morality is about relations of obligations, about mutual respect and support, about knowing right from wrong, about caring for others whether members of an immediate family or community or the distant strangers whose needs are great. Economics, on the other hand, as everyone knows, is the dismal science, based on assumptions about rational economic man, who knows the price of everything (but the value of nothing) and who, in capitalist societies, makes cold and calculating decisions based on the maximization of profits, extracting as much financial advantage as possible from transactions that occur between unknown, faceless others. Even when
defined in a less prejudicial way – making economies, being careful – there is a touch of the penny-pinching, the mean and the dour, although perhaps the term moral itself embodies implications of a somewhat careful, rather joyless approach to life rather than one of casual abandon and hedonism. How appropriate then that both the originator of the science of political economy – Adam Smith – and the current prime minister in the UK – Gordon Brown – are both Scots, unable to escape the associations with a Calvinist culture of moral certitude and careful prudence in economic matters. However, a concern with moral worth is evident more widely in Britain (and other capitalist societies) in the early twenty-first century as policy debates about the appropriateness of a strong Protestant ethic centered in participation in waged work influence economic and social policy decisions. Similarly, the need to respect others is a central idea in the debate about (the problems with) British youth and ‘esteem’ – a very Victorian notion – is a key measure of the worth of a British academic in the latest round of a rational calculation of what each of us is worth. It is clear that strong notions of what counts as valuable, what sorts of behaviors are acceptable, how judgments are made about worth structure most arenas of life. In economic terms these judgments about value are perhaps particularly clear as, in the formal economy at least, monetary values are placed on economic activities. Defining Morality Defining morality, however, even in association with the second term economies, is a task that is not easy. The older certainty of moral philosophers has been challenged by postmodern theorists who have pointed out the relative nature of key terms. Normative notions such as morality are neither uncontested nor universal; instead what is moral is context and situated, dependent on the circumstances and the actors involved. Nevertheless the centrality of the notion of what is good and just lies behind the evaluation of whether an action is moral or not. Western economic notions about the social basis of lending and borrowing, based on the regulation of interest rates – a way of repaying risk – have no purchase in economies based on Islamic beliefs, for example, and while the analysis of this article shall be restricted to capitalist Western economies, it is clear that even here there is debate about what is included within the term the economy and so as the subject material of the discipline. As many have argued, feminist scholars have challenged the very definition of what is an economy, showing how
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the exclusion of unwaged work from its purview resulted in a neglect of the essential contributions of domestic and voluntary labor from the total social reproduction of economic relations in the widest sense. Returning to definitions of morality, a distinction discussed (but actually rejected) by the geographer Andrew Sayer in his book about the moral significance of class is helpful. There he argues that in common sense terms morality is simply what kinds of behavior are regarded as good, how we should treat others, and be treated by them. In philosophy, there is a large and contested debate about normative conceptions of what is good but as Sayer suggests, in everyday life these norms are generally less coherent and explicit than philosophers typically assume. Sayer also notes that morality is sometimes distinguished from ethics, and that this distinction implies a difference between more formal norms or rules and informal everyday ideas of the good life based on experiences. Rather confusingly, though, philosophers tend to use both terms either interchangeably or even reversing the sense. The original distinction between formal morality and everyday ethics comes from the work of Hegel who saw a difference between an abstract universal morality (moralita¨t) and a more situated notion of good (sittlichkeit) related to individuals’ position in the communities in which they live. In his work on class relations, Sayer uses the terms ethics and morality interchangeably but also notes that liberal philosophers tend to associate ethics with good and morality with right. It is preferable in some contexts to keep this Hegelian distinction; also, the term ethics is less judgmental than the term ‘moral’ or morality with its universalist or singular associations with a particular version of what is right. The term ethics perhaps better captures the complex, situated, and interdependent decisions that people currently make about the best way to live and to relate to others. Thus in feminist-inspired work about relations of caring and how these activities are both essential to but undervalued by economic activities, the term ‘ethics of care’ seems preferable than the notion of ‘gendered moral rationalities’ that some geographers have adopted. However, Sayer and other commentators agree, that in most cases the terms are used interchangeably. Defining the Economy Defining the term economy raises equally difficult issues. It has been common practice in mainstream AngloAmerican economics to equate economic relations with relations of production, exchange, and distribution within capitalist societies in which a cash nexus is dominant. Thus, activities studied by neoclassical economists and economic geographers typically have included all those forms of work that have a monetary value. However, as
students of peasant economies or of domestic labor undertaken in the home have long argued, all sorts of production and exchanges take place outside the cash economy, or what might more generally be defined as formal market relations. Exchanges in kind, informal employment, cooking and cleaning ‘for love’ within households are also part of an economy and in their own way are as structured by moral beliefs, rules, and norms as are formal market relations, regulated by institutional structures and legislative controls. Indeed, the moral basis of these forms of work and exchange is perhaps rather clearer than in the market, as they depend on affection and mutual care rather than on profit (although also on exploitation and forms of interpersonal control and domination). All forms of economic behavior, however, have ethical implications as they are embedded within social interactions and so beliefs about the basis on which an interaction takes place, its fairness (or not), the relative position of the individuals involved and what is due to them, and a judgment of the potential outcomes. As an object of study then ‘moral economy’ (or economies) might ‘either’ be the study of the set of ethical beliefs and normative assumptions that structure any kind of economic action ‘or’ a subset of economics in which a particular (universal?) view of morality is the underlying principle of exchange. As an example, we might compare free-market or neoliberal capitalism as practiced at present in the US and UK which is based on a set of beliefs that values free markets, competition, and free trade more highly than the achievement of a less inequitable distribution of incomes with, say, green economics which is based on a particular valuing of the long-term sustainable use of resources and their preservation for future generations over immediate profits. While the latter arguments are clearly based on an identifiable version of a moral judgment, the former, despite its attempt to present itself as ‘value-free’ is equally evidently located within a set of moral beliefs about how the world ought to work. What is perhaps surprising is how long the notion of a value-free, positivist version of economics was dominant in twentieth-century Western social science, despite the self-evident involvement of economics in the sense of the production, distribution, and consumption of goods and income necessary to live at a particular standard in questions of who should get what – an evidently moral question that lies at the center of political or moral philosophy. Nevertheless, one of the marked features of the sort of positivist social science that dominated mainstream geography and economics throughout all but the last quarter of the twentieth century was the apparent absence of ideas about value or morality. Positivist social science was represented as objective and factual, based on the measurement and prediction of aggregate social
Moral Economies
behaviors. It made no claims to be ‘moral’ but simply to measure ‘what is’. But as the critiques that developed in geography from the late 1960s onward from, among others, Marxist and feminist geographers and economists, and later postcolonial theorists, have documented in detail, this apparent objectivity disguises relations of exploitation and oppression as mere facts. Ideas about market rationality, for example, or meritocratic societies where achievement is seen as a measure of worth rather than privilege, are just as value-dependent as the notions about class privilege and structured patterns of masculine domination that inform Marxist and feminist social science, respectively. Normative discourses – as Marxist and feminist scholarship are-imply a difference between what is and what ought to be: an argument that positivist social scientists tended to dismiss as ‘political’, rather than using the less judgmental term ‘normative’. The Origins of the Term ‘Moral Economy’ Although the focus of this article is capitalist economies, and on the interplay between cultural beliefs, political judgments, and economic activities, the term moral economy initially was developed in the context of traditional, peasant societies, in which customs, culture, and traditions influenced the social relations of production, exchange, and waged labor. Indeed, it has been argued that economic relations based on the principles of social justice, fairness, even goodness, are only possible in such small, closely knit societies based on face-to-face interactions. However, work by E. P. Thompson on the development of British capitalism during the eighteenth century and by other historians and sociologists has documented the ways in which a concept of a ‘moral economy’ might be utilized to resist authority and to justify struggles against capitalist exploitation. In the context of contemporary capitalist economies, it is often suggested that a moral economy is one in which there is some form of balance between ethical norms and economic principles in order to achieve a degree of social justice. It is in this sense that the term is used here, documenting the ways in which moral questions about what ‘ought to be’ have been addressed in post-war Britain. Also, a closer look has been taken at how moral arguments that lie behind demands for greater income equality and universal provision for risks have influenced economic policy. All states have to answer questions about the degree of income inequality and differences in overall standards of living that are acceptable and justifiable at different times. Who deserves what forms of support and on what moral basis? In the development of Western industrial economies, for example, until perhaps the late 1950s, it was assumed that every able-bodied man had the responsibility to engage in wage labor in order to provide for his
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own needs and those of his family, whereas women and children had a claim on his income through the rights and obligations of marriage and kinship. In the second half of the twentieth century and into the new millennium these rights and responsibilities have been transformed, altering notions about gender and household obligation, as well as maternal care. New notions about the extent to which caring responsibilities are economic issues are now important, as the concept of a work/life balance enters economic discourse, in part replacing or at least complementing discussion about who should enter the labor force and for what financial rewards.
Moral Philosophy and Political and Moral Economy At the heart of economics lie questions not only about the production of goods and services but interrelated issues about who is entitled to or deserves what standard of living – that is, questions about distribution and consumption. Clearly in conditions of great scarcity and want, ethical notions about fairness may be overridden by pressures simply to survive, but in modern Western societies, more complex issues about what is a good society, what is fair and just lie at the heart of the modern capitalist economy. Indeed, these moral principles may be contested and overridden by other considerations – arguments about maximizing profit, for example, or about the need to provide incentives for the very rich to work harder (or at all), or for the unemployed to enter the labor market. What is clear, however, is that in complex societies, systems of market controls and regulations have been established in order to ensure that the moral principles that lie behind the distribution of incomes between the working and nonworking population are enacted and enforced. These sets of social regulations include the institutions and regulations both of the tax system and welfare provision (identified in the French regulations school as a key part of the control of capitalism and necessary for the maintenance of profit), as well as the banking system, private property rights, labor law and workers’ organizations, and all those institutional regulations that define ‘the rules of the game’. All these rules are necessarily based on moral economic norms about what is right, or perhaps rather what is acceptable. What is always contested, as the economy is based on social relations of unequal power, is the extent to which forms of intervention should ‘interfere’ (as free marketeers claim) with the untrammeled rules of the market, in order to alter the control of and distribution of profits, for ‘the greater good’ or to raise the standard of living of the least fortunate. It is in this sense that one has to examine the different moral principles that lie behind arguments about and the methods used to regulate the distribution
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of incomes from participation in waged work at a number of key moments in the development of a British welfare state. These discussions tended to be corralled to a specialist sub-branch of economics – welfare economics – or to be seen as the domain for social policy rather than economic issues per se but this division is less and less tenable. One of the founding fathers of the discipline of economics is Adam Smith, whose Wealth of Nations established the basic principles of the new discipline of political economy. As Smith argued and other later nineteenth-century political economists extended, one of the purposes of economics as a theoretical discipline is to establish ‘the rules of decency’ – how the economic world should work, how owners and workers should be rewarded, and how its outputs should be distributed. The establishment of rules about what is fair and just, or acceptable is a historical and contested process, the outcome of long struggles about, for example, the length of the working day, about workplace health and safety regulations, and about fair and minimum wages. Although many of these issues are still the focus of struggle – legislation introducing a basic minimum wage was not passed until 2001 in the UK, for example, – political economy and economics as disciplinary frameworks influencing policy played an important part in establishing the normalcy of economic principles – about the nature and legitimacy of profit, for example. Now a set of neoclassical principles are taken for granted: what were once matters of contestation have become normalized, as if they were basic timeless facts of the world. Thus, as Sayer noted, questions of validity have become turned into questions of behavior, although there still remains key areas of disagreement about, for example, the right to sell body parts or the ownership of genetic information and material. In the next two sections of the article, focus is laid on questions about the distribution of income, looking back half a century or so to compare the arguments made then by the new Labour Government elected after the end of World War II with those made by the New Labour Government, initially elected in 1997, about economic inequality and the normative principles that lie behind an acceptable degree of inequality between individuals. Here the work of the political sociologist W. G. Runciman is particularly drawn upon.
Moral Principles Post-World War II Although many economic historians and social policy analysts regard the post-war settlement introduced by Attlee’s Government as establishing a new moral basis for the British economy and state, according to Runciman, the reforms rather completed the processes of the
moral transformation that had begun under Lloyd George between 1915 and 1922. Whether new or a continuation of older normative beliefs and standards, however, four principles underlay the settlement which all challenged previous Conservative ideas about providing for risk and about acceptable degrees of income inequality and security. The principles transformed the moral basis of providing for the poor and less-fortunate members of British society. First, the old insurance principle of contributions made by individuals against risk was to be replaced by universal, across the board provision financed by central government. Welfare provision was to be on the basis of need, regardless of ability to pay and free at the point of access. Second, progressive taxation was to be introduced, although the Labour Party stopped short of the abolition of private property. The third principle was to protect the legitimate interests of organized labor, especially the least well-paid and most exploited workers, shifting the balance from the long domination of capital, and aiming to produce relatively narrow pay differentials after tax between different categories of workers and management and bosses. The final principle was one connected to wider macro-level economic management and more centralized planning. While these moral principles had huge general appeal after the deprivations of World War II, as the decades passed and the working population became more affluent, the general consensus began to evaporate, allowing not only a long period of Conservative domination during the middle decades of the twentieth century but ultimately the election of the radical right government headed by Margaret Thatcher that established a new set of moral foundations for economic and social policy. Runciman suggests that the seeds of the decline of the post-war consensus lay in the changing economic circumstances of the second half of the twentieth century, illustrating the interconnections of political philosophies and economic conditions. First, all forms of social services – schools, housing, and especially the National Health Service (NHS) – were unable to meet the seemingly unlimited rising demands, the huge costs, and growing bureaucracies needed to provide and allocate the services. Second, progressive taxation of incomes became less popular as with growing affluence more manual workers found themselves paying tax and national insurance contributions. Third, trade unions lost a great deal of their moral legitimacy. Strike actions felt by the public became unpopular and more generally less-affluent and less-organized workers, especially women workers, felt let down by the masculinized union movement and its focus on the skilled male workers. Thus the widespread acceptance of the post-war moral compact began to vanish. In 1979 Margaret Thatcher became the prime minister with a completely different moral agenda for the
Moral Economies
economy – she had a vehement belief in the superiority of free, competitive markets, in individualized market provision of services, in ‘rolling back’ the state, and an implacable hostility to the Trade Union Movement. Declaring there is no such thing as society, she summarized her economic aims as turning Britain back from a ‘give-it-to-me’ to a ‘do-it yourself ’ society. These radically different normative beliefs have prevailed under New Labour since 1979. Despite the rediscovery of poverty in the 1960s by social policy commentators on the left, the moral beliefs of ‘old’ Labour lost their legitimacy, in large part, according to Runciman, because of the relative affluence of the British working class as a whole and the new forms of consumption and consumerism made possible by rising incomes, not withstanding the widening gap between the least and most affluent individuals and households. Redistributive arguments no longer had moral force. The latter part of the twentieth century was marked in affluent nation-states by the growing significance of consumption both as a motor of economic growth and as a marker of social position and self-identity. As many commentators have noted, the UK and the US have become consumerist societies marked by desire for instant gratification. A range of goods is available – and lifestyles constructed through their purchase – that was unimaginable in the earlier post-war decades when the political left was motivated by a more puritanical view of the world. The post-war welfare state was based on a moralizing notion of the basic necessities of life. And although the plain-living, chapel-going, good-doing, high-thinking wing of the Labour Party was never completely dominant, it lost its legitimacy as the century progressed. As the working class began to travel, expand the range of goods in their homes, spend more money on leisure and the purchase of private pleasure, a new rhetoric based on both class condescension and a belief that the absolute difference between the highest and the lowest incomes was less important once absolute poverty had (virtually) disappeared became dominant. Indeed a moral discourse about ‘spendthrifts’ who fail to save for their old age, about ‘benefit scroungers’ who live off state benefits rather than entering the labor market, about ‘yobs’ of all ages who drunkenly threaten the decent middle class in the public spaces of British cities has become the hegemonic representation of the unacceptable fraction of the working class, who are too loud, too brash, and so undeserving. To this radical change must also be added a more complex, multicultural society in which both women and men have more opportunities, in which religion has become an important social divide, and in which at least until recently opportunities for social mobility seemed the main mechanism for self-improvement rather than the state provision of a basic standard of living. Thus the moral certainties of
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post-war economic policy have vanished in the face of a neoliberal rhetoric about individual rights to pursue profit and income rather than to support aversion of social moral obligations. In the early years of the new millennium, however, the British economist Richard Layard has suggested that the pursuit of happiness rather than profit should be the overriding moral principle behind economic policy in the UK. Greater wealth, he has argued, is not correlated with satisfaction and happiness.
Ethical Consumption A strand of that ethical Puritanism that marked left wing movements in the post-war period, however, has reemerged today, fused with a growing concern about distributional issues at a global scale rather than within nation-states. Thus the key moral issues of the early twenty-first century are as much about the global distribution of income and resources, the location of production, the exploitation of workers, and the effects of rapid industrialization on the climate, for example, as they are about national policies and in the main are based on a moral belief in the principles of environmental sustainability. Ideas about ethical banking and socially responsible investment (SRI) in which fund managers make decisions about stock market portfolios based on social and/or environmental criteria are spreading. Another of the recent movements in the West based on normative beliefs about entitlement and distributional questions is the ethical consumer movement which takes a range of forms from boycotts of certain products and/or retailers to moves to buy locally and eat only seasonal products. Thus there is a growing number of non-meat eaters in Western societies, as well as boycotts of retail chains such as Wal-Mart and the fast-food outlets such as the MacDonald Corporation. These movements raise interesting ethical issues, as indeed does the wider sustainability movement. Who sets the standards? Are they equally appropriate for rich and poor consumers, for rich and poor nations? Recent work on Wal-Mart is an interesting example. This is a USbased and originally family-owned chain of stores (that now owns ASDA in the UK) that owns thousands of stores in low-income communities selling goods at rockbottom prices. This is achieved both through extremely aggressive purchasing policies and through the payment of low wages to its employees. The moral costs of these policies seem clear: suppliers, especially in the developing world, receive inadequate recompense, US and UK workers have to claim benefits to survive on poverty wages and so the state is subsidizing the chain and competition from small retailers is vanquished, wiping out the traditional main street in small-town America.
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Wal-Mart is also anti-union. However, the low prices at Wal-Mart clearly are important for the poor in the US. It has been estimated, for example, that food and dry goods at Wal-Mart are on average 27% cheaper than at traditional grocery stores. The poor benefit directly and all US consumers indirectly from the anti-inflationary effects of low prices. It is not so simple, however, when other factors enter the moral equation and when the timescale is longer as the farming and working conditions in the developing world that enable Wal-Mart to operate its low-cost policy are morally and environmentally unsustainable. Action is needed at a larger scale than individual boycotts, using international bodies to insist on adequate labor conditions in Third World factories, for example. Normative standards, levels of minimum pay, and codes of conduct are no longer (if they ever were) moral issues that can be addressed within the bounds of the nation-state. The new international division of labor in a globalizing world raises increasingly complex questions for moral principles on which to base economic decisions.
See also: Consumption; Gender, Historical Geographies of; McDowell, L.; Neoliberalism.
Further Reading de Goede, M. (2005). Virtue, Fortune and Faith: A Genealogy of Finance. London: University of Minnesota Press. Fishman, C. (2006). The Wal-Mart Effect. London: Allen Lane. McDowell, L. (2004). Work, workfare, work/life balance and an ethics of care. Progress in Human Geography 28(2), 145--163. Runciman, W. G. (2006). What happened to the Labour Party? London Review of Books 28(12), 17--21. Sayer, A. (2005). The Moral Significance of Class. Cambridge: Cambridge University Press. Thompson, E. P. (1993). Customs in Common: Studies in Traditional Popular Culture. London: New Press.
Relevant Websites http://www.ifat.org International Federation for Alternative Trade. http://www.fairtrade.org.uk The Fairtrade Foundation.
Glossary Absolute and Relative Poverty Alternative ways of conceptualizing poverty. The former depends on an absolute definition such as the income needed to purchase a basket of goods or a particular income level below which people or households are poor. Common standards are, for example, falling below the average income or state benefit levels, plus 20%. Relative poverty as the term indicates is a more flexible concept. Poverty is defined in relation to what is an acceptable standard within a particular geographical area (be it nation, state, or city) at a particular moment in time. As societies become more affluent poverty lines also rise. Caring Labor/Ethics of Care This term captures the distinction between work undertaken for financial remuneration and work that is about caring for others, without expectations of reciprocity or payment. It is typically employed in feminist analyses of domestic labor. Ethics A system of moral values. Gendered Moral Rationalities The notion that men and women operate on the basis of different moral systems; expanded in the work of geographer Simon Duncan to refer to differences ‘between’ women, especially mothers, in the ways in which they assess the decision to combine waged employment and unpaid caring labors. Normative Standards An established standard that typically is universal, or is not dependent upon the context.
Introduction: Definitional Contradictions At first sight the juxtaposition of the terms moral and economy(ies) seems paradoxical, even farcical – surely morality is about relations of obligations, about mutual respect and support, about knowing right from wrong, about caring for others whether members of an immediate family or community or the distant strangers whose needs are great. Economics, on the other hand, as everyone knows, is the dismal science, based on assumptions about rational economic man, who knows the price of everything (but the value of nothing) and who, in capitalist societies, makes cold and calculating decisions based on the maximization of profits, extracting as much financial advantage as possible from transactions that occur between unknown, faceless others. Even when
defined in a less prejudicial way – making economies, being careful – there is a touch of the penny-pinching, the mean and the dour, although perhaps the term moral itself embodies implications of a somewhat careful, rather joyless approach to life rather than one of casual abandon and hedonism. How appropriate then that both the originator of the science of political economy – Adam Smith – and the current prime minister in the UK – Gordon Brown – are both Scots, unable to escape the associations with a Calvinist culture of moral certitude and careful prudence in economic matters. However, a concern with moral worth is evident more widely in Britain (and other capitalist societies) in the early twenty-first century as policy debates about the appropriateness of a strong Protestant ethic centered in participation in waged work influence economic and social policy decisions. Similarly, the need to respect others is a central idea in the debate about (the problems with) British youth and ‘esteem’ – a very Victorian notion – is a key measure of the worth of a British academic in the latest round of a rational calculation of what each of us is worth. It is clear that strong notions of what counts as valuable, what sorts of behaviors are acceptable, how judgments are made about worth structure most arenas of life. In economic terms these judgments about value are perhaps particularly clear as, in the formal economy at least, monetary values are placed on economic activities. Defining Morality Defining morality, however, even in association with the second term economies, is a task that is not easy. The older certainty of moral philosophers has been challenged by postmodern theorists who have pointed out the relative nature of key terms. Normative notions such as morality are neither uncontested nor universal; instead what is moral is context and situated, dependent on the circumstances and the actors involved. Nevertheless the centrality of the notion of what is good and just lies behind the evaluation of whether an action is moral or not. Western economic notions about the social basis of lending and borrowing, based on the regulation of interest rates – a way of repaying risk – have no purchase in economies based on Islamic beliefs, for example, and while the analysis of this article shall be restricted to capitalist Western economies, it is clear that even here there is debate about what is included within the term the economy and so as the subject material of the discipline. As many have argued, feminist scholars have challenged the very definition of what is an economy, showing how
185
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the exclusion of unwaged work from its purview resulted in a neglect of the essential contributions of domestic and voluntary labor from the total social reproduction of economic relations in the widest sense. Returning to definitions of morality, a distinction discussed (but actually rejected) by the geographer Andrew Sayer in his book about the moral significance of class is helpful. There he argues that in common sense terms morality is simply what kinds of behavior are regarded as good, how we should treat others, and be treated by them. In philosophy, there is a large and contested debate about normative conceptions of what is good but as Sayer suggests, in everyday life these norms are generally less coherent and explicit than philosophers typically assume. Sayer also notes that morality is sometimes distinguished from ethics, and that this distinction implies a difference between more formal norms or rules and informal everyday ideas of the good life based on experiences. Rather confusingly, though, philosophers tend to use both terms either interchangeably or even reversing the sense. The original distinction between formal morality and everyday ethics comes from the work of Hegel who saw a difference between an abstract universal morality (moralita¨t) and a more situated notion of good (sittlichkeit) related to individuals’ position in the communities in which they live. In his work on class relations, Sayer uses the terms ethics and morality interchangeably but also notes that liberal philosophers tend to associate ethics with good and morality with right. It is preferable in some contexts to keep this Hegelian distinction; also, the term ethics is less judgmental than the term ‘moral’ or morality with its universalist or singular associations with a particular version of what is right. The term ethics perhaps better captures the complex, situated, and interdependent decisions that people currently make about the best way to live and to relate to others. Thus in feminist-inspired work about relations of caring and how these activities are both essential to but undervalued by economic activities, the term ‘ethics of care’ seems preferable than the notion of ‘gendered moral rationalities’ that some geographers have adopted. However, Sayer and other commentators agree, that in most cases the terms are used interchangeably. Defining the Economy Defining the term economy raises equally difficult issues. It has been common practice in mainstream AngloAmerican economics to equate economic relations with relations of production, exchange, and distribution within capitalist societies in which a cash nexus is dominant. Thus, activities studied by neoclassical economists and economic geographers typically have included all those forms of work that have a monetary value. However, as
students of peasant economies or of domestic labor undertaken in the home have long argued, all sorts of production and exchanges take place outside the cash economy, or what might more generally be defined as formal market relations. Exchanges in kind, informal employment, cooking and cleaning ‘for love’ within households are also part of an economy and in their own way are as structured by moral beliefs, rules, and norms as are formal market relations, regulated by institutional structures and legislative controls. Indeed, the moral basis of these forms of work and exchange is perhaps rather clearer than in the market, as they depend on affection and mutual care rather than on profit (although also on exploitation and forms of interpersonal control and domination). All forms of economic behavior, however, have ethical implications as they are embedded within social interactions and so beliefs about the basis on which an interaction takes place, its fairness (or not), the relative position of the individuals involved and what is due to them, and a judgment of the potential outcomes. As an object of study then ‘moral economy’ (or economies) might ‘either’ be the study of the set of ethical beliefs and normative assumptions that structure any kind of economic action ‘or’ a subset of economics in which a particular (universal?) view of morality is the underlying principle of exchange. As an example, we might compare free-market or neoliberal capitalism as practiced at present in the US and UK which is based on a set of beliefs that values free markets, competition, and free trade more highly than the achievement of a less inequitable distribution of incomes with, say, green economics which is based on a particular valuing of the long-term sustainable use of resources and their preservation for future generations over immediate profits. While the latter arguments are clearly based on an identifiable version of a moral judgment, the former, despite its attempt to present itself as ‘value-free’ is equally evidently located within a set of moral beliefs about how the world ought to work. What is perhaps surprising is how long the notion of a value-free, positivist version of economics was dominant in twentieth-century Western social science, despite the self-evident involvement of economics in the sense of the production, distribution, and consumption of goods and income necessary to live at a particular standard in questions of who should get what – an evidently moral question that lies at the center of political or moral philosophy. Nevertheless, one of the marked features of the sort of positivist social science that dominated mainstream geography and economics throughout all but the last quarter of the twentieth century was the apparent absence of ideas about value or morality. Positivist social science was represented as objective and factual, based on the measurement and prediction of aggregate social
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behaviors. It made no claims to be ‘moral’ but simply to measure ‘what is’. But as the critiques that developed in geography from the late 1960s onward from, among others, Marxist and feminist geographers and economists, and later postcolonial theorists, have documented in detail, this apparent objectivity disguises relations of exploitation and oppression as mere facts. Ideas about market rationality, for example, or meritocratic societies where achievement is seen as a measure of worth rather than privilege, are just as value-dependent as the notions about class privilege and structured patterns of masculine domination that inform Marxist and feminist social science, respectively. Normative discourses – as Marxist and feminist scholarship are-imply a difference between what is and what ought to be: an argument that positivist social scientists tended to dismiss as ‘political’, rather than using the less judgmental term ‘normative’. The Origins of the Term ‘Moral Economy’ Although the focus of this article is capitalist economies, and on the interplay between cultural beliefs, political judgments, and economic activities, the term moral economy initially was developed in the context of traditional, peasant societies, in which customs, culture, and traditions influenced the social relations of production, exchange, and waged labor. Indeed, it has been argued that economic relations based on the principles of social justice, fairness, even goodness, are only possible in such small, closely knit societies based on face-to-face interactions. However, work by E. P. Thompson on the development of British capitalism during the eighteenth century and by other historians and sociologists has documented the ways in which a concept of a ‘moral economy’ might be utilized to resist authority and to justify struggles against capitalist exploitation. In the context of contemporary capitalist economies, it is often suggested that a moral economy is one in which there is some form of balance between ethical norms and economic principles in order to achieve a degree of social justice. It is in this sense that the term is used here, documenting the ways in which moral questions about what ‘ought to be’ have been addressed in post-war Britain. Also, a closer look has been taken at how moral arguments that lie behind demands for greater income equality and universal provision for risks have influenced economic policy. All states have to answer questions about the degree of income inequality and differences in overall standards of living that are acceptable and justifiable at different times. Who deserves what forms of support and on what moral basis? In the development of Western industrial economies, for example, until perhaps the late 1950s, it was assumed that every able-bodied man had the responsibility to engage in wage labor in order to provide for his
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own needs and those of his family, whereas women and children had a claim on his income through the rights and obligations of marriage and kinship. In the second half of the twentieth century and into the new millennium these rights and responsibilities have been transformed, altering notions about gender and household obligation, as well as maternal care. New notions about the extent to which caring responsibilities are economic issues are now important, as the concept of a work/life balance enters economic discourse, in part replacing or at least complementing discussion about who should enter the labor force and for what financial rewards.
Moral Philosophy and Political and Moral Economy At the heart of economics lie questions not only about the production of goods and services but interrelated issues about who is entitled to or deserves what standard of living – that is, questions about distribution and consumption. Clearly in conditions of great scarcity and want, ethical notions about fairness may be overridden by pressures simply to survive, but in modern Western societies, more complex issues about what is a good society, what is fair and just lie at the heart of the modern capitalist economy. Indeed, these moral principles may be contested and overridden by other considerations – arguments about maximizing profit, for example, or about the need to provide incentives for the very rich to work harder (or at all), or for the unemployed to enter the labor market. What is clear, however, is that in complex societies, systems of market controls and regulations have been established in order to ensure that the moral principles that lie behind the distribution of incomes between the working and nonworking population are enacted and enforced. These sets of social regulations include the institutions and regulations both of the tax system and welfare provision (identified in the French regulations school as a key part of the control of capitalism and necessary for the maintenance of profit), as well as the banking system, private property rights, labor law and workers’ organizations, and all those institutional regulations that define ‘the rules of the game’. All these rules are necessarily based on moral economic norms about what is right, or perhaps rather what is acceptable. What is always contested, as the economy is based on social relations of unequal power, is the extent to which forms of intervention should ‘interfere’ (as free marketeers claim) with the untrammeled rules of the market, in order to alter the control of and distribution of profits, for ‘the greater good’ or to raise the standard of living of the least fortunate. It is in this sense that one has to examine the different moral principles that lie behind arguments about and the methods used to regulate the distribution
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of incomes from participation in waged work at a number of key moments in the development of a British welfare state. These discussions tended to be corralled to a specialist sub-branch of economics – welfare economics – or to be seen as the domain for social policy rather than economic issues per se but this division is less and less tenable. One of the founding fathers of the discipline of economics is Adam Smith, whose Wealth of Nations established the basic principles of the new discipline of political economy. As Smith argued and other later nineteenth-century political economists extended, one of the purposes of economics as a theoretical discipline is to establish ‘the rules of decency’ – how the economic world should work, how owners and workers should be rewarded, and how its outputs should be distributed. The establishment of rules about what is fair and just, or acceptable is a historical and contested process, the outcome of long struggles about, for example, the length of the working day, about workplace health and safety regulations, and about fair and minimum wages. Although many of these issues are still the focus of struggle – legislation introducing a basic minimum wage was not passed until 2001 in the UK, for example, – political economy and economics as disciplinary frameworks influencing policy played an important part in establishing the normalcy of economic principles – about the nature and legitimacy of profit, for example. Now a set of neoclassical principles are taken for granted: what were once matters of contestation have become normalized, as if they were basic timeless facts of the world. Thus, as Sayer noted, questions of validity have become turned into questions of behavior, although there still remains key areas of disagreement about, for example, the right to sell body parts or the ownership of genetic information and material. In the next two sections of the article, focus is laid on questions about the distribution of income, looking back half a century or so to compare the arguments made then by the new Labour Government elected after the end of World War II with those made by the New Labour Government, initially elected in 1997, about economic inequality and the normative principles that lie behind an acceptable degree of inequality between individuals. Here the work of the political sociologist W. G. Runciman is particularly drawn upon.
Moral Principles Post-World War II Although many economic historians and social policy analysts regard the post-war settlement introduced by Attlee’s Government as establishing a new moral basis for the British economy and state, according to Runciman, the reforms rather completed the processes of the
moral transformation that had begun under Lloyd George between 1915 and 1922. Whether new or a continuation of older normative beliefs and standards, however, four principles underlay the settlement which all challenged previous Conservative ideas about providing for risk and about acceptable degrees of income inequality and security. The principles transformed the moral basis of providing for the poor and less-fortunate members of British society. First, the old insurance principle of contributions made by individuals against risk was to be replaced by universal, across the board provision financed by central government. Welfare provision was to be on the basis of need, regardless of ability to pay and free at the point of access. Second, progressive taxation was to be introduced, although the Labour Party stopped short of the abolition of private property. The third principle was to protect the legitimate interests of organized labor, especially the least well-paid and most exploited workers, shifting the balance from the long domination of capital, and aiming to produce relatively narrow pay differentials after tax between different categories of workers and management and bosses. The final principle was one connected to wider macro-level economic management and more centralized planning. While these moral principles had huge general appeal after the deprivations of World War II, as the decades passed and the working population became more affluent, the general consensus began to evaporate, allowing not only a long period of Conservative domination during the middle decades of the twentieth century but ultimately the election of the radical right government headed by Margaret Thatcher that established a new set of moral foundations for economic and social policy. Runciman suggests that the seeds of the decline of the post-war consensus lay in the changing economic circumstances of the second half of the twentieth century, illustrating the interconnections of political philosophies and economic conditions. First, all forms of social services – schools, housing, and especially the National Health Service (NHS) – were unable to meet the seemingly unlimited rising demands, the huge costs, and growing bureaucracies needed to provide and allocate the services. Second, progressive taxation of incomes became less popular as with growing affluence more manual workers found themselves paying tax and national insurance contributions. Third, trade unions lost a great deal of their moral legitimacy. Strike actions felt by the public became unpopular and more generally less-affluent and less-organized workers, especially women workers, felt let down by the masculinized union movement and its focus on the skilled male workers. Thus the widespread acceptance of the post-war moral compact began to vanish. In 1979 Margaret Thatcher became the prime minister with a completely different moral agenda for the
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economy – she had a vehement belief in the superiority of free, competitive markets, in individualized market provision of services, in ‘rolling back’ the state, and an implacable hostility to the Trade Union Movement. Declaring there is no such thing as society, she summarized her economic aims as turning Britain back from a ‘give-it-to-me’ to a ‘do-it yourself ’ society. These radically different normative beliefs have prevailed under New Labour since 1979. Despite the rediscovery of poverty in the 1960s by social policy commentators on the left, the moral beliefs of ‘old’ Labour lost their legitimacy, in large part, according to Runciman, because of the relative affluence of the British working class as a whole and the new forms of consumption and consumerism made possible by rising incomes, not withstanding the widening gap between the least and most affluent individuals and households. Redistributive arguments no longer had moral force. The latter part of the twentieth century was marked in affluent nation-states by the growing significance of consumption both as a motor of economic growth and as a marker of social position and self-identity. As many commentators have noted, the UK and the US have become consumerist societies marked by desire for instant gratification. A range of goods is available – and lifestyles constructed through their purchase – that was unimaginable in the earlier post-war decades when the political left was motivated by a more puritanical view of the world. The post-war welfare state was based on a moralizing notion of the basic necessities of life. And although the plain-living, chapel-going, good-doing, high-thinking wing of the Labour Party was never completely dominant, it lost its legitimacy as the century progressed. As the working class began to travel, expand the range of goods in their homes, spend more money on leisure and the purchase of private pleasure, a new rhetoric based on both class condescension and a belief that the absolute difference between the highest and the lowest incomes was less important once absolute poverty had (virtually) disappeared became dominant. Indeed a moral discourse about ‘spendthrifts’ who fail to save for their old age, about ‘benefit scroungers’ who live off state benefits rather than entering the labor market, about ‘yobs’ of all ages who drunkenly threaten the decent middle class in the public spaces of British cities has become the hegemonic representation of the unacceptable fraction of the working class, who are too loud, too brash, and so undeserving. To this radical change must also be added a more complex, multicultural society in which both women and men have more opportunities, in which religion has become an important social divide, and in which at least until recently opportunities for social mobility seemed the main mechanism for self-improvement rather than the state provision of a basic standard of living. Thus the moral certainties of
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post-war economic policy have vanished in the face of a neoliberal rhetoric about individual rights to pursue profit and income rather than to support aversion of social moral obligations. In the early years of the new millennium, however, the British economist Richard Layard has suggested that the pursuit of happiness rather than profit should be the overriding moral principle behind economic policy in the UK. Greater wealth, he has argued, is not correlated with satisfaction and happiness.
Ethical Consumption A strand of that ethical Puritanism that marked left wing movements in the post-war period, however, has reemerged today, fused with a growing concern about distributional issues at a global scale rather than within nation-states. Thus the key moral issues of the early twenty-first century are as much about the global distribution of income and resources, the location of production, the exploitation of workers, and the effects of rapid industrialization on the climate, for example, as they are about national policies and in the main are based on a moral belief in the principles of environmental sustainability. Ideas about ethical banking and socially responsible investment (SRI) in which fund managers make decisions about stock market portfolios based on social and/or environmental criteria are spreading. Another of the recent movements in the West based on normative beliefs about entitlement and distributional questions is the ethical consumer movement which takes a range of forms from boycotts of certain products and/or retailers to moves to buy locally and eat only seasonal products. Thus there is a growing number of non-meat eaters in Western societies, as well as boycotts of retail chains such as Wal-Mart and the fast-food outlets such as the MacDonald Corporation. These movements raise interesting ethical issues, as indeed does the wider sustainability movement. Who sets the standards? Are they equally appropriate for rich and poor consumers, for rich and poor nations? Recent work on Wal-Mart is an interesting example. This is a USbased and originally family-owned chain of stores (that now owns ASDA in the UK) that owns thousands of stores in low-income communities selling goods at rockbottom prices. This is achieved both through extremely aggressive purchasing policies and through the payment of low wages to its employees. The moral costs of these policies seem clear: suppliers, especially in the developing world, receive inadequate recompense, US and UK workers have to claim benefits to survive on poverty wages and so the state is subsidizing the chain and competition from small retailers is vanquished, wiping out the traditional main street in small-town America.
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Wal-Mart is also anti-union. However, the low prices at Wal-Mart clearly are important for the poor in the US. It has been estimated, for example, that food and dry goods at Wal-Mart are on average 27% cheaper than at traditional grocery stores. The poor benefit directly and all US consumers indirectly from the anti-inflationary effects of low prices. It is not so simple, however, when other factors enter the moral equation and when the timescale is longer as the farming and working conditions in the developing world that enable Wal-Mart to operate its low-cost policy are morally and environmentally unsustainable. Action is needed at a larger scale than individual boycotts, using international bodies to insist on adequate labor conditions in Third World factories, for example. Normative standards, levels of minimum pay, and codes of conduct are no longer (if they ever were) moral issues that can be addressed within the bounds of the nation-state. The new international division of labor in a globalizing world raises increasingly complex questions for moral principles on which to base economic decisions.
See also: Consumption; Gender, Historical Geographies of; McDowell, L.; Neoliberalism.
Further Reading de Goede, M. (2005). Virtue, Fortune and Faith: A Genealogy of Finance. London: University of Minnesota Press. Fishman, C. (2006). The Wal-Mart Effect. London: Allen Lane. McDowell, L. (2004). Work, workfare, work/life balance and an ethics of care. Progress in Human Geography 28(2), 145--163. Runciman, W. G. (2006). What happened to the Labour Party? London Review of Books 28(12), 17--21. Sayer, A. (2005). The Moral Significance of Class. Cambridge: Cambridge University Press. Thompson, E. P. (1993). Customs in Common: Studies in Traditional Popular Culture. London: New Press.
Relevant Websites http://www.ifat.org International Federation for Alternative Trade. http://www.fairtrade.org.uk The Fairtrade Foundation.