Stefanie Haeffele and Virgil Henry Storr
Over time, the fields of economics and ethics have become more distinct with economics focusing on the rationality of actors, the incentives they face, and the outcomes of interacting within an amoral market setting. However, in the real world, economics and ethics are more interconnected. Humans are social and ethical beings regardless of setting. Recent studies have shown that individuals reward trustworthiness, punish dishonesty, and can develop meaningful social bonds within markets. Economists, seeking to better understand the world, should incorporate ethics into their economics. We argue that Adam Smith is an exemplar of pursuing a fuller approach to social science, and utilize his arguments on both economics and ethics to advance a study of ethical markets.
This chapter focuses on Hayek’s analysis of morality as an evolved spontaneous order while updating and revising it, taking account of current research and models. While his path-breaking work requires revision, Hayek presents an analysis of a complex adaptive moral order that is far more in tune with current science than are the highly rationalistic analyses of contemporary political philosophy, which often seek to present utopian plans for the perfect justice. Yet, I argue, we need to rethink important claims. Hayek puts great weight on group-level selection to maintain the functionality of the complex adaptive system of social morality, a claim that has been buttressed by the recent work of David Sloan Wilson. I question this, showing how an “invisible hand” can maintain functional cooperation among current humans without strong group-level selection.