The Myth of the Value Neutral Market | Mark Movsesian
When liberalism was young, it had great faith in markets – in particular, the ability of markets to mitigate social conflict. The theory had a French name, the sweet trade thesis, and it happened like that. Trade would encourage people to put aside tribal attachments and disagreements on big issues so that they could make money. Why argue about religion and politics when it could hurt business? As people got richer, the theory was, they would care less about identities and issues that divide; personal relationships would thus become more peaceful and productive. This virtuous cycle would operate both nationally and globally, creating increased peace and prosperity both within and among nations.
Liberalism seems to have gone beyond its initial enthusiasm for value neutral markets. In the West, big business regularly makes statements on hot social and political issues. In the United States, they intervene in battles over religious freedom, LGBT rights and, more recently, voting conditions. The overwhelming majority of large companies take the progressive side in these debates, although a few companies have taken conservative positions and the right-wing retreat is increasing.
There are many reasons for this growth in corporate activism, but the most important explanation is cultural. America is a polarized country and, despite its great wealth, its divisions inevitably affect our economy. There is a defect in the sweet trade a thesis that conservatives like Burke have seen from the start. The neutral market does not create tolerance for various points of view; rather the reverse. Tolerance for diverse points of view creates a neutral market; when tolerance disappears, the market becomes as polarized as anything else.
Enlightenment thinkers believed that the market, which distributes rewards and punishments regardless of belief, could end the religious conflicts that had disrupted European politics since the Reformation. In the Royal Exchange of London, wrote Voltaire, it made no difference whether one was Jewish, Muslim or Christian, as long as his credit was good. Everyone negotiated on an equal footing and only “bankrupts” were considered “infidels”. Trade has trained people to think of religious commitments – liberals later would call them “global doctrines” – as ancillary concerns that should not be allowed to hinder mutually beneficial trade. The market encouraged a benign indifference which, over time, would lead to greater tolerance of opposing views and social peace.
From the start, the Conservatives were skeptical about the sweet trade thesis. Markets have always existed, in all cultures, and most of them have not been associated with liberalism. Burke, for example, believed that the sweet trade the thesis had a backward cause and effect relationship. The kind of market Voltaire observed at the Royal Exchange, where merchants traded peacefully and disregarded religious differences, resulted from habits of mind that had developed in the West over the centuries. Voltaire undoubtedly exaggerated the tolerance of the Royal Exchange, but in any case it is not the market admired by Voltaire which led to liberal tolerance. It was liberal tolerance that had led to the market that Voltaire admired.
Today’s corporate activism demonstrates the veracity of Burke’s critiques. In the 21st century, American affairs do not avoid political and social controversies; he’s looking for them. Several years ago, the companies convinced Indiana Gov. Mike Pence to approve revisions to the amended state law on the restoration of religious freedom, on the grounds that the act discriminated against LGBT people. This year, a coalition of businesses opposed South Dakota’s legislation that would have banned transgender people from participating in high school sports. In response to corporate criticism, Gov. Kristi noem refused to sign the bill.
More recently, companies have intervened in controversies over new voting requirements, which civil rights groups say intentionally discriminates against minorities. Delta Airlines and Coca-Cola, both based in Georgia, condemned new requirements in this state (after a few timeouts); Texas based companies Like American Airlines, it also opposed revisions to voting requirements. Last month, hundreds of executives and companies published a public letter in the New York Times expressing its opposition to legislation which would prevent “any eligible voter from having an equal and fair chance to vote”.
I am not so much interested in the merits of the debate on the voting conditions here. The point is, American companies have gotten into a heated partisan controversy – just the sort of thing, according to the sweet trade thesis, this should not happen. In the electoral law controversy, as in previous battles over religious freedom and transgender rights, corporations have intervened on the progressive side, which is not surprising, given the generally progressive values of the professional class which the majority of business leaders are from.
But not all corporate activism is on the left. A few companies have taken conservative positions on public controversies – think Hobby Lobby and the contraception mandate. And the right groups are encourage conservative shareholders to attend annual company meetings to push back the progressives.
All this happens because, unlike the sweet trade thesis, people do not easily check their values at the door when they enter the market. And in a society as divided and politically saturated as ours, it’s only natural that many people want the companies they work for or deal with to reflect their side in public debates. “Today’s employees… want to know what you stand for,” a CEO recently said the the Wall Street newspaper. This also applies to customers. In fact, companies may no longer have the ability to remain silent on public controversies, as customers increasingly expect companies to have political and social commitments. “[I]in these difficult times, ”a corporate lawyer recently explained to Harvard Law School Corporate Governance Forum, clients often interpret silence on a political controversy as “a statement.”
Liberalism depends for its success on habits of mind which liberalism itself cannot create. the sweet trade the thesis works well where people generally agree on public controversies, or where people believe they can safely remain indifferent to them. In a society like ours, however, where views are polarized and politics are everywhere, it is naïve to think that the market will be an exception, or that trade will somehow bring them about. people to forget their deep disagreements. Until America reaches a new social equilibrium, our market will likely be as controversial as anything else.
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