The Moral Effects of Socialism and Capitlism

[Garth Zietsman]

I found the following on a blog I read.

Dan Ariely and co-authors have an interesting new paper looking at moral behavior, specifially cheating, in people who grew up in either East or West Germany.

From 1961 to 1989, the Berlin Wall divided one nation into two distinct political regimes. We exploited this natural experiment to investigate whether the socio-political context impacts individual honesty. Using an abstract die-rolling task, we found evidence that East Germans who were exposed to socialism cheat more than West Germans who were exposed to capitalism. We also found that cheating was more likely to occur under circumstances of plausible deniability.

…If socialism indeed promotes individual dishonesty, the specific features of this socio-political system that lead to this outcome remain to be determined. The East German socialist regime differed from the West German capitalist regime in several important ways. First, the system did not reward work based to merit, and made it difficult to accumulate wealth or pass anything on to one’s family. This may have resulted in a lack of meaning leading to demoralization (Ariely et al., 2008), and perhaps less concern for upholding standards of honesty. Furthermore, while the government claimed to exist in service of the people, it failed to provide functional public systems or economic security. Observing this moral hypocrisy in government may have eroded the value citizens placed on honesty. Finally, and perhaps most straightforwardly, the political and economic system pressured people to work around official laws and cheat to game the system. Over time, individuals may come to normalize these types of behaviors. Given these distinct possible influences, further research will be needed to understand which aspects of socialism have the strongest or most lasting impacts on morality.

It’s interesting that Ariely et al. try to explain cheating as a result of socialism. My own approach would look more to the virtue ethics of capitalism and Montesquieu who famously noted that

Commerce is a cure for the most destructive prejudices; for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.

See Al-Ubaydli et al. for a market priming experiment and especially McCloskey on The Bourgeoise Virtues for more work consistent with this theme.

[Colin Bower]

Thanks for this valuable research Garth. It seems to confirm that the unintended consequence of regulation is to diminish individual moral capacity. As the authors of the research say, people simply learn to cheat in an over-regulated system . A similar finding has been made in respect of road safety. A forest of controlling laws and regulations encourage the habit of adapting driving techniques eiether either simply to comply with regulation, or to avoid prosecution, rather than to exercise personal discretionary judgment in the interests of driving safely.

Colin B.

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[Garth Zietsman]

Related to this is the observation that cheating is rife among mainland Chinese students - both in China and when they study abroad - and in Chinese scientific research.  There is also a lot of faking of economic and other statistics.  Finally you can buy a pass on the fitness test to join the People's Army.  I'm sure there is much more dishonesty to be found in China and from formed USSR states.

By the way Pinker presents evidence that capitalism (free markets) have been extremely effective as a means to reducing violence and war - more so than policing and democracy.

[Trevor Watkins]

On 19 July 2014 21:03, Garth Zietsman <garth.z...@gmail.com> wrote:

for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.

I have always believed that libertarianism, free markets and the consent axiom are nothing more than simple good manners, writ large.

Trevor Watkins