Project

What Good Markets are Good for

Goal: This project, funded by the Templeton World Charity Foundation, sets out to (re)discover and develop connections between morality and markets by collecting, theoretically digesting and critically assessing evidence from a range of disciplines regarding the inherent morality of markets.

Scholars in economics, social sciences, business studies, theology, philosophy, and psychology will jointly examine old and new moral interpretations of free markets and integrate these interpretations into a coherent ‘moral markets master narrative’.

This project is funded by the Templeton World Charity Foundation (TWCF, Inc.). More information on the project: www.moralmarkets.org

Methods: Game Theory, Statistical Analysis, Factor Analysis, Conceptual Analysis, Literature Review, Principal Component Analysis, Archival Research, Oral History, Text Analysis, Narrative Integration, Behavioral Economics, (Multilevel) Regression Analysis, Panel Estimation, Prosopography, Binary Logit/Probit Model, Triangulation

Date: 1 January 2017 - 31 December 2019

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Project log

Jordan Ballor
added 2 research items
Interdisciplinary academic work is inherently fraught, and the incentives in most scholarly environments tend to direct efforts toward greater specialization rather than to foster cross- and interdisciplinary collaboration and dialogue. With specialization of focus comes specialization of terminology, and the challenge of overcoming the technical jargon of another discipline is one of the key barriers to genuine interdisciplinary work. "Interdisciplinary Dialogue and Scarcity in Economic Terminology," Journal of Markets & Morality 23, no. 1 (2020): 131-137
This article explores the economic teachings of the Heidelberg Catechism, a key confessional document in the Reformed tradition, through the lens of historic Reformed commentary, particularly that of the Dutch theologian and statesman Abraham Kuyper (1837–1920). The Catechism’s teachings concerning the origin, essence, and nature of economic activity are captured in the themes of superabundance, stewardship, and sabbath. These themes are reflected in the Catechism’s explication of the fourth petition of the Lord’s Prayer, “Give us this day our daily bread” (Lord’s Day 50); the eighth commandment, “Do not steal” (Lord’s Day 42); and the fourth commandment, “Remember the Sabbath Day” (Lord’s Day 38). "Abraham Kuyper and the Economic Teachings of the Heidelberg Catechism," Journal of Markets & Morality 23, no. 2 (2020): 363-390
Ilse Oosterlaken
added an update
To close of our research project on 'good markets', we are currently running a consultation process on the future of capitalism in Europe. One activity within the Future Markets Consultation is a series of online dialogues with visionary economists and other experts. We also invite individuals and organizations to submit a viewpoint, and we run an essay contest for students and young scholars.
We cordially invite you to participate in any of these activities! We would also appreciate it if you can bring the essay contest to the attention of your students (flyer attached to this post). For more information, please go to https://www.moralmarkets.org/futuremarketsconsultation/
 
Jordan Ballor
added a research item
This contribution advances a critical examination of Smith’s thought in theological perspective, with a point of departure in a recent interpretation of the ‘invisible hand.’ We show that the concept of general providence has displaced traditional understandings of special providence in the way Smith presents God’s care for the world. Whereas in traditional Reformed theology providence functions within the framework of a qualitative difference between the two orders of God’s being and the order of creation, in Smith we encounter an ‘immanentized’ providentialism, in which these orders are collapsed into one. It is argued that an application of a particular version of the distinction between special and general providence to Smith’s thought obscures older classical theological categories and distinctions — most specifically the dialectic of divine power — and that a retrieval of these older categories provides a more helpful framework for contextualizing and understanding Smith’s own thought.
Johan J. Graafland
added 7 research items
Literature has argued that income inequality crowds out trust. However, whether income inequality makes people less trusting depends on how they perceive income inequality within their personal social context and social cognition. In this paper we therefore conjecture that the relationship of income inequality to trust depends on how income inequality affects inequality of life satisfaction. If life satisfaction inequality is high, distrust is generated among the least happy. This will increase polarization and the risk of rebellion, thereby also affecting trust among the happier people. Thus, life satisfaction inequality may be an essential factor in the relationship between income inequality and trust. In previous literature, the potential mediating role of life satisfaction inequality in the relationship between income inequality and social trust has not yet received attention. We test our model by panel analysis on 25 OECD countries in the period 1990–2014. The panel analysis shows that income inequality increases life satisfaction inequality and that both income inequality and life satisfaction inequality have a significant negative impact on social trust. Mediation tests show complementary mediation: besides the direct negative effect of income inequality on trust, we find an indirect effect mediated by life satisfaction inequality. This indirect effect counts for 20% of the total effect of income inequality on trust. Our results imply that policy options for increasing trust are not limited to countering income inequality, but can also include policy measures that directly reduce inequality of life satisfaction.
The effect of economic freedom on firms’ environmental responsible management is still unconcluded. We conjecture that the effects are conditional on a firm’s internal motivation and use a large-scale survey to run an empirical test. The sample consists of 4338 small and medium-sized enterprises from twelve European countries. Distinguishing between intrinsic (environmental) and extrinsic (profit) internal motivations, we find clear support that the effects of economic freedom and intrinsic motivation on corporate environmental performance interact with each other. Our findings explain the ambiguous results of previous empirical studies at the aggregate level.
Jordan Ballor
added a research item
This article examines the moral status of wealth creation, particularly within its theological and religious contexts, across Reformed confessions from the sixteenth and seventeenth centuries. These confessional standards are a key source for the moral teaching of Reformed churches, and their treatments of the eighth commandment demonstrate a relatively nuanced and sophisticated view of wealth. Rather than simply denouncing wealth itself as intrinsically evil, these confessional standards, from a variety of national and ecclesial contexts, both on the European continent and Britain, provide a basis for viewing wealth creation as a moral good, even while warning against excess, temptation, and vices such as avarice and envy. This survey of the treatments of wealth from a diverse set of Reformed confessional standards provides a foundation for understanding a critical element in the formation of Reformed, and more broadly Protestant, economic ethics in the early-modern period.
Jordan Ballor
added a research item
Purpose Creativity and innovation are interrelated, and indeed often conflated, concepts. A corollary to this distinction is two different perspectives or types of entrepreneurship and entrepreneurs. The purpose of this paper is to explore the distinction between creativity and innovation on the basis of their relationship to history and implications for understandings of entrepreneurship. Design/methodology/approach This paper is a theoretical exploration of entrepreneurship understood in relation to a proper distinction between creativity and innovation. Creativity and innovation differ from the perspective of their relationship to what has already happened in history vs the radical novelty of a particular discovery or invention. Findings Creativity can be understood as what human beings do in connection with the fundamental givenness of things. Innovation, on the other hand, can be best understood as a phenomenon related to the historical progress of humankind. Innovation is what human beings discover on the basis of what has already been discovered. Entrepreneurs can be seen as those who discover something radically new and hidden in the latent possibilities of reality and creation. Or entrepreneurs can be seen as those who develop new, and even epochal, discoveries primarily on the basis of the insights and discoveries of those who have come before them in history. Originality/value This paper provides a helpful conceptual distinction between creativity and innovation, and finds compatibility in these different perspectives. A holistic and comprehensive understanding of entrepreneurship embraces both its creative and innovative aspects, its metaphysical grounding as well as its historicity.
Ilse Oosterlaken
added a research item
This paper investigates the theoretical and empirical relevance of motivation crowding theory for owner–managers' motivation towards sustainable development. Motivation crowding theory has argued that external pressures enforce (crowd in) moral motivation if these pressures are perceived as supportive. On the basis of this theory, we conjecture that a competitive environment that is characterized by a high intensity of competition on innovation will crowd in moral motivation towards sustainable development if owner–managers believe that environmental policy practices increase the innovative capability of their company. Test results on survey data filled out by 650 owner–managers support this hypothesis. These results imply that policy makers, who aim at stimulating innovation as well as sustainable development, should inform managers about the innovation‐enhancing effects of environmental policy practices.
Ilse Oosterlaken
added an update
Today, our project's 2-day workshop Market Economies: Worldviews and Practices is starting, organized by Eelke de Jong.
Topic: Since the fall of the Iron Curtain and the resulting transition of formerly centrally planned economies into market economies, academic interest in the different forms of a market economy has increased. This workshop aims at taking this one step further than the previous Varieties of Capitalism (VoC) and culture and economics literature. Participants will discuss the potential links between economic thought, the underlying value systems and the market practices in the countries concerned.
 
Ilse Oosterlaken
added an update
Just published:
Johan Graafland (2019). “Economic freedom and corporate environmental responsibility: The role of small government and freedom from government regulation.” In: Journal of Cleaner Production, volume 218, 1 May 2019, Pages 250-258.
Highlights
  • This study analyses the effects of two dimensions of economic freedom on corporate environmental responsibility
  • Small government diminishes corporate environmental responsibility
  • Freedom from regulation reduces corporate environmental responsibility
  • The results are robust for different types of measurement of economic freedom
Abstract
In international scientific literature, it is argued from institutional theory that economic freedom stimulates corporate environmental responsibility. However, economic freedom comprises several different dimensions, such as government size, rule of law, open markets, and (freedom from) government regulation. Whereas previous literature has shown that rule of law and open markets stimulate corporate environmental responsibility, the impact of government size and government regulation on corporate environmental responsibility of companies located in different countries has yet not been explored. This paper contributes to scientific literature by researching the effects of these two dimensions of economic freedom on corporate environmental responsibility. We hypothesize that small government stimulates corporate environmental responsibility and that freedom from government regulation discourages it. Using panel data from ASSET4 for the corporate environmental responsibility of 5023 companies, and data of government size and government regulation from Fraser Institute and Heritage Foundation for 41 countries, the authors perform panel analysis for the period 2005–2014 to test the hypotheses. The estimation results show that both small size of government and freedom from government regulation decrease corporate environmental responsibility. The test results are robust for the type of economic freedom data (Fraser Institute or Heritage Foundation) used.
 
Ilse Oosterlaken
added an update
In the past months we have worked on building an extensive digital bookshelf on the Ethics of Markets, Economics & Business. See http://www.moralmarkets.org/resources/books/
The individual book pages give a quick impression of contents & quality of each book: back cover text, extensive quotes from reviews, a video with the author, the table of contents, and interesting / relevant links (if available).
We hope that this will be a useful resource to both researchers an students! More books will be added in the months to come.
 
Ilse Oosterlaken
added an update
Today the project's 3-day seminar on World Religions, Markets & Human Flourishing has started. For this seminar representatives of religions and scholars in the field have been invited, as to draw together a group who can be involved in this project and make it a fruitful one. Discussion will be on the following thesis, tailored to each tradition:
“From X [e.g. a Buddhist, Islamic, Christian, Jewish, Hindu, Confucian] perspective, markets promote human flourishing.”
Participants may argue in favor of or against this thesis or give a nuanced, qualified answer somewhere in between ‘for’ or ‘against’. However, in the argumentation for or against this thesis from out of that particular worldview perspective, central attention should be given to the ethics that is promoted by the religion or worldview in case, and then particularly to – if applicable – human and social virtues. This first seminar is meant to exchange and discuss first drafts of papers, leading to the eventual publication of an edited volume.
 
Ilse Oosterlaken
added an update
Our research project is organizing a special track at the upcoming conference of the European Business Ethics Network (https://www.eben-net.org/). The conference will take place June 27-29 at Tilburg University, the Netherlands, with the theme "Reinventing Capitalism – Business Ethics and its contribution to the “Doux Commmerce".
Topic of our special track is the relationship between capitalism, virtues and human flourishing. Researchers working on this topic are cordially invited to submit an abstract. Key dates:
  • 01.04.2018: Submission of abstract/proposed workshop topic
  • 15.04.2018: Notification of acceptance
  • 31.05 2018: Full paper submission
  • 26.06.2018: Paper development workshop for young scholars
  • 27.-29.06 2018: EBEN Annual Conference
 
Ilse Oosterlaken
added an update
An interesting new book by a new researcher on our team: Rudi Verburg, assistant professor of History of Economic Thought at Erasmus University Rotterdam. See https://www.routledge.com/Greed-in-the-History-of-Political-Economy-The-Role-of-Self-Interest-in/Verburg/p/book/9781138285378 for more info on the book.
 
Ilse Oosterlaken
added an update
Abstract:
The case for free trade is often based on the view that man is a rational and individualistic homo economicus. This paper analyzes free trade from a broader, relational picture of mankind. After introducing this view, we discuss the blessings of free trade from this relational perspective. Next we explore three developments that put international trade under pressure.
  1. Free trade requires shared norms
  2. Complexity requires relationships governed by local rules
  3. Creative destruction requires sound social security and education
We investigate a number of policy options to prevent free trade from impairing interpersonal relationships, and end with some conclusions.
 
Ilse Oosterlaken
added an update
Eric Van Damme held a presentation on "Markets, Competition and Morality" on 4 October 2017 at ERGO Xtra, a public event at Erasmus Universit Rotterdam. For the video and sheets, see http://www.moralmarkets.org/markets-competition-morality/.
 
Ilse Oosterlaken
added an update
New article by our researchers Johan J. Graafland and Bjorn Lous.
Abstract
Since Piketty’s Capital in the 21st Century in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction.
Keywords: Economic freedom, Income inequality, Life satisfaction, Mediation, Regulation, Tax freedom, Trade freedom
 
Ilse Oosterlaken
added a research item
Since Piketty’s Capital in the 21st Century in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction.
Ilse Oosterlaken
added an update
There is a subset of scholarly literature that asserts that the title of Adam Smith’s famous work, The Wealth of Nations, is an allusion to passages from the Bible, such as Isaiah 60:5. Strong forms of the claim of this relationship between Smith and Scripture argue for a direct reliance of the former upon the latter. Weaker forms of the claim merely raise the possibility of the relationship or point more broadly to the significance and relevance of scriptural passages.
A recent article published by Moral Markets researcher Jordan Ballor sets these claims against the historical context of Smith and his work, finding that the relationship among “the wealth of nations,” Adam Smith, and English translations of the Bible demonstrates that Smith did not, in fact, allude to the passages in Isaiah. Thus, the rise of political economy itself, of which Smith’s work was an important element, was part of the background for, and preceded the appearance of, the phrase in English bibles.
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Ballor, Jordan J. “A Biblical Myth at the Origin of Smith’s The Wealth of Nations.” Journal of the History of Economic Thought 39, no. 2 (2017): 223–38. (https://doi.org/10.1017/S1053837216000286)
 
Ilse Oosterlaken
added an update
The site www.moralmarkets.org is now live! Moral Markets is a portal to high-quality inputs for public debate on the conditions under which free markets truly contribute to human flourishing. It is meant as a source of information and inspiration for business professionals, policy makers, students and researchers. The site draws on research in economics, philosophy and theology, but also accepts quality contributions from non-researchers.
The website Moral Markets was created as part of the research project What Good Markets are Good for, but is explicitly not merely a channel to communicate its research results. The site mission – see above – is broader than that, meaning that the Good Markets project is merely one contributor to the Moral Markets website.
Moral Markets is not connected to a specific political party or religious institution and is open to a wide range of views on the topic. Views expressed in news items / blog posts / event announcements are those of the contributing individual(s)/organization(s) and are not necessarily supported by the site’s editorial team, the Good Markets research project or any of the individual researchers involved in the project.
You are cordially invited to submit your own blog posts, news items and event announcements.
 
Ilse Oosterlaken
added a project goal
This project, funded by the Templeton World Charity Foundation, sets out to (re)discover and develop connections between morality and markets by collecting, theoretically digesting and critically assessing evidence from a range of disciplines regarding the inherent morality of markets.
Scholars in economics, social sciences, business studies, theology, philosophy, and psychology will jointly examine old and new moral interpretations of free markets and integrate these interpretations into a coherent ‘moral markets master narrative’.
This project is funded by the Templeton World Charity Foundation (TWCF, Inc.). More information on the project: www.moralmarkets.org