Montesquieu famous noted this
Commerce is a remedy for the most destructive prejudices; for it is almost a general rule that wherever one finds agreeable manners, commerce flourishes there; and that wherever there is commerce, one encounters agreeable manners.
and Voltaire said of the London Stock Exchange:
Enter the London Stock Exchange, a place more respectable than many tribunals, and you will see there representatives of all nations assembled for the benefit of men. Here, Jew, Muslim and Christian treat each other as if they were all of the same faith, and only apply the word infidel to people who are going bankrupt. Here the Presbyterian trusts the Anabaptist and the Anglican accepts a promise from the Quaker. At the end of these peaceful and free assemblies, some go to the Synagogue and others have a drink, this one is going to be baptized in a large bath in the name of the Father, the Son and the Holy Spirit, this one has the his son’s foreskin and has Hebrew words he doesn’t understand mumbled over the child, others go to their church and wait for God’s inspiration with their hats on, and everyone is happy.
Trade makes people traders, and on the whole traders should be benevolent, agreeable, and willing to bargain and compromise with people of different sects, religions, and beliefs. Contrary to what one might naively expect, people with greater market exposure behave more cooperatively and in in less ostensibly self-interested ways. Similarly, in an experience of letter return in Italy, Baldassarri finds that market integration increases pro-social behavior towards in and outgroups:
In areas where the market exchange is dominant, letter return rates are high. Moreover, prosocial behavior towards ingroup and outgroup members goes hand in hand, suggesting that norms of solidarity extend beyond ingroup boundaries.
Plus, contrary to what you may have read about Wall Street’s legendary game against community gambling, priming people in the lab with phrases evoking markets and trading, increases confidence.
In a new paper, Gustav Agneman and Esther Chevrot-Bianco test the idea that markets generate more universal behaviors. They carry out their tests in villages in Greenland where some people buy and sell in markets for their main livelihood while others in the same village still depend for a substantial part of their livelihood on hunting, fishing and trading. personal. They use a dice game in which players signal the number of a roll, with higher numbers being better for the player. Only the player knows their true roll and there is no way to detect cheaters on an individual basis. In some variations, other people (in-group or out-of-group) benefit when players signal lower Numbers. The result is that people exposed to market institutions are honest while traditional people cheat. Cheating is only improved in the traditional group when the cheating is at the expense of an in-group member (village mate) but not when it is at the expense of an out-of-group member. More generally the authors summarize:
…We conduct rule-breaking experiments in 13 villages in Greenland (N = 543), where stark contrasts in market participation within villages allow us to examine the relationship between market participation and take. of moral decision-making, holding village-level factors constant. First, we document a robust positive association between market participation and moral behavior toward anonymous others. Second, market-embedded participants show universalism in moral decision-making, while non-market participants make more moral decisions toward co-villagers. A battery of robustness tests confirms that behavioral differences between market and non-market participants are not driven by socioeconomic variables, childhood background, cultural identities, kinship structure, global connectivity and exposure to religious and political institutions.
Markets and commerce increase trust, cooperation and universal moral action – it’s hard to think of a more important discovery for today’s world.
Tip from the hat: The always excellent Kevin Lewis.