David R. Henderson  

A Price on Integrity

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In Peggy Noonan's latest weekly column in the Wall Street Journal, she quotes theologian Michael Novak's encomiums to capitalism. The quotes reminded me of an event I spoke at some years ago.

The Intercollegiate Studies Institute had sponsored the event in San Jose and the audience was about 200 mainly conservative college students. A few of the students were libertarians. Among the speakers were Michael Novak, David Friedman, and I. (I know "I' rather than "me" sounds weird, but when you've taken sentence diagramming in a high school English class, it's hard to forget the lessons.) If I recall correctly, the order of the speeches was Friedman, Henderson, and Novak. I laid out various reasons markets are so good--they cause monopolies, if not supported by government, to break down, they make people pay for discriminating on racial grounds, and they give even the poorest of us wealth than kings would not have dreamt of--think cell phones and penicillin. I usually get a good response from this talk even when I speak to what are now called "liberals." But the response was only slightly more than polite. In the Q&A, the first question was hostile in tone. I can't remember what the content was, but I dug deep and gave an answer. Then another hostile question. Then a friendly question. Then my turn ended.

Next up was Michael Novak, whose speech contained thoughts and sentiments about the goodness of free markets that were similar to some of the thoughts Ms. Noonan quotes from him in her piece. I agreed with pretty much all of them as did, I think, David Friedman. Novak got a much stronger ovation than I had. In the Q&A, one questioner asked if he saw any limits on free markets. Novak said yes. He said he wouldn't want to see a market for integrity, a market for honesty. He got a loud positive ovation for that answer.

At lunch, David Friedman, Michael Novak, and I spoke to each other. Novak and I exchanged compliments on each other's speech and he asked me if I knew why they hadn't been very enthusiastic about my speech. I admitted that I had wondered. "It's because you don't believe in God," he said. "How would they know that?", I asked, "I didn't say a word about God." "That's how they knew," he answered. I got it.

Then David Friedman said to Novak (these are my words but they express the gist of Friedman's remarks):

I think you should reconsider your view on the market for integrity. We do have a market for integrity and that's one reason markets work so well. When you hire someone and you're choosing between two people of equal productivity, wouldn't you be willing to pay more for someone who you think has more integrity?

Novak admitted he would.

Comments and Sharing

CATEGORIES: Economic Philosophy

COMMENTS (8 to date)

A belief in God is interpreted by others as a dedication to self-restraint and honesty. That person (we think) will be more honest and trustworthy, because he believes that he owes something to a more powerful overseer. We see him as proposing policies that are good for mankind, God's people, rather than suspecting that these policies may only be good for himself or his group.

But, how do we know someone believes? A criminal or narcisist will be the first to claim belief, to manipulate others and gain trust.

Why Should I Believe You?

The dominant idea in post-modernist thought holds that who advances an idea is the most powerful predictor of validity. Most people only believe someone from their group. Those in the tribe are trusted, those outside are automatically wrong.

Obama and God

When God talks to you through your inner voice, it is even better than prayer. Obama experiences this every day, in his own words, revealed in a March 2004 interview with a reporter on religious issues. I may be good when a person declares their submision to God. It may be bad when he claims to have a daily conversation.

Joe Marier writes:

Going to a ISI event and not mentioning God is like going to a Rockford Institute event and not mentioning "neocons".

Mike writes:

ISI has been but a shell of itself since they dropped the word "individualists" from the name.

Tim Worstall writes:

Someone needs to edit that entry on even the poorest of us getting wealthy.

"Prior to antibiotics, the common cold or flu was not a mere inconvenience but often a life-threatening disaster."

Umm, colds and flu are viral diseases and entirely unaffected by antibiotics.

Jacob Oost writes:

The Jakester is a hardcore, born-again, Bible-thumping, "fundie" but when it comes to economics I think I've learned just as much from people who happened to have been non-Christian as from those who were.

Which is not to say I think that Christianity is irrelevant to economics, on the contrary I think it serves as the basis for it, but in the same way in which quantum theory is the basis for all physics, it can safely be put aside when discussing most issues.

happyjuggler0 writes:

Jacob Oost,

The point of lectures like that is to persuade the audience. Knowing the audiences priors can surely help in that regard.

In this particular case, the connection between God and economics is sort of irrelevant. But what you want to do is put into people's minds that they can be complementary.

Similarly, if I were to give a lecture to self styled liberals, I would make sure that my audience knew that my economics were grounded in "good intentions", since that is the metric they tend to measure people by, as opposed to using good results as a unit of policy worth.

SpotCash writes:

"Among the speakers were Michael Novak, David Friedman, and I"

Didn't sound at all clunky; indeed it sounded about right. Putting 'me' in there would have stopped me and required a reread.

The Cupboard Is Bare writes:

"I know "I' rather than "me" sounds weird, but when you've taken sentence diagramming in a high school English class, it's hard to forget the lessons."

It sounded fine. BTW, here are some examples of sentence diagramming that I think you will appreciate:



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