All Commentary
Monday, March 21, 2016

Actually Bernie, Markets, Not Socialism, Promote Kindness

Markets are made of cooperation.

Bernie Sanders’ success is remarkable. He may be behind in delegates, but he remains competitive in a two-horse primary race, despite being an avowed socialist who has made denouncing capitalism central to his campaign.

In the last Democratic Party debate, Sanders even refused to disavow the Castro regime in Cuba, after video surfaced of a younger Sanders praising Cuba’s “revolution of values,” and how the Cuban people were working for the common good, rather than just themselves.

Sanders does not favor political oppression, but he clearly prefers Cuba’s collectivist approach over the greed he thinks comes from competitive markets.

He may be surprised to learn that, far from creating selfishness, markets actually promote kindness and a respect for the lives of our fellow man.

Markets Encourage Generosity

In Economics and the Virtues: Building a New Moral Foundation, Jennifer Baker and Mark White note a strong correlation between how market-oriented a society is and how likely its members are to volunteer and contribute money to charity. People who live in robust market economies, such as the United States, are more generous towards the less well-off than people in countries with less developed markets.

Part of this could be due to the greater wealth of more market-oriented economies, but the increased generosity is not limited to the wealthy. The working poor in the United States donate three times as much as people on welfare do. As Michael Shermer notes, “Poverty is not a barrier to charity, but welfare is.”

The more we trade and help others to earn our money, the more willing we are to give money to those in greater need.

People from cultures with stronger markets tend to be more generous to others.

Evidence of markets increasing generosity can also be seen in lab experiments, such as the Ultimatum Game. In this economic experiment, Person A is given a sum of real money (say, $100) and given the choice to share some of it with Person B. Person B can choose to reject the offer, in which case neither participant receives any money; or they can accept the split, in which case they both keep their respective shares.

If the first person offers a split that seems too unequal (say, $90/$10), the second person will often choose to reject the money and get nothing at all, effectively giving up $10 to punish the first person for being selfish. The game is a powerful measure of generosity and fairness.  

Baker and White surveyed a number of such studies across many cultures, and the results were clear: people from cultures with stronger markets tend to be more generous to others. In cultures with robust markets, people make higher, more generous offers. 

The reason is that markets encourage people to interact with strangers in win-win transactions. This gets them used to thinking in terms of fairness — what do I need to offer someone else to get what I want — rather than selfishness.

As former Marxist Herbert Gintis notes, “societies that use markets extensively develop a culture of cooperation, fairness, and respect for the individual.”

Markets Promote Peace

The same humanizing principle applies internationally; it’s not good fences but free trade that makes good neighbors.

Markets humanize our trading partners.

In “Peace Through Free Trade,” professor Patrick J. McDonald from the University of Texas at Austin argues that countries that are more protectionist tend to go to war more often. Take a country in the bottom 10 percent of free-trading nations and — without changing anything else about it — reduce its trade barriers until it is in the top 10 percent of free traders, and you decrease its likelihood of engaging in a new conflict by 70 percent.

Why? Because markets humanize our trading partners. Trade requires us to sit down in business meetings (or at least Skype sessions) with people from other countries to resolve differences and create win-win transactions. You’re less likely to want to go to war with a country if you’ve spent time with its people than if you only see it as lines on a map.

Markets Make Us Value Human Life More

In The Better Angels of Our Nature: Why Violence Has Declined, Steven Pinker notes that violence has been declining for centuries. This is true in every category, from murders to hate crimes to child abuse. One factor behind the decline is the spread of commerce. We have become conditioned to trade with others to get what we want. As a result, strangers “switch from being targets of demonization and dehumanization to partners in reciprocal altruism.”

Due to market-fueled innovations, living standards have increased dramatically since the Industrial Revolution.

Another factor is the rise in living standards that capitalism has enabled. In the United States, for instance, life expectancy has risen from 39.4 years in 1880 to 78.7 years in 2011. This change wasn’t inevitable; until the 19th century, life expectancy fluctuated from 30 to 40 years. Only since the Industrial Revolution has life expectancy climbed steadily.

Due to market-fueled innovations and new technologies, living standards have increased dramatically since the Industrial Revolution. Kids survive childhood, and shorter working hours mean that families can be closer-knit.

All of this makes people see their own lives as more valuable. This decreases their willingness to potentially throw their life away in crime, violence, or war. That’s one reason we see less violence in wealthier countries — and thanks to markets, we’re all a lot wealthier than our ancestors. 

If Sanders is interested in genuine solutions to improve human life and cooperation, he should take another look at markets. His socialist criticism ignores many of its greatest benefits.

  • Julian is a former political op-ed writer and current nonprofit marketer. His work has been featured in FEE, National Review, Playboy, and Lawrence Reed's economics anthology Excuse Me, Professor.