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Thursday, August 4, 2011

The Bourgeois Virtues and Consumer Ethics

Rewarding excellence.

In an earlier column I talked about Deirdre McCloskey’s work on the “bourgeois virtues.” McCloskey argues that capitalism both resulted from and helps to encourage a set of virtues beyond mere “prudence.” In a market economy we act more ethically toward others, particularly strangers, not just because it’s in our self-interest but because when our default engagement with them is via voluntary exchange, we slowly develop the unconscious habit of treating others well. In that earlier column I used an example surrounding a friend who had car problems.

Car problems are the topic of today’s column as well. This time, however, it was my son’s, whose transmission failed on his way home from college last week. Luckily the car died in a commercial area, more or less in front of a Midas Muffler shop in North Syracuse. The guys at that shop went above and beyond the call of duty in helping him out. They pushed the car into the bay in the pouring rain. They took a quick look at the problem and gave him a diagnosis (which turned out to be correct). They recommended a couple of nearby transmission shops. They let him use their waiting room to make a few phone calls. And eventually they drove him to a nearby coffee shop as they closed up so he could wait for me to pick him up. Most important, they didn’t charge him a penny.

A Show of Gratitude

When we returned a few days later to check on the car, my son and I stopped by that coffee shop to get a $25 gift certificate for the guys at Midas. They were genuinely appreciative of the gesture. What was most interesting, though, was what the senior mechanic said. He could have smiled and said, “Well, we’re always ready to help a potential customer!” That would have been fine, and as an economist I would have respected that. Self-interest can indeed lead to mutual benefit. But what he said was, “That’s what we’re here for.” To him, this was much more about an obligation he has to a driver in trouble. His language was more or less the language of ethics and virtue. I believe he meant it too.

This is what markets do. First they enable us to deal peacefully with strangers.  Exchange leads us to treat strangers as “honorary friends.” Moreover, by creating a default setting of dealing with others through negotiation rather than domination, markets get us in the habit of treating others with dignity. Even if we learn that such reciprocity is in our long-term self-interest, we still internalize the value and recognize its virtue. It soon becomes habit even when self-interest isn’t at stake. Treating a struggling stranger with kindness is a bourgeois virtue made possible by the market.

But there’s another aspect to this story I want to emphasize, namely, the way my son and I responded to their kindness. At a student seminar last week the philosopher Doug Rasmussen gave a terrific talk on “business ethics,” in which he articulated a set of ethical ideals that businesspeople should aspire to, most of which centered on making the best product possible and not being ashamed of profiting from it. This was a very different notion of business ethics from the one that focuses on “social responsibility.” I asked Doug afterward if he thought there was a parallel “consumer ethics.” Without hesitating, he said, “Yes. You should reward excellence.”

I think that’s right. And Doug’s point can be seen as part of the bourgeois virtues. Markets do encourage us to reward excellence, and as consumers we should take that idea to heart. For example, I tend to be a fairly heavy tipper at restaurants, especially when the food is really good or the service is above and beyond the merely good. My reaction to what Midas did for my son was similar. Their treatment of him was a good example of the sort of excellence that I think we as consumers should feel ethically obligated to reward.

Putting It All Together

If we put together the ideas of bourgeois virtue and consumer ethics, what we see is that markets encourage us to treat one another well and when that behavior is particularly excellent, we should reward it.

In leaving Midas, my son and I thanked the men and they thanked us. That dual “thank you” is yet another mark of the way in which markets create mutual benefits and encourage the virtue of civility. But the consumer ethics point is that the nonmaterial thank-yous should be followed by some sort of material reward when the producer has been truly excellent.

No you don’t have to tip the guy at the deli counter who cuts your meat – the dual thank-yous are enough. However, when people in the market display particularly virtuous behavior, we as consumers should feel obligated to reward it, and not just because we think it will encourage more of it. We should do so because it’s the right thing to do.

  • Steven Horwitz was the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he was also Director of the Institute for the Study of Political Economy. He is the author of Austrian Economics: An Introduction.