Review of Reckoning with Markets: The Role of Moral Reflection in Economics by James Halteman and Edd Noell. (Oxford University Press, 2012) 240 pages; $31.50.

Sometimes a book has considerable value for readers beyond its primary audience. Such is the case for a slender hardback written by two professors teaching business and economics at two Christian colleges (Wheaton in Illinois and Westmont in California). Not surprisingly, Reckoning with Markets seems aimed for Christian college students. Nonetheless, readers need not hail from collegiate environments to gain from moral reflections on economic justice and an exploration of developments in economic thought today.

Chapter one begins with a hypothetical conversation between various thinkers such as Aristotle, Aquinas, Adam Smith, Mill, Marx and Keynes. The dialogue is parceled out in snippets of thought somewhat less than synergistic. Fortunately, the educative value of the book grows as one moves along. Chapter two offers an assortment of moral reflections drawn from biblical literature and the ancient Mediterranean world. Chapter three leads the conversation into the scholastic period, with considerable attention given Thomas Aquinas. Unfocused readers will probably finish the first three chapters without a clear sense of the book's purpose.

Fortunately, chapter four sheds light on the preparatory nature of the preceding work. The authors explain: "In much of the discussion so far, moral reflection has been related to a sense of telos or the purpose to which human action is directed. Only when there is a goal can there be meaningful discussion about what is right and wrong or good and bad." If the reader returns to the first three chapters with this notion in mind, the rationale of what has gone before es evident. How can a society judge the merits of one economic pathway or another until there is a collective understanding about the purposes of life? There must be an organizing schema and a belief system. A sustainable public interest must be identified and agreed upon—democratically or by other legitimate means—before the merits of various acts can be asserted. It is only when merit is judged that we have a means by which to evaluate the prudence of economic rewards.

If economic systems must be moral in their operations and effects to possess legitimacy, then ad hoc goals that reflect mere political expediency or eclectic ideology will not suffice as the underlayment of market design. As Halteman and Noell suggest, societal goals cannot have moral import unless they have consequence and stability. Additionally, societal goals cannot exist in merely general terms. It is insufficient in evaluating economic morality to say that utility, happiness and the good life represent the national mission or ethos, as each of these goals potentially incorporates so many conflicting agendas that coordinated societal initiatives are possible only at the cost of sacrificing any real meaning in the goals.

Friedrich Hayek

As Halteman and Noell progress, they explain the nature of enlightenment thinking and religion's benefits to the social order. The authors note Adam Smith's lament that "flattery and falsehood too often prevail over merit and abilities." In a tacit defense of free markets, they suggest that market participants have the capacity to e "impartial spectators," thus allowing external policing to be minimized as the awakened moral conscience causes self-control to dominate unsocial passions. While this is a nice thought, crony capitalism seems to have gained the upper hand in our institutions of power.

Much of the discussion in the second half of the book reflects the authors' concern that today's dominant economic theories are unrealistic about the ways markets aggregate choice. Specifically, the authors contend that rational choice theory does not provide an adequate explanation of human behavior when it assumes the predictability of human perceptions of self-interest. Humans may not move toward self-actualization as rationally or neatly as theory suggests. There are groups of people whose values, beliefs and moral perspectives may move them toward choices that are inconsistent with their shortterm self-interest while constructive of society's long-term sustainable good. For example, individuals who risk death to defend their homeland against unjust aggression may facilitate a greater good that arises out of their truncated self-interest.

In the process of contrasting various economic conceptions, the authors build a case favorable to Friedrich Hayek's thinking; namely, that social norms develop as people solve problems by processes of intuition arising from their moral sense. Morally derived norms provide a context supportive of the enduring good as people respond rationally to price signals. Reflections of this nature put in mind one of Hayek's closing observations in his 1974 Nobel Prize lecture; namely, if man is to improve the social order, he must refrain from shaping results as a craftsman shapes his handiwork. Instead, mankind must facilitate winsome economic es by cultivating the appropriate environment in the manner a gardener does for his plants. The environment that Hayek speaks of may well include the moral context Halteman and Noell have in mind.

Saint Thomas Aquinas. Artist: Carlo Crivelli; Wikimedia Commons

It strains the rational imagination to assume that satisfactory market design arises spontaneously in a moral vacuum, analogous to a big bang theory of the universe's creation, absent divine intelligence and power. Without the existence of a national ethos built on moral considerations—a 'telos or purpose for human action,' as Halteman and Noell suggest—how can market e to any end but an amoral version of self-interest realized in cronyism and concentrated power? Little wonder, then, that Robert Nelson's 2002 book, Economics as Religion, was read by many to suggest that economics cannot be neutral and will always generate consequences that broadly overlap the work and vision of applied religion.

In arguing that economics is not value free, Halteman and Noell lend support to the theory that the Federal Reserve, assertions of neutrality notwithstanding, works to advance some values at a cost to others. If this effect of central banking is inescapable, it demands that the electorate give close attention to the Fed's congressional mandate—the overarching policy instructions given by the people's representatives to Fed governors. Inevitably, these instructions will either support moral financial es or undermine them.

In sum, the Halteman and Noell book tacitly builds a case for moral market design by conceding that petitive environments weed out those who do not shrewdly put narrow self-interest first. This acknowledgment enjoins the realization that there can be no lasting market freedoms without laws that constrain incentives to sell out the public interest. In this respect Friedrich Hayek came close to having the last word on 'economic gardening.' Unless we cultivate market designs that reward moral merit in relation to the value of merit's contribution to the enduring public good, we have little hope of es apart from crony capitalism. Current dysfunctions of justice remind us that morality does not spontaneously evolve petition. Moral reflections must be evident when we reckon with markets.

Timothy J. Barnett is an associate professor of political science at Jacksonville State University.