Markets and Morals

Society Seminar

WEEK 1: ECONOMICS AND THE PURSUIT OF HAPPINESS

Video: Introduction + Lesson 1: “Political Implications of Economic Systems”
Intro: Economics is a crucial discipline in the pursuit of happiness among people and nations, but economists strongly disagree on how it should be implemented. Adam Smith believed that it is work, and not legislation, that leads to prosperity—free markets and not state action that improves lives. In our time, many intellectuals believe that socialism is both more productive and more humane than the free market. They argue that government must counteract systemic inequalities in the market system. In this first week, you will begin to examine market alternatives and their political implications.
Discussion Questions:
- Why do you think people turn to socialism?
- What is democratic socialism and what are its problems?
- What should the role of government be in a free market economy?
- What are some areas in which the government oversteps economically today?
- Should the government provide education for all? If so, how much education? If not, why not?
- Are economic freedoms and economic rights necessary to a free society?
- Why is private property important for human beings?
- Does socialism necessitate authoritarian government?
Supplementary Materials:
- Consider taking the Lesson 1 Quick Quiz.
- Consider watching Lesson 2.
- “The Relationship between Economic Freedom and Political Freedom,” Milton Friedman
- The “Learn More” tab on Lesson 1
- “The Fatal Conceit: The Errors of Socialism,” F.A. Hayek
- “In Venezuela’s Socialist Paradise, Workers Report to Labor Camps,” Robert Tracinski

WEEK 2: COOPERATION & COERCION

Reading: Introduction + Chapter 1 (pp. 9—24)
Intro: “There are only two ways that humans work together: they cooperate with one another, or they coerce one another” (C&C, 9). Increasingly, people are turning to government to achieve their desired ends, but the means to these ends are coerced when facilitated by the government. Members of societies, on the other hand, are free to reach their desired ends through cooperation. To dive into these different paths, we encounter the knowledge problem that defines our intersection with other people. Even the smartest among us don’t really know a lot. This leads us to ponder the complexity of a pencil.
Discussion Questions:
- What are the benefits of coercion? What are the problems with coercion?
- What are the benefits of cooperation? What are the problems with cooperation?
- In what situations should coercion be used? How about cooperation?
- Can governments be cooperative? Can societies be coercive?
- Are there any ways in which you are actually self-sufficient?
  - Choose one item in the room and talk out how you would make it from beginning to end.
- How does the knowledge problem and the need for specialization fit into the premise of cooperation and coercion?
Supplementary Materials:
- Words & Numbers podcast
- “I, Pencil,” Leonard E. Read
- Common Sense, Thomas Paine

WEEK 3: HOW MARKETS WORK

Video: Part 1, Lesson 2, Parts 1, 2, 3: “Economic Choices”
Intro: Ever get into an economic conversation and immediately feel like the jargon is over your head? Well, every field of study has its own key ideas and principles. To think like an economist, you have to understand concepts such as competition, incentive, scarcity, and opportunity cost. They are central to our daily lives and integral to a productive economic system. This lesson shows you why.
Discussion Questions:
- What does it mean to call economics the study of human action and human choice?
- Why is it important to assess economic decisions after the fact instead of merely weighing costs and benefits before acting?
- What are some ways in which you see individuals or governments failing to recognize the unintended consequences of an action?
- Discuss how the price mechanism works in respect to supply and demand.
- Why do incentives matter?
- What is the difference between selfishness and self-interest?
- Is there any goal, value, or material good that is worth pursuing at all cost?
- Do you disagree with Dr. Ferrarini that “everything has a cost”?
Supplementary Materials:
- “Scarcity” video
- A Student’s Guide to Economics, Paul Heyne
- Consider watching Lessons 1 & 3 from Part 1.
- Consider taking the Lesson 2 Quick Quiz

WEEK 4: COOPERATION AND COERCION

Reading: Chapter 1 (pp. 24—36)
Intro: As we learned last week, humans make choices in both society and government. No decisions are made in a vacuum, and all decisions have consequences that affect more than just the decision-maker. This week, we will be looking at unintended consequences with negative, but largely ignored, effects on people. We will look at examples such as countries incentivizing the killing of overpopulated animals and even seat belt laws to see how seemingly good rules and regulations can cause more harm than good.
Discussion Questions:
- Brainstorm a few different rules/regulations/laws that have been passed recently that people widely accept as good. What are some unintended consequences that might stem from them?
- Is it possible to create rules that do not have negative unintended consequences?
- What are some examples of positive unintended consequences?
- How do unintended consequences from legislation lead to coercion?
- Do unintended consequences play out differently in cooperative groups?
- What are some “spontaneous orders” you have witnessed or been a part of? How would they be different if they were coerced communities?
- If laws do not lead to a change in peoples’ behaviors, why do we continue to pass them?
- Given the knowledge problem, what is the difference between people organizing themselves through cooperation and through coercion?
  - What are the pros and cons of each?
- If the premise is true that we lean toward coercion, is there a way to shift to cooperation? If it were possible, would we prefer to shift all the way to cooperation or is there a middle ground?
Supplementary Materials:
- That Which Is Seen, and That Which Is Unseen, Frederic Bastiat
- How Markets Work: “What Is Seen and Unseen”

WEEK 5: ECONOMICS AND THE PURSUIT OF HAPPINESS

Video: Part 5, Lesson 14: “Justifying Income, Wealth, and Capitalism”
Intro: This week, we ponder the morality of our mixed economic system. By “mixed,” we mean that our economy is the result of private individuals, families, and firms as well as government acting in markets. For want of a better term, we can call this economic system “capitalism.” Here’s the question: Is capitalism moral or immoral? Here we will examine measurement distinctions necessary to evaluate claims about inequality. By examining arguments on either side of the redistribution question, you will have an insight into the sociology of moral consensus in favor of or opposed to capitalism.
Discussion Questions:
- Is capitalism moral or immoral?
- What is income inequality? How do we calculate it? Is it unjust?
- Why does it matter how income is distributed?
- Why is the justice of a particular exchange complex?
- What do you think of Irving Kristol’s critique of Hayek and Friedman?
- Is there a dynamic in capitalism that erodes its moral foundations?
Supplementary Materials:
- Want to keep talking about this? Set up a time to debate the morality of capitalism.
  - Resolved: Capitalism is a moral economic system.
- Consider taking the Lesson 14 Quick Quiz

WEEK 6: COOPERATION & COERCION

Reading: Chapter 2: “Rights and Wrongs”
Intro: What is a right? How do we get rights? In this section, we will discuss the meaning of human rights in the United States. To do this, we will look into the impact of FDR’s presidency and how the shift of negative rights to positive rights “has led to a virtually limitless federal government” (39). With fewer limits on government action, spending has grown exponentially with limited results.
Discussion Questions:
- What does it mean to “have rights”?
- What is the difference between positive and negative rights?
- The addition of the Bill of Rights to the Constitution was heavily debated at the time of the Founding. If you were a Founding Father but had knowledge of how the Bill of Rights would be used today, would you support the addition?
  - If you didn’t have the knowledge of the world today, does your answer change? Why or why not?
- Are rights given to us by the governing power or are they inherent? What is the prevailing view today?
- Does every positive right diminish negative rights? Do positive and negative rights currently coexist?
- What is good about FDR’s list (43)? What is problematic?
  - Regardless of your answer, how did this shift the discussion on rights?
- To what extent does the coercive nature of government breed positive rights? To what extent does it diminish negative rights?
- If the distinction between positive and negative rights is an important one, why don’t we hear politicians talk about it?
  - Is there a way to include the discussion of positive and negative rights in the political sphere without harsh backlash?
Supplementary Materials:
- Federalist No. 84
- How Markets Work: “Virtue”

WEEK 7: HOW MARKETS WORK

Video: Part 4, Lesson 10, Episodes 1, 2 (YouTube), and 3: “The National Economy”
Intro: We love to make connections. In a globalized economy, making those connections is more important than ever. The interconnected nature of peoples, resources, and functions in an economy is a source of its abundance. But all this interconnectedness may make it harder to see the full range of effects of a given economic policy. In this section, we will apply the principle of what is seen and unseen to the economy writ large.
Discussion Questions:
- What is the difference between micro- and macroeconomics? Why is it important?
- How does government spending affect both individuals and the economy?
  - Do you think government spending is always bad?
- What is the difference between inflation and deflation?
- Why is the price mechanism so important to a market economy?
- Is it important to have an unbiased government? What happens when a government values some businesses over others?
- What are the downsides of a barter economy?
- What is the role of the central bank? Would we be better off without one?
Supplementary Material:
- Consider watching Lesson 11: “The National Economy, Part 2.”

WEEK 8: HOW MARKETS WORK

Video: Part 4, Lesson 12, Parts 1, 2, 3 (YouTube), and 4 “Monetary Policy”
Intro: You’ve probably heard the saying “money is the root of all evil.” It’s not true. Money is an instrument of exchange and the indispensable element of a prosperous society. Sound money stabilizes an economic system. It reduces uncertainty and encourages trust. Without it people disengage from economic activity, and the economy suffers—people suffer. In this section, we will explore why and how sound money is the root of human flourishing.
Discussion Questions:
- What are the three functions that stable money serves? Why is each important?
- What is the effect of a decrease in interest rates? An increase?
- What are the merits of the gold standard? What are some of its flaws?
- Explain the fiat money system. What are some of its problems?
- Why can’t monetary policy be the same across all markets?
- Is there a problem with attempting to solve problems with unemployment or inflation through government intervention?
- Why does the purchasing power of money change?
- What is the Federal Reserve? What does it do?
- What is the argument against the use of the Federal Reserve?
- What is Keynesianism? What are its flaws?
Supplementary Materials
- Human Goods, Economic Evils, Chapter 9, Edward Hadas

WEEK 9: COOPERATION & COERCION

Reading: Chapter 4: “Minimum Wage”
Intro: “Remember the first job you had? You were probably sixteen or seventeen years old and doing some menial, entry-level work that bored you to tears. Unless you were one of the lucky few with more marketable skills (like child actors and teen pop stars), you were earning minimum wage. You were thus the beneficiary of the federal minimum wage law.
. . . Or were you?” (63). In this chapter, we find the moral/economic argument against the minimum wage.
Discussion Questions:
- What is the human cost of the minimum wage? Is this a strong enough argument to get rid of the minimum wage?
- Why do most people misunderstand the volume of minimum wage workers?
- Is competition necessary for the authors’ argument?
- Is the increase in the minimum wage responsible for the increased use of technology in the workforce? Or is the parallel nature of the two trends coincidental?
- Thought experiment: You are a politician who agrees with Davies and Harrigan’s argument that the minimum wage hurts the people it intends to help. You believe this so deeply that you’re making it a prominent issue in your campaign. How do you incorporate this stance into your campaign?
  - If you want more direction: What are the lines in your stump speech? What is your campaign slogan? How do you answer reporters who ask you about your stance? How would you make this argument to a friend?
Supplementary Materials:
- Want to keep talking about this? Debate the effectiveness of the minimum wage.
  - Resolved: The minimum wage hurts the people it tries to help.
- Words & Numbers podcast: Episode 13: “The Minimum Wage Conspiracy”
- How Markets Work: “The Invisible Hand” lecture

WEEK 10: ECONOMICS & THE PURSUIT OF HAPPINESS

Video: Part 5, Lesson 15, Parts 1, 2, and 3: “Market Freedom, Efficiency, and Tradition”
Intro: This section brings us full circle to the question of what constitutes human flourishing and what institutions and structures are likely to help realize it. We will have the opportunity to describe and critique the moral foundations of market-oriented liberalism. We will also consider: (1) how to identify and evaluate trade-offs between financial and resource efficiencies that raise incomes and lifestyle priorities such as family, community, and contact with nature; and (2) how the connections between economics and the pursuit of happiness are complex. Take the time at the end of this seminar to reflect on what happiness is and how the market can help or hinder our achieving it.
Discussion Questions:
- Reflect on “The Minimum Wage” chapter from Cooperation & Coercion in light of this video. What do you think?
- What is happiness and how do you pursue it?
- What are the different types of happiness discussed here?
- Is money necessary to happiness?
- Is self-interest bad? In what ways might self-interest be used for the good of a community?
- What do free markets need in order to work? Is there anything missing from Dr. Richards’s list?
  - Do we have all these things today in America?
Supplementary materials:
- Watch the first 1:20 of then-Senate minority leader Mitch McConnell’s floor speech against raising the federal minimum wage.
  - Read the bill he was talking about here.

Supplementary Material

Take the Philosophy, Politics, and Economics course.
Listen to the Words & Numbers podcast: Episode 145: “Economics and Morality.”
Listen to the Words & Numbers podcast: Episode 165: “Constitutional Crisis.”
Check out the Mises Institute.

Society Seminar

WEEK 1: ECONOMICS AND THE PURSUIT OF HAPPINESS

WEEK 2: COOPERATION & COERCION

WEEK 3: HOW MARKETS WORK

WEEK 4: COOPERATION AND COERCION

WEEK 5: ECONOMICS AND THE PURSUIT OF HAPPINESS

WEEK 6: COOPERATION & COERCION

WEEK 7: HOW MARKETS WORK

WEEK 8: HOW MARKETS WORK

WEEK 9: COOPERATION & COERCION

WEEK 10: ECONOMICS & THE PURSUIT OF HAPPINESS

Supplementary Material

Donate to The Linda L. Bean Conference Center

Donate to The Linda L. Bean Conference Center

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