Published by EH.NET (January 1999)
Patricia O’Toole, Money and Morals in America: A History. New York:
Clarkson Potter Publishers, 1998. xxi + 408. $30 (hardback),
Reviewed for EH.NET by Donald Frey, Department of Economics, Wake Forest
O’Toole, whose previous books have included The Five of Hearts, a
portrait of Henry Adams and his circle of friends, sets out
to document Americans’ “never-ending debate about the relationship between
private gain and public good” (p. xiv). This volume portrays the tension in
American culture between self-interest and the belief that “to be human is to
live in a community.” The
portrayal is fair, even while O’Toole argues for the moral significance of the
O’Toole is not arguing that there is a tension between values and
practice. Such a thesis would be trite, because practice inevitably falls short
of ideals. Rather, the polarity she discusses is within the American
value system itself, as well as within American economic practice. Nor is
O’Toole contrasting individualism with some version of communalism. In fact,
she tends to downplay the American
communal tradition. Rather, she focuses on mainstream American values and
practices, which are both distinctly individualistic. The relevant distinction
is between a self-focused individualism and relational individualism, in which
a person acts with regard to a web of human relationships and obligations, not
merely personal preferences.
The utility-maximizing model of economics could have represented one of
the poles in the O’Toole thesis, if she had chosen to explicate it.
Community (acting as market) sets the constraints (e.g., relative prices)
on the individual’s maximization problem, but is otherwise irrelevant. Even
altruism is interpreted as being instrumental, occurring only because it
increases the individual’s utility. O’Toole plays off an implicit version of
this understanding of humans, which economist George Stigler admitted was a
type of morality, against an understanding that individuals do, and ought to,
recognize obligation to the common good. Her point is that both these poles
exist in an uneasy tension.
Observers long have noted just this tension in the American character.
Alexis de Tocqueville pondered the problem of self-interest for community in
his celebrated study of 1830s America. More recently Robert Bellah and
co-authors contrasted Americans’ utilitarian values and behavior with
community-oriented values and behavior in their best-selling Habits of the
Heart (1985). Amitai Etzioni’s The Moral Dimension (1988) also
developed the theme.
O’Toole uses case studies; these range from the New England Puritans’
city on a hill to Control Data’s experiments in corporate responsibility.
Other chapters focus upon figures like Benjamin Franklin, Ralph Waldo Emerson,
Andrew Carnegie, and Whitney Young. Along the way, O’
Toole examines labor relations in Lowell, Massachusetts, at Ford during the
five-dollar-a-day revolution, and at Kaiser shipyards during World War II.
Slavery is addressed in a major chapter that is enhanced by drawing upon
less-known sources. In almost every case, the polarity in values and practice
One could argue about O’Toole’s omissions. For
like the early Moravians, while out of the mainstream, made a significant
critique of dominant individualist values and
practices. O’Toole does not ignore religion, yet some of her omissions seem
large: for example, no chapter devoted to the Social Gospel, a major movement
in liberal Protestantism around the turn of the century. Also largely ignored
are economic moralists
like Henry George, (who rates but a few paragraphs in a chapter otherwise
about Andrew Carnegie) Daniel Raymond, Richard Ely, or Francis Wayland, who
might have been of more interest to economists than,
The views of the economists whom O’Toole ignores probably were more
sophisticated than those of the non-economists she does include. For example,
Malthus’ law of population, Ricardo’s rent theory, and the classical wage-fund
together provided the scientific basis for the proposition that poverty was
inevitable. This meant that no one had a moral obligation to the poor, for one
cannot have a moral obligation to change what cannot be changed. Henry George
(whatever one may think of his technical economics) exposed the ethical role of
the se assumptions and effectively critiqued them to a large American audience.
As another example: O’Toole nicely demonstrates the moral tensions inherent in
Andrew Carnegie’s meshing of social Darwinism and massive philanthropy. Yet, a
better exposition of
social Darwinism could have been had by directly examining the ideas of the
quasi-economist William Graham Sumner. That O’Toole barely touched on such
thinkers is a loss to the book.
Although this reviewer is not in a position to judge many of the chapters,
in the areas with which I am familiar I find that O’Toole has done a
good job. I have some familiarity with Puritan economic ethics, and in my
judgment O’Toole provides a finely nuanced exposition of that thought. Her
exposition of Puritan economic morality is far superior to the caricatures
that often mar business-ethics texts.
Would economists find reading this book of benefit? The recent Nobel Prize
awarded to Amartya Sen suggests that the profession may be ready to look again
at these kinds of issues. Even economists interested only in questions that
can be dealt with by the standard neoclassical model might benefit from
occasionally pondering the kinds of factors, like a culture’s morality, that
contribute to the unexplained residual in their statistical work.
Donald E. Frey Department of Economics Wake Forest University
Frey is professor of economics at Wake Forest University. His most recent paper
is “Individualist Economic Values and Self-Interest: The Problem in the Puritan
,” Journal of Business Ethics, October 1998.
|Subject(s):||Social and Cultural History, including Race, Ethnicity and Gender|
|Geographic Area(s):||North America|
|Time Period(s):||General or Comparative|