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),

ISBN 0-517-58693-2.

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

latter proposition.

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

is evident.

One could argue about O’Toole’s omissions. For

example, communitarians

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,

say, Emerson.

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.