The Market Incentivises Good Behavior

and people feel happier

In my Three Worlds notion I propose Life World as “the Lebenswelt of informal social interaction, face-to-face between humans,” Market World as “the half-human half-abstract world of making and buying and selling and borrowing and lending and investing,” and War World as “the world of politics, of government, of battles, of institutionalized religion, of administration, of regulation, of censorship, of socialism.”

And I think I am right.

But I had to admit to myself that maybe humans lost something in the transition from the village to the city and the transition from Life World to Market World. Because Market World is an Abstract World, an artificial world.

But maybe not. According to libertarian John Stossel, people are happier under capitalism. Interviewing Johan Norberg about his new book The Capitalist Manifesto, he gets Norberg to say that people in market-based societies are less lonely.

"It's the complete opposite of what people expect," Norberg says. "In less market-based societies, 20% to 40% say they have no one to count on if they need help. In the richest and most individualist societies, it's in the low single digits."

Norberg goes on.

"Feudalism, communism, fascism, that's divisive," he [says]. "All are based on getting resources by taking them from somebody else. Capitalism forces us to think, 'What does the other guy want?' The most important aspect of capitalism is cooperation. (It's) why every time you buy something, you hear this double, 'Thank you.'"

Ready for more? Capitalism makes us generous. There’s this game where

the experimenter gives a person a sum of money and tells them to divide it with a stranger any way they choose. The only condition: the stranger must accept the offer. If the other person refuses, nobody gets anything.

When people play this game in capitalist societies “on average, they offer twice as much as those in the least capitalist societies.”

"The closer people live to marketplaces, the more generous they are," Explains Norberg. "If they constantly buy and sell and negotiate, they begin to take other people's interests into consideration. That's what markets do. They do affect our character, but not in this way that the critics say. They don't make us more divisive and aggressive. They make us more generous."

But, I think that Market World is more challenging than Life World. It asks: do you accept the offer and the challenge? The fact is that since the invention of agriculture most humans have lived as serfs or slaves, sitting around doing nothing unless prodded.

And it is telling that the average corporate cubicle dweller or gubmint bureaucrat works, in my view, as a kind of neo-serf. They have a fixed wage, fixed benefits, and an informal promise of lifetime employment — that relies, of course, on the continuing existence of the corporation or gubmint.

So why does capitalism and Market World get such a bad rap?

Good question, senator.