The Golden Rule Requires Markets

By Robert E. Wright

At the third annual Philosophy, Politics, and Economics (PPE) Society conference in New Orleans last week, Nobel Prize winner Al Roth gave the final keynote speech about, what else, kidney exchanges. I had already read his book on the matter, but a reception was scheduled to follow, so I went.

I am glad I did because he made a somber topic quite interesting. He also pointed to a new study that confirms what I have long believed, that most people do not understand The Real Golden Rule.

What generally passes for The Golden Rule is some variation of treating others as you want to be treated. Like Jack Kennedy’s admonition to ask not what your country can do for you, but what you can do for your country, it doesn’t stand up to close scrutiny.

The common understanding of The Golden Rule can be quite authoritarian in practice. I’ve heard “good” people say, “Well, if I was a dirty, stinking X (insert any group here), I’d want to be Y’d (murdered, raped, dispossessed, etc.), so it is moral for me to do Y to X.”

Well, no.

The Real Golden Rule challenges those who would be moral to understand how others want to be treated, and then treat them that way, not the way you would want to be treated in like circumstance. Only in the absence of information about their preferences should we default to treating others as we would be treated, and even then we need to do so with extreme care and considerable empathy (or sympathy as Adam Smith put it in The Theory of Moral Sentiments).

Ideally, however, we should ascertain how others want to be treated and then treat them that way. But how is it possible to discover all those preferences? Through markets, of course. If X balks at receiving A for B, then X values B more than A.

If we want to follow The Real Golden Rule, and we should, we shouldn’t force X to make the exchange.

This is where Roth’s talk comes in. He showed experimental evidence that people will restrict the choices of other people without compunction. Some would allow a person to receive $50 or more to eat an insect, stipulated to be perfectly safe for human consumption, but would not allow the individual to consume it for less money.

Well, hell, I would have eaten the darn bugs for nothing right then and there (recall the talk was before the evening reception!), and, in fact, I have actually paid money to consume edible insects. Yet some large percentage of strangers are apparently poised to support legislation banning an activity that creates no negative externalities for anybody (except for the insects of course).

How does that jive with The Real Golden Rule? It doesn’t, but it is perfectly consonant with the weak tea that most people consider The Golden Rule. They wouldn’t want to eat an insect for less than $50 and are willing to impose their preference on others. That sickens me more than a whole plate of edible insects.

More importantly, people use the fake Golden Rule to justify all kinds of policies that injure others, from rent controls, to usury caps, to the minimum wage. They tell themselves that they are moral, but really what they are doing, imposing their will upon others, is immoral as hell.

When I have presented The Real Golden Rule to theologians and religion professors, as I did recently in Dallas at a conference sponsored by Oikonomia, a network of religion scholars (finally) interested in economic and business issues, all I received in return were blank stares. They didn’t banish me from the Kingdom so far as I know, so maybe some of them are chewing on the notion. That’s what I would do. Maybe I should push for a law forcing them to reconsider how they conceive of the Golden Rule?

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