This section is about the role of stories, belief systems, and ideologies in establishing what is and is not acceptable (right and wrong) behavior. It is also about the role of these mental constructs in justifying or challenging established institutions—the way things are. The stories we tell ourselves, the belief systems we construct, and the ideologies we articulate all serve to validate and justify our shared understandings of right and wrong in particular contexts. Such narratives are key parts of establishing and maintaining our moral systems. They are also instrumental in changing them.
“The King is established by God to rule over the people.” Does anyone in the United States believe in the divine right of kings to control the lives of others?
Yet, that notion once was widely accepted as a truism in many countries and may be accepted in a few still today.
“The sole purpose of corporations is to make their shareholders wealthy (i.e., to increase shareholder value).” Many, perhaps most, business professors agree with that dictum and propagate it in courses, articles, and books. This narrative received its most famous expression in Milton Friedman’s September 13, 1970, New York Times essay on the social responsibility of corporations: “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Period. ipse dixit. End of discussion. I am not aware of Friedman’s ever having developed a rigorous argument based on first principles supporting this assertion. Any unbiased argument would need to explain why society, which affords limited liability to shareholders–the legal protection that makes corporations possible in the first place–is not entitled to some benefit in return–why, that is, we are not entitled to expect corporations, like all other citizens, to be socially responsible.
Friedman’s pronouncements on the purpose of corporations has been disputed in many places, in some at great length, perhaps none so forcefully as by the late Lynn Stout in The Shareholder Value Myth. (See also Joseph Bower and Lynn Paine, “The Error at the Heart of Corporate Leadership.”)
The point here is not to argue who is right—Friedman and his crowd or Bower and Paine and theirs—but to call to mind the ancient statement: Ideas matter. Our narratives, stories, belief systems, ideologies, and other forms of making sense and justifying interests play a major role in what counts as right and what as wrong.
My aim is not so much to call attention to the shortcomings of the “shareholder value myth,” as Lynn Stout called it, but rather to observe that this ideology is an ideology that has had and continues to have a significant impact on our acceptance of an economic system that many sense is wrong. But we may not make a connection between this narrative and income and wealth inequality, for example. We may simply accept it because we cannot put our finger on where and how it violates the fundamental law of reciprocity. The result is moral confusion.
Another illustration of the role of narratives and beliefs in moral systems can be found in Mariana Mazzucato’s The Value of Everything. Mazzucato tells us that a complex set of narratives equates value with price and sees contributions to the gross domestic product only where money changes hands, leaving the value of home making and child rearing (including even homeschooling) out of the equation because women don’t get paid to do it. Implicitly, it is morally right to pay stock brokers well and not wrong to pay teachers poorly and home makers not at all. It’s a free market, after all–or so the free market ideology tells us. (See also Ezra Klein Show, “The World’s Scariest Economist.”)
When it comes to how people actually behave, it might be argued that the mental constructs of validation are as, perhaps more, important than norms, principles, or rules. That could be an overstatement. But they are important in moral systems. This section explores that importance.