Intentions Behind Division of Labor

Many free market economists see property right regimes as originating in the intention to solve conflict. There is a perceived benefit in joining a property based division of labor — that is, where property is protected by law —: security, cooperation (as opposed to conflict), et cetera. Otherwise, most of our resources would be spent securing our wealth by other means (e.g. violence). While A. Alchian, for instance, is bit more eloquent and nuanced than I suggest here, this is, more-or-less, the framework he adopts in “Some Economics of Property Rights” (included in an anthology published by LibertyPress, and another by Liberty Fund). When framed primarily as a result of the ubiquity of scarcity, and the conflict that results, property rights arise almost as a necessity; they’re a precondition to civilization, or an advanced division of labor. But, not everyone necessarily agrees with this narrative.

An alternative explanation behind the division of labor rests on the concept of the “moral economy.” This approach is relatively new to me — I ran across it while reading a book chapter on Southeast Asian maids and neo-slavery —, so allow me to briefly quote another’s definition,

[A] “moral economy” is a web of unequal relationships of exchanges based on a morality of reciprocity, mutual obligation, and protection.

— Aihwa Ong, “A Bio-Cartography: Maids, Neo-Slavery, and NGOs,” in Seyla Benhabib and Judith Resnik (eds.), Migrations and Mobilities: Citizenship, Borders, and Gender (New York: New York University Press, 2009), p. 161.

(By the way, Ong’s is a great paper. If you like to read on social issues, but with solutions that resonate with free market advocates, “A Bio-Cartography” is a real pleasure to read. As a bonus, Ong shares a view on ethics that resonates with me — ethical frameworks vary, and normative issues have to be dealt with by recognizing differences in moral outlook.)

A property rights regime interpreted from the “moral economy” perspective can be the result of a prevailing ethical/moral web, itself contingent on a number of other factors. People agree to the convention out of moral obligation, or because of what they perceive as “right.” These frameworks evolve over time, as people interact with each other. It’s almost like a dialectic between multiple belief systems, where syntheses are reflected through changes in action.

Ong’s subject is Southeast Asian maids who migrate from relatively poorer to relatively wealthier countries in the region (Philippines, Indonesia → Malaysia [Kuala Lumpur], Singapore, Hong Kong), working for wealthy families. There is a dynamic between the Chinese majority in receiving states and the various backgrounds of the sending states. This commonly leads to a very repressive hegemonic relationship between employer and employee, often leading to rape, torture, murder, domestic violence, et cetera (man against woman, but I’ve read that much of the violence is also woman against woman). These kinds of relationships between upper class and lower class Chinese disappeared sometime during the early 20th century, but they reemerged after the 1970s between Chinese and migrant service workers. One way to interpret Ong’s argument is that to guarantee migrant service workers better treatment is to change the prevailing ethic, which involves a local and dynamic dialogue between opposing force.

In the context of the “moral economy,” cleaner property rights (and a corollary, contract law) between employer and employee aren’t established out of the necessity for cooperation, but out of moral obligation. Making such an obligation relevant requires a change in the prevailing ethic. (One practical outlet in this dialectic is the media: it helps to shame those who do wrong.)

The concepts of a “moral economy” and a division of labor built on the realities of conflict and scarcity aren’t mutually exclusive. In the excerpt above, “protection” and “reciprocity” are mentioned. These are qualities of the “conflict theory” of property rights, as well; maybe an ethics of protection and reciprocity formed as a result of the establishment of property rights for other reasons. I, personally, see a lot of merit in accepting both positions as relevant to the subject. Yet, these similarities aren’t always recognized.

The reason I bring up the “moral economy” is to draw attention to alternative approaches. By acknowledging other angles to the same subject, we can better understand others’ stances when they reject (either partially or entirely, with the former probably being the most common) the “conflict theory.” We see this rejection in the dismissal of anarcho-capitalist arguments that property rights regimes can be protected through private law, because it’s in everybody’s interest to avoid conflict. Some might note that this isn’t always true, and you need an institution to enforce a prevailing ethic. These sociologists might see inequity in property rights as a failure, or shortcoming, of the moral economy — one that other forces behind property rights can’t solve.

  • person

    JSTOR link for “moral economy” didn’t work for me!

    • JCatalan

      Oops, thank you! It should work now.

      • person

        Oh, it’s an E.P. Thompson article! Cool, thanks!

  • Steve

    I’ll try to remember to read the article you link to but based on your article Jonothan, I don’t see how “moral economy” theory has any merit. Perhaps I don’t fully understand the idea yet which is why I intend to read the article you link to but it just seems like hooky wishful thinking to me.