Jonathan B. Wight

Our preview of Accepting the Invisible Hand: Market-Based Approaches to Social-Economic Problems continues today with a discussion of how markets transform lives in developing countries. 

Previous chapters:  Chapter 4, "Don't Let the Best Be the Enemy of the Good: A Stoic Defense of the Market," by Jennifer A. Baker was discussed here; Chapter 3 by James D. Gwartney and Joseph Connors on "Economic Freedom and Global Poverty,” was discussed here, Chapter 2 by John Meadowcroft on "Markets, Discovery, and Social Problems," was discussed here, Chapter 1 by Mark D. White on "Markets and Dignity: The Essential Link (with an Application to Health Care)" was discussed here, and the preface was posted here.

“Ethics in the Mayan Marketplace” (Chapter 5) explores the complex philosophy and psycho-spiritual views that direct behavior of many indigenous people in rural Guatemalan villages.  The abstract notes that a voluntary and often unconscious practice of redistributive justice exists in the indigenous marketplace based on social relationships embedded in Mayan cosmology.

This paper explains the ancient Mayan belief systems that are based on something akin to (although pre-dating) Adam Smith’s theories of moral sentiments.  The paper draws upon Adam Smith’s theories to demonstrate the overlap between Smith’s thought and Mayan thought.

The paper also relates Mayan social and market institutions to modern institutions that create moral limits to markets.  Importantly, indigenous Mayan culture is more receptive to self-help and entrepreneurial activity than to pity and charity.  Transformational non-profits such as the Highland Support Project (HSP) build upon indigenous practices that use social capital for lubricating entrepreneurship and market development. 

By contrast, traditional non-profits that provide hand-outs of medicine and aid often create dangerous dependencies that are difficult to break because they become embedded in local culture (e.g., the mindset of failing to solve problems internally and instead seeking external handouts). 

Mayan culture is being rapidly transformed by globalization.  Traditional social practices (including indigenous safety nets) are rapidly disappearing without being replaced by other supportive institutions.  Economists should be aware that narrow concepts of efficiency ignore social justice considerations that for hundreds of years have worked to support a cultural and economic structure. The authors conclude that:

Traditional practices provide safety nets that ensure economic subsistence and a social structure that supports personal dignity.  While economists equate increased production and global trade with a rise in efficiency, a full accounting would include the transitional and dislocating costs that go hand-in-hand with freeing up capital or labor inputs, and the potential loss of social capital.  This paper provides a glimpse into traditional village life and the moral construction of meaning through market activity.