Horwitz on the Private Sector Response to Hurricane Katrina and the Bourgeois Virtues (from Accepting the Invisible Hand)
Mark D. White
We finish our previews of the chapters from Accepting the Invisible Hand: Market-Based Approaches to Social-Economic Problems with Steven Horwitz's "Doing the Right Thing: The Private Sector Response to Hurricane Katrina as a Case Study in the Bourgeois Virtues." Against the background of Deirdre McCloskey's The Bourgeois Virtues (see also here), Horwitz details the extensive assistance granted by private firms like Wal-Mart, Home Depot, and McDonald's to the regions devastated by Katrina, and argues that the profit motive fails to explain it.
Major American companies from Marriott to McDonald’s to Wal-Mart undertook major and minor acts of bourgeois virtue, and contributed in a significant way to the recovery from the hurricane. Managers and senior leaders used the language of ethics and virtue, rather than that of narrow self-interest or profit maximization, in describing what they expected from employees, and employees used similar language to describe their own behavior. “Doing the right thing” was central to their response. What constituted doing the right thing, how the very nature of large capitalist enterprises made doing “right” possible, and how doing right improved conditions after Katrina will all be explored here. (p. 170)
Horwitz provides a wealth of evidence from news reports and interviews supporting his contention that these corporate agents, at the corporate level and throguh their regional branches and managers, were acting not out of calculated self-interest but a larger sense of duty, beneficence, or "the right thing":
Wal-Mart’s reputation is one that would not suggest that ethics and virtue were at the top of their priority list. However, then-CEO Lee Scott’s directive to all of Wal-Mart’s senior vice presidents is perhaps the most clear statement of the insufficiency of Prudence Only. In a meeting with those executives, he asked them to pass the following message down to their reports and get the word out to managers and associates across the country: “A lot of you are going to have to make decisions above your level. Make the best decision that you can with the information that’s available to you at the time, and, above all, do the right thing.” Of course this directive leaves open the question of what Scott considered the “right things” to do, but it became clear in the way the corporation praised various responses of individual managers and associates during the storm (to be discussed later) that he, like the leaders at McDonald’s, was concerned that people and communities be taken care of before anyone worried about profits. (p. 176)
Later in the chapter, Horwitz discusses the broader importance of private concerns like Wal-Mart and McDonald's (as well as individual grocers, builder, etc.) to communities, and emphasizes that the contribution they make to ravaged areas like those hit by Katrina are long-lasting and much broader than simply jobs and income (citing Virgil Storr's seminal work on the market as a social space):
Markets in commercial societies are much more than the sterile interplay of atomistic maximizers that constitutes the models of mainstream economics. In the flesh-and-blood world of the real marketplace, people come together in a variety of ways and for a variety of purposes. Much thinking about the liberal order has focused on the polity as the site of this sort of coming together, but the agora is also full of sites in which social interaction is central. ... Moreover, the fact that buying and selling is part of our everyday routine, whereas political action, even construed broadly, is much more the exception, means that the marketplace is far more likely to be a site of social intercourse and interaction than are the institutions of the polity. (pp. 185-6)