The morality of social structures

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I argue that repeated interactions between rational utility maximisers lead to the establishment of social structures that meet the requirements of morality. Thus, I reverse the question of whether economic institutions are ethical, by arguing that established institutions that arise from rational interactions, are moral. Morality in this context is defined as a mutually beneficial arrangement that is stable and efficient. Put differently, a moral outcome is defined by Pareto-optimality and Nash-equilibrium.
The argument is two-fold: (1) Rational morality on the individual level is maximising given that interactions are repeated. (2) Social structures, such as conventions, norms and institutions, are both maximising and optimal, provided that they are the outcome of repeated interactions between rational agents.
First, I examine the concept of rational morality. Within the context of repeated interactions it is rational to consider the potential of future interactions. This is achieved by relying on the concept of constrained maximisation. A constrained maximiser chooses a strategy that does not strictly maximise her utility if she knows others will behave similarly. This enables her to participate in future interactions with constrained maximisers, which increases the overall benefit (Gauthier, 1986). Constraining one's maximisation is rational if we consider that it maximises the likelihood that she will participate in cooperative ventures that in the context of repeated interactions yield higher utility.
The second part of the argument turns to the analysis of social structures and especially social conventions. These are defined as equilibria in repeated interactions; they are rational if and only if their participants maximise their utility and they are stable when they lead to a socially optimal state. Importantly, social structures serve as mechanisms of enforcement by distributing information. The availability of information is critical in ensuring that behaviour follows established rules. An agent acting within a social structure depends on future interactions within that structure and as a result she must follow strategies that are socially accepted. Therefore, there is an interactive and dynamic relationship between the individual and the collective.
The outcome of repeated interactions between rational individuals will have to be a social structure that meets the requirements of rationality. However, given that it also addresses the needs of the collective, the structure has to be optimal at the same time. In this context repeated interactions between rational agents lead to moral social structures. In turn, social structures directly affect the nature of social institutions.
Original languageEnglish
Publication statusPublished - Jan 2015


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