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Fair Market Ideology: Its Cognitive-Motivational Underpinnings

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Author Info

  • Jost, John T.

    (Stanford U and Harvard U)

  • Blount, Sally

    (New York U)

  • Pfeffer, Jeffrey

    (Stanford U)

  • Hunyady, Gyorgy

    (Eotvos Lorand U)

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    Abstract

    Public opinion research shows that most people espouse egalitarian ideals and acknowledge substantial income inequality in society, but they consistently perceive the economic system to be highly fair and legitimate. In an attempt to better understand this paradox by considering the cognitive and motivational bases of ideological support for the free market system, we draw on and integrate a number of social psychological theories suggesting that people want to believe that the systems and institutions that affect them are fair, legitimate, and justified. We have developed an instrument for measuring fair market ideology, and we have found in several samples that its endorsement is associated with self-deception, economic system justification, opposition to equality, power distance orientation, belief in a just world, political conservatism, right-wing authoritarianism, and scandal minimization. We also present evidence that people evince a system-justifying tendency to judge profitable companies to be more ethical than unprofitable companies. In addition, results from an experimental study we conducted in Hungary indicate that support for the free market system is strongest among people who score high in self-deception under conditions of system threat, suggesting the presence of a (nonrational) defensive motivation. Finally, we discuss several organizational and societal implications of the tendency to idealize market mechanisms and to view market-generated outcomes as inherently fair.

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    Bibliographic Info

    Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1816.

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    Date of creation: Aug 2003
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    Handle: RePEc:ecl:stabus:1816

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    References

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    1. Dan Ariely & George Loewenstein & Drazen Prelec, 2003. ""Coherent Arbitrariness": Stable Demand Curves Without Stable Preferences," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 73-105, February.
    2. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
    3. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
    4. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
    5. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
    6. Solow, Robert M, 1980. "On Theories of Unemployment," American Economic Review, American Economic Association, vol. 70(1), pages 1-11, March.
    7. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    8. Jost, John T. & Hunyady, Orsolya, 2002. "The Psychology of System Justification and the Palliative Function of Ideology," Research Papers 1754, Stanford University, Graduate School of Business.
    9. Jost, John T. & Haines, Elizabeth L., 2000. "Placating the Powerless: Effects of Legitimate and Illegitimate Explanation on Affect, Memory and Stereotyping," Research Papers 1606, Stanford University, Graduate School of Business.
    10. Kay, Aaron C. & Jost, John T., 2003. "Complementary Justice: Effects of "Poor But Happy" and "Poor But Honest" Stereotype Exemplars on System Justification and Implicit Activation of the Justice Motive," Research Papers 1753r, Stanford University, Graduate School of Business.
    11. Messick, David M., 1999. "Alternative logics for decision making in social settings," Journal of Economic Behavior & Organization, Elsevier, vol. 39(1), pages 11-28, May.
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    Cited by:
    1. Di Tella, Rafael & Galiani, Sebastian & Schargrodsky, Ernesto, 2012. "Reality versus propaganda in the formation of beliefs about privatization," Journal of Public Economics, Elsevier, vol. 96(5), pages 553-567.
    2. George Watson & R. Edward Freeman & Bobby Parmar, 2008. "Connected Moral Agency in Organizational Ethics," Journal of Business Ethics, Springer, vol. 81(2), pages 323-341, August.
    3. Mukesh Sud & Craig VanSandt, 2011. "Of Fair Markets and Distributive Justice," Journal of Business Ethics, Springer, vol. 99(1), pages 131-142, February.

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