If the Price is Right, Do Values Matter?

alexei_marcouxShould it matter to consumers whether the company’s CEO supports gay marriage, is a libertarian, or a Catholic, or is a supporter of a particular political party?

Yesterday, as part of my Business Ethics Speakers Series at the Ted Rogers School of Management, I had the honour of hosting Professor Alexei Marcoux, from the Quinlan School of Business at Loyola University Chicago. The title of his talk was “Adventures in the Market for Values.”

Alexei’s argument was that it’s almost always a mistake to let the values held by buyer or seller get in the way of a mutually-beneficial exchange. Or, to be more precise, he argued that we shouldn’t get into the habit of making purchases that way, or adopt the disposition to do so.

The argument was basically about what kinds of people we need to be in order to have a flourishing commercial society. The short answer is that we need to be tolerant folks, able to engage each other in commerce when we have shared interest in doing so. This means that we should make our buying decisions based on price, quality, and what we know about the basic ‘commercial integrity’ (i.e., trustworthiness) of the person or company we’re dealing with.

Why not care about the other person’s (or company’s) values? The argument is basically about character, or virtue. Our best ‘vision’ of a flourishing commercial society is one in which people put aside their differences to make themselves and the world better off by engaging in commercial exchange. Alexei quoted Rabbi Jonathan Sacks: “It is through exchange that difference becomes a blessing, not a curse.”

But his argument also has a more directly practical element to it. For any given individual, commerce based on values is going to be irrational, leading to the purchase of goods that satisfy our needs worse than available alternatives. If the deal is a good one, you should take it. (Charles Barkley exemplified this attitude when he was quoted as saying, “I can be bought. If they paid me enough, I’d work for the Klan.”) Socially, the problem with too much focus on the other person’s values is that in the aggregate it results in what economists call “dead weight loss” — a loss in efficiency in the market overall.

Now two caveats apply here.

First, Alexei’s argument isn’t that we shouldn’t care about the values embodied in the products we buy. In fact, quite the opposite: he argued that we absolutely should want to make sure that the products we buy match our own values. That’s part of what is summed up in useful but dreadfully vague word, “quality.” What counts as high-quality paper will differ from person to person, depending on the values they hold. One person demands crisp, bright white paper. Another insists on “good enough” paper that is high in recycled content. His point is that you shouldn’t care about the values of the person you buy from.

Second, his argument isn’t that it could never be right to make a purchasing decision based on the values of the person you’re dealing with. We might be able to imagine extreme cases where doing so would be reasonable. (My own candidates include situations in which the person is the product, or when the values of the person lead you to have doubts about for example the integrity of a brand and the cluster of values the brand is supposed to represent.) Alexei’s point is that we shouldn’t make a habit of making decisions that way; that’s not the sort of people — the sort of community — we should want to be.

2 comments so far

  1. Marvin Edwards on

    1) There was a Christian organization that my mother told me about that listed Christian businesses so that one could shop and do business only with other Christians. I reminded her that other people also need to be able to earn a living and the presumption that business run by Jews or atheists were less likely to deal from character was a prejudice being implied.

    2) The horrid Libertarians and Anarchists recommend using boycotts rather than law to force businesses out of business who discriminate against blacks. Ron Paul brags he was the only congressman to vote against the bill celebrating the 40th anniversary of the Civil Rights Act of 1964.

    3) Moral judgment suggests that we should not allow prejudice to guide our actions, but rather choose the path that is most likely to improve the world for everyone.

  2. moniqlyne on

    Reblogged this on Experimenting with words and commented:
    In some Instances Values do matter, At times when shopping for perfume associated with a glamorous celebrity i will buy it depending on how i perceive them, My perception of Mystique and luxury and if what they value matches with mine price is not a factor in such instances. So yes Your customers’ perception of you can be more important than your price in my opinion.

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