Sociology Index


The concept of moral economy helps us to clarify alternative ways of utility maximisation through the construction of altruistic meaning for economic transactions. Moral economy joins collectively held values and feelings with economic choices, and has been at the core of the moral economy theorem. The term ‘moral economy’ remained bound to a specific epoch and a particular historical context. The term moral economy offers an antithesis to the rational choice theory imperatives that conflate rationality and utility maximisation. The conceptual history of the term moral economy shows a great diversity of meaning over a 200-year span. Moral Economy is the central characteristic of economic activity in a tribal society.

Moral economy exchanges are driven by moral obligations created by kinship structure and relations, gift giving, and rituals. In a moral economy, like in a hunter gatherer society, a hunter or food gatherer may by obliged to give much of the food to a network of relations, accounting for the distribution of food within the community.

Moral economy has rarely been seen as a concept linking its two concurrent fundamentals, that is, ideational and utilitarian ends. The potential of the term moral economy as a dynamic analytical tool that can illuminate the workings of civil society in the modern world has not yet been realised. It was the final collapse of moral economy, and economic exchange as moral obligation that Karl Marx bemoaned when he described the cash nexus that has become the central medium and motivator of exchange in capitalism and capitalist society. Moral economy might see its future utility in the field of welfare, civil society, and the non-profit sector if moral concerns and economic resources coincide.

Adam Smith's classic liberal economy works well only when economic and political power is well distributed. The distribution of power in the twenty-first century depends on which of three paths we take: interventionism, libertarianism, or the middle path proposed. This path is called the moral economy. It seeks balance of power among social groupings, in which socially desirable behavior is imposed sidewise-by group acting upon group-rather than downward, through government regulation.

E. P. Thompson defined moral economy as a traditional consensus of crowd rights that were swept away by market forces. There is as little reason to be content with the limitations of moral economy as defined by Thompson as there is interest in updating a concept that challenges the anthropological claims of current micro-economic doctrine. E. P. Thompson's 1971 article ‘The moral economy of the English crowd in the eighteenth century’, both contradicts and confirms this. The term ‘moral economy’ succeeded in assigning meaning to a set of empirical observations by integrating them into a nomothetic framework.

The moral economy embodies norms regarding the responsibilities and rights of individuals and institutions with respect to others and regarding the nature and qualities of goods, services and environment. The story of capitalism and modernity is often told as one of the replacement of moral economy by a political economy, in which the fate of actors comes to depend on the outcomes of anonymous contending market forces, the positioning of people as consumers turns moral judgements concerning the social good into matters of private preference.

A moral economy is an economy that is based on fairness, and justice, as opposed to one where the market is assumed to be independent of such concerns. Moral economy is generally only stable in small, closely knit communities, where the principles of mutuality. Where economic transactions arise between strangers who cannot be informally sanctioned by a social network, and a moral economy becomes harder to maintain.

Moral Economy And Its Extended Notions

Thompson (1991, 340) opposed taking moral economy ‘out of the context of a particular historical formation’, with its unique configuration of class and social forces. He insisted that his findings on the entitlement to necessities internalised by the English crowd in the eighteenth century were not applicable to other cases.

In his 1991 review article he cited Charles Tilly's suggestion of a general definition of moral economy, with which Thompson inclined to acquiesce: The term ‘moral economy’ makes sense when claimants to a commodity can invoke non-monetary rights to that commodity, and third parties will act to support these claims – when, for example, community membership supersedes price as a basis of entitlement. (Tilly, cited in Thompson 1991, 338).

This was followed by Tilly's disclaimer that moral economy would lose its conceptual force if it were merely to mean custom, tradition, or non-market exchange. Both Tilly and Thompson assert that a broader use of the term moral economy would lead to a loss of focus. However, the critical question is: broader than what standard?

Tilly's definition of moral economy was more abstract than Thompson's contextual understanding, but it was confined in two respects: on the one hand it reserved moral economy to claimants, and on the other to the domain of rights.

Thompson and Tilly did not address the logical problem of how to motivate the public to equate moral economy with the view shared by the crowd and by paternalist authorities in early modern England. Instead, both qualified the generic concept by reference to a particular context, as evidenced in Thompson's own title, ‘The Moral Economy of the English Crowd in the Eighteenth Century’.

The same argument can be applied to the dominant way in which references to moral economy have proliferated since the 1970s as a slogan of critics of the market system. While fascination with the concept resulted from pre- or non-market arrangements being taken as a proof of the feasibility of a socialist post-market system, such a reading overextends the analysis of Thompson and others (Gailus and Lindenberger 1994, 471; cf. on a leftist reading Dogan 2010; Thompson 1991, 340–341).

Moral economy might be an ideal of economic relations in their totality, or could as well refer to a particular dimension or economic sector. Whereas one case promotes system change, the other is content to improve the market by casting light on blind spots and correcting failures. Thus, while discontent with the ideal-type market system as propagated by modern economic theory fuels all notions of moral economy, the concept does not incorporate a self-evident position with regard to the workings of market economy in its social environment; nor does it imply either revolutionary or reformist strategies.

The legitimacy of redistributive welfare state arrangements is therefore conceivable as a result of the larger ‘moral economy’ surrounding modern ‘market economy’. The current crisis of the welfare state reflects normative disorder as much as it does fiscal constraints and proliferating bureaucracy (Sayer 2000, 97).

Martin Kohli's criticism of Thompson's understanding of moral economy as ‘still relatively imprecise’ was followed by a definition that was not more than a deduction from the latter's ideas. However, he released the concept from Thompson's historical contextualisation in pre-industrial society, arguing that an industrial market economy was a new system that contained its own form of moral economy. While traditional society relied on a moral economy of consumption, modern society was founded on a moral economy of labour – one that was institutionalised in the welfare state and particularly in cross-generational transfer arrangements tied to the life career.

Peter Swenson examined the moral economy of wage setting in industrial capitalism from a similar vantage point, concentrating on trade unions and excluding direct state interventionism (Swenson 1989, 11–12).

Stefan Svallfors reframed moral economy to signify the public's opinion of the welfare state, although as a catchy title rather than a consistent interpretation. He understands moral economy as the result of an ongoing clash of norms. Thus, he adapts it to the notion of the welfare state as the outcome of a democratic class struggle, and simultaneously associates the term with consensus about welfare state regimes (cf. Korpi 1983; Svallfors 1996, 20, 217).

Svallfors (2006, 2) proposed a stratified moral economy of class as well as a societal moral economy resulting from ‘normative feedback effects of public policies and formal institutions’.

Steffen Mau identified the equalising redistribution of the welfare state and the social acceptance of its effects as a moral economy. This institutional and attitudinal arrangement encompassed both the principle of reciprocity and a commitment to the fate of the disadvantaged.

The discourse on moral foundations of the welfare state is in accord with the suggestion that juxtaposing moral economy and political economy resembles Habermas’ distinction of lifeworld and system (Sayer 2000, 89, 95; recourse to Habermas [1981] has earlier been made by Booth 1994, 653). In contrast to the main strand of welfare state research, literature on the moral economy of the welfare state focuses on civil society, trade unions, and the public sphere, rather than on the socio-political system or specific policy instruments.

The Moral Economy of the Mexican Miner - Adrian Bantjes.
The moral economy of the Mexican miner was not accepted by the State, which imposed cooperativism, mass unionism, and deskilling on this "labor aristocratic" sector of the workforce. The relative freedom and independence of the Mexican miner would soon be a thing of the past. 

The Moral Economy of the Peasant - Rebellion and Subsistence in Southeast Asia - James C. Scott - - Scott draws from the history of agrarian society in lower Burma and Vietnam to show how the transformations of the colonial era systematically violated the peasants' moral economy and created a situation of potential rebellion and revolution.

The Moral Economy - John P. Powelson is Professor of Economics Emeritus, University of Colorado. The Moral Economy proposes a desirable world that is historically possible, if world power becomes more diffuse. Shows how a moral economy, a balance between interventionism and libertarianism, and economic prosperity are mutually reinforcing.

Moral Economies Revisited. by Didier Fassin. The success of the concept of moral economy was not refuted for nearly forty years, a success that went well beyond the circles of the social history of Marxist thought, where it inspired as much enthusiasm as criticism. In the United States, it was the object of a relatively faithful re-appropriation in anthropology, thanks especially to James C. Scott, The Moral Economy of the Peasant: Rebellion, a political scientist, whose work on the moral economy of the peasants of Southeast Asia opened the path to a network of researchers working on economic logic and social mobilization in rural areas in developing countries.

Moral economy: its conceptual history and analytical prospects - Norbert Götz.
Abstract: This article challenges E.P. Thompson's definition of moral economy as a traditional consensus of crowd rights that were swept away by market forces. His understanding of moral economy is conditioned by a dichotomous view of history and by the acceptance of a model according to which modern economy is not subject to moral concerns. It is on principle problematic to confine a term conjoining two concepts as general as moral and economy to a specific historical and social setting. Recent approaches that frame moral economy as an emotively defined order of morals are also misleading since they do not address economic issues in the way they are commonly understood. The most promising current approaches appear to be those that consider the moral economy of welfare, humanitarianism, and civil society.


Geoffrey Hodgson has recently argued, economists need to restrain their utilitarianism and re-establish moral considerations as a proper part of their understanding and evaluation of economies. The moral economy embodies norms and sentiments regarding the responsibilities and rights of individuals and institutions with respect to others.

The term moral economy has usually been applied to societies in which there are few or no markets, hence no competition and law of value, and in which economic activity is governed by norms regarding what people's work responsibilities are, what and how much they are allowed to consume, who they are responsible for, beholden to and dependent on.

Books on Moral Economy

The Moral Economy of the Peasant: Rebellion and Subsistence in Southeast Asia. Professor James C. Scott Review: By Faruk Ekmekci.

Islam and the Moral Economy: The Challenge of Capitalism. Charles Tripp.

Darker than Blue: On the Moral Economies of Black Atlantic Culture (The Du Bois Web Lectures) by Paul Gilroy.