The parasitic liberalism thesis, advanced in many variants over the past two centuries, holds that the proper functioning of markets and other institutions endorsed by liberals depends on family-based, religious, and other traditional social norms that are endangered by these very institutions. Liberal society thus is said to fail Rawls’s test of stability: it does not “generate its own supportive moral attitudes.”
Consistent with the thesis, market-like incentives are sometimes counterproductive, apparently because they displace preexisting ethical commitments in favor of a self-interested strategic mode of reasoning, as Richard Titmuss claimed is the case when monetary incentives are deployed to encourage blood donations. Until recently, skeptics of the parasitic liberalism thesis could point to the paucity of hard evidence that market-like incentives compromise ethical motives. However, recent experimental studies show that while the “moral sentiments” underpinning the workings of markets and other institutions endorsed by liberals are common in most human populations,3 the same experiments also indicated that incentives that appeal to material self-interest often undermine interpersonal trust, reciprocity, fairness, and public generosity.