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EH.NET BOOK REVIEW 
 
Published by EH.NET  (January 1999) 
 
Patricia O'Toole, _Money and Morals in America: A History_. New York: 
Clarkson Potter Publishers, 1998.  xxi + 408. $30 (hardback), ISBN 
0-517-58693-2. 
 
Reviewed for EH.NET by Donald Frey, Department of Economics, Wake Forest 
University. <[log in to unmask]> 
 
     O'Toole, whose previous books have included _The Five of Hearts_, a 
portrait of Henry Adams and his circle of friends, sets out to document 
Americans' "never-ending debate about the relationship between private gain 
and public good" (p. xiv). This volume portrays the tension in American 
culture between self-interest and the belief that "to be human is to live 
in a community." The portrayal is fair, even while O'Toole argues for the 
moral significance of the latter proposition. 
 
     O'Toole is _not_ arguing that there is a tension between values and 
practice. Such a thesis would be trite, because practice inevitably falls 
short of ideals. Rather, the polarity she discusses is _within_ the 
American value system itself, as well as within American economic practice. 
Nor is O'Toole contrasting individualism with some version of communalism. 
In fact, she tends to downplay the American communal tradition. Rather, she 
focuses on mainstream American values and practices, which are both 
distinctly individualistic. The relevant distinction is between a 
self-focused individualism and relational individualism, in which a person 
acts with regard to a web of human relationships and obligations, not 
merely personal preferences. 
 
     The utility-maximizing model of economics could have represented one 
of the poles in the O'Toole thesis, if she had chosen to explicate it. 
Community (acting as market) sets the constraints (e.g., relative prices) 
on the individual's maximization problem, but is otherwise irrelevant. Even 
altruism is interpreted as being instrumental, occurring only because it 
increases the individual's utility. O'Toole plays off an implicit version 
of this understanding of humans, which economist George Stigler admitted 
was a type of morality, against an understanding that individuals do, and 
ought to, recognize obligation to the common good. Her point is that both 
these poles exist in an uneasy tension. 
 
     Observers long have noted just this tension in the American character. 
Alexis de Tocqueville pondered the problem of self-interest for community 
in his celebrated study of 1830s America. More recently Robert Bellah and 
co-authors contrasted Americans' utilitarian values and behavior with 
community-oriented values and behavior in their best-selling _Habits of the 
Heart_ (1985). Amitai Etzioni's _The Moral Dimension_ (1988) also developed 
the theme. 
 
     O'Toole uses case studies; these range from the New England Puritans' 
city on a hill to Control Data's experiments in corporate responsibility. 
Other chapters focus upon figures like Benjamin Franklin, Ralph Waldo 
Emerson, Andrew Carnegie, and Whitney Young. Along the way, O'Toole 
examines labor relations in Lowell, Massachusetts, at Ford during the 
five-dollar-a-day revolution, and at Kaiser shipyards during World War II. 
Slavery is addressed in a major chapter that is enhanced by drawing upon 
less-known sources. In almost every case, the polarity in values and 
practice is evident. 
 
     One could argue about O'Toole's omissions. For example, communitarians 
like the early Moravians, while out of the mainstream, made a significant 
critique of dominant individualist values and practices. O'Toole does not 
ignore religion, yet some of her omissions seem large: for example, no 
chapter devoted to the Social Gospel, a major movement in liberal 
Protestantism around the turn of the century. Also largely ignored are 
economic moralists like Henry George, (who rates but a few paragraphs in a 
chapter otherwise about Andrew Carnegie) Daniel Raymond, Richard Ely, or 
Francis Wayland, who might have been of more interest to economists than, 
say, Emerson. 
 
     The views of the economists whom O'Toole ignores probably were more 
sophisticated than those of the non-economists she does include. For 
example, Malthus' law of population, Ricardo's rent theory, and the 
classical wage-fund together provided the scientific basis for the 
proposition that poverty was inevitable. This meant that no one had a moral 
obligation to the poor, for one cannot have a moral obligation to change 
what cannot be changed. Henry George (whatever one may think of his 
technical economics) exposed the ethical role of these assumptions and 
effectively critiqued them to a large American audience. As another 
example: O'Toole nicely demonstrates the moral tensions inherent in Andrew 
Carnegie's meshing of social Darwinism and massive philanthropy. Yet, a 
better exposition of social Darwinism could have been had by directly 
examining the ideas of the quasi-economist William Graham Sumner. That 
O'Toole barely touched on such thinkers is a loss to the book. 
 
     Although this reviewer is not in a position to judge many of the 
chapters, in the areas with which I am familiar I find that O'Toole has 
done a good job. I have some familiarity with Puritan economic ethics, and 
in my judgment O'Toole provides a finely nuanced exposition of that 
thought. Her exposition of Puritan economic morality is far superior to the 
caricatures that often mar business-ethics texts. 
 
     Would economists find reading this book of benefit? The recent Nobel 
Prize awarded to Amartya Sen suggests that the profession may be ready to 
look again at these kinds of issues. Even economists interested only in 
questions that can be dealt with by the standard neoclassical model might 
benefit from occasionally pondering the kinds of factors, like a culture's 
morality, that contribute to the unexplained residual in their statistical 
work. 
 
Donald E. Frey 
Department of Economics 
Wake Forest University 
 
Frey is professor of economics at Wake Forest University. His most recent 
paper is "Individualist Economic Values and Self-Interest: The Problem in 
the Puritan Ethic," _Journal of Business Ethics_, October 1998. 
 
 
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