CHAPTER 4: Next let's turn to the key fundamental concept of MORALITY.

Morality is the difference between right and wrong. 

Some people think that expropriating an individual's property for public use (taxation) is moral under what is called the social contract theory.  Others disagree under natural rights theory.  Until a group of people share a common paradigm about what is right and what is wrong there will always be social conflict. 

EVOLUTIONARY PSYCHOLOGY gives us some insight into how an individual learns morality.  Everyone has a set of morals to guide their behavior but they are not always the same just like everyone can speak and understand a language but not always the same one.  Furthermore there are instincts like envy, the herd mentality, and suspicion of strangers that can compromise morality.  Read this to understand how humans developed a capacity for learning morality and a tendency to rationalize immoral behavior.

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Review Questions:   What does morality have to do with economics?  Can you have an economic system without most people adhering to some generally accepted moral principles?