This chapter distinguishes between moral values that encourage us to take positive moral actions and moral values that discourage us from taking negative moral actions. It explains why with regard to economic behavior, “moral exhortations” are superfluous while “moral prohibitions” are very supportive since they combat opportunism and thereby keep transaction costs low. The key to maximizing prosperity is driving up feelings of guilt that result from taking negative moral actions so as to make opportunism irrational. This conserves on resources normally devoted to safeguarding and supports the development and operation of trust-dependent institutions. It is also shown why the obedience of moral exhortations is inherently subjective and therefore incapable of defining universal standards for moral behavior.
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