How everyday ethics becomes a moral economy, and vice versa

Unrealistic assumptions underlying neo-classical economic theory have been challenged by both behavioral economics and studies of moral economy. But both challengers share certain features with neo-classical theory. Complementing them, recent work in the anthropology of ethics shows that economic behavior is not reducible to either individual psychology or collective norms. This approach is illustrated with studies of transactions taking place at the borders between market rationality and ethically fraught relationships among persons-organ donation and sex work. The paper argues that the inherent value accorded to social relations tends to resist instrumentalization and that the biases that dealing with other people introduce into reasoning are not flaws but part of the core functions of rationality.