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ejsp researcharticle theeffectofthebelief in free market ideology on redressing corporate injustice peter kardos bernhard leidner laszlo zsolnai emanuele castano bloomeldcollege bloomeld newjersey usa university of massachusetts amherst amherst massachusetts usa ...

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                                                                                                                                                            EJSP
                 RESEARCHARTICLE
                 Theeffectofthebelief in free market ideology on redressing
                 corporate injustice
                 Peter Kardos*, Bernhard Leidner†, Laszlo Zsolnai‡ & Emanuele Castano§
                 *BloomfieldCollege,Bloomfield,NewJersey,USA
                 † University of Massachusetts Amherst, Amherst, Massachusetts, USA
                 ‡ CorvinusUniversity ofBudapest,Budapest, Hungary
                 § NewSchoolforSocialResearch,NewYork,NewYork,USA
                 Correspondence                                    Abstract
                 Peter Kardos, Division of Social and              ManypeopleinthemajorWesterneconomies(e.g., United States, UK, and
                 Behavioral Science, Bloomfield College, 59
                 FremontStreet, Bloomfield, New Jersey              Germany)subscribetofreemarketideology(FMI),whichclaimsthatinstitu-
                 07003, USA.                                       tionaloversightofthemarketisunnecessaryforpublicreactioncanforcecor-
                 E-mail peter_kardos@bloomfield.edu                 porations to regulate their own behavior. The question then becomes how
                                                                   people’s belief in FMI affects their reactions to corporate transgressions.
                 Received: 29 January 2015                         Given its ingroup-centered values, we hypothesized that FMI beliefs would
                 Accepted: 9 May 2016                              bias reactions to corporate transgressions. We report results of a pilot study
                                                                   showing that FMI beliefs are predicted by selfishness, tradition, conformity,
                 http://dx.doi.org/10.1002/ejsp.2222               andlackofuniversalism. We then report three experiments, which showed
                 Keywords: freemarketideology,                     that stronger FMI beliefs predict weaker demands to redress corporate injus-
                 corporate transgression, justice demand,          tices committed by ingroup (but not outgroup) corporations (Studies 1–3),
                 ingroupbias                                       especially when victims of corporate wrongdoings belong to an outgroup
                                                                   (rather than the ingroup; Study 3). The findings inform our conceptual un-
                                                                   derstandingofFMIandgiveinsightsaboutitsimplicationsformarketjustice.
                 Market freedom has long been a contentious issue in                          company to abandon the environmentally destructive
                 the political and public discourse in the United States,                     plan. If, however, the public does not make such de-
                 Europe, and beyond, the attention peaking once again                         mands, there should be no corrective for bad corporate
                 during and after the 2008 financial crisis. A key issue                       behavior. The American oil company Chevron was not
                 inthedebateistheoptimaldegreeofmarketregulation.                             forced by public demand in the United States to change
                 Some argue that institutional regulation is necessary;                       its decades-long hazardous behavior that damaged the
                 themarketneedstobeassistedbysomeformanddegree                                South-American rain forest.
                 of institutional control for the greater good of society                        At the core of the divergent assumptions about
                 (e.g., Galbraith, 1952/1993; Goodpaster & Matthews,                          market freedom, thus, is the question of how the pub-
                 1982;Stiglitz,2010).Proponentsoffreemarketideology                           lic reacts to corporate injustice. This question is essen-
                 (FMI), on the other hand, argue that a minimal degree                        tially a psychological one, and the answer lays in
                 ofregulation—allowingcompaniestoactfreely,without                            people’s belief in FMI. The effectiveness of public over-
                 institutional and especially governmental control—is                         sight depends most on those who strongly (rather than
                 best for the market and also for society (Friedman,                          weakly) believe in FMI, as these people have the
                 1970; Friedman & Friedman, 1980). The majority of                            highest psychological stakes in it. High FMI believers
                 Americans (59%) agrees with this proposition. Only                           should be the most motivated to keep the market free
                 29% think that too much market freedom does more                             (from institutional regulation) and thus to participate
                 harmthangood,while12%areundecided(Newsweek,                                  in market regulation through individual action aimed
                 2011). Wesee similar patterns in other advanced econ-                        at corporations (e.g., outrage at corporate injustice
                 omieslike Germany and the UK (Newsweek, 2011).                               and consumer boycotts). If they demand to redress
                    The majority view that institutional regulation is                        corporate injustice when it occurs, then this demand
                 largely unnecessary is grounded in the assumption that                       could pose a powerful corrective for the market. Even
                 consumer behavior and public reaction can correct cor-                       if those who believe less in FMI demanded justice in
                 porate (mis-)behavior, first and foremost by public de-                       such situations, it would be unlikely to influence the
                 mands to redress corporate injustice (Friedman, 1970;                        market as long as there was simultaneous inertia or
                 Rothbard, 1986). Indeed, public discontent, for example,                     even defense of the transgressing corporations among
                 in the 1990s over Shell’splantodumpanoilplatform                             strong FMI believers. Given that strong FMI believers
                 into the Atlantic Ocean forced the Anglo-Dutch oil                           are, at least in the U.S. and Europe, in the majority,
                 EuropeanJournalofSocialPsychology00 (2016)00–00Copyright © 2016JohnWiley& Sons, Ltd.
                  Free Market Ideology and Corporate Injustice                                                           P. Kardos et al.
                  the public’s reaction to corporate injustice depends on    intervene for the societal good. Such intervention
                  strong FMI believers. We thus investigated how the         could span from public demands for justice to con-
                  belief in FMI guides people’s reactions to corporate       sumer boycotts that punishes transgressing companies.
                  transgressions.                                            In line with the free market-based idea of boycott and
                                                                             consumer power (Rothbard, 1998), the public’sde-
                                 FreeMarketIdeology                          mand for justice after corporate transgressions could
                                                                             then force companies to align their practices with the
                  Free market ideology is a worldview that defines            public’s expectation of ethical corporate behavior
                  values, grounds attitudes, and influences decisions         (Friedman, 1970). In contrast, the work on ideological
                  about what is right and what is wrong (Jost, Blount,       threat suggests that the stronger people’s belief in FMI,
                  Pfeffer, & Hunyady, 2003a; Jost, Glaser, Kruglanski,       the more they might be motivated to defend their ide-
                  & Sulloway, 2003b). It prescribes how to relate to         ology and react defensively, rather than responding
                  others, how to develop institutions, and how to build      critically to corporate transgressions. Indirect evidence
                  the ideal society. In other words, it guides everyday      for this hypothesis comes from research showing that
                  behavior in a variety of contexts (e.g., Kasser,           the belief in market fairness resulted in more lenient
                  Vansteenkiste, & Deckop, 2006; Salanick & Brindle,         (rather than harsh) judgments after corporate trans-
                  1997) and particularly so in the context of the econ-      gressions (Jost et al., 2003a). We hypothesized that
                  omy, the market, and government attempts to regu-          strong believers of FMI would respond to corporate
                  late it. We submit that FMI may influence perception        transgressions with weaker, not stronger, “public over-
                  and thus reactions to corporate transgressions in two      sight” (e.g., demands to redress corporate injustice and
                  different ways. First, those who subscribe to FMI could    demands for market regulation). Yet, as mentioned
                  react to corporate transgressions in ways that stem di-    earlier, FMI believers’ reactions to corporate transgres-
                  rectly from the ideology’s value system. Second, those     sions may not only reflect an attempt to protect their
                  who subscribe to FMI could react to corporate trans-       ideology from threat. They could also follow more di-
                  gressions defensively because corporate transgressions     rectly from the values that underlie FMI beliefs.
                  threaten the tenets of their beliefs. In other words,
                  FMI believers’ reactions to corporate transgressions       TheValuesUnderlyingFreeMarketIdeologyBeliefs
                  could reflect a natural outgrowth of FMI’s underlying
                  values, and/or they could reflect an attempt to protect     Classic and contemporary FMI promotes the pursuit
                  the ideology from threat.                                  of individual self-interest as the building block of
                                                                             the ideal society (Friedman, 1970; Hayek, 1960;
                  FreeMarketIdeologyUnderThreat                              Rand, 1966). Unsurprisingly, self-interest has been
                                                                             shown to be one of the core values underlying FMI
                  Corporate transgressions challenge the idea that corpo-    (Kasser, Cohn, Kanner, & Ryan, 2007). In societies
                  rations andthefreemarketservethegreatergood.Cor-           with relatively little market regulation, people also at-
                  porate transgressions thus pose an ideological threat to   tribute more importance to the related values of
                  FMI believers and might elicit reactions to this threat.   power and hierarchy (Kasser, 2011). Similarly, in
                  Because ideologies help people to comprehend, make         countries with more competitive (as opposed to regu-
                  sense of, and derive meaning from the world around         lated) economies—a ranking in which the U.S. leads
                  them,toomuchhingesonideologiestosimplyabandon              (Hall & Gingerich, 2004)—people rank lower on the
                  oraltertheideologywhenfacingchallengestoitsvalid-          values of universalism, benevolence, and egalitarian-
                  ity (e.g., corporate transgressions). Instead, when facing ism (Schwartz, 2007). Moreover, people who favor
                  challenges to their worldview, people are motivated to     an uncontrolled market are also the ones with the
                  affirm their beliefs (Grieve & Hogg, 1999; Jost, Banaji,    lowest empathic concern for others (Iyer, Koleva,
                  &Nosek,2004;VandenBos,2001)andusethethreat-                Graham, Ditto, & Haidt, 2012). Corroborating this
                  ening information to verify their worldview (Major,        relationship experimentally, primes of free market
                  Kaiser, O’Brien, & McCoy, 2007). As a consequence,         symbols (e.g., money and business) reduce people’s
                  peopleoftenengageinbiasedprocessingandinterpreta-          empathytowardothers(Molinsky,Grant, &Margolis,
                  tions of the threatening information (Jost et al., 2003b), 2012) and increase self-enhancement (Vohs, Mead, &
                  allowing them to make self-serving and ingroup-            Goode,2006),avaluethatconflictswiththevaluesof
                  serving moral judgments (Bandura, 1999; Castano &          universalism    and    benevolence     (Burroughs     &
                  Giner-Sorolla, 2006; Leidner, Castano, Zaiser, & Giner-    Rindfleisch, 2002; Grouzet et al., 2005; Kasser et al.,
                  Sorolla,2010).Thestrongerthecommitmenttoanidea,            2007;    Schwartz,    1992,   1994)    and    promotes
                  thestrongeristhisbiasandattitudinalrigiditywhenthe         dishonest behavior (Pulfrey & Butera, 2013).
                  idea is threatened (Skitka, 2002, 2010, 2014).                These values of FMI are often learned during the
                    People’s general tendency to engage in psychological     study of market-related ideology (Kasser, Ryan, Zax,
                  defense mechanisms raises doubts as to whether FMI         & Sameroff, 1995; Sheldon & Krieger, 2004) and im-
                  believers would be the ones most motivated to con-         bue the learners with corresponding behaviors. The
                  demn corporate transgressions. Ideally, upon learning      study of economics, for example, reduces students’
                  about corporate injustice, they would be motivated to      cooperative behavior (Frank, Gilovitch, & Regan, 1993),
                                                                   EuropeanJournalofSocial Psychology00 (2016)00–00Copyright © 2016 JohnWiley& Sons, Ltd.
             P. Kardos et al.                                                              Free Market Ideology and Corporate Injustice
             and people who endorse the view of human nature                          OverviewoftheStudies
             championed by standard economics (i.e., “homo              A pilot study aimed to validate our measure of FMI
             economicus”) behave more selfishly in economic              and examined the relationship between FMI beliefs,
             games (Yamagishi, Li, Takagishi, Matsumoto, &              political attitudes, and conservatism, as well as the rela-
             Kiyonari, 2014).                                           tionship of these constructs with selfishness and basic
                We hypothesized that FMI’s values would also            human values. Study 1 provided a test of the threat
             manifest in FMI believers’ reactions to corporate          hypothesis that FMI predicts leniency toward corporate
             transgressions. In the context of corporate transgres-     transgressions, as well as a first test of the ingroup bias
             sions, self-interest should result in (leniency) bias to-  hypothesis that FMI predicts leniency toward corporate
             ward corporations that have ties to the ingroup (i.e.,     transgressions only for home but not for foreign com-
             ingroup corporations). Further, because the values         panies. Study 2 conceptually replicated the findings of
             of universalism and benevolence focus on caring            Study 1 with respect to demands for future market re-
             about others, a lack thereof should result in less em-     forms (rather than demands to redress past corporate
             pathy for victims, especially when they are dissimilar     injustices). Study 3 tested the expanded ingroup bias hy-
             to the observer (e.g., when they belong to an              pothesis that this bias will be most pronounced when
             outgroup rather than the ingroup). Consequently,           the transgressing company is a home rather than for-
             FMI’s values should reduce FMI believers’ motivation       eign company, and its victims belong to an outgroup
             to seek justice for corporate transgressions committed     rather than the ingroup. Throughout these studies,
             byhome(ascomparedwithforeign)companies.Such                we tested the hypothesis that the predicted effects
             a bias should present itself particularly in the case of   would be specific to FMI beliefs in particular, rather
             transgressions that hurt outgroup rather than ingroup      than generally related to broader concepts linked to
             victims. People who do not support FMI, on the other       FMI, such as political attitudes, national identification,
             hand, may be less biased in their reactions to corpo-      or system justification.
             rate injustice. Their lack of support for, or rejection
             of, FMI may allow them to react, if anything, more,
             not less, harshly to transgressions by home as com-        Political Attitudes
             pared with foreign companies, because home compa-
             nies risk to tarnish the ingroup’s image in the eyes of    Free market ideology is neither simply a synonym for
             outgroup members and therefore misbehavior of              political conservatism nor can it readily be translated
             home companies needs to be addressed (Castano,             into party sympathy in U.S. politics. Self-identification
             Paladino, Coull, & Yzerbyt, 2002). Therefore, we pre-      as being conservative is based more on one’sendorse-
             dicted that in the context of corporate transgressions,    ment of social conservatism than on one’s endorse-
             FMI should result in (leniency) bias toward ingroup        ment of fiscal conservatism (Allen, Castano, & Allen,
             companies, especially when they mistreat outgroup          2007)—two kinds of conservatism that often weakly
             victims.                                                   correlate with each other (Conover & Feldman,
                Notably, the ingroup leniency bias we predict has       1981). In a similar vein, the idea of the free market
             beenreflected in FMI’s core tenets since its early days,    is endorsed not only by conservatives but also by lib-
             when self-interest and lack of universalism were           erals, if in different ways and to different degrees.
             expressed in the form of ingroup interest. Adam            Thus, the often-used self-report measure of political
             Smith explicitly incorporated ingroup interest in his      attitudes should not provide precise assessments of
             concept of the free market, arguing that a preference      belief in FMI. Further, conservatism predicts harsher
             for home over foreign businesses will enable the mar-      moral judgments in general (Haidt, 2012; Helzer &
             ket to maximize the wealth of the (home) nation            Pizarro, 2011). This generality, however, means that
             (Smith, 1776/1976, p. 456). This focus on preferring       conservatism or general political attitudes may not re-
             and protecting ingroup over outgroup economy, re-          liably predict reactions to corporate injustice. In sum,
             ferred to as “home bias” (Chomsky, 2011), is part of       political attitudes should neither reflect the values
             present-day FMI as well. Falling in line with a free       that underlie FMI nor should they reliably predict re-
             market biased in favor of the ingroup, politicians         actions to corporate injustice. To be able to establish
             who subscribe to FMI often promise deregulation            the expected specificity of the hypothesized effects of
             and freedom for national companies but punitive            FMI, we thus have to account for political attitudes
             taxation for foreign companies (e.g., Foster, 2011).       too. We expected that FMI beliefs but not political at-
             This discrepancy demonstrates that compared with a         titudes (even regarding economic issues in particular)
             universal, unbiased FMI that is possible in theory,        would moderate people’s reactions to corporate
             FMI in practice, as it is promoted in most free market     injustice.
             societies, is less about “disinterested interest” of
             businesses and society, and more about “ingroup-           National Identification
             interested interest”: the interest of “our” businesses
             over “their” businesses, and even over other interests     Whereas national identification influences reactions
             unrelated to business, such as social issues or envi-      to injustice in the context of intergroup violence
             ronmental concerns (Friedman, 1970; Klein, 2007).          (e.g., Doosje, Branscombe, Spears, & Manstead,
             EuropeanJournalofSocialPsychology00 (2016)00–00Copyright © 2016JohnWiley& Sons, Ltd.
                  Free Market Ideology and Corporate Injustice                                                           P. Kardos et al.
                  1998; Leidner et al., 2010), we did not expect it to do       Thedataandmaterialsforallstudiesinthispaperare
                  so in the context of corporate behavior. In the con-       availableattheInter-universityConsortiumforPolitical
                  text of intergroup violence, the injustice leads high      andSocial Research (www.openicpsr.org).
                  identifiers to respond with biased justice demands
                  andmoraljudgmentsbecauseitthreatenstheirsocial
                  identity (Bandura, 1999; Biernat & Feugen, 2001;                                 Pilot Study
                  Leidner & Castano, 2012; Miron & Branscombe,               Thepilot study explored the relationship between FMI,
                  2008). In the context of corporate behavior, how-          the 10 basic human values (Schwartz, 1992), selfish-
                  ever, the injustice may not threaten so much peo-          ness, as well as political attitudes assessed both with a
                  ple’s social identity but their ideological worldview      one-item measure of political attitude regarding
                  that the free market and its free economic agents          economic issues and with six items from Duckitt and
                  benefit society. People who subscribe to this view          colleagues’ right-wing authoritarianism scale (RWA;
                  should be motivated to protect it and therefore may        Duckitt, Bizumic, Krauss, & Heled, 2010).
                  respond with biased justice demands. Consequently,
                  transgressions in the context of corporate behavior        Method
                  (rather than intergroup violence) may critically de-
                  pend on FMI, not national identification. If identifi-         Participants
                                                                                             . Twohundredandsixty-sevenAmerican
                  cation influenced reactions to corporate injustice, it      participants, recruited via Amazon Mechanical Turk
                  should result in high identifiers making harsher            (MTurk),completedanonlinesurveyfor$0.75(mean
                  judgments when the victims of corporate injustice          age of 36.79, SD=13.31; 154 women). Samples
                  belong to the ingroup rather than the outgroup.            collected via MTurk have been found to be more
                  The moderating role of FMI, on the other hand,             representative of the U.S. population than convenient
                  should result in no such effect, as business interest      samples and more diverse than college samples
                  should trump other, non-business related interests,        (Berinsky, Huber, & Lenz, 2012; Buhrmester, Kwang,
                  even that of justice.                                      &Gosling, 2011).
                                                                               Materials
                                                                                         . Participants  completed the following
                  SystemJustification                                         measures.
                  Similar to the effects we hypothesized for FMI,              Belief in free market ideology. Eleven state-
                  system-justifying motives reduce justice demands af-       ments tapped people’sopinionsonregulatedversus
                  ter corporate transgressions, at least in capitalist       unregulated/free economy (e.g., The United States would
                  countries (Jost et al., 2003a). When the free market       benefit from deregulating the economy; Minimum wage laws
                  is dominant, it constitutes the status quo that people     causeunemployment;Peoplearebetteroffwithfreetradethan
                  may protect when facing corporate injustice that           with tariffs—see 1). Participants expressed their agree-
                  threatens this status quo. Investigating the similar       ment with the statements on scales ranging from
                  concept of fair market ideology, Jost and colleagues       Strongly disagree (1) to Strongly agree (7). Factor analysis
                  foundthat the belief in the fairness of the free market    showedthatallitemsloadedonasinglefactor;oneitem
                  positively predicts leniency toward corporate trans-       loaded below .40 and was thus dropped (α=.85,
                  gressions (Jost et al., 2003a). In the case of system      M=3.88,SD=1.06).
                  justification, however, people should be motivated
                  to protect the system as a whole, regardless of              Political attitudes
                                                                                                    . One item assessed participants’
                  whethercorporate injustice was perpetrated by home         political attitude regarding economic issues (“Regarding
                  or foreign companies. They should forego justice ei-       economic issues (e.g., taxation, public spending), I
                  ther way. FMI, on the other hand, because of its un-       am…”)withtheverbalanchorsLiberal/left(1)toConser-
                  derlying values should predict leniency toward             vative/right (7) (M=3.87, SD=1.71). To also acquire a
                  corporate transgressions by home but not foreign           moregeneral of political attitudes beyond economic is-
                  companies. In the studies of Jost et al., American par-    sues, we further administered six items from the RWA
                  ticipants were asked only about unethical American         scale of Duckitt et al. (2010; e.g., The “old-fashioned
                  companies. Building on and extending Jost and col-         ways” and “old-fashioned values” still show the best
                  leagues’ work, we assessed both system justification        way to live), rated from Strongly disagree (1) to Strongly
                  and FMI beliefs to reveal the similarities and differ-     agree (7). All items loaded onto one factor (α=.87,
                  ences in how they predict people’s responses to cor-       M=3.10,SD=1.39).
                  porate transgressions to both ingroup and outgroup
                  corporate injustice.                                         Values. We used the Short Schwartz’s Value Sur-
                    Thepresent studies tested the specificity hypothesis that vey (Lindeman & Verkasalo, 2005) as a valid and re-
                  the predicted effects of FMI would indeed be specific       liable  measure of basic human values (power,
                  to FMI, rather than being reducible, or generalize, to     achievement, hedonism, stimulation, self-direction,
                  political attitudes, national identification, or system     universalism, benevolence, tradition, conformity, and
                  justification.                                              security; Schwartz, 1992, 1996). Following Lindeman
                                                                   EuropeanJournalofSocial Psychology00 (2016)00–00Copyright © 2016 JohnWiley& Sons, Ltd.
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...Ejsp researcharticle theeffectofthebelief in free market ideology on redressing corporate injustice peter kardos bernhard leidner laszlo zsolnai emanuele castano bloomeldcollege bloomeld newjersey usa university of massachusetts amherst corvinusuniversity ofbudapest budapest hungary newschoolforsocialresearch newyork correspondence abstract division social and manypeopleinthemajorwesterneconomies e g united states uk behavioral science college fremontstreet new jersey germany subscribetofreemarketideology fmi whichclaimsthatinstitu tionaloversightofthemarketisunnecessaryforpublicreactioncanforcecor mail edu porations to regulate their own behavior the question then becomes how people s belief affects reactions transgressions received january given its ingroup centered values we hypothesized that beliefs would accepted may bias report results a pilot study showing are predicted by selshness tradition conformity http dx doi org andlackofuniversalism three experiments which showed keyword...

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