Doux Commerce and Self-Destruction in a Curvilinear Relation between Competition and Virtues By Johan J. Graafland CentER Department of Economics / Department of Philosophy Tilburg University P.O. Box 90153 5000 LE Tilburg The Netherlands Tel.00 31 13 4662703 Fax 00 31 13 4662892 E-mail j.j.graafland@uvt.nl Abstract The seminal article by Hirschman discusses two opposing hypotheses of how capitalism affects the characters of people: the doux commerce thesis and the self- destruction thesis. He stops short, however, of specifying the type of conditions under which the market economy will enforce virtues rather than erode them. This paper develops the hypothesis that the degree of competition is a major condition in this respect. In particular, I will argue for a curvilinear relationship between virtues and competition. The doux commerce thesis holds for situations of low competition, because lack of competition frustrates courage, satisfaction, truthfulness, prudence and diligence. In that case, more competition will enforce virtues. However, beyond a certain degree of competition, self-destructive forces set in. If competition becomes very fierce, courage will turn to fearfulness and recklessness, satisfaction to dissatisfaction, honesty to opportunism and diligence to overzealous behavior with accumulating distortions of other virtues such as temperance and prudence. Keywords Doux commerce thesis, self-destruction thesis, competition, free market, virtues