Moral capital is of great importance for both the material and immaterial wellbeing of a society. But, moral capital is likely to erode during transitions, especially economic ones. I argue that the dynamics of loss of moral capital during transitions is likely to result in migration of the bearers of moral capital both to the margins of a society and out of this society, a process unlikely to be reversed without a focused intervention by the state. I further argue that economic theory could both offer a justification for such an intervention, and inform on the most effective way to conduct it. The loss of moral capital can be seen as an instance of market failure in which parts of the transitional elite are imposing a negative externality on the rest of the society, while the measures for recovery of moral capital should combine fines and immaterial incentives.
Mrdjan Mladjan is a research associate of the Institute for Philosophy and Social Theory. He researches in the areas of economic and financial history, corporate finance, and philosophy of economics.