I’m not sure others will find this argument persuasive. But one argument for the morality of markets goes like this:
A. It is wrong to use something someone else values more.
B. But theft is also wrong, even if the thief values the object more than the current owner.
Prices give a signal that someone else values the item more, solving (partially) problem A.
And then the possibility of exchange means that markets can solve problem B, since there are bargains where both parties are better off, but the person who values the item more ends up with it.
A happy consequence of this system is that we can never run out of anything where property rights are specified clearly and prices are allowed to adjust to reflect scarcity and signal the fact that other people value an item more than the current owner.
At Business Ethics Review Journal, Dan Layman has a critique of “Markets without Symbolic Limits”. Abstract:
Jason Brennan and Peter Jaworski reject expressive objections to markets on the grounds that (1) market symbolism is culturally contingent, and (2) contingent cultural symbols are less important than the benefits markets offer. I grant (1) and (2), but I deny that these points suffice as grounds to dismiss expressive critiques of markets. For many plausible expressive critiques of markets are not symbolic critiques at all. Rather, they are critiques grounded in the idea that some market transactions embody morally inappropriate normative stances toward the goods or services on offer.
You won’t be surprised to learn that Peter and I don’t think the critique is successful, in part because we don’t think Layman successfully shows there’s a real difference between “embodying morally inappropriate stances” and symbolic objections. A response paper is forthcoming.
Graham Peterson also sent me this comment:
Do Markets Make People Selfish?
Jason Brennan and Peter Jaworksi have just published a clever new article in Ethics called “Markets without Symbolic Limits,” in which they throw some new light on the repugnant markets literature (think Al Roth, Michael Sandel, etc.). The repugnant markets literature asks why people are a-OK with markets in some things (PlayStations), but not others (kidneys).
Brennan and Jaworski’s addition is clever because it goes beyond the usual arguments recommending markets, which are materialist, and come from the guys in the economics and philosophy departments, and addresses market critics on their own English department turf, in symbolic terms.
Theirs is an extremely important, and extremely different, tactic for proponents of markets. Libertarians, conservatives, moderate liberals, and anyone else who believes in supply and demand cannot just keep scratching their heads when people don’t get it, or concluding that their view is superior and sophisticated.
Brennan and Jaworksi have landed on the first principle of persuasion — if your audience speaks symbolism, you’re not going to change ’em speaking materialism.
The bulk of the article reviews empirical literature in anthropology and sociology, literature that shows just how contextually dependent the meaning of money is. In some cultures, giving cash is a higher honor and more intimate than hand-knit mittens. They conclude that since there is nothing inherent in money, that attaches any particular positive or negative significance to it (contra Freud and Simmel on “filthy lucre”), we ought to think about how money has been constructed in the West.
If we can convince people there are sound empirical and moral reasons to change the meanings we attach to money and markets, let’s get right to it! It is a really brilliant argument. I’d love to see more libertarians and economists engaging the other side like this.
But I want to contend with the paper a bit. They start with some definitional work, reviewing the arguments against markets. There are material arguments against markets, like polluted river externalities or the inefficiencies that might result in a market for organs. These are traditional, materialist, economic, political, complaints. On the other hand, they want to separate out semiotic complaints about markets — complaints that pose markets themselves as a social force that degrades and debases objects.
I don’t see a difference. Every one of the not-semiotic complaints that Brennan and Jaworski list derives in what is at bottom a semiotic concern, that markets run on and encourage selfishness. People’s intuition, for better or worse, is that:
- Exploitation is the result of greed.
- Misallocation results from bosses who don’t care about employees, or because capitalists aren’t charitable.
- Selling people things that are bad for them is a result of carelessness and greed (the paternalistic complaint).
- Harmful externalities result from careless people not considering the knock-on effects of their actions.
- The selfishness of markets correlates to and probably generates other vices, like vanity or sloth or envy.
So, in my view, the entire enterprise of repugnant market research can be reduced to the semiotic question: “why do the lion’s share of cultures believe that markets and money taint sacred objects with the profanity of selfishness?” Brennan and Jaworski exhort us to do “more work . . . on the psychology underlying semiotic objections to markets.”
Our past was unimaginablyviolent relative to today. If you think Republicans and Democrats are prone to think the other team are a bunch of sociopaths, you can only imagine what the mentality was when people routinely massacred one another’s tribes at dawn. So, we’re understandably prone to think outgroups are selfish people who lack our ethics of reciprocity and community solidarity. We think out groups are evil. Trading partners by definition come from out groups. Ergot, we associate markets–and its material totem, money–with selfishness. By extension, we usually relegate low status people to dealing with outgroups, to doing our trading and banking. In European history, those people were Jewish.
Now, that conflation of outgroups with nasty selfishness is not entirely irrational. When positive sum trade between my ingroup and your outgroup breaks down, we probably will get nasty and hurt one another. So people are right to sense the tension and conflict in negotiation, in the marketplace. Economists mostly ignore that process. Deals don’t break down in the economics textbook. Best friends don’t sue each other and tank a successful business partnership, because rational agents recognize that trades are mutually beneficial.
If we recognize that people generally associate markets with greed, and maybe understandably associate greed with a lot of bad behavior, we can probably be more persuasive in enjoining people to experiment with markets. That will mean telling a story where private insurers and for profit hospitals aren’t callous, suspender wearing fat cats. It will mean telling a story where people running black markets in organs and babies in third world countries actually do care about the customers they are serving. And so on, with the bankers, with the bosses, with the drug dealers, with the children’s toys manufacturers.
Protesting and beating people over the head with supply and demand diagrams, calling their ideas “economic fallacies,” probably isn’t going to do the trick.
In the final section of Markets without Limits, Jaworski and I do some speculation about the psychology underlying anti-commodification attitudes. People have various objections about how markets in this and that would cause certain bad effects. E.g., they might say that they oppose kidney markets because they think they would prevent poor people from getting kidney markets. Now, suppose you ask them, “You think the market causes bad thing X. Suppose you had good empirical evidence that it doesn’t cause X. Would you be fine with the market then?” About half of people say yes. And about half say no. You can quickly get people to be morally dumbfounded–they’re convinced markets in this or that are evil, but they aren’t sure why. Following some ideas from Hayek and others, Jaworski and I speculate that it’s a combination of disgust and that our moral psychology wasn’t “designed” for extended and indirect forms of cooperation.
What do you think?
The Mercatus Center at George Mason University is accepting fellowship applications for a variety of programs: the PhD Fellowship (deadline Feb 1), MA fellowship (Mar 1), Smith fellowship (Mar 15), and Bastiat fellowship (Apr 1).
You can learn more about these programs here. The Mercatus Center is doing terrific work with students both at the Masters and PhD levels, and the Smith and Bastiat programs are for students from any university who want to learn about modern classical liberal political economy. Check them out.
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