Economics, Exploitation

A Libertarian Mungerfesto, Part III: If the Exchange Setting is NOT Euvoluntary, What Then?

I left off the previous edition (part II) (and here’s part I) of the five part series this way:

What does voluntary mean? Is it sufficient that consent not be extorted at gunpoint? Many believe that an absence of coercion by direct human agency does not suffice.  People also must not be coerced by the absence of alternatives.  A choice can’t be voluntary if it is not a choice.

Michael Sandel (1998:  78) formulates the objection in this way

The… objection [to the claim that an exchange is truly voluntary] is an argument from coercion. It points to the injustice that can arise when people buy and sell things under conditions of severe inequality or dire economic necessity. According to this objection, market exchanges are not necessarily as voluntary as market enthusiasts suggest. A peasant may agree to sell his kidney or cornea in order to feed his starving family, but his agreement is not truly voluntary. He is coerced, in effect, by the necessities of his situation.

To eliminate the ambiguity in the meaning of voluntariness, I proposed the formal notion of euvoluntariness, or “true voluntariness.” For a market exchange to be euvoluntarysix conditions must be met:

  1. The parties own the objects or services being exchanged, according to the conventional interpretation of ownership.
  2. The parties have both the legal and practical capacity to transfer these objects or services.
  3. There is no fraud, and no psychological compulsions such as addiction or neuropathy.
  4. The exchange does not produce large-scale uncompensated non-pecuniary externalities, and does not impose costs on third parties without their express voluntary consent.
  5. Neither party is coerced in the sense of being forced to exchange by threat of violence or other form of active aggression.
  6. Neither party is coerced into exchange by dire necessity, and neither party has enough bargaining power to impose an unconscionable price.

Conditions 1–6 are standard requirements for a valid contract in the common law. Conditions 5 and 6 could be summarized as “no duress.” A market exchange is voluntary if conditions 1–5 are satisfied, but it is not be euvoluntary unless condition 6 is satisfied as well.  Condition 6 requires that no one is “coerced by circumstance.”

A number of people asked in comments why this would ever be a concern.  Why would there be a necessity that both / all parties to the exchange have good alternatives?  There are many cases where contracts are invalidated because they are “unconscionable.”  The most interesting for present purposes is likely “Post v. Jones,” 1856.  The précis is simple:  No contract is valid if there is no market, no competition, and one party has absolute bargaining power.  (If you haven’t read the case, it’s worth studying, from the decision itself and from this summary). But here’s the short version:

A whaling ship, with a substantial load of valuable whale oil, is stranded (aground on dangerous rocks) and will almost certainly be wrecked, with total loss of the cargo.  The “rescuer” ships in effect negotiated a deal where all the oil became the property of the rescuer.  The rescuers then auctioned off the oil, receiving an amount much greater than the salvage fee would have been.  The owners of the wrecked ship argued that the “contract” was “negotiated” (sorry for the quotes, but they matter) under conditions of extreme duress, and that there was no market and that there was no competitive setting for the negotiation.   Therefore the implicit contract was not enforceable, because it was unconscionable.  This notion of unconscionable contract is common in law (that is, in common law of torts), and condition #6 is simply designed to capture that intuition.

Coerced by Circumstance?

Sandel’s claim is that people might be “coerced by circumstance” and that this makes markets bad.  He’s wrong.  What’s wrong is the circumstance, not the market.  Prohibiting the exchange does nothing to improve the circumstance.

To Sandel’s credit he lists two circumstances when what I have called condition #6 might be true:  “severe inequality or dire economic necessity.”  That is, either the bargaining strengths of the two exchangers are just too different, their power in the market too disparate, to justify the proposed exchange, or else the reversion point, or “no-bargain” solution of one (or more!) of the exchangers is too abject. Severe inequality implies that the disparity in alternatives to the exchange is too large to be fair.  Dire necessity implies that the alternative to exchange for one party is unconscionable.   If at least one of these conditions applies the transaction is not euvoluntary and therefore appears to be unjust.

The problem is that the set of conditions in the “euvoluntary” list are sufficient conditions for an exchange or exchange situation to be just.  What conditions are necessary?  It would be premature, at least, to conclude that it is obvious that because the transaction is unfair it should be prohibited.  In general, the unfairness is a condition of the pre-existing distribution of wealth and power across the potential participants in the transaction.

Suppose we grant the following (we might not, but suppose we do).  The peasant is desperate to sell his kidney to avoid an outcome we all agree is unconscionable:  family starves.  Our intuition is something like this:  no one should be forced to sell his kidney, or corneas, to feed his family.  Fair enough.  But prohibiting the transaction maroon the peasant at just that outcome, making him even worse off than if the transaction had been allowed.   It would appear that denying the desperate peasant the chance to sell his kidney is a different kind of injustice, where moral acceptability is purchase only at a price of substantial, and avoidable, harm to his family.  Thus “peasant should not be allowed to sell kidney” does not follow from “peasant should not be obliged by circumstances to sell kidney.”  The prohibition on the sale does nothing, nothing at all, to mitigate the desperate circumstance.  If any, our moral smugness in outlawing the makes the peasant even worse off, marooning him at a position that, by granted premise, is unacceptable.  What fresh hell is this?

I want to raise the possibility here that there is at least an ambiguity in the claim that it is wrong to buy from, or sell to, someone in a desperate position, if by refusing to do that a mutually beneficial exchange is ruled out.  What I mean is something like this:  I think sweatshops are wrong, so I refuse to buy from sweatshops. But that means that the people employed in the sweatshops lose their jobs.  I get to satisfy my own moral intuition that sweatshops are wrong, but at the price of material harm to the very people my moral intuition is supposed to protect.

More generally, suppose that, in order for the stronger party to act morally, the weaker party must actually be harmed in some material sense.  This possibility is accounted for by the “non-worseness” principle, described by Zwolinski (2008) interpreting Wertheimer (1996).

Zwolinski describes non-worseness this way: “In cases where A has a right not to transact with B, and where transacting with B is not worse for B than not transacting with B at all, then it cannot be seriously wrong for A to engage in this transaction, even if its terms are judged to be unfair by some external standard.”  (p. 357).

If Sandel actually refuses to buy the kidney, he is “buying” his own moral smugness (clearly valuable to him, as to each of us) at the cost of significant material harm to the peasant, who after all is supposed to be the subject of our altruistic urge.  The desperate situation pre-existed the consideration of the use of non-euvoluntary exchange, and if we rule the exchange because it is unfair we are imposing an even greater cost on the peasant.

Finally, in the case of the whaling ship, the Richmond:  suppose the captains of the rescuing ships know that no contract for more than salvage fees will be enforceable.  But the situation close to the rocks is very dangerous, and they (prudently) decide not to attempt the rescue.  The captain of the Richmond offers more than the salvage fee, because that is what is required to induce an increase in “supply” of rescue services.  But since that offer is not enforceable, and will in fact be reversed by a court once the rescue is effected, the rescue does not take place.  The captain of the Richmond would have been better off being rescued at the higher price, but he cannot offer a higher price, even if he wants to.

It’s perfectly true that the captain of the Richmond is “coerced by circumstance.”  After all, he’s on the rocks, the ship is breaking up, and it is likely that he and the crew will all die if they are not rescued.  If we prohibit (or, what amounts to the same thing, refuse to enforce after the fact) a contract that allows the captain to escape this desperate circumstance, we are violating non-worseness.  If our intuition is that we should help the desperate, this is a very odd outcome.

In short, all euvoluntary exchange should be allowed, without state interference.  But many non-euvoluntary exchanges should be allowed, too.  In particular, if the objection is that the distribution of wealth and power is unjust, that can’t be an objection to exchange, especially when outlawing the exchange maroons the weaker party at the outcome that, by premise, is unacceptable. What would be the standard?

(My thanks to Ricardo Guzman for suggesting the Post v. Jones case, and the Charles Fried book Contract as Promise )

  • Motivated Cognition

    Basically, arguing about definitions has no ultimate bearing on the basic microeconomic theorem that taking people’s choices away from them can’t make them better off.

    Fair restatement?

  • daniilgorbatenko

    The problem with your argumentation is that it is a category error to apply moral predicates to things like circumstances. Only human actions can be moral or immoral, fair or unfair, just or unjust. Of course, we can discuss the actions of the counter-party to the relevant non-euvoluntary transaction. Sometimes, a good case can be made that such a party owes a duty of benevolence to the disadvantaged person. However, duties of benevolence are not enforceable, and thus the whole issue of transactions you discuss is irrelevant to political philosophy.

    Besides, the idea of unconscionability is dubious at best because it is unclear what exactly it means. Obviously, it can’t mean that an alternative to the relevant transaction is unimaginable. Also, it probably can’t mean that the disadvantaged person enters into the transaction mechanically, without exercising his capacity to deliberate about alternatives. Thus, the only meaning this notion may have is being grounded in a very strong motivating reason or desire. The problem, however, is that lots of choices are grounded in very strong desires or motivating reasons. For example, some suicide bombers clearly act out of very strong motivating reasons, and there is no apriori reason to believe that those motivating reasons are weaker than the need to materially help one’s family. But we do not consider the actions of suicide bombers to be not truly voluntary.

    • Phil

      “The problem with your argumentation is that it is a category error to apply moral predicates to things like circumstances. Only human actions can be moral or immoral, fair or unfair, just or unjust.”

      Do you have an argument for this or just assertion?

      • I can’t speak for daniilgornatenko, but this seems a fairly standard libertarian position, akin to the Hayekian argument that the concept of “social justice” is meaningless because in a spontaneous order things like income and wealth distribution aren’t a product of human design and intent.

        If one is contrasting the results of natural events (e.g., storms at sea) on the one hand to deliberate and direct human action on the other (the proverbial gun to the head) then I think the argument has some merit. However I think it breaks down somewhere in the middle ground where the chain of causation from human action to circumstances is more indirect and obscure. There are lots of examples of clever humans able to keep their own hands relatively clean while arranging things so as to be able to make others offers they couldn’t refuse.

        • StephenMeansMe

          Would it be fair to consider conditions as, well, *conditions*? So that some circumstance isn’t “moral”/”immoral” or “just”/”injust” inasmuch as it’s *admissible* or *inadmissible* to a market transaction?

          It’s obvious that you can’t have a market with just one actor, for example. So a population of one is inadmissible to a market. Maybe this rescue scenario is similarly inadmissible to a market, and something else must inform just actions there.

          • I’m not sure exactly what you mean by “admissable or inadmissable to a market transaction”. Do you simply mean that conditions in Post v. Jones were such that a true market transaction was not possible?

            I don’t think Post v. Jones was strictly speaking a true rescue scenario, since based on my reading of the case what was at at issue was not that the owners of the shipwrecked vessel had to pay for saving the lives of the crew, but rather that they had to sell their whale oil for well below market rates or face receiving nothing for it.

            Given that, I think a possible approach would have been to allow the possibility of exchange but require that the price be renegotiated once the parties were on a more equal footing–and if the parties couldn’t come to an agreement then have a price be imposed by an arbitrator.

          • StephenMeansMe

            Yep, that’s what I mean. I had the same thought about deferring or renegotiating at a later time, it seems like a reasonable course of action.

      • daniilgorbatenko

        I think it is obvious. Morality exists only where there are acting human beings or potentially other agents endowed with free will. You won’t use moral terms in relation to lions or ants.

        • Phil

          I agree that moral responsibility only applies to rational, free agents (beings capable of intentionally choosing between available options). But we can still evaluate states of affairs and their causes as good or bad, beneficial or harmful. For consequentialists, these have moral significance.

      • Bob_Robert

        “Do you have an argument for this or just assertion?”

        Gravity. It is neither moral nor immoral, it just is.

        Morality is about choice. Without choice, there is no morality.

        • good_in_theory

          Unchosen effects prompt choices by those both affected and unaffected. So even if morality is strictly about “choice,” this does not mean that unchosen things, like the incidence of natural disaster or some such, are not capable of being morally evaluated. They prompt people to choose how they engage with the consequences of things which have not been chosen.

        • Phil

          “Gravity. It is neither moral nor immoral, it just is.
          Morality is about choice. Without choice, there is no morality.”

          I’m going to give you the benefit of the doubt and assume that you are perfectly aware the argument you gave was invalid. It had the following form:

          (1) Here is an example of something unchosen that is neither moral or immoral.
          (2) Therefore, nothing unchosen is moral or immoral.

          You cannot validly infer a universally quantified statement from a single instance. But I’m sure you know that.

          • Bob_Robert

            “I’m going to give you the benefit of the doubt and assume that you are perfectly aware the argument you gave was invalid.”

            Not at all. Gravity is an example of a condition that has nothing what so ever to do with morality, because there is no choice involved.

            I could throw someone to the ground in order to harm them without cause, thus utilizing gravity to commit an immoral action. Gravity still has nothing to do with the morality of the situation.

            I will give you the benefit of the doubt and assume that you were simply unaware of the point I was making.

          • Phil

            This was the disputed claim:

            (P) For all x, if x is unchosen, then moral predicates do not apply to x.

            Proposition (P) does not follow from the following claim:

            (G) Gravity is unchosen, and moral predicates do not apply to gravity.

            The inference from (G) to (P) is invalid. You cannot prove a universally quantified statement like (P) from a statement about a particular instance like (G), as you tried to do above. This is basic first order logic.

          • Bob_Robert

            “(P) For all x”

            Again: Gravity is one EXAMPLE.

            I never proposed “For all x”. Your premise is false.

            So, also again, I will give you the benefit of the doubt and assume that you remain simply unaware of the point I was making.

          • Phil

            Well, I don’t dispute that there are examples of unchosen things to which moral predicates do not apply. But this conversation began when someone denied that moral predicates can apply to circumstances. I asked him if he had an argument, then you responded to me.

            This was the comment to which you responded:

            {“The problem with your argumentation is that it is a category error to apply moral predicates to things like circumstances. Only human actions can be moral or immoral, fair or unfair, just or unjust.”

            Do you have an argument for this or just assertion?}

          • Bob_Robert

            “I don’t dispute that there are examples of unchosen things to which moral predicates do not apply.”

            Then we’re done. Thanks.

          • good_in_theory

            If you think that settles anything you aren’t too sharp. There are examples of cats without spots. This doesn’t mean no cats have spots.

          • Bob_Robert

            “If you think that settles anything you aren’t too sharp”

            You obviously get great pleasure out of insulting people you don’t know. I’m so very glad you’ve been able to get that out of your system. Do me a favor, please, and don’t have children.

          • good_in_theory

            And you obviously take great pleasure in making profoundly stupid arguments. Good luck with that.

          • Bob_Robert

            That wasn’t an argument. It was a plea.

    • martinbrock

      … duties of benevolence are not enforceable …

      Why is a duty of benevolence any less enforceable than a duty to respect a right to exclude others from the use of a resource?

      Moral adjectives are not applicable to amoral circumstances, but an exchange of property is not an amoral circumstance. An exchange presupposes a duty to respect the parties’ exclusive governance of particular resources, and this duty may be contingent upon respecting duties of benevolence.

      Property rights do not exist in a moral vacuum. No one owes you respect for any property right outside of an explicit, social contract in my way of thinking. You must earn this respect by performing any duties that a community, of persons freely agreeing to respect your property right, attaches to the right.

      If a particular community respects exclusive governance of a resource by a person creating the resource from unclaimed, natural resources and attaches no other terms to this right, so be it, but no law of nature compels communities generally to construct property this way.

      • TracyW

        Practically, it’s generally much harder to compel someone to do something than to stop them from doing something. (I once had a summer job as a nurse’s aid in a secure unit). And the more skill involved in a performance the harder it is to compel a job well done. To remove someone bodily from an area is much easier than making them carry heavy weights all day and that’s much easier than making them perform good-quality waitering, let alone brain surgery.

        As for respecting exclusive control over resources: experience shows us that resources are generally used far more productively when held as private property.

        • martinbrock

          It’s harder to compel someone to respect a standard of propriety than to stop him from disrespecting a standard of propriety?

          I agree that private property is useful, but I don’t know how that’s relevant. I don’t want to compel anyone to obey a duty of benevolence. I rather want people who want to obey a duty of benevolence to associate with one another, and I expect these people frequently also to divide the governance of resources, rather than expecting a central authority to govern all resources, in many cases to respect individual governance of particular resources.

          Historically, where are the communities respecting private property without any corresponding duty of benevolence?

  • Jerome Bigge

    An example of an exchange where one side has much more power than the other is in the form of government regulations that give doctors an enforced legal monopoly over access to medical drugs. In effect you must pay the doctor to get his or her “permission” to purchase medicine. Prior to 1938 here in the US you didn’t need to do this. If you knew what you needed, you could simply buy it at your local drugstore. The druggist would also assist you if necessary in making the best choice. In effect the professions have the power to “shake you down” as they hold a legal monopoly over things in their field. This of course considerably increases their income over what it would be if they didn’t have “government protection” over goods and services in their field.

  • To quote from the summary linked to, “It has been contended, also, that
    the sale was justifiable and valid, because it was better for the interests of
    all concerned to accept what was offered, than suffer a total loss. But this argument proves too much, as it would justify every sale to a salvor.” (Well,
    presumably every sale in which one party was not literally holding a gun to the head of the other.)

    Given that, I think I have a blueprint for how to do business: 1) Do everything legally (or even quasi-legally) in my power to ensure that those on the other side of the exchange are as disadvantaged as possible. 2) In pursuing (1), rely on others as much as possible to do the disadvantaging, so that if any unjust actions happen to occur, they cannot be directly attributed to me (“it’s just circumstances”, and hence questions of morality do not apply). 3) Profit.

    This reminds me of the evolutionary argument for why people supposedly have a in-born sense of fairness that causes them to reject exchanges which they perceive to be unfair, even at great cost to themselves. (Of course, natural selection is indifferent to philosophical arguments.)

    • TracyW

      You forget: you also need to provide whatever you’re proposing to trade, and do so better than your competitors.
      And that there’s a strong risk that while you’re managing all this behind-the-scenes manipulation, one of your competitors will swoop in and take all the advantages of your trade.
      Noticeably historically producers have often just gotten the government to pass laws legally requiring people to buy their products, rather than engaging in more complex schemes.

      • Point taken, but I’m not thinking of a hypothetical “free market and nothing but the free market” environment. (Such an environment has never existed, and I suspect will likely never exist — no anarchocapitalist I). I’m thinking more of what gets generally classified as “crony capitalism”: basically arranging via political policies an economic environment (and in particular a labor environment) that is favorable to oneself, one’s associates, and one’s descendants.

  • I would say unconscionabilty shows up way more in the common (and statutory) law of contracts than in torts. Are you thinking about IIED or damage awards or something?

    Anyways, I have a hard time following what point you are trying to make. Obviously most people opposed to these kind of exchanges want to forbid them AND impose some other solution rooted in smoothing over the unjust situation. Forbid the contract to rescue and impose a general duty to rescue, forbid organ sales and subsidize poor people who might want to sell organs while switching to an opt out donor system. Whatever. Point is, putting opponents of “coerced” exchange into a situation where the only policy levers are “forbid or don’t forbid the contract” makes them look bad, but it’s not clear you’ve identified any situations where that is the only choice.

    “Imagine a situation where the law can impose or not impose a duty to rescue, and a ship can safely do so but chooses not to because it would be too costly. Shouldn’t we impose the duty to rescue?” Maybe, but easing restrictions on bargaining for rescue might work better. There is a spectrum of policy options, presenting them as a duality proves nothing and isn’t useful.

    • So to simplify, “just ban the exchange” may never be justified, but “just ban the exchange AND do x” may be. “Just ban the exchange AND enforce a duty to rescue.” That won’t be Pareto optimal, but it can be both utility maximizing (in the benthamite sense) and inequality reducing.

      • You might ask, do you need to ban the exchange if you address the underlying inequality? In the duty to rescue case I can think of two cases the ban would be helpful:

        1. One party doesn’t know about the policy steps you’ve taken. The shipwrecked doesn’t know the rescuer has a duty to rescue and is persuaded to hand over cargo. Without a ban on that transfer, he’s not getting the cargo back.

        2. There are multiple shipwrecks. If the rescuer can’t rescue all of them but has a duty to rescue what ships he can, forbidding them from bidding against each other will keep inequalities of wealth from deciding who gets rescued.

        Ok, I will stop responding to myself now.

      • adrianratnapala

        I still don’t see how banning exchange becomes useful or even acceptable. Fair enough, impose a duty to rescue, that might dry up the market for extortionate rescues without an explicit ban. On the other hand, the duty to rescue might not always work: A captain facing danger might decide his duty to his own crew is more important than that duty, a Jury might even agree with him, and now we are back to square one.

        • I gave two examples how it could help. Other than that, I’m not claiming that I have a standard or general rule for when to ban these exchanges, just that in individual cases it’s easy to think of policy reasons for banning they exchange. I’ve thought of two: 1. Information asymmetry, 2. When the exchange is less about inducing the more powerful party to provide the service and more about inducing them to provide it to you in particular.

      • TracyW

        But it seems rather implausible that a job only done by legal demand will be done as well as a job done because the doer has a monetary interest in it being done.
        Furthermore legal duties require further resources to enforce.

        • That gets into empirical issues, though, and I understand the post to be making a more fundamental claim.

    • Theresa Klein

      Forbid the contract to rescue and impose a general duty to rescue

      But then you are imposing the duty to rescue on third parties who may have nothing to do with creating any of the circumstances that led to this person being “coerced” to sell his organs.

      IMO, it would be more just for you personally to assume the duty to rescue yourself, voluntarily.

      One might feel that one has a duty to rescue, but feeling that one has the right to put a gun to someone else’s head to force them to do the rescuing for you is another story.

      • 1. I was thinking about the duty to rescue solely as a solution to the shipwreck problem. I agree that a duty to rescue organ donees from poverty doesn’t really make sense. 2. Our society already imposes a duty of reasonable care in how we treat each other, and most societies in the continental legal tradition also impose a general duty to rescue. Duties to unrelated third parties generally and a general duty to rescue specifically are not fanciful or obviously illegitimate things. 3. I don’t think I have a right to put guns to people’s heads and make them rescue others. For one thing I am not a democratic polity, and don’t have many rights a legitimate state would have even by libertarian accounts (ie, I can’t tax people to build a judicial system). For another I think it would violate a basic right to proportional punishment if the state executed someone for flouting a general duty to rescue. So yeah, the analogy strikes me as hyperbolic.

        To give a concrete example: I have a legal duty to rescue my son if he is in peril. He has also been in peril. But at no point did a government actor put a gun to my head and threaten my life if I didn’t rescue my son, nor do I feel like my life is in danger when my son is in peril, nor is the punishment for a parent failing to rescue his son actually death.

        • Theresa Klein

          The gun to the head isn’t meant to be taken literally. All force is ultimately backed by guns. But if you prefer… let’s say, do you have the right to threaten someone with imprisonment for failing to rescue someone else that you think needs rescuing?

          In the case of parents, the parent has a duty to rescue to a child. But if the parent fails in some obligation towards a child, the parent isn’t imprisoned for failing in his obligation. Instead, the child is taken and given to someone else.

          • Alvincente

            Theresa – actually, it is in most US jurisdictions a crime to fail to rescue your child (a form of child neglect) and you do go to prison for that.

          • Theresa Klein

            From what I have observed, generally CPS steps in and takes the child away long before neglect becomes criminal.

          • If I am a government employee in a democracy that largely respects international human rights law acting with due process and in the scope of my employment and the polity has imposed criminal liability on those who avoid a duty to rescue then, yes, I can threaten someone with imprisonment for not rescuing and use non-deadly force to bring that about, provided their imprisonment is quickly reviewed by a magistrate. In the us that would mean a due process hearing within 48 hours.

          • Theresa Klein

            I’m talking about whether imposing criminal liability for not rescuing is moral, not whether if you impose a legal duty, the legal duty can be enforced by legal entities.

          • Me too? I am saying it would be moral for me to enforce criminal liability in that situation.

    • TracyW

      Yet organ sales are banned and there’s no global welfare state. And people do say they’ve not only stopped buying from sweatshops but from any source that might be a sweatshop.

      There are plenty of people who ignore the spectrum and just want the unequal trade banned.

      • That’s probably true. But Munger’s claim isn’t that those people are wrong, it’s that merely voluntary exchange should often be allowed without state interference. On the other hand, I think people rightly looking to address the underlying coercion of a merely voluntary exchange will often need to make use of banning the exchange. In general, I think Munger is wrong to focus on the exchange as an individual transaction and to ask whether it should be banned rather than to focus on the question of what regulatory regime is best and whether, given all the machinery of that regime, it makes sense to ban the exchange. As an example, I’ve argued that a possible (and oft used) solution to the rescue problem is to impose a general duty to rescue, and that that policy works better if you also don’t let people with a duty to rescue (ie, those who can do it with reasonably low costs) contract to rescue.

  • Les Kyle Nearhood

    My big problem is how do we decide, and on what basis when there is dire necessity or when there is inequality of power? It is a dire necessity that I eat food. It is also true that the Kroger Corporation has an enormous inequality in power with a nobody like me. So does that mean that Kroger is somehow coercing me when I buy food there?

  • adrianratnapala

    Well I don’t know the ins and outs of 19th century US law and precedent; but from moral instinct, I think the deal struck in “Post v. Jones” was perfectly honourable for both sides and should have been upheld. It was pretty low of the whalers to use the court system to stab their rescuers in the back.

  • Theresa Klein

    The problem with 6 is that it is so subjective. How do you define “dire” necessity?
    What price is “unconscionable”?

    The thing is that what we are really asking isn’t “what counts as coercive?”. It is “what justfies coercion?”. When we’re talking about banning or intervening in certain “coercive” transactions, we’re talking about using coercion to stop coercion.

    Is force justified to prevent someone from selling a kidney? If you think that it is, then what do you do about the fact that the prospective seller is *still* subject ot the dire necessities that you find coercive. You aren’t really relieving him of coercion, you are just imposing new coercion on someone else. I think if you want to stop someone from selling a kidney, you should be morally obligated to pay the guy whatever he needs to avoid the necessity of kidney selling. I.e. the people who are against this kind of thing should set up a fund to help prospective kidney sellers. Much like the pro-life groups that go out to convince women not to have abortions and offer them financial assistance in it’s place.

    • Les Kyle Nearhood

      except that also creates a problem, if you go paying people not to sell their kidney, then what about the poor person who needs the kidney. You are essentially paying for his/her murder.

      • martinbrock

        Paying someone not to sell a kidney when his family starves makes less sense than paying him to feed his family when his family starves.

        • Theresa Klein

          I like the last part. Food and Kidneys are both in desperately short supply. How do we best distribute these resources? If the price of kidneys is extremely high , and there is someone who can afford to pay for it, that kidney sale will buy a lot of food. So, arguably the sale of the kidney is pareto optimal.

          The problem seems to be that we have some basic moral intuitions that conflict with basic economic principles. The pareto optimal outcome does not seem to be the morally right outcome when you frame the problem in certain ways.

  • martinbrock

    Six is reminiscent of the Lockean Proviso. Compare and contrast.

    • Michael Byrnes

      I’m hoping “what then” comes in parts IV and V. 🙂

  • AL

    “What I mean is something like this: I think sweatshops are wrong, so I
    refuse to buy from sweatshops. But that means that the people employed
    in the sweatshops lose their jobs. I get to satisfy my own moral
    intuition that sweatshops are wrong, but at the price of material harm
    to the very people my moral intuition is supposed to protect.”

    But what about people who don’t work in sweatshops? Or their employers? Why should I harm them for being “moraly humble”?

  • reason60

    There seems to be an unstated assumption that may have been in a previous discussion, but without which, this post is puzzling.
    It is attempting to discover a normative principle for why a community should choose to enforce this contract versus that contract.

    But it is attempting to do this, without a discussion of what the community might want to acheive. The community is being asked by the 2 parties to enforce a contract- but does the community have a stake, and a legitimate interest in all this?
    Can it impose conditions on its participation, that neither of the parties finds agreeable? Or is the community obligated to enforce, without condition?

  • Just noticed: isn’t your reasoning circular? You are arguing that states shouldn’t ban euvoluntary exchange, but part of the definition of euvoluntary (point two) is that the parties are legally able to carry out the exchange, ie that the exchange isn’t banned. So that just seems like “states should not be able to ban exchanges provided the state doesn’t ban the exchange.”

    Or do you mean “capacity” in the mental sense?

    • adrianratnapala

      Intepret #2 to mean each individual act in the exchange is legal. That breaks your circularity, in the narrow logical sense. Munger is talking about contract killings etc.

      Also even if they the the individual acts are illegal we can ask if *that* ban is just, although that is not what Munger is discussing — he seems to be giving such laws the benefit of the doubt so he can concentrate on exchange.

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