Libertarians often claim that a just price is whatever people are willing to pay in the absence of force or fraud. So, if sweatshop workers are willing to sell their labor for close to subsistence wages, that’s fair as long as no one lied to them about the terms of their employment or held a gun to their head. If price gougers charge inflated prices in the wake of a disaster, that’s fine too. And if poor people in the developing world are willing to sell their kidney for a pittance, there shouldn’t be any problem with that either. Exchanges of this sort are positive-sum, and consistent with individual liberty. Prohibiting them isn’t.

Regular readers of this blog will be aware that I have more than a little sympathy with the libertarian position on sweatshops and price gouging. But as I’ve written here before, I also think that the moral issues involved in these cases are more complicated than the standard libertarian analysis would suggest.

Over at Libertarianism.Org, philosopher Neera Badhwar has a very nice post laying out the case for a more sophisticated libertarian view of just exchange, drawing Aristotle’s concept of voluntary action and John Locke’s theory of just exchange (as explained in his mostly unknown essay Venditio). Badhwar, like Locke, rejects the simplistic libertarian view that whatever people agree to in the absence of force or fraud is necessarily just. “A desperately poor but healthy woman whose family is on the brink of starvation because of a drought might be willing to sell her kidney to a well-off man (or his broker) for a large sack of rice,” but

By the baseline of simple humanity, the exchange is both disproportionate, and disrespectful of the desperate individual’s humanity (the idea for such a distinction between baselines is due to Alan Wertheimer, Exploitation, 1996). Indeed, it is no more just than an exchange between a man dying of thirst in a desert and a well-off, well-stocked tourist who, passing by him, agrees to give him some water in return for all his property after they reach home. Every philosophical ethical theory joins commonsense morality in condemning such a deal as unconscionable, and the common law agrees by refusing to uphold it if the thirsty man reneges on it.

So what would a fair price be? Badhwar suggests that it is the price that would be the price that emerged in a competitive market. And what does that mean?

Whatever else it might be, it is a market in which people are free to buy and sell. The kidney market, then, is decidedly not a competitive market, since kidney sales are banned in every country but one (Iran). If kidney sales were legal everywhere, or at least in most countries, and there was free legal trade in kidneys, many rich people would go to poor countries for kidney transplants (as they do for other medical procedures) and the price of kidneys would rise in those countries. Ironically, it is the attempt to save people from exploitation by banning kidney markets that has led to the unimaginably high levels of exploitation and injustice that we see in underground kidney deals.

This, too strikes me as exactly right, and very well-put. Read the whole thing yourself. It’s a great essay. And it’s great to see another heretic joining the blogging team at Libertarianism.org! Maybe she can draw some of the fire away from me on their Facebook page…