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Mar 02 2014

A Question for Free Market Proponents

I finally finished reading Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets (I’d talked about it earlier in this post on rhino hunting auctions). Since reading it, I’ve been pondering a question, which I wish Sandel had posed to his opponents during this LSE debate.

During the debate, one of the examples (of the moral limits of markets) Sandel gives is blood – i.e., rather than (or in addition to) donating blood, should one be able to buy and sell/auction it? In his response, his opponent Julian Le Grand promptly says yes, there should be such a market. The question I wish Sandel had asked as a follow-up is the following:

Practicalities aside, and assuming fair background conditions, is there anything which you think should NOT be on the market? If YES, what is your argument for the same?

Let me clarify it a bit – I say “practicalities aside” so as to exclude reasons like “it would be impossible to regulate” and “it would get misused”. And I say “fair background conditions” to exclude reasons of inequality, since this is bound to be the most common reason given (markets can exploit the under-privileged). Instead I want to keep the focus on the fundamental nature of the good itself. (This is one of the main arguments in Sandel’s book – markets “corrode” certain goods and change attitudes and practices associated with those goods for worse.)

Here are two examples that I thought of for the question:

1) A market in child adoption. I.e. biological parents hold an auction where adoptive parents bid for the baby.

2) A market in tickets for capital punishment. States (where capital punishment is legal) sell/auction tickets to an execution, and pump the proceeds back into improving the prison system. The state also auctions a single ticket to be the executioner.

It would be interesting to hear the “YES” responses from free market proponents. (Note: I’m genuinely interested; this is not a “let’s troll those libertarians” post.)

 

15 comments

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  1. 1
    Al Dente

    In the US (and possibly in other countries) there is a market for blood. There are collection centers which pay donors for their blood and sell the blood to hospitals and other organizations which use blood and blood products.

  2. 2
    arno

    Interesting question. However, I’d answer NO to both without seeing this as a restriction of a full free market concept. While I’m definitely not a “markets over everything” person, I do find it difficult to find an example of something I believe can be exchanged ethically, but should not be legal to sell.

    1) I don’t believe that biological parents have a suitable right to their kids they could auction off like that. Any decision the biological parent can make in such a situation ought to be for the best of the child, which will probably be unable to make the decision itself.

    2) Again, I don’t believe states have any right to execute people, thus they cannot sell associated stuff.

  3. 3
    corwyn

    Given the premise of capital punishment, the whole *point* is to make it a deterrent, which implies that it should be as widely publicized as possible. This means sell tickets.

    This is one of the reasons I oppose capital punishment, by the way. I think society is better off without death voyeurs. But I really don’t think this is a ‘free market’ question. The free market question would be auctioning off the rights to perform and broadcast it to some entity other than the state.

  4. 4
    ed

    1) Yes. Practicalities would include checks that you sell to normal people and not evil villains, but aside from that I don’t see a problem.

    2) No, because you’re encouraging very undesirable trait in the society – enjoyment of murder.

  5. 5
    ed

    “1) I don’t believe that biological parents have a suitable right to their kids they could auction off like that. Any decision the biological parent can make in such a situation ought to be for the best of the child, which will probably be unable to make the decision itself.”

    If the biological parent is willing to sell the child, it’s almost by definition in the best interest of the child to be sold.

  6. 6
    GG

    1) Probably not. The child represents a non-consenting third party and, more importantly, parents do not have property rights in their children and thus cannot sell them for personal enrichment. Its possible to imagine a system where the right to raise a particular child is auctioned off (provided appropriate checks and “background conditions”), but the bulk of revenues raised in the auction would need to be held in trust for the child.

    2) Almost certainly not. You specified “practicalities aside” and “fair background conditions”, but there must be limits even to these; a hypothetical world where any government is competent to carry out executions is just too far from reality.

  7. 7
    pacal

    I don’t see much difference between No. 1 and a slave auction. and as for No. 2, that is frankly grotesque.

  8. 8
    had3

    Ed @4; technically it’s not murder (& I oppose capital punishment), but we may still want to curtail seeking entertainment in the death of another human.
    I am fascinated by this discussion though. With respect to auctioning one’s child, the argument that the best interest of the child should trump the ownership interest of the child seems very sound. But let’s back up a bit and wonder about the free market ability to have a child for adoption or not: eg., a first trimester woman may choose to abort, but what if she sells that right in the com of just having the baby and putting it up for adoption through a “legitimate” agency? After all, the decision to abort or not is purely hers, so shouldn’t she be able to sell that right during the first trimester? Cool discussion. Thanks.

  9. 9
    Sunil D'Monte

    Hmm perhaps capital punishment was not a good example to suggest, since most of us are against it even in the absence of a market.

    W.r. to my adoption example -

    @arno (#2) and @GG (#6), the baby does not get to choose even today, right? The biological parents make the decision for it. So consent can’t be a good reason to not have an adoption market.

    Putting myself in market shoes for a minute: the market mantra is that “Markets allocate goods efficiently”, i.e. both the buyer and the seller are better off after the exchange (their “utility” increases). Buyers have an ability and willingness to pay. Since we’re assuming fair background conditions here, let’s assume the buyers have the same ability to pay, and therefore are distinguished only by their willingness to pay.

    In an adoption market transaction, the market economists’ argument could be something like this: The buyers (i.e. the adoptive parents) get the baby they wanted, so they’re better off. The sellers (i.e. the biological parents) are better off because they gave their baby to the adoptive parents who wanted the baby most and therefore are likely to be most committed to the child, as evident from their willingness to pay more. The baby would be better off as a result too. (Of course, the normal adoption checks and interviews that happen today would still happen; the only addition is the market price.) And of course the sellers would get money too, and more money is always welcome. The market could additionally ensure that adoption is not treated lightly by any of the parties involved, and would help kill off the adoption black market etc. etc. These are the kinds of arguments the economist would make.

    @ed (#4), can you think of an example of your own, of something you would NOT want to see on the market?

  10. 10
    GG

    @8: We need to be careful to specify exactly what is being sold in this case; you cannot sell a thing to which you do not already have rights. If we stipulate that birth parents don’t have a property right in a child then such a right cannot be created at auction. What would be transferred would be some package of rights related to the raising of the child.

    In regards to abortion: A fetus isn’t a person whereas a born child is. Rights accrue only to persons, so a child will have rights, including a right to self-determination, which simply do not apply in the case of a fetus. Setting aside the admittedly difficult issue of “When does a fetus become a person, exactly?”, this explains why abortion is fine but selling a child into slavery (or, indeed, selling them at all) isn’t.

    @9: It is true that a baby cannot consent to adoption, so one of the background stipulations that must be met is that the adoption makes the baby no worse off and, preferably, better off. A complicating factor is that, AFAIK and correct me if I’m wrong, the birth parents don’t typically receive significant remuneration. In this situation the can be seen as simply selling their right to raise the child, but this runs the risk of shading into selling the child itself.

    If such auctions were to take place it must be made explicit, in writing, the exact package of rights and obligations that are transferred from the biological to the adoptive parents. However, I’ll retract my earlier statement about proceeds being held in trust; I can’t see a reason to do so in light of the above formulation.

  11. 11
    GG

    Also, as a meta-commentary, thanks for not trolling “those libertarians”. It’s a refreshing change of pace.

  12. 12
    ed

    @Sumil Here’s an example – I wouldn’t want to have a market for votes.

  13. 13
    ed

    oops, sorry for the name misspelling

  14. 14
    Murali

    If one were to take the author’s assertion that his intention is not to troll those (dirty) libertarians, one has to conclude that the author doesn’t understand what is meant by ‘market’. Market is neither an ideology nor an utopia towards which libertarians march. It is just a descriptive term to denote the voluntary exchange of goods and services.
    1. How does a child fit the definition of ‘goods and services’/
    2. The state has a monopoly on violence. In fact, the definition of state itself is ‘monopoly on violence’, so to speak. How does the state’s exercise of this monopoly power have anything to do with ‘market’?

  15. 15
    Sunil D'Monte

    @Murali – there are already numerous markets today for things which do not meet the traditional economic definition of goods and services (see Sandel’s book/articles). So while it might be a distinguishing factor for you, it doesn’t seem to be a distinguishing factor for other free market players. Oh – and knock off the snide put-downs, or you’re done here.

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