Markets, repugnance, and externalities

Abstract

This Article considers one aspect of the ongoing debate about the moral limits of markets – namely, the purported harmful effects of market transactions on particular relations, goods, services, or society at large, due to an inappropriate valuation. In other words, the argument is that some markets are ‘repugnant’ because they degrade and corrupt a variety of nonmarket values and relations, not just to the willing parties to the exchange, but to larger segments of society. This objection contains both a (frequently unacknowledged) empirical component and a moral component. This Article critiques these empirical claims on two grounds. First, market skeptics fail to provide evidence of the negative effects they hypothesize, despite widespread variation over time and across legal regimes. Second, these objections fail to account for the well-documented human tendency to fashion repugnant exchanges in a manner that reinforces – rather than undermines – deeply held values and relationships.

Repugnance and institutions: an introductory essay

“…Indeed, ‘corruption theorists… fail to provide evidence of this predicted corruption’. This has been noted previously, as Krawiec reminds us, quoting for instance Martha Nussbaum who wrote that prostitution did not destroy love or the desire to fall in love, ‘any more than a Jackie Collins novel removes the desire to read Proust’ (1998: 713, cited in Krawiec, 2022: 6). Krawiec's point that she makes after having analysed kidney exchange or egg donation is that the development of these transactions did not destroy but rather preserved certain values such as the sacredness of motherhood and the sacredness of life.…”

“…Trying to find a definition of repugnance is not that easy. Kimberly Krawiec notes in her article that ‘[t]he term “repugnance” does not have a consistent meaning in the literature’ (2022: 3). One might try to suggest, as Krawiec does in her contribution here or as Élodie Bertrand did (2021), that repugnance is a form of ‘moral externality’.…”

Economic analyses of repugnant market transactions: a modest typology

“…When it comes to a rational assessment of sentiments of repugnance, we need both empirical data on the presence and strength of such effects and conceptual and normative tools to analyse and eventually criticise such sentiments – as not all of them deserve respect, let alone legal sanctions. Indeed, it is an open empirical matter whether in a specific context there are indeed demonstrable relevant market failures such as tangible negative external effects (Krawiec, 2022).…”

Repugnance, externalities and subjectivism: a comment on Krawiec

“…Creating markets for some goods, on which they would be traded against money, would thus be ‘repugnant’, to uses Alvin Roth's term (2007). This is the so-called ‘corruption thesis’ which considers that ‘some markets are ‘repugnant’ because they degrade and corrupt a variety of nonmarket values and relations’ (Krawiec, 2022: 2). Indeed, adopting a repugnant behaviour or engaging in a repugnant transaction does not only harm the individuals who are involved in the transaction – ‘the willing parties to the exchange’ (Krawiec, 2022: 2) – but that the harm spreads also ‘to larger segments of society’ (2).…”

“…This is the so-called ‘corruption thesis’ which considers that ‘some markets are ‘repugnant’ because they degrade and corrupt a variety of nonmarket values and relations’ (Krawiec, 2022: 2). Indeed, adopting a repugnant behaviour or engaging in a repugnant transaction does not only harm the individuals who are involved in the transaction – ‘the willing parties to the exchange’ (Krawiec, 2022: 2) – but that the harm spreads also ‘to larger segments of society’ (2). Repugnant behaviours or transactions generate unintended consequences on third parties.…”