Market Expansionism and Social Norms

It used to be socialists who wanted to radically reorganize society

In our society relationships between individuals are governed by a number of separate institutions with separate norms. The market is just one institution among many.

For decades socialists like William Lane argued that market competition ought to be replaced with friendly cooperation. The model for the new relationship between working people would be mateship. In this vision the institution of male friendship expands to replace markets.

Other socialists looked to the family for a model. States would relate to their citizens as parents relate to their children. Citizens would become brothers and sisters and a wise and compassionate governing elite would look after them the way Mike and Carol Brady looked after their distended family.

Other socialists imagined re-organizing industrial production as a kind of military service. In Looking Backwards Edward Bellamy saw it as obvious that a conscripted ‘industrial army’ would be more efficient than the fragmented system of the free market. And as one of his ever helpful characters observed, no one is really forced to work:

"It is rather a matter of course than of compulsion," replied Dr. Leete. "It is regarded as so absolutely natural and reasonable that the idea of its being compulsory has ceased to be thought of. He would be thought to be an incredibly contemptible person who should need compulsion in such a case."

These days it’s economic rationalists and law and economics academics who want to clear fell society’s existing institutions and replant with a single dominant institution which is more morally acceptable and efficient And when there is talk about ‘civil society’ it is often more of a tactic for attacking the institutions of the welfare state than a strategy for protecting non-market institutions such as families, churches, community organizations.

In the Cato Journal Donald J. Boudreaux proposes that "pregnant women, and women who have just given birth, be allowed to contract freely with adoptive parents at mutually agreeable prices for the sale of parental rights in their infants." Boudreaux argues that the burden of proof lies with those who object to such transactions. These critics should be "obliged to explain why their objections should trump a proposal yielding widespread benefits with little or no evident costs."

A similar argument might be made for creating a market in organs for transplantation. If a low income individual is happy to do without a healthy kidney and a high income individual wants to avoid waiting in a queue, then why should we object to a mutually beneficial exchange? Why should people who can afford to pay market price wait in line in a public health system?

Those who want to expand the boundaries of the market argue that traditional social norms are holding us back. For example, you could argue that widespread social disapproval of prostitution is discouraging thousands of attractive young women and men from receiving a fair return on their human capital while at the same time denying valuable services to potential customers. And in the field of education, forcing wealthy students to compete for a limited number of places at university instead of allowing them to buy their way in is surely just irrational meanness.

But social democrats often argue that public institutions such as hospitals, schools, universities, the military, and police and fire services are regulated by social norms of fairness and obligation. Citizens expect that access to life-saving healthcare should be on the basis of need and capacity to benefit rather than ability to pay. They want access to university places to be based on academic merit. And they expect their nation’s soldiers to have a sense of duty and professionalism rather than an attitude of self-interested calculation (otherwise why not use mercenaries?). They don’t want rich people to be able to buy their way out of conscription or jury service since these are duties of citizenship not market liabilities which can be bought and sold.

Many professions have their own norms of conduct. Doctors have the Hippocratic Oath, while lawyers, social workers, academics, teachers, public servants, and journalists are all expected to do more than just follow their employer’s instructions in return for pay. For many market expansionists these norms and expectations are unreasonable restrictions on trade. In their view an employer should not be forced to accept the norms of a professional association or to abide by tradition. Employees should be free to form associations which set standards but employers should be free to hire outside of these.

Stanford law professor Margaret Jane Radin argues that there is a push towards universal commodification. Market expansionists insist on talking about every social relationship as if it were a market relationship which ought to be governed by the norms of the market place. By doing so they make it harder to understand our relationships in terms of other institutions and their norms.

Given their ambitious project of moral re-programming it’s ironic that so many market expansionists complain about ‘elites’ who are trying to impose their norms and values on the general public. After all, the major impediment to an expanded role for markets is the public’s support for things like merit based access to higher education and needs based access to healthcare. As John Quiggin and Andrew Norton point out, public opinion seems to support existing government institutions which provide health and education services.

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Andrew Norton
Andrew Norton
2022 years ago

Don – There are interesting issues here. A few observations:
* at least in Australia, there is no ‘ambitious project of moral re-programming “. Body parts are off the poitical agenda completely. There is no opposition to prostitution norms or jury service. With the professions (an area of largely failed reform) there is no objection to the more positive parts of the professional ethos, more to over-charging through regulating entry. Against this, it is argued that regulating entry is necessary to enforcing professional norms.
* some of the most controversial issues surrounding norms to an extent rely on slippery slope arguments. Take for example the sale of blood or sperm. These can be provided at minimal inconvenience, yet there is resistance to creating markets in them – perhaps because people think it is the first step on the route to selling parts of the body that cannot be replaced.
* On the issue of academic “merit” in higher education: opposition to the full-fee places is, in my view, irrational *in the current policy context*, because it is a policy that would make many thousands of people worse off and nobody better off. The shortages the policy is alleviating are artificial shortages created by the government. But would my attitude be different if there was a genuine shortage? Probably, though I reject the view that all merit in university entrance ought to be academic. Provided the applicant is capable of doing the course, there are many other factors that can, and often ought, to be taken into account.
* my argument about health and education services is not the same as Quiggin’s. We agree that people want more spending on existing government services. But my argument is that this is partly because people are trapped by existing policy into this as the best option. Because they are taxed so highly they cannot afford the jump to the private sector, so a small increase in taxes in the hope that public services will improve is the best option. The best evidence for this is in schools, where most parents would use the private system if they could afford it, at least according to survey evidence. In health, a CIS question which hypothesised a cut in taxes to pay for private health insurance still found plurality support for the public system (46% to 41%), but this is still greater support for private medicine than if you leave out the low tax alternative.