heath pp 34 to 48 anderson

...-

34 Section A: The Moral and Political Framework of Business

from progress with the workers and also with a part ofthe capitalists and landowners and to increase the por-tion allotted to these people step by step until their ownshare melts away entirel

en epreneurial function, the striving of entre-preneurs aft . . . r in the mar-ket econom . Profit and loss are the devices by meanso IC the consumers exercise their supremacy onthe market. The behavior of the consumers makes prof-its and losses appear and thereby shifts ownership ofthe means of production from the hands of the less ef-ficient into those of the more efficient. It makes a manthe more influential in the direction of business activi- .

ties the better he succeeds in serving the consumers. Inthe absence of profit and loss the entrepreneurs wouldnot know what the most urgent needs of the consumersare. If some entrepreneurs were to guess it, they wouldlack the means to adjust production accordingly.

Profit-seeking business is subject to the sover-eignty of the consumers, while nonprofit institutionsare sovereign unto themselves and not responsible to

~oduction for profit is necessarily pro-'duction for use, as profits can only be earned by pro-viding the consumers with those things they most ur-

~t to IIsee moralists' and sermomzers' cntlque of profits

misses the point. It is not the fault of the entrep~sthat the consumers-the people, the commo~prefer liquor to Bibles and detective stories to senousbooks, and that govermnents prefer guns to butter. Theentrepreneur does not make greater profits in selling"bad" things than in selling "good" things. His profitsare the greater the better he succeeds in providing theconsumers with those things they ask for most intensely.People do not drink intoxicating beverages in order tomake the "alcohol capital" happy, and they do not go towar in order to increase the profits of the "merchants ofdeath." The existence of the armaments industries is a

consequence of the warlike spirit, not its cause.It is not the business of the entrepreneurs to make

people substitute sound ideologies for unsound. It restswith the philosophers to change people's ideas andideals. The entrepreneur serves the consumers as theyare today, however wicked and ignorant.

We may admire those who abstain from makinggains they could reap in producing deadly weapons orhard liquor. However, their laudable conduct is a meregesture without any practical effects. Even if all entre-preneurs and capitalists were to follow their example,wars and dipsomania would not disappear. As was thecase in the precapitalistic ages, govermnents would pro-

IIIJ.

duce the weapons in their own arsenals and drinkerswould distill their own liquor. . . .

ENDNOTES

1. For an examination of the Russian "experiment" see Mises,Planned Chaos (Irvington-on-Hudson, 1947), pp. 80-87(reprinted in the new edition of Mises, Socialism [NewHaven, 1951] pp. 527-592).

2. Cf. Frank A. Fetter, The Principles of Economics (3rd ed.New York, 1913), pp. 394,410.

3. Cf. Trotsky (1937) as quoted by Hayek, The Road to Serf-dom (London, 1944), p. 89.

QUESTIONS ON MISES

1. Mises contends that one is free within a market andthat one's actions and decisions are not subject tocompulsion and coercion. How does Mises under-stand freedom? Is there such a thing as "economiccoercion" or a "coercive offer"?

2. In what ways are markets analogous to democracies?How do the votes of consumers mirror or divergefrom the votes of citizens?

3. Mises writes that "Social competition is consequentlypresent in every conceivable mode of social organiza-tion." Do you think he is correct? Does his view dependon a certain view of human nature or assume an in-

evitable hierarchy in every form of social organization?

4. How do you understand the function of the entrepre-neur? How does the entrepreneurial function differfrom the managerial? How does profit managementdiffer from bureaucratic management? What doesMises mean when he says, "The only source fromwhich an entrepreneur's profits stem is his ability to an-ticipate better than other people the future demand ofthe consumers"?

The Ethical Limitationsof the MarketElizabeth Anderson

Elizabeth Anderson is Professor of Philosophy andWomen's Studies at the University of Michigan and theauthor of many essays in ethics and social and politi-cal philosophy. A version of this selection can be foundin her book Value in Ethics and EcoJ:.1omics(1993).

A distinctive feature of modem capitalist societiesis the tendency of the market to take over the ProduC-

/tion, maintenance, and distribution of goods that werepreviously produced, maintained, and distributed bynonmarket means. Yet, there is a wide range of dis-agreement regarding the proper extent of the market inproviding many goods. Labor has been treated as a com-moDitv since.!be :ldvent ofCiiPltaIIsm, but not withoutSignificant and continuing challenges to this arrange-ment. Other goods whose production for and distribu-tion on the market are currently the subject of dispute in-clude sexual intercourse, human blood, and human bodyparts such as kidneys. How can we determine whichgoods are properly subjects of market transactions andwhich are not? The purpose of this article is to proposea theory of what makes economic goods differ fromother kinds of goods, which can help to answer thisquestion.

I propose that we think of economic goods as thosegoods whose dimensions of value are best realizedwithin market relations. The market, like any other so-cial institution, embodies norms regulating the produc-tion, exchange, and enjoyment of goods that are sensi-tive to some qualitative distinctions among values andinsensitive to others. These norms also foster and sus-

tain certain shared understandings of the interactionsand relations of the participants and thereby promoteparticular ideals of self and society. The ethicallimita-tions of the market (or any other system of social rela-tions) can thus be explored in part by seeking the an-

swer~O-dfee questions.~what dimensions of value in things, relation-

ships, and persons are acknowledged and successfullyrealized, or i nQ~- and undermined, by the norms ofthemarket Seco ~, whataretheidealsof selfandso-ciety that the market attempts to embody? Do market in-stitutions embody an adequate interpretation of theseideals, or do they fail to rea' the ideals to which theyaim to give expressio. ird oes the extension of themarket to a certain re m undermine the realization of

other ideals? .t()This chapter has four parts. In the first p~1 ex-

plore the idea}~n~ ~ial relations of the market. In thenext two p~c~t economic values with the val-ues of personal relationships and of social democracy.For each of these other two spheres of life, several cases

will be examined in which values are unde~lr\d whenthe norms of the market come to govern theII\jJt the fi-nal section, I draw some general conclusions about thelimitations of the market and of welfare economics as atheoryof value-:--- --

AI: Introduction: Markets and Business 35

THE IDEALS AND SOCIAL RELATIONS OFTHE MODERN MARKET

We can understand the nature of economi oods by in-vestigating the ways we v commoditi, the socialrelations within which we pro uce, stnbute, and enjoythem; and the ideals which these relations are sup~sedto embody. 1 The most important ideal that the m~ern!y~JcJ{tattempts to embody is a particular conception 0

'--freedOI!J..0n this view, freedom is primarily exercised inthe choice and consumption of commodities in privatelife. It consists in having a large menu of choices in themarketplace and in exclusive power to use and disposeof things and services in the private sphere without hav-ing to ask permission from anyone else.2

The economic ideal of freedom is closely linkedwith the way we value commodities. I call this mode of

valuation "use" and contrast it in three ways with tthe~modes of valuation that demand constraints on use. First

I follow Kant in contrasting "use" with higher forms of~ard, such as ]:espect. To merely use something is tosubordinate it to one's own ends, without regard forwhatever intrinsic value it might have. For example, sev-eral years ago certain owners of David Smith sculpturesstripped the paint off of these works because Smith's un-painted works were selling for more money than hispainted works were. These owners treated Smith's art asa mere commodity, since they disregarded its intrinsic

aesthetic worth in favor of its mer!<~sefulness for theirindependently defined ends.I§~, use is an imper-sonal mode of valuation. It is contrasted with v8IUrngs~g for its personal or sentimental attachments tooneself, as when one cherishes an heirloom. A merecommodity is'something one regards as interchangeablewith any other item of the same kind and quality andsomething that one is prepared to trade with equanimityfor any other commodity at some price. But a cherisheditem is viewed as unique and irreplaceable. Since it isvalued for its special connections to the self, it is sold

only under-duress, and its loss is !~nal one ,

(Simmel, 1978, pp. 123, 404, 401).~se value~ ,~.(~may be contrasted with...s.haredvalDes, whose value foroneself is dependent on otherpeople also enjoying them.Such values cannot be realized in private acts of use, butrather reside in a shared public understanding of themeanings of the goods. For example, certain sites of his-torical events may be valued as parts of a national her-itage or the layout of a neighborhood valued as the locusof a p;uticular community. Again, the preservation ofthese values requires constraints on use. For instance,zoning laws may be required to preserve the architectural


integrity of a city or rent control required to enable acommunity's residents to remain living together as mem-bers of a community.

The market ideal of freedom has a special connec-tion with the mode of valuation of commodities known

as use. For the freedom that the market gives us is thefreedom to use commodities without the constraints im-

plied by other modes of valuation. The realization of thenoneconomic values that inhere in things oftl?n requiresconstraints on use and, hence, constraints on the degreeto which these things are treated as commodities. But toexplore these points, we must achieve a fuller under-standing of the distinctive character of economic goods.This requires an investigation into the social relations of

, the market

. < ) Five features of the social norms and relations of\2../the..m.arket are particularly important forunderstanding

the distinctive character of econo' es@, mar-ket relations are impersonal on s. Seco ,the market isunderstood to be a sphere in w c one is free, withinthe limits of the law, to pursue one's personal advantageunrestrained by any consideration for the advantage ofothers. ~the goods traded on the market are exclu-sive and rivals in consumption~, the market ispurely want-regarding: from its s~nt all matters ofvalue are simply matters of personal tast~s-satisfaction with a commodity or market ~s ex-pressed primarily by "exit," not "voice." That is, onesimply drops out of the market relationship rather thansticking with it and trying to reform it from within. Ac-tual market practices often deviate in significant waysfrom the patterns described here. But these patterns arestill characteristic of the market. They express a sharedunderstanding of the purpose and meaning of market re-lations that I believe every experienced participant in themodem market will recognize. Let us examine each ofthese features in more detail.

Perhaps the most characteristic feature of market re-lations is their impersonality. The producers and con-sumers of economic goods are typically strangers. Eachparty to a market transaction views one's relation to theother as merely a means to the satisfaction of ends de-fined independently of the relationship and of the otherparty's ends. The parties have no precontractual obliga-tions to provide one another with the goods they ex-change. They deal with one another on an explicit basisof exchange, in which each good that changes hands hasits equivalent in return. The explicit basis of exchangeserves to guarantee mobility. If each transaction betweenbuyer and seller can be completed to the reciprocal ad-vantage of each, leaving no unpaid debts on either side,

then nothing ties the parties together over time. They arefree to change their trading partners at any time.

The impersonality of market relations thus definesa sphere of freedom from personal ties and obligations.There is another side to this impersonal freedom: oneneed not exhibit any specific personal characteristics orinvoke any special relationships to gain access to thegoods traded on the market. The market is open to all in-differently, as long as they have the money to pay for thegoods. Money income-not one's personal status, char-acteristics, or relationships-is what determines one'saccess to the realm of commodity values.3

The impersonality of the market leaves its partici-pants free to pursue their individual interests unre-strained by any consideration of other people's advan-tage. Each party to a market transaction is expected totake care of ltUnself and not to depend on the other tolook after his own interests. ~xtension of the mar-!c~repmsents.an.extension 9f the sphere of egoism.Indeed, the market would not be economicallyertiCientif each party to a transaction tried to satisfy the other'spreferences at his own expense. The success of a com-mercial transaction, its bringing benefit to both parties,depends on the possibility of drawing sharp lines be-tween the interests of the negotiators. One must be ableto define and satisfy one's interests independently of theother. This is why the market is a domain for the ex-pression of individualism-one cannot function suc-cessfully in it without drawing a clear distinction be-tween self and other.

Individuals' interests are independently definableand satisfiable only with respect to a certain class ofgoods. Such goods have the properties of exclusivityand rivalry in consumption. A good is exclusive if ac-cess to its benefits can be limited to the purchaser. Ifthere is no means of excluding people from enjoying agood, it is impossible to charge a price for it. A good isa rival in consumption if the amount that one personconsumes reduces the total amount of it available to oth-

ers (Fisher, 1981, p. 175). The value that can be obtaine~from commodities is rival, since it is typically realizedthrough personal appropriation and use. Insofar as an-other person with distinct ends gains control over it, Ilose such control and consequently lose the use value ofthe good. The value of a rival good cannot be given toanother without losing it oneself. But many goods arenot rival-I do not lose, but rather enhance my knowl-edge, or my pleasure in a joke, by conveying thesegoods to others.

A further feature of the market is that it is a want-

regarding institution. What it responds to is "effective

demand," that is, desires backed up by money or the distribution be regulated through institutions of voicewillingness to pay for things. Commodities are ex- rather than exit. In the third section of this chapter, Ichanged without regard for the reasons people have in show how many of the goods of social democracy are ofwanting them. This fact has two implications. First, it this kind.means that the market does not respond to needs as such Since these arguments are based on comparisons of~clop.s not draw any distinction between urgent needs ideal types, some observations about the limitations ofand intense desires. Second, the market does not draw ideal typical analysis is in order. Any particular socialany distinction between reflective desires, which can be institution or practice is apt to diverge from its ideal typebacked up by reasons or principles, and mere matters of in multifarious and complex ways and to include mix-taste. Since it provides no means for discriminating tures of norms more prominently associated with insti-among the reasons people have for wanting or providing tutions and practices in other spheres of life. And thethings, it cannot function as a forum for the expression norms that presently govern our actual practices oftenof principles about the things traded on it. The market inadequately express the ideals these practices are sup-conception of personal autonomy reflects this fact. The posed to embody. The arguments I present are intendedmarket provides individual freedom from the value to highlight evaluative considerations that find littlejudgments of others. It does not regard anyone individ- place in the standard models for criticizing market andual's preferences as less worthy of satisfaction than any- other institutions-that is, in welfare economics and inone else's, as long as one can pay for one's own satis- most liberal theories of justice. The standard modelsfaction. But it provides this freedom at the cost of highlight other evaluative considerations, such as effi-reducing preferences, from the market's point of view, ciency, that are also important. Hence, any move from ato mere matters of taste, about which it is pointless to relative evaluation of ideal types to a relative evaluationdispute (Sheffrin, 1978). of actual practices must be informed by a detailed em-

A final feature of economic relations is that an in- pirical investigation of the actual norms they embody,dividual's influence on the provision and exchange of an evaluation of how well ~ey combine norms from dif-commodities is primarily exercised through "exit," not ferent spheres, how well these norms express the ideals"voice" (Hirschman, 1970). The counterpart to the cus- in terms of which they are justified, and how well thetomer's freedom to stop purchasing a particular product practices fare by other criteria such as justice and effi-or to stop patronizing a particular retail outlet is the ciency. Since I obviously cannot provide such detailsproducer's freedom to say "take it or leave it." The cus- here, the cases I discuss should be taken as illustrationstomer has no voice-that is, no right to directly partic- of the kinds of arguments I wish to endorse and not asipate in the design of the product or to determine h~w~prehensive evaluations of the practices in question.it is marketed. tNvt1?-~\~ fr .

iii1Iie1igiit of this account of the norms of the mar-et, ~e can offer a more precise account of an economic

good.A thing is an economic good if its production, dis-tribution, and enjoyment is properly governed by theseve norms, and its value can be fully realized through

s~se cntena allow us to anticipate me shape ot ar-ments that certain goods should not be treated as

commodities. There may be certain values that are real-ized only if the exchange of particular goods is respon-sive to personal characteristics or takes place on a non-explicit basis of exchange. Our ability to realize othergoods may be impaired if we view them as exclusiveand rival, rather than as shared. In the next section, Ishow how many of the goods of personal relationshipshave these characteristics. Some ideals may be realizedonly if the provision of certain goods is responsive to theneedsof others or reflects shared principles and not justindividualmatters of taste. And the realization of a goodas shared, or as reflecting principles, may require that its

III


THE VALUES OF PERSONALRELATIONSHIPS AND THE MARKET

The sphere of personal relationships is in many ways thepolar opposite to that of market relationships. For, as weshall see, the ideals of personal relationships are em-bodied in norms of exchange that directly conflict withmarket norms. '!\vo of many ideals central to the. per-sonal sphere of life ardlntimacy and commitment. }Liv-ing on intimate terms with another person involves amutual revelation of private concerns and sharing ofcherished emotions that are responsive to the other's~ characteristics.Thisis the romanticsideof per-sonal relations, which involves passion, affection, andtrust but not necessarily devotion or long-term commit-ment to the other person, for the romantic relationshipmay end as soon as the passions that animate it cool.

The deepest ideal of commitment involves dedicat-ing oneself to living a shared life with another person on


II

a permanent basis. A shared life is not simply a life oflong-term cooperation on mutually advantageous terms,as might be true of a business partnership. It is foundedon values that the persons committed to each other holdtogether. The central goods realized in such a life are

shared in at least two sense~eir goodness foreach partner partially consists m the facts that the otherpartner also enjoys them, and that each partner knowsthis fact and knows that the other knows. On.ecommit-ted and loving partner could not rejoice in living withthe other if he knew that the other found the relationship

to be oppressive. ~ of intimacy are also sharedin this first sense. econd e realization of the good re-quires an expansive understanding of the self as includ-ing another person. The persons to whom the good isgood are not selves regarded as isolated individuals, butselves regarded as members of the committed relation-ship. Commitment to a shared life, such as a marriage,requires redefining one's interests as interests of thecouple in the marriage. Insofar as one has this commit-

~ ent, one's interest in the aims of the m .age can nei-er be defined nor satisfie ndependen of one's be-

ing joined with one's spou e in marriage.1IThis is why~ :::""'.,gjUS,fot money" """': it ""'"' advantage of aninstitutional form of commitment merely for the sake oflower goods defmable independently of it.

These ideals inform the ways we value the peoplewith whom we have personal relationships and the wayswe value the goods we exchange with them. In thissphere love, affection, trust, and devotion supercede theformal respect of useful persons (acknowledgment oftheir autonomy) characteristic of the marketplace. Thegoods exchanged and jointly realized in friendship arevalued less through use than through appreciation andcherishing, for they are tokens of shared understand-ings, affections, and commitments.

If the ways we value the goods proper to friendshipdiffer from the ways we value commodities, then weshould expect that the norms that govern the exchangeof these goods should also differ; for different modes ofvaluation are embodied in different norms of exchange,production, and enjoyment. This is what we do find. Afundamental contrast between the sphere of personal re-

L" lations and that of the market is that~ former is prop-\" erly governed by the spirit of th~ather than the

Xi" spirit of commercial exchange. The goods proper to thepersonal sphere can only be fully realized if they aregiven as gifts or established through the exchange ofgifts. They are goods that cannot be genuinely procuredfor oneself by paying others to produce them or by ap-pealing to another's merely personal advantage to pro-

\...

vide them. The authenticity and worth of these goodsdepend on the motives that people have in providingthem. Among these goods are trust, loyalty, conviviality,sympathy, affection, admiration, companionship, anddevotion. None of these goods can be bought (or ex-tracted by threats), although people often deceive them-selves in the attempt, mistaking flattery for admirationand subservience for devotion.

The significance of gift exchange differs from thatof market exchange in several respects (Hochschild,1983; Hyde, 1983; Mauss, 1967; Sahlins, 1972; Tit-muss, 1971). In the first place, the exchange of gifts af-firms and continues the ties that hold the donor and re-

cipient together. This is why refusing a gift is often aninsult to a friend, but refusing a trade is merely an unre-alized financial gain to a retailer. To reject an appropri-ate gift is to refuse to acknowledge or sustain a friend-ship. One point of gift exchange is to realize a sharedvalue in the relationship itself, whereas the point of amarket relationship is purely instrumental and realizesdistinct goods for each party. Moreover, while bothforms of exchange involve reciprocity, the shape andtiming of the return of goods differ in the two cases. Inmarket exchange, a delay in reciprocation (unless ex-plicitly arranged in a contract) is cause for legal action.But the exchange of gifts among friends usually incor-porates an informal understanding of reciprocity only inthe long term. To be anxious to "settle accounts:~ aswhen one person insists upon splitting a restaurant tabexactly in half, calculating sums to the penny, or payinga friend for returning a library book, is to reiect the logic

,Qffriendship. The delay in reciprocation symbolizes thefact that goods are given for the friend's sake, not for thesake of obtaining some good for oneself in return. More-over, the accounting mentality reflects an unwillingnessto be in the debt of another and hence an unwillingnessto enter into the longer term commitments that suchdebts entail. For the debts of friendship-that is, thegoods friends owe to one another-are not of a kind thatthey can be repaid in such a way as to leave nothing be-tween the friends.

Friendly gift exchange is responsive to the personalcharacteristics of the friends involved and to the particu-lar qualities of their relationship. We seek to give to ourfriends gifts that have more than merely generic mean-ing, gifts whose full meaning is conditioned by who gavethe gift, to whom it was given, and the character of theirfriendship. For the gift is a vehicle for the expression ofthe friends' mutual understanding of how their relation-ship stands (or how the giver wishes it to be), and notmerely a good of impersonal use value to the receiver.

This fact is evident not only in cases of such materialgifts as engagement rings and Valentine's Day choco-lates, but also in the exchange of compliments, affec-tions, andjokes. Max knows that Adam isjust the personto appreciate this practical joke coming from him, buttakes care to offer a more serious expression of affectionto his girlfriend Marsha, who finds practical jokes rathervulgar. This is why cash is usually such an inappropriategift between friends. Since it can be used by anyone toacquire any commodity, it expresses nothing of thegiver's personality, of any particular thought the giverhad for the receiver, or of the receiver's interests.

In the light of this brief account of some funda-mental differences between the norms of the market andof personal relations, we can explore some of the wilYsvalues are undermined when the nonn!; of thp. m:lrJ<et,come to govern the exchange of gonel!;proper to per-sonal relatiQ..ns.Consider the following cases of the im-portation of market norms in the exchange of personalvalues: prostitution, the exploitative manipulation ofgift relations in commercial transactions, the detailedmarriage contract advocated by Ms. magazine, and thepractice of making loans .

Prostitu 10 e classic example of the debase-ment of a gift value th 'ts commodificatio. utwhat is base a out buying and selling sexual "services"on the market? One cannot understand what makes thispractice base without understanding the specificallyhuman good achieved when sexual acts are exchangedas gifts. This good is founded on a mutual recognitionof the partners as sexually attracted to each other andas affirming an intimate relationship in their mutual of-fering of themselves to each other. This is a sharedgood: one and the same good is realized for both part-ners in their action, and part of its goodness lies in themutual understanding that it is shared. The couple re-joices in their union, and not simply each in his or herown distinct physical gratification. As a shared good, itcannot be realized except through each partner recip-rocating the other's gift in kind, offering his or her ownsexuality in the same spirit in which the other's sexual-ity is received-as a genuine offering of the self.

When sexual "services" are sold on the market, thekind of reciprocity required to realize human sexualityas a shared good is broken. The prostitute does not re-spond to the customer as a sexually attractive person,but merely as someone willing to put down the cash. Soit is not the customer as a person that attracts the prosti-tute, but only his or her wealth. This is simply the coun-terpart to the impersonality of the market: one need notdisplay any personal characteristics to obtain the goods

AI: Introduction: MarKets and Business 39

sold there. And the customer seeks only sexual gratifi-cation from the prostitute, not a physical union. Sexual-ity as a specifically human, shared good cannot beachieved except through gift exchange; market motivescannot provide it.

The failure of reciprocity implied in the sale of sex-ual service!; signifies not simply a failure to realize agood, but a degradation of the prostitute, whose sexual-ity is reduced to the status of a mere service to the cus-tomer: sexuality is equated with the lesser good ofmoney.s The prostitute's subordination is expressed inthe fact that (except in the most blatantly alienated andsterile encounters), he or she must confer on the cus-

tomer all manner of personal at' . cus-A

10 ntioHenly to him- or herself. recoglJnizing th(' pr-Ostitute-.o ob' ect for satisfaction.The problems entailed by exp CI gmg

sexual acts for money arise in part because sexual acts,insofar as they are more than means for sheer physical

gratification, are valuable as expressions of u~l))ng

I

noncommercial motives and understandings.~ the

expressi~ content of actions cannot be traded on themarket;)(only those goods that are valuable to the re-ceiver apart from their being expressions of the giver'smotivations are genuine commodity value8:yhe attemptto sell gift values on the market makes a mockery ofthose values and subordinates the provider of them.6

Other values are undermined when goods offered inthe spirit of the gift have been solicited in the spirit ofcommercial exchange. These arise because the forms ofreciprocity appropriate to gift (personal) relationshipsdiffer from those appropriate to market relationships.One basic kind of exploitation occurs when one party toan exchange gives goods to the other in accordance withthe norms of gift exchange, while the other party returnsgoods in accordance with the norms of market exchange.Since gift exchange does not involve the demand for an

1\\immediate quid pro quo, the party taking a market orien-

tation to the trans,action can extract a greater share ofgoods from the gift giver than one returns.

This kind of exploitation occurs when firms attempt Jj'iJto establish a paternalistic relationship with their em- ..~-Oployees. By putting them in a dependent position and ,'?'. ,

providing, however meagerly, for their needs, the ~ G"&can engender feelings of gratitude and loyalty on the p~of its employees. These feelings can then fie exploited toextract more labor and obedience from the employees.This has been a common practice of employers of mi-grant farm workers and sharecroppers. The latter areplaced in the position of children to their parents becausethey have nowhere else to turn for the provision of basic


needs. This dependency is reinforced by the fact thatwages are paid largely in kind rather than cash. Cashpayment would free the worker to purchase his needsfrom another source and thereby enable him to affirm atleast some minimal autonomy from the employer.7 Pa-ternalistic practices are not confined to backward com-mercial enterprises. Young women training to be flightattendants are housed by airlines in airport dormitoriesand encouraged to regard their supervisors as substituteparents to whom they can come to confide any personalproblems. They are thus encouraged to develop ties ofIQ~alty and trust with their employers and to work torthem in thiS'Spnit. But at the same time they are con-stantly reminded that these ties are not reciprocal: poor

I

performance or disobedience can lead to immediate dis-

\ missal, since the tight job market ensures no shortage ofjob applican~ (Hochschild, 1983, pp. 89-101).8

Even the impersonal exchanges of civility followthe norms of gift exchange and consequently can be ex-ploited in commercial transactions. One common salestechnique is to take advantage of people's desire to bepolite, by manipulating them into a position in which itseems that they can back out of a deal only by riskingoffense or awkwardness. So car salesmen ask reluctant

customers questions such as, "Do you doubt the in-tegrity of our dealership?" knowing that most peoplewill go to great lengths to avoid giving offense, and thateach "no" they receive to questions like this undermines

. their ability to explain their reasons against signing thdotted line. e s ' ge consIsts m thefa~participates in the negotiation strictly in ac-cordance with market norms of pursuing maximum per-Isonal advantage, while the CJlstomeris manipulated into Iconceding his bargaining edge because he views'so e j

elf al exchanges as merel olite on s. Sincecivility often requires at we hide our frank opinions,we feel uncomfortable in explaining exactly why wedon't want to buy. The remark delivered in the spirit ofcivility ("No, I don't mistrust your dealership") is thenseized in the spirit of negotiation and used to the sales-man's advantage by being interpreted as a literal ex-pression of the customer's belief.

In these cases of exploitation, one party uses thenorms of the market to manipulate the exchange of sen-timents and civilities that are properly governed by thenorms of gift exchange. When both sides adopt thenorms of the market to govern the exchange of gift val-ues, we no longer have a case of exploitation, but otherlosses still occur. Such is the case with the kind of de-tailed marriage contract advocated several years ago byMs. magazine.9 In the interests of avoiding the exploita-

\

tive tendencies of traditional marriages, in which mostof the drudgery involved in maintaining a household andraising children is left for the wife to perform, Ms. pro-posed to place the marriage relationship on an explicitbasis of exchange. Henceforth, the duties of husbandand wife with respect to the household, children, andsexual interactions were to be laid out in detail in the

marriage contract.While the intentions of Ms. in promoting equality

in marriage are noble, the attempt to enforce this equal-ity by remaking the marriage on the same terms as abusiness partnership threatens to undermine the goodsof commitment and intimacy proper to marriage. For therealization of these goods depends on each partner car-rying out the projects and tasks constitutive of theirshared life' s mt 0 trust an ove ather than of con-

tractual obligation and the piece-me calculation of in-dividual advantage. Giving and receiving in a spirit oftrust is itself one of the goods of marriage. The point ofmarriage in realizing shared goods is obscured by tend-ing to the terms of the explicit marriage contract, whichevaluates the marriage in terms of the distinct advan-tages accruing to each party. And fixing the terms of ex-change in advance undermines the responsiveness of themarriage to the changed needs of the partners, as well asthe promise it holds out for deepening their commitmentin the light of a more articulate understanding of theirshared project, which may require a new division of ac-tivities between them. Being open to the possibility ofrenegotiating the contract in the light of changed wantsis not the same thing as committing oneself to love andcare for one's spouse "for better, for worse" (Hirsch,1976, pp. 87-88,99-101).10

These examples show how the norms of the marketand of

{i

erSOnal relationships are~ easily mixed, J)e-c~ dherence to these norms secures quite differentkinCls goodS) Consider, as a final example of thisproblem, the basis for discouraging friends from mak-ing substantial long-term loans to one another. II Loan-ing money to a friend threatens the friendship in at leasttwo ways. By undermining the equality of friends, itfosters resentment on the part of the debtor. And by ty-ing down his financial resources without prospect forgaining from his friend, it undermines the capacity ofthe creditor to pursue successfully his advantage on themarket and thus fosters resentment on his part. It mightbe thought that charging interest between friends wouldrestore equality and prevent the creditor from thinkinghe is losing out by loaning to a friend. But this expedi-ent threatens the friendship even more deeply than aloan without interest. To charge the prevailing interest

- _.J..

--~

rate is to pennit the ~ of ~ interactingmerelyfrom self-interestto govern the interactionsoffriends.Suchanact encouragesthe friendst.Q.yiewth~ir

\~ts as shawly divid~ and to view themselves ashavmg to be on their guard in protection of their inter-~sts when dealing with friends. But friendship is sup-posed t~e;:se;:rv~e of relationShip~ in which onedoes not have to ~ on one's guar~. Successful partici-pation in both spheres of life thus requires an isolationof their respective concerns.

POLITICALVALUESAND THE MARKET

The preceding section emphasized two qualitative dis-tinC

~' ns amonggoods to which the market is insens~

tive: etween gift values and ordinary exchan e valuesl

and etween shared goods and divisible gOodJ»argUedthat e goods of the personal sphere, which are sharedgift values, cannot be adequately realized within thenorms of the market. This section. will emphasize twofurther qualitative distinctions among goods that themarket does not acknowledge: between ideals and ordi-nary goods, and between the objects of need and of de-sire. I shall argue that these distinctions support the ap-plication of several norms of democratic political life tothe production, distribution, and enjoyment of a varietyof goods that could also be provided by the market. Asin the case of the economic and personal spheres, thesignificance of these norms must be understood in thelight of the ideals they are supposed to embody. In thissection, I focus on two ideals of social democracy: fra-ternity and demo~ra' IT dom.

The ideal 0 fr e . ,while rather vague, seems toinvolve the follow g notions. Citizens have fraternalrelations with one another when they agree to refrainfrom making claims to certain goods that come at theexpense of those less well off than themselves and whenthey view the achievement of such relations with theirfellow citizens as a part of their own good. 12People ex-press relations of fraternity with one another in partthrough providing certain goods in common. Whereasdistributing goods through a system of bilateral transac-tions tends to emphasize either the separateness of per-so~s (in the market) or some special relationship be-tween the two traders (in personal gift relationships),p[9viding goods out of pooled resources obliterates an-x "~tion of specific donors with cific reci ients. It ~therebyexp ses e i at the goods are provi e,by the community as a whole to its members, rather thanby some specific individuals to others. Furthermore,where the goods in question are not public but distrib-


uted, distribution takes place in accordance with someconception of members' needs. Fraternal relations areneed-regarding, not only want-regarding.13

Another aspect to the intuitive idea of fraternityfonnects it to the democratic tradition. This is the ideathat citizens ~~s engaged in a common coopera-tive project. In the democratic tradition, this project iscollective self-rule. The political freedom of a citizen isthe freedom to participate on terms of equality with fel-low citizens in deciding the laws and policies that willgovern them all. This freedom is meaningless unless cit-izens have the goods they need (e.g., education) to par-ticipate effectively in the project of self-government.Citizens express their fraternity in part by ensuring thatthese needs are met through community guarantees oroutright provision of the goods in question. But theproper interpretation of citizens' needs and, hence, ofthe ideal of fraternity is itself a subject for democraticdeliberation. Citizens cannot interact with one another

in the spirit of fraternity without a shared understandingof this ideal forged through participation in democraticinstitutions. Democratic freedom and fraternity are thuscomplementary goods.

These ideals of fraternity and democratic freedomare embodied~' normsthatconflictwith thenormsof the marke irst, itizensexercisetheir freedomin ademocracyp . y throughvoice,not exit.Theirfree-dom is the power to take the initiativein shaping thebackgroundconditionsof their interactionsand the con-tentof thegoodstheyprovidein common.It is a freedomto participatein democraticactivities,not just to leavethe co~ eir government does not satisfy their de-sires. on an uncorrupted democracy distributesgoods' .a~ rdance with shared principles (including ashared understanding of citizens' n~s), not in accor-

dance with unexamined wants. Deci_si~st be justi-fied in terms acceptable to the publ¥~ the goodsprovided by the public body are provided on a nonexclu-sive basis-everyone, not just those who pay, has accessto them. The different norms of decision-making in themarket and in democracy are reflected in the different in-terpretations of respect we apply to these two spheres. Torespect a customer is to respect her privacy by not prob-ing more deeply into her reasons for wanting a com-modity than is required to effectively satisfy her want.There is little scope here for challenging her own esti-mation of what is valuable. But to respect a fellow citi-zen is to take her reasons for advocating a particular po-sition seriously. It is to consult her judgment aboutpolitical matters, to respond to it in a public forum, andto accept it if one finds her judgment superior to others'.

)- ----

I

~


. ~(;{V ~~ Many goods can be secured only through a formof democratic provision that is nonexclusive, princi-ple- and need-regarding, and regulated primarilythrough voice. To attempt to provide these goodsthrough market mechanisms is to change the kind ofgood they are for the worse. They contribute to humanflourishing in lesser ways when they are providedthrough the market than when they are provided on ademocratic basis. Goods of this kind I shall define as"political goods." This conception of political goodscan shed light on two kinds of proposals for subjectinggoods to market control. The first is the proposal for"dividing the commons."Many goods, such as streets,parks, and schools, are presently provided on a public,nonexclusive basis and/or subject to public control.Some people argue that freedom (and sometimes alsoefficiency) would be enhanced if such goods werecompletely divided into privately owned or controlledparcels that would then be provided on an exclusivebasis. The second is the proposal for converting thepublic provision of goods in kind to the provision oftheir cash equivalents. I argue that both kinds of pro-posals fail to recognize the goods realized throughdemocratic provision and also embody a flawed con-ception of freedom when they are applied to the goodsdiscussed. Let us turn first to the various proposals to"divide the commons."

Since Locke wrote his Two Treatisesof Govern-ment, the argumentthat both individualfreedomand ef-ficiencywouldbe enhancedif publiclyprovidedgoods

~were completely divided into privately controlled

j parcels has been an enduring one in Western political

1, thought, particularly in libertarian circles. The basic

dea behindall of these proposals is tha~-ed ted wer of . -

commrm~ol of a g~. I argue,however,thatfuJ these cases the treedom of exit is no substitutefor theloss of voice and of nonexclusivt\ access to the goods inquestion. Some forms of freedom can be secured onlythrough institutions of voice established over goods towhich public access is guaranteed.

Let us begin our investigation of this problem witha relatively uncontroversial case: the value of publicstreets and parks. Some libertarians have suggested thata system of private, toll-charging roads would be supe-rior to a public system, since these would be paid forthrough voluntary user fees rather than a coercive taxsystem, which charges people whether or not they wantto use the roads (Rothbard, 1978, Ch. 11). The idea thatsuch a system woulq enhance individual freedom is

\

\'-

rather curious, however. Under a system of public roads,no one need ask anyone else's permission.to travel any-where these roads go. If all roads are privately owned,one must ask the permission of each owner to visit peo-ple in areas accessible only by such roads and subjectoneself to whatever terms the owner demands for usingthese roads. Nearly everyone would be subject to arbi-trary restraints on their freedom of association by oth-ers.14 Next to this loss, the restriction on my freedomentailed by taxation to maintain public roads is trivial. Iwould even be reluctant to characterize it as a loss offreedom at all-merely a loss of money.

The mistake in the libertarian picture seems to liein the view that individual freedom is always increasedwhen the common is divided into parcels over which in-dividuals have exclusive control. While this regimewould enable each person to be a despot in the territoryshe owns, she would be a mere' subject to others every-where else. This conception of freedom fails to grasp thepoint that some freedoms can only be exercised inspaces over which no individual has more control thanothers. These are the public spaces of free associationamong equals. I want to make two claims about suchgoods. First, freedom with respect to these goods re-quires the right of participation in their enjoyment andcontrol, and not just the right of exit. If the primaryspaces of free public association are appropriated byprivate persons, this amounts to a private appropriationof political power, similar to that found in a comprehen-sive system of private roads. Second, the goods pro-vided by spaces of free public association are qualita-tively different from those provided by exclusive spacesthat ostensibly provide the same goods. For these goodsextend beyond the privately conceived purposes of eachindividual using them. ISAssociation in public spaces isneeded to cultivate relations of civility among citizensof all walks of life. And relations of civility are indis-pensable for democratic politics.

Consider the goods that are provided by a successfulcity park. One good lies in its being open without chargeto any member of the public. The fact that all membersgain access to the park freely and in the same way pre-vents invidious distinctions from arising among them, en-abling all to meet each other on terms of equality-incontrast, say, with an exclusive country club. By provid-ing the park as a common good, citizens thus express fra-ternal relations with one another. A second good lies in itsbeing a locus for spontaneous interaction and political ac-tivity. The users of the park, who may each have separatereasons for being there, together create a lively scene of

......

1diverse people and purposes, with many occasions forspontaneous interactions that can build a spirit of trustand civility among the users. Joggers meet on the sametrail, one dog takes an interest in another, leading theirowners to stop and chat, an old man catches a stray Fris-bee and tosses it back to the players, business people eatlunch on the benches to watch the passing show. In virtueof its diverse and open uses, this kind of public space thenprovides the occasion for political action. Outside of themedia, it is only in lively public spaces that people canrapidly and effectively generate concern and support onmatters of the public interest among fellow citizens whoare strangers to themselves. Here rallies can attract curi-ous bystanders and petitioners gather signatures fromthose who would feel intruded upon by a door-to-door16canvasser. t>0'1(\Ab Ih - ~~

Sometimes the spaces of public interaction are en-closed under a roof and subjected to private control.This happens whenever a commercial mall leads to thedecline of a downtown business district. May the own-ers of a mall suppress any speech or political activity init that they find offensive or opposed to their interests?Insofar as they are granted the right to do so, the valueof this space deteriorates from one in which people canmeet as equal citizens with common interests to one inwhich they can meet only as private consumers. Andthere may be no alternative space that can serve thesame public functions as the downtown once did. . . .

So far I have emphasized the ways in which theprinciple of public access can change the kind of goodsomething is for us by changing the ways in which wecan value it. Similar transformations of value occur

when we distribute certain goods according to the

norms of fraternity rather than those of the market. I~ /both cases, we not only change the ways we value the.,r8-°ods we enjoy, but we also change the wavs we ap-preciate each other when we ado t the no arketno~. IS mSlg tIes at the foundation of ~d'Iitmuss' famous argument that human blood shonld-begiven only as a gift, not sold as a commoditv (Titmuss,1971). By understanding how his argument exemplifiesthe approach to value defended here, we can see how itilluminates another dispute about welfare policies,namely, whether welfare should be provided in cash orin .kind.

Titmuss' fundamental objection to obtaining theblood supply by paying people to provide it is that thispolicy undermines fraternal relations among people inthe community, whereas a purely volunteer system en-hances such relations.17 In a volunteer system, people


agree not to extract payment from those needing bloodas compensation for donating it. Their actions follow thenQ!!IlSof the gift rather than the market. But these arethe norms of the anonymous gift; they create no per-sonal bonds, since no one knows whose blood is trans-fused into a patient. Blood is regarded as a common re-source available to any member of the public. In otherwords, the provision of blood under the volunteer sys-tem follows the norms of fraternity, as I have previouslydefined this ideal.

As in the case of personal values, the value of bloodto both the recipient and the donor is partially depend-ent on the motives for which it is given, and enhancedwhen these motives are not commercial. Attempting toincrease the blood supply through firumcial incentivesrather than appealing to a sense of civic duty or frater-nity promotes the social expectation that people mayfeel entitled to some merely personal advantage for do-nating their blood. This attitude makes it seem as ifsmall acts contributing to the health of one's neighborsshould be seen merely as inconveniences requiring com-pensation instead of as enhancing the spirit of the entirecommunity. And this atmosphere of expectations reallydoes make blood donation an onerous task. Patients,forced to pay extravagant amounts for blood, must putpressure on their relatives to donate to keep down costs.The typical circumstances under which people do in factdonate are ones of stress, duress, and punishment. Thepoor who desperately need money, prisoners who hopeto gain parole, and relatives who face the choice of se-vere financial burden or donation provide most of thesupply. But when blood donation is a habit born of asense of civic duty or benevolence, no such punitive orburdensome circumstances accompany its donation,and the act of giving without pay enhances the donorrather than diminishing her. Virtue can be its own re-ward, but it ceases to be so once people are paid for it,even if some still volunteer. As Peter Singer pointed out,the significance of my volunteer donation is trivializedwh~n other blood is paid for. If blood is also a com-modity, then all I have given to the recipient is the cashequivalent of the blood, not the gift of life itself (Singer,1973, pp. 315-16).

This suggests that there is some good inherent inproviding goods in kind rather than in cash. Welfareeconomics takes the opposed view. According to itsanalysis, the welfare of the recipient is always in-creased when she receives her welfare payment in cashrather than in kind. For the cash-equivalent paymentoffers her more freedom of choice, she could use it to

.J


purchase the good for which it was a substitute, but shemay wish to purchase preferred bundles of goods thatwould contribute to her welfare even more. While

there is some appeal to this position, it seems that mostof us have the intuition that some goods, such as med-ical care, are still better provided in kind. Is this sim-ply a patronizing position? Why not let the poor decidewhether they will spend a cash donation to purchasemedical insurance or some other good that they mightprefer? Do we not arbitrarily reduce the recipients'welfare by preventing them from exercising thischoice?

There is a value, however, in collectively taking astand on what goods the community regards as so im-portant that it would be a disgrace to let any of itsmembers fall short in them (Kelman, 1986; Thurow,1977). The ability to take such a stand depends on be-ing sensitive to the distinction between urgent needsand merely intense desires. The scale of urgency is anobjective one that the whole community can recog-nize. It plays a public role in expressing shared princi-ples and fraternal bonds among community membersthat the policy to simply indulge in individuals' sub-jective tastes cannot do. Given that we do recognizethe distinction between urgent needs and intense de-sires, we can see that for a community to treat thesetwo as on a par is to trivialize and debase the concernsof those who have the needs and to hold itself hostageto those with extravagant tastes (Scanlon, 1975). Todistribute welfare payments on a want-regarding ratherthan a need-regarding basis would be, for instance, totreat the gourmet's anxiety at her lack of ostrichtongues on a par with the handicapped person's needfor a wheelchair. 18

But what lies at the basis of this distinction be-

tween needs and wants? It is our capacity to draw dis-tinctions of worth among goods. In the case of the gour-met and the handicapped person, we understand thatgastronomic pleasures are less important to leading aworthwhile life than the power to move about freelywithout depending on others. For the latter power isneeded to lead a life of autonomy and to pursue worth-while activities such as the development of one's tal-ents. To lack the power to pursue such ends leaves one'slife not merely frustrated, as when we lack certainpleasures, but degraded. Moreover, to lack the power togovern one's life in accordance with distinctions ofworth between goods is itself debasing. 19But such dis-tinctions are not the product of private fancy. I cannotdraw them in my own life except against a background

of shared social unde~standings that recognizes them.

\~\.

The social practice of distributing goods in accordancewith need-regarding rather than want-regarding princi-ples is one means of fixing these social understandings,thereby enabling us to lead not merely pleasurable but

~rthwhile lives. . . .

~NCLUSION: SOME ETmCALLIMITATIONS OF THE MARKET

. . . We have seen that the realization of some values de-

mands that they be open to the public (nonexclusive), orconfined to people who have personal ties to one an-other, or done for reasons other than merely personal ad-vantage, O

.

r held to be valuable as a matter of i~u~er th~ mere matter of taste, and so forth~Thi!is to say that the iea:Hzationof some values demiUi'dsthaicertain goods be produced, exchanged, and enjoyed out-side of market relations, or in accordance with nonmar

,"

!.et norms. \I have emphasized in particular two classes of

goods whose realization must take place within non-market norms of exchange: gift values and shared val-ues. Gift values differ from commodity values in thattheir worth is at least partially constituted by the non-market motives for which they are given. They are val-ued as tokens of love, admiration, respect, honor, andso forth, and consequently lose their value when theyare provided for merely self-interested reasons. Whatis important about these goods as gift values is the factthat they express the giver's acknowledgment and af-firmation of a certain relationship to the beneficiary, orof some characteristic she has, which is valued for itsown sake.

Shared values differ from commodity values in thattheir being good for a group of people cannot be fullyanalyzed in terms of their being independently good foreach member of the group, considered in isolation. Partof their being good consists in the fact that they are un-derstood to be held in common-that everyone in thegroup both acknowledges the thing to be good and par-ticipates in its benefits. The value of any noninstrumen-tal relationship is shared in this sense. The realization ofshared values needs to take place within social relationsthat differ from market relations in at least three re-

spects. First, since these values are sustained in partthrough a common activity of working out how they arevaluable for the group, their realization requires a forumfor working out these understandings together. Most ofthese values must be provided by the same people whoenjoy them. The people who enjoy the good need tohave the opportunity to participate in shaping its char-

~~~~~~I~Th h \ J\~ ""' ~ ~"

f'

tl d fr. ... ..

f.

acter. ese c ar~ctenstIcsreqUireinstItutIons0 vOIce nen y preserve om stnp-miningin apprecIatIon0 Itsratherthanof exit alone. Second, sincepart of its value aesthetic value, its commercialvalue is unrealized.Anlies in the fact that all members of the relevantgroup argument against marketing a good is stronger if ithave access to it, some provision must be made for shows not just that a noneconomicvalueis lost in mar-

openingaccessto thosemembersof thegroupwholack keting it, but that the value is degradedor perverted in ''4Jtheabilityto pay for their share of the costs of provid- marketingthe good.2o ~ ~ing it. Shared goods are undermined by the market norm The market has traditionall been d e 0'1r' -/

of restrictingaccess to those who can affordto pay for two grounds: for it~l~;or its~ odime~it.Finally,sincethevalueof sharedgoodsis realizednot of a particular conceDtto1'rOf~m. This argumentin individual,exclusive appropriation and use but in exposes a serious limitation on the market's claim tocommonactivities,rights over the physicalvehiclesof efficiency.The market cannot make claims to superiorthese values cannot be fully distributed in exclusive efficiency when it changes the qualities of the goods itbundles.This was the basis for my argumentsagainst provides, since claims to efficiency are valid only"dividingthe commons." when ends are unchangedby alternate means of provi- ./ . -,£

Gift values and shared values are not the only sion. My account also raises questions about the ade- ~kinds of goods that are improperly treated as com- quacy of the economic ideal of freedom. The marketniOcTIties,but our investigation of the problemsthat promises us freedomfrom the value judgment of oth-a:rrse1ilattemptingto regard them as commoditiessug- ers. Howmuch I choose to value a commodity is inde-gests the general form of arguments that certain goods pendent of how much others choose to value it. Weshouldnot be treated as economic values. By recog- have seen, however,that giving a good a place on one'snizingwhat this general strategy is, we can both make preference ranking is not all there is to valuinga good,sense of the heretofore vague objections that some unless that good is the object merely of a direct primi-goodsshouldnot be treated as commoditiesand apply tive liking. The freedom to value a good as much asit to new cases. When the good in question is some one wishes is not the freedom to value it in any waythingor service to be marketed, the argument is as fol- one wishes. For the ability of an individual to value alows:for a certain dimensionof value to be realized in good in some ways requires her participation in a so-a good, or for the good to serve as the vehicle for the cial practice in whichothers understand its valuein the .realization of our ideals, the production, distribution, same way. Outside of shared understandings, one canand enjoymentof this good must take place within the value things only as objects of primitive appeal. Andcontextof certain social relations.Totrade the goodon some ways of valuing goods require a shared under-the market, or otherwise to subject its conditions of standing that thegoods arenot commodities.The idealvaluationto market forces and market norms, is to re- of freedomas consenthas also emergedsomewhattar-move it from these social relations or to undermine nished.When the outcomeof bargainingis influencedtheir integrity.When the good in question is an ideal, by a manipulationof one party's commitmentto normsthe argument is that the social relations that most ade- of civility or gratitude, the normative significance ofquatelyembodythe ideal areunderminedwhen people his consent is diminished. ],.:,J..t,JJ..adopt market norms to regulate their interactions in Finally,we may note that the market i1malof'tree~these relationships. Then we can say that the ideal is domisjust oneamongothers.Sometimesthe realization'not an economic good, where to regard an ideal as an of <?neidealof freedomconflictswith the realizationofeconomicgood is to regard it as best embodied in mar- another.Themarketidealinterpretsfreedomas freedomket relations. fromties of obligationto others. Committedor involun-

Argumentsof this form do not conclusivelyshow tary relationshipswith other people are viewed as en-that the goods in question may ~eveI:be traded on the tanglements,as constraints on personal autonomy.Butmarket. It may be that the distinctive dimensions of we are not free to pursue the goods of deepest signifi-valuein thegoodscan be preservedshortof prohibiting cance to human life under these conditions.The per-their sale.Zoning lawsrepresent an attempt to preserve sonal sphere offers us a different ideal of freedom.certainpublic goods while allowinga privatemarket in Within committed and intimate relationships, we areland. More importantly,the good in questionmay have free to reveal ourselves to others, without having 0more than one dimension of value. Prohibiting or regu- self-disclosure become the 0 . er's u-latingthesaleof goodspreventscertaineconomicgoods ations.In the market,on the other hand, the successfulfrom being realized. If the Grand Canyon is perma- bargainermusthold his concernsand desiresin reserve,

AI: . Introduction: Markets and Business 45

oJ


lest they be used by the other party to gain a negotiatingedge. The sphere of democratic politics offers a differ-ent challenge to the market ideal of freedom. The mar-ket ideal identifies freedom with the power to excludeothers from participation in decisions affecting one'sproperty. But when some realms are completely dividedinto pieces of private property, nearly everyone is ex-cluded from decision-making power over central areasof their lives. Democratic freedom, on the other hand, isfreedom to participate in collective decisions. It is afreedom to be included, rather than to exclude others.When exit is impossible, when decisions concern sharedgoods, or when freedom can be effectively exercised byall only in public spaces of free and equal association,the freedom of democratic participation supercedes theexclusive freedom of the market.

To argue that the market has limits is to acknowl-edge that it also has its proper place in human life. Thereis a wide range of goods that are properly regarded ascommodities. Among these are the conveniences, luxu-ries, delights, gadgets, and services found in ordinarystores. The modern market produces and distributesthese goods with unsurpassed efficiency and in unsur-passed abundance. It is a good not only to have thesegoods, but to be able to procure them freely through theanonymous, unencumbered channels the market pro-vides. For harm is done both to personal autonomy andto the integrity of friendship when one's access to con-sumer goods is dependent on personal connections withpolitical cadres, foreigners, or other well-placed indi-viduals, as is often the case in socialist countries. Thedifficult task for modern societies is to reap the advan-tages of the market while keeping its activities confinedto the goods proper to it.

I..I

ENDNOTES

1. Economic goods are not confined to things or commodi-ties; they can include economic relations, activities, andideals as well. Things or services are "economic" insofaras their values are best realized through being traded onthe market or otherwise treated in accordance with mar-

ket norms-that is, as commodities. Ideals are "eco-nomic" insofar as they are best embodied in practices andrelations governed by market norms. Norms are here un-derstood as rules by which the participants in a practicegovern and evaluate their behavior, or standards by whichthey understand the meanings of what they do or value.Often norms are justified as attempts to realize ideals towhich we are committed.

The investigation needed to determine the nature ofeconomic goods is a historical and empirical study of thenorms and social understandings that govern market prac-tices. What we discover from such investigations of differ-ent practices is similar to what Michael Walzer (1983) calledthe social meanings of goods. I generally endorse Walzer'sview that goods can be usefully viewed as occupying differ-ent, although often overlapping, spheres of life. However,since social meanings are endlessly nuanced, constantlychanging and being reinterpreted, the generalizations I makehere about social meanings and norms should not be takento be unqualified, much less a priori claims. Since modemsocial practices are deeply pluralistic, I also do not wish tosuggest that I have offered an exhaustive account of the val-ues of any particular sphere of life. In every case, the claimsI make here should be taken as invitations to further detailed

empirical investigation. In taking social meanings as thestarting points for ethical argument, I also do not mean tosuggest that they are beyond criticism. After all, I criticizelater the economic ideal of freedom that informs many ofour social practices. A general account of how to criticize so-cial meanings is the task of another paper, however.

2. Friedman (1962) had a particularly clear exposition of theimplications of this view.

3. Both aspects of the impersonal freedom of the market arethe result of a long process of historical and legal develop-ment. My account of the market ethic and its developmentis indebted to the discussions by Atiyah (1979), Hirschman(1977), Horwitz (1977), Nelson (1969), Polanyi (1944),Simmel (1978), and Weber (1968). In particular, I havebeen influenced by Polanyi's thesis that societies need toconstrain the extent of the market in order to protect them-selves.

4. I owe this account of shared goods to Rawls (1971,pp. 523-26) and Taylor (1987).

5. This implied hierarchy of values, according to which one'ssexuality is a higher and deeper (more intimate) value thanany commodity, is founded on the public meanings em-bodied in our social practices and not on the possibly idio-syncratic intentions or feelings of individuals who may en-gage in them. The understanding that a person's sexualityreaches deeper into the self than money, that it is thereforea good that is different in kind from and higher than money,also lies behind our judgment that rape is a deeper viola-tion of the person than robbery. One who would deny thatprostitution is degrading would thus be hard pressed for anexplanation of why rape is a more serious crime than rob-bery. To claim simply that rape results in more "disutility"than robbery is not enough-the question is why this istrue, and how the claim can be substantiated. Since no one

has provided an adequate account of how interpersonalcomparisons of subjective utility can be made, it wouldseem that the basis for the judgment about utilities lies not

....

in such a comparison, but rather in the publicly accessiblemeanings of the acts themselves: the shared understandingthat rape is more degrading than robbery.

6. One could imagine forms of "prostitution" that, while of-fered on the market, diverge from market norms in waysthat could rescue the practice form the criticisms madehere. For example, Schwarzenbach (1990) defended aconception of prostitution as a form of sex therapy prac-ticed by professionals who help people liberate them-selves from sick, patriarchal forms of sexuality. Such apractice would diverge from the ideal type of market rela-tions presented here in many ways, especially insofar as itis informed by the norms and ideals of a profession. Pro-fessional services, such as legal, medical, and educationalservices, provide a classic case of "mixed" goods whoseproduction and distribution is determined partly by mar-ket norms and partly by nonmarket, professional norms.Notoriously, market norms pose a constant threat to the in-tegrity of professional norms. Yet, market norms may stillbe needed to ensure the efficient production and allocationof professional services, or to realize certain freedoms fortheir practitioners or customers.

7. Of course, the mere substitution of cash for in-kind pay-ment does not obviate the exploitative character of suchrelationships. The firms still take advantage of their em-ployees' duress and lack of decent alternatives; but theywould be less likely to be able to evoke the ties of childrento parents from which an extra margin of effort or obedi-ence can be extracted from workers, if their dealings withemployees were blatantly self-interested instead of ingra-tiatingly paternalistic.

8. While gift norms can be used by employers for exploitativepurposes, there may be cases where employers themselvescome to be guided by them. See Akerlof (1982).

9. "To Love, Honor, and . . . Share: A Marriage Contractfor the Seventies," Ms. vol. I, no. 12 (June 1973), pp.62-64, 102-3.

10. My claim here is not that bargaining can never takeplace in a worthwhile marriage, but that where thenorms of bargaining predominantly govern the rela-tions of the partners, the integrity of their marriage isthreatened.

11. It seems obvious to us that friends are not liable for

each other's debts. Yet, it was not until the sixteenth

century that in England it came to be seen as a foolishact rather than an act of true friendship to guarantee afriend's debts. This change is due to the fact that thepresent radical separation of the spheres of personal re-lationships and economic relationships is the productof a long historical development. For some of the de-tails of this history, see Nelson (1969, esp. pp. 142-43).Of course, it is possible that we could rework our prac-tices and understandings of friendship and credit, so


that the threats posed to success in each of these prac-tices by combining them would not come about. Ideal-typical analysis does not preclude the reformation orcombining of practices in new ways. It simply pointsout the conflicts and tensions among our present prac-tices, and the conceptions of value they reflect, whichwould have to be adequately dealt with by any proposalto combine them.

12. Here I am generalizing John Rawls' account of frater-nity and of the good of a social union (1971, pp. 105ff,520-29).

13. On the significance of communal provision, see Sahlins(1972, pp. 188-91).

14. This might violate the norm of impersonality that I pre-viously attributed to the market. However, libertariansdo reject the view that impersonality is an appropriatenorm to impose on people's use of their private prop-erty. Robert Nozick argues that a libertarian would haveto accept a proviso on property acquisition that preventspeople from trapping others in a small territory. But hisproviso doesn't preventprivate interference with others'freedom of movement that is less drastic than completeentrapment. For the libertarian account of freedomdoesn't acknowledge that the restrictions mentionedcount as interferences in others' freedom at all, since thefreedom of movementwe are concerned with here is notembodied in some property right. See Nozick (1974, pp.55, 178-82).

15. Welfare economists differ from libertarians on the is-sue of dividing common goods that are nonrivals inconsumption. It is a theorem of welfare economics thatnonrival goods may be more efficiently provided on anonexclusive (public) basis than on an exclusive one.However, even this view does not recognize the factthat providing a good on an exclusive basis may notmerely provide it less efficiently, but change the kindof good it is for the worse. I thank Howard Wial forthis point.

16. This account is indebted to Jane Jacobs' (1961) rich de-~cription of the goods of public parks and streets.

17. Titmuss has a second argument against selling blood,which relies on the facts that we depend on donors'honesty about their health to keep the blood supply safeand that the prospect of cash reward tempts unhealthypeople to donate. In fact, there are many goods forwhich we are not in a position to verify whether thethings offered to us really have the characteristics thatmake them good, or that are so complex that the costsof supervising the process by which they are providedare prohibitively high. In these cases, we have nochoice but to grant a large degree of discretionarypower to the providers, on condition that they exercisethis power as a trust and not as a private right to exploit


for merely personal advantage. This is one powerfulbasis for opposing the commercialization of hospitals,elementary and secondary schools, and prisons. Theprofit motive offers a constant incentive for violatingthis trust, while the complexity of the goods guaranteesa wide variety of opportunities for doing so undetectedby the public.

18. This is not to claim that providing certain needs on ameans-tested basis is better than other alternatives. Ar-

guably, fraternity would be better expressed by makinghealth care a right of all citizens, provided equally on apublic basis. Furthermore, the actual meaning of anygiven form of cash or in-kind provision-whether it ex-presses respect or contempt for its recipients--dependson the details of its enactment and administration. For

example, the petty regulations attending the food stampprogram seem more designed to exercise public controlover consumption habits of the poor than to express fra-ternity with its recipients.

19. Thomas Scanlon expressed this idea in the notion (fol-lowing Rawls) that we are responsible for our ends(Rawls, 1982, pp. 168-71; Scanlon, 1975, pp. 663-66).One account of distinctions of worth between goods, andits connection with responsibility for one's ends, is pro-vided by Charles Taylor (1985, esp. vol. I, essays 1,2, and4, and vol. 2, essay 9).

20. The view developed here does not depend on postulat-ing the existence of completely isolable spheres of so-cial practices. Talks of "spheres" is useful, however, be-cause the norms within which we produce and distributegoods typically come in bundles, with distinct bundlesdefining different spheres. Still, the different norms inthe bundles can be separated and combined in differentways, and new norms invented, resulting in hybrid prac-tices, or even in the creation of very new kinds of prac-tices. I would hope that the kind of analysis developedhere would be used as an opportunity to think of newkinds of practices that could help us move beyond thesterile dichotomy between market and state that informsso much contemporary political disagreement. The keyquestion to be asked is, "What sets of norms are best forrealizing these values?" and the answers need not beconfined to the bundles of norms presently in operation.

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heath pp 34 to 48 anderson

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