Sunday, 1 May 2011

Ideology and repugnant markets

In a paper, "Taboo Trade-Offs, Relational Framing, and the Acceptability of Exchanges and the Acceptability of Exchanges", from the Journal of Consumer Psychology authors A. Peter McGraw and Philip E. Tetlock note that ideology plays a role in determining which transactions we see as appropriate.
Whereas liberals and conservatives find efforts to monetize babies, body parts, and basic rights and responsibilities of democratic citizenship abhorrent, we find that among libertarians the objections to these types of transactions wane (Tetlock et al., 2000). Moving left on the political spectrum toward socialism increases the tendency to find not only surrogate motherhood unacceptable but also the buying and selling of borderline controversial commodities such as medical care and legal representation as well as currently uncontroversial commodities such as houses and food. Devout egalitarians tend to see such exchanges as inherently inequitable because they put the poor at a profound disadvantage (and because they seem to carry the implication that the lives and rights of the poor are worth less than those who can pay large sums for doctors and lawyers).
Do we find some markets repugnant because this fits in with an ideology we hold for other reasons or do we hold a given ideology because we believe certain markets are or are not repugnant?

The Economist magazine argues that there is more to it than just seeing some markets as repugnant.
But there's more to it than this. It's not just that buying and selling certain things is creepy or gross; it's that there is something inherently ennobling and honourable about government providing or assuring the provision of these same things.
But the Economist also points out there is a problem with all of this,
This is a pretty picture, but it's also a problem—a problem economists generally help us to see through. The policies that publicly express good will and mutual respect—that successfully broadcast that we care about one another—often are not the policies that would actually deliver the goods—the policies you'd favour if you cared more about people than signaling that you care about people. The policies that would actually deliver often would do so by enabling and encouraging consumer choice and entrepreneurial discovery and innovation in competitive markets. If the deep worry about certain forms of market exchange is that they put the poor at a disadvantage, we can address the worry by making certain that means-tested transfers are generous enough to ensure sufficient market power for all. But we can't address concerns about market inequity in this way if market-based policy is preemptively ruled out of bounds by a misguided public theology of markets and politics. Widespread public commitment to a vocabulary of moral and political symbolism according to which "merely commercial" transactions and relationships are seen to be profane, while political transactions and relationships are seen to be sacred, is a significant impediment to improving human welfare with policy that harnesses the power of markets. One task of the liberal intellectual is to chip away at taboos that cause preventable suffering by limiting the range of politically-feasible policy.
So trying to signal that we care may result in worse outcomes for those we claim to care about. Thus if ideology rules out certain types of markets then that ideology may make the disadvantaged worse off. The opposite of what is intended.

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