We Can Do Better Than Markets: A Philosophical Critique

Imagine that you decide to go on a camping trip with a group of friends. Each member of the group is tasked with bringing some items that are essential for the group to use for the camping trip to be a success, and each member does exactly this. During the camping trip, some fish while others cook, and some prepare tents for sleeping while others tend to the fire. One day during the trip, Amy, a member of the group, finds a wild apple tree full of luscious apples and decides to claim it for herself as private property. When the rest of the group members reach the tree, Amy decides she will not allow any of her group to have access to the tree, but instead she will sell the apples for a personal gain. In a different scenario, imagine that John, another member of the group, also decides that he will charge other members of the group an hourly rate to use his knife.

Most of us will instantly recognize that intuitively there is something ethically wrong there, and that the group members breached a presumed egalitarian moral code where much of the property, tools, and personal assignments are democratically and collectively managed to maximize the interests of all group members instead of one over another. This paraphrased hypothetical was drawn up as a thought experiment by philosopher G. A. Cohen as a critique against capitalism/markets, and John and Amy’s thinking form the central behavioral schema of how markets work in our capitalist society. The point of the thought experiment is not necessarily to imply that all of society should function like a camping trip, but rather that the egoistic exchanges which John and Amy offered, exchanges of the kind that dominate everyday markets, do not present a moral ideal for us, and that we have moral inconsistencies about how we think people ought to behave in regards to property.

A camping trip signifies something more than just what people like to do for fun. It is a social arrangement where people temporarily have very different moral outlooks on property.

A camping trip signifies something more than just what people like to do for fun. It is a social arrangement where people temporarily have very different moral outlooks on property.

This consequently brings us to our first possible critique of markets, and that is that they intrinsically function as selfish or egoistic exchanges. Consider the common tug of war between a car salesman and the typical buyer, a tug of war that will always remains as such, with neither party considering the interests of the other. In this market exchange, the salesman desires to sell the car at the highest possible price, while the buyer wants the exact opposite. The salesman would sell the car at ten times the average price if he could or even completely empty the pockets of the buyer if there was a way to persuade the buyer to accept such an expensive deal. At the opposite end, the buyer desires a car for the cheapest price possible, and would not mind buying the car for $10 if the salesman offered such a hot deal. The nature of this market exchange, connected more deeply to the profit maximization behavior of capitalism, ensures that there is always a behavior of extreme self-interest in both parties, causing them to care only for themselves and never for one another, a self-interest just like that of John’s and Amy’s in the camping trip thought experiment.

Not only do markets promote a culture of selfishness, they also promote a culture of distorted and illusory values where a commodity is socially valued only from the fact that it exists within this logic of market exchange, our second critique. This second argument is part of Karl Marx’s theory of commodity fetishism, a theory he first expounded in his influential work Capital. The illusion that commodity fetishism creates is that the commodity becomes the driving force behind the social relations we have in society, relations formed not of our own volition, but rather from the market transactions occurring. This creates the almost supernatural impression that commodities control human beings. The immeasurably large amount of money spent globally each year on advertising acts as a powerful influencing force on morality, values, traditions, customs, and other aspects of culture that we do not realize exist only because of commodity fetishism and not because we freely and collectively decided to value these things. From Capital, Marx explains his theory of commodity fetishism by arguing how the values we attribute to commodities do not actually come from the physical nature of the commodities themselves:

As against this, the commodity-form, and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men’s hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities.

A good contemporary example of commodity fetishism is the diamond. A lesser known fact about diamonds is that their expensiveness is not because they are inherently rare, but because diamond corporations artificially control the supply of diamonds in the market thereby dramatically raising their prices.1 The critical question is then raised of how truly and objectively valuable a diamond is, and where comes the value and urge to jump in to save a diamond ring when it accidentally falls into a body of water. Additionally, the most interesting fact about diamond rings is that the tradition of buying them as a necessary part of marriage was almost entirely concocted in the 1930s by the advertising of the company De Beers, a company which held a very long monopoly on the diamond supply throughout the 20th century. The historical tradition of diamonds being something possessed and worn only by wealthy ruling classes changed with the advertising campaigns of De Beers which successfully rebranded them as something valuable, desirable, and obtainable by the working class, a prime example of commodity fetishism.

From their high prices to involvement in social traditions, much of the aspects surrounding diamonds were created only by advertising.

From their high prices to involvement in social traditions, much of the aspects surrounding diamonds were created only by diamond corporations.

One of the primary philosophical arguments in defense of markets by capitalism apologists is that markets embody freedom and individual choice since persons freely consent to market exchanges, thus meaning that each exchange fulfills the interests of each individual. The problem with this view is that its premise of valid consent stands poorly since an individual has no choice but to participate in markets or else face the risk of starvation, homelessness, and other ills resulting from refusing to purchase or sell something. This is similarly why the supposedly “voluntary” employment between laborers and sweatshop owners in the Third World is not truly voluntary and consensual, as both markets and sweatshops represent the status quo, and individuals cannot feasibly and practically escape this status quo. One is thus born into a market society and through conditioning and lifelong practice is molded to think about goods and services as being inseparable from markets, and so markets cannot reasonably embody freedom and individualism through consent, but rather embody the status quo.

Since markets involve money, they are also one of the mechanisms that maintain inequality in our society, such as inequalities of wealth and class, which is our third and final critique. In explaining how “economic thinking and market reasoning have reached into spheres of life far beyond the domain of material goods,” philosopher Michael J. Sandel mentions how Gary Becker, a Nobel Prize-winning economist, seriously proposed that the public debate over immigration could be solved by selling or auctioning off the right to immigrate.2 The immediately visible problem with such proposals is that in an extremely unequal world where 85 of its richest people own as much wealth as the poorest half of the world, this would end up not only maintaining inequality between citizens in a nation but between nations themselves, as only the financially privileged could afford the right to immigration.3 This proposal and many others, which reject ethics, illustrates the morally degenerate premises that mainstream economics often functions by and how markets can be instrumental in maintaining inequality. As another example, world hunger exists not because there is insufficient production of food to feed the entire world, but because we do not have an adequate system of distribution for this production leading to the tragedy of people starving in front of food because they cannot make a market purchase.4

If we accept these criticisms and conclude that markets are morally non-ideal, then we pave the way for subsequent discussions of economic replacements for markets, as markets are simply one possible system for the distribution of goods and services in a society. The notion that markets could be replaced in our society with an alternate system of distribution may seem initially radical, but such a change allows us to answer to long respected and uncontroversial moral virtues and principles like cooperation and to negate other vices like selfishness. This would allow for a society that exhibits significantly more consistency in its moral views, and which improves its practice in regards to handling goods and services. A philosophical and moral critique of markets should thus be included as an important part of a wider critique of capitalism and the status quo, a critique that is vital to establishing justice in the economic sphere of life.

– Dino Mehic (Moontouch)

References:

  1. http://www.washingtonpost.com/wp-dyn/content/article/2010/07/02/AR2010070203990.html
  2. http://www.economist.com/node/16424085
  3. http://www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world
  4. https://www.oxfam.org/en/pressroom/pressreleases/2009-10-16/world-food-day-there-enough-food-grown-world-everyone-op-ed