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Merits & demerits of markets.

This is a nice piece on the merits and demerits of markets.

It is a discussion by Thomas Wells of Michael Sandel’s, What Money Can’t Buy: The Moral Limits of Markets.  The claim by Sandler is that markets degrade certain relationships and “products”.

Wells points out that conventional economics criticises markets strongly whenever natural monopoly or internal managerial capitalism distortions destroy efficiency.

I agree with the substance of his critical arguments on Sandler’s anecdotal critique and Wells’ rejection of capitalist rapaciousness. But I think his critique of capitalism misses the central point. As Adam Smith noted markets are amazing institutions that can create prosperity. As Smith noted that are even effective for eliminating poverty. But acting rationally/prudently in markets is not the only life ethic. To be an appreciated human being this value needs to be supplemented by a whole set of other values – a sense of justice, of altruism, of fairness and of temperance.

The argument can be reasonably put that capitalism and the “me first” society suppress these virtues. Our values get degraded because of excessively selfish concerns that alienate us from others.  Smith endorsed selfishness but simply said it wasn’t enough.  We need to be rational but make efforts to be ethical in a range of other respects as well. It is the most succinct and sensible view on markets and commercial society I have read.

1 comment to Merits & demerits of markets.

  • Jim Rose

    Markets through specialisation and the division of labour encourage cooperation and mutual dependence often with millions of strangers you will never meet. Remember the I. Pencil essay.

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