SOSC 2340. Intermediate business & society Lecture 5: Markets & morals. The dominance of the market. Today, people are more dependent on the market than at any other time in history. The market is also expanding to include items which, previously, have not been exchanged on markets.
Intermediate business & society
Lecture 5: Markets & morals
Today, people are more dependent on the market than at any other time in history. The market is also expanding to include items which, previously, have not been exchanged on markets.
We speak of “commodification” when a good becomes a commodity, i.e. something that is bought and sold.
Source: M. J. Sandel (2012) What Money Can’t Buy, pp. 3-5.
Voluntary market exchange represents a Pareto improvement.
An exchange brings about a “Pareto improvement” if the welfare of at least one of the transactors increases whilst the welfare of other transactor(s) does not decrease.
If a good or service cannot or should not be bought and sold for money, we speak of a limit to the market.
What are these limits?
Parts of people (kidneys, blood, parts of liver, teeth)
Rights: freedom of speech, religion, press
Health and safety laws (hazardous jobs)
Who gets the Order of Canada?
Why don’t we award students with grades in accord with who is willing to pay the most?
Can one buy another person’s love or friendship?
Some items (e.g. friendship, love, prizes) cannot be sold on the market without being transformed into something else.
Other items (e.g. kidneys, places in queues, narcotics) can be sold in markets but should not be.
People’s choices in markets appear to be free, but are some people coerced by their circumstances to enter into some exchanges?
Examples: hazardous jobs, joining the army, prostitution, selling kidneys.
Markets allocate goods to those willing to pay for them.
Economists assume that if you have a high willingness to pay, you should get the good in question because you desire or value it most.
But poor people have high willingness but little ability to pay (healthcare, housing, education).