Professional Documents
Culture Documents
Introduction
Repugnant markets
there are markets that were once repugnant that are no longer, and vice versa
slavery is an example of a market once thought acceptable, now repugnant
o reason being that we find ownership or near absolute servitude (indentured
servitude) repugnant
o this repugnance is so severe that we will not even allow someone to sell themselves
into slavery or indentured servitude
indentured servitude was one of the ways Europeans secured passage to
America
Lending money for interest (usury) is another example of something that was once
repugnant but no longer is
o Max Weber argues that this change is nothing more than an adaptation to financial
circumstances
o Changes in this law have also affected other laws such as bankruptcy
In colonial America insolvent debtors could be imprisoned or sentenced to
indentured servitude
As indentured servitude became more repugnant and debts less, this law
changed
Even when there are willing buyers and sellers in potential markets, aversion to these can
constrain or prevent them
o Aversion needn’t be as strong as repugnance, see also distasteful, inappropriate,
unfair, etc.
There are many ways in which repugnance can be seen
o Mercenaries used to be seen as an appropriate way to deal with military conflicts
o Since the rise of state armies this has shifted
o Repugnance comes from the fact that mercenaries kill for pay rather than country or
duty
o The repugnance can be seen in the lesser protection mercenaries receive under the
Geneva convention
Some markets are constrained on the repugnance of the negative externalities
o Prostitution and pornography can be repugnant due to the fact it is selling
something seen as sacred by some
o But also due to the effect it can have on the neighbourhoods in which it takes place
e.g. unwilling observers
o Furthermore, it may not always involve willing parties e.g. pimps and child abuse
Bans on obscene content may also involve concerns about externalities
o FCC regulations on certain words forbidden on T.V. and radio
o Voluntary regulations on whether children can see certain movies
o Repugnance can persist when externalities are minimal also
Post office banning of ‘Lady Chatterley’s Lover’ being posted through them
The sale of drugs, alcohol, and gambling can also be complicated
o When addiction is an issue there can be negative externalities through financial and
criminal channels
o Furthermore, addiction calls into question the willingness (in the normal sense) of
parties to the transaction
Questions over incentives for bad behaviour can also be asked
o Insurable interest laws governing who can be the beneficiary of life insurance
o Today, life insurance for small children still raises questions
o Today, the insurance industry lobbies against Stranger (or investor) owned life
insurance
Through Viatical settlements, third parties can buy the value of a life
insurance policy from the elderly or dying, should they wish to realise the
value of their life insurance before they die
Arguments against such arrangements usually revolve around repugnance
over an entity that profits from death, as opposed to insurance companies
which profit more the longer clients live
Repugnance over life and death also exists in other forms
o In July 2003, a US government funded prediction market for terrorist events was
scrapped after much publicity
o There was also concern about incentives, terrorists could easily play the market
To clarify ideas on repugnance, it can help to look at a case where seemingly nothing but
that is the reason for market restrictions
o Dwarf Tossing
o Completely banned in many places
Outright bans suggest concern is different from occupational health and
safety concerns, otherwise regulations could be put in place to ensure safety
o Logic for ban based around the fact that such an activity would lower the individual’s
human dignity, which is a public good, thus Dwarf Tossing is a public bad
o A French dwarf appealed to the UN courts stating that it was his choice, and there
was little other work for dwarves, as having a job is part of human dignity the sport
does not degrade his dignity – he lost the case
As shown above, repugnance, alone or in conjunction with other factors, can put serious
constraints on markets
Predicting repugnance is difficult, one reason being that apparently similar activities can be
judged very differently
o Wife carrying is similar to dwarf tossing in that it involves one person of diminutive
stature being carried and moved by another (although dwarf tossing is much more
severe)
Another example comes from Larry Summers apology after suggesting that it would be more
efficient to situate polluting industries in the less developed world
o This was met with much controversy
o However, this was after the 1990 clean air act was amended, which allowed firms to
trade in pollution permits
o This was an efficiency enhancing measure which attracted little public controversy,
despite arguably having the same effect
Similarly, there are laws preventing kickbacks given by suppliers to purchasing agents of
companies
o However, this is arguably no different to air miles awarded to workers who book
flights on behalf of themselves using company funds, thus effectively acting as
purchasing agents for their companies
Furthermore, laws against price gouging exist, but Ticketmaster (at the time of writing,
2006) recently began auctioning tickets just before the time of the event
Adoption is another example
o Adoption of a child involves many costs, payment to the birth mother however is
widely seen as repugnant, and is illegal
o However, large unregulated markets have developed for surrogate mothers, sperm,
and eggs
It would seem that technologies of different time and type garner different reaction, it can
also be that newer technologies are seen as more repugnant than older ones
o GM crops that are the product of selective breeding are not seen as repugnant,
however GM crops that are the result of laboratory gene modification are not nearly
as accepted
Repugnance of money, and views toward compensating organ donors
Some transactions are not repugnant as gifts or in-kind exchanges, but become repugnant
once money is added
o This category can be seen to include, usury, adoption payments, and perhaps
prostitution
o Loans, adoption, and love are regarded as good things, but for some the addition of
money to the transaction changes that
Concerns over monetization seem to fall into 3 categories
Objectification
o many people regard compensation for organ donation as turning a good deed, bad
o governments strongly encourage organ donation but forbit monetary payments
o Pope John Paul II
Pope regard donation of organs as a ‘particularly praiseworthy example’ or
and action that build an ‘authentic culture of life’
He derided any attempt to commercialize donation as morally unacceptable
as using the human body as an object violates the dignity of the person
o Such concerns seem similar to those the UN used to uphold the dwarf tossing ban
o There is a feeling that a public good, human dignity, is being infringed upon for
private gain
o It must be said that different religions can view matters differently
Emerging Jewish consensus on kidney donation is that under some
circumstances it would be acceptable to accept and give compensation
Rabbi Shlomo Zalman Auerbach – someone who sells a kidney does a good
deed ‘even if he would not have donated his kidney only to save life’
‘it is the community that needs soul searching for allowing someone to
reach such depth of despair that he must sell a kidney’
Islamic Republic of Iran allows live kidney donors to receive monetary
payments
Coercion
o Money can be seen as coercive, allowing sale of kidneys may allow the poor to be
exploited
o Even in the absence of money, surgeons can be unwilling to perform operations if
they believe that the donor is being coerced by family pressure etc.
Ghods and Savaj, 2006 – availability of paid unrelated kidney donors in Iran
has reduced coercion of unpaid related donors
o Limiting financial disincentives of live donation may prove effective in reducing
repugnance
Providing a fixed package including insurance and compensation for lost
earnings etc. a figure of $5000 was proposed as compensation
Such a proposed benefit would provide a disproportionate incentive among
rich and poor
$5000 will provide a much smaller incentive to a CEO than someone
on minimum wage
Slippery Slope
o Concerns that allowing money in kidney donations may lead to similar changes in
more repugnant circumstances
Kidneys entering into contracts as collateral, to repay debts, etc.
o Payments for deceased donation also fall into this category, the fear is that the
slippery slope will lead to payments for live donations
o Accounts of black market organ sales also lead to concerns that legal ones would be
similar
Schepper-Hughes, 2003 – the circulation of kidneys follows the established
routes of capital… from poorer to more affluent bodies
A further concern is that money markets might crowd out altruistic donations, in fact
reducing the supply of transplantable kidneys
Even when short of repugnance, emotional responses can constrain market design
In labor markets monetary payments are the opposite of repugnant
o Questions about what kinds of negotiations are appropriate do however exist
o Markets for entry level professionals have suffered from hiring times moving further
and further from the start date of the job – exploding offers – the effect is that
employees are not allowed the opportunity to consider other offers
Creating clearinghouses can sometimes correct for this market failure
o These clearinghouses come with the implication than an individual may start their
career by accepting a job and immediately declining to take another, this could be
deemed unprofessional
o The offering of exploding offers was deemed inappropriate and anti-competitive
o However, the market would be improved by the opportunity of workers to decline
offers
Such exploding offers would be declined frequently enough as to become
unprofitable
o Relevance to current debate is focussed on the propriety of how offers should be
made, accepted, or rejected
In-kind exchange does not rouse as much repugnance as a money markets
o In-kind exchange only helps those who already have a willing donor, so is not a
solution to a general shortage in kidneys
o If, however, such a system was organised on a national scale, it might be that 1000s
more transplants could be conducted each year
Economists’ voices in the debates about organ sales, and reaction to them
Objectification
o In labor markets the poor generally take more dangerous and less pleasant jobs, yet
we do not think that this diminishes their humanity
Coercion
o Voluntary transactions, if truly voluntary, increase welfare
Slippery slope
o Markets can be regulated
Role of repugnance on its own is often regarded as a side issue
o Radcliffe-Richards et al, 1998 – weakness of familiar arguments (against kidney
sales) suggest that deep feelings of repugnance are the real driving force behind
prohibition
o Feelings of repugnance among the rich and the healthy… cannot justify removing the
only hope of the destitute and dying
Conclusions