The Winter 2023 issue of Daedalus is about Creating a New Moral Political Economy, edited by Margaret Levi & Henry Farrell.
The article by Debra Satz will strike a chord with market designers: she takes very seriously that markets are tools that need thoughtful design.
"my argument is not a lawyer’s brief against markets. No large democratic society can or should entirely dispense with markets. Not only are markets among the most powerful tools we have for generating growth in living standards and incentivizing innovation, but also Smith was right to see their democratic potential as ways of enabling cooperation among independent, free, and equal individuals. As tools, however, we should think carefully about where to use them and how to design them when we do. While a neoliberal worldview sees efficient markets enhancing freedom and well-being everywhere, the reality is more complex. Some markets foreclose options that would better support democratic institutions and culture. Sometimes, closing off market options makes everyone better off. Consider that if individuals are free not to purchase health insurance on the market, the cost of publicly provided insurance will increase: healthy individuals are more likely to opt out of health insurance, leaving sicker individuals in the pool to be insured and raising the costs of their insurance, leading more people to forgo holding such insurance, driving the prices up even higher."
Among the markets she is concerned about are school choice, and military service:
"some of the ways parents prioritize their own children can lead to worse outcomes for other children and to the furthering of educational inequities, as well as to other social ills like instability and conflict. Evidence indicates, for example, that choice schools in the United States are more homogenous than public schools with respect to social class and race. Researchers have also shown that when public school choice is available, educated parents are especially likely to factor child demographics in their school selections.11 This may be because school quality is very hard to judge and parents default to markers such as the reading and math levels of other students. These levels, in turn, are heavily influenced by social class. It is likely that some parents take race and class directly as proxies for school quality."
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"Extending the reach of markets even more, war has been further outsourced to private military contractors: in 2009, there were more private military contractors in Afghanistan than U.S. military troops.17 Hiring private mercenaries and outsourcing national security to a subsection of our population might spare our citizens, but as political philosopher Michael Sandel has noted, it changes the meaning of citizenship.18 In what sense are we “all in this together” if most citizens never need to think hard about decisions to go to war? Whatever the efficiency pros and cons of the decision to outsource fighting and allocate military service through market means, doing so changes our relationships with one another and our sense of a common life."
"My argument so far suffers from treating the state and market as two stark alternatives for the allocation of goods and services in society. So I now want to consider ways in which the benefits of markets can be harnessed—through design—to better serve important democratic goals. "
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"One important mechanism is providing greater roles for worker voice. This can be done through such reforms as changing labor laws to support forms of worker association, like trade unions, allowing worker representatives on company boards, and strengthening democracy at work through diverse forms of ownership including worker-managed and -owned firms. Empowering the associational organization of labor would also help redress the background social conditions that render workers vulnerable to the oligarchic power of their employers.
"There are other examples in which careful design and policy can limit the “noxiousness” of a particular market for democracy. Policies such as a negative income tax can strengthen the power of workers, and campaign finance laws can diminish the power of money in elections. Others have argued for reforms to our current system of commodified legal representation within an adversarial system, and for single-payer health care systems."
Here's her concluding paragraph:
"Beyond education, we need to pay special attention to particular markets that affect democratic functioning and stability. Such markets include but are not limited to markets in legal representation, media and news markets, markets relating to national defense, and markets governing political rights. Politicians and other commentators usually write unreflectively, as if all markets were the same. They are not. Markets affect not only the distribution of income and wealth, but also our capacities, and our views of each other. Their strengths but also their limits depend on the fact that they are radically individualizing. But in some contexts, that individualizing threatens the practice of democracy. Markets have moral and even “spiritual” consequences relevant to our shared public life, and our evaluations of them must also attend to those consequences. A new political economy needs to take this larger evaluative frame into account."
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The next article in the issue is a thoughtful essay on markets for personal care of the young and the elderly, organized in various ways, including care within families, written as a commentary on the Satz article:
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