Saturday, May 28, 2011

Limits on the scope of markets

Tim Sullivan points me to this old post by Abe Othman on his blog Constructive Economics: Horseflesh and Hypocrisy

"T. Boone Pickens, from his autobiography The Luckiest Guy in the World:
I believe the greatest opportunity lies in a free marketplace. There are powerful forces afoot trying to restrict that freedom in the interests of the vested and already wealthy.
"T. Boone Pickens, in congressional testimony on a bill to prevent the slaughter of horses for food:
The whole thing, it’s a boondoggle on the American people…People that are for the slaughter should be forced to go down on that kill floor…The brutal slaughter of horses for consumption by wealthy diners in Europe and Japan cuts against our moral and cultural fiber — it’s just plain un-American.
"Remember, if they can come after the horse slaughterers, they can come after the hedge funds. So if you really believe in free markets, have some horse today!"

I'm inclined to think that Mr. Pickens is  being neither inconsistent nor hypocritical, but rather that he has opinions about the proper scope of markets.

When Steve Leider and I surveyed people on their attitudes towards whether kidneys should be for sale, one set of questions we asked concerned attitudes towards markets.

We measured agreement with statements that markets cause “an unfair distribution of income,” “rewards people fairly,” “lead to an efficient use of resources,” “require a lot of government control,” and are overall “fair and ethical.” However there was no correlation between disliking markets generally and disliking a market for kidneys: if anything, social conservatism was a predictor of dislike of kidney markets, and that was correlated with approval of markets generally. So, a picture began to emerge of people who liked markets generally, but thought they should they should not be extended into certain domains.  Maybe that's the view T. Boone Pickens is expressing.

(See Leider, Stephen and Alvin E. Roth, ''Kidneys for sale: Who disapproves, and why?'' American Journal of Transplantation , 10 (May), 2010, 1221-1227.)

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