Markets, Repugnance, and Externalities

Abstract

This Article considers one aspect of the ongoing debate about the moral limits of markets—namely, the purported harmful effects of market transactions on particular relations, goods, services, or society at large, due to an inappropriate valuation. In other words, the argument is that some markets are “repugnant” because they degrade and corrupt a variety of nonmarket values and relations, not just to the willing parties to the exchange, but to larger segments of society.

This objection contains both a (frequently unacknowledged) empirical component and a moral component. This Article critiques these empirical claims on two grounds. First, market skeptics fail to provide evidence of the negative effects they hypothesize, despite widespread variation over time and across legal regimes. Second, these objections fail to account for the well-documented human tendency to fashion repugnant exchanges in a manner that reinforces—rather than undermines—deeply held values and relationships.

Keywords: Repugnance, markets, corruption, externalities

JEL Classification: K00, K32, K36, K42