Book Review: Jason Brennan & Peter Jaworski - Markets Without Limits

I had an extremely polarized reaction to this book. Its central question - how exactly does money relate to morality? - is incredibly important, and its answer - if you may do something for free, then you may do it for money - is elucidated in a clear, convincing manner I've never seen anywhere else. I can't say that I fully agree with all of Brennan and Jaworski's arguments, but the main idea itself, that it's not immoral to buy or sell something for money unless it's also immoral to get or give it away for free, is worthy of a long ponder. Indeed, even though this book is clearly written from a libertarian perspective, you often encounter its central argument coming from "the left" in a surprising number of areas, even from those who don't subscribe to the infamous label "neoliberal", so it probably isn't all wrong. The notion that commodification introduces ethical problems is nearly universal, but lots of things are or were universal without being correct, and I think the logic here is strong enough that it's worthy of being promoted to the default view, in a John Stuart Mill sense, where the burden of proof should generally be on the side of market opposition and that we shouldn't restrict markets unless they can be shown to cause harm. However, the authors fail to convince in several specific areas where they don't engage with empirical evidence, such as when they try to argue that it should be legal to buy and sell votes, and their disengagement with many obvious real-world counter-examples means that even though I find the basic idea extremely compelling, much of the book falls into "nice in theory but maybe not in practice" territory.

One of the best running gags in Philip K Dick's Ubik, one of my favorite science fiction novels, is how awful a completely commodified future could be. Point of sale transactions are everywhere, and there's a great scene where the main character has to pay the door in his apartment to pass through it; without enough change to pay the door, he grabs a knife to start unscrewing it while the door threatens to sue him. Ever since I read it I agreed with the unspoken anti-capitalist logic: some things can be monetized out of great necessity, but by default market transactions are alienating and impersonal, and to pass through a door without paying is the very nexus of free and freedom. Yet after reading this book, I think there's a different lesson to be had: it's not that paying for doors is somehow wrong (after all, it costs money to make a door, thousands if not tens of thousands of people pay for door installation without a second thought every single day, and essentially all of us have paid for doors directly or indirectly via rent or mortgage payments), it's just that the micropayments model is inappropriate for doors for exactly the same reasons that Clay Shirky explained made it inappropriate for websites way back in 2000: transaction costs make many small payments far more inconvenient than a single simple door purchase. That's not the same thing as saying that doors shouldn't cost money, still less that buying and selling doors is immoral, and the authors expand on this basic idea and run with it for 200 pages. They outline 7 dimensions of market manner, and argue that many objections to markets are really objections to particular combinations of market manners, when other combinations would be perfectly fine. Those 7 dimensions are:

1. Participants (buyer, seller, middleman, broker, etc.)
2. Means of exchange (money, barter, local currency, bitcoins, gift cards, etc.)
3. Price (high, low, moderate, etc.)
4. Proportion / Distribution (how much each party gets)
5. Mode of exchange (auction, lottery, bazaar, co-op, etc.)
6. Mode of payment (salary, scholarship, tip, charitable contribution, etc.)
7. Motive of exchange (for-profit, public benefit, cost-recovery, non-profit, charitable, etc.)

A socialist would immediately respond that even the mundane door market you find at Home Depot is still inherently immoral for the same reason that all markets are immoral: the exploitation and alienation of worker labor is wrong, full stop. I'm not a socialist and I disagree with that analysis, so a more interesting debate to have in my opinion is how the decision to buy or sell something affects our understanding of its "inherent" worth, given the failure of alternative models like the labor theory of value (as they astutely point out, "Marx thought that the value of the product was determined by the value of the labor that went into the product. On the contrary, it’s closer to the truth that the value of the labor that goes into the product is determined by the value of the product").

Libertarianism is hardly a less controversial framework than socialism for analyzing value, of course, but one benefit of neoclassical economics, or whatever you want to call the logic behind capitalism, is that it gives us perhaps the closest thing to a true utilitarian methodology we've yet discovered to compare the worth of things to different people, and the more you go looking for examples of seemingly "purely moral" situations where markets have not only not corrupted morality but improved people's lives the more you find. Karl Polanyi's fascinating The Great Transformation argued that markets have social contexts, and that even though the gradual introduction of markets irrevocably transformed the communal peasant societies of Europe into the liberal capitalist societies we see today, that there is no such thing as true laissez faire because you cannot truly separate a marketplace from the people in it, who act to protect themselves from its negative aspects. But are the downsides of markets inherent to markets as a whole, or only particular marketplaces where the 7 dimensions have been combined inappropriately? The Ubik door scene shows that it's possible to make door shopping into a completely normal and mundane part of life rather than a nightmarish dystopia, but there are plenty of other examples of where creating markets in things that were previously off-limits is not only normal but good.

One of Brennan and Jaworski's go-to examples is life insurance, particularly for children. In a world where life insurance doesn't exist, putting a price on the life of a child by means of paying a monthly premium to a company that will cut you a big check if the child dies sounds incredibly immoral and outrageous, if not like a perverse incentive for infanticide. However, in a world where life insurance is normal, it's opting out of life insurance that seems, at best, like a personal idiosyncrasy, whereas insuring your child is the adult and responsible thing to do. Furthermore, proposals to make the payouts of the gigantic life insurance system called Social Security stronger, and to bring more people into the gigantic health insurance system called Medicare, are not only perfectly orthodox left-wing ideas, they're supported even by socialists! So it's tough to argue that putting a price on human life is wrong in all contexts (note that paying for Medicare via payroll taxes instead of monthly premiums does not change the logic here), and it's easy to show that pricing human life can actually make us more careful and aware of each other. Remember that the idea is that markets don't introduce immorality where there was none before, so while it's still possible to have callous individuals and even murderers in a universally insured population, if they would have committed their murders anyway then it's hard to argue that insurance made them do it. And while murders for insurance money do of course happen, I think most people correctly see that scenario as an extremely rare perversion of an otherwise well-functioning system, and would hardly welcome the abolition of life insurance to "solve" that problem.

In that spirit, the authors group moral objections to commodification into 7 types, with the seventh having three forms:

1. Exploitation: Markets in some good or service - such as organ sales - might encourage the strong to exploit (to take unjust advantage of) the vulnerable.
2. Misallocation: Markets in certain goods and services - such as Ivy League admissions - might cause those goods to be allocated unjustly.
3. Rights Violations: Markets in some good - such as slaves - might violate people's rights.
4. Paternalism: Markets in some good or service - such as crystal meth or cigarettes - might cause people to make self-destructive choices.
5. Harm to Others: Markets in some good or service - such as pit bulls or handguns - might lead to greater violence.
6. Corruption: Participating in certain markets - such as buying luxury goods for oneself or Disney Princesses for one's daughters - will tend to cause us to develop defective preferences or character traits.
7. Semiotics: Independently of objections 1-6, to allow a market in some good or service X is a form of communication that expresses the wrong attitude toward X or expresses an attitude that is incompatible with the intrinsic dignity of X, or would show disrespect or irreverence for some practice, custom, belief, or relationship with which X is associated. Three forms of this:
1. The Mere Commodity Objection: Claims that buying and selling certain goods or services shows that one regards them as having merely instrumental value.
2. The Wrong Signal Objection: Claims that buying and selling certain goods and services communicates, independently of one's attitudes, disrespect for the objects in question.
3. The Wrong Currency Objection: Claims that inserting markets and money into certain kinds of relationships communicates estrangement and distance, and is objectionably impersonal.

In many cases, it seems like the fundamental objection is not the exchange of money, but the thing itself, and the most classic example of the intersection of money and morality where the typically "left" position is to support commodification is prostitution. Again, a perfectly consistent socialist position is that sex work, like all work, is fundamentally exploitative, but in practice, support for the legalization of exchanging money for sex is hardly a right-wing or exclusively libertarian idea in America today, and there are many impeccably leftist organizations attempting to alter prostitution regulations to protect workers or to organize them into unions to increase their bargaining power (i.e. to increase their wages, among other things). It's hard to see how legalizing prostitution harms sex workers relative to the status quo, and likewise, if a government were to suddenly criminalize a previously legal prostitution market, I don't think we would see that as helping or empowering them either.

Any use of those 7 moral objections about worker safety, consumer protection, power imbalances, or even sexual morality against a market for sex work has to grapple with the fact that most of them apply equally to the current absence of a market for sex work. The argument of "if you may do it for free, you may do it for money" is that there is no moral dividing line between a consensual one-night stand and a consensual visit to a prostitute, and that the addition of money doesn't in and of itself turn something that was okay into something that's not okay or vice versa. That seems correct to me, and it tracks with a similar argument about money in sports: at one point Olympic athletes were lauded as the same kind of "noble amateurs" that NCAA athletes are today; now no one blinks at Olympic athletes being firmly embedded in commerce, and it seems inevitable that college athletes will someday be paid as well, since it's the lack of payments to players which is the exploitation there. Brennan and Jaworski have many similar examples.

I don't want to sound unabashedly positive about the book, because I'm not. They insist correctly that empirical evidence should be the standard, but evidence is mighty scanty in the book itself, and their attempts to sum up vast fields of research in just a few "some studies say" paragraphs in order to argue for more markets are often spectacularly unconvincing. There's a bit on how paying for college admissions is just fine that feels particularly ill-timed in light of the "Operation Varsity Blues" admissions scandal, and at various points they weigh in on such weighty topics as whether markets necessarily "solve" racism or sexism, or whether school choice/vouchers have reduced costs without sacrificing quality, or whether it's a good idea to introduce tiered pricing for adopted babies based on their race and market demand, etc, in a manner that's anything but empirical. Does private industry or the government build better roads? A smart person could think of all sorts of philosophical rationales for one or the other, or even a combination of the two, but the fact that there is not a single obvious answer in the real world should make you skeptical of claims to be able to produce definitive public policy guidelines based on pure logic alone. These digressions are especially frustrating because strictly speaking they have nothing to do with the book's core thesis whatsoever. A government department building a road via tax revenue is in practice not much different than a private contractor building a road via bonds backed by expected future toll revenue, and though I agree that things like congestion pricing, which is a market for space on the highway during rush hour, would be helpful, it's not like you don't have underpaid women/minorities, failing charter schools, or discriminatory restaurants in the real world.

The nadir of their style of argumentation is in chapter 19, which is about vote-selling. Specifically, Brennan and Jaworski hope to show that, using the same "if you may do it for free, then you may do it for money" theorem which has served them so well so far, since it's totally fine for us to attempt to persuade each other to vote a particular way using words, that it is therefore perfectly kosher to take the next step and simply allow paying people to change their vote or stay home. Politicians already compete for votes in a market-like manner, voters in safe states already sometimes "trade" votes with voters in swing states, and spending money on campaigns is already often enough to make the difference in close elections, so let's just go ahead and legalize the outright purchase of votes. A lot of the heavy lifting in this chapter is done offscreen, by way of references to The Ethics of Voting, another of Brennan's books (he thinks that since most people are fairly uninformed, they shouldn't vote), and since it's boring to dive too deeply into artificial theories of voting on Justified True Beliefs wherein I the rational actor attempt to translate my ethical convictions into policy outcomes via the ballot box based on mechanistic cost-benefit incentives, I'll refrain.

Instead I'll just say that their thought experiment involving Ignorant Ignacio, Careless Carla, and Lackadaisical Loren to "prove" that buying votes is fine given the existence of stupid or lazy voters is wholly unsatisfying, and the complete absence of engagement with literally any political science literature is so brazen as to be almost comical, and in fact when I read this chapter I was in danger of throwing out the whole book in a rage despite agreeing with so much of it. I don't care if you think Citizens United was a good or bad decision, or if you think George Soros is better or worse than the Koch brothers, or how much public choice literature you have or haven't read, or if you do or don't generally trust politicians - anyone can set up a trolley problem where the moneyed elite being able to buy elections is good, actually, but reading about literally any corruption or election fraud scandal in history should be reason enough to pause when someone says that abandoning the democratic franchise in favor of giving powerful interests even more power will work out just great, trust me. Imagine using and trusting this system for even something as trivial as American Idol winners and it's laughable. Not even the Libertarian Party would choose to run its party primaries in this manner, allowing anyone with enough money (gold bars?) to simply purchase the nomination. It's like they read libertarian pundit PJ O'Rourke's quip that "When buying and selling are controlled by legislation, the first things to be bought and sold are legislators", and thought "yes, more of this".

Now, Brennan and Jaworski are perfectly aware of reactions like mine, and the final section of the book is devoted to why I'm wrong to have strong negative emotional reactions to insane proposals to legalize vote-fixing. Once again, in the most abstract terms their analysis makes perfect sense: time and again in history, people have said that markets are bad, and yet after markets were introduced, they turned out to be just fine and indeed irreplaceable. Douglas Irwin's excellent book Against the Tide recounts how weak arguments against the concept of free trade have been unkillable for thousands of years no matter how many times they're refuted, and Brennan and Jaworski are going for the same sort of thing here with respect to introducing markets in general. Disgust is a strong but unreliable guide to morality, and organ sales are a good example of how deadly emotion-based thinking can be - we laud an individual who donates a kidney to help out a stranger, but a real market in kidneys and other organs would be vastly more efficient, and we shouldn't let urban legends or sci-fi dystopias scare us out of saving many lives via market mechanisms in the same way as we shouldn't eliminate insurance systems because of lurid but extremely rare tabloid murders. So they are correct, in a sense, that my occasionally incredulous reactions fit into a general reactionary pattern, and that since I and many other liberals happily donate money to political campaigns to get our desired outcomes achieved via electoral success, it could theoretically be cheaper for us all to just cut out the campaign middlemen and simply pay our fellow citizens directly to vote our way.

Well, maybe. I feel bad concluding that "the authors are correct in a general sense yet incorrect in specific examples for reasons that I won't explain", so I will instead say that they include enough great examples of how markets not only don't corrupt virtues but enhance them to earn them a place in my mental toolbox regardless of the CITATIONS NEEDED sections, particularly with their taxonomies of market dimensions and moral objections to markets. They're absolutely right that we shouldn't think that store-bought flowers for a loved one are worse than garden-grown flowers, or that pet owners who have bought their pets from a store love them any less than owners who were given their pets by friends, or that managing demand by charging higher prices is less moral than creating giant queues (the BBQ joint Franklin in my city of Austin is infamous for forcing people to waste their time in 4-hour lines because Aaron Franklin refuses to either raise his brisket prices or expand his capacity beyond his personal control). In fact, one of the examples that they used in their own book, where they sold various levels of acknowledgements in a tiered pricing model, was disarmingly funny enough that it also seemed profound: if the concept of meaningful, heartfelt acknowledgements isn't ruined for everyone by a few authors deciding to auction off inclusion instead of following the typical spouse/children/parents pattern, what else could safely accommodate this model? Quite a lot, it seems, because one of the major advantages of capitalism is that it can transform zero-sum conflicts into positive-sum transactions. Just perhaps not quite as many transactions as they claim.

Book Review: Austin to ATX

Quite where the boundary is between love for your hometown and simple narcissism is I don't know, but while the majority of the market for this book is probably limited to hardcore Austin navel-gazers like myself, since it does not attempt to provide a Grand Unified Theory of why Austin made the transition from small/poor/weird to big/rich/cool while other cities did not, it's certainly the best general cultural history of Austin that I've read. Patoski has really done his homework, digging deep into the archives for informed historical context and then leavening that research with revealing interviews of luminaries like Lance Armstrong, Richard Linklater, Liz Lambert, and a bunch more. Austin has always seemed to me like a large small town where everyone was only a few degrees away from everyone else, so I got a lot of pleasure out of learning more about the incredible web of connections between the people who turned Austin into a hotspot in food, music, film, tech, and so on. If you live here, even if you only showed up yesterday, you're participating in one of the fastest demographic and economic transitions in modern American history, and while I freely admit that there's almost no Austin-themed book that's too self-indulgent for my tastes, I think even a non-Austinite could enjoy this, if only for Patoski's real affection for the city. That, and the fact that you could construct quite a few great playlists out of the musicians he discusses.

Each chapter is immensely absorbing and offers a lot to ponder, but several recurring themes finally converged in my mind during the antepenultimate chapter "Keeping Austin Weird (The Looky-Loos)", which discusses how tourism has become an essential part of Austin's economy, and the complex reactions that that shift has engendered among us locals in an era when it seems like the city has been changing faster than ever. Everywhere that draws large numbers of tourists, or "looky-loos", has a basic dilemma: visitors bring in a great deal of revenue for businesses, often far more than locals do, and so selling Austin-ness to willing non-Austinites is not only a perfectly valid economic strategy for many entrepreneurs, tourism might as well be synonymous with being a "real city". The more people have a good time in Austin, the better off Austin is for it. This also cements Austin's place as a tastemaker, and one of the best places in the country to be a fan, broadly defined (Alamo is a movie fan's theater, bands of the world flock to our music festivals, Whole Foods redefines grocery stores, etc). However, even if the concentrated benefits to businesses handily outweigh the cumulative congestion and infrastructure costs to the city at large as our enterprises rake in hundreds of million of dollars, the distribution can be sufficiently out of whack to breed resentment and anger among the natives.

These concerns about growth and equity are also tied into the diversity paradox, which Patoski doesn't explicitly identify but which I think longtime residents feel implicitly, and which is also probably inevitable in any city that makes the parochial-cosmopolitan transition. Put simply, cultural exchange with other cities makes Austin more diverse yet less special at the same time. As Austin gets more diverse by exchanging stuff with other cities, we also start to resemble those places ever more closely, until the things that made us distinct are now universal because diversity increases on a local level at the same time as it decreases on a local level. We import NYC pizza, Hawaiian poke joints, and San Diego burritos, and export breakfast tacos, barbecue, and outlaw country artists right back. We're just not quite as special anymore, to the extent that we ever were, and yet people continue to arrive, because as an economist will point out, specialization increases with the extent of the market, and so size and variety combine in a virtuous cycle even as there are seemingly ever fewer "authentic" local experiences, however you want to define that. It also goes without saying that much of this bounty hasn't trickled down to the less fortunate sectors of the city either, who find their influence shrinking as the rest of the city seemingly leaves them behind.

Austin is hardly the first city to experience these dynamics, and one can only imagine a resident of Venice, New Orleans, or Paris rolling their eyes at our quaint complaints that there's an inherent difficulty in keeping yourself unique while the world wanders slowly up the sidewalk in front of you trying to take too many selfies. But even if the irritation someone feels at a tourist treating their city like a big Instagram backdrop is only natural (the chapter opens with a discussion of the infamous "I love you so much" graffiti wall at Jo's, which frequently causes traffic backups that I have personally had to endure), that peeving is ultimately self-defeating. A steady stream of people is enlarging Austin from a small pond to a big pond, and what kind of awful fish tries to build a dam upstream just to monopolize a particular riparium? Who would be helped if someone had discouraged you, or your parents, from moving here? If, as Patoski so copiously documents, the "good old days" of Austin consistently seem to have been just about 20 years ago, then right now is as good as time as any to live here. "Weird" might not be glamorous to everyone, particularly in bumper sticker form, but evidently the spirit that the word represents continues to charm.

Lame marketing slogans aside, the city we live in was built by a parade of self-described misfits coming to Austin, finding that they were home, and then doing something cool that even people outside of Austin liked. Creativity is the only thing that has a permanent place here. To the extent that Austin continues to enable that same ability to flourish and grow it will have preserved its spirit, and likewise it will have failed to the extent that the modern slacker finds that here is no place to dream. Seen in that light, while Austin has in no way been perfect in its past, the explosive growth that surrounds us is just a continuation of the trend that began with our founding, and while we might not be heaven on earth, we're pretty damn great, and the the more like-minded people who fall in love with the hills, the springs, and the river that provide our habitat, the better the future will be for us all. Austin is the kind of city that inspires this kind of passionate prolixity that strikes outsiders as so tedious yet so bewitching, and while far be it from me to tell anyone else the "right way" to be an Austinite, a failure to welcome the future is one of the surest ways to be wrong.