In search of a market morality for making real the “Community of Advantage”: a note on Sugden’s “Principle of Mutual Benefit”

In this note I discuss Robert Sugden’s original proposal of a market morality of mutual benefit, thoroughly expounded in his recent Community of Advantage. He envisions that jointly aiming at the benefit of all the parties in a transaction—a motivation different from both self-interest and altruism—can really make the market beneficial for everyone. Yet, such intention may not suffice when the transaction entails considerable negative externalities and these are not remedied by government regulation or intervention, or else when markets are not atomistic and some participants are rationed. So I observe that a morality of mutual benefit among transactors should be complemented by another constraint: not to cause significant undue damages to third parties. While recognizing that general adoption of a morality of mutual benefit would be a momentous step forward, in the end I suggest that the gravity of global problems call for walking some steps even beyond mutual benefit.