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Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy

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  • Michael J. Sandel

Abstract

In my book What Money Can't Buy: The Moral Limits of Markets (2012), I try to show that market values and market reasoning increasingly reach into spheres of life previously governed by nonmarket norms. I argue that this tendency is troubling; putting a price on every human activity erodes certain moral and civic goods worth caring about. We therefore need a public debate about where markets serve the public good and where they don't belong. In this article, I would like to develop a related theme: When it comes to deciding whether this or that good should be allocated by the market or by nonmarket principles, economics is a poor guide. Deciding which social practices should be governed by market mechanisms requires a form of economic reasoning that is bound up with moral reasoning. But mainstream economic thinking currently asserts its independence from the contested terrain of moral and political philosophy. If economics is to help us decide where markets serve the public good and where they don't belong, it should relinquish the claim to be a value-neutral science and reconnect with its origins in moral and political philosophy.

Suggested Citation

  • Michael J. Sandel, 2013. "Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 121-140, Fall.
  • Handle: RePEc:aea:jecper:v:27:y:2013:i:4:p:121-40 Note: DOI: 10.1257/jep.27.4.121
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    References listed on IDEAS

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    1. Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
    2. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, pages 746-755.
    3. Howard Kunreuther & Doug Easterling, 1996. "The role of compensation in siting hazardous facilities," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 601-622.
    4. David de la Croix & Axel Gosseries, 2007. "Procreation, Migration and Tradable Quotas," Chapters,in: Population Aging, Intergenerational Transfers and the Macroeconomy, chapter 9 Edward Elgar Publishing.
    5. Timothy Besley, 2013. "What's the Good of the Market? An Essay on Michael Sandel's What Money Can't Buy," Journal of Economic Literature, American Economic Association, pages 478-495.
    6. Janssen, Maarten C. W. & Mendys-Kamphorst, Ewa, 2004. "The price of a price: on the crowding out and in of social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 377-395, November.
    7. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
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    Cited by:

    1. repec:eee:ecolec:v:143:y:2018:i:c:p:286-293 is not listed on IDEAS
    2. Herrmann-Pillath, Carsten, 2015. "Energy, growth, and evolution: Towards a naturalistic ontology of economics," Ecological Economics, Elsevier, vol. 119(C), pages 432-442.
    3. Yew-Kwang NG, 2016. "Extending Economic Analysis to Analyze Policy Issues More Broadly," Economic Growth Centre Working Paper Series 1609, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    4. repec:spr:sochwe:v:49:y:2017:i:2:d:10.1007_s00355-017-1058-4 is not listed on IDEAS
    5. Vipul Bhatt & Masao Ogaki & Yuichi Yaguchi, 2014. "A Reformulation of Normative Economics for Models with Endogenous Preferences," IMES Discussion Paper Series 14-E-02, Institute for Monetary and Economic Studies, Bank of Japan.
    6. Strunz, Sebastian & Klauer, Bernd & Ring, Irene & Schiller, Johannes, 2014. "Between Scylla and Charybdis: On the place of economic methods and concepts within ecological economics," UFZ Discussion Papers 26/2014, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    7. Jordi Brandts & Arno Riedl, 2015. "Market Interaction and Efficient Cooperation," Working Papers 868, Barcelona Graduate School of Economics.
    8. Sandmo, Agnar, 2014. "The Market in Economics: Behavioural Assumptions and Value Judgments," Discussion Paper Series in Economics 12/2014, Department of Economics, Norwegian School of Economics.
    9. Konow, James, 2016. "Does Studying Ethics Affect Moral Views? An Application to Distributive Justice," MPRA Paper 75377, University Library of Munich, Germany.
    10. Brandts J. & Riedl A.M., 2016. "Market competition and efficient cooperation," Research Memorandum 006, Maastricht University, Graduate School of Business and Economics (GSBE).

    More about this item

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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