I recently heard a podcaster suggest that we sell tickets to weddings.
By replacing the gifts with a charge, newlyweds could avoid those unwanted presents, eliminate no-shows, and get a free party. You could even have different price plans for your poor and rich friends. And imagine not having to write all of those thank you notes.
So why don’t we do it?
This is the story…
What We Cannot Sell
On a list of goods and services that should not be sold, some people would include child labor, sex, body organs, votes, high grades, places on a movie theater line, life saving drugs…We could go on and on.
Instead, let’s decide which goods and services belong on the list through four criteria that indicate when we’ve moved beyond the moral limits of a market:
- insufficient information
- individual harm
- societal harm
The first two criteria are about the inputs we use to create one of the items on our list. We can say for instance that child labor should not be sold because youngsters and teens are too vulnerable. Leaping to stock markets, we can cite insider trading prohibitions that prevent the purchase or sale of securities from someone who has non-public information.
When we move to outcomes, our concern is how much an individual or society is harmed. Here we can use selling the right to pollute as one example. Whether excessive or not, the impact is some level of respiratory disease. We could also ponder that buying votes damages democracy and selling sex increases gender inequality.
You can see that the decision is easy for some of the items. With others though, we should consider the benefits of the market.
Our Bottom Line: The Power of the Market
Long ago, when former Secretary of the Treasury Lawrence Sommers walked past me, I asked him which economic idea I should emphasize in class. Without missing a beat (and not stopping), he said,”the power of the market.”
We could say that markets are a process that shape our identity and values. Through countless individual decisions, they allocate land, labor and capital. Harnessing the power of supply and demand, they encourage innovation and determine quantity, quality, and price. And rather amazingly, free markets are much more efficient and productive than centrally planned production.
Still, I guess we shouldn’t sell those wedding tickets. But it is tempting.
My sources and more: Always interesting, the Planet Money podcast gave me the wedding ticket idea that reminded me of this Econtalk podcast with the author of Why Some Things Should Not Be For Sale (the source of my four criteria). Finally I recommend this video. Michael Sandel is so good at making us ponder dilemmas: