The Author’s Corner with Brian Luskey

men is cheapBrian Luskey is Associate Professor of History at West Virginia University. This interview is based on his new book, Men is Cheap: Exposing the Frauds of Free Labor in Civil War America (The University of North Carolina Press, 2020).

JF: What led you to write Men is Cheap?

BL: My book illuminates three interests of mine–the importance of middlemen in the nineteenth-century American economy, the cultural conversation about bad businessmen in this era, and the economic history of ordinary people in the Civil War–and constitutes my attempt to show that these themes intersect with each other.

JF: In two sentences, what is the argument of Men is Cheap?

BL: Fought to uphold the ideal of “free labor,” the war for Union encouraged Northern entrepreneurs, employers, and soldiers to envision their impending success through the accumulation of capital, and Yankees often sought the independence that capital purchased by employing laborers whom the war had made vulnerable. The war seemed to offer some Northerners opportunities to get rich because it clarified that other Americans were poor.

JF: Why do we need to read Men is Cheap?

BL: My book shows how the Civil War and the wage labor economy shaped each other. It is about labor brokers–failed businessmen, recruiters, officers, soldiers, and bounty men–who facilitated the movement of workers–Irish immigrants, former slaves, Confederate deserters, and Union soldiers and veterans–to work in the army and in northern households during the Civil War. The economic activities of these brokers and the cultural conflict about them reveal the nature and limits of free labor ideology as northern employers sought to benefit from the destruction of slavery and slavery’s capital during the war.

JF: When and why did you decide to become an American historian?

BL: I’ve been interested in American History since a family trip to the Gettysburg battlefield when I was eight years old. My parents bought me Bruce Catton’s The American Heritage Picture History of the Civil War and I was hooked. But it wasn’t until I was a student at Davidson College when mentors such as Vivien Dietz, John Wertheimer, and Sally McMillen taught me not only how to be a good historian but also that being an academic historian was a career option. I fell in love with historical research and writing under their tutelage, and the rest is history.

JF: What is your next project?

BL: Honestly, I don’t know what my next book will be about, but I’m preparing to write an article about the relationships Abraham and Mary Lincoln forged with laboring people and the ways the Lincolns served as labor brokers in the Civil War Era.

JF: Thanks, Brian!

“There is no functioning, stable, globalized world of the future without the humanities”

GLobal commerce

Karen E. Spierling is an associate professor of history and director of global commerce at Denison University in Granville, Ohio.  She believes that the humanities must “go on the offensive.”  Here is a taste of her piece at The Chronicle of Higher Education:

It is time for humanists to go on the offensive. Not by shoring up our silos or rejecting collaboration with nonhumanists. Not by insisting that the nature of the humanities is somehow unchanging across time and place and, thus, of ineffable and universal value. And not by giving in to the pressure to reduce the goals of our teaching to producing students who can manage both spoken and written communication effectively. (This is certainly an inherent product of humanities teaching, but not an isolated goal.)

Instead, we must make clear what we ourselves already understand: There is no functioning, stable, globalized world of the future without the humanities.

A world based on the constant global exchange of information, goods, services, and money depends upon an increasing need to rapidly access another person’s or organization’s point of view, cultural assumptions, and social norms. In a world where exchanges of all kinds rely on technology and big data, some of the greatest potential pitfalls come not in the numbers but in the interpretation of those numbers, the communication strategies needed to carry out initiatives based on those numbers, and the relationship-building areas of all types of work.

Functioning effectively in a globalized society — in business, politics, medicine, education, daily interactions with immigrants in one’s own community, or daily interactions with locals in the community into which one has immigrated — requires the skill of rigorous, critical, empathetic thinking.

Not just run-of-the-mill empathy. Not a wishy-washy definition of empathy that reduces it to natural feelings or emotions. Not just instinctive “people skills.” Not some kind of imagined empathy that depends on a person’s inherent ability to listen well and think from another person’s point of view. Not touchy-feely but uninformed sympathy for “those less fortunate” in other parts of the world. Instead, navigating this globalized world requires sophisticated, well-honed skills of empathy.

Rigorous, critical, empathetic thinking. How else are we to understand the experiences and points of view of co-workers, trading partners, or colleagues who live long distances from us? There are limits to global travel, and those limits are becoming more glaring as our climate-change crisis picks up speed. There are limits to technology — even with all of its benefits — and to how we communicate through video chats and instantaneous texting. There are limits to how much time and energy we can invest in moving to another place and immersing ourselves physically in the cultural practices of another society.

Read the entire piece here.

Economists Make the Case for More History Majors:

ShillerOver at The Washington Post, Heather Long calls our attention to Nobel Prize-winning economist Robert Shiller’s new book Narrative Economics: How Stories Go Viral & Drive Major Economic Events.  Here is a taste of her piece:

As humanities majors slump to the lowest level in decades, calls are coming from surprising places for a revival. Some prominent economists are making the case for why it still makes a lot of sense to major (or at least take classes) in humanities alongside more technical fields.

Nobel Prize winner Robert Shiller’s new book “Narrative Economics” opens with him reminiscing about an enlightening history class he took as an undergraduate at the University of Michigan. He wrote that what he learned about the Great Depression was far more useful in understanding the period of economic and financial turmoil than anything he learned in his economic courses.

The whole premise of Shiller’s book is that stories matter. What people tell each other can have profound implications on markets — and the overall economy. Examples include the “get rich quick” stories about bitcoin or the “anyone can be a homeowner” stories that helped drive the housing bubble.

“Traditional economic approaches fail to examine the role of public beliefs in major economic events — that is, narrative,’ Shiller wrote. “Economists can best advance their science by developing and incorporating into it the art of narrative economics.”

Shiller, who is famous for predicting the dot-com crash and coming up with the Case-Shiller Home Price Index, is spending a lot of time looking at old newspaper clippings to understand what stories and terms went viral and how they influenced people to buy things — or stop buying things.

When asked if he’s essentially arguing for more English and history majors, Shiller said, “I think so,” adding: “Compartmentalization of intellectual life is bad.”

Read the entire piece here.  Of course I have been making this case here and elsewhere for a long time.  We need more story-tellers!

Study: U.S. Billionaires Paid a Lower Tax Rate than the Working Class

Triumph of InjusticeIn 2018, American billionaires paid a lower tax rate than than the working class.  This is the first time in this has ever happened.

Here is Chris Ingraham’s piece at The Washington Post:

A new book-length study on the tax burden of the ultrarich begins with a startling finding: In 2018, for the first time in history, America’s richest billionaires paid a lower effective tax rate than the working class.

The Triumph of Injustice,” by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.

In 1980, by contrast, the 400 richest had an effective tax rate of 47 percent. In 1960, their tax rate was as high as 56 percent. The effective tax rate paid by the bottom 50 percent, by contrast, has changed little over time.

The analysis differs from many other published estimates of tax burdens by encompassing the totality of taxes Americans pay: not just federal income taxes but also corporate taxes, as well as taxes paid at the state and local levels. It also includes the burden of about $250 billion of what Saez and Zucman call “indirect taxes,” such as licenses for motor vehicles and businesses.

Read the rest here.

The Author’s Corner with Peter Guardino

510sRclx3YL._SX327_BO1,204,203,200_Peter Guardino is Professor of History at Indiana University–Bloomington. This interview is based on his new book, The Dead March: A History of the Mexican-American War (Harvard University Press, 2017). 

JF: What led you to write The Dead March?

PG: I wrote The Dead March because I was deeply dissatisfied with many of the things that both the general public and academic historians in the United States and Mexico believed about this crucial war. Most writing about the war still contained ideas about both countries that had first become embedded in conventional wisdom during the nineteenth century as an increasingly racist United States rose to become a world power. More recent and professional research has debunked or called into question many of these ideas. It was time to reexamine the war in the light of what we know now, and with new primary research. I also felt that a social history of this war would tell us much about both Mexico and the United States during the period.

JF: In 2 sentences, what is the argument of The Dead March?

PG: When we look at the Mexican-American War through the experiences of common people in both countries, it becomes clear that Mexico lost this war not because Mexicans were less committed to their nation but because Mexico’s economy was not as strong as the U.S. economy. Both national governments were still in the process of building national institutions and convincing people that loyalty to the nation should be more important than other forms of identity.

JF: Why do we need to read The Dead March?

PG: This war shaped the continent in dramatic ways, and it is best understood through the motivations and stories of the regular people who experienced the violent battles, the diseases that stalked American military camps, the atrocities inflicted on Mexican civilians, and the hunger that shaped the lives of Mexican soldiers and civilians. The political, strategic and tactical choices made by politicians and officers were important, but the social and economic realities of the two countries always shaped those choices. Researching and writing this book helped me learn an enormous amount about both the United States and Mexico, and I hope reading it will inform and entertain others.

JF: When and why did you decide to become an American historian?

PG: My path toward researching US history has been anything but direct. I have been fascinated by history for as long as I can remember, but in college I became interested in the history of Mexico. I focused my research almost completely on Mexican history through two books, many articles, and decades of teaching. Still, I was always dissatisfied with the ways in which our visions of Latin American history are often implicitly comparative: Latin American history is largely constructed as a story of the region’s relative lack of political stability, democracy, and economic development. Because that comparison is implicit it is usually intellectually weak, with people comparing idealized versions of the history of the United States or Western Europe to exaggerated versions of Latin American failures. It was the desire for better comparison that led me to write a book about an event that the US and Mexico shared, and that led me to serious research about American history in both secondary and primary sources. Oddly, I didn’t become a historian of the United States until I had been a Mexicanist for decades.

JF: What is your next project?

PG: Well, I am trying to figure that out now. I remain interested in the early nineteenth century in both the United States and Mexico. I have begun some very preliminary research for a new project focused on the 1820s and 1830s. Both countries dramatically expanded suffrage and experienced the development of mass political parties in this period, but in other ways they were quite different. Jacksonian Democracy was about expanding the participation of white males in formal politics while limiting the rights of racial others. Race also shaped social hierarchies in Mexico, but it had no formal political or legal role: Mexico abolished slavery, and all males, regardless of race, could vote. In fact, officials no longer even recorded racial identities in official documents. The contrast is fascinating, and I am hoping to write a book about this.

JF: Thanks, Peter!

It’s “Infrastructure Week”

Trump economic

In about twenty minutes James Comey will be speaking before the Senate Intelligence Committee.

I guess this whole “Infrastructure Week” thing did not work out very well for the Trump administration.

Over at The Atlantic, Derek Thompson moves the conversation beyond infrastructure and wonders if Trump has any economic policy.

Here is a taste:

On Monday, the administration announced a plan to spend $200 billion on infrastructure and overhaul U.S. air traffic control. There was a high-profile signing in the East Wing before dozens of cheering lawmakers and industry titans. It was supposed to be the beginning of a weeklong push to fix America’s roads, bridges, and airports.

But in the next two days, Trump spent more energy burning metaphorical bridges than trying to build literal ones. He could have stayed on message for several hours, gathered Democrats and Republicans to discuss a bipartisan agreement, and announced a timeframe. Instead he quickly turned his attention to Twitter to accuse media companies of “Fake News” while undermining an alliance with Qatar based on what may be, fittingly, a fake news story.

It’s a microcosm of this administration’s approach to public policy. A high-profile announcement, coupled with an ambitious promise, subsumed by an unrelated, self-inflicted public-relations crisis, followed by … nothing.

The secret of the Trump infrastructure plan is: There is no infrastructure plan. Just like there is no White House tax plan. Just like there was no White House health care plan. More than 120 days into Trump’s term in a unified Republican government, Trump’s policy accomplishments have been more in the subtraction category (e.g., stripping away environmental regulations) than addition. The president has signed no major legislation and left significant portions of federal agencies unstaffed, as U.S. courts have blocked what would be his most significant policy achievement, the legally dubious immigration ban.

The simplest summary of White House economic policy to date is four words long: There is no policy.

Read the rest here.

Rich People are Immoral

wealth-05This is the argument made by journalist  A.Q. Smith at the website of Current Affairs: A Magazine of Politics and Culture.  

Here is a taste of his essay “It’s Basically Just Immoral to be Rich.”

Of course, when you start talking about whether it is moral to be rich, you end up heading down some difficult logical paths. If I am obligated to use my wealth to help people, am I not obligated to keep doing so until I am myself a pauper? Surely this obligation attaches to anyone who consumes luxuries they do not need, or who has some savings that they are not spending on malaria treatment for children. But the central point I want to make here is that the moral duty becomes greater the more wealth you have. If you end up with a $50,000 a year or $100,000 a year salary, we can debate what amount you should spend on helping other people. But if you earn $250,000 or 1 million, it’s quite clear that the bulk of your income should be given away. You can live very comfortably on $100,000 or so and have luxury and indulgence, so anything beyond is almost indisputably indefensible. And the super-rich, the infamous “millionaires and billionaires”, are constantly squandering resources that could be used to create wonderful and humane things. If you’re a billionaire, you could literally open a hospital and make it free. You could buy up a bunch of abandoned Baltimore rowhouses, do them up, and give them to families. You could help make sure no child ever had to go without lunch.

We can define something like a “maximum moral income” beyond which it’s obviously inexcusable not to give away all of your money. It might be 50 thousand. Call it 100, though. Per person. With an additional 50 allowed per child. This means two parents with a child can still earn $250,000! That’s so much money. And you can keep it. But everyone who earns anything beyond it is obligated to give the excess away in its entirety. The refusal to do so means intentionally allowing others to suffer, a statement which is true regardless of whether you “earned” or “deserved” the income you were originally given. (Personally, I think the maximum moral income is probably much lower, but let’s just set it here so that everyone can agree on it. I do tend to think that moral requirements should be attainable in practice, and a $30k threshold would actually require people experience some deprivation whereas a $100k threshold indisputably still leaves you with an incredibly comfortable lifestyle better than almost any other had by anyone in history.)

Of course, wealthy people do give away money, but so often in piecemeal and self-interested and foolish ways. They’ll donate to colleges with huge endowments to get needless buildings built and named after them. David Geffen will pay to open a school for the children of wealthy university faculty, and somehow be praised for it. Mark Zuckerberg will squander millions of dollars trying to fix Newark’s schools by hiring $1000-a-day-consultants. Brad Pitt will try to build homes for Katrina victims in New Orleans, but will insist that they’re architecturally cutting-edge and funky looking, instead of just trying to make as many simple houses as possible. Just as the rich can’t be trusted to spend their money well generally, they’re colossally terrible at giving it away. This is because so much is about self-aggrandizement, and “philanthropy” is far more about the donor than the donee. Furthermore, if you’re a multi-billionaire, giving away $1 billion is morally meaningless. If you’ve got $3 billion, and you give away 1, you’re still incredibly wealthy, and thus still harming many people through your retention of wealth. You have to get rid of all of it, beyond the maximum moral income. 

The central point, however, is this: it is not justifiable to retain vast wealth. This is because that wealth has the potential to help people who are suffering, and by not helping them you are letting them suffer. It does not make a difference whether you earned the vast wealth. The point is that you have it. And whether or not we should raise the tax rates, or cap CEO pay, or rearrange the economic system, we should all be able to acknowledge, before we discuss anything else, that it is immoral to be rich. That much is clear.

Read the entire piece here.

Quote of the Day

From the editorial board of The New York Times:

The Carrier deal stands as an interesting argument against longstanding Republican economic orthodoxy.  In making the deal, Mr. Trump and Mr. Pence have embraced the idea that government does indeed have a role to play in the free market.  They intervened, and as a result, 800 people will keep their jobs.  If they applied the same interventionist approach to other labor issues–raising the minimum wage and expanding overtime pay come to mind–millions of working people might actually stand a chance.

The Dark Side of Free Markets

Over at The Conversation, Yale University economist Robert Shiller and Georgetown University economist George Akerlof argue that free market capitalism preys on human weakness and exploits it for economic gain.  


According to Shiller and Akerloff, the authors of a new book titled Phishing for Phools: The Economics of Manipulation and Deceptionthe free market forces us into bad decisions in four area of our lives: consumer spending, investment, health, and politics.

Here is a taste of their article:

Just as free markets can serve the public good “by an invisible hand” (as Adam Smith saw more than two centuries ago, and is the foundation of the field of economics), free markets will do something else. As long as there is a profit to be made, they will also deceive us, manipulate us and prey on our weaknesses, tempting us into purchases that are bad for us. That is also a fundamental feature of market equilibrium, in which supply and demand balance each other out.

My fellow economists, while they recognize such behavior in individual instances, fail to see this as a general principle. And thus a lot of bad things happen, such as the candy at the checkout counter. Most notably, we economists should have been a chorus warning of the financial crash of 2008. We should have recognized that people should not be buying overrated mortgage-based securities, nor should banks have been creating the insecure loans that backed them. Instead there were at most a few lone voices of protest. We should have been more skeptical.

But this is not just about economists and what we think, because through long chains of reportage and other channels (such as this one), what we say in our faculty lounges affects politicians and the public opinion more generally.

This failure to understand that markets have this downside is then passed on into policy more narrowly defined. The public fails to understand that in the economic equilibrium, if there is a profit to be made, someone will take it up, as long as it is legal and as long as there is no public protest against it. Now that we are overpopulated with companies that will help repair your credit, we are asking ourselves questions, its’s too late for that one, we need to be vigilant for the next one.

Read the rest here.

In Most Colleges and Universities You Can Receive a Bachelor’s Degree Without Having to Take a History Course

Messiah College requires a course in history (but not specifically American history) and at least six hours of foreign language study (2 courses). It does not require that all students take a course in economics.
It looks like very few colleges and universities require students to take a course in history, foreign language or economics to graduate.  Here is Douglas Belkin’s article in today’s Wall Street Journal:
A majority of U.S. college graduates don’t know the length of a congressional term, what the Emancipation Proclamation was, or which Revolutionary War general led the American troops at Yorktown.
The reason for such failures, according to a recent study: Few schools mandate courses in core subjects like U.S. government, history or economics. The sixth annual analysis of core curricula at 1,098 four-year colleges and universities by the American Council of Trustees and Alumni found that just 18% of schools require American history to graduate, 13% require a foreign language and 3% economics.

http://si.wsj.net/public/resources/images/NA-CD110A_HISTO_G_20141014190611.jpg
“It’s much easier for campus administrators to let faculty make decisions rather than to decide with them what are really important and what really matters,” said Michael Poliakoff, director of the survey. “It’s like saying to a lot of 18-year-olds the cafeteria is open, you kids just eat whatever you like.”
The report is often dismissed by college presidents as arbitrary, but it comes amid growing unease about the value of a university degree at a time of grade inflation and employer complaints that graduates are entering the workforce without basic skills such as critical thinking.
Last month, authors Richard Arum and Josipa Roksa released a sequel to their book “Academically Adrift,” which follows a group of freshman who entered a four-year college in 2005. Many earned good grades while studying less than five hours a week, but more than a third didn’t significantly improve their critical-thinking skills, the authors said.
Their new book “Aspiring Adults Adrift,” checks up on the same group and finds that two years after graduation a quarter of them were living at home, and 30% were earning less than $30,000 a year in full-time jobs.
Mr. Poliakoff says the lack of a rigorous core curriculum is behind the failure to learn. At stake, he says, is the nation’s civic and economic health.
Among schools that fared poorly on the survey was Whittier College, a private liberal-arts college in Southern California. It earned an F because, by the metrics of the poll, it requires only one core course—in composition—and none in literature, language, government or history, economics, math and science.
Sean Morris, chairman of the English Department at Whittier, said the survey was superficial. The school has an interdisciplinary approach, so a history curriculum might be wrapped into an art or science course, and composition might be tied to math.
“We don’t mandate every single student take a class in American history…so you may find a senior not knowing the specifics of the New Deal,” he said. “But you will graduate knowing how to think and how to accumulate that knowledge and make connections between things.”
The authors of the report commissioned a survey in 2011 that found that 49% of Americans don’t think college students are getting their money’s worth from public schools and that 70% believe colleges should require basic classes in core subjects. Among adults between the ages of 25 and 34, the share was 80%.
“That’s the kicker,” said Mr. Poliakoff. “These are the kids who just graduated and were dealing with reality and they said ‘these are things we need.’ ”
Among schools that received one of the 98 F’s were Wesleyan University in Connecticut and Brown University in Rhode Island. A spokesmen for Wesleyan declined to comment. A representative for Brown wasn’t immediately available to comment.
Christopher Newport University in Virginia received one of just 23 A’s. “We believe that acquaintance with these seven subjects is essential to building a strong foundation for a meaningful and consequential life,” said university President Paul Trible, a former Republican senator from Virginia.
The American Council of Trustees and Alumni is a nonprofit organization that advocates for accountability at U.S. colleges and universities.
And the answers to the survey’s history questions: The Emancipation Proclamation proclaimed the freedom of slaves during the Civil War; a congressional term lasts two years in the House; and George Washington led the American troops at Yorktown.

Ron Sider on Inequality

Ron Sider, president of Evangelicals for Social Action, wonders if “economic inequality of opportunity” is a sin.  Here is a taste of his nuanced answer:

In my book Fixing the Moral Deficit: A Balanced Way to Balance the Budget, I argue that the bible does not promote equality of income or wealth. When laziness and other forms of sin result in less income, inequality is appropriate. When parents rightly pass on an inheritance of skill and wealth to children, some inequality is proper (although we certainly should keep the estate tax!). When the economic rewards of work create incentives for creativity and diligence, some inequality is desirable.

On the other hand, I believe the Bible suggests at least two limits on inequality. For one, the biblical principle of justice demands that every person and family have access to the productive resources so that if they act responsibly, the can earn a decent living and be dignified members of society. Whenever the extremes of wealth and poverty make it difficult or prevent some people from having access to adequate productive resources, then that inequality is unjust, wrong, sinful and must be corrected.

The second limitation on inequality flows from the biblical understanding of sin and power. In our broken world, whenever one group of people acquires excessive unbalanced power, they will almost always use it for their own selfish advantage.

And then Sider provides the sobering statistics, as he did so well in his classic Rich Christians in an Age of Hunger.  (You may also want to watch this video for some context).

Between 1993 and 2007, more than half of all the increase in income in the U.S. went to the richest 1 percent. Between 2002 and 2007, 66 percent of all increased income went to the richest 1 percent. And in 2009-2010, 93 percent of all the increased income in the U.S. went to the richest 1 percent. The richest 1 percent of Americans own more than the bottom 90 percent.

Over the last three decades, the average annual income of the richest 1 percent has jumped by $700,000 while the average Joe has actually lost ground. The poorest 20 percent had less income in 2009 than they did in 1979. Over 46 million Americans are in poverty.

Today there is much greater inequality and less equality of opportunity in the U.S. than in “aristocratic” Europe.

Then Sider offers some action steps:

There are ways that public policy could move us away from today’s gross inequality and back toward more equality of opportunity. We should maintain effective programs that care for and empower poor people. We should spend enough on minority urban education so that everyone, not just white suburbanites, receive an education that offers vastly expanded equality of opportunity. We should increase taxes somewhat on rich Americans and tax income from dividends and capital gains at the same rate as other income. Yes, we must greatly reduce our ongoing federal budget deficit over the next five years, but we need not — and should not! — do it on the backs of the poor.

And he finally concludes with an answer to the original question:

It is time for evangelical preachers to label today’s gross inequality what it is: SIN. If we believe what the Bible says about God’s concern for the poor; if we believe what the Bible says about justice; then we must denounce the gross inequality of opportunity and income in our country today as blatantly sinful.

What if Michael Sandel Ruled the World?

If he ruled the world, the Harvard political philosopher Michael Sandel would rewrite economics textbooks so not to confuse market reasoning with moral reasoning. Here is a taste of his piece at Prospect:

If I ruled the world, I would rewrite the economics textbooks. This may seem a small ambition, unworthy of my sovereign office. But it would actually be a big step toward a better civic life. Today, we often confuse market reasoning for moral reasoning. We fall into thinking that economic efficiency—getting goods to those with the greatest willingness and ability to pay for them—defines the common good. But this is a mistake.

Consider the case for a free market in human organs—kidneys, for example. Textbook economic reasoning makes such proposals hard to resist. If a buyer and a seller can agree on a price for a kidney, the deal presumably makes both parties better off. The buyer gets a life-sustaining organ, and the seller gets enough money to make the sacrifice worthwhile. The deal is economically efficient in the sense that the kidney goes to the person who values it most highly.

But this logic is flawed, for two reasons. First, what looks like a free exchange might not be truly voluntary. In practice, the sellers of kidneys would likely consist of impoverished people desperate for money to feed their families or educate their children. Their choice to sell would not really be free, but coerced, in effect, by their desperate condition.

So before we can say whether any particular market exchange is desirable, we have to decide what counts as a free choice rather than a coerced one. And this is a normative question, a matter of political philosophy.

The second limitation to market reasoning is about how to value the good things in life. A deal is economically efficient if both parties consider themselves better off as a result. But this overlooks the possibility that one (or both) of the parties may value the things they exchange in the wrong way. For example, one might object to the buying and selling of kidneys—even absent crushing poverty—on the grounds that we should not treat our bodies as instruments of profit, or as collections of spare parts. Similar arguments arise in debates about the moral status of prostitution. Some say that selling sex is degrading, even in cases where the choice to do so is not clouded by coercion.

For more stuff like this check out Sandel’s What Money Can’t Buy: The Moral Limits of Markets.