Institutional pluralism and the limits of the market

Politics, Philosophy and Economics

Volumn 8, Issue 4, 2009, Pages 420-447

  Claassen, Rutger J G ^a  

^a LEIDEN UNIVERSITY   (Netherlands)

Author keywords

Capability approach; Care; Commodification; Institutional pluralism; Markets; Media; Spheres of justice

Indexed keywords

EID: 70350782124     PISSN: 1470594X     EISSN: 17413060     Source Type: Journal    
DOI: 10.1177/1470594X09345479     Document Type: Note

References (103)

1. Apart from Michael Walzer, some other pluralists are David Miller, Jon Elster and Elizabeth Anderson. See Michael Walzer, Spheres of Justice: A Defense of Pluralism and Equality (New York: Basic Books, 1983).
2. David Miller, Principles of Social Justice (Cambridge, MA: Harvard University Press, 1999).
3. Jon Elster, Local Justice: How Institutions Allocate Scarce Goods and Necessary Burdens (New York: Russell Sage Foundation, 1992).
4. Elizabeth Anderson, Value in Ethics and Economics (Cambridge, MA: Harvard University Press, 1993).
5. For a general discussion of institutional pluralism in political philosophy, see Ewald Engelen and Veit Bader, Taking Pluralism Seriously: Arguing for an Institutional Turn in Political Philosophy, Philosophy and Social Criticism 29 (2003): 375-406.
6. For an overview of the debate on the market, see Debra Satz, Market and Nonmarket Allocation, in International Encyclopedia of the Social and Behavioral Sciences, edited by N.J Smelser and P.B. Baltes (Amsterdam and Oxford: Elsevier, 2001). For references to a selection of other important contributions to this debate, see note 15 below.
7. Although the approach I will offer draws inspiration from both Amartya Sen's and Martha Nussbaum's versions of the capability approach, it diverges from it at several points, as I explain in the fourth section. See Martha Nussbaum, Frontiers of Justice (Cambridge, MA: Belknap Press, 2006).
8. Martha Nussbaum, Women and Human Development: The Capabilities Approach (Cambridge: Cambridge University Press, 2000).
9. Amartya Sen, Capability and Well-Being, in The Quality of Life, edited by Martha Nussbaum and Amartya Sen (Oxford: Clarendon, 1993), pp. 30-53.
10. Amartya Sen, Inequality Reexamined (Cambridge, MA: Harvard University Press, 1992).
11. Walzer, Spheres of Justice, pp. 21-6. I must emphasize that I take this to be the only interesting way of reading his work. As Govert den Hartogh has very well shown, Walzer's language also suggested another interpretation, in which all the goods he subsequently discussed in separate chapters (membership, security and welfare, money and commodities, offices, hard work, free time, education, kinship and love, divine grace, recognition, and political power) each formed a separate sphere of their own. In that interpretation, the goods themselves are constitutive of the spheres that they make up. However, such an interpretation begs the question of why a good should fall into a certain sphere instead of another.
12. See Govert den Hartogh, The Architectonic of Michael Walzer's Theory of Justice, Political Theory 27 (1999): 491-522.
13. Miller, Principles of Social Justice, pp. 25-32.
14. By way of illustration, the class of status-based principles includes, inter alia, principles based on age, gender, sexual orientation, ethnic status, other physical features, mental features, and so on. See Elster, Local Justice, pp. 70-103.
15. Walzer, Spheres of Justice, p. 21. Moreover, he states that these three meet the open-ended principle that he formulated; they do not present a reason for distributing a good that only refers to the possession of some other good.
16. Elster, Local Justice, p. 70.
17. As a matter of normative theory, we may want to go further. We may want to say, 'For goods x, the mechanism should be y and the more specific outcome of applying this mechanism should yield outcome z. Still, the choice of mechanism is the first step and this step will constrain the results one can reach, since each mechanism will be unable to generate certain outcomes. Therefore, arguments at this level are sometimes important, independent of the further specification (For good x, outcome z is required, and the market cannot reach outcome z).
18. For examples, see the authors mentioned in Notes 10 and 11. It should be mentioned that it is often hard to judge what the exact position of authors on this issue is, because even where it is clear that they do not refer to the well-known distributive principles, they do not explicitly discuss the ontological status of the market (is it a mechanism, an institution, or a principle?).
19. For example, Margaret Radin, Contested Commodities: The Trouble with Trade in Sex, Children, Body Parts, and Other Things (Cambridge, MA: Harvard University Press, 1996).
20. For example, Judith Andre, Blocked Exchanges: A Taxonomy, in Pluralism, Justice and Equality, edited by David Miller and Michael Walzer (Oxford: Oxford University Press, 1995), pp. 171-96.
21. Raymond Plant, The Moral Boundaries of Markets, in Ethics and the Market, edited by Richard Norman (Aldershot: Ashgate, 1999).
22. Debra Satz, Noxious Markets: Why Should Some Things Not Be for Sale? in Globalisation, Culture and the Limits of the Market, edited by S. Cullenberg and P.K. Pattanaik (New Delhi: Oxford University Press, 2004), pp. 11-38.
23. Michael J. Trebilcock, The Limits of Freedom of Contract (London: Harvard University Press, 1993).
24. Anderson, Value in Ethics and Economics, pp. 143-63.
25. It should be emphasized that these are merely ideal types, not some kind of Platonic entities. Ideal types prove their value in their ability to discuss the issues at stake and allow for the existence of mixed types. Any classification will have something arbitrary about it. Nonetheless, if only for purposes of exposition, we need a classification to explicate the options available - not using any classification is not an option.
26. For an elaborated discussion of this typology, see Rutger Claassen, The Market's Place in the Provision of Goods (Utrecht: Zeno Institute for Philosophy, 2008), pp. 43-59. Doctoral Dissertation. In institutional economics and in the social sciences, a closely similar typology has gained ascendency. It distinguishes four coordination mechanisms: markets, states (or bureaucracies or hierarchies), communities (or clans), and networks (or associations).
27. See Oliver Williamson, The Economic Institutions of Capitalism (New York: Free Press, 1985).
28. William G. Ouchi, Markets, Bureaucracies, and Clans, Administrative Science Quarterly 25 (1980): 129-41.
29. Wolfgang Streeck and Philippe C. Schmitter, Community, Market, State and Associations? The Prospective Contribution of Interest Governance to Social Order, European Sociological Review 1 (1985): 119-38.
30. Robert Boyer and J. Rogers Hollingsworth, Coordination of Economic Actors and Social Systems of Production, in Contemporary Capitalism: The Embeddedness of Institutions, edited by J. Rogers Hollingsworth and Robert Boyer (Cambridge: Cambridge University Press, 1997), pp. 1-48.
31. Grahame Thompson et al., Introduction, in Markets, Hierarchies and Networks: The Coordination of Social Life, edited by Grahame Thompson et al. (London: Sage, 1991).
32. Colin C. Williams, A Commodified World? Mapping the Limits of Capitalism (London: Zed Books, 2005).
33. A common source of inspiration for these typologies is Polanyi's distinction between exchange, reciprocity, redistribution, and householding. See Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston, MA: Beacon Press, 2001 [1944]).
34. His typology was the source for Sahlins' typology in economic anthropology which distinguished different types of reciprocity. See Marshall Sahlins, Stone Age Economics (New York: Aldine de Gruyter, 1972).
35. Finally, there is the relational models theory presented in Alan Page Fiske, Structures of Social Life (New York: Free Press, 1991).
36. This was connected to Michael Walzer's spheres in Alan Page Fiske and Philip E. Tetlock, Taboo Trade-Offs: Reactions to Transactions that Transgress the Spheres of Justice, Political Psychology 18 (1997): 255-97.
37. Aristotle, The Politics and the Constitution of Athens, edited by Jonathan Barnes (Cambridge: Cambridge University Press, 1996).
38. See also Weber's discussion of the oikos in Max Weber, Economy and Society: An Outline of Interpretative Sociology (Berkeley: University of California Press, 1978).
39. Polanyi called this the principle of householding. See Polanyi, The Great Transformation, p. 55.
40. For an overview, see Aafke E. Komter, Social Solidarity and the Gift (Cambridge: Cambridge University Press, 2005). Gift giving is not the only instance of informal provision, since it adds one specific element to the definition of informal provision: a lapse of time between the performances of both parties in the exchange. Where such a lapse of time is absent, we have another subspecies of informal provision: cooperation (think of examples such as making music or doing the dishes together).
41. For the former, see the redistributive type described in Sahlins, Stone Age Economics, p. 188. For the latter, see Weber, Economy and Society.
42. Note that informal provision also has exchange rules: these are set by the social norms which determine what kind of informal exchanges are appropriate or not. All of these sources of exchange rules (social norms, expert knowledge, the price mechanism, and the political process) may take various forms, depending on local conditions, institutions, and culture. For example, some countries will have a presidential political system, others a parliamentary one, and so on. Here the price mechanism stands out somewhat, since its basic operation does not require further local specifications (which is not to say that the latter are not needed to implement the conditions for making the price mechanism function well or cannot constrain the price mechanism in various ways).
43. The terms simple pluralism and complex pluralism should not be confused with Walzer's use of the terms simple equality and complex equality. Although his theory is one of complex equality, it is one of simple pluralism.
44. See Adrian Walsh, Teaching, Preaching, and Queaching about Commodities, Southern Journal of Philosophy 36 (1998): 433-52.
45. Walzer, Spheres of Justice, pp. 100-3. Another reason may lie in the normative standard used to assess the market question: see the next section on conventionalism and contextualism.
46. See Radin, Contested Commodities. Elizabeth Anderson introduced a closely related idea when opposing 'sphere differentiation' to Walzer's sphere segregation.
47. See Anderson, Value in Ethics and Economics, p. 147.
48. This point does not just apply to the market: it can be applied mutatis mutandis to other modes of provision, for example, 'incomplete' as contrasted to 'pure' professional provision or public provision.
49. Walzer, Spheres of Justice, p. 21. 'Criterion' in the quotation refers to 'principle of distribution'. We should distinguish the reason for why there is a pluralism of spheres from Walzer's reason for why this pluralism is a matter of justice. The latter goes back to his belief that the separation of spheres (walls between them) guarantees non-domination.
50. See Michael Walzer, Liberalism and the Art of Separation, Political Theory 12 (1984): 315-30.
51. These points were made by, among others, Joshua Cohen and Ronald Dworkin.
52. See Joshua Cohen, 'Spheres of Justice: A Defense of Pluralism and Equality (Book Review)', Journal of Philosophy 83 (1986): 457-66.
53. Ronald Dworkin, 'What Justice Isn't', in A Matter of Principle (Cambridge, MA: Harvard University Press, 1985).
54. David Miller, 'Introduction', in Pluralism, Justice and Equality, edited by David Miller and Michael Walzer (Oxford: Oxford University Press, 1995), p. 6.
55. Elizabeth Anderson proposed associating market and non-market alternatives with specific modes of valuation and making evaluations on the basis of the appropriateness of these for specific goods.
56. See Anderson, Value in Ethics and Economics. Margaret Radin used a personhood theory of property to distinguish between goods that are 'fungible property' and should be on the market and those that are 'personal property' and should be withheld from the market.
57. See, inter alia, Radin, Contested Commodities. Michael Sandel proposed a theory of republicanism to argue that certain goods should not be commodified.
58. See Michael Sandel, 'What Money Can't Buy: The Moral Limits of Markets', in The Tanner Lectures on Human Values, Vol. 21, edited by Grethe B. Peterson (Salt Lake City: University of Utah Press, 2000). Debra Satz presented a theory based on liberal democratic citizenship.
59. See Satz, Noxious Markets. For a liberal approach inspired by Locke
60. see Edward Soule, Morality & Markets: The Ethics of Government Regulation (Lanham, MD: Rowman and Littlefield, 2003). For a MacIntyrian approach
61. see Russell Keat, Cultural Goods and the Limits of the Market (London: Macmillan, 2000). For a pluralist approach using four different normative grounds
62. see Adrian Walsh and Richard Giulianotti, Ethics, Money and Sport: This Sporting Mammon (London: Routledge, 2007).
63. As an alternative to the capability metric, a resourcist metric or a utilitarian metric could bring out the same type of normative evaluation (albeit with different conclusions in individual cases). The comparative advantage of the capability metric is that it allows people to choose whether to convert their capability into actual functioning.
64. One could, of course, ask why personhood should be respected. This would require showing why from the fact that persons need to have agency there arises a demand on others to respect their agency. These complicated matters of foundation I will have to leave out of consideration here. For a well-known attempt to solve these problems
65. see Alan Gewirth, Reason and Morality (Chicago, IL: University of Chicago Press, 1978).
66. For example, does it require endorsing the preferences persons happen to have or would have under some idealized circumstances (utilitarianisms) or promoting the actions and institutions that people would consent to in some hypothetical choice situation (contractarianisms) or idealized discourse (discourse ethics) or the development of the excellences belonging to a person's essential human nature (Aristotelianisms), and so on?
67. Crocker elaborately discusses different definitions of the capability notion. My use of the term conforms to the position he ascribes to Sen: I now believe that for Sen capabilities are like three-place predicates. If I have a capability to or for X, (1) I face the option or have the real possibility of X, and this possibility both refers to or is partially dependent on (2) my powers and other internal traits, and (3) external enabling and non-preventing conditions. For Sen, capabilities are options or choices open to the person, possible functionings from which a person may choose. David Crocker, Ethics of Global Development: Agency, Capability, and Deliberative Democracy (Cambridge: Cambridge University Press, 2008), p. 174.
68. As I define the notions, there is no overlap between morally required and morally permissible capabilities. Of course, morally required capabilities are also 'permissible'; They are not disqualified by moral theory. But the category of morally permissible capabilities is reserved for those capabilities which are 'merely permissible', and not also required.
69. Nussbaum has claimed that her list of capabilities is to be treated as a list of fundamental entitlements: Central capabilities may not be infringed upon to pursue other types of social advantage.
70. See Nussbaum, Women and Human Development, p. 14. A separate question is whether these entitlements should be interpreted as giving rise to rights. For Nussbaum's comparison of the vocabulary of rights with that of capabilities.
71. see Martha Nussbaum, Capabilities as Fundamental Entitlements: Sen and Social Justice, Feminist Economics 9 (2003): 36-40.
72. Similarly, see Nussbaum, Women and Human Development, pp. 96-101. Here I remain agnostic as to the question of whether my criteria could and should be translated into moral rights.
73. Nussbaum also uses this idea that what is required is a 'basic level' or 'threshold level' of capabilities. The threshold is to be determined for each capability separately and in the context of the particular circumstances of a society.
74. See Nussbaum, Women and Human Development, p. 71. Sen also recognizes that it may sometimes be useful to distinguish 'basic capabilities' from other capabilities; he mentions the example of the analysis of poverty.
75. See Sen, Capability and Well- Being', p. 40.
76. For example, sometimes this will be an equal level for all; sometimes this will be a sufficient level, determined by a lower threshold where it is morally permitted for each to strive to attain a higher level.
77. The criterion of agency development does not apply to all practices. For many practices no relevant morally required capability will be assigned to it by the global theory. These practices only exist for the sake of promoting morally permissible capabilities.
78. This is analogous to Nussbaum's idea of 'multiple realizability': that the capabilities list requires specification to be applicable in local contexts. See Nussbaum, Women and Human Development, p. 77.
79. In comparison with Nussbaum's list, the category of morally required capabilities will probably turn out to be shorter, as it is a list of the requirements for agency, not of the requirements for a life that would be fully human. Capabilities for play, for relations with animals, for producing self-expressive works, and many others on Nussbaum's list would not qualify, in my view, for being necessary to the development of agency. They do receive a place in my theory, but as morally permissible capabilities.
80. The 'question of the list' thus is resolved in a way that is both reminiscent of Martha Nussbaum's and of Amartya Sen's capabilities theories. The exhaustive list of morally required capabilities resembles Nussbaum's theory, while for the category of morally permissible capabilities (due to the endless variations that are possible) no list can be drawn. Here there is merely an open 'evaluative space' analogous to Sen's theory.
81. For brevity's sake I have left out of the exposition a third constitutive condition of personhood: being protected from violations of the capacity for agency. This condition requires protection against the class of 'immoral capabilities', in turn generating a third criterion for practices: that of 'agency protection'. Also, I have left out the question of in which cases actual functionings have to be promoted instead of capabilities. The two normative criteria would have to be complicated to allow for such promotion of functionings wherever appropriate.
82. Nonetheless, context sensitiveness should not be too readily assumed to lead to differential results in different contexts. For at the same time others could argue that literacy enhances the quality of one's practical reasoning, independent of the social context. If that argument is correct, then the promotion of literacy is morally required, even though no vital information about one's potential courses of action is missed without it. For a discussion of this dilemma.
83. See Nussbaum, Women and Human Development, pp. 294-6.
84. If he accepts, the question is whether there is a moral obligation upon society to provide me with benefits (from public funds) to take care of him, say, during a substantial part of the week. Eva Kittay argues that there is such a duty: society should support care givers to a very large extent.
85. See Eva Feder Kittay, Love's Labor: Essays on Women, Equality, and Dependency (London: Routledge, 1999).
86. The main simplification is that other types of formal care also exist (professional and public provision). However, given privatization of public care institutions in many countries, it is not unrealistic to put the market in the forefront in the illustration. See Clare Ungerson, 'Social Politics and the Commodification of Care', Social Politics 4 (1997): 362-81.
87. I leave out of consideration the arguments of those who take the position that market-based care should be prohibited, a blocked exchange.
88. See, for example, Kathleen Lynch, Love Labour as a Distinct and Non-Commodifiable Form of Care Labour', Sociological Review 55 (2007): 550-70. I also leave out of consideration the reasons for supposing that market-based care is a priori worse than informal care because payment triggers less caring motives.
89. See the discussions in Nancy Folbre and Thomas E. Weisskopf, Did Father Know Best? Families, Markets, and the Supply of Caring Labor', in Economics, Values, and Organization, edited by Avner Ben-Ner and Louis Putterman (Cambridge: Cambridge University Press, 1998), pp. 171-205
90. Julie A. Nelson, Of Markets and Martyrs: Is It Ok to Pay Well for Care? Feminist Economics 5 (1999): 43-59.
91. Deborah Stone, For Love nor Money: The Commodification of Care, in Rethinking Commodification: Cases and Readings in Law and Culture, edited by Martha M. Ertman and Joan C. Williams (New York: New York University Press, 2005), pp. 271-90.
92. For reasons I cannot elaborate here, a different conclusion has to be reached for one type of dependant: children. They have a claim to be cared for by their parents.
93. The government may provide them with the necessary purchasing power (voucher scheme), so that all dependants have the ability to pursue care on the market. Alternatively, there may also be instances of public provision - I have left this alternative out of the discussion in order not to complicate the complex pluralist scheme more than necessary for purposes of this illustration.
94. The argument is usually made in terms of the 'positive externalities' of public information being available. For example, see C. Edwin Baker, Media, Markets and Democracy (Cambridge: Cambridge University Press, 2002). Sometimes the argument is in terms of the good functioning of the public sphere.
95. See Jürgen Habermas, The Structural Transformation of the Public Sphere (Cambridge: Polity Press, 1989 [1962]). A related case is made by Sunstein in favour of a unified public sphere.
96. See Cass Sunstein, Republic.com (Princeton, NJ: Princeton University Press, 2001)
97. Cass Sunstein, Television and the Public Interest, California Law Review 88 (2000): 501-32.
98. In addition, some countries have known a system of state subsidies for newspapers, which would make them a mix of public and market provision. For a refined sociological treatment of types of media provision.
99. See Daniel C. Hallin and Paolo Mancini, Comparing Media Systems: Three Models of Media and Politics (Cambridge: Cambridge University Press, 2004).
100. See, among many others, Shaun Hargreaves Heap, Public Service Broadcasting', Economic Policy (2005): 111-57.
101. John O'Hagen and Michael Jennings, Public Broadcasting in Europe: Rationale, License Fee and Other Issues, Journal of Cultural Economics 27 (2003): 31-56.
102. For a detailed elaboration of this argument, see Cass Sunstein and Edna Ullmann- Margalit, Solidarity Goods, Journal of Political Philosophy 9 (2001): 129-49. The theoretical background is found in the notion of an assurance game.
103. See Daphna Lewinsohn-Zamir, Consumer Preferences, Citizen Preferences, and the Provision of Public Goods, Yale Law Journal 108 (1998): 377-406.