Markets in Everything, Not
This essay examines how repugnance sometimes constrains what transactions and markets we see. When my colleagues and I have helped design markets and allocation procedures, we have often found that distaste for certain kinds of transactions is a real constraint, every bit as real as the constraints imposed by technology or by the requirements of incentives and efficiency. I'll first consider a range of examples, from slavery and indentured servitude (which once were not as repugnant as they now are) to lending money for interest (which used to be widely repugnant and is now not), and from bans on eating horse meat in California to bans on dwarf tossing in France. An example of special interest will be the widespread laws against the buying and selling of organs for transplantation. The historical record suggests that while repugnance can change over time, change can be quite slow.Economists tend to be more open to market mechanisms than non-economists. But even we set limits. For example, we do not sell grades to students, and we do not buy and sell research papers among ourselves.
The absence of the latter market, however, may be due to lack of incentive rather than repugnance. I recall a conversation a few years back in which someone was wondering whether professors faced diminishing marginal rewards to publishing scholarly articles. One of my more prolific colleagues said, "Of course not. Otherwise, I'd be selling my articles to others."