Markets

Conference announcement: Markets and Society (October 21-24, 2022)

Markets and societyBy Mark D. White

The F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics (Mercatus Center, George Mason University) has announced an intriguing conference for next October. From the announcement:

The Markets & Society Conference aims to bring together scholars, students, and practitioners from various disciplines, ideological perspectives, and backgrounds who seek to advance inquiry, contestation, and research of consequence that are grounded in mainline political economy. This tradition posits that through emergent orders, formal and informal institutions, and the ability to learn from errors, humans can and often do find ways to live better together. Research in this tradition examines governance, resilience, and cooperation as well as the burdens, biases, and injustices that result from human interaction and institutions. Multiple disciplines, methods, and strategies are needed to examine the complexities of social life, ranging from analyzing the economic, political, and social consequences of institutions; understanding and reexamining history; assessing policies that attempt to stymie or encourage particular outcomes; and examining issues of morality and justice.

See the announcement for more details—the deadline for abstracts is March 1, 2022.


Elizabeth Pollman on the Supreme Court and the complexity of business interests (at Harvard Law Review)

Hlr pollmanBy Mark D. White

In her article "The Supreme Court and the Pro-Business Paradox" in the Harvard Law Review, Elizabeth Pollman (Penn Law) reconsiders the Roberts Court's reputation as pro-business in light of the heterogeneity of interests across firms, as well as the conflicting interests of different parties within firms, both often neglected in both economic and legal commentary and analysis. (For earlier work on this general topic, see Jonathan H. Adler's edited volume Business and the Roberts Court.)

From her introduction:

This Comment makes two primary contributions. It first observes that cases from the recent Term reflect an important way in which the Roberts Court has earned its reputation: over the beginning of the twenty-first century, the Court has often expanded corporate rights while narrowing corporate liability or access to justice against corporate defendants. Part I of this Comment sets forth this argument, using Americans for Prosperity, Ford, and Nestlé as case studies to show how the Court uses ill-fitting conceptions or overbroad generalizations to empower corporations and limit their accountability.

This trend gives rise to a paradox that Part II subsequently explores: the “pro-business” Court is often at odds with internal activity in corporate law and governance. Quite remarkably, as the Roberts Court has expanded corporate rights and narrowed pathways to liability, many shareholders and stakeholders have become vocal participants, putting pressure on corporations to rein in the use of their rights, to mitigate risks generated by their externalities, and to take account of environmental, social, and governance (ESG) concerns. The Court’s expansion of corporate rights not only disserves many corporate participants and spurs them to action but also might fuel challenges to new disclosure rules about corporate political activity or other ESG-related concerns that investors and others seek for effective participation in corporate governance. Further, as the Court has downplayed or ignored corporate decisionmaking structures in its jurisprudence expanding rights and narrowing liability, by contrast, in the world of corporate law and governance, we see that board oversight, monitoring, and compliance functions have grown in importance. State corporate law cases have heightened attention on the board’s role in providing oversight to ensure legal compliance throughout the corporation’s operations and to mitigate litigation and reputational risks that can arise from corporate abuses around the world. Corporate compliance programs and voluntary ESG initiatives have proliferated amid widespread debate about the purpose of the corporation and a broadened role for stakeholders.

Looking at these diverging developments together suggests that, at least in some important circumstances, the Supreme Court’s approach may not capture the reality of modern business corporations, and it might not be what many shareholders and corporate participants actually want. It may instead create new tensions in corporations that are not fully and easily resolved through private ordering and that undermine the conceptual foundation for the existing arrangements in corporate law and governance. It may also ultimately serve only a limited set of business interests — not the great number of workers who are often framed as stakeholders on the other side of “pro-business” jurisprudence, nor the majority of public corporation shareholders, who are increasingly diversified through institutions that rely on external regulation to constrain corporations and minimize systematic risk. And so, in sum, corporations might bear little resemblance to the Court’s characterizations, and the business world, on the whole, might often be better off without “pro-business” jurisprudence that empowers corporations and erodes their external constraints.


Elizabeth Brake on price gouging (in Economics and Philosophy)

Economics and philosophyBy Mark D. White

In the latest issue of Economics and Philosophy (37/3, November 2021), Elizabeth Brake (Rice University) examines one of the most controversial topics in the ethical analysis of market behavior. In her article "Price Gouging and the Duty of Easy Rescue," Brake surveys the standard economic and ethical arguments for and against the practice, and suggests a novel ethical argument against it: that it violates our obligation to help people in emergency situations when it is of little cost to us. This position is usually associated with utilitarianism, thanks to Peter Singer, but can also be derived from various forms of deontology (although the positive nature of the duty may demand an extra step) as well as virtue ethics.

Brake makes a legal case as well as an ethical one, arguing that there is a basis in law for enforcement of a duty of easy rescue in such cases where price gouging arises. As she acknowledges, this is a more difficult case to make, because a legal duty normally implies a right that is violated, and a legal right to assistance is not generally recognized, however dire one's circumstances. She suggests several alternative ways of justifying a limited prohibition of price gouging based on legal duty of easy rescue, such as considering it as part of the regulation of market activity in the public interest, in which businesses are prohibited from harmful practices.

There is much more in Brake's paper than I can discuss here and it rewards a careful reading. For instance, she does address the economic benefits of price gouging, such as increasing supply of much-needed goods to disaster-stricken areas, and her ethical and legal analysis does allow for price increases to cover legitimate costs and risk. Her argument is against "pure" profiteering only, claiming that the seller's interest in higher profit does not justify holding disaster victim's interest in survival hostage to negotiations over price. Related to this, Brake also notes that market conditions are far from ideal in disasters, so we should not assume the same quality of consent, or use the same standards of coercion or duress, when evaluating transactions offered or made in such a context.

(For more of Brake's work on disaster ethics, see the dedicated page at her website.)


Virtual Conference on "Teaching Ethics to Economists: Challenges & Benefits"

By Jonathan B. Wight

Conference Dates: October 21-22, 2021

Virtual Conference

LSBU Business School
&
London Centre for Business and Entrepreneurship Research

During the last 30 years, the conversation between economic theory and ethics has been restarted, after a period of interruption, generated by the positivist era in economics. We cannot ignore, in this revival, the role of the financial crisis, gender and racial inequality and now the divisions revealed by the unequal impacts of the pandemic. An important contribution has been the call for a professional economic ethics led by DeMartino (2011) and DeMartino and McCloskey (2016).

More recently, Dolfsma and Negru (2019) challenge the idea that ethics has no place in economics. Building on their ideas we ask: Is ethics important for the study of the economy and, if so, how should it be taught?

This two day conference will be of interest to lecturers and students in economics and business - and anyone with an interest in the future of the economics curriculum.

Link for the event & registration: 
https://www.eventbrite.co.uk/e/teaching-ethics-to-economists-challenges-benefits-tickets-170298187463 


Programme

Day One: Thursday 21 October

9.45am - Virtual housekeeping & Zoom functionality - Neil Hudson-Basing, Corporate Events Manager, LSBU

9.55am - Welcome Craig Duckworth, LSBU Business School, UK

10am - Introduction to the day. Economics and Ethics - what is the agenda?

10.30am - Revisiting the analytical relationship of Ethics and Economics María Isabel Encinar & Félix-Fernando Muñoz, Universidad Autónoma de Madrid, Spain

11.15am - Theoretical and ethical reductionism and the neglect of subjectivity in economics and economic education - Giancarlo Ianulardo, University of Exeter, UK

12pm - Lunch break

12.30pm - Keeping alive non-individualistic ethics in political economy: a review of concepts from Aquinas to Habermas Stefano Solari, University of Padua, Italy

1.15pm - Racism, the economy and ethics: where does it all begin? - Paolo Ramazzotti, University of Macerata, Italy

2pm - Teaching economic harm to economists - George DeMartino, University of Denver, USA

2.45pm - Comfort break

3pm - The fate of moral philosophy in the age of economic scientism: ethics and welfare economics in mainline economics - Peter Boettke, George Mason University, USA

3.45pm - Plenary: Reflections

4pm - End of Day One

______________________________________________________________________

Day Two: Friday 22 October

9.45am - Virtual housekeeping & Zoom functionality - Neil Hudson-Basing, Corporate Events Manager, LSBU

9.55am - Welcome and intro to Day Two Craig Duckworth, LSBU Business School, UK

10am - Managerial decision making: consequences and Consequentialism - Malcolm Brady & Marta Rocchi, Dublin City University, Ireland

10.45am - Economic curricular, pluralism and the Global South Michelle Groenewald, North- West University, South Africa

11.30am - Accounting as applied ethics: teaching a discipline - Wilfred Dolfsma, Wageningen University, Netherlands

12.15pm - Lunch break

12.45pm - Purusharthas: the human pursuit of wealth and welfare. The Indian approach to ethics and economics - V P Raghavan, Indira Gandhi National Centre for the Arts, India

1.30pm - Economics, ethics and deliberation

  • Ioana Negru, Lucian Blaga University of Sibiu, Romania
  • Imko Meyenberg, Anglia Ruskin University, Cambridge, UK
  • Craig Duckworth, LSBU Business School, UK

2.15pm - The kidney market debate: a retrospective on Becker and Elias - Jonathan Wight, University of Richmond, USA

3pm - Comfort break

3.15pm - Alfred North Whitehead on the education of the commercial class: its influence on Keynes Dennis Badeen, University of Hertfordshire, UK

4pm - Plenary: Reflections

4.15pm - End of Conference

*Times according to GMT

________________________________________________________________________________________________

This conference will be delivered virtually via Zoom. You will receive the joining instructions on the Monday before the event takes place.


New book: Jennifer A. Baker and Mark D. White (eds), Economics and the Virtues: Building a New Moral Foundation

Mark D. White

E&V coverOur readers may be interested to know about a new book coming out soon from Oxford University Press that I co-edited with Jennifer A. Baker entitled Economics and the Virtues: Building a New Moral Foundation. From the blurb:

While ethics has been an integral part of economics since the days of Adam Smith (if not Aristotle), many modern economists dismiss ethical concerns in favor of increasing formal mathematical and computational methods. But recent financial crises in the real world have reignited discussions of the importance of ethics to economics, including growing calls for a new approach to incorporating moral philosophy in economic theory, practice, and policy. Ironically, it is the ethics of virtue advocated by Aristotle and Adam Smith that may lead to the most promising way to developing an economics that emphasizes the virtues, character, and judgment of the agents it models.

In Economics and the Virtues, editors Jennifer A. Baker and Mark D. White have brought together fifteen leading scholars in economics and philosophy to offer fresh perspectives on integrating virtue into economics. The first section covers five major thinkers and schools in the virtue tradition, tracing historical connections and suggesting new areas of cooperation. The second section applies the ethics of virtue to modern economic theory, delving into its current practices and methodology to suggest areas for integration with moral philosophy. Finally, the third section addresses specific topics such as markets, profits, and justice in the context of virtue and vice, offering valuable applications of virtue to economics.

With insights that are novel as well as rooted in time-tested ethical thought, Economics and the Virtues will be of interest to economists, philosophers, and other scholars in the social sciences and humanities, as well as professionals and policymakers in the fields of economics and finance, and makes an invaluable contribution to the ongoing discussion over the role of ethics in economics.

Many if not all of the contributors will be familiar names: besides me and Jennifer, they include Christian U. Becker, Tim O'Keefe, James Otteson, Michael Baurmann and Geoffrey Brennan, Eric Schliesser, Andrew Yuengert, Christine Swanton, David C. Rose, Seung (Ginny) Choi and Virgil Storr, and Jason Brennan. (You can see the complete table of contents at Amazon, OUP, or my personal blog.)

Personally, this book has been a dream of mine for a number of years, and working with Jennifer, Adam Swallow and (the late) Terry Vaughn at OUP, and all the contributors, made that dream a reality in every possible way.

Economics and the Virtues has already been reviewed by Adam Gurri at Sweet Talk, where he calls it "a valuable source of insight, especially for economists used to operating within only one framework." Will Wilkinson of the Niskanen Center and The Economist calls it "a fascinating volume" and "an indispensable collection for anyone interested in moral psychology, economic theory, or the morality of markets," and pre-eminent philosopher and Kant scholar Onora O'Neill calls it "a rich and rewarding collection" that "explores classical accounts of the virtues, and argues that they remain essential not only to character but to culture, including the culture of markets."

(You can also see Jennifer's and my post at OUPblog discussing "The Big Short" in relation to the theme of the book.)


Cost effectiveness is not the problem — government control of health care is.

Health dataMark D. White

In today's "The Upshot" in The New York Times, economist Aaron E. Carroll bemoans the fact that health policymakers, regulators, and spokespeople are reluctant, and sometimes even forbidden, to discuss and make use of information regarding the cost effectiveness of particular treatments. The fear is that they will invoke the spectres of rationing and "death panels," or more generally, medical decisions made on the basis of money alone and not the needs or interests of patients and their loved ones.

I agree with Carroll that cost effectiveness is an essential and necessary topic for discussion; after all, health care has to be paid for by someone, who is responsible for making sure that scarce resources are used in the most beneficial way possible. And I think most people understand this principle as well, even if they don't want to acknowledge it at times of tragedy and impending loss.

If people are afraid of calculations of cost effectiveness, it's because they don't want some distant, faceless, bureaucracy using cold data to make decisions that affect such an intensely personal aspect of their lives. But the problem isn't the numbers themselves—it's who is using them to make the critical decisions.

If health care decisions had not been centralized under the Affordable Care Act (or a similar plan), and health care decisions were left in the hands of doctors, patients, and insurance companies unbound by government mandates regarding coverage, these parties together could use cost effectiveness numbers in a way that worked with each patients based on his or her interests, coverage, and resources. Each patient, together with his or her doctor and loved ones, could balance these various factors in a way that furthered his or her overall interests within available resources and insurance coverage. They could use cost effectiveness information as one input into a specific decision in a way that furthers that patient's interests.

I wrote about this aspect of private health care in "Markets and Dignity: The Essential Link (With an Application to Health Care)," my chapter in my edited volume Accepting the Invisible Hand: Market-Based Approaches to Social-Economic Problems (Palgrave Macmillan), on pp. 13-14:

The possibility of making private decisions regarding the benefits and costs of various treatment options, whether for minor illness or chronic disease, puts the choice in the patient’s hands (as well as with her doctor and whomever else the patient wants to join the process, such as family or friends). In consultation with her doctor, the patient can assess the value of various treatments, considering the merits compared not only to their costs, and the benefits and costs of alternative options, but also other uses towards which those resources can be devoted, which are all subjective valuations. Perhaps she will choose not to undergo the premium treatment, even if she could afford it, because she wants to leave the money for her children, or take a cruise in the final months of her life; or perhaps she will sell her house to pay for a little more time on life support and with her grandchildren. In a market setting, this choice is hers, along with its benefits, costs, and other consequences.

I am not denying that the patient may not be able to afford the premium treatment because she does not have the resources for it; this is tragic, to be sure, but unavoidable in a world of scarcity. If she is not making these decisions, someone else is; an insurance company or HMO may also refuse her the premium treatment based on costs, and a government-run health plan may do the same. But in these cases, the decision would be made for her, according to someone else’s calculation of whether the treatment was “worthwhile” in terms of costs and benefits for the hospital, insurance company, or government health program, all of whom have scarce resources that must be allocated somehow. In a market context, the decision would be hers, even if it seemed she had no decision at all because she does not possess the resources, either due to bad luck or bad planning, or other choices made through her life.

All is not lost, necessarily; just because the premium treatment is out of reach does not mean there are not lesser, more inexpensive treatments that will also be of benefit. In a market system, this is the patient’s choice, just as she can choose what size house to buy, what model car to lease, what size TV to own. Every person prioritizes the various interests on her life; some forego the large house to take frequent vacations, some do the opposite. Some may opt for the cheaper treatment option to retain more resources for another goal in life, or to give more to others rather than spend it on premium care for herself. And certainly, past choices will constrain or expand her present options; one who spends her income on lavish toys throughout life should not expect sympathy when she cannot afford top-line treatment at the end of it. But these are her choices, while in any other system, this decision may be made for her, according to calculations based on the imputed value of her life and her well-being compared to other persons. Not every person can afford to have the premium treatment, but this fact is due to scarcity of resources, not the way in which they are allocated or distributed, and it will be true under a state-controlled system as well as a market system. A state system focused on efficiency cannot allow everyone to have the premium treatment either, and the choice of who (if anybody) undergoes it will be truly arbitrary, with no role for choice on the part of the patient or her family. Choices that so closely affect a person’s life should be made by that person alone (or other persons to whom she delegates—or sells—that authority); they should not be made by another party that either presumes to know her “true interests” or serves the collective weal in the name of efficiency.


Call for papers: Symposium on "Ethical Limits to Markets" in Moral Philosophy and Politics

Mark D. White

A new call for papers for a special journal issue, highly recommended:

Moral Philosophy & Politics, issue 2016/01 , symposium:

Ethical Limits to Markets

Claims about the dominance or “hegemony” of the market abound in contemporary discourse, yet there remain areas of social life in which goods are not produced and/or allocated via markets. There are also areas of social life in which the use of the market mechanism is contested. The editors of Moral Philosophy and Politics invite high quality submissions that examine questions such as:

- Are there goods that cannot, opposed to should not, be produced and/or allocated via the market?

- What are the characteristics of goods that cannot or should not be bought and sold on markets?

- Is there a “general theory” of limits to markets, or are their limits to be enumerated on a case-by-case basis but not by an all-encompassing theory?

- Are there examples of discourses about the limits to markets in history from which contemporary debates can learn?

- What are the processes through which a given good enters the market domain, having been previously produced or allocated by non-market means?

- What sorts of ethical arguments and sentiments are made or held by lay people who oppose “marketization”?

- What are the processes through which ethical opposition to “marketization” is reduced or broken down?

- To what extent can questions about ethical limits to markets be detached from wider questions about the ethics of “market society” or “capitalism”?

Commentaries and critiques of recent literature on the limits of markets are also welcomed.

Submissions are to be received via the journal’s manuscript submission site (http://mc.manuscriptcentral.com/mopp) by 1st January, 2015.

For more information, see the journal's homepage: http://www.degruyter.com/view/j/mopp


Mehmet Cangul on an upside to a reduction in employment

Mark D. White

Mehmet bookMuch has been written recently regarding Obamacare's predicted effect on employment and, even more recently, on the CBO's report on the effect of increasing the minimum wage on same—see, for instance, Ross Douthat's latest column, "When Work Disappears." 

As it happens, I was fortunate enough to see an advance copy of Mehmet Cangul's upcoming book Toward a Future Beyond Employment, in which he argues that there can be an upside to a gradual reduction in employment, but that society needs be re-evaluate its ideas about work, consumption, and leisure in order for that to happen. (I have an older piece at Psychology Today along the same lines, so I was drawn to Mehmet's arguments.)

I asked Mehmet if he would write a short piece for Economics and Ethics addressing the recent Obamacare controversy, and he graciously agreed. Below is what he wrote:

-----

The recent Congressional Budget Office Report, revealing Obamacare would cause more than 2 million job losses, has caused much stir. Republicans have been quick to point out that they were right all along about Obamacare’s cost on jobs and business. But the White House defended the result, arguing that much of the job loss will come from people choosing not to work and instead focus on their “dreams.” Their reasoning is that healthcare subsidies for the lower ladder of the income scale would enable workers to “escape” jobs that they would otherwise stay in only to keep their healthcare coverage. Some on the right have been quick to ridicule this argument about expanded choice, framing it as a last-ditch political effort to make the best of an embarrassing revelation.

However, we should take a pause from politics and ask this intuitive question: does it make sense that people would continue to work at jobs they would rather quit just so they can have affordable healthcare? This is in fact a severe distortion that prevents the full realization of what the American economy has already inherently achieved, more choice.

This is one of the core ideas of the book I wrote, Toward a Future Beyond Employment, that will be published by Palgrave this April. My main argument is that the Western economies that have been able to incorporate their technological progress structurally to their economic production should be able to afford more free time for their workers. Due to certain economic inefficiencies and cultural biases, however, the system is not able to fully internalize this opportunity. If Obamacare will give workers more choice, and ultimately more time, this should be welcomed, not attacked on the basis of a dogmatic cling to political correctness about job loss.

Some have argued that a declining work force would pose problems for economic production as jobs would increasingly be harder to fill. However, the trend of technology and automation points otherwise. The more sophisticated and nuanced automation becomes, the faster we will converge toward a paradigm where the demand for human labor will become either irrelevant or severely reduced (in terms of both laborers and hours) even in areas where we would never imagine robots could toil on our behalf. Just as the technological shift of manufacturing eliminated jobs in physical production, a parallel structural shift is taking place in non-tangible jobs such as administration. Increasingly more sophisticated software technology is rendering mental labor less relevant as well.

Does this mean more people will be idle without a purpose? This is a caricature. In truth, it only means that society will have to translate the time savings from this labor elimination toward alternatives that give individuals more choice and creative satisfaction while certain industries and their potential for traditional job generation face a natural decline. The economy is no longer one of industrial and material production, but instead operates on the basis of the production of ideas and concepts. More time away from declining traditional work structures should naturally enable more people to contribute to the production of ideas on an individualized basis.

In my book I argue that this is the next stage of economic advancement that Western economies face, and will result in higher welfare based on people having more time to use as they wish. Public policy that accommodates this evolution by expanding choice should therefore be encouraged. While Obamacare will continue to be debated on multiple grounds, its impact on jobs has to be considered more thoughtfully beyond headline numbers and short-term political gain.


What explains the lack of criminal prosecutions related to the financial meltdown?

Mark D. White

Many people, including in the media and academia, have wondered about the lack of criminal prosecutions stemming from the 2007-08 financial meltdown, especially related to fraud in the banking sector. In the new issue of Crime, Law and Social Change (61/1, February 2014), Henry N. Pontell, William K. Black, and Gilbert Geis probe this question in a paper titled "Too big to fail, too powerful to jail? On the absence of criminal prosecutions after the 2008 financial meltdown":

Various explanations have been offered regarding the causes of the current global economic crisis that was spawned by the collapse of mortgage-based securities in the U.S. that were sold world-wide and that contained "toxic assets" comprised of subprime loans. There is ample evidence that such loans were originated through fraud. Firms recorded huge profits, and executives were awarded large bonuses even though some had led their companies into bankruptcy and plunged both the U.S. and global economies into the greatest recession since the Great Depression. This paper assesses the reasons why there have been no major prosecutions to date, and compares the U.S. government's response to that in the savings and loan crisis. It analyzes the influence of large financial institutions on lawmaking, regulation, and the allocation of enforcement resources, the continued general lack of understanding of financial fraud including control fraud, and problems related to the higher status and power of potential defendants.

This paper promises to contribute a much-needed criminological insight to this question (which seems to bring out a retributivist sentiment in people who would normally disavow such ideas!).


An Answer to "Questions for Free-Market Moralists"

Mark D. White

I read with great interest Amia Srinivasan's contribution to the New York Times' philosophy column "The Stone" titled "Questions for Free-Market Moralists." After introducing the political philosophies of John Rawls and Robert Nozick, she states that "on the whole, Western societies are still more Rawlsian than Nozickian: they tend to have social welfare systems and redistribute wealth through taxation. But since the 1970s, they have become steadily more Nozickian." Then she presents four statements that she claims describe Nozick's minimal state -- and are representative of what she terms "free-market moralism" -- with which she assumes most people will not be comfortable. (Certainly not readers of The New York Times, by any rate.) But I'm not so sure, especially once we clarily what the four statements are talking about.

The four statements are:

1. Is any exchange between two people in the absence of direct physical compulsion by one party against the other (or the threat thereof) necessarily free?

2. Is any free (not physically compelled) exchange morally permissible?

3. Do people deserve all they are able, and only what they are able, to get through free exchange?

4. Are people under no obligation to do anything they don’t freely want to do or freely commit themselves to doing?

For each statement, Ms. Srinivasan provides an example of what such a world would look like: for instance, after statement #2, she suggests the following. (Note that this example also invokes statement #3 about inherited wealth.)

Suppose that I inherited from my rich parents a large plot of vacant land, and that you are my poor, landless neighbor. I offer you the following deal. You can work the land, doing all the hard labor of tilling, sowing, irrigating and harvesting. I’ll pay you $1 a day for a year. After that, I’ll sell the crop for $50,000. You decide this is your best available option, and so take the deal. Since you consent to this exchange, there’s nothing morally problematic about it.

This example points out my problem with Ms. Srinivasan's argument: she conflates political philosophy with moral philosophy. It is perfectly consistent to maintain, as in statement #2, that free exchanges are morally permissible while also believing that that is something morally problematic with the situation described above -- as long as you don't subscribe to a perfectionist system of morality that fails to distinguish between forbidden and merely "problematic" actions.

But there's more. Statement #2 really isn't speaking to morality -- instead, it's talking about legality that's simply based on a certain morality. How statement #2 should be read (based on my understanding of Nozick, at any rate) is as saying that the state has no moral basis to question free exchanges. Of course, the situation above is distasteful to most, but does this mean should it be forbidden by law? This is a different issue than the one Ms. Srinivasan addresses in her example -- and I suspect many would answer "no, it shouldn't be illegal" even if they regard the landowner's behavior as despicable. This doesn't imply a moral free-for-all, but simply a state that stops short of legislating all moral (or immoral) behavior.

Consider also Ms. Srinivasan's example for statement #4 regarding forced obligation:

Suppose I’m walking to the library and see a man drowning in the river. I decide that the pleasure I would get from saving his life wouldn’t exceed the cost of getting wet and the delay. So I walk on by. Since I made no contract with the man, I am under no obligation to save him.

The problem of duties of beneficence is an old and well-worn one in moral philosophy: while most would say we do have a general obligation to help those in need when it would come at little cost to ourselves, not as many would be willing to make that a strict requirement, much less a legal one (though some jurisdictions have). Ms. Srinivasan seems to draw a extreme and false dichotomy between coerced beneficence and rapacious self-interest -- I would like to think that no matter what kind of state we live in, people would still extend a hand to those in need when they can. (Furthermore, I see no reason to believe this would be any more likely to occur in a Rawlsian system where the state, not the individual, is the party understood to do most of the helping.)

As I understand him, Nozick was describing a state that enables people to make choices when they don't wrongfully harm others, and the market was but one framework in which they could do that. (For that reason, I disagree with the term "free-market moralist," but that's of little concern.) He did not, as Ms. Srinivasan writes, maintain that "the market can take care of morality for us," nor did Rawls hold that morality was the sole responsibility of the state. Fundamentally, Rawls and Nozick differed on the degree to which the state should exercise individuals' collective responsibility to each other on their behalf. Neither Rawls nor Nozick denies a role for private morality outside of the state. But Nozick and the "free-market moralists" believe that individuals, as parts of families and communities, bear the bulk of the responsibility to take care of one another, a responsibility borne voluntarily and, yes, imperfectly (unlike how perfectly the state conducts it, of course).

Ms. Srinivasan also holds Nozick's system to an incredibly high standard, arguing that to concede any weakness in any of the four statements "is to concede that the entire Nozickian edifice is structurally unsound. The proponent of free market morality has lost his foundations." But she neglects to mention the problems with Rawls' system, especially the very particular psychological assumptions that ground the "results" of the veil-of-ignorance exercise -- a brilliant metaphor also found in the work of other philosophers and with various predictions regarding the terms of the social contract.

Ms. Srinivasan states clearly that she believes that Western societies should be tilting back towards Rawls (I would say "further" rather than "back," but that's a difference of interpretation) and away from Nozick. Fair enough -- we disagree on that. But she makes Nozick's system an all-or-nothing proposition while ignoring problems with Rawls, and further misinterprets Nozick's work as describing the whole of morality rather than the operation of the state alone. In the end, her article shows a troubling lack of faith in people to care for each other outside the confines of the state -- and an overly optimistic belief in the power of the state to do the same.