In our society, several markets have characteristics which make them undesirable. Debra Satz defines them as noxious markets. In order to measure whether a market is noxious, she describes the following four parameters. Extreme harms for individuals, Extreme harm on society, Vulnerability and Weak Agency. My claim is that the parameter of weak agency has limited applicability because the scope is too wide. At first I will explain the parameter of weak agency and my claim that it is not applicable. Then I will explain two arguments which support my claim that this parameter is not applicable. After that, I will conclude that the parameter of weak agency has limited applicability and should not be used to define whether a market is noxious.
Debra Satz describes her parameter of weak agency as “a market that is characterized by very weak or highly asymmetric knowledge and agency”.[1] Satz includes two interpretations of this parameter. ‘Firstly, the lack of important information by direct participants of the market. Secondly, serious indirect effects on people who are not involved in the market transactions.’.[2] ‘She states ‘that the weak agency characteristic is always present in markets, but when a market has a high score on this parameter it should be defined as noxious. Even when there is no harmful consequence of that particular market.’[3]
My claim is that the weak agency parameter is not applicable because the scope is too wide. There are markets which we appreciate in our society while they score high on this parameter. These markets are not necessarily noxious because, when an individual on a market has a company as an opponent there will always be asymmetry in knowledge about products, consequences of the product and consequences of the company itself. So when we use the parameter of weak agency, all markets that involve companies are noxious. I will explain this trough a micro and a macro view.
Firstly, the micro view. When a company sells a product to an individual, the individual has no good reference about the price. They do not know what the costs for the product were, they cannot always compare the ratio of price and quality with other products of the same type, therefore they can’t define if the price of the product is reasonable. This asymmetry rises when the product becomes more complex or has a contract which bounds consumers for a longer time. For example, when a supermarket sells apples a consumer can compare the price with apples from other supermarkets because they can value the quality the products. Consumers still can’t say if the price is reasonable or artificially high, because they do not know what the costs or agreements of different supermarkets are. When a product becomes more complex, or there is a contract involved, the valuing part becomes more difficult. For example, an insurance. Consumers can’t properly value the quality of an insurance because, most of them don’t have the knowledge to understand the specific information that is present in insurances. Furthermore, consumers can’t predict the future, and therefore they don’t know to what extent they will need the insurance. Still, both of these markets are accepted and not necessarily noxious.
Secondly, the macro view. When an individual trades a product with a company, in a way that benefits the company, the individual doesn’t know which investments or lobbies he supports as a result of his trade. But this will only become problematic when the investments are wrong. For example, when a construction company invests in new machinery causing a more effective way of constructing houses, there is no problem It doesn’t matter if the agent, who bought a service of this company, has no knowledge of the investment that the company made and therefore unknowingly supports it. But when a bank invests money in arms trading in favour of a civil war, then it could be a noxious market. So on this level it’s not the weak agency parameter that defines a market to be noxious but the character of the company involved. So we can perfectly accept most of the markets have a high score on this level of the parameter.
As a conclusion I can say that both arguments are present in almost all markets which involve companies. Therefore these arguments support my claim that the parameter of weak agency is has limited applicability because it’s scope is too wide. It would define almost all markets with a company as an agent as noxious, but most markets are perfectly desirable in our society. Therefore we shouldn’t use this parameter to define a market as noxious.
[1] D. Satz, Why some things should not be for sale, Noxious markets, 2010, p. 96
[2] D. Satz, Why some things should not be for sale, Noxious markets, 2010, p. 96
[3] D. Satz, Why some things should not be for sale, Noxious markets, 2010, p. 97
This essay was rated as an assignment for the Premaster Philosophy EBO @ Tilburg University