If markets are so wonderful, why can't I find friends at the store?

American Journal of Economics and Sociology, The, Oct, 2002 by M. Neil Browne

MARKETS DESERVE ABUNDANT PRAISE. They perform many tasks briskly and effectively. But I am disturbed by the dichotomizing tendencies of those market adherents who fear that any movement away from market outcomes is necessarily flirting with the worst dangers of statism. This essay positions itself in the body of literature that sees markets and politics as inextricably intertwined (Sunstein 1997; Nell 1996; Wade 1990). Hence, fruitful discourse about allocation and distribution necessitates the search for an optimal partnership between markets and the state. From this framework, the search for something called "a market decision" unsullied by governmental framework or interaction is a delusion, the social equivalent of a search for the abominable snowman.

In an era of market ascendancy (Kuttner 1997), it seems apt to pause to think about the optimal scope for market activity. We are all familiar with the standard list of market failures contained in every text on the principles of economics. These include, inter alia, externalities, free rider problems, monopolization, asymmetric information, and unfair distribution of wealth and income. Other critics of market logic have focused on weaknesses in the form of rationality presumed in the market narrative (Quinn 1996) and the incommensurability of particular kinds of preferences (Sunstein 1997; Anderson 1993). Paying heed to these limits works against the arrogance that often accompanies the victory of a particular set of ideas. There is no reason to assume that market advocates are immune to this danger.

To give markets the credit they deserve, but no more, requires an awareness of their limits as valuation processes. This paper argues that the interactions between buyers and sellers, for all the promise possessed by those interactions, are relatively barren in terms of their producing one important human relationship, friendship. Friendship is illustrative of a domain of relationships where markets fail us.

The point here is not to say that people go to the store to find friends. Nor does this paper contend that friendships cannot emerge from market exchange relationships. That I just might find a friend from barter and trade in no way argues that the store is hospitable to the establishment of friendships.

Rather, the objective of this argument is to provoke reflection about the proper boundaries of market constructs in particular contexts. If friends are not likely to be found at the store, what other human needs must be sought elsewhere?

I

Asking Institutions to Do More Than They Can Do

PARTICIPANTS IN MARKET EXCHANGES often profess disappointment at the absence of trust in their interactions (Goodwin 1997). Trust, as we all know, is a central basis for friendship. But to what extent is such an expectation even apposite for market exchanges? As one social institution among many, the marketplace fulfills certain purposes, but there is no reason to expect it to satisfy any and all demands we place on it.

Sociologists, such as Emile Durkheim and Herbert Spencer, often conceptualize society as a body, and liken social institutions to the separate parts within the body (Nash and Calonico 1993, pp.12-13). In other words, the body cannot function optimally unless all body parts are functioning optimally, and just as each body part was designed to work together with other body parts, social institutions were designed to work together with other institutions. At the same time, however, each body part has a unique role to play within the body. We do not expect our feet to think or our lips to smell. In the same light, we cannot expect social institutions to play roles they were not designed to play.

Look at what happens when we ask a social institution to achieve more than it was designed to achieve. Formal education provides an evocative illustration. Contemporary educators cannot focus solely on the cognitive development of their students, arguably their comparative advantage. Instead, they are now expected to accomplish multiple goals throughout their work day. For example, teachers are expected to care for the psychological and social needs of the child, to provide intercultural, health, drug, and sex education. They are also expected to allocate time for planning, pupil evaluations, teacher in-service training, parent-teacher conferences, and extracurricular activities with students, staff meetings, playground and cafeteria supervision, and even time to attend to the security of buildings and materials (Esteve 2000).

Unfortunately, by expecting public schools to accomplish goals they were never designed to accomplish, we are distracting teachers from the initial goal of education. As DeCicco and Allison argue, "mission clutter is the root cause of failure in America's public schools" (1999, p. 273). The more roles teachers are expected to play, the less time they have to devote toward the fundamental goal of cognitive development.

What I fear is a similar loading of responsibilities on the market that the institution cannot sustain. Markets are both engines of potential efficiency and stimuli for particular forms of freedom. Those functions are enough by themselves to deserve vigorous encomium.