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Does the Market Commodify Everything?

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Tags Free MarketsPricesPrivate Property

09/18/2006Thomas E. Woods, Jr.

More clichés have been directed at the market economy than at just about any other social phenomenon. Reading through the proceedings of an international symposium from 1982, edited by Walter Block and Irving Hexham, I came across this remark:

The free market philosophy and social reality makes us look at the whole of social life as a market…. It leads people to regard everything that surrounds them as merchandise, as having a price, as an object to be used.

Now it doesn't matter who said this, though I owe it to the editors at least to note that neither of them was the guilty party. (I doubt Walter Block would say something like that even under threat of torture.) It is not an unusual argument: the free market allegedly "commodifies" everything, and reduces all of life to a matter of dollars and cents.

But is that really what the market does?

Murray Rothbard described the free market as simply "the social array of voluntary exchanges of goods and services." In titling one of his books Power and Market (originally intended to be the closing section of Man, Economy and State) Rothbard was positioning "power" and "market" as antinomies. The market consists of voluntary transactions between willing parties; the state, or "power," introduces compulsion into human relations, bringing about coerced outcomes that people would not voluntarily have chosen.

If power and market are opposites, let us contrast the pure market economy with a pure exertion of power — the military draft. The draft consists of a group of people who comprise the state declaring the right to employ the physical bodies of its subjects in a conflict involving the infliction of violence and the serious risk of death. The moral hazard involved in the draft is obvious: the state will be more prepared to wage wars, and to engage in tactics likely to involve significant loss of life, if the cost of such activity is socialized and the soldiers they use are, from the state's point of view, essentially costless. If there are plenty more where that hundred thousand came from, and none of the authorities must bear any direct cost for the loss of life, we can expect more recklessness with human life than would otherwise exist.

Now our critic says that the market "leads people to regard everything that surrounds them as merchandise, as having a price, as an object to be used." But isn't that exactly what the state does in the case of the draft, this most non-market of transactions? It views the populace as raw material to be employed, involuntarily, in perilous and violent pursuit of the state's goals — in other words, as "an object to be used." Except the state doesn't even pay a mutually agreeable price for the labor it conscripts!

This is how the state behaves all the time. It need not interact with people justly or with any concern for their preferences or rights at all, much less actually arrive at mutually satisfactory terms with them. It may act unilaterally, and the individual has no recourse other than to accept whatever the state determines with regard to how much of his property will be expropriated, what his children will be taught in school, or where he must be sent to fight and die.

Market prices serve an important function, apart from making possible both economic calculation and the indefinite extension of the division of labor. Market prices imply ownership, which in turn implies the right of disposal over the thing owned. If I don't meet your price, you need not perform your labor service for me. If I don't meet your price, you need not relinquish your property to me. They remind us that social cooperation must involve genuine cooperation, which means that no one side of a transaction has the right to cheat or steal from the other. That is the morality of the thug. Instead, they must reach terms that are mutually satisfactory in order for a transaction to take place.

Market prices, in other words, are not artificial, wicked things that discourage social cooperation. They make social cooperation, properly understood, possible in the first place. They convey the rule that we may not simply walk around as self-absorbed savages, taking whatever we want from whomever we want, as if nothing and no one can trump our demands and desires. We must be willing to offer something in exchange for the things we acquire, such that the person providing them — instead of being exploited by us, with no thought to his well-being at all — can see his own condition improved as well.

With the state, on the other hand, the price is whatever the state says it is. It will provide services you do not want, will never use, and may even find morally repugnant, and then tell you what you must pay for them. In the case of eminent domain, where the state confiscates your property for its own purposes, you will be paid something, but the state itself will decide exactly what it will pay you. How is this preferable to a world in which each individual is allowed to declare the terms on which he will dispose of his person and property, and in which no exchange takes place unless both parties voluntarily agree to it?

It is the state, then, and not the market, that "regards everything that surrounds [it] as merchandise … as an object to be used." Precisely because it acts outside of the market, the state can devise arbitrary prices for its services, make those prices vary across different classes of people, and then threaten physical force against anyone refusing to pay them. Who in civil society is allowed to behave like that?

Now our critic may say that he does not wish to dispense with the market altogether, but that he wishes to see the market play less of a role in society, and to foster a more democratic and communitarian approach to property and its use. But neither voting nor flowery language affects the moral question in the slightest. If a majority of voters vote to expropriate me or to send me to fight one of the state's battles overseas, the situation is morally no different than if the state had done these things according to its own whims.

And to the extent that the market plays less of a role in society, to the very same extent do arbitrariness and force take its place. If the free interaction of property owners is not permitted to determine the terms on which individuals will interact with each other, the barrel of a gun must do so instead. Then we'll see which system treats everything as "an object to be used."

Nothing is easier or more fashionable than to condemn the alleged materialism of the market, but this kind of rhetoric is the enemy of rational thought. It is private property and market prices or the law of the jungle, and no amount of fashionable cynicism about the market or romantic delusions about how nice life would be without it can obscure this fundamental choice.


Contact Thomas E. Woods, Jr.

Tom Woods, a senior fellow of the Mises Institute, is the author of a dozen books, most recently Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion. Tom's articles have appeared in dozens of popular and scholarly periodicals, and his books have been translated into a dozen languages. Tom hosts the Tom Woods Show, a libertarian podcast that releases a new episode every weekday. With Bob Murphy, he co-hosts Contra Krugman, a weekly podcast that refutes Paul Krugman's New York Times column.

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