Sacrifice, Solidarity, and the Scope of the Market: Why Might Permitting Trade Crowd Out Gifting, and Why Would It Matter?

Abstract

In the absence of a threat of maldistribution, what reason could there be to bar trade of a genuine good that is otherwise owned? Market skeptics have asserted that, once permitted, trade tends to crowd out gifting. Why should we care, though, if needs are satisfied via sales? More importantly, why suppose that permitting trade will cause crowding out? In this paper, I address both questions with an emphasis on the second. Normatively, I claim that gifting has expressive value over and above its value in satisfying needs. Causally, I differentiate between possible cultural and psychological mechanisms, and I offer an original, institutional one. The cultural mechanism relies on the notion that pricing symbolizes a good as a mere commodity. The psychological mechanism draws on empirical evidence that introducing a monetary incentive can diminish a good's provision. And the institutional mechanism invokes an assumed division of moral labor that dictates that each of us sometimes eschews opportunities to gift so that, together, we enable the invisible hand. I further argue that the institutional mechanism is likely to be more widely applicable than the more familiar cultural and psychological mechanisms. Show more