Are Markets Coercive?
What the liberal left and the post-liberal right get wrong about capitalism
A while back, I wrote a post about an old argument that’s recently come back into fashion. The argument: property rights are a right to exclude, backed up by the state’s threat of force; that exclusion restricts what others can do; so property — and the markets it makes possible — is pervasively coercive. The legal theorist Robert Hale made the argument in 1923 against the laissez-faire orthodoxy of his day. Today it’s deployed by progressive legal scholars in the Law and Political Economy movement and by post-liberal conservatives like Sohrab Ahmari. Both sides quote Hale, and both take the argument to indict capitalism.
My original post made a simple observation. The logic of Hale’s argument applies just as much to bodily integrity as it does to property rights in external objects. If property’s state-enforced exclusionary structure makes property coercive, bodily integrity rights are coercive too. A person who refuses to donate a kidney is, on this Halean view, coercing the dying patient who needs it. That looks like a reductio.
I’ve thought about Hale’s argument a lot since that post. And the result of that thinking is a new paper out today in Politics, Philosophy & Economics (open access via Sage): “Are Markets Coercive?”.
The paper argues that both the libertarian and the Halean analysis of market coercion fail, in mirror-image ways. The libertarian answer — that voluntary exchange is non-coercive by definition — moralizes coercion and strips it of any evaluative force independent of rights. Hale’s answer goes the other direction: it de-moralizes coercion and makes it ubiquitous, which strips the concept of any discriminating power. If coercion is everywhere, it cannot pick out the arrangements worth criticizing.
The positive proposal is a graduated framework. Identify coercion non-moralistically — yes, property restricts options under state-backed power; that’s coercion in a perfectly real descriptive sense — but evaluate its moral significance in degrees. On this view, the question isn’t whether markets are coercive — they are — but whether their coercion is of the kind that should worry us. Sometimes (company towns, monopsony, mandatory arbitration in bad faith) it is. Often (a competitive market with a decent safety net) it isn’t.
The upshot — and this may surprise libertarian readers — is that the graduated framework supplies a better defense of markets than the moralized libertarian one it replaces:
The libertarian who insists that voluntary market exchange is non-coercive by definition will persuade no one who does not already accept the moralized premise — and will have no resources to explain why competitive markets are preferable to monopolistic ones, since neither involves ‘coercion’ on the moralized view. The graduated framework, by contrast, can explain precisely why well-functioning markets deserve support: competitive markets with adequate safety nets minimize the moral significance of coercion by expanding alternatives, protecting vital interests, and dispersing power.
The paper’s open access. So have a look and let me know what you think!
Because your work is overall good, my itchy copyediting finger wishes to point out that usage of "coercion" used in the following senses:
"The concept of coercion, so understood, picks out a specific class of option-restrictions: those imposed by human agents through the exercise of institutionally backed power."
"Markets involve coercion—restriction of options backed by institutional power—"
may require specification as state or institutional coercion.
The paradigmatic bandit's coercion, "your money or your life" remains coercion even when there's no institution backing it up – indeed, even when institutions oppose it (though it remains true that institutional opposition toward banditry is less coercive than institutional enabling of it). I find the paper reads as more confusing than necessary when "coercion" bare of any modifier must be read as, not just option-restrictions imposed by human agents (like the bandit), but human agents backed by institutional power.
I'm used to reading and chatting with libertarians who at least implicitly understand coercion comes in degrees, not all equally important, but I admit the notion of gradation is often more intuitive and implicit than explicit and systematic.
I agree with you that clarity on questions like, "How coercive is this, really?" and "How important is this coercion?" (which are different questions, but can collapse into each other, when coercion of less importance is regarded as less overall) in a systematic framework helps avoid myopia about who's being coerced worse, and by what (for example, "Lincoln was a tyrant" myopia).
Exploitation and theft of the invioable will, seems like a good framework for measuring a coersiveness in the market.