On this week’s episode of the Counterintuitive Series on the Governance Podcast, Professor Mark Pennington (King’s College London) argues that if not quite everything, then a great many things, ought to be legally for sale. From kidneys, to drugs, to sex, to votes, how much ought the market be allowed to freely trade in?
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The Guest
Mark Pennington is Professor of Political Economy and Public Policy in the Department of Political Economy and Director of the Centre for the Study of Governance and Society.
Mark works in the area of philosophy, politics and economics and is best known for his work developing the ‘robust political economy’ paradigm which examines how well different institutions respond to human frailties reflecting ‘imperfect knowledge’ and ‘imperfect incentives.’
Mark directed the ‘The Ideal of Self Governance’ project funded by the John Templeton Foundation. Inspired by the research agenda of Vincent and Elinor Ostrom, this project applies the robust political economy perspective to examine the case for governance arrangements that lie ‘beyond markets and states.’
Transcript
Paul Sagar
Hello, and welcome back to Counterintuitive – A Governance Podcast. I’m your host, Dr. Paul Sager, a lecturer in the Department of Political Economy here at King’s College London. And this podcast is made in association with the Centre for the Study of Governance and Society at King’s College London.
Each week on this podcast, I invite a speaker to come and defend an idea. That is, to some degree counterintuitive. I play the role of devil’s advocate or sceptical inquirer, in order to see where the ideas will take us. Of course, whether you agree with me or my speakers, is in the final instance, entirely up to you.
Today on Counterintuitive, I’m speaking to Professor Mark Pennington. Mark is Professor of Political Economy and Public Policy here at the Department of Political Economy at King’s College London. He is the author of numerous studies exploring the nature and limits of markets, and in particular the 2010 book, Robust political economy, classical liberalism and the future of public policy. He is also the director of the Centre for the Study of Governance and Society here at King’s College London.
Professor Mark Pennington, welcome to Counterintuitive. So your position broadly construed is that most things, perhaps almost everything, should be for sale. But there are many cases in which people would argue that it is right that things are not for sale that have been prohibited, usually through a legal framework. So I’d like to explore with you the question of what (and why) should in fact be for sale. And maybe we could start with something relatively uncontroversial, perhaps from your point of view, but counterintuitive to many people’s point of view, with illegal drugs. So in most countries in the world, this country, the United Kingdom, things like heroin, cocaine, ecstasy, cannabis, these psychoactive substances cannot be freely traded on an open market, if you’re caught selling these things, you could potentially be sent to prison. But I’m gonna guess from the outset that that’s a prime candidate for you for the kind of thing that should be for sale. Could you explain briefly why you think that is?
Mark Pennington
Yes. So I think there are two sorts of arguments that people typically will refer to for either banning the sale of a particular commodity or service, or very heavily regulating it. And you can divide those into kind of social welfare arguments, that if you allow people to engage in certain kinds of exchanges, there’ll be negative social consequences, not only for the individual, but some kind of wider societal externality. And then you might have some kind of moral argument, which is that if you allow people to engage in the trade, it has some detrimental effect on their capacity to exercise autonomous decisions, or it cripple it reproduces some kind of power imbalances, which is the reason that people entered into the exchange in the first place.
So those are the kinds of reasons that people will give in the case of drugs, that would be if you allow people to buy and sell drugs freely, there are going to be many negative consequences that people don’t have enough information to evaluate whether drugs will have harmful effects on themselves, but also the sort of social consequences from widespread drug use. And you might also get arguments which are moral claims that when people who engage in these sorts of trades, they do so out of some kind of, you know, desperate situation, in this case, perhaps the person is mentally disturbed or unstable, and they’re not in a position to properly evaluate the kind of decision that they they are making. So I don’t have a problem with those criteria, these kinds of social welfare criteria or moral type criteria, but I think many people who argue for banning traits often apply those criteria inconsistently. So they don’t look at possible negative or external effects from the ban. In the case of drugs, it’s making it go underground. It’s the crime that’s generated from the actual banning of the activity. Now, we’ve got very good examples from history from prohibition in the United States, what happened when alcohol was banned. And likewise, in the case of the moral argument, as little consideration to the way in which banning something can actually deprive people of the autonomy that they get from being able to enter into trades, even trades that many of us would consider not ones that we personally would want to be involved in.
So that would be the kind of argument that I worked hard, I developed, which is to say, you need to apply your criteria consistently to the alternative that’s being proposed when you’re wanting to ban or very heavily regulate activity.
Paul Sagar
Great. So in the case of drugs, the position therefore would be banning it in fact creates more harm than good because you create an illicit black market and you put an extremely lucrative product in the hands of organised criminals. And in the process, you may interfere with the autonomy of adult free individuals who may want to partake in a recreational substance, which, in most cases, may produce no harm for other people. And at any rate, even if harm is produced on balance, more harm is produced by making it illegal than legal. And so I think that your position here is we need to look at the entire consequences of this framework, that banning something doesn’t simply make it go away, it in fact, has consequences of itself, we have to factor in those consequences. So that’s really, I think, quite clear on the question of drugs and whether or not people agree on how that falls out. There’s a sense in which we can all agree that that’s one way to look at the situation.
But I suppose if we take this framework, we can then start applying it to other examples that people may find progressively more counterintuitive. So how about trading in organs? So what about the idea that, well, I might want to sell my kidney? Perhaps because I want to take the money for a kidney and buy a new car? Or alternatively, perhaps, because I’m desperate, and I need to feed my children? Now many people would start to say, well hang on a minute, surely, we can’t allow people to start selling their own organs. But I take it that you think it’s not as clear cut as that?
Mark Pennington
Absolutely. So I mean, what you need to look at is, first of all, what is the objection to kidney sales being rooted into or to organ sales more generally, typically, it would be something along the lines of the two criteria that I set out before. So there may be some kind of social welfare arguments, that there’ll be negative consequences to such society if you allow this to happen. And you might also have cut some kind of moral argument that the autonomy of the person who’s engaging in these kinds of traits is compromised. So those, I think, are the criteria that you should actually use. In the case of organ sales? I think the social welfare argument against sales is going to be one on the grounds of do people have the information to know what the consequences of this kind of trade are going to be? If you sell your kidney? You know, do you know what the long term health consequences may be from doing so from having the operation to remove the kidney? And also, you may have general arguments about should people be allowed to engage in dangerous sorts of activities, which, you know, having these kinds of operations might involve? I think the moral argument would be one, that the only circumstances in which people would engage in this sort of trade would be one of desperation, that they haven’t got resources to sustain themselves, and therefore, they’re driven into this kind of market. And I think the argument against allowing trade there would be that, you’d actually remove the likelihood that we may get a better type of solution, which presumably, would be that you make sure people are wealthy enough to avoid being in situations where they have to trade back their kidneys. So my argument would be in the social welfare case, people don’t have perfect information, they never do about any trade that they are involved in. But typically, they will have more information about their own circumstances than some kind of external agent is going to be trying to regulate that conduct. So I might be in a better position to judge even though I’m not going to be perfectly informed whether or not this option is one that is valuable to me, that it’s better than the alternatives that I may personally face.
And so on those grounds, just in the way that we allow people to make decisions to engage in other kinds of dangerous activities, like mixed martial arts, for example. Or even playing rugby, people should be allowed to, to make those risk calculations themselves, even accepting that the information that they have isn’t isn’t perfect. The claim is simply that they probably got more information to know about which deals they should do, and some external actor. If we look at them, the moral of the autonomy argument, my argument would be well, what are the alternatives?
You know, in many cases where people think about these options, the welfare system isn’t sufficiently developed. So are we going to say to people, well, you’re not going to have the option to improve your life by making what is admittedly perhaps an undesirable type of transaction until that welfare system arrives. And, you know, we know that in many, many cases, well, you could be waiting a lifetime for that system to develop.
But I think there’s another argument here, which is that I don’t see why having a welfare system is necessarily incompatible with people trading kidneys, organs. And this relates to this point I was making earlier about having a consistent sort of type of evaluative framework in place. So if you’re not going to have a welfare system in place, such that people end up having to trade things like kidneys, presumably the reason for that is that people just aren’t generous enough to provide the welfare. And if that’s the case, then it seems to me you need to allow people to trade kidney so that they can improve that position because the alternative just isn’t going to be provided.
But let’s suppose you move to a better world, where people actually are generous enough to make sure people have the resources where they don’t need organs, just to get by and life in those circumstances seems to me, there’s no reason to ban the sale of the kidneys, because anybody who does enter into a trade in most circumstances, isn’t doing it out of desperation, they’re doing it as something that looks like a genuinely autonomous choice. So whether you’re looking at the non ideal conditions, where we’re in a background where people just aren’t very generous, or you’re looking at a situation where people are generous enough to provide welfare for people, there’s no strong argument for preventing people from engaging in these kinds of traits.
Paul Sagar
Great, but what would you say to somebody who said, okay, but let’s stick in the non ideal scenario that we’re likely to find ourselves in. In reality, we’re not going to get one to one trades, when it comes to kidneys, we’re gonna get a situation where there are people who need kidneys desperately or they’re going to die or be on dialysis for a very long time, it’s extremely unpleasant for them. And there are people who may want to sell their kidneys, because they may want the financial return, but they can’t communicate with each other. What’s actually going to happen is third party middlemen are going to have to facilitate this transaction. And what you’re going to have there are potentially two problems: one, the exploitation of both sides by an actor in the middle to facilitate the transaction, which may itself be problematic, because you could see in your perhaps large corporations making an enormous profit at the expense of vulnerable people.
And secondly, that there’s just something inherently wrong about that in and of itself, that you shouldn’t have vulnerable people who may be weak in a market position being predated upon as it might be seen by those with more market advantage in order to secure themselves at private profit. There’s something intrinsically important about the integrity of the human body here. So there’s two different arguments, but they’re, of course connected in various ways. And what might you say in reply to that kind of response?
Mark Pennington
Well, the argument about some sort of fundamental integrity of the body, I’m very, personally, I’m very sceptical of those kinds of claims, because they are sort of based on kind of a naturalistic view that there’s some kind of, you know, objective reality about what we ought to do with our our bodies. But we know from looking at different cultures, that people in different cultural contexts approach these things differently, whether it’s attitudes to sex, attitudes to other sorts of things that many of us think to be sort of natural, they’re actually quite culturally contingent. And so when you’re in a world where you’ve got multiple different cultures that are interacting, I don’t think there’s any one standard of what a kind of reasonable act that you should be engaging with, with your with your body, whether that’s selling organs, selling sex, or some other sort of thing.
So I’m sceptical those kinds of claims. I think the argument about power is a much more powerful argument. You know, aren’t you going to be in a situation where people can be exploited? If you allow these traits? The answer to that is yes. But compared to what if you don’t allow the trades to take place, people will be exploited? How can adding an opportunity to people even if it’s not a great opportunity, actually make them worse off than in a situation where that opportunity is not available? Now, some people would make the argument that even adding the opportunity somehow doesn’t make people worse off because they can get trapped into a situation that they subsequently just cannot escape from. But again, you have to look at what the alternatives might be. And my feeling is that in most cases, the alternatives are normally worse. Otherwise, people wouldn’t be thinking about entering into these kinds of activities in the first place.
Paul Sagar
So take it as one of the background assumptions, it’s doing some work here. At least if we legalise selling organs, then the people who need organs would get organs, which currently they’re not doing. Most people who need an organ transplant have long, long waiting lists, and many die waiting for an organ transplant. And I suppose one point to be made here is, well, if there was more supply, that demand would be better satisfied. And so you know, we mustn’t forget the consequences of the people who are going to benefit from this, even if on the one hand, on the one side of the balance sheet, there are people who may have to make a poor choice. And we may also hope never to be in that situation, and that’s bad.
On the other hand, the flip side of that is a good has been produced, which is fewer people who need organs aren’t getting organs. And I take it that this is actually borne out by the empirical evidence in Iran, which is, as far as I’m aware, is the only country in the world which does allow organ sales, and where they’re waiting lists for organ transplants are just incredibly low compared to the rest of the world. So there seems to be strong empirical support for that, for that outcome.
But you mentioned in your reply that another area, which is very controversial when many people have strong intuitions against sale of the body in general, and that, of course, is trading sex. And many people would say that prostitution is an evil, which disproportionately affects women, because again, it tends to be vulnerable women who are doing this out of necessity or desperation. And insofar as we should protect people from being forced into market transactions, because they’re simply desperate, we should therefore criminalise the sale of sex. But I take it that even though you can’t make an argument, in that case, similar to what about organs about reducing the number of people on the other side of the equation, because it’s a different sort of transaction, I take it nonetheless, from what you’ve said, you still would say that legalising sex, the sale of sex would still be the optimal thing to do. So could you just explain to us why that is?
Mark Pennington
Well, let me first go. Let me just quickly go back to the last question. I think I didn’t quite fully answer the original question. So you’re quite right, one of the social welfare arguments is that there are people who need kidneys out there, they’re not getting them. And if you allow the market to take place, it will be a mechanism for those people to get those kidneys, and also for the people who are supplying them to improve that position by engaging in these sorts of trades. So I think that argument is a powerful one. And it’s also an argument that I think Jason Brennan has made, and in some contacts, or Jason, Ben and Peter, you’ve asked, which is that if people can give their kidneys away for free, there’s nothing that worsens the situation by allowing them to trade those organs. And that’s basically a view I would endorse. If you’re allowed to give a kidney your way, then why can’t you sell it? Nobody’s saying everybody should sell their kidneys. But you’re simply saying, why shouldn’t that option be there, especially if it’s an option that can mean that other people get kidneys that they otherwise wouldn’t have? And also, people have got an option to improve their living standards in a way that they might not otherwise have.
Now, I think when it comes to to sex, although it’s a, it’s a more, I don’t know, whether it’s a more controversial topic or not. But in some ways, you know, the arguments are not dissimilar. If you can have sex with people for free, why can’t you sell sex? Not something that I would want to do. Not something that I’m sure many people would want to do but what is the moral evil that’s introduced by simply allowing the exchange of money to take place? It’s not obvious to me, given the different cultures treat sex differently. That it’s obviously some kind of moral evil that’s introduced by allowing people to engage in a sale. Now the point about prostitution, about the vulnerability of women, or anyone actually in the situation where they feel that out of necessity to survive, they have to engage in prostitution, I think the argument would be very similar to the one with the kidneys, you know, what are the alternatives facing these people? Ideally, we would be in a world where they have enough resources not to even consider engaging in this sort of activity, if it’s not the sort of thing that they would do out of some sort of sense of enjoyment or the exercise of their autonomy. But if those resources are not there, how does it improve things for those women to remove the option for them to engage in these kinds of trades, especially one, and I think there’s a lot of empirical evidence to support this. The alternative is that you simply drive the trade underground, you have a kind of prohibition type phenomenon, so that the prostitution still goes on. But it takes place in much less transparent circumstances where the exploitation that people concerned about is actually more likely to take place than in a situation if you had a market, if you like happening above ground and in the
Paul Sagar
Great, but I suppose the reply here would be, that’s all well and good at a certain level of abstraction about how markets function about autonomy. But the truth is that these kinds of markets are always embedded in social contexts. And one answer we might call this the feminist answer, or what is unfortunately sometimes labelled the radical feminist. I think unfortunate, because I think all feminism is radical, but would be that look, this is going to take place in a patriarchal society, it’s quite revealing that we’ve already assumed that the sale of sex will be from women to men, we haven’t been assuming that it’s men to women, which is very rare, or, in fact, men to men, which is much less rare, but nonetheless, the very fact that we all associate prostitution, and certain feminists would say it’s important that we use that word and not the concept of sex work because they’d want to say it is not simply work. But what’s going on here is the reproduction of certain forms of social domination. That a group of human beings who are typically dominated by another, so in this case, women by men are further forced into dependency on men, thus reinforcing not only an economic dependency, but a social subjugation of wider gender norms. And that means that we should not allow the sale of this thing because it isn’t simply about one to one transactions between autonomous agents in relative differing levels of economic, luxury or desperation. There’s a wider social normative context here, what would you say in reply to that kind of answer?
Mark Pennington
Well, I think it’s a very genuine concern. There’s no doubt that if these relationships take place in the current sort of cultural or social and economic setting, that you could reproduce some of those disadvantages that women face, that domination can be reproduced through these kinds of structures. But again, the question I would pose is compared to what you know, if the position of women is not being improved by other kind of institutional arrangements in in society, then it seems to me that depriving people of an opportunity to have more income, which could then even if only incrementally start to improve their relative status, or their bargaining power cannot be a good thing to do. Especially if you are criminalising an activity, which arguably reduces even further the status of people so that women who were engaging in prostitution are seen as you know, borderline criminals. Actually, criminalising an activity doesn’t seem to me to be something that is improving the status of women. More generally, I think there’s an argument to saying the market more generally, allowing people to engage in trade could be one, not necessarily the only, but it could be one of the mechanisms that we might want to use to break down some of these gender stereotypes are about the kind of roles that people should should be playing.
So you know, why not have men and women being allowed to sell themselves in this way for sexual activities, being precise, not saying we want people to be doing that, in some sense that, hey, this is great. But why not allow it as a way of challenging social norms or conventions about what is acceptable sexual conduct?
I think, in a strange sort of way, market mechanisms, allowing people to engage in subversive trades can be a way to break down some of the sort of stereotypical views that there are about things like sex. That’s not to dismiss the concern that you could reproduce notions of domination. But it seems to me if we’re going to make those arguments, we also need to consider the way in which allowing trade could disrupt those sorts of notions as well.
Paul Sagar
What if somebody said, Okay, that’s all well and good. But if you have a free market of trading sex, again, similar to with the organ situation, what you’re going to have are third parties moving in and exploiting and trying to control this, if you like, the suppliers of the labour is often like if he’s the women. And as from what we know from historical experience, what will happen is that very unpleasant men will quickly move in and start dominating those women and exploiting them. So there’ll be not only transacting potentially in an uneven market relationship with a client, but will end up being controlled by a pimp as is usually the case. And surely we need to make prostitution illegal to stop that kind of behaviour.
Mark Pennington
Well, let’s take two issues that first of all, the idea of middlemen being inherently objectionable. I think it’s something that needs to be challenged. Middlemen in all markets perform an important function, they create a market, they bring buyers and sellers together. It’s through middlemen that markets operate, they’re not doing an activity that is unnecessary, because in many cases, buyers and sellers may not be aware of each other’s existence, and therefore there is a gap in the market to bring those people together. All sorts of activities in markets are about having middlemen. So there’s nothing inherently bad about being a middleman.
Now, the issue you have to look at is, is there something about these markets in particular, that mean they’re going to be subject to forms of exploitation or the reproduction of domination in the way that you spoke about? Now, in my view, you can’t rule out the possibility that that will be the case. And I wouldn’t say you wouldn’t ever have situations where a market interaction allowing a market interaction would allow that kind of domination to arise. But it’s not obvious to me that that would always be the case. And it’s not obvious to me that the alternative, which in many cases is a patriarchal society or a site which dominates women in some way, provides a better route out of that. domination, then allowing people to engage in these sorts of trade.
As a general rule, I would say that the more these things are out in the open, although you’re not going to eliminate domination, you’re going to reduce the amount of domination compared to a situation where you drive it underground. And you do have pimps, as opposed to actually, you know, open trading organisations, which are branded as they would be in most of the markets, and where if there are transgressions, if people are abused, then there is a mechanism to address that. So think about it as an example.
And I guess this applies to the organ case, as well. We have lots of examples of middlemen, who arise in markets precisely to deal with these problems, problems of asymmetric information or problems of trying to avoid exploitation. So we know in the coffee market, there are fair trade coffee brands, which are branding themselves selling to people precisely on the grounds that they’re not engaging dominated practices, or that they’re trying to make trade more progressive in a certain way. Now, there’s lots of arguments about whether those are effective mechanisms on what not, but they’re certainly in an attempt, where you have a market, which allows the trade to take place, but you also have the middlemen operating away, which is trying to limit exploitation or domination. I don’t see any reason why you wouldn’t have similar kinds of third party middleman, who are responsible agents operating in some of these other kinds of markets, whether their markets or organs, markets for sex, or something else.
Paul Sagar
Great. I think an important point in the background here is that a market in any particular good or service doesn’t mean an unregulated market. We can still have rules about how the transactions take place.
Mark Pennington
But you have I mean, you I think you have a secondary debate there, which is about how is that regulation provided? You can have a right to a market that’s regulated purely by market mechanisms. So it’s purely on supply and demand, or it’s on the basis of regulatory standards that are set by agencies within the market. And I think the fair trade example is an example of that. Or you can have a market, which is one regulated by the government. Or you can have a hybrid, which is one way you’ve got a market where it’s regulated by some combination of government regulation, and the activities of private parties to try to provide regulation within the market.
Paul Sagar
Great. How about we now turn though, to a really difficult example, at least one that many people find extremely counterintuitive. We’re actually recording this on November the fifth, and we’re still awaiting the results from the American presidential election. But what if somebody were to suggest Well, on the basis of the logic of everything you’ve said, right now, why shouldn’t people be allowed to legally sell their votes? Perhaps I don’t really care who wins out of Biden and Trump, maybe I live in a swing state. And I’ve realised that maybe there are other people from out of my state who would really like me to vote for their candidate. I don’t care who wins, but I do care about having $1,000. Maybe it’s a rich benefactor. Maybe it’s a large organisation, why shouldn’t I be allowed to sell my vote? And why somebody else? Shouldn’t somebody else be allowed to buy my vote?
Mark Pennington
Well, that’s a very difficult issue. I’m happy to say that I’m not sure what my view is, on whether or not we should have buying or selling of votes. And for me, it comes down to an issue about externalities. So if you think about the examples that we’ve been discussing, so far, they are cases where you’re talking about facilitating trade between two parties. The assumption in most sort of economic theory is that if an exchange takes place, it’s because both parties expect to benefit. They may be wrong about that, but they expect to benefit. Otherwise, the trade would not happen.
Now, people will make arguments that, oh, well, when the trade happens, there’s some kind of external effect to third parties. But in most of the examples that we’ve given, we’ve been discussing so far, organ sales, prostitution, I think those arguments are are wrong, there aren’t external effects. Or if they are external effects, they’re more the kind of effects which are not the ones that economists, externalities, they’re more to do with the fact that people may be offended by the activities that other people engage in, as opposed to being directly harmed by them, in some sense.
So my argument in those cases, you should allow the trades because there aren’t really externalities, at least not compared to some alternatives. In principle, at least it’s something that can be mutually beneficial. I think with votes. The issue is much more complicated. So if you think about it, and you know, many people will disagree with my view on this. But voting is an activity that almost inevitably generates external effects. If you allow a system of majority rule, that means that what the majority decides, effectively can impose on a minority, or if the democratic system works in such a way that organised minorities are able to impose their views through legislation through the political process in some way, then external effects are being generated. Some people are having things forced upon them that they didn’t want. Now, it strikes me, should you have the right to sell that? I’m not sure.
You know, do you have the right to sell something which can be used to harm other people? I don’t know.
In the same way that I’m unsure personally about my views on democracy itself, I think we need democracy, because it’s the, you know, the least spite of all the available systems, but I don’t lionise the idea that we make decisions by some people being sufficient in sufficient numbers to impose that particular view on a small number of people. I think that’s the principle you might need to use in certain circumstances. But it’s something that generalises ideally tall decisions. I think the strongest argument for democracy is that you might need to make certain collective decisions because there are public goods or collective action type problems involved in a certain situation. But equally you can say that, within democracy itself, those problems can arise. So it’s not clear how many decisions should be subject to democratic decision making. And likewise, it’s not clear to me whether or not the right to participate in that kind of decision making should be something that you have the right to sell.
Paul Sagar
It’s very interesting that you focus almost exclusively on consequences and externalities and I guess you’re coming at this very much from a political economy point of view. But what would you say to somebody said, hang on a minute, part of the point of democracy is, however, imperfectly in practice, it attempts to enshrine a principle of equality, which is that we all are equal, we all get one vote. But if some people can start selling their votes, then in principle, the rich will get more votes than the poor, because they will simply be able to find, even if it’s only a small percentage, they will nonetheless be able to find a certain percentage of people willing to sell their votes. And they will thus be able to exercise more weight in the political system than other people, and that’s fundamentally wrong. And so focusing on the consequences or the externalities is, is not to really see what’s at stake here. How would you respond to someone making that argument?
Mark Pennington
Well, that would be one of the reasons why not the not the argument that the rich can take advantage of vote buying in this way but the idea that external effects might be generated, that is one of the reasons why I’m quite sceptical of the idea of selling votes. So because you are selling the right for somebody else, potentially to engage in actions which negatively affect other people, you know, so we don’t have a right.
In a sense, in my view, to sell violence, I think violence is an activity that is wrong unless you’re in a situation, and you’re consenting to, to be punched or whatever. Violence is not something that is morally acceptable. So we don’t have a right to decide that the area of voting is more complicated precisely because you’re in this grey zone where it can be used for very negative purposes that you might want to constrain anyway. And that will be my concern about then allowing people to sell that right onto somebody else. So I am concerned about externalities in the case of voting, and that’s one of the reasons why I don’t know where the balance of the argument lies. I’m not someone who thinks it should be pretty obvious who sort of thinks voting itself is wonderful, precisely because I think it can be used to impose costs on other parties, by people effectively ganging up on minorities. And that’s not something that I think is particularly desirable, either.
Paul Sagar
What about a sort of nearby case, then? What about judicial decisions? Or criminal cases? Why should judges not be allowed to? Or maybe they should be allowed to put out to the highest bidder the verdicts that they come to? Most people would think, you know, that’s absolutely something that we shouldn’t be allowed to buy and sell. But why exactly? maybe
Mark Pennington
Well maybe not. Maybe they should. Well, I mean, so I don’t think that I think of the idea of having legal functions available for sale. That’s not something that I am opposed to, I mean, I think there are many legal services that are available for sale. And I think here the issue is, is one about what kind of mechanisms will give people trust in the legal process?
So it’s the case that you can just buy and sell any kind of opinion to produce the result that you want, then there isn’t really going to be much trust in that kind of process from the population at large. And I think one of the things that people forget in these sorts of discussions is the role of competition.
So the argument there would be, you might have competing legal systems, my expectation would be in a situation where you have competing legal systems, people would gravitate away from a system, which enables people just to pay for the decisions that they actually want, you know, the function of a legal system is to provide some measure of trust and a set of institutional procedures where there might be disputes between people, you want a resolution of those disputes in a reasonably satisfactory way. If you’re in a regime simply where, you know, if you’ve got more money, you can pay for the result that you want, then the broader trust in that kind of system from people at large is not going to hold. So I would expect that to be a competitive advantage for systems which are in theory, open for sale in the sense that services are open for sale. But what is being sold is a process in which you have many of the kinds of protections against corruption that people are concerned with. Does that make sense?
Paul Sagar
I suppose it does. To the point. I guess one, one response here would be but that the whole structure of a legal system is there could only have the country be one for it to function. You can’t have competing legal systems, because then you get into a Hobbesian problem of, well, if people don’t get the view there, they like they’ll go somewhere else. And then who enforces the final decision? And then you so it seems like this is in some ways a natural monopoly. So assume that there is a natural monopoly? Why not within that natural monopoly that whoever’s got the power will enforce their decision? So I think it’s a little bit implausible, say to move from well, you know, if this were outcompete the rival, because let’s assume that there aren’t there is only one, but within the one enforcing its decisions, why not allow some people within that to trade their debt judgments? For whoever has the highest makes the highest bit?
Mark Pennington
Well, in a monopoly situation? I’m not sure.. So if you were in a monopoly situation, I don’t think I would allow that. I see the point of whether law is inherently a natural monopoly. I would disagree. It’s the case that law is a natural monopoly. So if you look globally, we don’t have a monolithic legal system that has emerged naturally through some kind of market process where all the competitors are eliminated to the point where we have one monopoly, global legal system, you actually have multiple interlocking legal systems.
And within that context, an awful lot of legal regulation is carried out by private arbitration. So there was something like I think, 10,000 private arbitration agencies that operate globally, to deal with transporter trade disputes. And you know, when people enter into those kinds of cross border contracts, they choose an arbitration agency in advance that’s going to resolve the dispute. And those agencies are chosen on the basis of a reputation for being neutral, not being engaged in nefarious sort of practices.
Is that perfect? No, it isn’t. Does it eliminate corruption? No, it doesn’t. But the issue is compared to a regime where you did have one monopoly global legal regime, which eliminates all kinds of competition. It strikes me that that will be the comparison that you have to make. And I don’t see any reason why that type of analysis can apply on a more localised scale within countries as well as it applies at the globe.
Paul Sagar
I think perhaps that might be the most counterintuitive thing that you’ve said in the entire podcast. But it’s also, I think, a really good place for us to leave it. I think that was a really fantastic and illuminating discussion. So Mark, thanks very much for joining me today. Thank you.
Mark Pennington
Thanks, Paul.
