When Markets Aren’t Markets: a Reply to David Rondel

In a recent article in this journal, David Rondel argues that symbolic (or semiotic) objections to markets hold significant argumentative force. Rondel distinguishes between Incidental markets and Pervasive markets, where Incidental markets describe individual instances of exchange and Pervasive markets comprise the social management of goods by an institutional market arrangement. In this reply, I specify a key insight that buttresses Rondel’s distinction. The distinction as it is currently characterized fails to identify when Incidental markets become Pervasive. This opaqueness allows scholars that defend markets without limits to question the analytical distinctiveness of Incidental and Pervasive markets. I show that by incorporating the market’s price mechanism as an indicator of a properly Pervasive market, Rondel’s distinction is not only able to tackle the aforementioned retort, but also allows for important reflections on what types of institutions should be considered markets at all.

without limits, so says Rondel, tend to conflate the two. 1 Thus, the challenge they further "misidentifies the proper terrain of the debate" (Rondel, 2022, 224).
In this reply, I specify a key insight that buttresses Rondel's distinction. The distinction as it is currently characterized fails to identify when Incidental markets become Pervasive. While aware of this, Rondel seems not to realize this opaqueness allows scholars that defend markets without limits to question the analytical distinctiveness of Incidental and Pervasive markets. I show that by incorporating the market's price mechanism as an indicator of a properly Pervasive market, Rondel's distinction is not only able to tackle the aforementioned retort, but also allows for important reflections on the broader debate on limits to markets.
This reply is structured as follows. In Section 1, I elaborate on Rondel's distinction between Incidental and Pervasive markets, positioning it within the general debate on limits to markets. Subsequently, in Section 2, I cover the argumentative oversight that persists when the distinction remains unspecified. I cover the market's price mechanism in Section 3 and go on to show that its inclusion in Rondel's distinction points to several productive insights relating to semiotic limits to markets. Section 4 concludes.

Limits to Markets and Rondel's Argument
The debate on limits to markets pertains generally to the nature, and more specifically to the very possibility, of limits to markets. Scholars furthering semiotic arguments within this debate argue that markets in certain goods signal an attitude that violates or perverts the meaning of that good. On the opposing side, Jason Brennan and Peter Jaworski have argued that markets really have very little power over a good's intrinsic meaning. Markets in child porn, so an example spells, are impermissible not because they are markets, but because they facilitate exchange of child porn. That is to say that is does not matter how one comes to own child porn; whether it was a gift or a market exchange, it is simply morally impermissible to possess child porn. In general, Brennan and Jaworski argue, if you may have something, you may sell it. 2 They take meaning in markets to be largely "contingent, fluid, [and] socially constructed" (2016, 50). Instead of riding on our intuitions, Brennan and Jaworski propose subjecting them to a litmus test: if the consequences of marketing any given good are not disadvantageous, we should adapt the semiotics accordingly. Following this rule of thumb, they defend the introduction of markets in several goods -specifically those that are contentious because they inspire feelings of revulsion, such as kidneys-but that do, according to the authors, on the whole lead to better consequences than not having markets in those goods. In short: consequences outweigh semiotic intuitions.
In "Semiotic Limits to Markets Defended" (2022), David Rondel questions the substance of Brennan and Jaworski's argument. He concedes that markets probably "have no essential meaning", but rejoins that "the same claim could plausibly be advanced about virtually anything" (225). By arguing in vague and imprecise abstractions, so Rondel asserts, Brennan and Jaworski fail to meet their opponents on their own "moral diamond", as they claim to be doing (Brennan and Jaworski, 2016, 23). Rondel illustrates that their definition of what constitutes a market is in fact so broad as to render the term meaningless. Indeed, in Markets Without Limits (2016), Brennan and Jaworski seem at various points to consider not only all forms of commodity exchange to be markets, but even go so far as to argue that "the distinction between gift and commodity exchanges does not track the distinction between market and non-market exchanges" (2016,116). Their definition is so very broad, Rondel remarks, that the authors "seem to include within their ambit modes of interaction that would not be considered "markets" in any ordinary sense of that term" (2022, 220). Instead, Rondel advances two separate understandings of markets. Incidental Markets bring to mind individual instances of exchange; I offer you ten bucks for the barbie doll at your garage sale; you receive twenty-five dollars when you have cleaned my car. Ultimately, these types of markets are not what defenders of limits are concerned with, or indeed have immediate problems with. Instead, so Rondel posits, Pervasive Markets are the proper subject of debate. He argues that "the question about whether there ought to be a market in some good can also be understood as a question about the principles that properly govern how this or that good is properly distributed in some context, along with the social and legal institutions against whose background such distribution takes place" (221). According to Rondel, these are the types of questions defenders of limits to markets like Satz (2010) and Anderson (1990) are concerned with. They are talking about the way a given good should be properly valued and whether this should be "in some other way than use" (Anderson, 1990, 73). Some goods, say, kidneys, carry meaning that is not captured only in its status as a use-object. Thus, by framing the question in terms of their preferred slogan (if you may have it, you may sell it), Brennan and Jaworski have devised a retort to an argument that advocates of limits to markets have never defended. 'To be sure,' philosophers like Satz and Anderson might say, 'kidneys may sometimes be sold, but it does not then follow that society should categorically institutionalize kidneys as marketable products unless there is a reason not to'. the market itself should not decide which goods fall under its purview. 3 Whether we have institutionalized markets in this or that good is, instead, for public debate to decide. Brennan and Jaworski have thus sidestepped the question of decision-making altogether, even though this is the very question defenders of limits intend to engage with. Brennan and Jaworski have covertly imported, so Rondel says, a "libertarian political morality, namely, that each individual is the sole and final arbiter of what has value in life and how that value is best realized" (Rondel, 2022, 228). This is their central mistake, because there is, as Rondel furthers, simply no way to talk about markets without importing political considerations first. 4 He holds that Brennan and Jaworski sometimes claim to be interested in the limits on "markets as such" (Brennan & Jaworski, 2017, 656). But there are no such things, nor could there ever be. In the real world (where else can markets exist?) markets will always be of this or that sort, have this or that set of features, they will be regulated in this or that way and to this or that degree. In short, there is no such thing as "markets as such" -the pure idea; the naked concept-any more than there are Platonic Forms (Rondel, 2022, 221) I do not disagree with Rondel. In fact, I think he is right on the money. However, because the distinction relies on both types of markets being comparable in some sense, critics like Brennan and Jaworski are able to press Rondel on exactly when Incidental markets become Pervasive. If, in Rondel's words, it is difficult to believe that defenders of limits "would object to a handful of Incidental… transactions among individuals if that was required to ward off some significant evil" (7), when does the problem, in fact, become a problem? When do some incidental exchanges in kidneys become a pervasive decision-making mechanism? A hundred kidneys sold? A thousand?
To be sure, Rondel is acutely aware of this omission. In a footnote he adds that, while he takes no definitive position as to when an incidental market becomes pervasive, "[c]learly… social and legal institutions need to be involved. It takes more than sheer volume of transactions to move from the one to the other. Pervasive markets are thus not merely like a garage sale writ large" (2022, 222n8). This does little to assuage the problem, however, as garage sales are really no less subject to social and legal institutions than, say, a market in kidneys. Rondel is obviously looking for a certain type of institutional arrangement that makes an Incidental market Pervasive, but offers no guidance as to what that would look like. The difficulty seems to be that, although Rondel holds that there is no such thing as a market simpliciter, he takes both Incidental and Pervasive markets to be fundamentally the same type of institution. This, I argue, is a mistake.
Rondel's silence on what makes a market leans into what Joseph Heath calls "the catallactic bias" which leads many to privilege "gains from trade as a primary mechanism of cooperative benefit" (2006,315). An unfortunate side effect of this phenomenon is that any type of institutional arrangement leading to Pareto efficient 5 outcomes is immediately taken to be a market, to such a degree that the term has become almost entirely meaningless. 6 To be sure, Rondel expresses surprise at a number of institutions he considers only tangentially related to what one would generally classify under the header of 'market'. One quite indicative -and oftcited-example he appeals to is that of Nobel prize winning economist Gary Becker (1993), who subjected the institution of marriage, including his own, to a rigorous market analysis. However, Brennan and Jaworski's flagship 'repugnant market', 7 the kidney market, is similarly chimerical. Brennan and Jaworski go to pains to advance the argument that markets in kidneys would save lives, concluding that if you are repulsed by kidney markets, "you should just get over it" (2016,221). And, to be sure, Markets Without Limits makes a very strong and convincing case for the benefits of an institutional arrangement through which kidneys can be exchanged. But the successful 8 arrangements Brennan and Jaworski appeal to on first glance really do not resemble anything like markets at all. As Nobel prize winning economist Alvin Roth 9 has it, kidney-for-kidney exchange has increased the number of donated kidneys largely because of an innovative arrangement that managed to connect "nonsimultaneous chains" of people in need of kidneys (2015,45). Oftentimes, Roth notes, people are perfectly willing to donate one of their kidneys to help a loved one out. However, kidneys are rarely easily compatible. Somewhat reductively phrased, what the kidney exchange arrangement has managed to do is allow incompatible donors to donate to someone else and have their loved one receive a kidney in turn. 5 The well-known definition of which is an outcome comprising a situation in which one individual's preference is satisfied without dissatisfying at least one other individual's preference. 6 One instance cited by Heath is unemployment insurance administered by the state. This practice is commonly considered to be a redistributive practice in which residual gains from trade are disseminated amongst the state's unemployed populace. According to Heath, this amounts to a wrongful designation, because unemployment insurance is "first and foremost a set of risk-pooling arrangements, which are organized in the public sector primarily in the interest of promoting efficiency gains" (2006, 317). 7 That is to say, those markets that inspire feelings of disgust or revulsion. 8 There is some evidence that motivational crowding out would occur in kidney markets -that is to say, by coupling what would normally be a gift with a monetary reward, intrinsic motivation is crowded out by extrinsic motivation-eventually leading to less rather than more kidney exchanges. However, the evidence is somewhat tenuous and speculative. See Rothman and Rothman (2006) and Capron (2014), but contrast Semrau (2019). 9 It should be noted that, while Roth is laudably conscientious and courteous to those with feelings of repugnance vis-à-vis markets in certain goods, discussion of these markets occurs entirely within what would be Rondel's conception of the Incidental. It does not seem to occur to Roth, like it does not occur to Brennan and Jaworski, that markets may be objected to by "people who may not themselves experience any direct harm" (2015,196) for reasons other than repugnance towards any single interaction. That is to say, for the economist, markets are a multiple of incidental exchanges, not a societal decisionmaking mechanism.
Markedly, the kidney exchange mechanism does not involve the use of money, the 'market actors' do not 'trade' with each other but with unknown third parties, there is no competition, no performance-based interaction, and there are no price signals. On what basis would we call such an institution a market?
Brennan and Jaworski play fast and loose with market-related concepts several times over the course of Markets Without Limits. For instance, they concede that the crowding out effect influences the willingness to donate blood, but subsequently hail the effect being counteracted by hospitals offering to donate an amount of money to a charity instead as a non-financial "substitute form of payment" (2016,110). 10 But if we can agree that, for instance, a highly competitive global market in real estate is an entirely different beast than the aforementioned kidney exchange network, does it really make sense to consider both to be fundamentally the same type of institution? If, in this vein, Rondel himself remarks that Incidental markets "are not really markets in any interesting sense of the term" (2022, 221), why consider them markets at all? Once one recognizes the lexical "expansionist tendency of the market" (Buchanan, 1985, 110) engendered by the catallactic bias, it becomes clear that incidental exchanges do not necessarily have anything to do with markets at all.

What Makes a Pervasive Market: The Price Mechanism
Thus, if Incidental markets are not markets at all, and semiotic objections to limitless markets are largely uninterested in incidental exchanges, what is the defining characteristic of a Pervasive market that is able to pervert a good's meaning? According to Rondel, 'sheer volume' alone does not do the trick; 'a social and legal arrangement' is required. I argue that there is one market attribute that satisfies both requirements: the price mechanism. Indeed, the price mechanism is an especially salient institution to connect to Pervasive markets because Brennan and Jaworski's insistence on subjecting markets to a consequentialist procedure tacitly pledges them to honoring competitive equilibria. And competitive equilibria -that is, market states that (nominally) have good consequences-nearly always only come about in markets that utilize the price mechanism effectively. As such, including the price mechanism 11 as a core attribute of Pervasive markets would allow Rondel to meet Brennan and Jaworski on their own 'moral diamond' in a way they themselves ultimately could not.
Firstly, volume; per the first fundamental theorem of welfare economics, also known as the 'Invisible Hand Theorem', Pareto efficient outcomes are achieved when a market is perfectly competitive (Arrow, 1951;Debreu, 1951). This means that demand and supply are equalized in such a way that there is no possibility for a redistribution that makes one person better off whilst no other person is made worse off. 12 Even approximating perfect competition certainly requires, in the words of George Stigler, "numerous rivals" (1957,2), as well as customers. On this view, therefore, Incidental 'markets' do not as a matter of definition require many actors to partake, but Pervasive markets require at least broad enough societal participation for the price mechanism to come into effect. Some incidental exchanges of kidneys are fine; a large price-informed market in kidneys is not. This seems to be one part of what Rondel is after.
Secondly, connecting the price mechanism to the concept of Pervasive markets tracks perfectly with the view that those kinds of markets are a type of decisionmaking mechanism. Indeed, Hayek famously argued that the price mechanism is capable of helping market actors make decisions based on information no one single person possesses. All of the knowledge that is relevant to the market actor in question, he argued, is captured in prices. Of course, Hayek would never have argued that the price mechanism itself makes decisions; and indeed, this is not the argument I am here trying to advance. Instead, I am arguing that once the price mechanism comes into effect, the decision to institutionalize a good as something to be sold has already been made. That is to say, relevant information about a good's scarcity, quality and desirability has to already be known -be part of the market system-to generate price signals in the first place. And to be able to do so, its properties have to equate to any and all other goods in the market; market price, after all, is a fundamentally comparative concept that can only exist relative to prices of other marketed goods. This inescapably entails that certain other properties -or irrelevant bits of information-are erased. For Hayek, this was one of the price system's great boons. The price mechanism could grant a single market actor the ability to wield vast amounts of decentralized information by constantly using rates of equivalence (or "values," or "marginal rates of substitution") i.e., by attaching to each kind of scarce resource a numerical index which cannot be derived from any property possessed by that particular thing, but which reflects, or in which is condensed, its significance in view of the whole means-end structure. In any small change he will have to consider only these quantitative indices (or "values") in which all the relevant information is concentrated (Hayek, 1945, 525, emphasis mine) This is well and fair enough, but it also means that once a good is subject to the price mechanism, the market has already stripped it of its particular meaning. In brief, the price mechanism might change the meaning of a good if it possesses certain properties that are not relevant to its price on the market. In the very act of generating price signals for any given good, then, the mechanism necessarily has to consider it commensurate to other goods.
Rondel already touches on this phenomenon in his own analysis and provides an evocative example. Invoking Sandel (2012), he suggests that "[i]f we were to establish a market in Nobel Prizes, the goods thus commodified would no longer be Nobel Prizes (at least not the good that we know of as Nobel Prizes)… Purchasing a Nobel Prize would fundamentally alter what such prizes are and what they mean" (Rondel, 2022, 229). Rondel seems here to take a pass on the question whether this would also be the case for Incidental 'markets'. Clearly, a market in Nobel Prizes that is Pervasive -and therefore voluminous and subject to the price mechanism-defeats the very purpose of a Nobel Prize to begin with. But what about an incidental exchange? What if Gary Becker, spurred on by his wife, had one day decided to sell the Nobel Prize he had won for his work on expanding the domain of economics beyond its original territory in a yard sale? What if his neighbor, on a whim, had offered Becker a hundred dollars and subsequently put the Prize on display on his front porch? Would that have changed the meaning of the good? I do not think it would have, further suggesting that it is, in fact, the price mechanism and not the simple act of exchange itself able to change the meaning of goods. All of this means to say that kidneys subject to price signals are in a very real sense commensurate to, say, a can of cat food. Price signals are only able to regard a good in Anderson's use-value, to the detriment of other ways goods may be valued -like something one can only gift or deserve. 13 Of course, it is this very commensurateness that requires the entire social and legal apparatus around property rights and market competition that Rondel is looking for.

When Even Markets Aren't Markets
Thus, it is the price mechanism that separates Incidental markets from Pervasive markets. More specifically, the price mechanism is the social and legal institution that comes into effect when prices become relative to other prices, which in turn requires 'sheer volume' of buyers and sellers. At the same time, by advancing the price mechanism as a defining aspect of markets, one puts into question whether Incidental markets should be called markets at all. Subsequently, that the use of the word 'market' initially turns off many from the idea of say, kidney markets, is not only due to false intuitive reactions to certain modes of exchange, like Brennan and Jaworski like to argue. Rather, there exists (at least also) a very real fear that subjecting a good to market institutionalization governed by the price mechanism may very well change its meaning. Markets are terribly complicated and complex institutions, and if we want to partake in conscientious market design, we should take care not to subsume ever more forms of human interaction into its ambit. As such, David Rondel's insightful addition to the debate on the limits of markets is much strengthened if it adopts a well circumscribed definition of its subject matter.