ABSTRACT
This chapter focuses on how commodification studies have sought to identify contested markets by reference to the idea of negative externalities. According to the argument from externalities, which is drawn from standard welfare economics, some market exchanges produce negative effects on third parties that are not taken into account by participants, leading to inefficient results. For the purposes of commodification studies, these externalities are seen as justifying the banning or regulation of certain markets, for example, markets which cause pollution. Some authors include under the heading of this argument a version of the inequality argument against markets, seen as a form of pecuniary externalities, that is changes in prices or in conditions of choice – markets for organs being a typical example; others include the repugnance argument, seen as a form of moral externalities, that is offence – the typical example being markets for sexual services. The externality argument for market-inalienability thus evaluates markets relative to their efficiency, and adds moral and political presuppositions concerning the legitimacy of certain preferences and of public intervention. I argue that while the concept of negative externalities remains useful for analyzing the unintended consequences of certain markets, what is needed is in fact a theory of justice which will enable us to determine which externalities are indeed troubling enough to warrant limits to commodification.
