There is more at stake in market economies than self-interest or making money. Lying just below the surface, there are shared projects answering the deepest political questions of how we live together and who we become. The Price of the Common Good exposes the inadequacies of the prevailing individualistic vision of markets and firms and develops an incisive new framework for analyzing the shared goods that are always in play.
In order to see the distinctiveness of common goods more vividly, it is useful to think about the contrasting cases where they are absent. For the Aristotelian pluralist, outside of collaborative contexts where some irreducible and morally transformative “we” is at stake, the grammar of common action simply does not apply. Absent some emergency, Team A’s coach is not responsible for Team B’s common goods, any more than the mail carrier shares in my family’s thriving or struggles. I see nothing troubling or stingy about this. There is no moral duty to seek solidarity with everyone in everything. The basic rule of a grammar of common goods is conditional: if one engages in common action, then one is answerable to the full scope of the resulting common ends and to the persons who share them. Otherwise, private goods prevail. In the context of this book, the paradigmatic example of voluntary interaction that does not aim at a common good is market exchange.
What is a market? In its concrete historical meaning, “a market is a meeting place for the purpose of barter or buying and selling.” Today we speak of physical marketplaces, like a supermarket, and of abstractions like the “used-car market.” These different types of markets all center on the readiness of some group of buyers and sellers to enter into a particular kind of exchange relation. For Adam Smith and his heirs, the elemental character of market exchange boils down to a three-word slogan: Strangers Selling Stuff. What is distinctive about a paradigmatic market relation is its focus on the item or service at hand, not on the persons involved. Whether the transaction takes place depends overwhelmingly on the quality of the benefit and its price. As I walk the bazaar, it doesn’t matter to me whether I buy from Maria or Jose, only whether I get a good deal. The social standing or status of the parties is largely irrelevant. They may be fellow members of a fraternal club, or even superior and subordinate in some organization, but on the market they meet, so to speak, as strangers and equals. Neither do power and authority determine the outcome of the exchange. In order to minimize their influence, market relations presuppose legal freedom as well as the existence of other similar buyers and sellers, so that each party has an effective “exit option” both de jure and de facto. As a starting point, we may say that a market relation is a free exchange in which price alone, or nearly so, determines if the transaction takes place, and not authority or social position.
It is important not to confuse market relations in the sense of “strangers selling stuff” with the much broader notion of “the free market,” which often serves as a shorthand for the entire liberal economy of production, consumption, and trade. The key difference is that free citizens often form organizations whose members do not stand in market relations to one another, such as the family farm or, as I shall show in Chapter 1, the business firm. Farms and firms may be involved in many different markets—in raw materials, labor, retail, and so on—but they are not constituted internally by market relations inasmuch as they employ social mechanisms of authority and solidarity, not price signals. They are in the market, but not of the market.
This clarification is not an arbitrary bit of linguistic hygiene; understanding what is and is not price-centered exchange is crucial for concretely locating common action and its ends within our commercial world. In practice, prices generally map the limits of common action, because the aim of an impersonal market exchange is not a common good shared by the merchants. It is true that a market bargain will be freely consummated only if each party judges it to their advantage. But, contrary to appearances, this mutual benefit is not an end held in common, only “a sum of private goods that happen to be interdependent.” Typically, buyers and sellers in an arm’s-length transaction are not trying to pursue some goal together, but to get a good deal for themselves. This mutual disinterest does not imply that the market is a morality-free zone. It only looks that way (to some) because the governing norms of exchange are designed to ensure equality in private gains and prevent collusion. But in so doing, they rule out merchant solidarity as well, almost by accident. In a corporate merger or real-estate purchase, if bankers or regulators suspect some “community of interest” such as insider trading, they are apt to cry foul. Reasonably so, since sale prices among family or friends will likely not reflect fair market value. Where common ends are at stake, as among friends, there are relational goods to consider in addition to the strict value of the item changing hands. “Strangers selling stuff” are far more likely to bargain at the market price, just because they share no common goods.
(excerpted from the Introduction)