Pro-Market Arguments

In Development as Freedom, Amartya Sen explains the two different arguments for markets.

The first pro-market argument is based on the claim that markets typically work to expand income, wealth, and economic opportunities for people (26).

Before I get into Sen's critique of this first argument, I would like to present my critique. As Sen states, this argument is a very popular one, and it is an argument I have encountered. I have seen individuals argue for capitalism by stating that capitalism helps every individual in a capitalist state become richer and therefore increases the quality of life for all individuals of that state. However, connecting back to Sen’s income and mortality analysis, it seems that higher income per person does not necessarily translate into a better quality of life, or even a longer life. Sen states that even though African Americans are many times richer in income terms compared to the people of China or Kerala, men in China and Kerala decisively outlive African American men (27). So even if markets typically work to expand income for all people, does that matter if increased wealth alone does not increase overall well-being?

Sen critiques the first argument by stating that the mere fact that a market expands economic opportunities for all people cannot be a sufficient reason for the market. He presents this scenario: if the outcomes of a competitive market are the reasons for the market in the first place, could a dictatorship that produces the same economic outcomes replace the competitive market? It is clear that the merit of a market system does not lie only in its capacity to generate more efficient outcomes. Individuals care about freedom in where to work, what to produce, and what to consume.

This leads to the second pro-market argument he presents and takes, which states that markets matter not because they generate wealth, but rather because a denial of participation in markets can be a source of unfreedom in itself (25). It must be made clear that his view does not depend on the efficiency of the market at all.

Although I agree with Sen that a denial of participation in markets can be a source of unfreedom, I wonder if he is presenting a circular argument of sorts here. If markets are needed because they promote freedom, but freedom is, in part, defined as the ability to participate in markets, then it seems that markets are being used to justify themselves.

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