Adam Smith and the Economic Concept of Repugnance

morality rules of morality social rules organ market organ donation repugnance

Walter Castro and Julio J. Elías for AdamSmithWorks

Some kinds of transactions are repugnant in some times and places and not in others. In Smith, there is an empiricist and practical morality, which could change.
“Why can’t you eat horse or dog meat in a restaurant in California, a state with a population that hails from all over the world, including some places where such meals are appreciated? The answer is that many Californians not only don’t wish to eat horses or dogs themselves, but find it repugnant that anyone else should do so, and they enacted this repugnance into California law by referendum in 1998 (Alvin Roth, 2007).” 
 
The economic concept of Repugnance, developed by Alvin Roth (2007), establishes that some transactions, such as the buying and selling of kidneys for transplantation or buying and selling horsemeat for human consumption in California, are illegal simply because a sufficient number of people find it repugnant. In a repugnant transaction the participants are willing to transact, but third parties disapprove and wish to prevent the transaction.
 
As Alvin Roth argued, these could have big consequences in what markets we see and can impose important social costs. Adam Smith explains the adverse effects of price regulations:
 
“When the government, in order to remedy the inconveniencies of dearth, orders all the dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing it to market which may sometimes produce a famine even in the beginning of the season; or if they bring it thither, it enables the people, and thereby encourages them to consume it so fast, as must necessarily produce a famine before the end of the season. The unlimited, unrestrained freedom of the corn trade, as it is the only effectual preventative of the miseries of a famine, so it is the best palliative of the inconveniences of a dearth; for the inconveniencies of a real scarcity cannot be remedied; they can only be palliated”. (WN, 4.v)
 
As we discussed in a previous post, banning payments to organ donors is the main cause of the severe organ shortages in virtually all countries. Roth resumes the disapprobation to the introduction of monetary compensation as follows: 
 
Selling organs is illegal in most countries. Legalizing kidney sales faces substantial, perhaps insuperable obstacles. Just as you can't sell yourself into indentured servitude anymore, some transactions are illegal because enough people find them repugnant”.
 
The idea of repugnance is present in Adam Smith. In a community, repugnance is the degree of disgust approved by the impartial spectator. It represents a feeling of rejection that is enacted into law against what would be considered inappropriate or vicious.
In introducing the concept of Sympathy, Adam Smith account for the sentiment of immediate disgust:
“There are some passions of which the expressions excite no sort of sympathy, but, before we are acquainted with what gave occasion to them, serve rather to disgust and provoke us against them. The furious behaviour of an angry man is more likely to exasperate us against himself than against his enemies.” (TMS, 1.I.i)
 

Smith elaborates further and explains that this sentiment can be moderated upon reflection by the judgement of the spectator:
 
“When the original passions of the person principally concerned are in perfect concord with the sympathetic emotions of the spectator, they necessarily appear to this last just and proper, and suitable to their objects; and, on the contrary, when, upon bringing the case home to himself, he finds that they do not coincide with what he feels, they necessarily appear to him unjust and improper, and unsuitable to the causes which excite them. To approve of the passions of another, therefore, as suitable to their objects, is the same thing as to observe that we entirely sympathize with them; and not to approve of them as such, is the same thing as to observe that we do not entirely sympathize with them.” (TMS, 1.I.iii)
 
Tracing a parallel with our sense of beauty, Adam Smith recognizes that customs affect what is considered proper or improper:
 
“Our first ideas of personal beauty and deformity are drawn from the shape and appearance of others, not from our own. We soon become sensible, however, that others exercise the same criticism upon us. We are pleased when they approve of our figure, and are disobliged when they seem to be disgusted. We become anxious to know how far our appearance deserves either their blame or approbation.
…In the same manner our first moral criticisms are exercised upon the characters and conduct of other people; and we are all very forward to observe how each of these affects us. But we soon learn, that other people are equally frank with regard to our own. We become anxious to know how far we deserve their censure or applause, and whether to them we must necessarily appear those agreeable or disagreeable creatures which they represent us.” (TMS, 3.I)
 
In Part Seventh, Section III, “Of the Different Systems Which Have Been Formed Concerning the Principle of Approbation,” Adam Smith discusses the foundations of repugnance: 
 
“After the inquiry concerning the nature of virtue, the next question of importance in Moral Philosophy is concerning the principle of approbation; concerning the power or faculty of the mind which renders certain characters agreeable or disagreeable to us; makes us prefer one tenor of conduct to another; denominate the one right and the other wrong; and consider the one as the object of approbation, honour, and reward; the other as that of blame, censure, and punishment.
Three different accounts have been given of this principle of approbation. According to some, we approve and disapprove both of our own actions and of those of others, from self-love only, or from some view of their tendency to our own happiness or disadvantage; according to others, reason, the same faculty by which we distinguish between truth and falsehood, enables us to distinguish between what is fit and unfit, both in actions and affections; according to others, this distinction is altogether the effect of immediate sentiment and feeling, and arises from the satisfaction or disgust with which the view of certain actions or affections inspires us. Self-love, reason, and sentiment, therefore, are the three different sources which have been assigned for the principle of approbation…To examine from what contrivance or mechanism within those different notions or sentiments arise, is a mere matter of philosophical curiosity.” (TMS, 7.III)
 
Repugnance could change, some kinds of transactions are repugnant in some times and places and not in others. In Smith, there is an empiricist and practical morality, which could change, making society a more open social order, characterized by fewer prohibitions and a greater degree of freedom, or, on the contrary, a more closed system. Considering these moral constraints that could impede certain transactions, Alvin Roth sees an important role for economics: 
 
One of the interesting ways that economics could intersect with sociology…is to try to understand which markets get social support and which prohibitions on markets get social support, and how can we intervene in those things.
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