The Morals of the Market
Now, more than ever, American Democracy demands innovative public policies that can dismantle the embeddedness of racial capitalism in sociopolitical life. One solution emerges from the historic “freedom dreams” of Washington, D.C.’s Black and brown residents. During the height of Jim Crow segregation, D.C. was dotted with community-owned mom-and-pop grocery stores and cottage industry “hucksters” that brought vegetables and meat to neighborhoods across the city. Many of these stores leveraged cooperative economics to forge a pathway toward economic uplift for Black and brown Americans weighed down by the oppressive forces of racial discrimination.
For example, the District Grocery Store (DGS) cooperative, a network of cooperatively owned small businesses across the District, pooled community capital to establish a localized and culturally appropriate food economy. Unfortunately, the outmigration of white citizens to the suburbs, coupled with the growth of big-box supermarkets in affluent D.C. neighborhoods after the civil rights movement, triggered market forces that put most DGS stores out of business. The escalation of neoliberal politics during the administration of President Ronald Reagan that favored privatization, deregulation, and reduction in government spending only furthered the stifling of alternative ownership models for small-business development.
The historic squelching of cooperatively owned small businesses that met the food needs of marginalized communities across Washington, D.C., begs the question: What role did law and public policy play in paving the road (or turning a blind eye) toward the pervasive income and health inequities that plague Black America today? As large-scale franchised grocery stores pushed small-scale grocery cooperatives and hucksters out of business under the forces of free market capitalism, what ethical code guided the operation of the economic marketplace? And, as the purchasing power in D.C.’s lower income neighborhoods in the urban core and south and east of the Anacostia River declined, what were the countervailing forces that sought to stop the outmigration of full-service grocery stores? Put simply: What were the morals of the market?
The answer surprisingly surfaces from a common misunderstanding of Adam Smith, the so-called father of market economics. In his famous work, An Inquiry into the Nature and Causes of the Wealth of Nations, Smith laid the foundation for free market capitalism by conceptualizing the economic marketplace as an interaction between countless consumers and producers pursuing their individual utility and profit maximizing goals while being “led by an invisible hand.” With an invisible hand guiding the ethical compass of the marketplace, economists justified the neoliberal quest for an unregulated market with a general equilibrium theory of economics (defined by the laws of supply and demand) governed by the principle of Pareto optimality. Pareto optimality is a minimalist moral framework that defines its optimal state as one where all resources have been fully utilized and no person’s individual utility can be improved without reducing the individual utility of another. From a belief in the virtues of Pareto optimality came a commitment to the ethic of neutrality and colorblindness in market functioning.
However, in The Theory of Moral Sentiments, which Adam Smith considered his most important work, Smith argued that the true power of the market was its ability to achieve socially desirable outcomes from the self-interested pursuits of countless individuals operating within a discrete moral frame. In other words, market economics flounders without a clear moral compass to keep it on course. To Smith, the socially optical outcome could not be achieved without a moral frame. Importantly, the morals of the market could not be forced upon individuals. Instead, market morality emerged as human behavior was regulated by virtues of sympathy and compassion.
Accordingly, although the market economy embraces the self-interested goals of individual market actors, it also requires the collaborative and communal ideals of citizenship—what one might call “beneficence”—that seek to minimize circumstances where some people become mere means for the selfish ends of others. As Immanuel Kant argued, an unwillingness to recognize the intrinsic worth of all peoples is an affront to the concept of human dignity. Taken together, a market governed by efficiency, yet guided by beneficence, establishes the conditions for justice.
Food Justice in the Twenty-First Century
In the age of COVID-19, traditional food systems have proven inadequate to meet the needs of low-income communities. In fact, centralized food systems with long supply chains and multiple hand-off points do not serve anyone’s long-term needs. Instead, they have proven detrimental to countless low-income Americans who work in food packaging, food distribution, and food delivery as so-called essential workers and, consequently, bear the heightened health risks of COVID-19 without added protection or compensation.
Washington, D.C.’s history of localized food markets powered by cooperative economics reveals the power of community-based food systems to ignite community empowerment and mitigate systemic racism. When coupled with modern technologies that facilitate urban agriculture, from rooftop farms to soil-less hydroponic and aquaponic systems, to community farmers markets and cooperatively owned ventures, such local food systems can help to disrupt an industrial-scale global food system that has fallen short. However, when urban food markets carve out opportunities for urban agriculture buoyed by modern technology, such local markets must be shaped by a commitment to social and economic justice. The University of the District of Columbia’s innovative Urban Food Hubs Initiative, alongside the pro bono lawyering of the Community Development Law Clinic at the David A. Clarke School of Law, demonstrates the added importance of public investment by public universities to build local capacity through applied research, innovation, training, and resource development.
To be sure, these models are not anti-market. Rather, they recognize the ability of decentralized markets to reflect the localized and cultural interests of individuals and communities. In so doing, they seek to combat the social disruption of markets run amok under neoliberal ideals that no longer achieve the beneficial goals of market making. Instead, neoliberal markets devolve into what Mariana Mazzucato calls “market taking”—individual accumulation based on pre-existing accumulation facilitated by public investments. To shift from taking to making, markets must be structured to promote the collaborative and communal ideals of democratic citizenship, values that benefit the public interest.
The work of economist and Nobel Laureate Elinor Ostrom provides guideposts for the development of new market models based on collaboration and trust. Ostrom’s research revealed that economic actors, when given the opportunity to build norms of reciprocity and trust, can successfully develop innovative institutional frameworks capable of solving private utility and public goods dilemmas. According to Ostrom, even when individuals hail from diverse cultural backgrounds and disparate experiences, they can leverage trust to strategically organize themselves to benefit from trade, mitigate risks, and preserve natural resources. Thus, the task for modern governments must be determining how best to support the establishment of norms of reciprocity and trust among citizens to enable creative institutional frameworks to manifest.
One opportunity arises from a legal doctrine that builds upon the very concept of trust—the public trust doctrine. The public trust doctrine is a common law principle in the United States, stemming from English law, that recognizes a trust relationship between government and citizenry whereby the sovereign holds in trust for public use certain natural resources—such as forests, minerals, fisheries, and shorelines—regardless of the private ownership of the land. Although the doctrine has traditionally been invoked to uphold a public right to access navigable waters for commercial navigation and fishing, a more expansive interpretation of the doctrine could suggest an affirmative duty for the government to protect public access rights to public land in urban spaces. Policies guided by a progressive reading of the public trust doctrine would counter the narratives of individualism and private gain that privilege the creation of competitive economic marketplaces that too often lead to inequitable distributive outcomes.
The community land trust (CLT) is an example of a legal entity that builds upon norms of reciprocity and trust. Across the country, CLTs have been used to acquire and retain permanent ownership of land held in trust in perpetuity for the benefit of the community. The CLT makes the land available to other entities through long-term ground leases while maintaining community control over land use through a democratically elected board of directors. This model was successfully used in Chicago, Illinois, to create an organization called NeighborSpace that operates a city-funded community land trust. NeighborSpace purchases tracts of land, protects land from commercial development on behalf of the community, and provides resources for community members.