Friday, March 19, 2004

Restrictions on Alienability, Anti-Commodification, and eBay

A few days ago this article appeared in the New York Times about the problem of girl scouts selling cookies on eBay. The girl scout rules forbid this, in order to promote "the activity" of selling to the public. I see their point. Unfortunately, market forces are tearing the rule apart. In some areas, there's a surplus of supply because of high scout concentrations. In other areas, you can't get ahold of the cookies to save your life.

It doesn't take Milton Friedman to see what's going to happen - the scouts use loopholes to circumvent the restriction. The most popular way, it seems, is to auction off cookie order forms. However, I'd advise the method often used with Southwest Airlines' rapid rewards tickets (which also have a restriction on alienability) - people sell "one free alcoholic beverage" tickets for about $180, with the "bonus" gift of a rapid rewards ticket. It seems the difference is whether something is purchased or given, but clearly the distinction is spurious in practice.

This situation reminds me of the general principle in property law against restrictions on alienability. As I was taught it, the ultimate goal was to avoid the European problem of land being tied up for ages by complex wills. For example, a great case in this area is Johnson v Whiton, 159 Mass 424 (Mass 1893), in which then-Massachusetts Supreme Judicial Court Justice Holmes faced a will with the following restriction:

"After the decease of all my children, I give, devise, and bequeath to my granddaughter, Sarah A. Whiton, and her heirs on her father's side, one third part of all my estate, both real and personal . . .." (emphasis added)

The effect of this condition was to keep the property in the Whiton side of the family for time eternal - if you weren't a blood relative to Whiton, you couldn't receive the fee. Professor Helmholz noted that the backstory of this case was Mr. Royal Whiton's distaste for Mrs. Whiton and her side of the family. This condition in the will was Royal's creative way of paying her back for years of nagging. Justice Holmes wasn't having it. After noting the English and French rules allowing restrictions by blood, Holmes grandly announces that "inherited property may pass from one line to the other in Massachusetts." And that was that.

Justice Holmes' opinion is grounded in little more than a policy preference, but it's a good one. Restrictions on alienability usually impede the transfer of goods to increasingly efficient uses. This preference is also seen in property law concerning adverse possession, the rule against perpetuities, and others I probably don't even know of.

From this discussion, one could conclude that eBay, like the market entire, should be open to anything. Fighting market forces is as futile as it is inefficient. Consider this recent news story, however:

"EBay halted an auction this week and suspended a Taiwanese user who allegedly tried to sell three Vietnamese girls on the Internet site for a starting bid of $5,400.

The auction, which began March 2 on eBay's Taiwan site, did not include a detailed description of the goods for sale but said the 'items' were from Vietnam and would be 'shipped to Taiwan only.'

. . .

San Jose-based eBay strictly forbids the sale or purchase of humans, alive or dead."

Recall that in the girl scout cookie context, eBay stated this position:

"As far as eBay is concerned, these cookies are private property. We are not going to ban people from reselling them."

I think most of us would agree that eBay's positions in both cases are correct. But based upon what principle? Some conception of proper property rights? The inherent dignity of man? A Stockholm-syndrome-like belief that the Vietnamese women’s' choice wasn't truly free?

Imagine that the women were well-educated 40-year-olds who just want a chance to leave Vietnam and work for someone in Taiwan, but need a middle-man to handle the details of getting there. We would be hard pressed to say they weren't thinking clearly. They're only commodifying themselves to the extent that they're looking for work - they do not wish to be sex slaves and the like. Perhaps we would prefer they phrase the auction as "Vietnamese women looking for work in Taiwan. $5400 as lump sum for salary." Maybe we just prefer people commodify the work, rather than the person.

Now imagine that the facts are true to life, but Vietnam has a clear conception of women as a property right that men may control. If eBay denies them auction space, it's imposing a view of commodification upon the world. I don't have a problem with this, but I do think that these examples signify that an anti-human commodification view is, in the end, rooted in a human dignity conception. I don't think most of us care whether the sale is voluntary or what the Vietnamese position is on property rights. We feel that human life is of incalculable worth, and to commodify it is to demean it.

But if one really subscribes to this view, I think you must comes to terms with valuing human life in risk assessment. Every day the OMB evaluates regulations based upon calculating the value of our lives. If saving our lives costs too much, the agency won't regulate. Moreover, Professor Sunstein mentioned the other day that there is a modern trend towards valuing "life years," not lives simply. Thus, a regulation that adds 7 years of life to an old person is not worth as much as one that saves 3 years of a child. How does one rectify these ideas with the anti-commodification viewpoint above?

For me, the difference is best explained by example: imagine a fireman rushes into a burning house, and must choose between saving five people by lifting a piano or two people by moving a small table. Obviously, his time is scarce. In the end, he chooses to move the small table and save two people, rather than trying to move a piano, which carries high costs in time, and a lower risk of success. Now, if the five under the piano were children, perhaps he would take the risk and attempt to save them. I doubt any of us would disapprove of these choices.

Yet, in a sense, the fireman placed a value on human life, and took into consideration costs when making the judgment. The fireman made the smart decision to save as many lives as he could, using quick calculations of success rates, and taking into account scare resources in time and ability. Moreover, adding children to the picture changed his calculations of value.

Similarly, money is scarce. The OMB can't save everyone. It must make choices. In these scenarios, the commodification is not an effort to value a life as a good for sale, but to make value judgments on whom to save. I think the benevolent purpose is some comfort, and perhaps an important distinction between these actions and an eBay auction.

My rationales of "human dignity trumping free choice/the market" and "benevolent purposes trumping anti-commodification principles" probably wouldn't fly with a true libertarian, and perhaps others have different reasons for supporting/rejecting these positions. I'm certainly curious what eBay's policy people would think about all of this. I have a feeling most of our views are heavily influenced by our gut reactions, but maybe a true rationalist can set me straight. Speaking of guts, some thin mints sound pretty good right about now . . .

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