Acton Commentary

Lunchbox Markets: A Moral Tale


In the land of PB&J, the girl with a peanut butter and M&M sandwich is queen. In the third grade, that girl’s name was Rita. That’s not to say I didn’t have my own competitive edge. Due to what I now consider to be a wholly irrational distaste for jams and jellies at the time, my lunch came packed with a peanut butter and honey sandwich. As have so many children from the dawn of time, every so often one of us would get a brilliant idea and approach the other with a simple question: “Wanna trade?” If the answer was yes, both of us judged ourselves to have profited from the deal. Though children, we knew even then, though only intuitively, that exchange can and often does mutually benefit those who trade. As it turns out, that mutual benefit is often not only material but, at its base, moral as well.

I am unsure how it is that Rita ended up with a peanut butter and M&M sandwich in the first place. Certainly not under our current First Lady’s watch — that’s for sure. Perhaps Rita’s mother let her pack a lunch as an exercise in  responsibility, and when her mom wasn’t looking Rita would sneak the red-, green-, brown-, and yellow-covered chocolates into the white bread bookends of her (until then) plain peanut butter sandwich. Or maybe her mother was an economist, and she knew that to pack her daughter a peanut butter and M&M sandwich meant effectively to give Rita her pick of any other sandwich in the classroom.

As Adam Smith (in)famously observed in The Wealth of Nations, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.” Thus the question, “Do you want to trade?” And what third grader wouldn’t consider a peanut butter and M&M sandwich to be in “their own interest”?

James Halteman has argued that Smith is often misinterpreted by contemporary readers. On the one hand, in Smith’s time “Christianity’s heavy moral hand on commerce was beginning to fall away.” On the other hand, in our own time “modern economists work in a methodology that claims to be value-free.” Both of these explain a lot. But I would add to this a third reason: The term “self-love” equates to selfishness in the minds of many today.

On this point, Thomas Aquinas, at least, offers more nuance to the discussion: “Well ordered self-love,” he wrote, “whereby man desires a fitting good for himself, is right and natural; but it is inordinate self-love, leading to contempt of God, that Augustine … reckons to be the cause of sin.” So self-love can mean that a person desires what is godly and virtuous, knowing that such things are “a fitting good for himself.” We may even recall the commandment, “You shall love your neighbor as yourself” (Leviticus 19:18). Clearly, some form of self-love must be “well ordered,” for the commandment assumes that you love “yourself.” Rather, only if “inordinate” does self-love then become a “contempt of God,” through which one overvalues one’s own needs and wants.

Thus, while we ought not assume that Smith’s self-love is the same as selfishness, it should also be noted that Smith clearly isn’t pointing to one’s own self-love. When we trade with other people, “We address ourselves, not to their humanity but to their self-love”—their self-love, not ours. To “address ourselves … to their humanity” would be to put our self-love first, asking them to consider our needs over their own. Indeed, in order to be effective in exchange, one needs insight into the concerns of other people, such as the fact that most third graders would prefer a peanut butter and M&M sandwich to whatever else they may have packed away in their lunchboxes. In this way, trade requires a certain minimum level of sympathy.

And sympathy, as it turns out, figured prominently in one of Adam Smith’s other books, The Theory of Moral Sentiments. “Whatever may be the cause of sympathy, or however it may be excited,” he wrote, “nothing pleases us more than to observe in other men a fellow-feeling with all the emotions of our own breast.” The point Smith makes in The Wealth of Nations is that exchange doesn’t work through asking for that “fellow-feeling” from others but rather from giving it to them, “never talk[ing] to them of our own necessities but of their advantages.” In this sense, Smith’s may be one of the least selfish accounts of the motivation of exchange and, thus, quite a bit more moral than it is often portrayed. If his observation is correct, the person with the highest capacity for sympathy would also potentially have the best economic insight into any given exchange.

This is not to say that all exchanges are, therefore, necessarily moral. Of course, people may trade in inherently immoral goods or markets, such as prostitution or noise-making children’s toys. Or a seller with a monopoly may take advantage of the inelastic demand of others for necessities, such as if there were only one producer or vendor of toilet paper, who then chose to price-gouge it in a given economy. But in reasonably diverse, competitive markets (that is, in free markets), the latter, at least, is not a problem. Accordingly, immoral markets excluded, the freer the market the greater the likelihood that exchanges are conducted on the basis of “fellow-feeling” rather than exploitation, freedom rather than necessity, morality rather than selfishness.

When markets are free in this way, the potential for mutual benefit is at its greatest, such as third-grade me gaining a peanut butter and M&M sandwich and Rita gaining a peanut butter and honey sandwich. It may be true that each of us wanted the other’s sandwich more than our own, but it took one of us recognizing that desire in the other, or at least venturing the possibility, for the exchange to take place. Through the question, “Wanna trade?” we did not only materially benefit, we also put into action that “fellow-feeling” for the interest of another that lies at the basis of all truly moral exchange.