Note: This is the last installment of our series of blog posts reviewing Nathan B. Oman’s new book The Dignity of Commerce.

Nate Oman concludes his beautiful book on The Dignity of the Commerce by drawing a fundamental distinction between “pernicious markets” and “well-functioning markets.” This distinction is essential to Oman’s theory of contracts. According to Oman, contracts should only be enforced when they support healthy or well-functioning markets. To this end, Professor Oman identifies three types of pathological markets: (1) markets that produce harm, like the market in slaves in the antebellum south, (2) noncommercial markets, such as markets in human organs, and (3) malum in se markets or inherently bad commercial transactions. Imagine, for example, a judge conducting an auction instead of delivering a well-reasoned verdict in accordance with law. (As an aside, it’s worth noting all three of these markets are illegal under existing law, although the slave trade was once legal.)

Here, however, is where we part ways with Professor Oman. At the end of the day, Oman’s tidy distinction between “well-functioning markets” and “pernicious markets” is unsatisfying and unhelpful. Why? Because once we draw a distinction between moral commercial practices and immoral commercial practices, then Oman’s commercial theory of contracts completely falls apart: the commercial nature of a particular promise becomes totally irrelevant to its legal enforceability. Instead, what ultimately matters is whether the contract is consistent with morality. But this conclusion brings us back to square one: why should the law enforce only “moral” promises and not “immoral” ones (a topic we explore in detail in this paper), especially when morality is almost always in the eye of the beholder? Was Shakespeare’s Shylock, to borrow Oman’s own example, acting morally or immorally when he demanded a pound of Antonio’s flesh as per their agreement?

Moreover, as a matter of logic, we could do without the qualifiers “well-functioning,” “healthy,” etc. to describe markets. Such qualifiers are totally superfluous, since any actual market is, by definition, well-functioning; otherwise, it would not exist. Right? Despite these objections, let us conclude by confessing that we really enjoyed reading Oman’s book. His work forced us to clarify our thinking about the relation between markets and morality.