True elegance is often found in deducing striking and sound conclusions from very simple observations – observations that are accessible to all. Michael J Sandel’s “What Money Can’t Buy – The moral limits of markets” seems to me a case in point. Sandel starts off with a couple of simple premisses and takes it from there, going roughly along the following lines: 1) The pre-2008 era of market triumphalism has come to an end. The financial crisis did more than cast doubt on the ability of markets to allocate risks efficiently, it also prompted a widespread sense that markets have become detached from morals – and that something needs to be done. 2) While some argue that (an increase in) greed is the cause, the most fateful change that unfolded during the past three decades was not an increase in greed, but the expansion of markets and market values into spheres of life where they do not belong. 3) Inveighing against greed would therefore be a symptomatic treatment at best, we need to rethink the role that markets should play in our society. We need to think through the moral limits of markets, to ask whether there are things that money should not buy, because 4) the more money can buy, the more affluence or the lack thereof matters. 5) This can be expressed in terms of inequality, as experienced by lower and middle class families over the past decades, but also in terms of corruption. Markets are not inert as economists often assume, markets leave their mark. They can crowd out nonmarket values worth caring about. 6) Some of the good things in life can and have been corrupted or degraded into commodities. 7) The discussion of where the market belongs and where it does not has not taken place during the era of market triumphalism, as a result we have drifted from having a market economy to a being market society without realising it or deciding to do so.
Consider the proliferation of for profit schools, hospitals, and prisons; the outsourcing of war and security to private military contractors and private security firms, respectively. Consider pharma’s aggressive marketing and prescription of drugs to consumers in first world countries.
Consider the buying and selling of the right to pollute by companies and countries, or a system of campaign finance that comes close to permitting the buying and selling of elections. The list goes on and on: death bonds, terrorism futures, internet death pools, branded lifeguards and nature trails, paying to kill an endangered species, or even getting paid to be sterilized or to have a brand-logo permanently tattoo-ed (on your forehead(!)). Living in the US now I see many even more mundane things where market reasoning has entered everyday life without really having been questioned. Consider the naming rights, most apparent in sports games and stadiums, the increasing presence of skyboxes (i.e while visiting sports games used to be an event where people of all walks of life sat next to each other and interacted, this is becoming less and less so), paying someone to stand in line for you, paying someone to write a wedding speech for you, buying college admission, the increase in gift cards instead of giving gifts (i.e. a gift is increasingly seen as a commodity with economic value instead of a token of affection), paying to not have to wait in line at airports, ticket scalping for national park campsites or music concerts, et cetera.
The idea that market reasoning involves moral reasoning is allegedly somewhat controversial, but real. For instance, Sandel writes about a school that, upon having decided to fine parents who arrive late in picking up their kids, experiences a surge in late-comers. The reason: instead of the social pressure of slight shame of being too late for your kid, parents now saw it as a form of day care fee. Or another, where a Swiss mountain village hesitantly yet collectively agreed to sacrifice its own surroundings in agreeing to host a nuclear waste site. When economists suggested to further increase the support through generous financial compensation, the support for the nuclear waste site went down, not up. It turned out that against the background of this civic commitment, offering cash felt like a bribe to buy their vote. It turned a civic question into a pecuniary one; market norms crowded out civic duty. Non-market values are often worth keeping, and not all problems in our society are best solved through market reasoning.
Sandel’s opinion – as well as my own – on this matter is not that necessarily all the examples mentioned here and in the book are examples of the negative influence of markets. The point Sandel wants to make is not one of judgement, but the fact that we let market values penetrate our daily lives ever further without ever stopping to ask if this is how we really want to shape society. We have all sheepishly gobbled up what mainstream plain vanilla economists have fed us (and plain vanilla is allegedly virtually the only flavor available at universities around the world), with as a result that we are unable to have an intellectual debate about where market reasoning belongs. The political right seems overeager to label any point of market criticism ‘socialist’ in true dogmatic and Pavlovian fashion, while the liberal/left does no much better: an increasingly cosmopolitan educated cohort for whom market reasoning brought prosperity; they are now hardly able to utter a word of criticism either – and have been steadily sticking their heads into the sand by resorting to a seemingly more manageable set of worries by means of identity politics (though this is worth many a post in its own right).
The result is that no matter whether you look left or right: no palpable difference is being offered. Yet I think a critical re-examination of the limits of markets is exactly what is needed. We need to look beyond the pettiness of identity politics or black-white Pavlovian responses. This is not an argument against capitalism, but an argument that capitalism can have more flavors than the one we have now. Markets leave their mark. Globalization and automation increasingly lead to unease in the West as we all well know. Many of the masses throwing in their protest votes are the ones directly experiencing rises in inequality that the highly educated cosmopolitan more often than not fails to (truly) acknowledge. Rises in inequality are felt more in a world where everything is for sale. I think it is time to and have an honest and open discussion about the broad strokes of Western civilization.
All in all a well and clearly written, comfortable read: I recommended. Sandel should be part of the hypothetical committee in charge of making the world’s top economic schools more pluralistic in their teaching.