Month: November 2012

Michael J. Sandel is one of the foremost political philosophers of our times. He is the Anne T. and Robert M. Bass Professor of Government at Harvard University, where he has taught political philosophy since 1980. His book, Justice: What’s the Right Thing to Do?, relates the big questions of political philosophy to the most vexing issues of our time.  His new book, What Money Can’t Buy: The Moral Limits of Markets, argues that we have drifted from being a market economy to being a market society. In the book Sandel tries to answer what is the proper role of markets in a democratic society, and how can we protect the moral and civic goods that markets do not honour and money cannot buy. Sandel will be in India early next year speaking at the Jaipur Literature Festival. In this freewheeling interview he speaks to Vivek Kaul.
One of the reasons you wrote What Money Can’t Buy was to reintroduce moral philosophy into conversations about market forces. Why was that necessary?
The last three decades have been a period of market triumphalism. The era started with the likes of Margaret Thatcher and Ronald Reagan proclaimed their conviction that markets not, government, held the key to prosperity and freedom. We have drifted from having a market economy to becoming a market society. And the difference is this. A market economy is a valuable and effective tool for organising productivity activity. And market economy has brought prosperity and affluence to countries around the world. A market society is different. A market society is a place where almost everything is up for sale. It’s a way of life in which uses markets to allocate health, education, public safety, national security, environmental protection, recreation, procreation, and other social goods. This was unheard of three decades back. And when this happens market values crowd out non market values worth caring about. So I think we need to step back and have a public debate about what should be the role of money in markets in our society. We need to ask where market mechanism suits the public good and where they don’t belong. There has been an expansion of market and market values, into spheres of life, where they don’t belong.
You just said that markets have colonised too much of society, spreading unchecked into healthcare, education and military matters with unforeseen moral consequences. Could you explain that in some detail? 
Let me give you a couple of examples. In Iraq and Afghanistan there were more paid military private contractors on the ground than U.S. military troops. We never had a public debate whether we wanted to outsource war to private companies. But this is what happened.
Now take education many school districts in the United States are experimenting with the use of cash incentives to improve academic performance especially for students with disadvantaged backgrounds. So they are offered cash incentives for good grades, for high test scores and in one case they even offered young children two dollars for each book they read. Now the goal is of course a good one to improve academic performance. But the danger is that offering students money to learn may teach them the wrong lesson. It may teach students to regard reading books as a chore against making money rather than an activity which is intrinsically satisfying and worthwhile. That’s my worry.
Any other examples?
The number of private guards in Great Britain and the United States is twice the number of public police officers. Or consider the aggressive marketing of prescription drugs by pharmaceutical companies in rich countries. The funny thing is if you have ever seen the television commercials that accompany the evening news in the United States, you might come around to believing that the greatest health crisis in the world is not malaria or river blindness or sleeping sickness, but erectile dysfunction.
In your book you even talk about queues being up for sale nowadays. Can you share that with our readers?
In recent decades the ethic of the queue is being replaced by the ethic of money. The principle of first come first serve is being replaced by the ability to pay. This is happening in large places and small. If one goes to an amusement park it used to be the place everyone had to wait in the queue for the popular rides and attractions. Now most amusement parks have a fast track ticket that enables those who can afford to pay extra to go the head of the queue. The same is true for airports. Those who buy first-class or business-class tickets can use priority lanes that take them to the front of the line for screening. British Airways calls it Fast Track, which is a service that allows the high paying passengers of the airline jump the queue at passport and immigration control.
So what is the issue with that?
It may not be a morally serious problem at amusement parks or airports but increasingly the ethic of money is replacing the ethic of the queue throughout our social life. In Washington DC if one wants to attend a hearing of the United States Congress, often there are long queues. Sometimes people even wait in the queue overnight. Now lobbyists love to attend the Congressional hearings but they don’t have the time to stand in a queue. So they now hire line standing companies that in turn hire homeless people and others to wait in the queue so that the lobbyists can take his or her place in the queue just before the hearing begins and he can thus climb the queue. The same thing can be done by hiring the land standing companies to attend the US Supreme Court’s oral arguments. So what may seem innocent enough in amusement parks or concerts or waiting to buy the latest Apple iPod actually raises more serious questions when it is used to even in institutions which are representatives of governments.
But those who jump the queue really don’t see it like that? 
They complain that queuing discriminates in favour of people who have the most free time. Yes that is right. But in the same way as markets discriminate in favour of people who have most money. Markets allocate goods on the ability and willingness to pay, queues allocate goods based on the ability and willingness to wait. And there is no reason to assume that the willingness to pay for a good is a better measure of its value to a person that the willingness to wait. 
Why did Bruce Springsteen change only $95 per ticket for his shows in New Jersey in 2009, when he could have filled up the venue even by charging more? What does this tell us in the context of the broader argument you are trying to make?
Bruce Springsteen, in some cases, does not charge the full market price for tickets to his live concerts. He does that even though he could make more money by doing so. He limits the ticket price. And the reason he does this is partly to keep faith with his working class fans. And also because he recognises that his live performances are not purely market goods but part of the performance and part of what draws people to Bruce Springsteen and the spirit in which they gather together.  A part of enjoying the Springsteen concert is the relationship between the performer and his fans, and the spirit in which they gather. This example is a metaphor for the kinds of choices that we should make, discuss and debate throughout our social lives and our civic lives.
Any other example that you could share with us?
When Pope Benedict XVI made his first visit to the United States, free tickets were distributed through local parishes. But the demand for tickets far exceeded the supply of seats. And soon a market was those tickets started to develop and one ticket sold online for more than $200. Church officials condemned this on the grounds that you cannot pay to celebrate a sacrament. Turning what are essentially sacred goods into what are essentially instruments of profits values them in the wrong way. 
Do you think as a society we’re averse to talking about this connection, the moral implications of economics?
Yes, especially in recent decades we have not really debated the moral implications of economics. We do have some debate about distributive questions in relation to economics but what we have been more reluctant to do is another very important moral aspect of economics and that is the question that which goods and social practices should be governed by markets i.e. by the effect of buying and selling. Which goods should be commodified and be up for sale and which goods are damaged or degraded when we put a price tag on them. But most economists prefer not to deal with moral questions, at least not in their role as economists.
Can you explain through an example?
Most people would agree that we should not tag a market in children up for adoption because it would commodify and objectify children and possible erode the norm of unconditional parental love. Take another example most people would agree that we shouldn’t have an open market in votes in a democratic society even though from the standpoint of economic efficiency it’s hard to explain why not have a market in votes? Many people don’t use their votes. So as some free market economists advocate why shouldn’t people be free to sell their votes to other people who are willing to buy them? I think the reason we don’t allow this because it is considered that civic duties should not be regarded as private property but should be viewed instead as public responsibilities. Hence to outsource them is to demean them and value them in the wrong way. There are many areas of civic life where we have allowed money and markets to govern without having a serious public debate about the moral limits to market reasoning.
You talk about two objections to the concept of the market: the fairness objection and the corruption objection. What are these? Could you explain through an example?
Some free market economists argue that having a free market there should be a global free market in kidneys or other human organs for transplantation, and this would increase the supply. But there are two possible objections to this view. The fairness objection worries that a market in human organs would not involve truly voluntary exchanges but the poor would effectively coerced by the poverty and desperate need, to the affluent. That’s the fairness objection. The fairness objection worries about the inequality that may undermine the voluntary character of exchanges. The corruption objection is for reasons that go beyond inequality.  It makes the argument that it’s a violation of human dignity to treat our body as a collection of spare parts to be bought and sold for money. The corruption objection worries about market values degrading or corrupting important human good. This is an example of what I mean by the distinction between the fairness argument and the corruption argument. Both arguments have to be a part of any public debate about the moral limit of economic reasoning.
A major point that comes out in your book is that monetary incentives sometimes undermine the intrinsic one and leads to worse performance. Why is that?
Some years ago in Switzerland they were trying to decide where to locate a nuclear waste site. No community wants one in its backyard. There was a small town that seemed to be the likely place for the nuclear place site. The residents of the town were asked to in a survey carried out by economists shortly before a referendum on the issue if they would vote to accept a nuclear waste site in their community, if the Swiss Parliament decided to build it there. Around 51% or a little over half of the respondents said they would accept it. The reason was that their sense of civic duty outweighed their concern about risks. The economists carrying out the survey then added a little twist to the entire exercise and asked a follow-up question.
And what was that?
They asked the residents of the community that suppose the parliament proposed building the nuclear waste facility in their community and at the same time offered to compensate them with an annual monetary payment, would they still favour it? You might sense that the number would have gone up to 80 or 90% but in fact the opposite happened. The support went down and not up. Adding the financial inducement to the offer reduced the rate of acceptance to 25% from the earlier 51%. The offer of money reduced the willingness of people to host the nuclear site in their community. Even when the economists upped the monetary incentive further the decision of the people did not change. The residents stood firm even when they were offered yearly cash payments of $8,700, which was more than the median monthly income of the area.
So what is the moral of the story?
This is an illustration in which a cash payment can crowd out a non market value. When the people were asked to make a sacrifice for a common good without paying them the majority said yes out of the sense of civic responsibility. But when they were asked changed their mind many of them said we didn’t want to be bribed. The offer of money changed the character of the offer. What had been a question of civic sacrifice for the common good now became a financial transaction, and many of those who were willing to accept the setting up of a nuclear site for the purpose of a common good, felt they were not willing to be bribed to subject themselves and their family to risk.
What is commercialisation effect?
Commercialisation effect is when buying and selling of a good previously governed by non market norms changes the character of the good. If you buy a flat screen television and gift it to me, then the flat screen television is worth the same either way. It would be the same good. But the same may not be true about health, education, national security, criminal justice, family relationships, civic life etc. In these areas introducing market mechanisms and cash incentives they change the character of the good and they drive out non market values worth caring about. The commercialisation effect happens when the offers of money the attitudes people have for the good they have exchanged.  So going back to the education example where children are being paid to study and learn and go through the reading material, the commercilsation effect suggests that the performance of the children may improve in the short run but they change children’s attitudes towards reading and learning. In the long term they drive out the intrinsic love of learning.
Any other example?
Here I would like to give one another example which is perhaps the most classic example of this effect and that is prostitution. Most people would agree, even most free market economists would agree, that there is a difference between prostitution which is paid sex and non instrumental and non monetised sexual intimacy. And so perhaps the classic illustration of the commercialisation effect is prostitution. Another example is friendship. Till recently, you could bolster your online popularity by hiring some good looking “friends” for your Facebook page at 99 cents a month. This website was shut down after it emerged that photos of models that were being used were unauthorised. Even with this, people will agree that friendship is something money can’t buy, somehow, the money that buys the friendship dissolves it, and turns it into something else.
Can you summarise the entire argument for our readers?
The marketisation of everything means that people who are rich and people who are not rich have started to live increasingly separate lives. And that is not good for democracy, nor is it a satisfying way to live. Democracy does not require perfect equality, but it does require that citizens share in a common life. For this is how we learn to come to care about the common good. And so, in the end, the question of markets is really a question about how we want to live together. Do we want a society where everything is up for sale? Or are there certain moral and civic goods that markets do not honour and money cannot buy?
A shorter version of the interview appeared in the Daily News and Analysis on November 5, 2012. http://www.dnaindia.com/money/interview_do-we-want-a-society-where-everything-is-up-for-sale_1760214
(Interviewer Kaul is a writer. He can be reached at [email protected])