The Society Of Crossed Price Tags: Review Of What Money Can’t Buy By Michael Sandel

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What Money Can’t Buy: The Moral Limits of Markets by Michael Sandel asks, as the title goes, what money can’t buy. More intriguingly, it wonders what money can but shouldn’t buy.

Here are some observations I made upon reading that book.

Warm-Up

Sandel suggests to reflect on many provocative questions.

For example, whether it is acceptable—

• to pay people to lose weight
• to place ads showing fried chicken legs on fire hydrants
• to charge fees for admission to papal mass
• to pay kids for good grades
• to sell admissions to elite universities
• to allow trading death bonds — a package of life insurances generating an income stream from the insurance payouts that become due as the original policyholders die
• to create a market-based system that issues each couple a tradable procreation voucher entitling the bearer to have one child
• to allow those who refuse to pay for public transport establish an insurance fund that will pay their fines if they get caught
• to pay a drug-addicted woman for undergoing sterilization or taking long-term birth control
• to allow wealthy countries to avoid reduction in their own carbon emissions by buying the right to pollute from others or by paying for programs that enable other countries to pollute less
• to assign honary degrees for generous donates, or
• to pay line standers to get in the US Supreme Court hearing?

What I like the most about the book is that Sandel poses questions, lays out the background, and offers no ready-to-go solutions, allowing readers to decide for themselves.

Unpopular Culture

The general public usually associates the market morality with greedy Wall Street banks, state-sponsored bailouts, or beautifully crafted portraits of bankers from Hollywood movies.

However, Sandel argues, the issue is broader: one needs to understand at what role and to what extent does the market — and can the market — intervene into everyday lifes.

That issue becomes burning as the power and prestige of market thinking persists despite of numerous financial crises and the public forum continues to lack open and substantive discussion of the right way to value such goods as education, procreation, citizenship, health, and the environment.

No Place For Sentiments

Sandel disagrees that economics studies merely the allocation of material goods.

Market reasoning is incomplete without moral reasoning — at least as far as the market reaches beyond material goods, Sandel believes.

Otherwise, maximizing social utility will happen without regard to the moral worth.

Basics

In general, the market rests on 2 arguments, Sandel reminds, —

1. Libertarian argument calls for respecting individual freedom. People should be free to buy and sell whatever they please, as long as they do not violate others’ rights.
2. Utilitarian argument calls for maximizing welfare. The free market allows people to make mutually advantageous trades and, thus, allocates goods to those who value them most highly, as measured by their willingness to pay.

All Is Calculable

People act to maximize their welfare, utilitarians believe. To decide what to do, people weight costs and benefits of available options. People choose the option they believe will give them the greatest utility.

This happens always and regardless of what goods are at stake. Everything has its price tag, even human life.

As Gary S. Becker states in The Economic Approach To Human Behaviour, all human behaviour can be explained and predicted as a rational calculus of costs and benefits. The only thing that obstructs such thinking — sentimentality.

I can’t refrain from quoting this insightful passage about marriages —

According to the economic approach, a person decides to marry when the utility expected from marriage exceeds that expected from remaining single or from additional search for a more suitable mate. Similarly, a married person terminates his / her marriage when the utility anticipated from becoming a single or marrying someone else exceeds the loss of utility from separation, including losses due to physical separation from one’s children, division of joint assets, legal fees, and so forth. Since many persons are looking for mates, a market in marriages can be said to exist.

Is All Calculable

Certain goods have value in ways that go beyond the utility they give to individual sellers and buyers, Sandel supposes.

Turning such goods into profit instruments values them in the wrong way and cultivates bad habits.

Ultimately, how a good is allocated may be part of what makes it the kind of good it is.

Lenses

Sandel points out 2 major assumptions the economists make —

1. The fact that some good becomes tradable does not change the very nature of that good. The market only helps increase economic efficiency.
2. Solidarity, altruism and other moral sentiments are a scarce resource and deplete with use. The self-interest market saves us from using a limited supply of virtue.

Sandel questions both assumptions —

1. Money can corrupt and have a corrosive effect. As the case about poor results of door-to-door collecting charity for a fee shows, financial incentives can weaken people’s motivation and depreciate or crowd out moral and civic commitments.
2. Ethical behaviour does not deplete with use, but develops and grows stronger with exercise. As the case about Swiss people refusing to allow nuclear waste allocation for a fee shows, the market can let the ethic virtues languish.

Interestingly, Sandel observes, offering a financial incentive for certain behaviour can get you less (not more) of it and reduce (not increase) supply.

(No) Worries

Imagine a society in which everything is for sale. Should it bother its members?

Sandel answers positively and names 2 reasons — inequality and corruption.

Sandel argues as follows —

• Where everything is bought and sold, having money makes all the difference. However, the willingness to pay for a good does not necessarily show who values it the most.

For example, paying a line stander to get a free ticket to the Shakespeare play does not mean you value the performance more than those who stand in the queue on their own behalf.

• Inequalities in the background conditions can undermine meaningful consent.

For example, if a man sells his kidney out of economic necessity, his consent does not pass a voluntary test.

• If bought and sold, some goods are treated according to a lower mode of valuation than is appropriate to them.

For example, charging admission to the US Congress hearings treats the Congress as if it was a product rather than an institution of representative government.

In the end, the market is an effective and valuable tool, but not an innocent one.

Disclaimer: This is my personal blog. This is neither a legal opinion nor a piece of legal advice. The opinions I express in this blog are mine, and do not reflect opinions of any third party, including employers. My blog is not an investment advice. I do not intend to malign or discriminate anyone. I reserve the right to rethink and amend the blog at any time, for any or no reason, without notice.