What Isn’t for Sale?…Do we want a market economy, or a market society?

What Isn’t for Sale? is the title of a new book by Harvard Philosopher – Michael Sandel. I was ignorant but Sandel is a huge rockstar. His course on Justice is one of the most sought in Harvard.

Atlantic prints a snapshot from the book which is quite a read. He says these days almost everything is up for sale.

THERE ARE SOME THINGS money can’t buy—but these days, not many. Almost everything is up for sale. For example:

• A prison-cell upgrade: $90 a night. In Santa Ana, California, and some other cities, nonviolent offenders can pay for a clean, quiet jail cell, without any non-paying prisoners to disturb them.

• Access to the carpool lane while driving solo: $8. Minneapolis, San Diego, Houston, Seattle, and other cities have sought to ease traffic congestion by letting solo drivers pay to drive in carpool lanes, at rates that vary according to traffic.

• The services of an Indian surrogate mother: $8,000. Western couples seeking surrogates increasingly outsource the job to India, and the price is less than one-third the going rate in the United States.

• The right to shoot an endangered black rhino: $250,000. South Africa has begun letting some ranchers sell hunters the right to kill a limited number of rhinos, to give the ranchers an incentive to raise and protect the endangered species.

And in case you do not have income to buy here are novel ways to buy:

• Sell space on your forehead to display commercial advertising: $10,000. A single mother in Utah who needed money for her son’s education was paid $10,000 by an online casino to install a permanent tattoo of the casino’s Web address on her forehead. Temporary tattoo ads earn less.

• Serve as a human guinea pig in a drug-safety trial for a pharmaceutical company: $7,500. The pay can be higher or lower, depending on the invasiveness of the procedure used to test the drug’s effect and the discomfort involved.

• Fight in Somalia or Afghanistan for a private military contractor: up to $1,000 a day. The pay varies according to qualifications, experience, and nationality.

So basically we are in a time where anything can be bought or sold. This was all seen as fine till this crisis:

Today, that faith is in question. The financial crisis did more than cast doubt on the ability of markets to allocate risk efficiently. It also prompted a widespread sense that markets have become detached from morals, and that we need to somehow reconnect the two. But it’s not obvious what this would mean, or how we should go about it.

Some say the moral failing at the heart of market triumphalism was greed, which led to irresponsible risk-taking. The solution, according to this view, is to rein in greed, insist on greater integrity and responsibility among bankers and Wall Street executives, and enact sensible regulations to prevent a similar crisis from happening again.

The real issue is not rise of greed but reach of markets and its values into everything:

This is, at best, a partial diagnosis. While it is certainly true that greed played a role in the financial crisis, something bigger was and is at stake. The most fateful change that unfolded during the past three decades was not an increase in greed. It was the reach of markets, and of market values, into spheres of life traditionally governed by nonmarket norms. To contend with this condition, we need to do more than inveigh against greed; we need to have a public debate about where markets belong—and where they don’t.

Consider, for example, the proliferation of for-profit schools, hospitals, and prisons, and the outsourcing of war to private military contractors. (In Iraq and Afghanistan, private contractors have actually outnumbered U.S. military troops.) Consider the eclipse of public police forces by private security firms—especially in the U.S. and the U.K., where the number of private guards is almost twice the number of public police officers.

Or consider the pharmaceutical companies’ aggressive marketing of prescription drugs directly to consumers, a practice now prevalent in the U.S. but prohibited in most other countries. (If you’ve ever seen the television commercials on the evening news, you could be forgiven for thinking that the greatest health crisis in the world is not malaria or river blindness or sleeping sickness but an epidemic of erectile dysfunction.)

He says this marketisation leads  to two issues:

For two reasons. One is about inequality, the other about corruption. First, consider inequality. In a society where everything is for sale, life is harder for those of modest means. The more money can buy, the more affluence—or the lack of it—matters. If the only advantage of affluence were the ability to afford yachts, sports cars, and fancy vacations, inequalities of income and wealth would matter less than they do today. But as money comes to buy more and more, the distribution of income and wealth looms larger.

The second reason we should hesitate to put everything up for sale is more difficult to describe. It is not about inequality and fairness but about the corrosive tendency of markets. Putting a price on the good things in life can corrupt them. That’s because markets don’t only allocate goods; they express and promote certain attitudes toward the goods being exchanged. Paying kids to read books might get them to read more, but might also teach them to regard reading as a chore rather than a source of intrinsic satisfaction. Hiring foreign mercenaries to fight our wars might spare the lives of our citizens, but might also corrupt the meaning of citizenship.

Economists often assume that markets are inert, that they do not affect the goods being exchanged. But this is untrue. Markets leave their mark. Sometimes, market values crowd out nonmarket values worth caring about.

This seems to be forming most part of the book and the article. Sandel says we need to have an informed debate over whether we want market economy (which he appreciates) or a market society (which he does not like):

The difference is this: A market economy is a tool—a valuable and effective tool—for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavor. It’s a place where social relations are made over in the image of the market.

The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society? What role should markets play in public life and personal relations? How can we decide which goods should be bought and sold, and which should be governed by nonmarket values? Where should money’s writ not run?

A debate about the moral limits of markets would enable us to decide, as a society, where markets serve the public good and where they do not belong. Thinking through the appropriate place of markets requires that we reason together, in public, about the right way to value the social goods we prize. It would be folly to expect that a more morally robust public discourse, even at its best, would lead to agreement on every contested question. But it would make for a healthier public life. And it would make us more aware of the price we pay for living in a society where everything is up for sale.

Hmm. Interesting philosophical take on economics and markets.

Here is some criticism on his ideas by Mark Perry and another one by Tim Worsell.

Whatever, the criticism Sandel’s ideas are worth exploring. We do not have many philosophers around who help get a different perspective on economics and markets. Philosophy has been divorced from economics long back and hardly anyone thinks these ways. But as the crisis shows all these issues about fairness and justice are important. One has to think about the whole idea of economics and markets differently.

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One Response to “What Isn’t for Sale?…Do we want a market economy, or a market society?”

  1. Dave Thomas Says:

    Ultimately Dr. Sandel seems to think that a small group of those with some kind of civic virtue need to determine the market in goods he designates as too vital for the free market.
    I’m sorry Dr. Sandel, but I’ll trust the free market over a small group of supposedly disinterested individuals any day, and I won’t restrict the market from any good.
    It is those claiming to ignore their own self-interest for the public good are delusional, and they pose a greater danger to society than the free market

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