What Money Can’t Buy

Note: This post is one of two that will discuss the moral limits of markets. I’ll post the other by the end of the week.

I just finished Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets. According to Sandel, “The most fateful change that unfolded during the past three decades was not an increase in greed. It was the expansion of markets, and of market values, into spheres of life where they don’t belong.” Throughout the book, Sandel sets out a string of discomfiting examples of things that are now available for cash that hadn’t been in the past:

• In Santa Ana, California, nonviolent offenders can pay $82 per night for quiet, clean jail cells away from cells for nonpaying prisoners.

• In Minneapolis, solo drivers can pay $8 to drive in the carpool lane.

• For $1,500 and up a year, people can sign on with a growing number of “concierge” doctors across the country, who will answer cell phone calls and take same-day appointments.

• A business called LineStanding.com, regularly used by Washington lobbyists, will, for pay, find someone to stand in line at congressional hearings open to the public on a first-come-first-serve basis.

• It costs $22 to ride the elevator to the top of the Empire State Building.  But if you pay $45, you can now buy an Express Pass that lets you cut the line.

Sandel argues there are two reasons that the expansion of markets into these areas is problematic. The first reason, long raised by critics on the left, has to do with inequality: If everything is for sale, life will be far more difficult for those with less money, and will result in an even more unfair distribution of more goods to the rich. Before, the rich went to prison just like anybody else; now they get nicer cells. Before they had to wait in line for congressional hearings just like everyone else; now they step into place at the front of the line minutes before the hearings begin. Furthermore, inequality arguably makes the expansion of markets morally unpalatable because of its coercive effects: poverty may impel people to sell things (their organs through organ transplants; their wombs through surrogate parenting; their sexuality through prostitution) that we think shouldn’t be sold.

Sandel is less interested in inequality, though, than he is in a second reason to worry about the spread of markets, which he calls “corruption.” “Putting a price on the good things in life can corrupt them. That’s because markets don’t only allocate goods; they also express and promote certain attitudes toward the goods being exchanged.” Sandel asserts that paying for some things values them in the wrong way, and therefore changes our relationship to these goods. Paying kids to read books, for example, might get them to read more, but it puts children in a profoundly different relationship to reading than reading for its intrinsic value would. The same is true when people pay to have their wedding toasts or apologies written for them by others.

Sandel’s overall point is that markets have a moral impact on the way we perceive the goods traded in them, and that sometimes this moral impact is problematic . “Treating religious rituals, or natural wonders, as marketable commodities is a failure of respect. Turning sacred goods into instruments of profits values them in the wrong way.”

In raising the moral impact of “marketization,” Sandel pushes back against the spread of economic theory and market logic into domains that hadn’t traditionally been seen as the province of economics. He seeks to counter Gary Becker and other rational choice proponents of the past half century who argue that economic logic and monetary incentives are a valuable tool to solve social problems, even those outside the traditional realm of the market. Above all, Sandel’s book seeks to argue that this marketization of the social world is not, contrary to the contention of some economists, amoral, but rather has a profound moral impact on the way we look at and interact with the world.

One of Sandel’s most persuasive examples on the relationship between markets and morality comes from an Israeli daycare that sought to deal with the problem of parents who turned up late to pick up their children, thereby inconveniencing staff who had to wait for them. When the daycare introduced fines in an attempt to motivate parents to pick up their children on time, late pickups unexpectedly increased rather than decreased. Why? Parents perceived the fine as a fee, and now saw late pick-ups as a service for which they could choose to pay. Arriving late, in other words, was transformed from a matter of moral disapprobation to an amoral market transaction. The same, Sandel argues, is true for increasingly more interactions in society.

Sandel’s collecting and exploring the many examples of the spread of marketization is important work. His call to public discussion of the moral effects of marketization is critical in an era in which economic logic has coopted much of public policy with little resistance. As other reviewers have noted, however, this is a relatively thin volume that largely presents a compendium of individually problematic examples, raises the issue of whether the marketization at issue corrupts the way we value individual goods, and then mostly leaves the issue there. This would have been a more satisfying book if Sandel had explored more deeply the complexity of the important issues he raises.

For example, Sandel treats marketization as a yes-or-no issue without exploring the complex ways that markets interact with the goods in question. According to Sandel, “once we see that markets and commerce change the character of the goods they touch, we have to ask where markets belong – and where they don’t.” Yet the issue isn’t simply the black-and-white question of to marketize or not to marketize: As the work of sociologist Viviana Zelizer and historians like Amy Dru Stanley show us, even the most personal of relationships and the areas we consider most deeply immune from market values are related to the market in complicated ways. And many of the examples that Sandel raises are not problematic because of the fact of marketization, but because of its manner. Take Sandel’s example of the Empire State Building: it’s not the fact that people have to pay to ride the elevator that’s problematic, it’s the fact that people can pay more to buck the line.

The same problem arises with Sandel’s examples concerning treating human bodies and labor as market commodities. Sandel states that treating people as commodities is wrong because “[s]uch treatment fails to value human beings in the appropriate way—as persons worthy of dignity and respect rather than as instruments of gain and objects of use.” But of course it’s more complicated than that. We’ve long allowed human labor to be treated as a commodity; the question is what the appropriate limits on this marketization should be. Likewise, even if we find baby selling morally inappropriate, as Kim Krawiec points out, we generally tolerate some fees accompanying adoption. This calls for a more nuanced conversation about which kind of market effects and permeation is okay with respect to particular goods, which are not, and why, than Sandel gives us here.

As Jeremy Waldron points out, Sandel’s conception of corruption would have benefited from engagement with Michael Walzer’s Spheres of Justice. In it, Walzer argues that to be just, the principles by which goods are distributed in a society should be plural, and tailored to their own social meaning and function, rather than based on some metric common to the distribution of all goods. Money and markets have their place in society, Walzer contends, but that place must be limited to avoid domination of some people by others. Injustice, in Walzer’s view, is created when goods in one sphere of society – the market, family, the church, politics, the university – can easily be translated into goods in another sphere. (I’ve written elsewhere about how the relationship between family and market would be negotiated under Walzer’s “separate spheres” principle.)

Under Walzer’s theory, for example, those who achieve power in the church should not be able to translate this power into political power. More to the point, those who achieve power in the market might properly be able to use it to buy more consumer goods. However, they should not be able to translate this money into political power (or, for that matter, into easier entrée into congressional hearings through bypassing lines) or admission of their kids into the university. Taken in this way, Walzer’s theory offers a helpful means of thinking about the appropriate limits of market forces when it comes to particular goods that goes beyond Sandel’s sometimes murky assertions that marketization degrades them.

The most thought-provoking parts of Sandel’s discussion come on the occasions that he moves beyond the discussion of whether individual goods should be able to be bought to the question of what happens to a society as market logic permeates deeper and deeper into citizens’ views of their relationship with others. “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.” Sandel questions whether citizens who learn to see themselves as self-interested consumers in increasingly more arenas of life can be expected to develop the altruism and public-spirited nature needed in a healthy society. This is among the most important issues raised in the book, and calls for far more discussion than it receives in this volume.

To function well, democracies need a critical quotient of citizens willing to educate themselves on important issues and to vote, to volunteer in schools, and to involve themselves in civic life. Legitimate grounds exist to question whether those steeped in an ethos of self-interest will be sufficiently other-regarding and public-spirited. In a series of experiments detailed by Robert Frank, researchers tested economic theories that predicted that people generally act in a self-interested manner. In one such experiment, a subject was given $10 and told to propose a division between himself and another subject. Once the “allocator” made the proposal, the other subject had the choice to accept or reject the proposal. A person acting solely based on self-interest would be expected to propose $9.99 for himself and the remaining $0.01 for the other subject; the other subject, in turn, would be expected to accept the proposal on the ground that a penny is better than nothing. The experimenters, however, discovered that subjects seldom adopted that self-interested strategy: 50–50 splits were the most common proposal, and highly unequal proposals were often rejected by the other subject on the ground of fairness. The exception to these rules, however, were economics graduate students, who far more often acted in their own self-interest than other subjects. The finding that economics students act more self-interested than others has been replicated in a series of experiments. While Frank attributed part of the difference between economic students and other students to the fact that self-interested students were more likely to choose to study economics, after teasing out this selection effect, he concluded that some of the self-interested behavior was a result of the education that the economics students received.

Is the triumph of neoclassical economic theory driving more self-interested behavior in society? To what extent is the view that one should drive as hard a bargain as possible, and should look only to one’s narrow self-interest, contributing to our winner-take-all society? Surely the notion that it is legitimate to extract more money from people to join an express line to the top of the Empire State Building would have been inconceivable a generation ago.

It seems likely that these types of changes in social norms have contributed to the skyrocketing of the vast wage disparities between CEOs and their workers. Executive compensation at the nation’s largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of America has stalled. In 1980, CEOs at the largest companies received 42 times the pay of the average worker; this year, CEO pay rose to 380 times the pay of the average worker.

To take a closer look at one example of this increase, the CEO of Dean Foods earned one million dollars annually in the 1970s. During those years, he turned down several raises on the ground that it would be bad for company morale if he made too much more than his workers. In contrast, the current CEO of Dean Foods earns $10 million, adjusted for constant dollars, and has a private jet devoted to his business and personal needs. During the period between the 70s and today, however, company workers’ real wages declined slightly. According to Andrew Douglas, son of the 70’s CEO, if his father had seen how much executives were making today, he’d be “spinning in his grave. My dad just believed that after a while, what else would you need the money for?” Douglas said his father viewed wages in part as a moral issue. Imagine CEOs of today discussing the wage disparity between themselves and workers in moral terms.

As the notion that sharp dealing is the only valid way to conduct one’s business and one’s life becomes more prevalent, we may be eviscerating the notion that people should behave any differently. Indeed, the question of the morality of this behavior is taken off the table by the spread of economic logic. At the same time, this logic promotes the belief that members of a society have no standing in a society apart from their ability to pay and discredits the notion (in Mitt Romney’s words) “that [citizens] are entitled to health care, to food, to housing, to you name it – that that’s an entitlement.”

In 1912, John Jacob Astor was aboard the Titanic when it struck that fatal iceberg. Astor, worth $85 million at the time ($2.08 billion in 2012 dollars) helped his pregnant wife into the lifeboats, then helped two immigrant children that he happened upon into the boats, before backing away himself to make room for more women and children. He went down with the Titanic, along with the many other men who had ensured space for the women and children – theirs and others – into the boats. In our era of expanding markets and sharp dealing, would this other-regarding behavior be repeated? Would Astor think about what the moral thing would be to do, or would he simply consider his own self-interest? And which sort of behavior should we encourage in our society?

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6 Responses

  1. Ken Arromdee says:

    I’d point out that a government has a monopoly on force and I would think that it generally isn’t right for the government to charge people for better treatment in a situation that involves the government’s use of force. Four of the original five examples are such cases.

  2. Kent Schenkel says:

    Excellent review. I had read the Waldron review where he points out that Sandel ignores Walzer’s contributions but bringing in the Robert Frank research really has the potential to enrich this project. Very thought-provoking.

  3. Jimbino says:

    How do you explain this:

    National parks, forests and BLM lands, as well as state parks and beaches, charge very little to enter, and national park entry (even Yosemite) is free to those over 60 and anyone in their car.

    Why do you almost NEVER see a Black, Hispanic or Native American face in any of them? They amount to nothing but White Country Clubs, though fully 80% of visitors to Yosemite, for example, are Asians, mostly foreign tourists.

    These are prime candidates for privatization of the management and, perhaps, outright sale. Ted Turner, Walmart and Disney serve poor minorities better.

  4. Wonks Anonymous says:

    This Israeli thinks we should be skeptical of that daycare study. By his account they did not keep good enough records to substantiate the claim:

  5. Eric Hodgdon says:

    @ Jimbino
    Sure let’s sell EVERYTHING in America, after all it’s stolen except the middle part, which was stolen before being purchased.

  6. Eric Hodgdon says:

    However, the book and subject reveal many parts of our system and society. The evidence is clear, but more is not said.

    A good look back to Woodrow Wilson in 1912, where, in his speeches while running for office, he talks about American industry producing too much for the people to consume, therefore, America needs to conquer the World’s markets and control them.

    Then, as Europe returned from WW2 devastation’s, our ability to keep our markets growing, stopped. But, this was not seen as so, but was most likely the Stagflation of the 1970s.

    Thus enters Ronny Reagan and his Voodoo Economics. Growth continued, but by different means.

    Cannibalistic Capitalism ensued, which fueled growth as it ate into the regular Americans lives, livelihoods, and life.

    Financial transactions fueled the apparent growth, which continue to today, as our national incomes keep rising, as an average, for only a few at the top.

    The never mentioned drawback of Capitalism is that growth can not be had without an external input, and more importantly, it can not continue on a finite planet – Earth.

    Capitalism must end in these United States before millions and millions die in abject poverty.