Review: 'What Money Can't Buy: The Moral Limits of Markets’ by Michael Sandel

Professor Michael Sandel is quite the philosophical superstar; his course on Justice at Harvard University – now available online and for free – has been viewed by millions. Compared with your average, sleep-inducing university lecture, Sandel’s course makes for compelling viewing. In 2009 he delivered the BBC’s Reith Lectures on ‘A New Citizenship’ to great acclaim. He is, without question, a brilliant communicator and a stirring intellectual.

In his latest book, ‘What Money Can’t Buy: The Moral Limits of Markets’, Sandel takes a prod to our fetish for markets and the rising tide of commodification. Some things should just never be sold, he argues, because doing so degrades and corrupts goods that are best understood in non-market terms.

It’s necessary to get something out of the way to begin with, because I can hear the indignant cries of the rampant right-wingers already: “Communist! Communist!” This is not a tract against capitalism. Sandel doesn’t question – and really, the debate is just boring now – that markets are powerful and efficient (though, imperfect) tools for the allocation of resources and the organization of productive activity. Free markets are, as Churchill said of democracy, the worst system available – besides everything else. What this book laments, is “the expansion of markets, and of market values, into spheres of life where they don’t belong,” and the fact that, “without quite realizing it, without ever deciding to do so, we drifted from having a market economy to being a market society.”

There are two arrows to Sandel’s bow; the first is an objection about inequality, and the other is about corruption. To take them in turn: in a society where everything is for sale, life is harder for those of modest means – the more money can buy, the more it matters. Secondly, some things are improperly valued or degraded (corrupted) when commodified. I don’t agree with Sandel’s approach to why some things shouldn’t be sold, but let’s give him the benefit of the doubt for now and consider some examples. Here are some things you can now buy (at least in the United States):

-  A prison cell upgrade: $82 per night. In Santa Ana, California, and some other cities, nonviolent offenders can pay for nicer accommodation – a clean, quiet jail cell, away from the cells for non-paying prisoners.

-  The services of an Indian surrogate mother to carry a pregnancy: $6,250. Western couples seeking surrogates increasingly outsource the job to India, where the practice is legal and the price is less than one-third the going rate in the United States.

-  The right to shoot an endangered black rhino: $150,000. South Africa has begun letting 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.

Of course, some of these things are a little pricey. But no worries – you can always raise some extra funds by:

-  Renting out space on your forehead to display commercial advertising: $777. Air New Zealand hired   thirty people to shave their heads and wear temporary tattoos “Need a change? Head down to New Zealand.”

-  Stand in line overnight on Capitol Hill to hold a place for a lobbyist who wants to attend a congressional hearing: $15-20 per hour. The lobbyists pay line-standing companies, who hire homeless people and others to queue up.

-  If you are a second grader in an underachieving Dallas school, read a book: $2. To encourage reading, the schools pay kids for each book they read.

Sandel’s book is great value for its panoply of jaw-dropping and often hilarious examples alone. The ones I’ve outlined here are by no means the most unusual (for the truly tragic, wacky and outrageous, you’ll have to get yourself a copy of the book).

Take the phenomenon of hired line-standers. What should we make of this practice? My guess is that most people would think that paid line standing, at least on Capitol Hill, is objectionable. But why? One reason is that Congress is a democratic institution, and when well-heeled lobbyists buy their way into hearings, it undermines the public nature of the forum. If allowing this practice would make congressional hearings the exclusive purview of the rich, I think we’d have a pretty good reason not to allow it.

In his book the ‘The Gift Relationship’, the British sociologist Richard Titmuss showed that paying people decreased both the quantity and quality of blood that a blood bank would receive (unless a very large amount of money was at play). The payment converted what had been a donation into a transaction, and eroded the moral aura that had been associated with the act. A market culture, just as here, changes how we view a whole multitude of goods, and not always for the better.

Sandel walks a fine line in this book between playing the moralist, and the conversation starting provocateur. It’s difficult to know which examples he supports and which he doesn’t. Let’s take another one from above: paying $150,000 to kill an endangered black rhino. No doubt there is an emotional knee-jerk, or ‘yuck’ reaction against this. It seems base, or uncouth, to kill such a beautiful creature if the only reason is that it’s for what might, generously, be described as ‘sport’. But it’s not clear why we shouldn’t allow it if it does in fact lead to less black rhinos dying overall. The empirical evidence Sandel discusses indicates that it has indeed had this effect; the new monetary incentive to preserve rhinos has been, apparently, enormously effective. If what we care about is outcomes, we should (assuming there are no viable alternatives) allow the hunters their bloody indulgence.

I’m not convinced by Sandel that we need to philosophize to figure out the ‘nature’ of goods. We can, and should, be less highfalutin and more consequential in our analysis. A decision not to allow something to be sold is best reached after concluding that doing so will have bad consequences, not because it is somehow inconsistent with it’s ‘nature’. Sandel is right to challenge the market fundamentalists, but I am concerned that he seeks to replace it with a fundamentalism of his own; namely that some things should just never be sold, no matter what.

It is in enunciating the various ways in which market culture has degraded and debased society (most particularly in the United States), and in its vigorous call for a more robust public debate, that the value of this book chiefly lies. Sandel is never less than highly entertaining, and even if you don’t agree with him, this book won’t fail to induce some seriously enjoyable cogitation.

Here is an interesting interview of Sandel on this book. And for those who haven’t heard of his course at Harvard on Justice, it is well worth taking a look.

--

William Isdale is a law and arts (politics and philosophy) student at the University of Queensland, where he is an Academic Excellence Scholar and TJ Ryan Medallist and Scholar. He is the President of the Australian Legal Philosophy Students' Association and Editor of the Justice and the Law Society's journal 'Pandora's Box'. In early 2012 he was a visiting student at Oxford University's Uehiro Centre for Practical Ethics.

The 'Sole director of the fate of human beings'?: Revisiting the idea of markets as 'default'

Markets are often described by economists in an almost messianic way- as if they alone will solve all of the world's problems. Now, it is worth noting that markets do a great many things well- they can be great democratisers (in the sense that they in principle allow for a levelling of the playing field), they are often better at distributing resources than a centralised economic instruments and they are more free of rent-seeking and political influence than command economies. However, something they certainly are not is natural- they are like anything else institutions, Douglass North's 'rules of the game' or 'humanly devised constraints on action'.

Indeed, as Polanyi claimed what has really happened is a Market Society (for anyone interested in a more in-depth look at this idea I recommend Polanyi's The Great Transformation) has been created: a combination of market exchanges, industrial production and hedonistic consumption. In this blog post, I will briefly chart how this is different from the mainstream economic account of what market mechanisms are, before briefly posing some conclusions on how this might affect modern development policy (looking particularly at the experience of Russia in the early 90s). The key difference I posit is that along Polanyi's lines, markets are embedded in the social and cultural relations of a society, rather than existing as a separate mechanism alongside them as neoclassical economics assumes (actually neoclassical economists mostly just seem very disquieted whenever the word 'culture' is mentioned).

'The Invisible Hand': Modern Market Exchanges

Markets used to be largely places where often subsistence-based farmers, tradespeople or originally small-scale settlers or tribes would get items they needed but didn't have or couldn't produce from other people. They were often ad hoc, sometimes based on barter and very much not interconnected- prohibitions both religious and social against profit-making ('usury') were followed to various degrees. Modern capitalism changed all this. Modern market exchange is predicated on the idea that commodities have value because of the relationship between things, especially in terms of the translation into a monetary value. Trade is predicated on the substitutability of unlike goods and each participant having a different scale of values in order to produce mutually beneficial trades. Markets have to be embedded and naturalised within society, that is markets must have “institutedness”. As Polanyi observes, ‘free markets’ are instituted processes that must be articulated through social, legal and political strategies. 

This system of exchange is predicated on social acceptance, which is why Western development projects often include help setting up market economies, as a ‘charitable’ venture. Therefore, when confidence is lost in markets they cease to function and as a test of this hypothesis, the exchange system should also fail. This occurred amongst the Nentsy people of Northern Siberia when the bank accounts the Soviets had given them became valueless due to the depreciation in the value of the ruble in the early 1990s. As predicted, the herders switched from buying consumer goods off the Russians back to solely reindeer herding. 

Markets did not become successful because barter inherently transformed into modern capitalism- indeed as Polanyi notes, the really curious thing about laissez-faire capitalism is how planned it was- it needed helping although through establishing private property rights, creating and then dismantling large monopolies (like the East India Trading Company) and a change in attitudes to wealth accumulation, which brings us to consumption. 

'J'adore, Dior': Consumption Patterns and the Modern Corporation

Value in cultural terms is defined by how people expect the world and people in it to behave and how they judge that behaviour. The value of wealth accumulation has changed from the medieval view of public virtue arising from private virtue to the formal economists’ idea that public virtue can arise from private vice. Associated with this has been a popularisation of modern hedonism, characterized by the creation of cultural value in the self-conscious seeking of personal pleasure. These concepts have spread widely to the point where self-interest is taken for granted in most of modern Western society and through global media, much of the world. Consumer goods are in Western society associated with 'commodity aesthetics' in which people ascribe value solely on the basis of design or promotion. Companies have sought to create a 'hyperreality' (Baudrillard) or an aesthetic coating of the world that seeks to use images to generate a market-based society. Companies have also successfully in many cases proselytised to the developing world, for example a Power Rice Ad that was run in Papua New Guinea that was synchronised to the soundtrack recording of “Power to the People!” and featured a muscular man lifting the rice at a construction site. Foster also charts the rise of beauty contests and other competitions that serve to reinforce that cultural capital is to be gained through individual choices (see Materialising the Nation: Commodities, Consumption and Media in Papua New Guinea by Robert Foster). This is also related to what Jonathan Friedman calls homo consumens, "whose fragmented identity is constantly rearranged by the winds of fashion". But how is this all made?

'Work must not Cease’: Mass-Production'

Production is driven by the demands of the market, with an emphasis on creating surplus to trade with others and where the value is determined by what others will exchange for them. Perhaps the defining feature of the capitalist mode is its tendency to reproduce itself on an increasing scale. Production is also changed from previous reciprocal or household modes of production, because who makes the product is now irrelevant- i.e. all goods can at least hypothetically have their value translated into a monetary one (this is quite different to say the Kubo system where who gave you the pig is more important than the pig's 'worth' to you). Capitalism also means that production is no longer autonomous- capitalist production is the most interlinked of any economic system. Finally, high fidelity is ensured by industrialised production technologies, which can produce millions of copies of the same good (this is a key difference from say craft-based economies).

Moving from the Positive to the Normative: Some Policy Ideas

All of the claims I have made so far are what economists call 'positive', that is I've tried as hard as possible to make factual claims about what is not what should be (by hedonism for example, I do not mean a Catholicesque value judgment, I just mean the pursuit of individual pleasure). Now I will try and draw some tentative policy conclusions from what I've written.

The first is that we should not expect markets in the third world to just spontaneously exist- governance needs to get better before the 3rd world can open up to trade more fully and before those countries can actually prosper. In particular, Chicago School style 'shock therapy' is an appalling idea because weak economies with markets that are barely embedded in society will just collapse- witness Russia in the early 1990s. There is a role in international NGOs and other aid providers to tie further aid to institutional improvements- also Western governments should help here rather than just prescribing more of the 'Washington Consensus'.

The second is that the continued survival of markets means that institutions in every country have to be kept strong- there is a role for government policy in other words to stop the collapse in social relations that Polanyi discusses (though I obviously disagree with Polanyi's solution, which is to transition to either socialism or economic democracy).

The last is that while international finance and other forms of globalisation are breaking down national boundaries, there will be a continued role for nation states in the future to regulate these issues and that they will require a truly international response.

I would also make the empirical observation that economics needs to study these issues more- it should not be left to sociologists and anthropologists to fix up huge gaps in modern economic theory.

--

Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.