About Rationally Speaking


Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Monday, June 25, 2012

Michael Sandel on markets and morals


by Massimo Pigliucci

I have just finished the latest book by Harvard philosopher Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets. Readers of this blog will not at all be surprised at finding out that I liked it, just as I enjoyed Sandel’s previous foray in ethics for the general public, Justice: What Is The Right Thing To Do? In both cases Sandel avoids top down expositions of moral philosophical principles, and instead begins by directly tackling issues relevant to everyday ethical problems, usually straight from news reports.

Of course Sandel does begin his analyses from a particular moral standpoint, a communitarian position inspired by virtue ethics — as opposed to, say, a utilitarian or deontological stance. Which of course suits me well because I lean towards the same type of approach to ethical reasoning. This, however, is not just a matter of reading what you like. I do think that virtue ethics is particularly appropriate to analyzing contemporary moral dilemmas precisely because it is not constrained by a rigid single criterion, like the principle of utility, or Kant’s categorical imperative. Rather, it helps to bring out in the open our values and priorities, which Sandel then ably subjects to a type of reflective equilibrium analysis.

Sandel’s starting point in What Money Can’t Buy ought to be relatively uncontroversial (though I’m sure some of my more enthusiastic free-market supporters will find a way to disagree): on the one hand, there is clearly no problem with having markets for a lot of goods, because markets — under significantly more restrictive conditions than it is popular to acknowledge these days — are indeed efficient at pricing things and at distributing goods. On the other hand, there are things we most definitely do not want to have a market for, because we value them independently of whatever price tag anyone could possibly put on them.

The first category is populated by all sorts of everyday objects subject to economic transactions. I want a car; you have one to sell; if we agree on the price, and there is no cheating (you ain’t trying to sell me a lemon*), there is no ethical problem at all. The second category comprises, for instance, children, or voting rights. These are things that we do not sell — even if there would arguably be a vigorous and profitable market for them — because... well, why, exactly?

Sandel’s answer is that some times (definitely not all, or even necessarily most of the times) markets tend to crowd out morals, and that in those cases we need to ask the (very Aristotelian) question of what those things which we are considering selling are for. If our analysis leads us to the conclusion that putting a price tag on said things undermines or corrupts their function in society, then we have found those things which should be excluded from markets.

Sandel gets to the heart of the matter in chapter 3 of the book, appropriately entitled “How markets crowd out morals.” His starting point is provided by examples where most people would immediately agree markets simply do not belong. We cannot buy, say, friends, or Nobel prizes. Or, rather, we can buy the appearance of friendship, and we could certainly buy a Nobel medal on eBay, if it were up for sale. But it would be ridiculous, or self-deluded, for someone to have paid for these items going around saying that he has friends or has won the Nobel. Again, why?

Because buying a friend or a Nobel medal irremediably corrupts (morally) the meaning of friendship or of the Nobel prize. Friends are supposed to be people who genuinely care about you, who appreciate you and support you for who you are. That sort of affection simply cannot be bought, and in fact to attempt to buy it is directly at odds with the whole idea of friendship. The same goes for the Nobel: its purpose is to recognize some of the highest accomplishments of human ingenuity and creativity, accomplishments that are the result of people’s intellectual efforts, not commensurable with one’s bank account. Displaying a bought Nobel medal not only wouldn’t get you the recognition and respect of a real Nobel winner, but would likely (hopefully) open you to scorn by anybody who actually saw it in your display case of (fake) trophies.

Of course, much of the reasonable debate here (i.e., excluding the opposite extremes of people who simply would want capitalism to be done with and those who think markets ought to apply everywhere) concerns items that fall somewhere between those for which there clearly is no problem in commercializing and those for which there clearly is a problem.

For instance, is it (ethically) acceptable to buy one’s place in a queue? The practice is becoming increasingly common these days, and Sandel dissects two situations in particular. The first one concerns the habit of lobbyists of paying homeless people to stand in line on their behalf to get a seat at a Congressional hearing. It seems like a win-win situation from the point of view of a strict market-based logic: the lobbyists save themselves precious (?) time, and the homeless get a few bucks in return. What could be wrong with this picture? Sandel points out that cases like these are open to two types of criticisms: one in terms of (presumably) unintended consequences, the other in terms of corruption of the activity itself. One of the consequences of paying for queue-standing is that often groups that do not have comparable funds (say, an environmental organization wishing to attend a Congressional hearing on water standards) are going to be excluded from the democratic process of deliberation and feedback. The economist might respond that the amount of money one pays is a measure of how much one wants something, and that markets simply — and neutrally — allocate resources accordingly. This is, of course, nonsense on stilts, because it does not take into account the obvious fact that economic resources are not distributed on a level field, so that a rich person may want something far less badly than a poor one, but the former can afford it and the latter can not. In terms of corruption of the activity itself, in this case standing in a queue, the idea is that queues have always been predicated on a simple criterion: you get there early, you get in early, regardless of any other consideration. So queues really do measure how much one wants something: the teenager who absolutely wants tickets to a rock concert will camp overnight in the cold in order to get them, while the Wall Streeter will stay at home and miss out. Unless, that is, the latter can simply buy his way into the concert by easily outbidding anyone else who really wants to be there.

The second example of queue jumping that Sandel considers is that of people buying their place in the queue for the very popular “Shakespeare in the Park” events in New York City. These are public events whose whole purpose is to allow people from all walks of life to enjoy high level theater performances in an open public space. There is no way to get tickets for these performances except by staying in line when they become available. But the event has become so popular that some people of wealth have begun paying others to stand in line on their behalf. The resulting issues are the same as we have seen above: on the one hand there is no longer any relation between how much people want to go see the performances and who actually gets in (contra standard free market analysis), and on the other hand the very idea of Shakespeare in the Park — a high caliber art performance aimed at a broad public — is corrupted by the queue buying process.

Throughout the book Sandel applies the same type of exploratory ethical reasoning to a number of other things that should or should not be for sale, including paying women to be sterilized or to stop taking drugs, bribing kids to read books and get good grades, giving money to people so that they eat more healthy foods, paying one’s way to breaking the speed limits on highways, allowing companies to buy polluting rights, offering big game hunters the ability to shoot endangered species for a price, buying pre-made apologies and wedding speeches, purchasing life insurance on strangers’ lives (and trading it on the securities market), and so on. The list is very long, though interestingly most of these novel markets arose in the past few decades, beginning with the Reagan-Thatcher turn of the 1980s or thereabout. It is a very interesting and educational exercise to go through each example and see what you think of its moral implications: sometimes you may agree that there is a problem, at other times not. The point is that each time you will be forced to make explicit to yourself why exactly there may or may not be a problem with a given market.

Sandel’s concluding remarks at the end of the book sum up the problem concisely: “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 honor and money cannot buy” You can guess what my answer is to that question.

______

* Of course, the possibility that you succeed in selling me a lemon means that there have to be regulations in place so that I can have legal recourse against your fraud, etc. Which means that even that uncontroversial market isn’t completely “free.”

26 comments:

  1. I am a lefty, so I will confine my comments to the Elephant in the Room. Your knowledge and mine have been given to us by Society. Some of us would be happier foraging without language or ideas, but for the rest of us repaying our Society involves more than just using it to trade goods and services. That would be the primary justification for Society to intrude upon the freedom of the market, always within reasonable limits. The basal justification is hatred at being ripped off.

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  2. I am having a difficulty here. I certainly do not want to live in a society where everything is for sale. However, I also do not want to live in a society where someone else can tell me what I should and should not buy or sell. I think it is up to me to decide what should be my limits . Yes, i think, for example, that selling friendship is wrong (and stupid), I would advise anyone not to do that, but i won't send someone to jail if he does that. It is one thing to say that selling or buying X is bad and undesirable, and it is another thing to say that whoever sells or buys X should be punished. Since I did not read the book (yet), I don't know what Sandel's position is: if he simply wishes to trigger us to consider our values and our moral believes, I agree, but if he suggests that the law should limit our freedom to buy and sell, I am not sure this is the right path to take.

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    Replies
    1. Shay,

      two points concerning your worry. First, by the very fact that we live in a society we forgo the right to absolute personal freedom. After all, you can't go around killing and stealing, because it is not in the interest of society to let that happen, right?

      Second, Sandel in some cases simply wants us to think about the problem (e.g., how silly it would be to try to buy friendship), but in other cases surely you'll agree that society does have a right to limit your freedom to sell. Is it okay if we let someone sell their children, for instance?

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    2. Massimo,

      Killing and stealing are very different from buying and selling in that they involve harming X without X's consent.

      This is (i think) also the reason why we are so reluctant to allow selling of children - because we perceive it as a harm inflicted on the child without receiving his consent, it is a transaction between 2 adults to sell a human being who did not consent to be sold. Again, this is very different from a transaction between 2 consenting adults regarding a non-human commodity.

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    3. We need more good lawyers in the world, even ahead of philosophers. The basis of any transaction is title of some kind to the property being sold. The moment you try to classify if someone has title, and of what kind, you enter ancient law based on thousands of years of practical history. Morality runs that deep.

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    4. Shay,

      my point was simply that we certainly agree not everything can be for sale. However, I'll bite the bullet and argue that that is the case even among consenting adults. First, Sandel (and others) points out that often "consent" is actually given under duress, which means it really ought not to count as consent at all. Second, would it be okay for society to allow people to voluntarily enter slavery? I think not, but they would be given their consent... Or, an exchange of illegal drugs or weapons is often made between consenting adults, so what? Society still has an interest in regulating or prohibiting such transactions.

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  3. Massimo,

    I was wondering what your thoughts were on the structure of Sandel's work. I liked the book for its arguments, but I found that I saw the same arguments over and over again. Couldn't the entire work have been confined to a NYT Op-Ed and been just as effective?

    This is my first comment and it's not a very good one, so I'll try to redeem myself by saying that I love your blog and the way you think about your topics. Keep it up!

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    Replies
    1. Matt,

      thanks for the kind words about the blog. Yes, I did detect some redundancy in Sandel's book, but no, I don't think the whole thing could have been compressed in an op-ed. He needed to work his way through a number of clear and borderline examples across a broad range of ethical situations to make his point.

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  4. Massimo,

    In the abstract I agree with Sandel that decisions under duress or coercion are not properly consensual. Of course, how one defines "duress" or "coercion" is all important, and I suspect Sandel and I would differ significantly here.

    That said, I would go further and argue that voluntary transactions can also be morally blameworthy and / or subject to regulation if they impose costs on third-parties which those third-parties did not consent to undertake (this is in part what economists call 'negative externalities'), or if they arise from or give rise to an exploitative state of affairs. (Naturally, how one defines "exploitation" is all important.)

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    Replies
    1. Eamon,

      yes, we would likely disagree on what constitutes duress or coercion. Still, my friend, there may yet be hope for you... ;-)

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    2. Massimo,

      Ironically, I was thinking the same about you :-p

      Roy,

      Finally you agree with me!

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  5. I haven't read the book (yet?) but the discussion you present of queuing for Shakespeare in the Park seems to omit an important consideration. "Time is money" is a cliche, but a person earning minimum wage may want to see the performance more than a college student whose rich parents are paying their tuition. The former may not be able to "afford" standing in line while the latter can.

    It seems that it is the ethics of a first come first serve systems that needs to be discussed, not the ethics of those who are forced to participate in them. (Especially since in the current world there are obvious alternatives such as online lotteries)

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    1. Jerry,

      I doubt that's the comparison Sandel had in mind. Yes, we could go to lotteries - though that would certainly have nothing to do with "who wants it the most - but the point is that queues have always been about first-come-first-serve. By buying one's place in a queue one undermines the point of having a queue.

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    2. First come first serve is ordinarily a "courtesy" arrangement for maintaining some order in short term situations. Nobody usually has to wait too long in other words
      Long term waiting situations, however, might work better and be less exploitable with a lottery system.
      (But unfortunately there will always be someone who will figure out a way to game any system.)

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  6. Were it true that possession of a dollar always represented a quantum of input human effort, human creativity, value to society etc. you might argue for "one dollar, one vote" instead of "one person one vote"; but in truth, you can inherit money, find it in the street, steal it, win it in a lottery, get it by selling drugs, be paid millions to be a CEO of a company that needs government bailouts, etc.

    It amazes me that people still cling to the obviously false notion that possession of a dollar necessarily represents anything admirable performed by the holder, entitling him or her to unlimited privileges.

    Paying someone to wait in line would not be so bad if, in order to get the funds to make the payment, you'd HAVE to do work EQUIVALENT to standing in line -- but it ain't necessarily so! I think the (false) assumption of having performed equivalent work in order to make the payment underlies the viewpoint of many people.

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  7. Tom,

    Re: the "possession of a dollar necessarily represents anything admirable performed by the holder."

    I've never heard anyone claim that.

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  8. Eamon,

    Well, I said that they "hold the notion", not that they
    claim it explicitly.

    For example, the Supreme Court rules that money is
    "free speech" -- hence the super PACs.

    In general, the attitude is that holding money entitles
    the bearer to special privileges that supersede individual
    rights.

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    1. Tom,

      Re: "Hold the notion"

      What does that mean?

      In general, your second comment does not seem to follow from your first, or if it does, you are not articulating your point well enough (or, as is not unlikely, I am being daft). What does super PACs have to do with special privileges?

      Money entitles one to purchase more goods & services, and to contribute financially to one's preferred charitable & political causes. So what? Am I to be prohibited from contributing to a political campaign because you are incapable of contributing a similar amount?

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    2. Eamon,

      By "hold the notion" I mean that it governs
      their underlying philosophy without their
      necessarily articulating the principle
      explicitly.

      You ask, "Am I to be prohibited from
      contributing to a political campaign
      because you are incapable of contributing
      a similar amount"?

      Well, it depends on your point of view.
      Should we have a society based upon
      "one person one vote" or based upon
      "one dollar one vote"? I would favor
      the former since, as I have noted, a person
      can come into money in a variety of ways,
      some of which have nothing to do with their
      wisdom or prior contributions to society.

      Why should a person who, say, won the lottery
      have more voice in government affairs than
      his neighbor who did not win?

      I hope the reason for my mentioning super
      PACs is now clear. But the Supreme Court
      would never say, "we made this ruling because
      we believe people with lots of money should
      have special privilege in comparison to people
      with little money".

      P.S. I'm sure you're not daft. What seems obvious
      to me when I make my argument must seem obscure
      (or even crazy) to you if you come from a different
      viewpoint. I guess I am challenging (what seems to me to be) your belief that "money entitles one to..." ...to what? An over-sized voice in government affairs that affect us all?

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    3. My goal in life is to come up with a voters license test, where the right to vote depends of the ability to choose intelligently. We have tests like that to qualify for numerous types of jobs, private or public, but voting is apparently not considered a job - not even a duty. And thus any cretin that can crawl into the booth has the same right as my own relatively brilliant self to choose the most powerful person to temporarily rule the world.
      (As an aside, I'd rather bring my dog to vote than a libertarian, for example, but he can't get a picture ID.in Hawaii.)

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    4. Voting is compulsory in Australia at 3 levels of government, local, regional, national. $120 fine if you fail to vote, if they can find you. I think there might only be a few systems like that in the world, enforcing democratic participation with totalitarian zeal, but its works well in this case.

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  9. "There is no way to get tickets for these performances except by staying in line when they become available."

    A scheme which prevents a busy surgeon who spends 90 hours a week saving lives from seeing Shakespeare in the Park is not self evidently morally superior.

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  10. Massimo,

    I am a regular reader of your blog and it is the right kind of mental exercise to keep up reflecting the world I live in.

    You write:
    "Having markets for a lot of goods, because markets .. are indeed efficient at pricing things and at distributing goods.
    On the other hand, there are things we most definitely do not want to have a market for, because we value them independently of whatever price tag anyone could possibly put on them."

    I agree, but ..
    not at every market it is paid with money: the casting-show, the marriage-market, many black markets, to name a few of these. To widen the picture, there are other “markets” of which we are not even aware of when we are dealing there: Disco, companie’s X-mas-parties, reunions of all sorts.
    A basic definition of market is, one attends to satisfy needs and is prepared to give something in return: to be loved, chosen before others, adored, to be given a chance, have access to real coffee or real American cigarettes (in the late 40th in Europe for instance) etc.
    This is what markets are made for: give and take. But not every market deals with money. What one gives in return might be something little like a smile, a promise for help, sex, social acceptance etc.
    What I want to point out is that if one looks at the wider picture, it is only natural, that money can’t buy everything. Neither can sex, or a smile or sympathy or American cigarettes.
    My point is, that to derive ethics it is not enough to look at money only. One I suppose will have to dig deeper, looking if one might depicture a general character of markets and if markets are an evolutionary phenomenon. But obviously, reducing the problem to money makes it easier to hit the markets.

    Hope this comment has not been posted too late. I am very interested in what you think.

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  11. I mused on Sandel's examples, as you suggest, but it's depressing. So, to cheer myself up, I riffed on them in my (satirical) blog:http://rummelsincrediblestories.blogspot.ca/

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  12. The morality has been melt up to western society. Good example, the payday loan. 20% interest charge. For one week only. It is really rip-off and immoral. No one can say it is a free market. When it comes the buying the friendship, it is common in western society whether of the head state or whether the business men or women. Good example is the kings of Saudi Arabia. The friendship between the head of America state and King Abdul of Saudi Arabia, UAE, Qatar and so on is friendship of money.
    When it comes the market in western society, it goes toward the lack of morality and unethical. Therefore, I for the one who have 100% support what he wrote this professor

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