The Moral Limits of Markets

I just finished reading and studying an important book which is quite germane in the middle of an election-year campaign: What Money Can’t Buy: The Moral Limits of Markets by Michael Sandel (Farrar, Strauss and Giroux, 2012). Sandel, a gifted teacher and political philosopher who teaches at Harvard University, conducted, three years ago, a very popular PBS show based on his book, Justice; What is the Right Thing to Do? Sandel has no problems with markets and the economy. But he laments that ” we drifted from having a market economy to being a market society.” He sees a prevailing ideology which underscores faith in markets as the primary means for achieving the public good. But, he argues, “we need a public debate about what it means to keep markets in their place.” As he tellingly asks: “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?”

Naturally enough, money can not buy love or true friendship. We do not think we should be able to buy or sell children (although some have suggested a market for adoptions!) or hire someone to serve as our jury substitutde. Yet, the turn to the private profit sector has proliferated as for-profit schools, hospitals, private prisons, private security guards and the outsourcing of war through hired mercenaries grow apace. Sandel recounts the complaints by members of New York’s Public Shakespeare in the Park Company that rich people hired people to stand in line for them to obtain the free tickets given on a first come, first serve basis. He also mentions the condemnation by church officials when scarce tickets to papal masses in New York and Washington were scalped. Church spokesmen thought access to a religious rite should not be bought or sold. Cash is one—often enough legitimate—source to obtain goods and services. But there are other criteria to be considered: merit, need, even the sense of waiting our turn in that great equalizer, the queue.

So, Sandel asks: should people be able to pay to get to the head of the line in public facilities, such as airports ? To drive alone in car pool lanes for a fee? Should people pay people to get sterilizations? Or to quit smoking or lose weight? Should having money determine who gets transplants for kidneys or first access in emergency rooms? Sandel notes that “often market incentives erode or crowd out non-market motives.” Money to lose weight or stop smoking, often enough, induces us to do the right thing for the wrong reason. As a result, smokers soon resume or weight losers gain the weight back. Marketing a good can change its meaning and corrupt attitudes and norms worth protecting.

Thus, one pundit suggested tradeable procreation permits to help limit over-population. If a couple wants more children than the allowed two, they can buy the procreation permit from someone who does not want to use the allotted two. As Sandel notes, such ways of thinking turn a child into a commodity and cast a dark shadow on the moral good of parenthood. In a similar way, another person has suggested using a market mechanism to allocate refugee resettlement. Sandel complains: “To think of refugees as burdens to be unloaded or as revenue sources rather than as human beings in peril” degrades the status of the refugee. Sandel is also not a fan of cap and trade market mechanisms for controlling greenhouse gas. He prefers a carbon tax (a kind of fine). As he sees it, like the resort to outsourcing to mercenaries in our nation’s wars, cap and trade can involve an outsourcing of a civic obligation: “It enhances an instrumental attitude toward nature and it undermines the spirit of shared sacrifice that may be necessary to create a global environmental ethic.”

Two dangers in marketizing everything lie in the issue of fairness and the issue of corruption. Thus, a market in body parts might assume a fair and free exchange of a kidney for money. But poverty may explain the transaction and indicate that the exchange is less free, more coerced, than meets the eye. Inequalities of wealth blunt the so-called blind fairness of markets. If someone can simply buy access to the best university or to obtain an honorary degree, this corrupts the good of university education. If we knew money had determined the granting of an award based on merit (a Nobel or Pulitzer Prize) we would feel the award had been corrupted. Buying elections has a similar corrupting taint.

One of the things I found illuminating in Sandel’s argument is his uncovering the fact that many main stream economists do not like the economic inefficiency of gift giving. They often argue that, instead of Aunt Sarah giving you a $120 dollar argyle sweater, it would be more efficient if she just gave you the money so you could buy with it what would have been your own preference. This is to be blind to the role of gift-giving as more than some market exchange. It signals love. Gifts are not only about utility (which, in a sense, if the only moral relationship markets know).

That is why the famous study by Richard Titmus, The Gift Relationship, is so illuminating. Titmus compared blood giving in the United States (where blood was bought on markets as well as coming from volunteers) with blood giving in the United Kingdom where blood only came from volunteers. The British blood supply was always more ample and sure, relying on volunteers. Selling blood may not be a fair and free exchange but, instead, exploit the poor. Titmus also argued that introducing a money market into blood volunteering reduces the sense of gift-giving, gratuitous generosity and he worried that a decline in the spirit of altruism in one sphere can boomerang. I became more appreciative of the insistence by Pope Benedict in his economic-social encyclical, Caritas in Veritate , on re-introducing the notion of gift and gratuitousness into economic thought. Most economists do not really understand the logic of gift. Marketizing gift-giving undermines it.

Most economists also tend to misunderstand virtue and altruism. Frequently, they assume these are scarce and rare qualities and we had better resort to market allocations rather than rely on or deplete such scarce goods. Resorting to Aristotle, Sandel argues: “Altruism, generosity and civic spirit are not like commodities that are depleted with use. They are more like muscles that develop and grow stronger with exercise.” Sandel cites examples in Israel where three groups of students were sent out to raise money for cancer victims. One group was motived simply by altruism. A second group was promised a one percent cash bonus for what they garnered; a third group was promised a ten percent bonus. In fact, those motivated by altruism actually gained the most. Similarly, when trial laywers were asked to take a reduction in fees to support poor clients, they refused. But they were willing to do so, pro bono.

Sandel also laments the proliferation of ads now found on eggs and apples in supermarkets (pushing television shows), on fire hydrants, in school buildings (one school was willing to sell ads which would appear on report cards!). Some police departments have allowed ads to appear on their police cars. We are selling naming rights to public parks. As someone has said of this invasion of everyday life by such commercial motives: Will Thoreau’s Walden Pond become Wal-Mart Pond? As Sandel reminds us: “Most of our political debates today are conducted between those who favor unfettered markets and those who maintain that market choices are free only when they’re made on a level playing field, only when the basic terms of social cooperation are fair.” Some things money can’t or, at least, should not be allowed to buy! Understanding and protecting citizenship and a true civic public good entails we vigorously enter this debate.

John A. Coleman, S.J.