Posted: November 27, 2012
ichael Sandel is well known for his writings on political philosophy, and about a thousand Harvard undergraduates annually crowd into his course titled "Justice." In contemporary terms he is a liberal, though of a decidedly "communitarian" bent. His new book, What Money Can't Buy, offers a good occasion to examine his communitarian moral convictions and his resulting distaste for the market.
One cannot disagree with him about the need to remoralize the study of markets. We should know why we believe, morally speaking, that bread should be allocated by a market but children should not. It's not enough to simply sneer at these propositions—even economists must perform their philosophical due diligence. "Markets are not mere mechanisms," he wisely observes, but "embody certain norms." He is right that "[m]arket reasoning is incomplete without moral reasoning."
But the book does not perform the work it calls for. Sandel knows moral and political theory, yet his book is strangely shallow. He does not provide, as he promises early on, "a philosophical framework for thinking...through" the "role and reach of markets." Instead, he mounts a tendentious assault, often veiled as mere reporting of what "some people" say, against "market triumphalism," which he understands to be an unsophisticated and unprecedented drive to price everything. He does battle with the more easily defeated utilitarian economists (Judge Richard Posner, for example), but ignores the best that has been thought and written about the merits of a commercial, innovative society. (John Tomasi's new Free Market Fairness is one book Sandel could have profited from, among others.) Playing to his audience's least examined dispositions about what's fair and what's reprehensible, Sandel doesn't try to elevate the philosophical game of the people he lectures.
He does, to his credit, give many interesting examples of the moral dilemmas of allocating things by money rather than by status or queuing, from selling kidneys to buying baseball players. Yet, Sandel's ideas display little connection to human moral thinking since Moses and Confucius and Socrates. The students, and the readers, deserve better.
His moral thoughts in fact are two only, and thin versions of these: Equality is good. And the sacred can be corrupted by the profane. "The fairness objection [to what money should buy] asks about the inequality that market choices may reflect; the corruption objection asks about the attitudes and norms that market relations may damage." That, philosophically speaking, is it.
About the fairness objection, Sandel repeatedly declares without much argument that "part of what's troubling" about whatever scheme to market something he doesn't want marketed "is the unfairness of such a system under conditions of inequality." His analysis of equality as a moral principle never gets beyond the schoolyard taunt that such-and-such is "not fair." He asserts, for example, that scalping tickets to Shakespeare in the Park or campsites at Yosemite "is unfair to people of modest means, who can't afford to pay $150."
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"Afford" means that people literally cannot pay for an item. I cannot "afford" to buy Oprah Winfrey's house in Chicago, now up for sale at $2.8 million. If I cashed in all my assets, and got the largest mortgage that I could persuade a bank to give me, and robbed a few convenience stores on the side, the $2.8 million would be unaffordable, beyond my means. It is, as the economists put it, outside my budget line.
But even a family of four living at the federal poverty line of $23,050 per year can afford an expenditure of $150, which is less than 8% of their monthly income. That sum is inside their budget line. The occasional harmless indulgence of a quart of ice cream for the kids, or a movie, adds up to a good deal more than $150 in a year.
What Sandel probably means, though never says, is that people of modest means would be pinched by a $150 discretionary purchase, whereas Oprah would scarcely notice either it or a $2.8 million house. But you cannot use the poverty of the man of modest means as a philosophical tool against markets simply by brandishing the word "afford."
The slender argument Sandel does offer makes things worse. He contends, as do many on the Left, that "market choices are not free choices if some people are desperately poor or lack the ability to bargain on fair terms." As Anatole France famously noted, "The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets, and to steal bread." Yet "bargaining on fair terms" has little to do with how people get into or out of poverty, contrary to what many well-intentioned people think. The well-intentioned believe in the benefits from intervening in and curtailing markets. Labor unions are supposed to make workers better off, for example, by giving them more bargaining power. In fact, the rising productivity of the economy improved the standard of living much, much more that what can reasonably be attributed to unionization.
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Having desperately poor people is a moral problem in itself, regardless of the alleged lack of "bargaining power." The problem has been partly solved in many countries from 1800 to the present by innovation, previously blocked. If the lack of bargaining power, not the supply of their labor relative to demand, were truly the problem the poor faced, bosses would drive down their wages to nil.
Indeed, the American poverty line of $23,050 is around the world average, and would buy a comfortably middle-class existence in India. Sandel never explains why we Americans should ignore the desperation of people earning $1 a day in Chad, and attend instead to the unfairness of "unaffordable" tickets for Shakespeare in the Park. It is a moral failure that communitarianism values our community, our fellow New Yorkers or Angelinos, so much more than it values poor people elsewhere in the world, ignoring the good a commercial, innovative society would do for Chadians or Bangladeshis. Introducing free markets in agricultural products by removing European and American protection for "our" farmers, or having rich countries pay poor ones to put our garbage in their landfills, as Lawrence Summers once suggested in blunt but sound reasoning, would ameliorate a most terrible lack of affordability. In short, the best policy for the $1-a-day wretched of the earth is to let capitalism rip, which is what China has been doing since 1978 and India since 1991, with vastly more gain to the poor than from communitarian hand-wringing and redistribution. Sandel doesn't face the actual, moral problem—which is real, desperate poverty. Instead, he recommends that we fiddle with prices and create queues for A Midsummer Night's Dream.
Sandel's philosophy ignores, too, the slippery-slope objection to allocating goods outside the price system. If charging tolls on congested highways is "unfair to commuters of modest means," what's to stop us from concluding that charging for bread, housing, clothing, cable TV, and Fritos is unfair? The unanalyzed dictum that it's unfair that I lack a 100-foot yacht (which I do indeed find troubling) would slope downward to North Korean-style allocation of everything. One could perhaps imagine moral dicta to halt our descent down the road to serfdom. But Sandel does not tell his readers what these might be.
Moreover, he ignores the moral issue of the source of unequal incomes, famously posed in the Wilt Chamberlain Example in Robert Nozick's Anarchy, State, and Utopia (1974). Suppose 4 million people willingly pay Chamberlain 25 cents each to watch him perform hook shots. He ends up a millionaire, able to afford a moderately big yacht. If the source of high incomes is legitimate—Fred Astaire's feet, Jane Austen's pen, Warren Buffett's investing acumen—why shouldn't the recipients be able to spend the proceeds as they wish, enjoying preferred access to goods, even necessities? Sandel gives no reply. Indeed, John Rawls argued in A Theory of Justice (1971) that if Andrew Carnegie or Bill Gates innovates in a way that makes even the least among us better off, then their profits should be left alone. (Sandel is well known in philosophical circles for attacking Rawls as insufficiently communitarian.)
Or turn to the most fundamental philosophical argument for allowing the price system to get on with the job. Suppose, as in fact happened in Holland and then Britain in the 17th and 18th centuries, we agree to the Bourgeois Deal: you let me make a fortune inventing the coffee trade, cheap steel, or a computer operating system, and in the third act of the economic drama I'll make you—all of you—rich by historical and international standards. In 2010 incomes averaged $129 a day per person in the United States as against $6 a day in the same prices in 1800 and $1.40 a day, even now, in Zimbabwe. The Deal is not in the first act egalitarian, which is as far as Sandel's economic and philosophical analysis reaches. Yet by the third act it has been powerfully improving the lot of the worst off. The daily income per person in the average country that has agreed to the Bourgeois Deal has risen, in inflation-corrected terms, from $3 a day in 1800 to $100 a day now—and much higher if one properly allows for the superior quality of modern travel, medicine, and other goods.
The poor have benefited the most from capitalism. Had Sandel's "fairness" prevailed three centuries ago it would have killed the modern world and kept us in the appalling poverty ubiquitous before 1800. In some countries it did. After 1947 India embraced egalitarianism, which yielded "the Hindu rate of growth," as Indians themselves bitterly described their anemic economy. I worry that Sandelian dispositions will kill, quite unintentionally, the only chance the world's poor have to achieve the scope for a full human life.
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Sandel's second principle, and his much better argument for what money can't buy, is that the love of gain can cause the sacred to be spoiled by the profane. Sandel does not actually use the theological words, though they would have been clarifying, arguing instead that "we corrupt a good, an activity, or a social practice whenever we treat it according to a lower norm than is appropriate to it." Such a sensible rule is not usable, however, absent a framework for deciding what is lower. Without one, we can only express our disgust when professional ethics in banking, say, is corrupted by sheer profit maximization, but cannot think through the ground or justification of our reactions.
He does give good examples of the dangers of profanation. (His book is mainly raw examples, in fact, scores and scores of them.) We can agree that parenthood is sacred, and therefore that selling children is disgusting, and even that "trafficking in the right to procreate promotes a mercenary attitude toward children that corrupts parenthood." Paying a child to read a book may give her the idea that reading books is a "way of making money [though in truth it is], and so erode, or crowd out, or corrupt the love of reading for its own sake." Paying for the daily paper is one thing, paying to have a second child in China is another. (Notably, Sandel does not commend the direct solution, which would be for China to drop the One Child Policy itself.)
His examples suggest why the growing fashion for "libertarian paternalism," the "nudging" that Cass Sunstein brought into the Obama Administration, might be mistaken. "If cash can cure us of obesity," Sandel asks rhetorically, channeling the nudgers, "why cavil about manipulation?" "One answer," he notes, "is that a proper concern for our physical well-being is a part of self-respect," and that "paying people to take their meds does little to develop" and "may even undermine" self-respect.
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Here Sandel sounds almost libertarian, since self-respect is one of the chief goods of a market society, one in which the community does not provide all of our needs. He might have reflected, as Tomasi does in his book, about the self-respect that comes from earning one's way. Minimum-wage laws that prevent people from working can undermine self-respect, for instance, by making unskilled people wards of the community. But Sandel, combining superficial philosophy with page after page of unanalyzed and politically slanted examples, does not so reflect.
He is persuasive, admittedly, when he goes after the naïfs of Prudence Only, especially the economist Gary Becker, Judge Posner, or the Freakonomics writers Steven Levitt and Stephen Dubner. Sandel is right that what is called "agency theory," which has taken over American graduate schools of business in the past 40 years, is naïve in declaring that all we need, like trained seals, are incentives. We also need professionalism, judgment, history, and norms, as bankers have recently learned.
Yet Sandel offers no philosophical standard for the bankers. One can readily agree that buying school grades or honorary degrees, or paying for a friend's advice or a husband's sexual services, are viewed nowadays by "some people" as immoral. But why? Once upon a time all such things were for sale. In the European Middle Ages one could buy almost anything—wheat and iron, yes, but also husbands, marketplaces, kingdoms, eternal salvation. Sandel claims repeatedly that "market triumphalism" is a novelty. But it is mistaken to imagine that in olden days we were pure and fair, and now we are capitalist and corrupt. Before 1933, for example, markets ruled in China and India as much as in England and Italy.
Sandel worries, properly, that the market can crowd out the sacred. A corporate market in instruction in elementary classrooms, say, could crowd out unbiased teaching about capitalism. Yet he does not tell his own classroom that state schools could crowd out unbiased teaching about, say, the environment.
And what about crowding in? a society in which goods are allocated by race, gender, or party membership is not obviously superior in moral terms to one in which prices rule. Sandel declares that we must ask "whether market norms will crowd out nonmarket norms," but fails to consider the opposite case, as when white Southerners' non-market, communitarian norms decreed that a black person's money is not as welcome at a lunch counter as a white person's. A market society is by no means contemptible ethically. The French spoke in the 18th century of doux commerce, the civilizing effect of markets introduced into societies previously based on status.
Over the front door of the late-medieval city hall in the Dutch city of Gouda is the motto of the first modern economy, the first large society in which commerce and innovation instead of state regulation and social status were honored. It says, Audite et alteram partem—Listen even to the other side. It's good advice for a bourgeois society, and for a philosophy classroom.