This may be the first work of political philosophy ever nominated for a business book of the year award. Michael Sandel’s short, clear, and very readable book certainly addresses a major economic problem of our time, and for directness and accessibility it is reminiscent of Ronald Beiner’s 1992 book What’s the Matter with Liberalism? Sandel and Beiner, like Albie Sachs, know that serious philosophic issues arise in our everyday lives, and Sandel delivers a commanding account of the problems caused by the transformation of market economies to market societies.
We now trade things we would probably not have dreamt of trading even two decades ago. In some United States prisons, non-violent prisoners can buy upgrades to “better” cells; solo drivers can pay to use lanes reserved for multiple-occupancy cars; children in inner-city schools can be paid to read books; Indian women can rent out their wombs for about $6,000, a third of the price in the U.S.; wealthy parents can buy their offspring places at prestigious universities; a $30 billion business has evolved in which people buy others’ life insurance policies, pay the premiums, and collect the payouts when the others die.
South Africa augments wildlife conservation funds by charging $150,000 to shoot a black rhino. Some Inuit sell their right to kill walrus; “hunters” then shoot the ponderous beasts at close range. States and corporations trade pollution permits; some analysts have proposed tradable refugee quotas. Some people are prepared to buy the eggs or sperm of healthy, tall, well-educated — and in many parts of the world, no doubt, white or fair-skinned — people, so as to give their yet-unconceived children real or imagined advantages.
All human activity, furthermore, becomes a vehicle for advertising or sponsorship. The Houston Astros baseball stadium became Enron Field — until some of the Enron management were imprisoned. McDonalds almost came to symbolise the United States around the world, and paid a price after the illegal invasion of Iraq in 2003.
Yet market society does not work as economists think it does, and people confound market expectations in all manner of ways. Paying schoolchildren for better test scores had varying results in different cities — no effect, or improved attendance and unimproved results, or better reading comprehension; one offer of money was seen as “cool”, but the school concerned also provided twice-weekly evening tuition, and extra classes on 18 Saturdays, as part of the enhanced programme.
Marketisation
When an Israeli nursery fined parents for collecting their children late, the late pickups increased — and did not fall when the fines were abolished. When the inhabitants of a Swiss village were asked about accepting a nuclear waste dump, they narrowly voted “yes”, but when offered a financial incentive they opposed the dump, because the offer insulted their sense of public commitment. Those who can afford expensive boxes at baseball games often arrive late and leave early, while the kids in the bleachers know every starting player’s batting average. And killing an animal is a strange way of valuing it.
Marketisation, therefore, changes the meaning of what we marketise. The nursery fines just become fees; Sandel remarks that, of their own accord, some rich Chinese parents pay huge sums to local government – the purported fine for having more than one child. Harvard Business School has been documented as, in effect, selling cachet and networks rather than imparting knowledge.
Seeing market incentives as the only motivation also makes coercion, not to mention structural oppression, invisible. Lawrence Summers and Jagdish Bhagwati, separately, conclude that becoming a bonded labourer is a rational action. That cannot encompass a starving or seriously sick person’s inability to make free decisions.
This results from more than neoliberalism’s apparent victory in the early 1980s. Economists’ conception of their discipline has also expanded enormously; Sandel traces the move from Paul Samuelson’s statement that economics is about “prices, wages, interest rates, stocks and bonds, banks and credit, prices and expenditure” to Gary Becker’s economics as a comprehensive science of behaviour; Becker even says the costs are the decisive factor when people consider getting divorced.
Steven Levitt and Stephen Dubner go further, saying people respond only to incentives; for Kenneth Arrow, ethical behaviour is marketable and of finite supply. Lawrence Summers says altruism towards strangers leaves less of it for our family; Dennis Robertson has said love is a finite market commodity. Therefore, if we do not act as economically rational beings, we are the problem (Paul Glimcher says people’s brains are an obstacle to rational conduct). Where David Hume was honest about what followed from his separation of reason and the passions, many economists have tried to tell us we are wrong. Economics has gone from explaining some of our conduct to being a highly interventionist and manipulative metaphysics founded on a philosophical anthropology which sees us as incentive-driven beings and nothing else.
Indeed philosophy could provide yet more critical resources here. The Swiss village exemplifies the fallacy of pre-limited options, because the question put excluded a priori the matter of whether to use nuclear power at all. Some of Sandel’s strongest passages show how the market may seem to provide an index of value and a way of settling awkward moral and political questions, but instead closes our moral and political space, and cannot itself survive without moral considerations.
This can have very nasty results. If we buy someone else’s life insurance, we lose money should they live beyond their estimated lifespan. The firms involved are among the biggest behind the global crash, namely Goldman Sachs, Credit Suisse, UBS, and Bear Stearns; all fought regulation of this market in 2007. In addition, terrorism insurers need us to fear terrorism enough to buy cover, whatever the actual risk.
Some economists, however, such as Dan Ariely, have followed Fred Hirsch in starting to rethink what it is to act rationally. They may thereby free themselves and perhaps the rest of us from captivity to a certain picture of humanity; but we already live in that captivity, and the picture could have come from Dante’s Inferno .
