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The Price of Everything and the Value of Nothing
Posted By Jeremy On December 11, 2012 @ 3:59 pm In Book Reviews | No Comments
There are those who say that New Zealand has become NZ Inc. What they mean by this is that New Zealand is being run just like a business. The government, and increasingly voters, are looking out for the best return possible.
To give just a few examples: wealthy tourists, identified by their ownership of a gold or silver frequent-flyer card with a Chinese airline, now have access to a streamlined visa process; there has been an abortive attempt to open up conservation land to mining companies; and labour laws are urgently changed by the government at the behest of film companies. Even critics of government policies get in on the act. It is not uncommon to hear the argument against, say, mining of conservation land in terms of the damage that it will do New Zealand’s ’clean, green’ image and, ultimately, the tourist dollar.
Those who talk about NZ Inc no doubt do so in pejorative terms. But what, exactly, is wrong with it, if anything? Defenders of the kinds of policies that I have outlined will point out that a small nation like New Zealand must operate at the level of market competition in order to prosper. But, for some, the lingering feeling remains that something important is being lost by treating New Zealand as merely an economic trading unit, almost on a par with Hewlett-Packard. This feeling, that something important has been lost, would no doubt be shared by Harvard philosopher Michael Sandel. His new book, What Money Can’t Buy: The Moral Limits of Markets, discusses the increasing intrusion of money and markets into areas where, arguably, they do not belong.
In fact, the title of Sandel’s book is something of a misnomer. Sandel is really concerned with what money can, but, arguably, shouldn’t be able to buy. Looking through the extensive list of interesting, and sometimes surprising, examples with which Sandel furnishes us it is clear that there is, in fact, very little that money cannot buy. We learn that it can buy prison cell upgrades, the right to shoot endangered species, places for wealthy lobbyists in queues for Congressional hearings, the rental of the womb of a poor Indian woman, and advertising space on police-cars and in public schools, amongst many other things.
That a fairly small Pacific nation might want to sell itself to Hollywood executives and wealthy tourists would probably not come as a surprise to Sandel. Nevertheless that some people bemoan the encroachment of money and markets into areas of life where they have traditionally played little, if any, role does not prove that we have lost anything important when this happens. Many economists might argue that markets merely add new options, including options that we might otherwise never have expected to enjoy, and satisfy more preferences than would otherwise have been possible. Nevertheless, Sandel’s examples are sometimes disturbing and it would do to think about why that might be.
Early on in What Money Can’t Buy, Sandel promises to offer a “philosophical framework for thinking through” the “role and reach of markets”. Ultimately and unfortunately, however, this framework is disappointingly slight. Sandel is surely correct to note that what he calls market reasoning is incomplete without moral reasoning. The operation of the market is not merely a kind of value-free mechanism for distributing resources. Of course, money and a market economy are good for some things as Sandel admits. By means of money I can do certain things, like buy the laptop on which I am currently writing, that would be incredibly difficult, if not impossible, for me to otherwise do. But we should be able to say why it is that we think money can properly buy things like laptops whilst we recoil at the idea of buying and selling babies.
Sandel is at his most persuasive when he attacks those wertfrei economists, like Steven Leavitt and Stephen Dubner of Freakonomics fame, who declare that all we need are incentives both to predict what people will do and to tell us what kind of policies we ought to put in place to get them to do it. I worry, however, that these represent rather easy targets and that Sandel does not engage with the best that has been thought and written about the merits and virtues of a market society.
What, then, is Sandel’s philosophical framework for thinking through the role and reach of markets? There are two moral thoughts at work. The first “asks about the inequalities that market choices might reflect”. This is the objection that market choices can reflect underlying economic inequality. When money rules and anything can be bought, some transactions will be coercive or unfair. For example, we might worry that it is mainly poor and vulnerable women who will rent out their wombs for commercial surrogacy. Commercial surrogacy is coerced, we might say, when the money represents an offer that cannot be very well refused. Other transactions will be unfair, even if they are not coerced. If body organs are sold for money then some people will lose out on body organs simply because they are poor.
These are legitimate concerns, especially in a world where some people earn $1 per day. But the argument here is for policing certain transactions (for example, weeding out transactions that are based on large inequalities of wealth). Such an argument would be a controversial one and Sandel does not pursue it in detail.
Sandel focuses instead on what he calls the “corruption argument”. This is an argument that markets and money corrupt some goods and undermine traditional social norms even when the background conditions to the proposed exchange are fair and the transaction un-coerced.
The corruption argument is an important one, but it is here that Sandel’s promised philosophical framework proves unsatisfactory. Sandel argues 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”. Good. This is an interesting and important idea. To treat a country as simply a way of getting the best return possible rather than a civic enterprise might be considered by some to be treating it according to a lower norm than is appropriate to it. So, perhaps, NZ Inc ‘devalues’ or ‘taints’ the civic enterprise that is New Zealand. But for this point to be truly persuasive we need to know how we are to decide whether some norms are ‘lower’ than others.
Rather than provide a detailed philosophical framework for making such decisions Sandel provides scores of examples and his feelings, or the reported feelings of others, about those examples. It is undoubtedly true that ‘some people’ view buying babies as immoral and corrupting, just as ‘some people’ would find the sale of conservation land to mining companies disturbing. The question is; why, and in what way, are these things devalued when they are sold? For example, would it be acceptable if the New Zealand government gifted the conservation land to mining companies? It is hard to see that it would even when the market or money plays no role in the transaction. But Sandel does not give us enough of a framework to be able to determine the answers to such questions adequately. This feels like a lost opportunity.
Sandel is correct to worry about the ‘crowding out’ of non-market motives and virtues. For example, he notes an interesting Israeli case of a kindergarten that decided to charge a fine on parents who were late in picking up their children. But with the policy in place the number of parents turning up late to collect their children actually increased. Some economists might say that the kindergarten simply got the incentives wrong, that they charged too little. Sandel suggests that the parents came to see the fine as a way of paying for a service. And when the kindergarten tried to reverse the policy they were unable to do so. The market incentives had ‘crowded out’ the non-market motives of the parents.
‘Crowding out’ is an interesting phenomenon but I wonder if sometimes we should not be glad that market motives have crowded out non-market ones. If I am concerned primarily with making money then, for example, I will not care whether that money comes from someone of a different race or sexuality. This is an old argument, one that was made by Montesquieu, amongst others, several hundred years ago. Maybe the money motive is not the most noble of motives. And Sandel is right that it is, sometimes, a completely inappropriate one. But the mere possibility that market motives are not always morally contemptible, that they are sometimes quite appropriate, means that we need some way of distinguishing just when ‘crowding out’ should be encouraged or discouraged. Sandel leaves this task to the reader.
There is much in Sandel’s book to get the conversation started regarding what should and should not be up for sale, and it is presented in a clear and accessible manner. On a charitable interpretation, this conversation is exactly what Sandel wants. It is not just up to the arm-chair philosopher to decide what things people should or should not value, or how. But neither is it only up to the economist, or the technocratic civil servant, or the politician. In Sandel’s eyes it is up to all of us as a community.
And it is here that there is one last thing that might be said about NZ Inc. Treating a country, a civic enterprise, as a way of making the best return possible may undermine the very civic values that make such a debate possible. Sandel’s book is not quite up to the task of giving us a detailed framework for this debate, but he is surely correct to note that it is a debate that we ought to be having.
Steve Riley is currently doing a PhD in philosophy at Victoria University. His particular interests are political philosophy and the philosophy of economics. He currently lives in Wellington but is originally from the U.K.
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