Allen Lane, £20
What Money Can't Buy: The Moral Limits of Markets, By Michael Sandel
Should you pay to jump the queue – or for a new kidney? It's hard to define where cash has no place.
Michael Sandel, the superstar Harvard moral philosopher, wants people to spend more time queuing. Well, he wants people not to spend money to avoid queuing, which amounts to the same thing. Except sometimes the money option is ethical. When a bus arrives at the stop, it should be first come, first served; but he agrees I should not be under an obligation to sell my house to the first buyer who arrives at the doorstep.
"There's no reason to assume that any single principle – queuing or paying – should determine the allocation of goods," he writes. In which case, practical moral philosophy needs to indicate which principle applies in which circumstances. Professor Sandel does not give an answer, although he is very clear that the market principle applies in far too many cases, and many readers will agree wholeheartedly.
Perhaps we can figure it out from his examples. He objects to some people being able to buy the right to board airlines faster than others; or to pay for better service from a call centre; to paying someone else to stand in a queue on your behalf; to reselling concert tickets at a higher price. He thinks children should not be paid for attaining good grades at school.
This entertaining and provocative book is full of examples of vulgar commercialisation, including US towns that have sold advertising space on police patrol cars, the Washington lobbyists who pay homeless people to queue to see a congressman, the sale of a forehead as advertising space, and the purchase of naming rights to New York subway stations by (among others) Barclays Bank. A lot of us will agree that there is far too much of this in modern life.
However, there are examples in this book of the expansion of markets in ways that many people, especially economists, would mostly regard as beneficial, but the author argues are degrading. Life insurance is one. Sandel describes it as a "wager on death". He shares, it seems, the opposition of religious authorities to life insurance before it became increasingly widespread from the mid-19th century.
There are certainly some commercial excesses in the life insurance market. These include so-called "dead peasants insurance", whereby corporations take out policies on the life of their employees, originally without their consent; and the investment index of "viatical" insurance policies, whereby the investor buys at a discount the insurance policies of people who are dying and trades them. Yet to put normal life insurance policies in the same category, even though they may create a theoretical incentive to murder, seems extreme.
Sandel is particularly opposed to the idea, attributed to economics, that all human relations are market relations. His opposition to market relations stems not from an argument about fairness (that rich people can afford more), or about blackmail (poor people are effectively forced to make unpalatable choices because they need the money). Instead, his argument is that introducing market choices into domains where civic values ought to prevail has a degrading and corrosive effect.
The fact that a market might lead to outcomes that improve welfare is irrelevant to the over-riding importance of civic virtue, he argues. Thus a global scheme for a market in carbon dioxide is morally unacceptable, even if it reduces the level of emissions, because it does damage "to two norms: it entrenches an instrumental attitude toward nature; and it undermines the spirit of shared sacrifice that may be necessary to create a global environmental ethic."
I would rather see an effective scheme to reduce greenhouse gas emissions, but then I'm an economist. Economics is firmly grounded in utilitarian ethics, which can conflict with Sandel'smoral principle of virtue for its own sake. So at some point he and an economist are bound to part ways in making ethical judgments.
However, he thinks economists are more ideological than is the case (for the most part). For example, the book cites a well-known example of the use of a financial incentive proving counter-productive: a nursery that introduced a fine for parents who picked up their child late found that it increased lateness. Similarly, offering pupils payments to improve their grades does not always have the desired result.
A jobbing economist is not philosophically challenged by evidence that a financial incentive does not work, however. She will try to redesign the scheme with incentives that do work. The field of economics known as market design offers examples of market incentives whose outcomes are both effective and (I think) moral. A kidney-matching market created by economists in New England in 2004 has dramatically increased the number of kidney transplants, a result that surely outweighs any counter-argument against the commodification of body parts.
Economics does not deny the existence of limits to markets, or what are known as "repugnant" markets. On the contrary, market design tries to identify which reasons can account for the, often instinctive, moral repugnance in a specific case, and work around it. The good professor's insistence on a domain of civic values is certainly one principle for ruling out or limiting markets, and this explains why justice is supposed to be beyond purchase, and votes too, and why states insist on providing education for their citizens.
However, the generally accepted boundaries on markets vary, and the tide can flow both ways. There used to be a large market in humans, now banned in international law. The US prohibited the alcohol market in the 1920s. Short-selling of shares has sometimes been banned, sometimes not.
What Money Can't Buy will tap into a widespread unease about having to limit government and accept a larger private domain in this age of austerity; and about crass commercialisation when unemployment and inequality are too high. But it does not offer a clear guide to which markets are repugnant, and why.
We might agree that the new markets in financial indices of agricultural commodity prices, created by Goldman Sachs and others, are intolerable. For me, the reason is the utilitarian one that they are making very poor people go hungry.
But is it really morally repugnant for educational buildings to be named after rich donors? Sandel objects to a school naming its donated gym after ShopRite. Yet he, the Anne T and Robert M Bass Professor of Government, researches in Harvard's Harry Elkins Widener Memorial Library, named by a grieving but rich mother after a young Harvard student who died on the Titanic. Is the passage of time enough to disinfect the transaction?
He ends the book with a question: "Are there certain moral and civic goods that markets do not honour and money cannot buy?" This is rhetorical. Of course the answer is, yes. But how do we know what they are?
Diane Coyle is the author of 'The Economics of Enough' (Princeton University Press), and runs the consultancy Enlightenment Economics
Arts & Ents blogs
Thirteen-year-old Conor awakes in bed one night to discover that the yew tree outside his house has ...
It’s hard not to feel sorry for doe-eyed Andy. He spends months pining after Louise, has huge nostr...
Fragility of life looms large over an episode that closes with the scarring on Julie's stomach. Whil...
‘Hello, NME? I’d like to complain about your Tom Odell review. Why? I’m his dad’
Kan you believe it? Kim Kardashian and Kanye West reportedly name baby daughter 'Kaidance Donda'
American studio claims it designed London 2012's Olympic cauldron
Sopranos star James Gandolfini dies aged 51 of suspected heart attack
Anger Management? Charlie Sheen fires Selma Blair as his onscreen therapist with expletive-filled text
- 1 Breaking the Silence: In the reality of occupation, there are no Palestinian civilians – only potential terrorists
- 2 Mike Ashley wants blood after last season's trauma at Newcastle - and it won't stop with Derek Llambias
- 3 Richard Nieuwenhuizen death: Six teenagers and 50-year-old father convicted of manslaughter in shocking case of referee killed over a game of football
- 4 Exclusive: Newcastle's star talent-spotter on brink as Joe Kinnear sparks walkout
- 5 Vast methane 'plumes' seen in Arctic ocean as sea ice retreats