(This essay was published in Hong Kong Economic Journal on 25 November 2015.)

 

Michael Sandel teaches Government at Harvard, for which he is internationally known. His course titled “Justice” has been attended by some 15,000 Harvard students and has been adapted into a 12-part TV series. He is believed to have a large number of fans on the Mainland.

 

In 2013 he published What Money Can’t Buy: The Moral Limits of Markets. As an economist, I read the book to seek enlightenment about a subject I have been teaching for almost 40 years, but I was deeply disappointed. Sandel is sophisticated about moral and political theory, yet his book is puzzlingly shallow. Also, I was shocked by the moral implications of what it espoused.

 

Recently, though, a dear friend who liked the book wanted to discuss its contents with me. In the process of putting together my thoughts, I decided it deserved a wider audience, especially at a time when grassroots politics in our city is turning toward community solidarity and activism.

 

Sandel’s book purports to demonstrate that markets corrupt, or degrade, the goods they are used to allocate. Therefore, “we” as a society should deliberate together about the proper meaning and purpose of various goods, relationships, and activities and how they should be valued. Sandel does not tell us who is among the “we” – is it a local community, an ethnic or religious group, a nation, or all men and women of the world?

 

I don’t think Sandel’s arguments work. Nor do I find his communitarian political philosophy attractive. But the book does succeed as a provocation: it evokes an attitude of critical resistance to what I would call “political capitalism,” where greed is backed by the exercise of political power.

 

A market is an institutionalized space in which goods and services can be exchanged, usually though not necessarily via the medium of money. Economists like markets because under certain conditions (such as rivalrous competition between producers), they tend to promote innovation and the efficient allocation of resources.

 

Economists themselves are the first critics of markets. They recognize that the conditions for a successful market are not always met, and that where they aren’t met, such as in the case of ‘natural monopolies’, alternative institutional arrangements may well perform better.

 

In contrast to economists, moral philosophers have tended to focus on the fairness of a market system. There are multiple aspects to this, such as inequality and exploitation. Markets may generate inequality of wealth as a byproduct of competition, as they allocate resources on the basis of willingness-to-pay, which has an obvious relation to the ability-to-pay.

 

Another aspect of unfairness is political exploitation, or the abuse of power asymmetries. Individuals  (or corporations) can take advantage of initial inequalities such as of wealth, legal rights, information, or their possession of some extraordinarily valuable good (like a scarce medicine) to offer vulnerable people a choice they cannot refuse. These advantages can often be addressed by reforming and even deepening market institutions to make them better resemble the economist’s ideal market. But if the source of the asymmetry lies in the uneven access to political power, then it might persist for a long time if not forever.

 

Sandel’s critique is not about fairness or efficiency. Rather, he follows a third tradition in worrying about how the meaning of the goods themselves is corrupted by the use of markets. What is this corruption? Sandel argues that “To corrupt a good or a social practice is to degrade it, to treat it according to a lower mode of valuation than is appropriate to it.” Thus, Sandel argues that scalping free tickets to a public concert, accepting the children of ‘donors’ to prestigious universities, selling residency rights to prospective immigrants, etc. degrades the nature of what is sold. Selling such things profanes them.

 

Do markets corrupt?        

 

Sandel does not develop his corruption critique systematically. Instead, he presents a large collection of examples of things being for sale. We are invited to be disgusted by the idea of people being allowed to pay money to avoid queuing; companies buying and trading life insurance on their employees; rich people paying to hunt endangered species; poor people having themselves tattooed with a casino website address; etc.

 

Unfortunately, Sandel’s examples do not demonstrate his claim that markets corrupt the things they touch – first, because few of them have anything to do with markets and second, because they do not really support the claim of corruption.

 

Markets are a specific kind of institutional arrangement. The mere presence of money doesn’t make a market, as Sandel seems to suppose. Most of Sandel’s examples actually take place outside of a market context and concern administrative decisions rather than market outcomes. Take monetary incentives: offering a child $2 for every storybook she reads doesn’t seem to have anything to do with markets. Rather, it is an exercise in behavioral control.

 

Many of the managerial practices Sandel identifies do invite ethical scrutiny. But the theme that unites them is not markets, or even prices, but rather the absence of accountability of managerial power.

 

The second problem with Sandel’s examples is that they don’t seem to have much to do with corruption. He relies on readers’ disgust at the ugliness of the practices he identifies to press his ethical case that the underlying goods and activities are themselves degraded. It seems to me ugliness is not corruption – there is a sea of difference between mere vulgarity and actual moral degeneracy.

 

The difference is important because Sandel directs us to focus on the appearances (i.e. the presence of dollar signs), which is not particularly helpful for discerning or preventing actual corruption.

 

In the real world, we can see corruption without money. To Sandel the fringe activity of reselling free tickets to a papal mass constitutes a serious threat of corruption to the Catholic Church. I would consider the scandal of sex-abuse cover-ups, which rarely involved payments, a rather more substantial instance of corruption. We also see money without corruption. In a market economy, all members are paid for their work. Is education corrupted because teachers earn a salary? Does food taste worse because you bought it rather than growing it yourself? Sandel’s account is simply superficial.

 

Sandel’s illiberal political philosophy

 

Some left-leaning liberals will endorse Sandel’s book simply because it criticizes markets. They should be careful. Sandel’s approach is best understood as a reactionary conservative one: its implications threaten many principles that liberals should hold dear.

 

First, Sandel’s critique is peculiarly specific to his time and place. Yet, historically, all sorts of things have been accepted by societies as reasonable objects for sale, including slaves, public offices (even tax collecting), military commissions, votes, marriage, short-cuts to heaven, and so on. The problem here is that Sandel’s moral analysis is hostage to whatever social norms happen to prevail for a community and generation, i.e., they become specific to time and place.

 

Second, Sandel’s corruption thesis fails to critically distinguish between what is socially accepted as opposed to being morally proper. If he had been born 30 years later, one can only suppose that he would think many of the new activities we are doing today would be normal and right. Sandel’s approach thus has a strong conservative bias – to preserve things as they used to be – and a troubling reliance on childhood nostalgia rather than moral argument. Childhood nostalgia is of course a favorite subject with the “memories” crowd.

 

Sandel also assumes that market exchange arrangements are always worse than alternative ‘moral’ relationships. Yet liberals know well that traditional social institutions are as capable of gross injustice and corruption as market ones, despite having the appearance of being animated by reciprocal benevolence and solidarity. In particular, they tend to generate dreary moral obligations that suffocate the individuality and freedom of lower status members of the community, such as women. Feminists, for example, have long argued for the civil right of women to paid work, on the grounds of freedom and fairness.

 

Consider a Dutch program, which allows parents to use their governmental childcare allowance to pay their own parents to look after their children. Under the program, grandparents’ care work is recognized as real work that deserve real remuneration. Unsurprisingly, the scheme is very popular. Presumably Sandel would claim that paying grandparents corrupts their love. But that does not sound right. Introducing this payment arrangement allows parents to economize on their reliance on moral coercion, and for grandparents to reduce their vulnerability to that coercion, and that would seem to support rather than degrade the flourishing of loving relationships.

 

All too often moral coercion is called ‘altruism’ because no money changes hands. This definition absurdly implies that emotionally blackmailing family members and friends into helping you is moral, but paying for the service is selfish and corrupting.

 

Third, the concept of corruption has a long association with intolerant strains of political conservatism, for example, in support of racist politics. Liberals should be suspicious of the rhetoric of purity and pollution wherever they find it, for it is a license to abuse power. The argument that actions as trivial as buying a signed baseball should be banned because they profane the true meaning of a revered action is a governing principle of theocracies in the Middle East. It should not be how liberals look at the world.

 

Finally, there is Sandel’s communitarian political philosophy. Like ”defenders” of the moral right, Sandel is anxious to politicize value questions. He believes a community should ask itself a philosophical question – what are such activities as education and baseball for? – in order to determine how they should be valued and how they should be treated. Sandel never really elaborates on this political dimension of his argument. Perhaps because he knows that few readers would be willing to go along with this illiberal view of politics.

 

Liberals are committed to separating the private and public spheres. They don’t consider it the business of politics to make decisions about how everyone in society should value baseball, and to ban whatever might corrupt that purpose. To the contrary, liberalism deliberately makes space for the spontaneous creation of new practices and values from the free interaction of individuals. Liberals are also comfortable with and committed to respecting value pluralism because persistent disagreements even among reasonable people will always exist.

 

Sandel seems to think that a community can determine the single right answer to value questions and that this is what democratic politics is for. Activists here and in other places speak of going to the community to raise awareness and uncover the community’s view. This is democracy, they say, and sometimes they believe that. All too often they actually mean to forge political consensus through forced preaching.

 

Sandel’s illiberalism should not be surprising – after all, he made his name arguing against John Rawls’ political philosophy. Liberals who believe in regulating the market economy for the sake of liberal principles like personal autonomy should be very skeptical of where this fellow critic of the market wants to take them.

 

Sandel wants a debate to determine whether people should be allowed to use prices when they cooperate or allocate scarce goods. The problem is that Sandel seems to assume the market is a construction of greed rather than a natural process. Professor Sandel points to practices he abhors, such as the trade in human organs and exclusive seats at baseball games, but what he deplores is human behavior, greed and elitism rather than a mechanism of exchange. The question is, did men make markets or did markets make men?

 

Sandel suggests the second. The consequence is a cruel world where the interests of the poor are unprotected and the rich use economic power to manipulate everybody else. As for the state, well, government is the good guy overwhelmed by the avaricious. As Sandel puts it, “Our only hope of keeping markets in their place is to deliberate openly and publicly about the meaning of the goods and practices we prize.”

 

But, who is “we”?

 

Having desperately poor people is a moral problem. By international standards, Hong Kong’s poverty line for a household with 4 persons was $16,400 in 2014 (the equivalent US measure is $15,760), which is around the average of world income and deemed a comfortable middle-class income in India. Why does that fact matter? Because Sandel does not answer why we in Hong Kong should ignore the desperation of people earning $1 a day in Bangladesh, and attend instead to the “unfairness” and “corruption” of ticket scalping at a free public concert.

 

It is a moral failure of communitarianism that it weighs our fellow Hong Kongers or our Tin Shui Wai and Shamshuipo residents so much more above other poor people in the world, ignoring the good of Bangladeshis. Sandel does not note that the introduction of free markets in Sahil-grown cotton would ameliorate a most terrible lack of affordability.

 

Sandel does not face the actual, moral problem – which is poverty, real poverty. Instead he recommends that we fiddle with prices and create queues for free Shakespeare in the Park. Communitarianism is not my cup of tea; it is too parochial and conservative.

 

References:

 

Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets, Farrar, Straus and Giroux, New York, 2013.

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