Free Market Economy v. Free Market Society

Should there be markets in everything?

In the aftermath of the Supreme Court’s ruling on Obamacare, the sharpest analysts pointed out that Chief Justice John Roberts’ interpretation of the individual mandate as a tax (rather than a fine or penalty) undercut the fiscal logic of this approach to healthcare reform. Defenders of Obamacare had been appealing to “behavioral economics,” arguing that because Americans are a law-abiding people, we would comply with the individual mandate not because the penalty was so high that it made economic sense to purchase a plan, but because our sense of citizenship makes us averse to violating the law. Norms of citizenship, not of the market, would drive our behavior. By translating the penalty for violating the law to a tax, Roberts changed the nature of the individual mandate. Because it is much lower than an insurance premium, healthy Americans, now operating on market logic, will be more likely to simply pay the tax.

While What Money Can’t Buy went to press before the Supreme Court’s ruling, its author, Harvard University Professor of Government Michael Sandel, points to several examples that parallel this shift in behavior. In one, a school introduced a late-pick-up fee in an attempt to get parents to fetch their kids on time. The results were unexpected; no longer feeling guilty about wasting the teacher’s time, more parents started arriving late as they now viewed their tardiness as legitimate provided they were willing to pay for it. Introducing market logic to this basic aspect of the parent-teacher relationship changed the social practice from one of respecting the teacher’s schedule to one of disregarding it while offering compensation.

In exploring “the moral limits of markets,” Sandel argues that modern America has become a market-dominated society, and that this cultural change has taken place without any acknowledgment of the moral values at stake. As he puts it: “Without ever deciding to do so, we drifted from having a market economy to being a market society.” While the former is a tool, the latter is a way of life—and one which may or may not be conducive to human flourishing. Just consider some of the examples Sandel highlights of the pervasiveness of markets-in-everything: Ivy League egg and sperm, Third World surrogate wombs, pollution permits, immigration status, highway fast lanes, prison cell upgrades, rewards for reading and good grades, corporate naming rights of civic spaces. We need to reason, he argues, about whether these have been innovations for good or ill.

Sandel isn’t a socialist or a Luddite. While acknowledging that “no other mechanism for organizing the production and distribution of goods [has] proved as successful at generating affluence and prosperity” as markets, Sandel worries that markets—and market values—have entered into areas of our personal and communal lives where they don’t belong. As he sees it, “the logic of buying and selling no longer applies to material goods alone but increasingly governs the whole of life.” We haven’t had a national conversation about the proper limits of markets, not simply as an empirical matter of market efficiency or failure, but as a moral matter about the types of goods and practices that shouldn’t be for sale. Market norms might not be appropriate for areas of life traditionally—and rightly—governed by other, nonmarket norms. “We need to ask,” Sandel suggests, “whether there are some things money should not buy.”

Sandel’s case for the moral limits of markets has two pillars: equality and corruption. He argues that “in a society where everything is for sale, life is harder for those of modest means.” Indeed, this is half of the equation overlooked in recent debates about the gap between rich and poor; not only has this gap increased, but “the commodification of everything has sharpened the sting of inequality by making money matter more.” Safe neighborhoods, good medical care, and decent schools, Sandel argues, used to be available to all regardless of wealth; now these are available largely on the basis of one’s ability to pay for them.

The equality argument extends to general considerations of fairness and justice. Creating markets in less-than-desirable activities creates opportunities for exploitation. But for lack of resources, few would sell their bodies as baby incubators, or their foreheads as walking billboards. Certain market forces will impact the least well-off the most, creating further dynamics of exploitation, coercion, and bribery.

Markets measure willingness (and, more importantly, ability) to pay, but not necessarily desire for or appreciation of the good in question. Take the example of waiting in line. Amusement parks, airlines, and even doctors now offer special faster-moving queues for those willing to pay. And a new industry—line-standing—allows the busy rich to hire the underemployed poor to wait in line, holding them a place. Although the libertarian or utilitarian economist can justify the exchange on the grounds that no one’s rights are violated or that collective utility increases, Sandel worries about the fairness of such a regime, where ability and willingness to pay does not accurately reflect “those who value [the good] most highly,” but simply substitutes for ability and willingness to wait.

But whether the ethic of the queue or the ethic of the market is most appropriate depends on the good in question. Thus, Sandel’s more fundamental concern is about market corruption: putting prices on everything in life can corrupt social practices and human goods. Markets don’t just efficiently allocate scarce resources, “they also express and promote certain attitudes toward the goods being exchanged.” Paying students to read, for instance, cultivates the attitude that reading is a “chore rather than a source of intrinsic satisfaction.” Creating babies to sell for profit “is a corruption of parenthood, because it treats children as things to be used rather than beings to be loved.” Renting out one’s womb or one’s forehead treats one’s own body in similar fashion.

Consider the line-standing example. Sandel argues that “turning access to Congress into a product for sale demeans and degrades it.” In hiring line-standers and determining the allocation of seats for a Congressional hearing on the basis of wealth, we value “the good of representative government in the wrong way.” This is one reason why Congress itself doesn’t charge market-based admission for tickets in the first place; it corrupts and degrades the institution and the social practice, “it treats Congress as if it were a business rather than an institution of representative government.” Sandel isn’t naïve. He knows that much of government already does operate like a business, selling influence and peddling favors to well-financed special interests. He sees these as “also instances of corruption,” degrading the “purposes and ends an institution . . . properly pursues.”

Considerations of either economic efficiency (from the right) or distributively-just outcomes (from the left) are insufficient, for sometimes “market values crowd out nonmarket values worth caring about.” It simply isn’t true that markets just increase efficiency of transactions; Sandel argues they can change the nature of the goods being transacted.

One of Sandel’s greatest worries is that as market norms dominate, civic norms weaken, thus eroding civic responsibility. He points to recent studies in social psychology which suggest that “when people are engaged in an activity they consider intrinsically worthwhile, offering them money may weaken their motivation by depreciating or ‘crowding out’ their intrinsic interest or commitment.” Again he’s at loggerheads with economists, such as Lawrence Summers, who thinks that “altruism [i]s a valuable and rare good that needs conserving. Far better to conserve it by designing a system in which people’s wants will be satisfied by individuals being selfish, and saving that altruism for our families, our friends, and the many social problems in this world that markets cannot solve.” But Sandel suggests an Aristotelian alternative: Virtue isn’t a scarce resource that gets depleted with use. No, virtue is cultivated by repeated acts; practicing virtue builds it up, while “conserving” it is a surefire way for it to dissipate.

Sandel’s major concerns in What Money Can’t Buy parallel his concerns about biotechnology in his book The Case Against Perfection. Then, the problem was that “the familiar categories of autonomy and rights, on the one hand, and the calculation of costs and benefits, on the other” were inadequate. Only by reintroducing ultimate questions about our purpose, nature, and fulfillment could we successfully evaluate the ethics of human enhancement. The same is true of markets. His discussions of markets and biotechnology both find an analogy in sports—they frequently diminish the game: “Making markets more efficient is no virtue in itself. The real question is whether introducing this or that market mechanism will improve or impair the good of the game. It’s a question worth asking not only of baseball but also of the societies in which we live.”

Indeed, the central task of What Money Can’t Buy is to think through which “values should govern the various domains of social and civic life,” while fully aware that Americans share no consensus about the good life. These aren’t merely economic questions; they are “moral and political questions,” and questions with which, Sandel fears, public discourse is too coarse to contend: “The problem with our politics is not too much moral argument but too little. Our politics is overheated because it is mostly vacant, empty of moral and spiritual content.” In a remark reminiscent of the late Fr. Richard John Neuhaus’s critique of what he called the Naked Public Square, Sandel laments the attempts to “banish notions of the good life from public discourse,” which insist that “citizens leave their moral and spiritual convictions behind.” Sandel’s solution is that we need to “reason together, in public, about how to value the social goods we prize.”

Sadly, while What Money Can’t Buy is heavy on examples, it is relatively light on moral reasoning. It is more the work of glorified journalism than moral and political philosophy. Sandel exerts so much time and energy documenting the various new and often disconcerting forms of market activity that his actual discussion of the moral merits is anemic by comparison. Most all of his moral argumentation could be contained in an article, and at times it felt that Sandel was padding his copy to stretch it into a (relatively short) book. I can’t say I was fully persuaded by his analysis of any of the topics at hand—each requires additional reasoning. But whatever the merits of Sandel’s particular arguments on particular cases, his overarching argument—that we have largely allowed markets to creep into every facet of our lives without counting, much less reasoning about, the cost—is spot on. Hopefully the book will inspire others to think more critically about these issues.

But think about them to what end? For a political philosopher Sandel is notably silent about politics. The book has no conclusion, and Sandel provides no suggestions for what we should do if we agree with him, how we should limit market encroachment in our lives, and whether political action would be appropriate (and, if so, of what type).

From a political perspective, Sandel’s concern about the market intruding where it doesn’t belong is most likely to be embraced by today’s left, as today’s right has largely become unreserved market(s) enthusiasts. This is a shame, as an older—and healthier—conservatism did have a greater appreciation for the limits of markets. Where today’s right can appreciate Sandel’s case, however, is in its parallel to a conservative critique of overly expansive government. Government and markets (and the market-value mentality attendant to them) have the ability to crowd out civil society, and corrupt human goods, social practices and civic institutions, even if they introduce efficiency and maximize utility (which isn’t even true of much government action).

Our problem is that the dominant ideologies and political parties today favor expanding either the market or the state into too many domains of life. And this becomes a mutually reinforcing problem: as the market grows, voluntary associations, civil society, the family, and other non-market communities recede; as they recede, there arises more of a need for and less of a check on the growth of markets. Likewise, as the state provides more social services, voluntary associations, civil society, the family, and other non-governmental communities recede; as they recede, there arises more of a need for and less of a check on the growth of government. Indeed, the growth of both the market and the state go hand in hand as they then provide favors to each other (crony capitalism and the best politics money can buy). And in the process, civil society is crowded out. Rebuilding non-market non-state institutions of civil society is the task going forward.

Ryan T. Anderson is Editor of Public Discourse: Ethics, Law, and the Common Good.