peteg's blog

Michael Sandel: What Money Can't Buy: The Moral Limits of Markets

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Sandel is famous for his justice class at Harvard, and claims to have co-lectured with Amartya Sen. I therefore had high hopes for this book, and hoped it would explore my abiding interest in why we use particular mechanisms (voting, markets, consensus, representational institutions, dictatorships, ...) to make particular collective decisions. There is a significant body of theory about markets but it is (supposedly) generally morally-neutral beyond some weak requirements such as Pareto optimality, liberalism and other things I don't know about. Of course this book was disappointing, but that is almost always the case with these philosophical sorts of adventures.

Perhaps the key thing to understand about this book is that Sandel is less interested in the operation of markets than in taking moral offence at attaching prices to things. Consider his hoary example of trading human body parts. Sandel thinks that having a money-based market in them would value them the wrong way, but we could just as easily have a bartering arrangement that yields very similar moral quandaries. (Some amount of bartering seems necessary due to the biological incompatibility of donors and recipients.) This, combined with an adversion to mathematics, means that he struggles to get to grips with modern concerns such as (provable) efficiency and resistance to manipulation. I don't recall him ever really defining what a market is. Moreover there is the conflation of can't buy with shouldn't buy; I simply cannot buy a Nobel prize or a friend in any meaningful way, but Sandel wants to argue that I shouldn't be able to buy a liver.

As for buying access to universities, well, there have been crammers around for ever; just because I don't pay at the gate doesn't mean I'm not buying my way in. One also has to wonder if it is so very different to the bums-on-seats policies that keep the unemployment statistics for youth down to almost non-scandalous levels. It is clear that commercial sponsorship at universities does crowd out freedom of expression, for it (obviously) limits dialogue about the sponsor's products, even to the extent of making fair evaluations (take, for example, Oracle's no benchmarking policy).

Here are some notes I took while reading this book, many of which are merely picking nits. I started after the first few chapters as these did not raise my ire or interest so much. The page numbers are for the Allen Lane ("An imprint of Penguin") paperback edition.

  • p60: The idea of pricing immigration visas is becoming more common; Australia is going down the same path now.
  • p80: Apparently one can buy the right to shoot an endangered black rhino, which is intended to incentivize their preservation. Sandel ignores the opportunity for moralists to buy up the shooting permits and not exercise them, thereby helping the rhino and signalling their moral judgement. That markets may facilitate such signalling is a broader point he does not consider.
  • p83: Contrary to Sandel's dogmatic assertion, markets do pass judgement, if only by existing or not (consider the black market), and by pricing out repugnant outcomes. Moreover the existence of a price does not imply the existence of a market.
  • p88: Sandel asks why we should maximise social utility, and I wonder why he doesn't also ask why we should worry about efficiency at all. (I tend to think at least some "economic efficiency" is really about externalising costs; consider superannuation versus government-guaranteed pensions). He blithely ignores the recent trends in economics that try to reconcile the discipline with humanistic goals. (Amartya Sen has done some work here too.)
  • p96: Paying someone to apologise on one's behalf reminded my of the professional mourners of Vietnam; then again, in a Buddhist society there is probably not as much deathbed pleading as in a Christian one.
  • p98: Gift giving is not a persuasive example. I tend to think that the best gift to someone these days is something non-fungible, such as spending time with (or apart from :-) them. Stuff is no longer scarce, so what do I care what you buy for me? Once again Sandel seems to think that pricing something is the same thing as there being a market in that good. Surely we also need negotiation / bargaining / price discovery and so forth as well for there to be a market.
  • p107: You cannot buy a friend but you can buy many of the things that friends are supposed to produce, such as wedding speeches. This made me think of paid thesis editors, and someone with someone else autobiographies. Then again, Pete R. made the point years ago that being able to write well is not the same thing as having a story worth telling.
  • p122: The section on blood donations is spot on.
  • p125: Sandel does a good job of dissecting Arrow's assertions about the market. However he missed the bigger opportunity to discuss how plausible markets really are, and under what conditions they work as intended. He could also have explored the reasons that markets get distorted, and strengthened his appeal to authority by discussing Arrow's technical results. By the end I began to wonder if his real objection was to the application of rationality (science?) to sacred cows.
  • p127: Sandel tries to argue that we should rely less on economic rationalist / self-interest mechanisms and on more humanistic notions such as civic duty. While I don't completely disagree with the sentiment, he seems to think that local comity can somehow scale up to nation-states; around about here one might also start mumbling about the tragedy of the commons and nuclear nightmare diplomacy. Dogmatically I would say that economics (and many other Western institutions) is about somewhat anonymous interactions, those with people we don't know or have no reason to treat well; it encodes a kind of institutionalised fairness towards the "other", such as non-citizens and foreigners. I remember my Law of the Global Market lecturer saying something like "if goods don't cross borders then guns will" as a way of summarising the Marshall Plan and so forth. Conversely markets inflict a computational problem on participants which is likely to crowd out other considerations. I guess I could gesture at Bruce Schneier's take on security, which (Schneier argues) is a necessary underpinning for a large society. Sandel's position is to essentially affirm the social contract.
  • p131: Chapter 4 on death markets is solid, though it is warmed-over; the "insurable interest" test has been there forever, and Sandel labours the point that the morality of the life insurance market has been undone by a series of crappy (corrupt?) decisions of SCOTUS over the years.
  • p163: Chapter 5 on commercialising sport is banal. David Williamson complained far more eloquently about commercialising sport in the late 1970s in The Club. Sandel here engages in some tedious sacred cow-ism; what do I care if the audience for professional sport is stratified? It would be better for everyone if amateur sport was better funded, for (p174) the former has already crowded out many of the socially valuable outcomes of people playing rather than watching; one merely needs to listen to the cynicism that swirls around the cost of each Olympic medal.
  • p168: one could imagine a twenty-first century Solomon selling the baby and splitting the proceeds.
  • p173: Sport is not a universal social glue; here Sandel paternalistically excludes women, minorities, geeks, migrants, etc.
  • p190: Municipal marketing appears to be uncommon in Australia; according to Sandel this is the practice of buying influence over the policies of a sponsored organisation. This is clearly a conflict of interest sort of thing. I would contrast this to the kinds of sponsorship that e.g. Surf Life Saving Australia attracts; Westpac might get its name on the helicopter but it has no say in how the service is provided (I hope and expect).
  • p203: In his closing paragraphy, Sandel wants to think we're all in this together, quietly ignoring the fact that having lots of money insulates people from the need to worry about the common good.

What I really wanted from this book was more analysis of serious / established / consequential markets, such as labour; surely the revealed preference of working Australians for longer hours (more money) and less leisure time is a moral issue, given that it takes time away from family, meaningful relationships (of choice), child rearing and so forth. I also hoped he would clarify the limitations of the market dogma; for instance we can't buy more than 24 hours a day, though we can pay to make them more pleasant. Expanding choice yields diminishing returns; surely there could have been a broader exploration of what we value and why, an expansion of the "good life" rubric into something less dogmatic.

Sandel really should have provided examples of where markets work well, so we had some reason to believe that they had some validity at all. Why are they being so aggressively and invasively pushed now? In contrast to many of the philosopher kings I have met, he seems to avoid discussions of historical antecedents and the maths that might bring another kind of understanding to the table. The U.S. is already so compromised by thorough-going market thinking that almost all of the examples he gives look like fiddling at the margins.

Out in the wilds of the internet, this book is often bracketed with one by the father-and-son Skidelsky team. Here's a brief list of pages I read:

Of these I find myself siding with the CATO review.

Update: a bloke at the New Yorker points out the difficulties of having justice (etc.) supervene on empathy.