Sunday, September 27, 2015

This police car brought to you by...

A couple years ago I wrote about nine areas of public life that should not be privatized. These are things that are ruined, or at least made less efficient, more costly, or somehow distorted when the profit motive is involved. The areas are health care, water, internet, transportation, banking, prisons, education, consumer protection, and elections. An example of distortion is a health insurer that would prefer that the patient stay sick to be able to get more money.

So when I saw the book What Money Can't Buy, the Moral Limits of Markets by Michael J. Sandel I knew it was one I needed to read. I was sure it would confirm and my ideas of privatization. Well, not exactly. It didn't mention any of the nine areas listed above and didn't pursue the argument that there are things a government should do that should not be outsourced.

But it did tackle a related area and did so thoroughly and understandably (though repetitively). Since about 1980 there has been a strong sell for "market solutions." Let the market decide! Structure some process or event like a market with financial incentives and the market will come up with the best solution. The book examines all the areas of life in which this claim does not work or damages the process or event being marketed.

Here are a few of the areas that have come under market influence: Paying extra to jump the line, such as paying to use highway lanes reserved for cars carrying two or more people. Incentives, such as paying kids to read books. Naming rights, such as ads on police cars. And markets crowding out altruism, such as paying blood donors.

This push to marketize everything got a bit boost from the book The Economic Approach to Human Behavior by Gary Becker, and economist at the University of Chicago, published in 1976. By "everything" I do mean everything. Here is Becker's look at marriage and divorce:
According to the economic approach, a person decides to marry when the utility expected from marriage exceeds that expected from remaining singe or from additional search for a more suitable mate. Similarly, a married person terminates his (or her) marriage when the utility anticipated from becoming single or marrying someone else exceeds the loss in utility from separation, including losses due to physical separation from one's children, division of joint assets, legal fees, and so forth. Since many persons are looking for mates, a market in marriages can be said to exist.
One might reasonably say that looking at marriage as maximizing "utility" rather than love is a mighty cold method of calculation. But the marketization of many other things is just as cold. So we might debate whether such cold calculation is the proper way to look at things. And that debate is what this book is about.

When I read the above quote one idea jumped out at me. The utility of such things as marriage is not measured in dollars. The person entering into marriage may be aiming to maximize such things a love, security, friendship, and support as well as trying to minimize such things as fear and loneliness. These things can't be measured in dollars.

Sandal touches on my insight only briefly. He has other issues to present.

For most of the cases Sandel presents his objection to market influence comes down to just a few reasons.

There is the issue of fairness. In the case of scalped tickets, the product goes to who can pay the most, not who might value it most. The rich get the limited product because they are rich. The poor do not. In the case of using a forehead as a billboard the issue is injustice because inequality produces coercion. A poor person may agree to it as one of the few ways to get cash. The deal cannot be fair.

There is the issue of corruption. A Nobel Prize cannot be bought. And if the prize (not just the medal) is bought in the eyes of the rest of the world it becomes worthless. A bought politician has lost respect because he works for his purchaser, not for those who elected him. A person with an ad on his forehead is seen as an ad, not a human. Ads of a sponsor of a nature trail, even if discreet, intrudes on the serenity of the experience and spoils it.

Money crowds out morals. This was most clearly demonstrated through the practice of paying people to donate blood. Yes, blood for sale. The fairness argument certainly applies. When blood donations are paid, the people who donate are the ones who need the money most. The poor, due to their circumstances, are coerced into giving. However, there is a more important aspect. When blood is a commodity, people are less likely to feel a moral responsibility to give, to take care of their fellow humans. And that leads to an overall decline in moral and social life, a reduction in altruism.

Some economists think markets are good based on the idea that altruism is limited. Let's save this scant resources for the areas of life where it is most needed. And in all other areas let's use the markets so people are guided by plentiful self-interest instead of scarce altruism. But the fallacy is that altruism works the same way as love – the more it is exercised, the more there is.

Sandel's last major point is what he calls "skyboxification." One important feature of attending sport events 50 years ago was that everyone sat together. The price range was limited and the poor, middle class, and rich sat next to each other as one large community of fans. But skyboxes are a part of of nearly every stadium and ballpark (now named for a corporation). The average person sits down here and the rich sit up there. There is no longer a common life. And that isn't good for democracy.

Sandel finds market influence in a wide number of areas. All of them fall into the categories of fairness, corruption, or morals being crowded out.

In the category of jumping the queue – by paying extra I can go to the front of the line: Airports, amusement parks, and car pool lanes; hired line standers (used by lobbyists when Congressional hearing seats are limited); ticket scalpers for concerts, papal masses, and Yosemite campsites; and concierge doctors (ones who only care for patients who have paid a hefty subscription fee).

In the category of incentives (on which Obama – of all people – has based a great deal of public policy): Cash to sterilize women with drug problems, paying kids for grades, bribes for weight loss, selling immigration rights, trading pollution permits, carbon offsets, and paying to hunt endangered species (which provides more money to combat poaching).

In the category of insurance: Janitor insurance (in which a corporation takes out life insurance on even the janitor and makes good money, though the janitor's family gets nothing), terrorism futures market, and death bonds.

In the category of naming rights: Selling autographs; corporate-sponsored home runs; skyboxes; bathroom advertising; body billboards; branding of the public square, nature trails, and police cars; commercials in the classroom; and ads in jails.

Sandel concludes:
Once we see that markets and commerce change the character of the goods they touch, we have to ask where markets belong – and where they don't. And we can't answer that question without deliberating about the meaning and purpose of goods, and the values that should govern them.

Such deliberations touch, unavoidably, on competing conceptions of the good life. … For fear of disagreement, we hesitate to bring our moral and spiritual convictions into the public square. But shrinking from these questions does not leave them undecided. It simply means that markets will decide them for us. … The era of market triumphalism has coincided with a time when public discourse has been largely empty of moral and spiritual substance. Our only hope of keeping markets in their place is to deliberate openly and publicly about the meaning of the goods and social practices we prize.

Democracy does not require perfect equality, but it does require that citizens share in a common life. What matters is that people of different backgrounds and social positions encounter one another, and bump up against one another, in the course of everyday life. For this is how we learn to negotiate and abide our differences, and how we come to care for the common good.

And so, in the end, the question of markets is really a question about how we ant to live together. Do we want a society where everything is up for sale? Or are there certain moral and civic goods that markets do not honor and money cannot buy?

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