Wednesday, May 16, 2012

Another Case of the Anticapitalistic Mentality

Another Case of the Anticapitalistic Mentality

Mises Daily: Wednesday, May 16, 2012 by

What Money Can't Buy: The Moral Limits of Markets
Michael Sandel, a popular government professor at Harvard, asks a good question, but his answer leaves a great deal to be desired. Are there things, he wants to know, that should not be bought and sold on the free market?
What role should markets play in public life and personal relations? How can we decide which goods should be bought and sold, and which should be governed by nonmarket values? (p. 11)
Clearly there are limits to the proper scope of the market: you cannot legitimately buy and sell people. Further, contracts to violate people's rights are also illicit. Beyond these commonsense restrictions, should not people be free to make whatever market arrangements they wish? This simple view is not to Sandel's liking.
He recognizes the position just suggested, but he rejects it.

The first [defense of markets over queues] is a libertarian argument. It maintains that people should be free to buy and sell whatever they please, as long as they don't violate anyone's rights. Libertarians oppose laws against ticket scalping for the same reason they oppose laws against prostitution, or the sale of human organs: they believe such laws violate individual liberty, by interfering with the choices made by consenting adults. (p. 29)
Sandel suggests that the free choices here appealed to are sometimes less free than they appear. Suppose, he inquires, that a poor person has only one opportunity to better his position. Is the person really free to reject the opportunity? "Market choices are not free if some people are desperately poor or lack the ability to bargain on fair terms" (p. 112). As an example, he mentions an odd scheme by Barbara Harris that offered $300 to women addicted to drugs who agreed to sterilization or long-term birth control. He says,
Although no one is holding a gun to her head, the financial inducements may be too tempting to resist … her choice … may really not be free. She may be coerced, in effect, by the necessity of her situation. (p. 45)
It hardly seems plausible to think that a tempting offer is coercive: if a college student who works part time at McDonalds receives an award of $100,000 on condition that he bid his job goodbye, he is likely to find it very difficult to turn down his opportunity. That hardly suffices to make the offer coercive. A threat is very different from an offer, however tempting; and it is the former, not the latter, that is coercive.[1]
Indeed, it is not clear how strongly Sandel is committed to the claim that offers difficult to turn down metamorphose into threats; and in any case, he objects to many market exchanges where no coercion in his extended sense occurs.
His main argument against various market exchanges is a different one. It is that buying and selling changes the meaning of a great many of our social practices. What he has in mind is best explained by an example. The example will also show, by the way, how remarkably easy he finds it to get upset. Nowadays, he tells us with outrage, people can avoid waiting in long lines. They can hire others to stand in line for them. One might at first be tempted to think this a good thing. If you hire someone as a substitute, you are in your own estimation better off, because you prefer hiring him to waiting. In like fashion, the person who waits thinks that it is worth it to do so. Both parties to the trade are better off. What could be easier to grasp?
Sandel does not agree. For example,
Think again about the Public Theater's free summer Shakespeare performance [in New York]. "We want people to have that experience for free," said the spokesperson, explaining the theater's opposition to hired line standers.… The Public Theater sees its free outdoor performances as a public festival, a kind of civic celebration. Charging for admission, or allowing scalpers to profit from what is meant to be a gift, is at odds with this end. It changes a public festival into a business, a tool for private gain. (p. 33)
Sandel's argument, then, is that buying and selling strikes against the meaning of various social practices. But why should we think, to take the example just mentioned, that performing a Shakespeare play in a park has as part of its meaning that admission to the play is free, with no paid line standers allowed? Would the play cease to be a play if those horrid paid line standers and scalpers plied their respective trades?
Sandel might answer that even if the play could be performed before a paying audience, it wouldn't be the same event as a performance before an audience that got in for free. But then he has simply built into the definition of the play's performance that the audience not pay admission. (Is it permissible, by the way, if the actors are paid? Are they required to donate their services?) Under this supposition, Sandel would be right that the meaning of performing the play would change; but this is just the consequence of the way he has elected to characterize what the performance of the play includes. Why should we be concerned with Sandel's preferred play, rather than a privately performed play? The latter is just a different social practice. Why is it worse than the free performance?
The answer to this uncovers the key assumption of Sandel's book. Though he does not wish to abolish the market — he thinks, for example, that it is all right to for stores to rent videos — he regards economic freedom with deep disquiet. He would not agree with the wag who suggested that the most beautiful word in the English language is "cash." To the contrary, he views the market as corrupting. People who attend to economic gain put aside the nobler motive of sacrificing together for the common good.
Sandel's denigration of filthy lucre frequently reaches absurdity. He opposes selling tickets for prime camping sites at Yosemite National Park on Craigslist at a higher price than the nominal cost set by the park service. He does so even though demand "is so intense, especially for the summer, that the campsites are fully booked within minutes of becoming available" (p. 36). To allow the dread hand of the market to besmirch Yosemite is to fail adequately to grasp the meaning of national parks. "They are places of natural wonder and beauty, worthy of appreciation, even awe. For scalpers to auction access to such places seems a kind of sacrilege" (p. 37). Holy space must not be profaned by money. Like Jesus, Sandel would drive the moneychangers out of the temple. What he has given us here is not a reasoned argument, but an expression of a pseudoreligious faith.
His faith these days is under constant assault.
The corrosive effect of advertising matters less in the grocery aisle than in the public square, where naming rights [i.e., the right to name buildings, streets, stadiums, etc., in return for a payment] and corporate sponsorships are becoming widespread. They call it "municipal marketing," and it threatens to bring commercialism into the heart of civic life. (p. 189)
The market's effect is "corrosive": it "threatens" civic life. Why should we accept the implicit value judgments that lie behind Sandel's emotive language? He does not tell us: instead, he again and again excoriates the evil market.
Even baseball is not immune from Sandel's vaporings. His complaint should by now be familiar. No longer do people enjoy baseball as a public festival, with rich and poor sitting in seats that differ little in price. Now, big business has taken over: luxury "skyboxes" serve to separate wealthy persons and corporations from the rest of us, and advertising is ubiquitous.
Sandel acknowledges that people do not go to baseball games "primarily for the sake of a civic experience." Nevertheless, the civics lesson needs to be present: "But the public character of the setting imparts a civic teaching — that we are all in this together, that for a few hours at least, we share a sense of place and civic pride" (p. 173). Why cannot we just enjoy ourselves, without the Aesop's fable?
Sandel never stops complaining. He tells us that in
1965, when I [Sandel] was twelve years old, the best seats in the park [in Minneapolis] cost $3; bleacher seats were $1.50.… The business of baseball has changed a lot since then.… Not surprisingly, ticket prices have soared. A box seat at a Twins game is $72, and the cheapest seat in the park costs $11. (p. 164)
Before we join Sandel in his lamentation for the ordinary fan, who has been driven out of the ballpark by greedy businessmen, we might usefully ask an elementary question that apparently never occurred to our Harvard professor and common scold. What is the purchasing power today of $1.50 in 1965? According to the CPI Inflation Calculator of the Bureau of Labor Statistics, the answer is $10.92. True, eight cents is eight cents: but one doubts most people would take this increase to be an example of soaring prices. Also — what a thought! — perhaps charging high prices for box seats helped the owners to keep prices low for the less-well-off customers.
I cannot hope to do justice to the very wide range of market invasions that arouse Sandel to his jeremiad. One more of his complaints must here suffice. He appeals to the famous book The Gift Relationship (1970), by the British student of "social policy" and adviser to the Labour Party Richard Titmuss. He contrasted the British system of voluntary unpaid blood donations with the practice in the United States, which includes both voluntary and paid donations. The American system, he contended, "leads to chronic shortages, wasted blood, higher costs, and a greater risk of contaminated blood" (p. 123).
Why these dire consequences? If some people are paid to give blood, this drives out donations for altruistic reasons: "the market values that suffuse the system exert a corrosive effect on the norm of giving" (p. 124).
Kenneth Arrow objected to this that people who want to donate blood without compensation are not prevented by a commercial alternative from doing so. Sandel finds this response unconvincing.
The answer [to Arrow's objection] is that commercializing blood changes the meaning of donating it. For consider: in a world where blood is routinely bought and sold, is donating a pint of blood at your local Red Cross still an act of generosity? Or is it an unfair labor practice that deprives needy persons of gainful employment selling their blood? (p. 126)
If you want to be generous, why not donate money so the hospital can attract more paid donors? Thus does a paying system crowd out unpaid donors.
This is more than a little lame. Do people who want to donate blood just because they think this an act of beneficence refrain from doing so for the bizarre reasons that Sandel adduces? Arrow seems perfectly correct: if you want to volunteer, the fact that others are paid should not and probably does not stop you. Further, that someone receives money for a donation hardly suggests that he does not think blood donation a good in itself, with motivating force. Persons can be motivated at the same time both by self-interest and concern for others.
Sandel responds to another objection to the arguments of Titmuss, again raised by Arrow. Earlier, Sir Dennis Robertson had suggested the point more generally. Arrow and Robertson noted that altruism is a scarce resource: it is unwise for society to rely on it unduly. The economist, realizing this, promotes "policies that rely, whenever possible, on self-interest rather than altruism or moral considerations … [thus saving] society from squandering its scarce supply of virtue" (p. 128).
Against this, Sandel appeals to the weighty authority of Aristotle. Does not moral virtue grow in the exercise of it? The economist's way of thinking "ignores the possibility that our capacity for love and benevolence is not depleted with use but enlarged with practice.… Aristotle taught that virtue is something we cultivate with practice" (p. 126).
Aristotle's point is characteristically wise; but Sandel has unaccountably failed to see that it is perfectly consistent with the claim that virtue is a scarce resource. The growth of virtue with practice does not imply that virtue can expand to an extent that makes it unnecessary to seek to conserve it.
Murphy, Robert P.

There is yet one more problem with Sandel's account of blood transfusions. He endeavors to respond to Arrow's criticisms of Titmuss, but he fails to consider a matter of no slight significance. Titmuss's claims for the superiority of the British system are highly controversial; other studies have found that a market system works as well or better. Sandel evidently thinks the controversy unworthy of mention, if indeed he is aware of it at all.[2]
Sandel calls explicitly for no more than "public discourse" on the proper scope of the market. But no reader of the book can be in doubt about what he wants the outcome of that discourse to be: the coercive displacement of the free market in favor of the communitarian exhortations to self-sacrifice he finds so edifying. If one did not know that Sandel existed, one might suspect that this book was a Randian parody of an altruist intellectual.

No comments: