Tag: Michael J Sandel

  • What Money Can’t Buy: The Moral Limits of Markets

    Michael J. Sandel

    Michael J. Sandel’s ‘The Tyranny of Merit‘, which questions what has become of ‘common good’, remains a favourite because it touched upon a topic that is not found commonly in public discourse. “What Money Can’t Buy” continues that approach, and is about the invasion of market economics into areas of life that were previously considered above it – education, government, our physical body, and family life, among others. The book is about whether there is a moral limit to the reach of markets. I was reminded of “When money is made the measure of all things, it becomes the measure of all things.”

    The book starts with multiple examples of what I would call the overreach of markets – upgrading a prison cell, the right to shoot an endangered black rhino, stand in line in Capitol Hill in place of a lobbyist, get paid in primary school to read a book, pay life insurance premium on behalf of an elderly person you don’t know and collect the payout after their death, and so on. Sandel points out that it is not just greed, it is the expansion of the market into spheres of life we once thought were beyond it.

    “Drifting from having a market economy to being a market society.” The former is a tool for organising productive activity, the latter is one in which social relations are made over in the image of the market.
    In the subsequent chapters, he provides a huge set of scenarios where this is playing out. Examples of jumping the queue using money – from fast tracks in airports and supermarkets to hiring people to stand in queues in Capitol Hill or exclusive events. A rare opposite is Springsteen’s concerts whose pricing reflects that he sees it more as a social event than a market good. The principles of ‘wait in line’ and ‘don’t jump the queue’ are relics.

    Monetary incentives are being used for everything from sterilisation to good grades to losing weight to immigration, and refugees (paying another country to take your share) to pollution permits and carbon credits. An insightful point is the nuance between fines and fees. Fine carries moral weight, it points out that you’re doing something wrong, fees is a transaction. Sandel notes how economics tries to stay away from ethics and quotes Levitt and Dubner, “Morality represents the way we would like the world to work, and economics represents how it actually does work.” But by getting into social aspects, this distinction starts to blur.

    When money gets introduced into the social sphere, it starts crowding out morality – in China, you can hire someone to apologise on your behalf. But you needn’t go that far – cash vs a wedding gift, and the middle ground of a gift card is a good example to chew on. There is also the counter example of a town in Switzerland which agreed to be a waste site for nuclear material considering their civic duty, but promptly withdrew when each resident was offered monetary compensation. Another example is the Israeli day care, where introducing fines for parents who came late to pick up their kids increased the number of late arrivals, because it eroded the parents’ sense of responsibility by making it a transaction.
    Even life and death are not exempt. The good use case of insurance is transformed into what is called janitors insurance. Companies buy insurance on behalf of employees without their knowledge and cash in, creating a revenue source! Then there are viatical investments – say a person with a $100000 policy is told that he has a year to live. An investor buys that for half the price in cash, which the patient uses for treatment. The investor collects the insurance after the patient’s death! Thus people have an incentive for another person’s death! Insurance had been prohibited for centuries just to prevent this! But now, investors buy insurance of elderly people using the same tricks. It is a major industry. There are also sites that apparently allow bets on celebrities dying in a particular year.

    Naming rights of public places in lieu of payment is another area of infringement. It has moved beyond stadia and sports to prisons and schools. In the latter, the corporate spin is allowed to varnish or even omit truth.

    In all of this, two objections usually arise from those who oppose this- fairness and corruption. Fairness, because when money is introduced, those without it start losing access. Corruption, not in the way we normally use it, but how it degrades the original quality of the interaction. The Swiss and Israel examples point to that. Ironically economists see altruism as a valuable and rare good that depletes when used too much. And therein probably begins the warped worldview.

    But as Sandel himself admits, this is a discussion on what we define as a good life, and whether that’s what we want to lead. Public discourse is increasingly becoming devoid of moral and spiritual substance and money continues its march. Call me a cynic, but I am struggling to see a way out. An excellent book to read, to at least remember how the world and humanity used to be.

    What Money Can't Buy

  • The Tyranny of Merit

    Michael J. Sandel

    If I go by my blog posts, it was in 2004 that the thought first occurred to me – “humankind protests against all kinds of disparities – race, sex, age etc..but aren’t institutions like IIMs promoting discrimination based on intellectual aptitude“. I did not know the word meritocracy then (coined by Michael Young in 1958, who saw it as a dystopian concept), but since 2015, the word and the world it has created has been appearing in many of my posts. That’s why this was a book I was looking forward to. And it didn’t disappoint. Despite an American context, it peels the layers, and the insights are universal. 

    Meritocracy began as a remedy, and its earliest proponents probably understood that while it may not be able to bring about equality, it could help create mobility across the levels of society. Unfortunately, it has increasingly moved away from that purpose too, and has now created a system where those are already privileged have a disproportionate advantage over those who do not. And no, education, especially the way it is now, is not a solution. And anyway, mobility can no longer compensate for inequality. Meritocracy was a means to an end, but I can’t help but think that its progress is mirroring that of a related “inter-subjective” concept – money, which is now an end in itself. 

    The author begins with the recent success of populist movements – Trump, Brexit – some of which are a threat to democracy, and provides his perspectives on why they were able to rally people. The answers lie beyond the usual suspects – backlash against racial, ethnic, gender diversity, and the dislocation caused by globalisation. In short, a technocratic way of conceiving public good, and meritocratic way of defining winners and losers. The former removes moral arguments from public discourse and treats them as matters of economic efficiency. The technocratic version of meritocracy de-links merit and moral judgment, by defining the the common good only in economic terms, and equating it to GDP. The latter creates hubris among the winners by deeply embedding the thought that their success is all their own doing without luck or privilege playing any part, and humiliation and resentment among the losers, by making it seem that their status is purely their fault. The author does an excellent job of highlighting this change through the American political rhetoric, and the “you deserve it” narrative in everyday life. 

    For the longest while, education was the ticket to the “American Dream”, but this has created damage on multiple counts. It has eroded the self esteem of those who have not gone to college, devaluing their contributions, and making it seem the sole reason for their lot in life. It has also promoted credentialism, the “last acceptable prejudice”, making a college degree a pre-condition for dignified work. “Smart vs dumb” began to replace “just vs unjust” and “right vs wrong” in public discourse and policy. Democratic institutions too became the exclusive preserve of the credentialed class (in the West) making it less representative. The author shows how the support base of various parties have changed over decades, alienating the working class and adding to polarisation. 

    There is a fantastic section on whether we deserve our talents, or are responsible for the value that society happens to place on them. While he acknowledges the effort involved in success, there really is no question on the importance of talent in the overall equation. Another part that really proved to me how I was conditioned to accept meritocracy was the exploration of free-market liberalism and welfare state liberalism’s alternatives to meritocracy. In the first, the author quotes Friedrich A Hayek, when pointing out that “Market outcomes have nothing to do with rewarding merit. Merit involves a moral judgement about what people deserve, whereas value is simply a measure of what consumers are willing to pay for the goods and services sellers have to offer“. In the second, he quotes John Rawls, “If people competed on a truly level playing field, the winners would be those endowed with the greatest talent. But differences of talent are morally arbitrary as differences of class“. Later in “Success Ethics”, he uses Frank Knight’s “..meeting market demand is not necessarily the same thing as making a truly valuable contribution to society.” Also useful was the nuance between deserving and entitled, and the rabbit hole of moral thinking it opens up. The author also provides recommendations on how we can attempt to fix this tyranny – in the domains of education and economics. 

    Why is all this important? Technology is making more and more jobs extinct, and my generation is already feeling the pain. Beyond the economic aspects, work also makes huge contributions to meaning, dignity, and does its share of removing our fear of becoming obsolete and irrelevant. Contributive justice, as opposed to the distributive justice that both sides of the political spectrum are attempting to achieve. To quote R.H.Tawney, “Social well-being… depends upon cohesion and solidarity…Individual happiness does not only require that men should be free to rise to new positions of comfort and distinctions; it also requires that they should be able to lead a life of dignity and culture, whether they rise or not.” By promoting meritocracy and free-market evaluations of our contributions, we are increasingly removing that agency from a human’s life.