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Thursday 18 October 2012

Review: Michael Sandel, What Money Can't Buy

Michael Sandel is Professor of Government at Harvard. Actually, he is the Anne T. and Robert M. Bass Professor of Government. He's lucky. It could have been worse: Oxford has a Rupert Murdoch Professor of Language and Communication, currently Deborah Cameron whose well-known comic sensibility no doubt allows her to bear the burden lightly.

Sandel has a chapter "Naming Rights" on sponsorship (what universities prefer to call "endowment") which has the feel of a Miscellany of irritants at the end of a short book which is lively, provocative and underpinned by just a couple of simple claims: we should not allow markets in some things and specifically when to do so would be unfair or corrupting.

Sandel's starting point is to ask us to think about the kind of things which cannot be bought and sold in markets just because of the things they are. The paradigm case is friendship but Sandel gives other examples, like the Nobel Prize. If you could buy one, it wouldn't be worth having since the whole idea is that it is the unsought reward for exceptional merit. This simple picture gets complicated when you realise, for example, that an honorary degree bought for himself by some wealthy university benefactor still has some value precisely because other honorary degrees (maybe most of them) are not sold.

Sandel then asks whether some markets are inherently unfair and has a good discussion of queues and queue-jumping (paying someone to stand in line for you, paying for a fast track at passport control).

Then he gets us to see that some markets are prohibited (at least in the USA and Europe) because they are felt to be corrupting. Parents are not allowed to sell their children because it would corrupt [an ideal of ] parenthood. But it is perfectly possible to have a market in children and some countries do and many countries have done (the film Geisha begins with the selling of two children).

Sandel recognises that setting moral limits to the role of markets is a fraught question simply because there will be disagreements about what morality demands. Take the example of the sterilization of heroin-addicted women who otherwise give birth (often repeatedly) to heroin-addicted babies. In the USA financial incentive schemes exist to encourage heroin-addicted women to accept sterilization. Sandel is clearly uncomfortable with this; he does not think there should be a market in such things.

But he does not consider all the options and therefore misses the argument that in some cases a market may be a compromise - a second-best but better than the alternatives. Sandel pitches the choice between moral persuasion on the one hand (heroin-addicted women would see the light and voluntarily abstain from having babies, maybe in the context of rehabilitation schemes) and on the other, the simple deal in which a woman gets cash in return for accepting sterilisation. But there is a third choice: compulsory sterilisation. Just because it has a bad name ("Nazi eugenics") does not mean it can be ignored. There are probably quite a few doctors and social workers looking at heroin babies who would vote for it.

In a three-way choice, the market option may appear the least unattractive, especially when you face the reality that morality has so far failed to stop the birth of heroin-addicted babies (who in the UK are normally removed from their mothers at birth).

Likewise, Sandel does not follow through and discuss the fact that if you criminalise a market you immediately create criminals. This brings its own social costs. Suppose someone sells one of their kidneys for an organ transplant operation. And suppose that is a criminal act. So do we have a better society if we send the person left with one kidney to prison? Or should we only jail the person who received the other kidney? (Some countries jail prostitutes, some jail their clients. Both have no problem finding people to jail).

It's all very well preaching that there should be Moral Limits on markets. But Morals have a habit of turning into prison sentences. Does Sandel really think that American prisons are better features of American society than American markets?

In this context, I felt Sandel could have discussed the payment of Blood Money, a common practice in many societies but disallowed in America and Europe. Something is criminalised, a crime is committed and the punishment is severe. With the consent of the victim or the victim's family, the criminal or the criminal's family can buy their way out of punishment.

Now often enough Blood Money payments will come under Sandel's category of unfairness - rich people will simply pay off poor people for crimes committed against them. Poor people won't be able to buy their way out of trouble.

But is Blood Money corrupting? I can think of lots of situations where the answer is clearly No. In a stupid brawl, one man kills another. The dead man leaves a grieving wife and children who also now have no means of support. If you execute the killer, you then create another grieving wife and children. In this context, financial compensation does not equate to the loss of a life but it can protect two families from destitution.

Monday 15 October 2012

Essay: America Cannot Continue Like This

I haven't reviewed any books recently - I have been giving up on books half way through and therefore -  under the terms of this Blog - cannot review them. This is true of Joseph E. Stiglitz's The Price of Inequality (Allen Lane 2012). I kept comparing it unfavourably with Richard Wilkinson and Kate Pickett's The Spirit Level: Why Equality is Better for Everyone - a book which Stiglitz does not mention.

The problem with Stiglitz's book is not its argument - which relates only to America - but in a decision to consign all the evidence to the footnotes. There are 290 pages of text and over 100 pages of footnote citations and discussions. This leaves the text uncluttered, but - unfortunately - dumbed-down and repetitive. I gave up.

But this is not at all to deny that growing inequality in America, combined with the weakness of the political system,  is a problem for us all and could become a pressing problem.  America surely cannot for long escape its own Arab Spring. Its rent-seeking (Stiglitz) or, as I would put it, extractive elites (the 1% who own and rule and don't pay taxes) have no intention of conceding any ground - indeed, they are still pushing for even more favourable treatment. And their grip over the media, the political process and the legislature has disillusioned citizens where it has not simply disenfranchised them. That is a recipe for civil disorder not orderly political renewal.

Wilkinson and Pickett's book contains many graphs correlating different kinds of Inequality with different social and economic measures. On most of those charts, the USA is an outrider - it has more Inequality and it has worse performance on measures of employment, health, security - you name it. It is never anywhere near the average. Some of those outrider figures surface in Stiglitz's book. We may in a sense already know it, but it is still shocking to read - for example - that "roughly one in three black men will spend time in prison in his lifetime" (page 70). That's a Gulag-like statistic and no society which achieves that outcome can be other than dysfunctional.

Here in Europe, serious newspapers and their serious readers looked at the Republican primaries with jaw-dropping disbelief. How do these nutters get to be front-runner Presidential wannabes? And when Romney finally emerged as candidate, the sigh of relief was quickly replaced by the fervent conviction that No Way, No Way do we want this man to become US President. That would be true across the political spectrum. Even the Conservative Party guardians of Britain's "Special Relationship" with the US pray each night for an Obama victory.

To tell the truth, they pray because they are scared. We are all just a bit scared and become a bit more scared every time some strange Congressman holds forth on Abortion or Evolution or Rape. These guys are Fundamentalists and they are Dangerous, make no mistake.

Whether they are scared in China, I do not know. But in China they are watching America carefully. It is only Chinese money which prevents America's financial implosion. If you think Greece has got problems, look at America's federal budget or its trade balance.

And back of it all, we know that America's war industry is lobbying for another War - and Romney knows that, if elected, he will have to give them one. It makes money and it makes jobs. That the War will be lost, just like those in Iraq and Afghanistan, is of absolutely no concern.