“Michael Sandel’s What Money Can’t Buy is a great book and I recommend every economist to read it… brimming with interesting examples which make you think… I read this book cover-to-cover in less that 48 hours, and I have written more marginal notes than for any book I have read in a long time.”
I must agree: it’s the most thought-provoking book I’ve ever read.
Michael Sandel lists dozens of examples of commercialisation of areas of life, where financial transactions crept into arenas where they don’t belong: matters of life and death, education, art, civil duty. He then argues that markets went too far: they corrupt us, they demean our values, they erode our society.
Some examples - to an economist - are celebrating the way market failures are improved upon.
When Ryanair introduces services like speedy boarding, it improves upon a situation, where in the absence of the service, some passengers were willing to pay to board first, but instead, had to wait.
Sandel considers it “odd if someone at the back of the line offered us $10 to trade places”. I disagree. I once tried to buy a place at the head of the queue to a Marina Abramović exhibition at the Serpentine Gallery, which was about to close. I did not succeed (but I still got in later), either because people in the queue had read What Money Can’t Buy or because I did not offer enough.
Other examples are truly shocking.
Apparently, there are several websites offering to gamble on which celebrities will die by the year end. For $15 entry fee, stiffs.com offers contestants a chance to win a $3,000 jackpot for a correct list of names.
Getting inspiration from product placement on TV, a British novelist Fay Weldon wrote a book The Bulgari Connection, mentioning Bulgari thirty-four times, in exchange for an undisclosed fee. Needless to say, it’s not a novel I’d be dying to read, but it is not hard to imagine writers desperate to make a living and willing to compromise integrity in exchange for a payment.
In the US it became popular to sponsor every aspect of a sports game. "By 2011, 22 of the 32 teams in the National Football League played in stadiums named for corporate sponsors.” The New England Patriots play in Gillette Stadium, the Washington Redskins play in FedEx Field. Of course, Arsenal football team in London also plays in a shiny new Emirates Stadium, but things progressed a little further over the pond. Corporate names started to appear during broadcast: an Arizona home run in baseball is announced as a “Bank One blast”, being sponsored by Bank One. In a different stadium when a baseball umpire calls a runner safe at home plate, an announcer must say: “Safe at home. Safe and secure. New York Life.” Guess which mutual life insurance company sponsors that.
In 2011, a Colorado school district sold advertising space on report cards. Meanwhile, a retail giant General Mills sent teachers a science curriculum supplement on volcanoes called "Gushers: Wonders of the Earth.” The kit included free samples of its Fruit Gushers candy with soft centres that “gushed” when bitten. The teacher’s guide suggested that students bite into the Gushers and compare the effect to a geothermal eruption.
It’s not that Sandel blames the economists for corporate deals invading schools, literature and sport. He recognises that economists and political philosophers think about matters differently.
As an economist, I would argue that economics simply provides tools of how resources could be allocated more efficiently (i.e. making someone better off without making anyone else worse off) and explains social phenomena with laws of supply and demand. Ethics too can be analysed this way.
If management of Arizona’s team signed a deal with Bank One, it must have weighed financial benefits of corporate sponsorship against the potential costs of eroding the public enjoyment of baseball and decided the benefits were greater. A school in Colorado must have been severely strapped on funding to offer school report cards as advertising space.
Another argument made by Sandel, which made me ponder a lot, is a suggestion that markets creep into our lives so that eventually we stop noticing them, and our ethical standards fall.
In 2000s a North Carolina company offered to provide brand new, fully equipped police cars to US municipalities for $1 a year in exchange for the right to advertise on cars. When deliberating the deal, city and state governments cited an example of sport stadiums having ads on fences and corridors, arguing that some corporate branding is acceptable, when compared with benefitting from brand new fleet.
AIDS epidemic of the 1980s and 1990s gave rise to the so-called viatical industry: a market in life insurance policies of terminally ill. People diagnosed with AIDS and told they had a year to live sold their $100,000 life insurance policies at discount (e.g. for $50,000) in order to be able to afford medical care or to live well in the short time remaining. Investors paid $50,000 to cash in $100,000 when original policyholders died. Obviously, investors were interested in people dying as quickly as possible and were disappointed when new AIDS drugs extended life expectancy well beyond what they were hoping for.
Unfortunately, the viatical industry developed only because there was supply and demand for it. Terminally ill patients needed cash, investors were keen to provide it. No doubt, it is a morally objectionable market, but I do not see how economics as a science is at fault. The problem lies with morally bankrupt investors.
After the breakthrough in the treatment of AIDS, the same investors went ahead to buy policies from cancer patients and healthy senior citizens, willing to cash in, formed death securities, packaging individual policies into bonds, then reselling them to pension funds. According to a New York Times article, published on September 6, 2009, “Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned.”
Before you exclaim: “Outrageous!”, answer this: do you have a pension plan? If so, are you 100% sure that Fidelity or Legal & General hasn’t invested your money in life settlement funds?
What I liked best about What Money Can’t Buy is that it did not spoon-feed me conclusions. It made me think and question things more. Sandel encourages us to reflect and debate. You can bet that I’ll be bringing up all sorts of questions at the next dinner party: “Should we sterilise heroin addicts and pay them for it?” and “How would you feel if you found out that your best man paid for the speech he delivered at your wedding?”. But the larger question remains: will our governments listen to political philosophers as well as economists when formulating their policies?