Warren Chisum is a conservative state legislator in Texas. He has long campaigned for the re-criminalization of homosexual acts, and for the elimination of programs designed to help people with AIDS. In 1994 he boasted to the Houston Post that he had invested $200,000 in buying the life insurance policies of six AIDS sufferers, enthusiastically proclaiming that the earlier they died, the more money he stood to make.
This is the viatical industry—a market in the life insurance policies of people diagnosed with terminal conditions. Consider someone with a $100,000 life insurance policy who is given a medical prognosis of one year to live. An investor offers to buy the policy at the discounted price of $50,000, and takes over the annual premiums. When the original policy holder dies, the investor claims the $100,000. The economic logic is unassailable: the dying person receives a substantial lump sum with which to improve the quality of his or her remaining days, and the investor makes a 100 percent profit—provided, of course, that the original policy holder dies on schedule. All investors deal in risk but, in the viatical industry, the risk necessarily carries a profound moral complication: the returns to the investor are inversely proportional to the longevity of an ailing human being.
For Harvard philosophy professor Michael J. Sandel, this kind of confrontation between economic rationalism and moral sensibility is inevitable once the moral standards governing what we can and cannot legitimately sell have broken down. And broken down, he insists, they most certainly have. Over the past three decades, free-market thinking has colonized economic theory and exercised a profound influence on political practice—a transformative process that began on the right with the Ronald Reagan-Margaret Thatcher revolution and continued on the liberal left as politicians like Bill Clinton and Tony Blair adopted free-market policies. The result is an everything-for-sale society in which, Sandel writes in his latest book, What Money Can’t Buy, “the logic of buying and selling no longer applies to material goods alone but increasingly governs the whole of life.”
Sandel illustrates his case with a compelling multiplicity of real-world examples. We see the expansion of marketization in the proliferation of for-profit schools, hospitals, and prisons. We see it in the outsourcing and privatization of war, to the extent that private contractors actually outnumbered U.S. troops in Afghanistan and Iraq. Similarly, private security guards now outnumber police officers in both the United States and Britain. More and more sports stadiums are named for corporations. The federal government effectively sells immigration rights when it issues green cards to would-be immigrants who invest $500,000 and create at least ten jobs in the United States. Western couples can now purchase the services of surrogate mothers in India. In South Africa, ranchers sell the right to shoot an endangered black rhino for $150,000. For €13 per metric ton, the European Union will sell companies the right to emit carbon into the atmosphere. And lobbyists seeking entry to congressional hearings can hire homeless people to hold their places in queues.
Sandel makes clear that he is by no means opposed to the market economy, which he recognizes as the most successful wealth-generating system yet devised. What troubles him is that we have “drifted from having a market economy to being a market society.” The distinction is crucial: a market economy is simply a mechanism for the efficient allocation of resources, but a market society is nothing less than a way of life organized upon the basis of market reasoning and morality.
In its free-market incarnation, economic science has expanded far beyond its traditional preoccupations with issues such as inflation, unemployment, savings ratios, investment levels, and trade balances in order to claim explanatory power across the full range of human activity. As a result of its increasing intellectual and political influence, we are witnessing “the remaking of social relations in the image of market relations.” But Sandel argues that market reasoning and its inherent market morality are not equally appropriate to all domains. In some cases, it may be objectionable or even unacceptable. So Sandel challenges us to morally reevaluate market society, and the central question he poses in this book is “Where should money’s writ not run?”
The response to such arguments from free-market theorists is that market reasoning points the way to better outcomes, and that there is no such thing as a distinctive market morality. Market reasoning is based on the premise that people are self-interested, utility-maximizing individuals who respond to incentives. Therefore, all relations are ultimately market relations; everything has its price, and restrictions on commercialization can only result in the inefficient allocation of resources. And since the commercialization of an activity does not alter the nature of that activity, the question of market morality never arises.
Sandel advances two fundamental objections to free-market theory: inequality and corruption. From Sandel’s perspective, the inequality of income and wealth is substantially unimportant when the scope of the market is restricted to consumer goods such as luxury cars, foreign vacations, or yachts. But in a market society characterized by expansive and intrusive commercialization, inequality takes on an altogether more pernicious significance; when it is the ability to pay that determines access to medical care, non-failing schools, safe neighborhoods, or political influence, then the social fabric is torn.
The corruption objection rests on the contention that there actually is such a thing as market morality, and that there are some non-market moral norms that it should not be allowed to subvert. This is a direct rebuttal of the free-market contention that commercialization has no impact on the nature of a previously non-commercial activity. Sandel uses the example of a Dallas, Texas, school that pays under-achieving second graders $2 for each book they read: the monetary incentive may increase the volume of students’ reading, but it may do so at the cost of undermining teachers’ efforts to instill in them a love of reading as an intrinsically worthwhile activity.
The inequality and corruption objections are both illustrated in Sandel’s discussion of the sale and donation of blood. Free-market theorists contend that altruism is a finite resource that needs to be economized. Exclusive reliance on blood donation depletes this resource, whereas a market in blood conserves it. But Sandel rejects the underlying premise. Drawing on Aristotle’s Nichomachean Ethics and Rousseau’s Social Contract, he argues that altruism and other virtues are not depleted but rather enlarged through exercise. This, he believes, can be seen in a comparison of American and British blood banks. The American practice of selling blood effectively redistributes blood from the poor to the rich. At the same time, the market in blood erodes the expressly social obligation to donate it, the result being that American blood banks aren’t as well stocked as British ones, which only accept donations.
Sandel is pointing to the morally corrosive effects of what radical political economists call “commodification” (a term he also uses). But Sandel isn’t a radical. Though he defies easy categorization, his Liberalism and the Limits of Justice (1982) is a core text in liberal communitarian philosophy. As Sandel explained in the conclusion to his best-selling Justice (2009), the practical imperative of this philosophy is the reconstruction of a crumbling civic culture. To accomplish this, we need to put markets back in their place. There is no simple formula for determining that place. Instead, society needs to recover its previous understanding that not all goods are properly valued by market forces, and it must reassert non-market norms where that is in the public interest—which is itself a non-market norm.
Sandel’s thoroughgoing criticism of imperious marketization is always coolly argued, but nonetheless unsparing. At points he is quite ruthless in indicting free-market theorists with their own words. But he appears to believe that we have drifted into market society, and that we can reverse this process through an elevation of public discourse achieved as an act of will. Sandel admits that he is baffled by the continuing prestige of market thinking in the wake of the financial crisis, and he is discouraged by the rancor and vapidity of the media. But both of those phenomena are explained by the fact that we have been led to market society by the powerful interests that benefit from it. The central problem with liberal communitarianism is that it has little to say about how those interests may be challenged.