Book review: What money can't buy, by Michael Sandel

Financial logic now dominates most areas of life. This is a much-needed look at the consequences, says Matthew Taylor.

by Matthew Taylor
Last Updated: 01 Jun 2012

Book: What Money Can't Buy: The moral limits of markets

Author: Michael Sandel

Which of these actions is wrong: paying a homeless person to stand in line so a lobbyist can grab a sought-after seat at a congressional hearing; offering a drug-addicted woman with several children already in care a cash payment to be sterilised; making a donation to an elite university on the understanding this will secure a place for your child?

For many economists the answer is 'none of them'. The homeless man provides something he has in abundance - time - in exchange for something he doesn't have - money. The drug addict willingly sells the right to procreate and in so doing avoids the misery and cost to society of more unwanted children. The university can use the rich person's donation to create new places for children from poor backgrounds.

One of the many strengths of What Money Can't Buy, by Harvard professor, political philosopher and public intellectual Michael Sandel, is its willingness to engage fully with the case for extending markets and monetary incentives into every corner of our lives.

After all, despite the recent battering the profession of economics has received, there are ever more activities that are subject to its logic. Paying to avoid queues at airports is conventional even for standard class passengers, ever more sport and music arenas carry the names of sponsors, we increasingly save the time and anxiety of buying presents in favour of simply exchanging gift cards. And every time a messy relationship or social convention is replaced by a naked transaction, there are entrepreneurs to carry the logic to the next stage. For example, in the US a successful website lets people swap unwanted gift vouchers for cash at various rates of discount.

In the face of this powerful logic, Sandel implores us to consider the cost in terms of fairness and what he calls corruption. The effect on life chances and wellbeing of economic inequality is pronounced enough without allowing the privileged to queue jump and subvert processes - like university selection - which are supposed to be meritocratic.

Corruption is the more subtle process, whereby economic logic 'crowds out' social norms such as solidarity or duty. Sandel offers the example of the Israeli nursery school where starting to fine parents for picking up children late rebounded when parents saw the fine as a permitted fee and arrived even later.

Similarly, if the poor sell their children, if pupils are bribed to read books (as in several US schemes), or people are paid to donate blood, is there a danger we undermine the values of parenting, learning and volunteering which are essential components of the good society?

Many of the most egregious examples of commodification are American but Sandel's argument has a wider relevance.

As John Kay argued in his book Obliquity, the single-minded pursuit by bosses of profit at the expense of a more substantive mission is often counter-productive. The mixed record of performance-related pay may reflect its impact on collaboration at work, but there is also evidence from behavioural economists and social psychologists that the relationship between financial incentive and individual performance is not nearly as simple as economic logic implies.

Human beings are driven not only by the pursuit of economic gain. What about love, ambition, duty or compassion? But money is simpler, more tangible and more fungible. As the power of tradition and deference has declined and the ideology of individualism has triumphed, so market rationality has become dominant.

As one of his case studies, Sandel describes how collecting autographs and sports memorabilia has gone from a hobby to a huge and debased multibillion dollar industry. English football fans too will recognise the ambiguous impact of money on their sport.

Many will disagree with Sandel. After all, the US is an aggressively free market country but it also has high levels of philanthropy. But, as usual with Sandel's Socratic style, the tone of this engaging collection of essays is enquiring rather than accusatory.

In a world where solutions based on market and economic incentives have powerful advocates, What Money Can't Buy offers much-needed pause for thought.

Matthew Taylor is the chief executive of the RSA

Book: What Money Can't Buy: The moral limits of markets

Author: Michael Sandel

Allen Lane, £20.00

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