Harvard Professor Michael Sandel’s recent book, What Money Can’t Buy, is a critical look at the commoditization (economification?) of everything in our society. We’ve gone from a world with first class and coach tickets (which, to Sandel, apparently was mostly OK) to a world where people pay for blood, pay second graders to read, pay homeless people to stand in line to hold spots for public congressional hearings, and pay people to tattoo advertisements on their foreheads.
The book is long on questions and short on answers – the central question being whether the potential utilitarian improvements that result from market transactions (both sides participate, so both parties must be better off) is corrupting to society as a whole. As Sandel puts it, “In deciding whether to commodify a good, we must therefore consider more than efficiency and distributive justice. We must also ask whether market norms will crowd out nonmarket norms, and if so, whether this represents a loss worth caring about.”
Sandel argues forcefully that in order to resolve these questions we need to get comfortable having normative discussions about the kind of society we wish to create and live in – and I was longing for a last third of the book that would equip me as a reader with tools to have those conversations. That critique notwithstanding, it’s impossible to read the book and not start to notice how everything (everything!) seems to be for sale, and the prevailing wisdom is that this has to be a good thing.
The counterargument is that putting a price on things crowds out civic behavior. The moment you offer $50 to people to give blood is the moment people stop showing up to donate blood out of a sense of duty and generosity to their fellow man. As a wise friend of mine once said, “I’ve considered donating a kidney, but I’d never consider donating a kidney and getting paid $500 for my troubles.”
With this as context, I wonder if part of my interest in generosity was a backlash against everything being monetized and maximized – a desire to create a space in my life, connected to a sense of service, where market norms don’t prevail, where I act from a sense of duty first.
Duty means you don’t get to ask clever questions…you just act. And these days, just acting is a welcome respite from the Chase review of line calls at the U.S. Open, the football games at Invesco Field, people buying the future income streams of young people instead of just finding great people and giving them our support.
Even in impact investing there’s a quiet whisper (getting louder every day) that if it something has a market-based solution then it HAS to be better.
Maxims are nice because they make the world simple and they ask little in the way of judgment and nuance. But let’s just be clear: markets are great at efficiency, markets instill discipline, and markets give us quick feedback. But the premise never was that markets alone have all the answers, and if we as a sector are going to make large-scale change, we need to learn the lessons of history – today’s (read: 2008 crisis) as well as yesterday (the building of the U.S. interstate system) – of where markets have worked and where they haven’t; what are their strengths and what are their limitations; where markets empower and where they marginalize.
The lines aren’t bright, but there are important lessons out there, and most of them weren’t written by Milton Friedman. As our sector grows up, we will all have to start becoming better students of history, and becoming more versed in talking about where markets work, where they don’t work, and why.