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Books

Michael Sandel interview: the marketization of everything is undermining democracy

22 May 2013

9:41 AM

22 May 2013

9:41 AM

Michael Sandel is a political philosopher and a professor at Harvard University. He is best known for his  ‘Justice’ course, which he has taught for over two decades.

Sandel first came to prominence in 1982 with his book Liberalism and the Limits of Justice. The book offers a critique of liberalism, arguing that individuals’ needs are rooted with a sense of community and obligation to others, rather than the self.

Last year, Sandel published What Money Can’t Buy: The Moral Limits of Markets. When one initially begins to read this book, it seems as if Sandel is simply stating the obvious. He asks questions that many of us think about on a day to day basis, but perhaps are afraid to ask, such as: do we want a society where everything is up for sale? Or are there certain moral and civic goods that we should not put a price on?

But it’s a testament to Sandel’s dexterity as a critical thinker that he can articulate this argument without injecting a righteous or pious tone.

In this short and lucid polemic, Sandel describes a culture that has developed in the west — over the past three decades — that puts market principles above all else. In such a society, solid values like virtue, decency and friendship, he argues, are being jeopardized by the lure of monetary compensation. Sandel believes, at the very least, these values should be an intrinsic part of any functioning democracy, regardless of how wealthy a society becomes.

Over an hour-long conversation, I asked him about how he thinks we might try to reform society so that a transaction is not the final word on everything.

How has the expansion of markets affected society in the West?

If you look at it, we have drifted over the last three decades from having a market economy, to becoming a market society. A market economy is a valuable and effective tool for organising productive activity. But a market society is a place where everything is up for sale. It’s a way of life, where market values reach into every sphere of life. That can be everything from family life in personal relations, to health, education, civic life, and civic duties. This has happened with relatively little debate. Part of the appeal of market faith is that it seems to spare us the need, as citizens, to deliberate, reason together, or argue together, about how to value goods. Markets seem to be a neural way of sorting it out. But it’s a mistake to see markets that way.

Economists often assume that markets are inert: that they do not affect the goods they exchange. But you disagree with this. Why?

Well if we are talking about material goods, markets may leave the goods unchanged. But the same may not be true in non-material spheres of life. Because important social practices are defined by certain social attitudes and norms that markets can displace or crowd out. A market mechanism does not leave the good unchanged, and it may transform the attitudes that we want to cultivate and encourage.

Could you give me an example?

Yes, take the use of mercenaries. Now from the standpoint of purely market reasoning, the use of mercenaries, seems to be economically efficient: you let a global labour market determine who will fight our wars. Yet there is something troubling about the idea of outsourcing war to private military companies. Part of the worry is that turning the sacrifice of war into a market transaction is corrosive to a sense of shared responsibility and civic virtue. Once markets enter into the domain of social life, they may transform the meaning and character of the goods, and of the social practices.

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How did we drift to being a market society: was it as simple as the deregulation that happened with neo liberalism in the 1980s, or were there more subtle reasons?

It was a gradual process, but it happened especially in the post-Cold War period. I think we misread the meaning of how the Cold War ended. We assumed that the end of the Cold War meant that capitalism had prevailed: that it was the only system left standing. We also assumed that capitalism meant one thing only: that markets are the primary instruments for achieving the public good. That was a misreading also. But it didn’t just happen overnight either.

What other factors led us to this situation?

The way was prepared in developments within economics. The discipline of economics used to be about inflation, employment, how to avoid depressions, questions of foreign trade, banks, stocks, and so on. These are traditional economic subjects. But beginning in the 1970s, economics became a kind of imperial discipline. It claimed to explain the whole of life, including: why people marry, whether they decide to have children, when to divorce etc.

Gary Becker, the Nobel Prize winning economist, was one of the figures in the 1970s who argued that economics could be applied to explain all of human behaviour. It was the coming together of these developments in economics, along with developments in the world that led us down the road to having this market society we are now a part of.

The justification of markets is often drawn from two arguments: a libertarian argument, about freedom, and a utilitarian argument, about the greater good. Can you discuss why you think both claims for the justification of a market society may be exaggerated?

The libertarian argument for markets is one made in the name of freedom. Milton Friedman and Friedrich Hayek’s ideas would both be classic example of this: it’s the idea that market relations are free because they are voluntary. Therefore the more areas of life that markets govern, the more areas of life will be free. It’s supposed to be the result of voluntary transactions between consenting adults. The utilitarian argument is an efficiency argument: it says that where markets govern, goods are allocated more efficiently, because incentives are aligned.

The utilitarian argument for markets is that they increase economic growth and provide for economic efficiency. That is different from the freedom argument, which is a matter of principle, or honouring the choices that consenting adults make. These are two strands of market arguments that figure whenever markets are debated. But I believe both have been taken too far.

Why?

Well market freedom really refers to our freedom as consumers, not as citizens or human beings. Our identity as consumers is only part of us. If we allow our identity to be dominated as consumers, then we miss out on important aspects of freedom to do with individual self-development and citizenship. This is why the freedom argument is often too narrow.

The utilitarian argument for markets is certainly valid up to a point. We do want to try and achieve the efficient organisation of productive activity, and the efficient allocation of scarce resources. The problem arises when we try and extend that utilitarian reasoning to social and civic life. If we try and turn all of the good things in life — including family friendship, and mutual responsibility — into a utilitarian calculus and transaction, well then those relationships lose something.

The notion that economics is a value free science, independent of moral and political philosophy, you say, is questionable. Why do you believe this to be the case?

This attempt to cast economics as a value neutral science really only arrived in the 20th century. It has always been questionable. But when economists attempt to explain everything — from family to civic life — it’s less plausible to think that it could be value neutral. We need to go back to the way Adam Smith conceived economics. He and the classical economists understood the subject to be a branch of moral and political philosophy.

Aristotle taught— you point out in the book— that virtue is something that we cultivate and practice.  Can you speak about civic virtue in opposition to market economics?

There are some economists who make the argument that we should we rely as much as possible on self-interest, and as little as possible on altruism, solidarity, and civic virtue. These economists think that generous virtues, and altruism are fixed in quantity. They believe they are like fossil fuels: the more you use, the less you have.

But I think that metaphor is misleading. I refer to Aristotle’s view, which I think is closer to the truth. This says that virtues are not fixed once and for all in quantity, as if they were commodities. We cultivate virtues by exercising them through practice. Aristotle said we learn to become brave by acting courageously. We learn to care for the common good by engaging in civic acts that involve engaging in civic responsibility. I follow Aristotle in viewing altruism, generosity, and civic virtue, more like muscles that are developed with exercise. Those economists who argue that altruism is a virtue that is depleted with use, they are mistaken.

You also talk about the marketization of life: why do you think this is not good for democracy?

When I was 12-years-old, I would go to baseball games. There were always box seats, and then cheaper seats. The difference in price was not enormous. When you went to a sports event, it was class mixing civic experience that cultivated a sense that we were in this together. With these skyboxes nowadays, there is a kind of separation between the privileged, who can watch in air-conditioned comfort, and the common folk in the stands below.

This is symbolic of what is happening throughout our society: which is that there are fewer and fewer events and occasions, when people from different social backgrounds, and different walks of life, encounter one another in the ordinary course of life. We often take this for granted that we encounter one another in ordinary places, and on civic occasions.

Why do we need these occasions?

Because they enable us to think of ourselves as engaging in a common endeavour, or in a shared way of life. It’s what enables us to abide our differences, and to feel that we are all in this together. Democracy needs that. Democracy does not require perfect equality, but it does require that we share enough of a common life that we see ourselves as participants in a common project. But the marketization of everything puts greater pressure on the commonality that democracy requires.

What Money Can’t Buy: The Moral Limits of Markets by Michael Sandel is published by Penguin (£5.99)

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