Michael Sandel's book, What Money Can't Buy: The Moral Limits of Markets is one of my favorite books because of its sheer novelty. Unlike most suspicious of market operations, Sandel is, for the most part, okay with capitalism. What is different is that he argues that we live in a market society instead of a market economy and that this market society is corrosive to our moral lives because not everything should (and can) be commodified. Instead of opposing free markets from the standpoint of fairness, or equality for its own sake, which he admits is still worthwhile, he opposes the crowding out of non-market norms.
More than just a critique of market society, Sandel's argument raises questions about the exalted status of economics as a discipline that is neutral among competing conceptions of what is good. He notes that Adam Smith, for example, was not just an economist, but also a philosopher who understood economics, the distribution of scarce resources, to be a subfield of philosophy. This is not to say that philosophy is more important that economics but that economics should teach itself not as a way of thinking about everything and instead only as a way of thinking about the distribution of goods. I myself am so interested in this book because it is as much a critique of markets from a novel standpoint as it is an extension of the conflict between my two favorite disciplines of academia.
Throughout the book, Sandel explores various contentious topics, such as higher education, criminal justice, the value of friendship, the environment, and civic responsibility. In each case, Sandel explains the usual arguments that are given, namely objections from fairness, and then offers what he sees as the stronger arguments against certain policies, such as auctioning admissions to selective colleges, paying drug addicts to sterilize themselves, paying for prison-cell upgrades, paying to damage the environment, and selling citizenship.
Any person who objects to any of those policies from the grounds of fairness would likely permit them if, say wealth were distributed according to their favorite wealth distribution pattern. If I thought the problem with paying for admission to selective universities was wrong because it was unfair to the less economically advantaged, then what objection could I have if wealth were redistributed according to my favorite economic distribution pattern (call it socialism)? Sandel, in presenting this example, elucidates a schism between those who object to certain practices in principle and those who object because they are happen to be unfair.
I for one, do not think that selling admissions to selective universities is acceptable. But I would feel just as strongly about that if there was less or no income inequality. How is that, you ask? My objection (and Sandel's) is not that it is unfair to those who cannot afford it. First of all, looking at college admissions through the lens of fairness treats college degrees as merely another good to be distributed. It completely commodifies and then ignores the honorific aspect of admission. If someone could buy admission to a better college, it would corrupt the value of admissions to institutions of higher education. Sandel thus induces that introducing a market sometimes destroys non-market norms worth caring about.
The long-standing debate about prostitution illustrates the difference. Some people oppose prostitution on the grounds that it is rarely, if ever, truly voluntary. They argue that those who sell their bodies for sex are typically coerced, whether by poverty, drug addiction, or the threat of violence. This is a version of the fairness objection. But others object to prostitution on the grounds that it is degrading to women, whether or not they are forced into it. According to this argument, prostitution is a form of corruption that demeans women and promotes bad attitudes toward sex. The degradation objection doesn't depend on tainted consent; it would condemn prostitution even in a society without poverty, even in cases of upscale prostitutes who liked the work and freely chose it (Sandel, 112).
So what does this have to do with economics? Markets in sex corrupt something worth caring about. Markets, supply, demand, poverty, and fairness are not the be-all and end-all when we make policy decisions. As someone who thoroughly enjoys economics and philosophy, this book is rather sobering. Sandel does not dislike economics in itself, nor does he oppose capitalism. He and I oppose economics only when it presents itself as a complete theory of human motivation and as the sole language of policy.
So how do you know where markets should and should not be? Sandel says that the answers for what money literally can not buy and what money should not buy are not so disparate. Economic transactions would completely change the meaning of some goods, such as prizes and awards, which do not have monetary value (you can not buy the Stanley Cup or a Nobel Prize; they are honors). Of course economic transactions do not effect the meaning of most goods, such as coal and pineapples. But finally, the transactions that taint the meaning of goods, such as human body parts and college admissions, where the good itself survives the transaction but means something different after being sold, that is where you will find the moral limit of markets.