Crowding Out Virtues
Michael J. 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.
In April 2012 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 in public, 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?
It is 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 jeopardized by the lure of monetary compensation. Sandel believes that, at the very least, these pre-market values should be an intrinsic part of any functioning democracy, regardless of how wealthy a society becomes.
You write in your book that mainstream 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. If you sell me a flat-screen television, or give me one as a gift, it will work just as well, either way. The good will not be affected. But the same may not be true in non-material spheres of life. Often, important social practices are defined by certain social attitudes and norms that markets can displace or crowd out.
Could you give an example of this?
Well, there is a debate going on now where some economists have proposed motivating young students to work harder by offering cash incentives to get high test scores. In one case they offer eight-year-olds two dollars for every book that they read. Now the goal is a worthy goal: to attain higher academic achievement. And yet there is something worrying about the cash offer. Maybe the lesson being taught is that studying and reading books are chores done for pay. That can cultivate a purely instrumental attitude towards reading and learning and crowd out the higher good—namely the love of learning and reading for its own sake. This displays how a market mechanism does not leave the good unchanged, and it may transform the attitudes that we want to cultivate and encourage.
Speaking about the word incentive in economics, you say it has become so pervasive that it has come to define the discipline. Can you talk about why this word has become so prominent in economics since the end of the twentieth century?
Today the language of economics is filled with talk of incentives. Even today we have what I find an ungainly awkward new word: incentivize. The language of incentives doesn’t feature in economics before the twentieth century. Adam Smith never used the word. But today we take it for granted that economics is sometimes defined as the science of incentives. This represents a radical departure from economics as it was traditionally understood: issues like trade inflation, interest rates, economic growth, that kind of thing.
But in recent decades, economists have made their discipline more abstract. They have tried to apply it to the whole of life. The language of incentives enables this kind of abstraction. It’s one thing to be able to talk about the price of stocks, or the price of goods in shops, but economics now wants to explain the whole of life—and most of life doesn’t come with an explicit price. So economists need a more abstract language to capture this economic way of thinking about human behavior generally. This has led to the language of incentives: because an incentive can be any kind of motivation. One can think of an incentive to study hard, an incentive to stay married, to abide by the law. In a way the language of incentives represents the abstraction of economics in its attempt to explain everything.
The word incentivize was almost unknown thirty years ago. The language of incentivizing is not just used by economists, but by politicians: Cameron and Obama use incentivize frequently, where as if you search for the language used by their predecessors, you find it used almost not at all. So this is a sign of the times, and an indicator into the way in which “marketizing” logic has deepened its hold, not only as practiced by professional economists, but in the culture generally.
You say that the notion that economics is a value-free science—independent of moral and political philosophy—is questionable. Can you talk about how markets reach into noneconomic spheres of life, the more entangled they become with moral questions?
This attempt to cast economics as a value-neutral science really only came about in the twentieth century. I think it was always questionable. But when economics attempts to explain everything—from family to civic life—it’s even less plausible to think that it could be value-neutral.
Let me mention one example. There is this well-known study about an Israeli daycare where parents were coming late to pick up their children. With the help of some economists, the daycare established a fine for late arrivals. The result was that more parents arrived late, not fewer. Now from the standpoint of standard price theory, this is an anomaly. Normally if you raise the price of something, you get less of that behavior, not more of it. So what happened?
Introducing a market mechanism—in this case a cash disincentive for late arrivals—led to more late arrivals because it changed the attitudes and norms. Before, when parents arrived late, they felt guilty that they were imposing on the teachers who had to stay late. But once money arrives in the equation, it puts a price on the late arrival, a price many parents were willing to pay. It was like paying a fee for a service. So this dissolved the guilt.
What is interesting is that when they realized what had happened, the daycare removed the fine. But the pattern of late arrivals continued. There is a sobering lesson here: once non-market values are eroded by market mechanisms, it’s not so easy to restore them.
But has there actually been a great loss in this situation?
Maybe it’s not a great loss in the case of a childcare center. But what the example shows is that if markets and market norms can drive out moral attitudes from various social practices, we need to ask ourselves: how valuable are those social norms and practices, and do we want to protect them? And that is not just a matter of economic efficiency. It also requires us to reflect on the moral and ethical norms that might be lost. So here is a small example of how a seemingly economic question—should we use a market mechanism to reduce the incidence of late arrivals?—then becomes entangled with ethical questions—how valuable are social norms like consideration for workers, and how likely are they to be disturbed, displaced, or corrupted?
Once market reasoning travels abroad, so to speak, it has to engage with these ethical questions. That is why economics needs to be reconnected with moral and political philosophy. We need to go back in the way we think about economics to the way Adam Smith conceived this subject. He understood economics—as did all the classical economists—as a branch of moral and political philosophy, not a separate, value-neutral science. And I think there is a lot of wisdom in that.
Has advertising money in U.S. schools—which has jumped from $100 million in 1983 to $16.8 billion in 2005—essentially replaced public funds for schools? And does this mean U.S. public education is becoming corporatized?
There is a danger that we are moving in that direction.
The most troubling aspect of this is that as schools become more reliant on commercial advertising and corporate sponsorship, and as commercialism pervades classrooms, there is the risk that schooling becomes basic training for a consumer society, rather than a civic education, equipping students to become citizens.
This is yet another example of how commercialism and market values pervert and crowd out the values that should be taught in schools. Society as a whole is pervaded by commercialism, we know that. But the schools should be a place where students are taught to reflect critically in the consumer society they are a part of. But if schools and classrooms are drenched in commercialism, then it is harder to create the space for a critical reflection by the students on the consumer society. It’s harder to inculcate the civic virtues that schools should cultivate. It goes back to this identity as consumers crowding out our identity as persons and as citizens. And we can see the risk of this happening in schools, if commercialization and advertising come to dominate the schoolyard and the classroom.
JP O’Malley is an Irish writer living in London.
Posted: August 4, 2013 in Interviews.
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The End of America as We Know It?
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Volume 47, Number 1 (Winter 2010)