Thursday, March 3, 2016

Sandel (2013) on Markets and Morals

Michael J. Sandel, “Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy.” Journal of Economic Perspectives 27(4): 121-140, Fall 2013.

• Putting goods into the market domain can change their nature; therefore, economics cannot avoid ethics. 

• Does an increase in efficiency make a society better off? The answer depends on one’s view of what constitutes the social good. Economists tend to implicitly adopt a utilitarian approach. Selling slots in universities, or votes, or babies, might promote efficiency, but might nonetheless be morally objectionable. 

• Shouldn’t we be wary of the “voluntary trade is mutually beneficial” claim? Unequal starting points might imply coercion. Are there societal conditions that are not consistent with the provision of meaningful consent to a transaction? 

• Markets might corrupt goods or crowd out other types of incentives. People might do things voluntarily that they would be unwilling to do for payment. 

• Selling spots to attend Congressional hearings would demean the institution. It would be better to distribute tickets by an online lottery, and make the tickets non-transferable. 

• Fines indicate social disapproval; they are not equivalent to fees, and people do not like it when intentional offenders treat fines as fees. 

• The Intuits in Canada receive a quota for killing walruses – an exemption that recognizes the longstanding role of walrus hunting in the Intuit civilization. The sale by the Intuits of some of that quota to “sport” hunters corrupts the meaning of the exemption. A further issue is whether society need respect the perverse preference of hunters to shoot defenseless walruses. 

• Are love and benevolence non-renewable, depletable resources, or are they augmented with use?

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