Review : We live at a time when money can buy just about anything. Market values are crowding out non-market values, and have come to govern our lives as never before. We drifted from having a market economy to being a market society.
Each chapter focuses on a different market – queuing, incentives, life and deaths etc. Numerous examples are given to analyse the market transactions then detailing the moral implications, allowing us to think through the moral limits of markets and ask whether there’re some things money should not buy.
Morality represents the way we would like the world to work, and economics represents how it actually works. Sandel put morality into theoretical economical modelling. A proactive read, highly recommended.
Highlights
Markets and queues – paying and waiting – are two different ways of allocating things, and each is appropriate to different activities. The ethic of the queue, “First come, first served”, has an egalitarian appeal. It bids us to ignore privilege, power and deep pockets.
The Ethic of the Queue, What Money Can’t Buy
[…] But the ethic of the queue does not govern all occasions. […] There’s no reason to assume that any single principle – queuing or paying – should determine the allocation of all goods.
[…] Of course, markets and queues are not the only ways of allocating things Some goods we distribute by merit, others by need, still others by lottery or chance.
What economics offers, they argue, is not merely a set of insights about the production and consumption of material goods but also a science of human behaviour. At the heart of this science is a simple but sweeping idea: In all domain of life, human behaviour can be explained by assuming that people decide what to do by weighing the costs and benefits of the options before them and choosing the one they believe will give them the greatest welfare, or utility. If this idea is right, then everything has a price.
The Economic Approach to Life, What Money Can’t Buy
Can all human action be understood in the image of a market? Economics, political scientists, legal scholars, and others continue to debate his question. But what is striking is how potent this image has become – not only in academia but also in everyday life. To a remarkable degree, the last few decades have witnessed the remaking of social relations in the image of market relations. One measure of this transformation is the growing use of monetary incentives to solve social problems
Health care is another area when cash incentives are in vogue. Increasingly, doctors, insurance companies, and employers are paying people to be healthy. […] Two questions can be asked about paying people for health behaviour: Does it work? and, Is it objectionable?
Health Bribes, What Money Can’t Buy
From an economic point of view, the case for paying people for good health is a simple matter of costs and benefits. The only real question is whether incentive schemes work. If money motivates people to be healthy, why object?
And yet many do object. The use of cash incentives to promote healthy behaviour generates fierce moral
controversy. One objection is about fairness, the other about bribery.
On fairness: Some argue cash incentives as a “reward for indulgence rather than a form of treatment”. Underlying this objection is the idea that “we can all control our own weight,” so it’s unfair to pay those who have filled to do so. On the flip side, some argue that financial rewards for good health (and penalties for bad health) can unfairly disadvantage people for medical conditions beyond their control.
The bribery objection is more elusive. The press commonly calls health incentives bribes. But are they? […] Whatever external ends may be served, the money encourages behaviour that promotes the health of the recipient. So how is it a bribe? Or, to ask a slightly different question, why does the charge of bribery seem to fit, even though healthy behaviour is in the interest of the people being bribed? This is because bribes are manipulative. They bypass persuasion and substitute an external reason for an intrinsic one. Health bribes trick us into doing something we should be should anyhow. They induce us to do the right thing for the wrong reason.
In general, cash incentives seem to work better at getting people to show up for a specific event – a doctor’s appointment or an injection – than at changing long-term habits and behaviours.
What is the difference between a fine and a fee? It’s worth pondering the distinction. Fines register moral disapproval, whereas fees are simply prices that imply no moral judgement.
Fines versus Fees, What Money Can’t Buy
Economists don’t like gifts. Or to be more precise, they have a hard time making sense of gifting giving as a rational social practice. From the standpoint of market reasoning, it is almost always better to give cash rather than a gift.
The Case Against Gifts, What Money Can’y Buy
We value items we receive as gifts 20% less, per dollar spent, than items we buy for ourselves. If gifting is a massively wasteful and inefficient activity, why do we persist in it?
Mankiw’s explanation is that gift-giving is a mode of “signalling,” an economist’s term for using markets to overcome “information asymmetries”.
This is a strangely wooden way to think about lovers and gifts. “Signalling” love is not the same as expressing it. To speak of signalling wrongly assumes that love is a piece of private information that one party reports to the other. If this were the case, then cash would work as well – the higher the payment, the stronger the signal, and the greater (presumably) the love. But love is not only, or mainly, a matter of private information. It’s a way of being with and responding to another person. Giving, especially attentive giving, can be an expression of it. On the expressive account, a good gift not only aims to please, in the sense of satisfying the consumer preferences of the recipient, It also engages and connects with the recipient, in a way that reflects a certain intimacy. This is why thoughtfulness matters.
The reason gift-giving is not always an irrational departure from efficient utility maximising is that gifts aren’t only about utility. Some gifts are expressive of relationships that engage, challenge, and reinterpret our identities.
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