What Money Can’t Buy?

Scandals everywhere. All about money (or sex, as in Penn State; or was that really about money too?). Is money the root of all evil?

 In truth it was one of our greatest inventions. Barter works fine if each party has something the other wants. Otherwise, it’s far handier if you can sell your stuff for cash you can use to buy anything. This enabled the division of labor, with people specializing in professions – one of civilization’s killer apps.

I’ve written before about greed. It may seem puzzling that a billionaire wants even more – how many mansions and yachts can one use? But that’s not the point. It’s the playing of the game; money is the scorecard. And wealth confers power and status, which humans are biologically programmed by evolution to crave – especially males, to attract more mating opportunities. (Aristotle Onassis said that if women did not exist, all the money in the world would be meaningless.)

The recent supposed “crisis” of capitalism has intensified concern with issues of money –inequality and greed. The cliché is that money can’t buy happiness. Tell that to the world’s billion or so still subsisting (or not) on less than a dollar a day. In fact, money buys a lot of things that make life more pleasant. And longer.

But, beyond a certain point, does it confer greater happiness? Some studies say no. This partly reflects what Barry Schwartz, in The Paradox of Choice, called the “Adaptation Effect.” You adapt psychologically to whatever socio-economic niche you happen to occupy, which you now expect to occupy; and anything merely expected gives no special satisfaction. Win the lottery and you’ll soon adapt to that higher niche. You may not feel happier; yet your quality of life has improved in a thousand ways. Does that not count for anything? Rather, for the world as a whole, surely it’s good if more people can afford better living.

True, pursuit of money for its own sake, rather than for what it buys, may actually degrade quality of life by detracting from pursuit of other desiderata (friendship, love, wisdom, etc.). Yet chasing wealth, for whatever reasons, is the chief motivating factor for all the efforts ever made to improve our lives. Until every human has such a good existence that no further gain is feasible, we should not denigrate the moneygrubbing that fuels such improvement.

In How Much is Enough? Money and the Good Life, Robert and Edward Skidelsky invoke a 1930 Keynes essay foreseeing increased future productivity so people need work only 15 hours a week to maintain their standard of living. We’ve gotten the higher productivity, but don’t work less. The Skidelskys wonder why people don’t claim all that added leisure time. Well, maybe they’re not satisfied to “maintain” a 1930 living standard! We do value leisure, but are motivated to work to afford better leisure activities. Besides, most people’s sense of identity is in their work, not their leisure. They don’t want to be like the useless, frivolous Eloi in H.G. Wells’s The Time Machine.

Then comes philosopher Michael Sandel’s book, What Money Can’t Buy: The Moral Limits of Markets.* (It ought to be What Money Shouldn’t Buy.) Sandel decries a world where it seems everything is for sale; he doesn’t want poor people selling kidneys to rich ones, for example. Many would indeed see an “ick” factor here.

 But that ignores the fundamental logic, and virtue, of all free market transactions: people buy and sell to each other only when it makes both better off. You can argue that the impoverished kidney seller is not really a free agent in the transaction because his poverty leaves him little choice. Perhaps so. But this is condescending elitism of the worst sort.

Nobody is ever totally free; everything we do or choose is constrained by a myriad of factors – economic, social, cultural, psychological, physical. Poverty is just one such constraint. Still we try to do what improves our circumstances. Thus the kidney peddler may be constrained by dire poverty, but given that reality, he judges that selling the kidney will improve his situation. He needs the money more than the kidney. Where does philosopher Sandel get off telling him he shouldn’t be allowed to make that choice for himself? And what about the other guy who may die if he can’t buy the kidney? Do Sandel’s moral scruples leave either of them better off? No, they do not.

In fairness, Sandel effectively argues that allowing such sales is bad for society; and that’s a legitimate concern. Certainly society may limit freedoms that harm third parties. But are kidney sales anybody’s business but the buyer and seller? Well, you might argue that a society permitting this is in some sense a worse society for everyone. That selling kidneys for money somehow uglifies society, or somehow degrades human life, etc.; again, the gut’s “ick” response. But these are all subjective judgments with no basis other than feeling. Not good enough.

To feel there’s something inherently grubby about selling anything for money is an irrational prejudice. The existence and use of money is a good thing, not bad. Ability to buy and sell things makes people more free. That’s why it’s called a free market. It means having more opportunities to engage in exchanges that make people better off – and kidney sales are in fact a perfect example. Anything that hinders such transactions makes people worse off. If you disallow kidney sales, the seller can’t ameliorate his poverty, and the other fellow will die (the ultimate in being worse off).

Sandel has forgotten what may be the first principle of moral philosophy: whether something is good or bad depends on how it affects the well-being of creatures capable of feeling. The parties to the kidney sale strike a deal because it improves well-being for both. It may put Sandel’s sensitive moral nose out of joint; but I don’t see how his personal feelings come into the matter at all.

*Confession: I have only read reviews, but I did read Sandel’s book Justice making similar arguments.

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7 Responses to “What Money Can’t Buy?”

  1. Lee Says:

    I think we do need to protect people at some basic level.

    [FSR comment: protect them from what? Their own decisions? Sorry, that’s the quintessential liberal mindset, and it is paternalism that I don’t subscribe to.]

    Or are you arguing that we would be better off with indentured servitude?

    [FSR: No. The economic circumstances that caused indentured servitude to make sense in some ways are extinct, and we as a society have determined to outlaw the practice, just as we outlawed slavery. How many times must I repeat on this blog that free market economics does *** N O T *** mean people (or businesses) should be free from all legal restraint against conduct that unjustly harms people?]

    Or are you arguing that an emergency room can charge any outrageous price, to save the life of a dying person who had the temerity to get into a car accident without first securing a contract with every hospital he might have to transact with?

    Kidney sales by the desperate are more than just ick, they are exploitation.

    [FSR: Ask the seller.]

  2. Lee Says:

    For what it is worth, in tomorrow’s column The New York Times Ethicist argues that it is unethical to buy oneself a better place in a queue.

    [FSR comment: a lot of things would be unethical to purchase. Such as a contract to murder your wife. I don’t see how that undermines anything I wrote.]

  3. Lee Says:

    Capitalism may be better than any other economic system, but it is not perfect. As a society we create socialized medicine precisely because capitalism gives the wrong answer when it comes to a transaction between a greedy doctor and a desperately ill patient.

    [FSR comment: “Not perfect?” What a devastating indictment of capitalism. Surely human beings should be capable of devising a perfect economic system.
    The “greedy doctor” is not obligated to treat the “desperately ill patient” unless they can agree on a price for what the service is worth. If “desperately ill patient” does not agree or can’t afford the price — OR if some slightly less greedy doctor quotes a lower price — then “greedy doctor” gets nothing.
    Society may, out of humane feelings, decide to subsidize some standard medical care for unfortunates who cannot afford it. People who can afford to pay their way deserve no subsidy from society which, after all, is ultimately paid for by taxpayers some of whom are less well off than the people being subsidized. I am against forcing the poor to pay for the affluent.]

  4. Lee Says:

    If she is the attending doctor in an emergency room then, barring extraordinary circumstances, she *is* obligated to treat the desperately hurt accident victim and she *is* obligated to charge a reasonable price (costs plus profits) rather than *exploit* the victim whose “demand curve” might be willing to pay much more.

    Oh sure, ideally it would be impossible to exploit victims in this way because every individual will have already anticipated and secured the necessary contracts to cover every desperate situation. But then, we live in the real world.

    [FSR comment: So what, finally, is your point? That medical people shouldn’t be paid with money for their services? Since we do indeed live in the real world, few of them would provide such service for free. We can agree that armed robbery and other forms of taking undue advantage of people should be illegal. But otherwise, people should be left free to buy and sell anything.]

  5. Lee Says:

    The point is that anyone (e.g., you) who are willing to admit that some behaviors are off limits (e.g., violence or its threat) should be willing to admit that other behaviors can be off limits as well. (I would have much more trouble persuading a violent anarchist (e.g., a gang member).)

    The emergency room doctor is obligated to perform services for a reasonable price (cost plus profits) — I didn’t say for free. Just because a desperate person can be exploited into selling a kidney for much less than a non-desperate person would charge, doesn’t make it free or fair or legal.

    We abandoned anarchy for good reasons, though I am sure there were naysayers who argued that “if I have the strength why shouldn’t I use it to my advantage; how unnatural to prohibit the natural order of things,” yada yada. Similarly, for good reasons we abandoned economically exploiting the desperate, despite that such can be argued to be unnatural.

    Although “might makes right” and this kind of economic exploitation might be natural in some sense, we as a society have rightly determined that we want none of it.

    [FSR comment: Even the “strong” sign up for society and rule of law (if they have brains) because even they are better off in this situation than in a war of all against all.
    Regulating a commerce — e.g., kidneys — or any other — may be appropriate to prevent abuses. Obviously. I am not arguing for commerce without laws. How often must I repeat this? I am arguing against banning commerce.]

  6. weeklybraindump Says:

    […]  His posts at the same time spark thought and induce ire (both are appreciated).  A recent post was no exception.  Of particular interest were the following words (pertaining to the buying and […]

  7. You’re Not Wrong Walter… | weeklybraindump Says:

    […]  His posts at the same time spark thought and induce ire (both are appreciated).  A recent post was no exception.  Of particular interest were the following words (pertaining to the buying and […]

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