What money can’t buy by Michael J Sandel

What money can’t buy by Michael J Sandel
The moral limits of markets

[More on ethical discussion and narrates markets where moral seldom exists]

Economists often assume that market are inert, that they don’t affect the goods they exchange. But that is untrue. Markets leave their mark. Sometimes, market values crowd out non market values worth caring about. When we decide certain goods may be bought and sold, we decide, at least implicitly that it is appropriate to treat them as commodities as instruments of profit and use. But not all goods are properly valued in this way. The most obvious example is human beings (Slavery, child trafficking).

As a result, without quite realizing it, without ever deciding to do so, we drifted from having market economy to being a market society. The difference is: A market economy is a tool for organizing productive activity and a market society is a way of life in which market values seep into every aspect of human endeavor. It’s the place where social relations are made over in the image of the market.

Now, we have short-cuts of every queue by paying more for the privileges. First class passengers do have fast track option, amusement parks, Empire state buildings et al, people can shorten queue time by paying surcharges.

If you ride the Paris Metro without paying $2 fare, you can be fined up to $60. Recently a group of habitual fare dodgers came up with a clever way of converting fine into fee and a modest one at that. They informed an insurance fund that will pay their fine, if they get caught. Each member pay in about $8.50 per month a month to the fund, far less than the $74 it costs to buy a legitimate monthly pass.

In the 1990, South African government began to consider using market incentives to protect endangered species. If private ranchers were allowed to sell hunters the right to shoot and kill a limited numbers of black rhinos, the ranchers would have an incentive to breed them, care for them and fend off poachers. The first legal hunt in decades commanded a handsome $150,000 paid by an American hunter in the financial industry. Subsequent customers included Russian petroleum billionaire who paid to kill three black rhinos. Landowners in S. Africa now have a monetary incentive to devote large ranchers to wildlife, the black rhino population has begun to rebound. (Black Rhinos are notoriously dangerous  and difficult animals to kill and the chance to hunt one is highly prized among trophy hunters).

Today, rich trophy hunters from around the world make their way to Artic for the chance to shoot a walrus. They pay $6500 for the privilege. So why shoot walrus? Apparently the goal of killing one specimen of every creature on lists provided by hunting clubs - the African Big Five (leopard, lion, elephant, rhino, and Cap buffalo) or the Arctic Grand-Slam (caribou, musk, ox, polar bear, and walrus).

As per Paul Samuelson, he identified economics with its traditional subject matter:”the world of prices, wages, interest rates, stocks and bonds and credit, taxes and expenditure’. The task of economics was concrete and circumscribed: to explain depression, unemployment and inflation can be avoided, to the study the principles ‘that tell us how productivity can be kept high” and “how people’s standards of living can be improved”.

There are certain things money cannot buy - friendship, Sport’s MVP titles, Olympics medals, Nobel prizes, etc.

(theperfecttoast.com is one of the leading websites offering ghostwritten wedding speeches).

The viatical business - life insurance settlement - is another example there is a conflict of interest. Insurance company wants the person to live long & pay monthly fees as long as the insured person lives; however the one (person or bank or hedge fund) who bought viatical insurance wants to have the insured person to die fast. If the insurance industry has the right to lobby for its interest in prolonging life (through mandatory seat belt laws of antismoking policies), should n’t the viatical industry have the right to lobby for its interest in hastening death (through reduced federal funding for AIDS or cancer research?).

A closer analogy to viatical is death pools, a macabre gambling game that became popular on the internet  in the 1990s about the same time the viatical industry took off. Death pools are the cyberspace equivalent of traditional office pools on who will in the Super-Bowl, except that instead of picking the winner of a football game, players compete to predict which celebrities will die in a given year.There are many such sites and one of the most popular is stiffs.com which help its first fame in 1993 and went online in 1996. For a $15 entry fee, contestants submit a list of celebrities they think are likely to die by year’s end. Whoever makes the most correct calls wins the jackpot of $3,000.

By the mid-2000s, the secondary market in life insurance had become big business. Hedge funds and financial institutions were spending billions buying the life insurance polices of wealthy seniors. As the demand for such policies increased, some brokers began paying elderly people who held no insurance to take out large polices on their lives and then flip the policies to speculators for resale. These policies were called speculator-initiated or spin-life policies. In Minnesota, an 84 old man bought $120 million worth of life insurance from seven different companies and then sold the policies to speculators at a handsome profit. The insurance companies cried foul, complaining that the purely speculative use of life insurance was at odds with its fundamental purpose of protecting families from financial ruin, and that spin-life policies would drive up the cost of life insurance for legitimate customers.

One unhappy spin-life client was TV talk show Larry king who had bought and immediately sold two polices on his life with a total face value of $15 million. King complained that he could not find out who now held a financial interest in his death. By 2009, most states had enacted laws banning spin-life or stranger-originated-life-insurance (STOLI) as it came to be called,. But they permitted brokers to continue trading in life insurance policies from ill or elderly people who had bought them on their own, unprompted by speculators.

Sometimes we decide to live with a morally corrosive market practice for the sake of the social good it provides.