Yes, capitalism is working … for the Forbes 1,000 Global
Billionaires whose ranks swelled from 322 in 2000 to 1,426 recently.
Billionaires control the vast majority of the world’s wealth, while the
income of American workers stagnated.
For the rest of the world, capitalism is not working: A billion
live on less than two dollars a day. With global population exploding
to 10 billion by 2050, that inequality gap will grow, fueling
revolutions, wars, adding more billionaires and more folks surviving on
two bucks a day.
Over the years we’ve explored the reasons capitalism blindly
continues on its self-destructive path. Recently we found someone who
brilliantly explains why free-market capitalism is destined to destroy
the world, absent a historic paradigm shift: That is Harvard philosopher
Michael Sandel, author of the new best-seller, “What Money Can’t Buy:
The Moral Limits of Markets,” and his earlier classic, “Justice: What’s
the Right Thing to Do?”
For more than three decades Sandel’s been explaining how
capitalism is undermining America’s moral values and why most people are
in denial of the impact. His classes are larger than a thousand
although you can take his Harvard “Justice” course online. Sandel recently summarized his ideas about capitalism in the Atlantic. In “What Isn’t for Sale?” he writes:
“Without being fully aware of the shift, Americans have drifted
from having a market economy to becoming a market society … where
almost everything is up for sale … a way of life where market values
seep into almost every sphere of life and sometimes crowd out or corrode
important values, non-market values.”
Sandel should be required reading for all Wall Street insiders
as well as America’s 95 million Main Street investors. Here’s a
condensed version:
In one generation, market ideology consumed America’s collective spirit
“The years leading up to the financial crisis of 2008 were a
heady time of market faith and deregulation — an era of market
triumphalism,” says Sandel. “The era began in the early 1980s, when
Ronald Reagan and Margaret Thatcher proclaimed their conviction that
markets, not government, held the key to prosperity and freedom.”
And in the 1990s with the “market-friendly liberalism of Bill
Clinton and Tony Blair, who moderated but consolidated the faith that
markets are the primary means for achieving the public good.”
Today “almost everything can be bought and sold.” Today
“markets, and market values, have come to govern our lives as never
before. We did not arrive at this condition through any deliberate
choice. It is almost as if it came upon us,” says Sandel.
Over the years, “market values were coming to play a greater
and greater role in social life. Economics was becoming an imperial
domain. Today, the logic of buying and selling no longer applies to
material goods alone. It increasingly governs the whole of life.”
Examples: New free-market capitalism trapped in American brains
Yes, it’s everywhere: “Markets to allocate health, education,
public safety, national security, criminal justice, environmental
protection, recreation, procreation, and other social goods unheard-of
30 years ago. Today, we take them largely for granted.”
Examples … for-profit schools, hospitals, prisons … outsourcing
war to private contractors … police forces by private guards “almost
twice the number of public police officers” … drug “companies aggressive
marketing of prescription drugs directly to consumers, a practice …
prohibited in most other countries.”
More: Ads in “public schools … buses … corridors … cafeterias …
naming rights to parks and civic spaces … blurred boundaries, within
journalism, between news and advertising … marketing of ‘designer’ eggs
and sperm for assisted reproduction … buying and selling … the right to
pollute … campaign finance in the U.S. that comes close to permitting
the buying and selling of elections.”
Why should you worry? Capitalism breeds corruption and inequality
But the 2008 crash challenged our faith in free-market
capitalism: “The financial crisis did more than cast doubt on the
ability of markets to allocate risk efficiently. It also prompted a
widespread sense that markets have become detached from morals.”
Then comes the big question: So what? “Why worry that we are
moving toward a society in which everything is up for sale?” Two big
reasons concern Sandel:
First, inequality: “Where everything is for sale, life is
harder for those of modest means.” If wealth just bought things, yachts,
sports cars, and fancy vacations, inequalities wouldn’t matter much.
“But as money comes to buy more and more, the distribution of income and
wealth looms larger.”
Second, corruption: “Putting a price on the good things in life
can corrupt them … markets don’t only allocate goods, they express and
promote certain attitudes toward the goods being exchanged.” Also
“corrupt the meaning of citizenship. Economists often assume that
markets … do not affect the goods being exchanged. But this is untrue.
Markets leave their mark.”
Warning: Morals are new commodities auctioned to highest bidder
Sandel warns that our new dominating capitalist mind-set is
crowding out “nonmarket values worth caring about. When we decide that
certain goods may be bought and sold,” they become “commodities, as
instruments of profit and use.”
But “not all goods are properly valued in this way … Slavery
was appalling because it treated human beings as a commodity, to be
bought and sold at auction,” failing to “value human beings as persons,
worthy of dignity and respect; it sees them as instruments of gain and
objects of use.”
Nor do we permit “children to be bought and sold, no matter how
difficult the process of adoption can be.” The same with citizenship …
jury duty … voting rights … “we believe that civic duties are not
private property but public responsibilities. To outsource them is to
demean them, to value them in the wrong way.”
Many things should never be commodities.
America transforms from mere market economy to new market society
Sandel’s core message is simple: “The good things in life are
degraded if turned into commodities. So to decide where the market
belongs, and where it should be kept at a distance, we have to decide
how to value the goods in question — health, education, family life,
nature, art, civic duties, and so on. These are moral and political
questions, not merely economic ones.”
Unfortunately, we never had that debate during the 30-year rise
of “market triumphalism. As a result, without quite realizing it —
without ever deciding to do so — we drifted from having a market economy
to being a market society.”
And “the difference is this: A market economy is a tool … for
organizing productive activity. A market society is a way of life in
which market values seep into every aspect of human endeavor. It’s a
place where social relations are made over in the image of the market.”
The difference is profound.
Not only did the debate never happen. It may never. Why?
Because politicians aren’t up to debating values, may be pushing us past
the point of no return.
Today’s “political argument consists mainly of shouting matches
on cable television, partisan vitriol on talk radio and ideological
food fights on the floor of Congress,” says Sandel, so “it’s hard to
imagine a reasoned public debate about such controversial moral
questions as the right way to value procreation, children, education,
health, the environment, citizenship and other goods.”
Dysfunctional politicians pushing Americans past point of no return
Can we change? “The appeal of using markets to put a price on
public values, is that there’s no judgment on the preferences they
satisfy.” Debate is unnecessary. Markets don’t “ask whether some ways of
valuing goods are higher, or worthier, than others. If someone is
willing to pay for sex, or a kidney … the only question the economist
asks is ‘How much?’ Markets … don’t discriminate between worthy
preferences and unworthy ones.” Markets may never draw the line, but do
politicians, in secret?
What is certain: Capitalism is eliminating moral values, as
Nobel economist Milton Friedman and capitalism’s philosopher Ayn Rand
had been preaching to the generation. As Sandel puts it: “Each party to a
deal decides for him- or herself what value to place on the things
being exchanged. This nonjudgmental stance toward values lies at the
heart of market reasoning, and explains much of its appeal.”
But unfortunately, market capitalism “has exacted a heavy price … drained public discourse of moral and civic energy.”
The good professor is a great teacher, with only one glaring
flaw in his logic: he’s too idealistic, too quixotic. You don’t have to
be a fatalist to know that without a total economic collapse, market
capitalists — including 1,426 billionaires, Wall Street bankers,
hedgers, lobbyists and every other special interest getting rich off the
new market society — will never voluntarily surrender their control
over the American political system.
Rather, they will blindly continue down their self-destructive
path with an absolute conviction they are divinely guided by the
Invisible Hand of Adam Smith, and perhaps even God.
Meanwhile, we have no choice but wait patiently till the
collapse, anxiously aware that our bizarre political system will just
keep degrading America’s moral values, pricing, buying, selling, trading
morals like commodities, because in the final analysis everything has a
price and everyone has a price in our hot new exciting Market Society.
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