Economists are really good at figuring out the consequences of various policies, like selling pollution permits. By placing a price on pollution, you also create an incentive to reduce it. If the policy goal is less pollution, this is one of the best ways to reach it.
This kind of analysis leads naturally to the moral ethic of consequentialism, where a policy is judged "good" if its consequences are good, i.e., the ends justify the means.
So why does this rub so many people the wrong way? Perhaps the biggest objection to consequentialism is that by using markets to allocate goods and services, we turn personal relationships based on love or affection into arms-length commercial relationships based on the pursuit of profit. Philosophers call this "commodification."
This can make a difference if, for example, the "means" of trading pollution permits, changes how we feel about the "ends" of reducing pollution. Specifically, by allowing people to trade pollution permits, we may reduce the stigma of pollution, and make it more acceptable.
So, if some of you get queasy during economic class, you are not alone:
The problem with this critique, of course, is that we need something to replace economic relationships. And, as the author points out,
This reminds me of something that Winston Churchill would have said, "markets are the worst way to allocate goods and services, except for every other method that has been tried."
HT: Daniel C.
This kind of analysis leads naturally to the moral ethic of consequentialism, where a policy is judged "good" if its consequences are good, i.e., the ends justify the means.
So why does this rub so many people the wrong way? Perhaps the biggest objection to consequentialism is that by using markets to allocate goods and services, we turn personal relationships based on love or affection into arms-length commercial relationships based on the pursuit of profit. Philosophers call this "commodification."
This can make a difference if, for example, the "means" of trading pollution permits, changes how we feel about the "ends" of reducing pollution. Specifically, by allowing people to trade pollution permits, we may reduce the stigma of pollution, and make it more acceptable.
So, if some of you get queasy during economic class, you are not alone:
What Money Can’t Buy – which must surely be one of the most important exercises in public philosophy in many years – examines a wide variety of cases in which goods that in the past were believed to be outside the market have been turned into commodities. Surrogate motherhood, paying others to queue for you to attend a Supreme Court hearing, buying the right to immigrate into a country or shoot endangered wildlife, purchasing the insurance policies of ailing and elderly people to collect death benefits and charging fees for a better class of prison cell are just a few of the examples that Sandel deals with.
The problem with this critique, of course, is that we need something to replace economic relationships. And, as the author points out,
...in a highly pluralistic society such as ours, there is not much consensus on the content of the good life. As a result, there is little prospect of agreement on the moral limits of the market. Sandel points out: “We disagree about the norms appropriate to many of the domains that markets have invaded.”
This reminds me of something that Winston Churchill would have said, "markets are the worst way to allocate goods and services, except for every other method that has been tried."
HT: Daniel C.
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ReplyDeleteCommodification in its purest sense should make us queasy, in my opinion. However, I can't help but feel a bit queasy when I think of how this would be measured or policed as I'm certain it would be by the over-reaching arm of our federal government.
ReplyDeletePrescribing any single morality is obviously difficult. But can't even consequentialists disagree over how to evaluate the same consequences? Different actuaries will estimate different values for a single person's life. Certainly money isn't everything, or more rich people would be happier and some of the happiest people on earth wouldn't be the same people who have taken vows of poverty. Maybe we should all be consequentialists, but just because it's hard to figure out what consequences to measure, doesn't mean we shouldn't try to identify and quantify them.
ReplyDeleteI believe that consequentialism can be a good thing in society but that problem is we all have a different opinion on what is deemed "good". A policy maybe "good" for one group of people but could be determental to another group. It is in the eye of the beholder. As far as commodification, we have a free market in the US and if there is money to made off an opportunity, someone will do it. I don't think there is anything wrong with commodification if you feel what you are doing is morally right.
ReplyDeleteAs I was reading this post, the first example that popped in my head was that of the Asian Carp that are invading the Mississippi River Watershed. To make a long story short, this invasive species is out-competing native species and causing populations of desirable fish to drop. The Asian Carp is now knocking on the door of the Great Lakes, and it could devastate that ecosystem. A few years ago, an entrepreneur wanted federal grant money to open up a processing plant specifically for these fish. His plan was to solve the carp problem by turning them into dog food and/or freeze drying them and sending them to China, where the meat is considered a delicacy. In the end he was denied the grant money because the government was worried that if an industry was created for the fish then the fisherman would want the fish to thrive and not reduce the population back to manageable levels. In short, the government feared the commodification of the invasive Asian Carp.
ReplyDeleteThis is a super interesting example! Seems like this guy has an idea strong enough to not need the government, too.
DeleteUnfortunately, the government's logic doesn't extend to the dozens of species of fish for which there is a market today. I don't see a lot of fishermen replenishing tuna populations in the wild, only in farms where they can be sure to gain a return on their investment.
There are many goods/services that I personally consider morally and ethically wrong. However, my neighbor may have no problem with those same goods/services, and may, in fact, have a bigger problem with those who share my opinion trying to stifle or discontinue the availability of those goods/services. Who is in charge of "the official moral code"? I don't know the answer to that, but I do know that if there were no demand for these good/services, there would be no need to continue offering them.
ReplyDeleteThe carp story is an example of what is known as the "Cobra effect," that by putting a bounty on cobras, the Indian Govt actually created an incentive to raise, and then kill them to collect the bounty.
ReplyDeleteI've got a similar example of unintended consequences. I am a big hockey fan and love going to Nashville Predators games. I try to make this hobby as cash-neutral as I can by flipping tickets to games. When the Preds went on their Stanley Cup Final run a couple of years ago, the team made all playoff tickets non-transferable and removed season ticket holders' ability to re-list them on Ticketmaster (had they not, the Preds could have captured a slice of the resale market via commission fees). At that time, the "dark market" (in this case, Stubhub) only allowed their highest-rated sellers to list screenshots of the mobile QR codes. Unprecedented demand and bottlenecked supply led to tickets selling at twenty (20!) times face value for the biggest games. The biggest brokers were able to scour fan websites and buy up extra tickets from fans (by paying for QR codes) for far, far cheaper than market value because they were the only ones permitted to sell on Stubhub. The Preds didn't want their local fans selling tickets to fans of the other team and making a few bucks (which would have just been applied to the next year's ticket costs); what happened was those same opposing fans got the tickets anyway and made out-of-town power-brokers rich.
DeleteIn addition to the moral quandary of defining our collective interests and effectively imposing disincentives to protect society at large is the challenge of making the policies sufficiently far reaching so as to avoid creating loopholes. If we don't all play by the same rules the very regulations and policies intended to benefit everyone can penalize the participants and reward those that find a workaround.
ReplyDeletehttps://www.sciencedirect.com/science/article/pii/S0140988319300222
otherwise known as the law of unintended consequences
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