Limits of markets - I

Michael Sandel is a professor of philosophy at Harvard University who has the status of a rock star. He has put his Harvard lectures online for free viewing. His most famous book is What Money Can't Buy: The Moral Limits of Markets where he reflects on market norms replacing social norms. He worries about a market economy inexorably turning into a market society. He writes:

 The difference is this: A market economy is a tool—a valuable and effective 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. 

He says that "market triumphalism" of the past few decades has resulted in markets becoming detached from morals. Postulating that greed led to excessive risk taking is only a partial diagnosis.The most profound change is the expansion of markets and market values into areas of life where they don't belong, eg. health, education, family life, nature, civic duties, etc. These are moral and political issues not just economic ones. He writes:

Consider the proliferation of for-profit schools, hospitals, and prisons, and the outsourcing of war to private military contractors. (In Iraq and Afghanistan, private contractors have actually outnumbered U.S. military troops.)

Consider the eclipse of public police forces by private security firms—especially in the U.S. and Britain, where the number of private guards is more than twice the number of public police officers.

Or consider the pharmaceutical companies’ aggressive marketing of prescription drugs to consumers in rich countries. (If you’ve ever seen the television commercials on the evening news in the United States, you could be forgiven for thinking that the greatest health crisis in the world is not malaria or river blindness or sleeping sickness but a rampant epidemic of erectile dysfunction.)

Consider too the reach of commercial advertising into public schools, the sale of “naming rights” to parks and civic spaces; the marketing of “designer” eggs and sperm for assisted reproduction; the outsourcing of pregnancy to surrogate mothers in the developing world; the buying and selling, by companies and countries, of the right to pollute; a system of campaign finance in the U.S. that comes close to permitting the buying and selling of elections.

These uses of markets to allocate health, education, public safety, national security, criminal justice, environmental protection, recreation, procreation, and other social goods were for the most part unheard-of 30 years ago. Today, we take them largely for granted. 

Why worry that we are moving toward a society in which everything is up for sale?

PS: Micael Sandel on Fora TV.

Some TED talks

I had bookmarked some interesting TED talks a while ago but I did not find any excuse to link to them in earlier posts so I decided to put them all together here.

1. William Noel: Revealing the lost codex of Archimedes
2. Neil MacGregor: 2600 years of history in one object
3. Rajesh Rao: A Rosetta Stone for the Indus script
4. VS Ramachandran: 3 clues to understanding your brain
5. Dan Dennett: Cute, sexy, sweet, funny
6. Bandi Mbubi: Demand a fair trade cell phone
7. Christien Meindertsma: How pig parts make the world turn
8. Molly Crockett: Beware neuro-bunk
9. Ed Gavagan: A story about knots and surgeons

Money and happiness

It is quite well established that money does not buy happiness. (In this post where many people give their views on how to attain happiness, there is hardly any mention of wealth.) The marginal utility of money quickly diminishes once you are above the poverty level but the hedonic treadmill ensures that you keep wanting more. But you can always find someone richer and feel  miserable. I saw some quotes in How the Mind Works which show comparison with another person influencing happiness:

But O! how bitter a thing it is to look into  happiness through another man's eyes! - William Shakespeare, As You Like It 

Happiness, n. An agreeable sensation arising from contemplating the misery of others. - Ambrose Bierce

It is not enough to succeed. Others must fail. Gore Vidal

When does a hunchback rejoice? When he sees one with a larger hump. - Yiddish saying

From the book:

Research on the psychology of happiness has borne out the curmudgeons. Kahneman and Twersky give an everyday example. You open your paycheck and are delighted to find you have been given a five percent raise - until you learn that your co-workers have been given a ten percent raise.

[SNIP]

People in different classes and countries are often content with their lot until they compare themselves to the more affluent. The amount of violence in a society is more closely related to its inequality than to its poverty. In the second half of the twentieth century, the discontent of the Third World, and later the Second, have been attributed  to their glimpses through the mass media of the First.

[SNIP]

Within an industrialised country, money buys only a little happiness: the correlation between wealth and satisfaction is positive but small. Lottery winners, after their  jolt of happiness has subsided, return to their former emotional state. On the brighter side, so do people who have suffered terrible loses, such as paraplegics and survivors of the holocaust .

These findings do not necessarily contradict the singer Sofie Tucker when she said, 'I have been poor and I have been rich. Rich is better. 'In India and  Bangladesh, wealth predicts happiness much better than it does in the West. Among twenty-four Western European and American nations, the higher the gross national product per capita, the happier the citizens (though there are many explanations). Myers and Diener point out that wealth is like health: not having it makes you miserable, but having it does not guarantee happiness. 

In One Hundred Years of Solitude, there is a description of a very old Ursula:

...in the impenetrable solitude of decrepitude she had such clairvoyance as she examined the most insignificant happenings in the family that for the first time she saw clearly the truths that her busy life in former times had prevented her from seeing.

Similarly, in in my "solitude of decrepitude", I noticed something: The general rule that we value less that which we have in abundance seems to broken in the case of money. Many very rich people seem to be freaked out about money and many super rich seem to use wealth as a means of 'keeping score'. These folks have all the money in the world but are not free from worries. (Moving away from individuals, corporations go through complicated loops to increase their bottom line.) I am reminded of  Tolstoy's short story, How Much Land Does a Man Need?

 In my house, compared to everybody else, I am the least concerned about money even though I have nothing in my name (for the simple reason that I cannot sign). Would this have been the case if I had not suffered a  stroke and had a few crores in my bank account? It is highly unlikely. What Alain de Button calls 'status anxiety' in this talk would have ensured that there will be no escape from the hedonic treadmill. I have noticed quite a few people change slowly for the worse, like the picture of Dorian Grey, as they became richer and status anxiety stated to take its toll.

'Money, like vodka, can play queer tricks with a man', said Chekhov in his short story, Gooseberries. I heard a news item that the application for gun licences in some city in India had shown a quantum jump (why does quantum jump mean 'big jump' when a quantum is an infinitesimal quantity?) because the nouvoue riche regard owning a gun as a status symbol!

PS: Here is an interesting talk by Daniel Pink about money and productivity.

The genesis of superstitions

Mistakes Were Made (But Not by Me) mentions a curious tradition among the Dinka and Nuer tribes of the Sudan - they extract the front teeth of their children.This gives them a sunken chin, collapsed lower lip and speech impediments. The practise started at a time when lockjaw (which causes the jaws to clench together) was widespread. Pulling out the front teeth meant that the children could drink liquids through the gap. The lockjaw epidemic is long gone but the practise continues. Why? In 'Mistakes Were Made (But Not by Me)' the authors write:

During the epidemic, the villagers would have begun extracting the front teeth of all their children, so that if any later contracted tetanus ,the adults would  be able to feed them. But this is a painful thing to do to children, especially since only some would become affected. To further justify their actions, to themselves and their children, the villagers would need to bolster the decision by adding benefits to the procedure after the fact. For example, they might convince themselves that pulling teeth  has aesthetic value - say that sunken-chin look is really quite attractive - and they might even turn the surgical ordeal into a rite of passage into adulthood. And indeed that is just what happened. "The toothless look is beautiful," the villagers say. "People who have all their teeth are ugly. They look like cannibals who would eat a person. A full set of teeth makes a man look like a donkey." The toothless look has other aesthetic advantages: "We like the hissing sound it creates when we speak." And adults reassure frightened children by saying, "The ritual is a sign of maturity." The original medical justification for the practice is long gone. The psychological self-justifications remain.

Perhaps many superstitions began in a similar manner. There may initially have been good reasons to start the practice. These reasons have been long forgotten but the justifications remain.