What Money Can't Buy: The Moral Limits of Markets Michael J Sandel, Harvard University

good evening ladies and gentlemen may I welcome you to the second annual Lord Patent lecture on social renewal my name is Mark Smith and I'm director of the Newcastle Institute for social renewal I'll explain social renewal in a moment so that you're not mystified all evening what that is but first some further words of welcome this is the second annual law platen lecture on social Newell as I've said and the first was given by Lord Patton himself last May and we're delighted to welcome Lord Patton back to Newcastle University for this event and he's kindly

agreed to chair the proceedings tonight second I would like to welcome our distinguished lecturer tonight Michael Sandel I believe that Professor sandal gave one of his 2009 wreath lectures here in Newcastle at the Center for life so I'm very pleased also to welcome professor Sandow back to the region in the city after almost four years Lord Patten will introduce Michael Sandel in a moment but before handing over to our Chairman and our speaker I will take just a few moments to set this lecture within the context of social renewal Newcastle University has set out its

mission to be a world class civic university that means not just being excellent in our research and in our teaching and learning but being part of a wider community and putting our excellence to a purpose helping to address the major societal challenges of our time we ask not just what we're good at but what we're good for and to this hand the university has chosen to focus on three societal challenges aging sustainability and social renewal and has established an institute to lead our efforts on each of these now most people understand what aging is and

most people understand or think they understand what sustainability is but social renewal may be less familiar in this context we define social renewal as addressing the question can people communities and societies thrive when faced with rapid transformational change in Britain and in many other countries the impact of globalization technological change demography and the unevenness and perturbing effects of capitalist economic growth are creating challenges of great magnitude to which there are no simple or obvious responses old certainties have gone for many people the failure to provide convincing responses to these challenges has exacerbated their sense of

powerlessness which in turn threatens to undermine the political process itself it seems to me that a crucial element of any response is to deliberate and debate what we understand to be a good life and this is exactly the question which Professor sandal asks in his inspiring new book in which which addresses crucial moral questions at the heart of our society on 13th of November 1967 in this very Hall Newcastle University made the historic award of an honorary degree to dr. Martin Luther King the only UK University to honor him during his lifetime in his acceptance

speech dr. King spoke of three major challenges urgent challenges that he sought to address racism poverty and war last autumn again in this very Hall one of his forum colleagues told us that today these challenges boiled down to just one injustice helping address the profound challenges that affect people's lives across the world remains 45 years later the central task of our work here in Newcastle University now I'm very pleased that the insight series has been able to attract such a distinguished speaker as Professor Sandell and I'll pass over now to Lourdes pattern to introduce Sandow

[Applause] [Music] [Applause] Chancellor vice-chancellor professor sundial ladies and gentlemen I feel doubly privileged this evening first of all privileged that you started this series of lectures in my name as I was leaving home this morning my wife said to me is is this your Memorial Lecture not sure whether she knows something that I don't know but it is it's a great privilege and always pleasant to be back in New Castle on a balmy summer evening like this I'm also very well aware when I look at the size of this audience I think our speaker this

evening could have filled us in James Park of the distinction of Professor sandal so I'm really honored that he has come this evening and he is the sort of modest man who would recoil from most of the fulsome tributes that introductory speakers would normally give I'll be brief he's used to being called one of the world's top thinkers foreign policy magazine he was called memorably if I'd been called this I'd have put it up in lights the world's first moral philosophy rock star he is as you know professor at Harvard of philosophy where he went

after Brandeis and Balliol College Oxford where he did his doctorate he has attracted an enormous following around the world for the best Socratic dialogues since Socrates the Agora is now a great deal larger thanks to technology and I doubt there's anyone in this hall who hasn't how what some of those extraordinary lectures from Harvard which are down streamed to a grateful world including people like me who for a few moments think they understand philosophy he's written of course about rules he's written about justice and most recently a book which I think encouraged a lot of

us to think we weren't entirely ba me a book on the moral impact of market forces and the importance in life of not forgetting the difference between value and price so it's a great privilege to have him with us this evening he'll talk to us and then in his own way involving I suspect some of you in the process and then be happy at the end to take questions but thank you very much indeed for being with us this evening thank you thank you very much Chancellor vice-chancellor thanks to all of you for having me

what of what a thrill and honor it is to not only to be introduced by Lord Patton and by the way when you insisted on being brief I was kind of hoping you'd carry on as long as you wanted to but also to give this lecture in his name especially in Newcastle given its mission your mission of social renewal and of a civic purpose one of the main arguments that I make try to advance at least for discussion is how we might find our way to a new politics of the common good and I know

of no public servant anywhere who has displayed more dedication to the common good from Hong Kong to Newcastle to the BBC than Lord Paton and I want to salute him and say what an honor it is to be here in to lecture in his name one of the subject I would like to discuss with you tonight it's it's the subject of the book the new book what money can't buy it really asks a simple question well it's simple to ask not so easy to answer what should be the role of money and markets in our

societies today there are fewer and fewer things that money can't buy if you're ever sentenced to a jail term in Santa Barbara California just in case that ever happens to anyone here you you should know that if you don't like the standard accommodations and you have the money you can buy a prison cell upgrade you didn't know that for how much do you suppose what would you say anybody just shout it out a million dollars this isn't a hotel this is a jail per night it's about ninety dollars now if you want a way of

making some extra money there are also novel ways of doing this they're advertising companies advertisers want always to find novel places for their advertisements some have come up with the idea of what's called tattoo advertising they buy advertising space on people's bodies preferably visible places on their bodies [Music] the forehead is a common one there there was a woman who needed to raise money she was a single mom she needed money for the education of her son and she actioned off space on her forehead a permanent tattoo for any company that would pay ten thousand

dollars unfortunately the winning bid came from an online casino and so for the rest of her days she will have the advertisement for the online casino tattooed to her forehead but for $10,000 some when advertising executive said he thought it was a good idea not altogether novel he said it's a bit like he said it's a little bit like the old sandwich board but a bit more organic well these are small examples but throughout social life more and more of our institutions are governed by market principles we have increasingly in our societies for-profit schools for-profit

prisons for profit hospitals this tendency has affected the way we we fight our wars in Iraq and Afghanistan there were more paid military contractors on the ground than there were US military troops this isn't because we had a public debate about whether we wanted to outsource war to private companies but this is what has happened over the past three decades we've drifted almost without realizing it from having a market economy to becoming market societies the difference is that the market economy is a tool a valuable and effective tool for organizing productive activity the market society

is a place where almost everything is up for sale it's a way of life in which market values and market thinking reach into almost everything family life personal relations health education civic life and the question I'd like to put to you for discussion this evening is should we worry about this and if so why why exactly should we worry now there are some things money can't buy even if it tries friendship for example suppose I want more friends than I have and I have difficulty acquiring them in the usual way it might occur to me

to buy a few extra but the thought wouldn't last long because I would quickly realize that it wouldn't work it's an interesting question philosophically why it wouldn't work to buy a friend but most of us understand since intuitively that a bought friend is not the same as a real one somehow the money that would buy the friend dissolves the good that we seek but there are many goods that are not of this kind there are many goods in social life that money can buy but arguably shouldn't and sometimes we can learn about how to figure

out where money belongs and where it doesn't by reflecting on the cases and the kinds of things that money can't buy here's an intermediate case what about expressions of friendship if not friendship itself probably some of you have had the experience of being asked to give the best man speech at a friend's wedding as any of you had that yes you know it you know what it's like it's it's an honor in a way but it can also be quite anxiety provoking it's not easy to right an eloquent moving heartwarming speech for such an important

personal moment now there is help there are websites that you can go to if you find yourself in this predicament and they will provide you a custom-made best man speech for four how much do you suppose 500 it's pretty costly wedding speech any other guess a hundred well it's ten dollars this is a custom written wedding speech ten dollars well it's a hundred and forty nine dollars shipping and handling included you enter in some information about how you came to know the couple whether you want a heartwarming speech or a tearjerker or a funny one

and within two to three business days they deliver you the speech know in a sense a wedding speech is a good that money can buy up to a point would it be the same this is the question that intrigues me would it be the same good well it depends I suppose it depends in part on whether after you deliver it your friend finds out I mean how would you feel if at your wedding your closest friend gave a heartwarming speech so moving that it brought tears to the eyes of everyone in the room including you

and then later you found out he bought it online for 149 dollars would the meaning of it change probably it would in the clue to this is that most people who give them I suspect don't announce the just the speech I'm about to give I just bought online $449 so if some if covering up to the provenance of the speech is necessary to preserving its meaning that's a pretty good indication that even a wedding toast though nominally it can be bought is a good that somehow corrupted or degraded or diminished in its meaning and in

its value by the purchase and sale take books now books have always been commodities in a sense you can't go into the bookstore and just walk out with the book you have to pay for it so in that sense a book is a product but books had never been thoroughgoing commodities take the practice of paid product placement it's familiar in television in the movies not so much in books until recently there was some years ago a British writer named Fay Weldon has anyone ever heard of her pretty well known and she entered into a deal

with the jewelry company to write a novel that included paid product placement the jewelry company was Bulgari jewelry and the contract specified that she had to mention in exchange for a payment the name Bulgari at least a dozen times in the novel the title of the book aptly enough was the Bulgari connection now she came in for some criticism many critics complained about the clunkiness of the product Laden pros that resulted would you want to hear an example here's one quote a Bulgari necklace in the hand is worth two in the bush said Doris or

here's here's another one quote they snuggled together happily for a bit all passion spent and she met him at Bulgari that lunchtime fortunately product placement paid product placement in books hasn't really caught on but I suspect that with the advent of digital publishing and electronic readers the experience of reading will be brought in closer and closer proximity to commercial advertising last year Amazon put out two versions of its popular Kindle reader the standard version and then an almost identical version for $40 less the only difference is that on that Kindle the cheaper one you had

to be willing to put up with banner ads on the home page and on the screen saver would it be worth it maybe for some it would now what seems to be objection well there seem to be two - whirring things about putting a price tag on everything one of them has to do with equality and inequality the the more money can buy the more it matters who's rich and who's poor if the only parts of life governed by money were the ability to buy yachts or to take fancy vacations or to buy BMWs inequality

wouldn't matter all that much but if money can buy essential ingredients of the good life access to a good ed to a good education to decent medical care the ability to live in a secure neighborhood rather than a crime-ridden one political voice the ability to make one's political views heard when more and more of life depends on money inequality matters much more and so part of what's happened I think in recent decades is that as more and more of life has been governed by market relations the sting of inequality has sharpened inequality matters more when

money buys more so that's one reason to worry but even apart from questions of equality and inequality there's a further reason to worry about putting a price on everything and that is as we saw with the example of the paid best man speech sometimes marketizing a good putting it up for sale changes the kind of good it is changes its meaning may even degrade or corrupt the meaning of that good and it's a difficult thing to sort out in advance which Goods and social practices will be diminished or corrupted by market valuation in exchange and

which will survive untainted by the buying and selling and so that's really the question that I would like to put to you tonight and to do it I would like to see what you think about the following proposal it's to do with refugees now there are more refugees in need of asylum each year than there are countries willing to take them so one proposal advanced by an economist tickly minded law professor was to convene an international convention to work out a formula of assigned refugee asylum quotas for each country probably based on per capita GDP

or some such measure but in order to persuade the countries of the world to accept higher assignments higher numbers of refugees than would otherwise be the case add a provision that enables any country once it's received its assignment either to admit that number of refugees each year or to pay another country to take them instead credible refugee quotas you might call it it's similar to market oriented schemes that have been proposed for reducing greenhouse gas emissions tradable pollution permits let's just see by a show of hands what you think about the proposal for tradable refugee

permits the argument is it will enable more refugees to receive asylum than would otherwise be the case how many would be in favor how many think it would be worth the try raise your hand go ahead we'll have a discussion you can that's all it's only about a dozen people how many would be opposed large number opposed all right well we need to hear from some of you brave souls who in some cases timorously raised your hand let's first hear from those in the majority who oppose it let's hear those arguments and then we'll see

if there's someone who can argue the case in favor who will get us started by explaining why those of you who oppose it why do you oppose it what's wrong with it remember it's giving the argument is that it gives more places to refugees in need of asylum than would otherwise be the case then why oppose it all right why don't you get a microphone go ahead stand up and tell us yes because it would mean that the rich countries can say we don't want these people and send them to the countries that don't have

that privilege to do that all and that we're better that everybody should have to take an equal amount maybe it would be better that every country should have to accept its assigned refugees but suppose just except for the moment the assumption underlying the proposal which is yeah then if you do it that way the countries will agree to certain low levels but if you give the option of outsourcing the refugees countries will be willing to take much higher assignments knowing that they can either accept them or hire in other countries you put more people into

poor ikonn more refugees into poorer countries that can hardly look after themselves yet alone okay good more people all right thank you for that who else subjects it would anyone like to add to this anyone in the front of the balcony go ahead [Music] it feels intuitively like a simplistic solution to a complex problem so you you just want to say we could try harder to solve it but do you have an objection in principle suppose it would lead suppose for the sake of argument it would lead to more refugees receiving asylum would you still

oppose it has this got to be a yes or no answer this one does you can give your reasons it's impossible to say yes or no because then we start to get into bigger examples of solving the problems in the countries where the refugees are coming from okay what do you say um what we don't recognize is that the rich countries or the country is most responsible for the the number of refugees and it's them getting out of or us getting out of them the problems that we've caused it's rather like the oil companies pursuing

oil in the retreating Arctic ice thank you for that I wonder if we have any microphones down here that can reach more quickly do we have a helmet has is holding a microphone errs could go ahead yes I think for me the problem is that it it has over tons of commoditizing people and so it's not the same as slavery but it's sort of somewhere in that very uncomfortable space come up wait wait keep keep the microphone for a moment it feels like commoditizing persons and seems morally analogous to in the same neighborhood as slavery

yes but why but why is that the the refugees are not being enslaved they're not being forced to work is it because it seems as though there's a kind of price on their heads essentially yes I mean they're not being enslaved and there are economic arguments that you've put already as to why it could be a good thing it could benefit them it could benefit it could it could produce many ancillary benefits but there is still something troubling my mind emotionally troubling right about such a proposal right okay that's very good but wait keep the

microphone on it again I see what's troubling and you've helped us articulate it but what exactly if it did hypothetically result in more places for Refugees overall what exactly is troubling about it and is it troubling enough that you would forgo a scheme that might yield more places for refugees in need of asylum to be honest I I would need to think longer yeah I come to a decision yeah but it but I would certainly anticipate it would be difficult to get there okay that that's good that's a a measured moral worry that that gives

us a good place gives us something to pursue I'd like to now hear from someone who thinks it would be worth to try and let's have the person yeah in the back by the column tell us why and you've heard you've heard the objections stand up so what would you say well I feel that if you were a refugee you would really really want someone to go regardless of where that is a why that is even if it's poorer countries I feel the poorer countries are only going to take people when it's worth their while

so if we can make it worth their while to take refugees right I feel that there's gonna be a lot more people in this world with somewhere to go and somewhere to live and some might not be persecuted and tell us your name I'm Alistair Alistair MindTree Alastair do you heard the previous moral worry that it's putting a price on the heads of human beings it seems to commoditize persons and though it isn't exactly slavery it feels a little bit like slavery in that respect what do you say to that argument well I didn't know

refugee feels very ignored and completely worthless in today's society and so to have a price on their head at least makes them worth something rather than nothing at all and helps to in fact would you even go so far as to say then maybe the higher the price went and the world market the better the refugees would feel well I feel that as long as there are enough safeguards to ensure that the refugees are going to be treated properly and not ignored or persecuted in the countries they go to they're going to get a quality

of life that even rich countries feel permissible for people and so I think the focus on quality of life and their standards of living and by by extension their happiness right more important than the actual figure it gets is more important than the actual number it's the fact that we are valuing human life rather than not valuing it so we are valuing human life by putting a price on it absolutely all right who has stay there I left there let's go let's leave the microphone by Alastair and I'd like to hear from someone who disagrees

with Alastair who can reply what's your name my name is Ellen you disagree with what yeah all right then stand up Alastair you speak directly Ellen speak directly to Alastair hi tell him tell him why you think he's wrong well I think in our sort of Western society we have a big problem with creating the stigma about immigrants and stuff so if we develop this culture where so many people are coming in and putting a price on someone's head so fuels this nature people have are saying well you know people who are here natively oh

well you're here because of the goodness of my country therefore I'm better than you and I mean what are we supposed to do you know taking everyone from every poor country that has civil disruption until were full I don't really think that it's a long term good solution and if we create this you know really strong stigma of you know work that'll happen just naturally the way human nature develops it'll end up being where we can't think of legitimate ways to help you know make these countries develop into ways where people can live in them

that's great I have a question for you I have a question for you you said that there this is placing a stigma you say that putting the price on the head of the refugee even for his or her own good carries a stigma whereas Alastair said the opposite he said it shows how much that refugee is valued why do you say it's a matter of stigma the money rather than valuation because giving a financial incentive to a country is basically saying we're only taking you for the money otherwise surely you'd give them value anyway and

take them without the financial incentive so you wouldn't need the scheme okay and Alastair you say that putting a price on my head displays to the world my value it's a expressing my worth at least in a certain way what do you say to the argument that it's actually demeaning that it's it's imposing a stigma what do you say to that well I think it's a lot less demeaning than the status quo you look at all the refuge Syrian refugees in Jordan and their current living conditions and I don't think that's very human and that

that's more stigmatizing anything because it I feel it dehumanizing the way we've forced them to live because they have nowhere to go so not providing asylum to some whom we could help is more demeaning than imposing what Ellen considers a stigma by using a price yes okay I want to thank everyone who's participated in this round of the discussion really good [Applause] so the what emerges from this discussion this debate really about whether to use a market mechanism to allocate refugees is whether the use of the market mechanism demeans or diminishes or places a stigma

upon the refugees and if it does then we're then we have in evaluating that's this scheme not one question but two not only the question will it enable us to find more places but will it do so in a way that respects the dignity of the persons or demeans them now I'd like to put to you a different kind of market mechanism that that some have proposed and some schools have actually tried out to improve academic achievement many urban school systems struggle with children especially from disadvantaged backgrounds who fall short academically and who don't study

hard and so some economists have proposed as a solution to provide for the schools to provide cash incentives for getting good mark or high test scores they've tried this in New York in Chicago in Washington DC $50 for an a $35 for a B to try to motivate kids in Dallas Texas they have a scheme that offers eight-year-olds two dollars for each book they read now let's imagine that you are the head of a school with some struggling students and it's up to you to decide whether to try this experiment let's see again by a

show of hands how many think it might be worth a try see if it works and how many would object in principle would rule it out how many think it might be worth a try a few more than with the refugee quotas maybe Alasdair you're swaying some views about the use of Marcos you voted for this you try and how many would not how many object still a majority let's hear what the objection is in this case who can explain why those of you who objected why would you rule it out in principle without even

trying without even trying to determine whether it would work yes we'll pass or just stand up and speak loudly and maybe we'll hear you go ahead when you stop putting a price on children's education where do you stop they're going to come to expect monetary gain you know just base my morals on my education on the amount of money that I received right did it what's your name it's Kate Kate Kate yeah okay did anyone ever pay you to get good marks no you think it would help if they had no cuz some of my

friends got paid for the grades at GCSE there are a levels or getting into University I don't feel like I lost out you know I come from a background where money really isn't you know the center of all know everything I think money right and in the case of the friends of yours who were paid to get good grades did it work in their case and I don't know whether it was really at the forefront of their minds all the time saying oh I'd better work as hard as you know everybody else so that I

can make sure that I can get any so that I can get you know $200 or whatever all pounds in this case but I don't think it made much of a difference to them alright so Kate says she worries that the students will get in the habit of expecting to be paid for everything and that that's a bad thing what do you say I yeah I just wanted to comment that actually I was one of those people my parents promised me a car if I did so well in my own levels and whatnot and it

didn't motivate to me in the slightest and I was rubbish and I did very poorly later on in life I suddenly came to the joy of learning and and just how interesting and fulfilling I was purely through just getting there eventually on my joy of learning for its own sake exactly Ramona no I think I think there has to be much more creative ways of solving these issues than just throwing money it's like the lowest common denominator yeah hey somebody's you know it's a tenner go and do that okay now let's hear from someone who

thinks it would be worth a try at least to see if it works let's what would you say to the to the arguments go ahead you're in favor and in I don't see a principled objection at this stage I think this is very different to the previous question the objection beforehand was we were comparing the potential positive effects I guess a utilitarian outcome against a question on human dignity putting a price on a person's head give raises those kinds of issues here we're looking at I don't see there being an issue of human dignity here

what your what we're essentially saying is well if we pay children as an incentive to work hard and achieve good grades will that have a good outcome and they're issues that have been raised so far as well what could the potential negative outcome be would there be an overall negative effect will it lead to the distortion of expectations I think the point that was being raised from the balcony will you be will there be a negative social effect because the the adults were raising these children to become will have their expectations expectations distorted by that

marketizing shape so you're saying chief that in this case it's all about the effects exactly then it's not about dignity and respect on the one hand to be weighed against positive effects on the other hear the objections you've heard so far it's all about how you would formulate the policy and whether or not you could formulate whether it'll work or whether it'll cultivate bad habits and therefore won't work absolutely okay that's good what's your name Rachel Rachel Clement Rachel Clement and all right well this this is an interesting suggestion so the question is I suppose

one question that might be asked Rachel of your view is what counts what would count as this scheme working I should mention what happened in these experiments the cash for grades did not seem to improve test scores or grades but the two dollars for each the two dollars did lead those eight-year-olds to read more books it also led them to read shorter books but but the real question the real question is as Kate worries what will become of these kids later which is another way of asking the question what is the lesson being taught are

we teaching them by offering the money to read books that reading is a chore to be done for pay if that's the lesson they learn then as rachel says chances are the scheme will backfire because when people stop paying them they'll stop reading books and it won't have worked and we can tell whether it's worked or not by in principle counting up the number of books if we could do the do comprehensive survey is read by these children now and later but there is another possibility which is that the money being paid gets them to

read just for the money let's say but maybe then they acquire the joy of reading maybe they come for the money but find themselves drawn in in which case when the money stops they will have acquired the intrinsic love of learning and carry on reading now you could say and Rachel makes a powerful argument this is all about what works what will leave these kids to read more books now and extend it into the future fair enough is it only that one of the reasons we might hesitate I think to pay kids to read is

not only because we're not sure whether it will lead in the long run to more books being read maybe part of the point of Education is cultivating certain attitudes toward learning for their own sake consequentialism Rachel aside and if that's the case then we have to ask ourselves a normative question that goes beyond what any survey about number of books read could tell us what attitudes and norms and values do these does this system promote a friend of mine pays his young children one dollar for each thank you note they write if someone takes him

out to dinner gives them a gift I've received some of these thank-you notes and I can tell by reading them that they were written under a certain pressure my wife and I look askance at this practice we wonder how these kids will turn out now it could be that by writing thank-you notes for pay they developed the habit of writing thank-you notes their habit takes they eventually learn the real reason to write thank-you notes which is the expression of gratitude such that when the money stops they carry on writing them for the higher motive not

for the lower one in which case all will be will but it could also turn out the other way it could be that the lesson they are being taught is thank-you notes of the sort of thing one writes for pay and if that's what they learn when the money stops so will the thank-you notes that's the consequentialist concern of Rachel but not only that they may find it difficult ever Rachel to learn the virtue of gratitude in which case in a moral education will have been corrupted that's a question that's a moral question that's independent

of the strictly speaking consequentialist effect now we've been discussing the way in which market mechanisms and cash incentives can change or corrupt or crowd out attitudes and norms worth caring about we've used some small examples to test our intuitions but one can see this writ large in Switzerland some years ago they were trying to decide where to locate a nuclear waste site no community once won in its backyard they identified a small town in the mountains of Switzerland as likely to be the safest place but under the law the local community had to approve and

so before the decision was made a survey was done of the residents of this town in Switzerland and they were asked if Parliament chooses your town will you vote to accept the nuclear waste site despite the risk 51 percent said yes then they asked to follow up question they sweetened the deal they said now suppose the Parliament chooses your town and offers yearly financial compensation to each resident of the town up to 6000 euros a year then would you accept now how many do you suppose said yes what do you think 7080 500 but 35

lower this is like an auction here the number dropped from 51 to 25 percent and number fell in half when money was offered now from the standpoint of standard economic analysis this is a paradox normally if you pay people to do something you get a greater willingness to do that thing not less so what do you suppose happen what explains this seemingly anomalous result anyone just call it what do you think it could be that so did everyone here one possibility is that when they started offering the money that people thought gee this must be

riskier than I thought I don't want that so it could backfire for that reason but they tested they tested for that explanation and they found that the estimate of the risk by the respondents was about the same before and after the financial offer so while that's a plausible account something else must have been going on what do you suppose it was oh well I think maybe the local communities think they are contributing for the country when they they are law in the ways that you bury in their backyard well when the government are paying them

they think that their lives are tradable or if the government the government put a price on their lives right so that's probably they have a sense of contribution to their community yes yeah that's and that does seem to be thank you for that that seems to be what was happening because when they asked the people who change their minds why did you change when the money was offered many of them said we didn't want to be bribed and so before when they were asked without money to accept it the majority was willing to accept it

for the sake of the common good out of a sense of civic responsibility but once money entered the picture the nature of the question and of the relationship changed what had been a civic question a question about the common good now became a transaction a financial deal and whereas people were willing to make a sacrifice for the sake of the common good they were not willing to sell out the safety and the health of themselves and their families for money that's why it felt like a bribe in Israel there were some kindergartens day care centers

that had a problem faced by all such kindergartens parents coming late to pick up their children so with the help of some economists they established a fine for late arriving parents what do you suppose happen more parents came late now here again it's a paradox if if you're thinking in terms of the price effect is the economist called you place a price on some something and yet more people do that thing here again it seems that the money changed the transaction the meaning of the relationship before when parents came late they felt guilty they were

imposing upon the teachers but now that they can pay for a late arrival it's like paying for a service like hiring a babysitter what these examples suggest is that money and markets sometimes change the meaning in the character of good economists often assume that markets are inert that they do not touch or taint the goods they exchange and this may be true enough if the goods in question our material goods if you give me a flat-screen television or sell one to me the flat-screen television will work the same either way whether it's a gift or

a bought product but the same may not be true if we're talking about the marketization of buying and selling of personal relations health education teaching and learning civic life in these domains introducing market mechanisms and market values may crowd out non market goods worth caring about it if this is true there are two important implications one is for the way we conceive economics and teach it in the 20th century economics came to present itself as a value neutral science of social choice and of human behavior this is different from the way it was originally conceived

by Adam Smith who saw economics as a branch as a subfield of moral and political philosophy now the picture of economics as a value neutral science I think was always questionable but at a time when economics has elevated its ambition to explain not just unemployment and inflation and banks and stocks and foreign trade but all of social life it's less and less plausible to think that economics can possibly be a value neutral science for the reasons that emerge from our discussion if market transactions don't leave goods undisturbed but sometimes change their meaning then we have

to ask not only about efficiency in deciding whether to use a market but also about whether the market mechanism will corrupt or crowd out attitudes and norms worth caring about and that is clearly unavoidably a moral question a normative question the second implication is for our public discourse during the past three decades of market triumphalism we have embraced implicitly the assumption that markets are the primary instrument for achieving the public good and this assumption has been widely shared despite differing actual policies across the political spectrum and at the same time that this market faith has

deepened its hold something else has been happening the terms of public discourse in democracies have been hollowed out emptied of larger meaning our politics has become increasingly managerial and technical and this I think is because we shy away from engaging with contested questions in public about how to value goods and for that matter what the good life consists in we shy away from those debates because in pluralist societies we worry about disagreement and disagreement there unavoidably is when it comes to questions of virtue in the best way to live but the result of this shying

away that's bracketing this setting aside substantive moral and even spiritual questions is that we have a kind of empty politics in which economics has crowded out democratic politics it's as if we have out sourced our moral judgment for fear of disagreement to markets but what we but we look up and find now after the financial crisis and as markets govern more and more of life we look around and we find that trying to step back from and avoid engaging in politics in public discourse with these big questions doesn't leave them undecided it simply lets markets

decide those questions for us one of the most important features of social life that the market triumphalist faith has eroded over this these decades its commonality because at a time of rising inequality putting everything up for sale creates a condition in which there are fewer and fewer public places and common spaces when men and women from different walks of life different social backgrounds encounter one another in the ordinary course of life increasingly the affluent and those of modest means live separate lives we live and work in shop and play in different places we send our

children to different schools this isn't good for democracy and I don't even think it's a satisfying way to live even for those of us who may inhabit the privileged precincts and here's why democracy does not require perfect equality but it does require that people from different walks of life encounter one another bump up against one another in the ordinary course of living their lives because this is the common shared experience that enables that teaches us how to negotiate and abide our differences and this is how we come to care for the common good and so

in the end the question of markets is not really an economic question it's a question of how we want to live together do we want a society where everything is up for sale or are there certain moral and civic goods that markets do not honor and money cannot buy thank you very much [Applause] okay I think we've got ten minutes or so for any questions which you may want to put to that professor Sandow who would like to start I'd like to ask you your view on an issue fairly current about universal benefits versus needs

based benefits and the case that that I think is quite compelling that that says Universal benefits at least some should be maintained because they provide some kind of binding mechanism binding kind of social that goes yeah all right it's a great it's a great question and this is much debated Universal versus targeted means-tested benefits the argument obviously for means-testing benefits is that a time when resources are limited the the resources should be directed to those of greatest need that's the argument for means-testing clearly but the counter-argument is just precisely the one you suggest that even

though it's counterintuitive from the standpoint of distributive justice to say that people regardless of means should have access to certain benefits having benefits be universal is a way of giving tangible and concrete expression to the idea that we are all in this together and I think how to reside there's not an easy way to resolve that the clash of those principles I would simply say this whether it may depend on the public character of the benefit and the way it's provided if it's a check in the middle the answer the concern about cultivating a sense

of shared common space and practice may be different than if the shared benefit has to do with creating public institutions civic places public transport gathering places whether cultural centers or clinics that everyone rich and poor alike wants to use because the services provided are of a high standard and it provides class mixing institutions in a society and I think one of the great defects of the market driven societies we increasingly inhabit is that there are a few and fewer such spaces so I've not perhaps given a definitive answer except to say it matters all the

more the universality in the Solidarity expressed when the benefits at stake the public services at stake involve bring people together the most important example being schools school you you wouldn't school should be a be universally provided precise and because it's not just providing access it's creating a common space and a common experience that's important for democratic citizenship you can be entitled to a benefit but not claim it should I claim winter fuel allowance now here I'm being hypocritical because I could show you my freedom pass that's for the bus I'm a twirly I'm a twirly

if I get to the station before 9:30 it's too early so but I want Lord Paton to be on the bus because that's that's I don't care so much about your fuel allowance because nobody knows whether you claim it or not but that everyone in the society use public transport is very important in not only preserving the constituency for good public transport but it's creates common spaces common experiences common encounters so it's a great example of the difference the difference between writing the public transport and claiming a fuel allowance that's nobody you know that matters

in deciding this question yeah I'm very tempted to ask this question to Lourdes Patton as a former member of Margaret Thatcher's government but but my question is is hubris the last thirty years in the States and in this country shown regardless of political color of government a widening gap between the rich and the poor but there are countries Japan and I think many of the Scandinavian countries which this hasn't been true and I just wondered what you felt characterized what those governments have done in order to narrow rather than widen the gap between rich and

poor a critic of the view I've been advancing might say well Japan has paid a heavy price in sluggish economic growth during this period whereas the anglo-american world has had more growth and more inequality I don't think that's exactly I don't find that a fully satisfactory answer but that would be a familiar answer but I do think that social and cultural patterns and traditions and commitments matter and some societies do have strong traditions take exactly one sees this even looking just at executive pay the gap between CEO pay in the pay of the average worker

is the yawning gap in the u.s. quite large though not as yawning in the UK and relatively almost miniscule by comparison in Japan for example and that puts in question the often heard argument that the reason for enormous pay differentials is simply that CEOs have to work so much harder I don't think CEOs in the u.s. work harder than those in Europe and I don't think those in Europe work harder or a more gifted than those in Japan I think these are our differences of culture economics and politics not of the the way in which

markets reward hard work a concept of seam leanness which has been diluted in some of our societies yes in the u.s. it's not a really a source of embarrassment if a banker or a hedge fund manager makes a zillion dollars it's a source of pride whereas there are other societies and this goes back to the question of culture and norms where there are there are traditions of solidarity that generate a certain kind of embarrassment at great yawning gaps and to speak of seem leanest I love the language of it in the United States no one

few people would say it's unseemly for those hedge fund managers to make so in a way that the language it's so much it's a cultural quasi aesthetic language rather than whereas in American people would say some would say it's unfair and someone would say no I deserve it and that would be the clash and no one would think to say but is it seemly that's why one of the reasons I love to come to we haven't had a question from a lady well first of all professor yes it is a slightly academic question you did

some thought experiments with us and you also talked about real experiments the example of money in schools I'd like you to say something about the whole idea of whether it is possible to do controlled experiments because a lot of the stuff that's coming out of economics is being about experiment but in many situations you capture it's very complicated yes some solutions might work but it's very difficult it's not in social sphere like medical science where we have a tradition of doing controlled trials and experiments and in this country may not be aware the government's launching

a program called what works in public policy it's taking the model into social spheres for medicine where there's being controlled experiments I decided what drugs so do you have views on because you'll indicate that in certain instances markets can work how do you actually do the experimental process right I'm a little wary of experiments in the social sciences I don't think they work quite as reliably as in in the medical sciences or the Natural Sciences generally I am very much in favor of making economics more empirical and less formalistic less scientistic and there are ways

of doing empirical studies about the effects of various incentive structures some may involve experiments though I think there still needs to be a good deal of skepticism about how any such experiment is designed but I think economics should change in two directions it should become more it should be reconnected with moral and political philosophy that was the main I was making about economics in the lecture but also it should become I think more empirically oriented because too much of economics is not only scientistic and claiming to be value neutral but also divorced from the world

and purely a model building formalistic and so I do think that empirical studies matter though they needn't necessarily be experiments designed in a in a social scientific laboratory looking at what happens in the world there's something to be said for that gender balance yes the lady at the back is this on yes along the lines what you're saying earlier about Scandinavia and differentials about twenty years ago I met three young American men living in Scandinavia they said they wanted to get away from the sexual capitalism of America where women traded on their their looks in

order to get a man of wealth and power and they they said in Scandinavia a woman comes up she just not interested in what your job is or what your car is just if she fancies you or not and I think you know that's not like quite healthy I but my question is you talked about us becoming more isolated gated communities I wonder if the nation-state itself is a gated community and whether we should be working towards abolishing borders so that we as human animals can move to areas where there's better grass to graze or

where our children can have a better life that that would be a healthier dynamic in the world well this is this is one of the great questions one of the great global questions that political philosophy has to sort through what is the moral status of national boundaries and what should be policies toward immigration and many of the arguments against open immigration are economic arguments the worry that jobs will be lost and wages will be driven down and benefits will be claimed but another more challenging argument force against open immigration of some advanced is that communities

should be able to cultivate in a firm certain aspects of character and identity over time no I don't think that's a decisive argument against open immigration but I think that the debate about immigration should address the broader cosmopolitan Universalist human aspirations suggested by your question and put them alongside arguments about communities of character and identity shared identity that should be the debate or at least a good part of the debate about immigration rather than the rather than some of the lower concerns that inform the debates we commonly have about immigration so I don't have a

quick and direct answer except to say that the ethical principle that you suggest is powerful and needs to be taken into account along with these other considerations last question lady with us is right time in the air my question is back to the refugee example we put prices in human life every day we have life insurance we pay people if their relatives died in plane crash and stuff should we stop doing that all together putting a price on human life because that's what people seem to object to right people it does seem to be objectionable

to put a price on life and yet as you say life insurance policies do that annuities implicitly do that pensions do compensation for loss of life puts a kind of value on life but the question is whether the prices we place on life in those kinds of cases our all-purpose prices that give us a full account of the value of human life it does go back to the discussion we had because one argument that we heard was that by putting a price on a life on a human life we make explicit the value of that

life and that's an affirming thing and then we heard a counter argument that suggests no putting a price on a life is not an affirming but a demeaning thing and in order to start out that debate we have to ask ourselves a question that lies right at the heart of our topic tonight which is how should we properly value goods including human life how should we assign value and one of the appeals of letting markets govern is didn't they seem to enable us to say if two parties to a deal agree on a price and

exchange a good two consenting adults each of them decides the value of that good for them and nobody else looking on certainly not the society as a whole has to take a view about how to value how properly to value the goods they have exchanged and so it's tempting I think this is the deepest allure of the good faith it's not that markets deliver the goods or greater GDP the deepest allure is that it seems to enable us to avoid judgmentalism who's to say what is the right way of valuing reading a book or giving

refuge to it giving asylum to a refugee or an organ that someone needs for a an organ transplant who's to say just let the parties make their deals and then the rest of us don't have to engage in those messy debates and my argument in the book and in the discussion tonight is that allure misleads us it misleads us into thinking that we can possibly have a public life that avoids moral judgment of this kind and instead we need to engage more directly with competing ideas about how we should value the good good things in

life not because we will agree but because having a morally more robust kind of debate about the social goods and the human goods we prize will lead us to learn at least learn more about views with which we disagree and even where they don't lead to agreement may deepen our democracy and make us better citizens [Applause] I'm sure you'll all agree that that was as great a treat as we all expected it to be there are two things that I'm sure you can do as a consequence the first is to go home and on your

laptop or computer look up say the series of lectures on justice which are streamed to the world happily by Harvard University which it's conceivable and it's a point we didn't discuss this evening has a slightly different discourse on some aspects of the market the relationship between higher education in the market than is traditional in Europe but that's a discussion for another for another day the other thing you could do which would and it's an area where Professor sandal and I had wholly in favor of market forces is to buy a book and I think the

signing is going to be outside so if you want a book well I'm sure you all want a book if you want a book signed professor Sam Bell has about half an hour to oblige but I just want once again on all your behalfs to thank him very much indeed for coming to Newcastle this evening you