Friday, September 21, 2012

Sandel on Economics

I read Michael Sandel's 2009 book, Justice, and was underwhelmed by it. The book seemed geared more toward an undergraduate audience and paled in comparison to other, much deeper books published in the same period, particularly Amartya Sen's The Idea of Justice

Sandel has a new book out, What Money Can't Buy, which consummates his sustained attack on the way Economics is taught and practiced in the US. The book has received a lot of commentary and criticism already, some of which has deterred me from reading the book. Today, Sandel has an article in Prospect (here), which summarizes some of the main themes of his book. That summary, far more than any of the critiques I have read of his book, has finally convinced me that it's not worth reading.

I don't disagree with everything Sandel says is wrong with the way Economics is currently taught and practiced. I fully agree, for example, with his assertion that economics is not a "value-neutral science," and that every economist should read Adam Smith and John Stuart Mill carefully to understand how closely economics is connected to moral and political theories. Much of that connection has been obscured by misguided efforts to turn economic theory into some kind of social physics.

But some of the practical implications Sandel draws are not only bad economics but morally obtuse. Here is a representative passage:
Consider the case for a free market in human organs—kidneys, for example. Textbook economic reasoning makes such proposals hard to resist. If a buyer and a seller can agree on a price for a kidney, the deal presumably makes both parties better off. The buyer gets a life-sustaining organ, and the seller gets enough money to make the sacrifice worthwhile. The deal is economically efficient in the sense that the kidney goes to the person who values it most highly. 
But this logic is flawed, for two reasons. First, what looks like a free exchange might not be truly voluntary. In practice, the sellers of kidneys would likely consist of impoverished people desperate for money to feed their families or educate their children. Their choice to sell would not really be free, but coerced, in effect, by their desperate condition.
Even if we granted Sandel's supposition that poverty would "coerce" kidney sales by poor people,* it hardly follows that such a market would therefore be immoral. Should poor people be deprived of the opportunity to capitalize on a (relatively speaking) unneeded organ in order to better their material conditions? Sometimes the only thing worse than being exploited (if that's what Sandel wants to call it) is not being exploited.

And what basis in reality is there for Sandel's simplistic presumption that a market for kidneys would be laissez faire? There's no reason to believe that kidney or other conceivable organ markets would be completely unregulated, so that the organs would all go to the highest bidders. At the very least, we would expect medically-based regulations concerning tissue-matching, etc. In all probability, a legal kidney market would (and probably should) be quite heavily regulated.

Finally, what about the morality of allowing people to die for want of kidneys that a legal market would supply? At the very least, Sandel's moral argument is woefully inadequate.

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*Sandel seems not to appreciate that completely voluntary exchange and complete coercion are the two extremes of a long continuum. Every day my hunger coerces me to buy food, but that does not mean my choices are completely involuntary. Likewise, the fact that a person is poor does not mean that a choice to sell a kidney is completely involuntary.

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