A keynote address given at a meeting of Ethics in the Workplace at DeSales University, Sponsored by the Salesian Center, September 13, 2012, introducing Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets (2012).

Let me begin with the assumption that the world contains two basic kinds of goods.  G.E.M. Anscombe once called these useful goods and mystical goods.  Useful things, such as diamonds, are valuable because they help you achieve your goals: they help you cut concrete, say, or propose to your future wife.  Mystical things are valuable because they are sources of value: it is because your beloved is worth spending your life with that you want to give her diamonds; without her, a diamond would just be another rock.

While there is only one way for something to be useful (i.e., efficiency), we have many words for the many mystical ways in which useless things are good.  We say such things are beautiful and fine, virtuous and pleasant, possess dignity and honor, are sacred and holy.  Some things are only usefully good–like a root canal–and a few are only mystically good–like true love–but most things, like philosophy, are a bit of both.  Philosophy itself bakes no bread, as the saying goes, but it did get me invited to a free breakfast this morning.

Because we live in a world full of good things, we must be careful about how we talk and think about those things.  For we can make two kinds of mistakes about value.  I call the first mistake the Counting Error, which occurs when we choose the appropriate way to measuring some good (e.g., using inches and not colors to measure length), but we either under or overvalue what we’re measuring.  (Sometimes we do this on purpose rather than by mistake, of course, as when we lie about our weight or exaggerate the size of the fish we caught this weekend.)  The second kind of mistake is a category mistake, which in morality we call Perversion.  This happens when we attempt to measure the value something using categories that are inappropriate for what we are measuring.  Making a category mistake is like trying to use units of length to measure something’s weight.  When we make a category mistake about value, we debase or corrupt what we’re valuing.  We twist it into something that it’s not; hence the term perversion.  Sandel’s book is full of perversions.  We see that Barbara Harris’s scheme to pay poor women to get sterilized is but the flipside of human sex trafficking, since both inappropriately value human sexuality in dollars, and we learn that investors buying “viaticals” – life insurance policies on terminally-ill patients that pay higher dividends the sooner the patient dies – inappropriately measure the value of a human life as the expected return on an investment, just as Ford Motor company infamously did when it based its decision not to recall the deadly Pinto automobile on a comparison between recall costs and the costs of wrongful death litigation.  (I should note that not every perversion involves measuring mystical goods using money – every semester my students try to convince me that rap music has artistic value because it’s popular, i.e., people listen to it, a clear category mistake!)

Now if there were only one kind of value, Perversion would be impossible.  The fact that we can find so many examples of it is proof that we shouldn’t always measure the value of things in terms of their expected utility.  The explicit thesis of Sandel’s book is that although there are diverse and appropriate ways to value and allocate the world’s goods, modern “market thinking”–the perverse valuing all goods in economic terms–is increasingly and inappropriately displacing appropriate ways of valuing things, leading to unfairness, injustice, and the corruption of mystical goods.  This explicit thesis is much less interesting than his implicit thesis, however, which is, to put it mildly, that perversion might be inherent in, built into, modern economics.  As Sandel puts it, markets are not ideologically neutral tools; they “reflect and promote certain norms, certain ways of valuing the goods they exchange” (78).  If that’s correct, then free market capitalism is a Faustian bargain: it delivers all the goods it promises, but at the price of our souls. (Sandel repeatedly shows economists denying that there is such a thing as perversion, arguing that all apparent instances of perversion are really just Counting Errors, and thus that only one kind of value exists: utility.)

An argument that modern economics is Faustian economics goes something like this.  People in market societies divide their labor in order to produce greater quantities of higher quality goods, with the consequence that everyone becomes, in some sense, a merchant, since everyone must trade with everyone else in order to get what they want.  But then you face a practical communication problem: how many sewing pins for a loaf of bread?  Adam Smith’s insight into this problem was to think through the puzzle from the standpoint of the Pin-Maker.  What would tell the pin-maker whether to spend a lot of time making a few, high-quality pins, or a little time making a lot of low-quality pins?  The answer is: what the Baker is willing to give up for pins of each sort!  In other words, the Baker communicates his desires for pins of such-and-such quality through the price he is willing to pay for pins of different kinds.  Pin 1 costs a wheat loaf; Pin 2 costs a wedding cake.

Price, Smith saw, isn’t primarily a quantitative measure at all.  Rather, the ‘price’ of the exchange is the time each party gives up laboring in order to reach the point of mutually beneficial exchange.  If the Baker wants high-quality pins, for instance, he’s going to have to spend a lot of time and effort baking enough bread or wedding cake that the Pin-Maker will trade him for it.  Thus the price of bread to the Baker is the opportunity cost of baking lesser-quality bread for other people, or even of not baking bread at all, going without pins and instead spending time with his children, or reading Plato.  Prices, you see, are more like words than numbers: a price is a meaning, a sign of something’s subjective value to a person.  Markets, to extend the metaphor, are giant translation mechanisms.  Their job is to translate the inarticulate desires of individuals into a language everyone can understand so that everyone can acquire from everyone else exactly what each wants and needs.  If the translations are accurate, Smith argued, what should happen, will happen: everyone benefits.

The problem is that Smith’s argument is flawed – fundamentally flawed, I’d argue.  Contrary to Smith, prices are not a suitable medium for conveying human desire, since they are incapable of communicating important meaning – all of those mystical meanings – about value.  Using prices as the vehicle of value is like trying to write a love poem using piles of rocks.

Let me give you just two examples of my point.  The price of bread is supposed to truly convey tell us how valuable bread is to someone.  We assume that the person who needs bread the most is the person who wants it the most.  Thus, if you’re starving like Jean Val Jean in Les Miserables, bread is really valuable to you, while if you’re well-fed like Mr. Cresote in Monty Python, bread is not really valuable to you.  But the fact that bread costs $2 to both men doesn’t communicate the fact that Jean Val Jean will die without it.  Now an economist will simply say that this is because bread is being inefficiently priced.  But this doesn’t solve the problem: if Jean Val Jean has no money at all, like so many mothers of starving children in Africa and Haiti and India, he literally has no voice in the market in response to which the market can correct the price of bread.  Does that mean that he doesn’t value his life, or that these mothers do not love their sons and daughters?  Val Jean’s violence, his thievery, is an inarticulate (non-market) expression of need in the same way that an infant’s cry is–a way of communicating something mystical that cannot be said in the language of prices: “I am; I hurt; help me.”

Prices are equally unable to capture the value of the silver candlesticks with which Bishop Bienvenu ministers to the convict Jean Valjean, who has stolen from him.  Says the Bishop: “Jean Valjean, my brother, you no longer belong to evil, but to good.  It is your soul that I buy from you; I withdraw it from black thoughts and the spirit of perdition, and I give it to God” (Hugo, I.2.XII).  The Bishop’s actions speak the words of Christ to, Mdm. Magliore, the Bishop’s house assistant, who can only weep the language of prices as she laments the loss of her silver: what would it profit a man to gain the whole world (or even two candlesticks?) and lose his soul?  The mystical value of those candlesticks to the Bishop and Jean Val Jean is categorically different than the utility value of those candlesticks in the market; indeed (something that economists will have nothing to do with) it is impossible to price agapic love, since this gift costs nothing to give away (it only costs to keep it): the one who loses his life finds it.  The very idea of there being a price for Jean Val Jean’s soul (let alone weeping over its price) is perverse.

But knowing no other value, a market cannot speak of what lies outside its ken.  It does not translate desire without loss of meaning; it reduces value to desire, and desire to power (power to pay).  Market-thinking, as Sandel argues, thus tends to (a) corrupt non-useful goods through perverse thinking, and also (b) to unfairly or unjustly concentrate goods in the hands of the powerful and neglect the needs of the poor.

The alternative is to refuse to engage in perversion at all.  As Sandel puts it, “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.  To resolve them, we have to debate, case by case, the moral meaning of these goods and the proper way of valuing them” (10).  Let the conversation begin.