Wednesday, January 9, 2013

Capital Markets, Morals, and Ethics (The Project Syndicate)

The Moral Limits of Markets

TOKYO – Today, there are very few things that money can’t buy.
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If you are sentenced to a jail term in Santa Barbara, California, and don’t like the standard accommodations, you can buy a prison-cell upgrade for about $90 per night.
If you want to help to prevent the tragic fact that, each year, thousands of babies are born to drug-addicted mothers, you can contribute to a charity that uses a market mechanism to ameliorate the problem: a $300 cash grant to any drug-addicted woman willing to be sterilized.
Or, if you want to attend a US Congressional hearing, but don’t want to wait for hours in line, you can enlist the services of a line-standing company. The company hires homeless people and others in need of work to wait in line – overnight if necessary. Just before the hearing begins, the paying customer can take his or her line-stander’s place in the queue, and claim a front-row seat in the hearing room.
Is there anything wrong with buying and selling these things? Some would say no; people should be free to spend their money to buy whatever someone else is willing to sell. Others believe that there are some things that money should not be able to buy. But why?  What exactly is wrong with selling prison-cell upgrades to those who can afford them, or offering cash for sterilization, or hiring line-standers?
To answer questions such as these, we need to pose a bigger question: What role should money and markets play in a good society?
Asking this question, and debating it politically, is more important than ever. The last three decades have witnessed a quiet revolution, as markets and market-oriented thinking have reached into spheres of life previously governed by non-market values: family life and personal relations; health and education; environmental protection and criminal justice; national security and civic life.

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