I recently learnt that Harvard philosophy professor Michael Sandel has become the Wilt Chamberlain of the anti-commodification discussion circuit. He commands academic-salary-sized fees for single webinar appearances. Although I disagree with some of his views, I appreciate the fact that he brings enormous value to whoever purchases his services.
Now Mark Carney, former governor of the Bank of England and Don Draper lookalike, appears to have noticed the excess demand for anti-market sentiment as well. He has just published a new book, Value(s), that is decidedly cool on the market economy. He argues that the rise of market society coincided with a loss of social values.
These claims are empirically suspect. Virgil Storr, Ginny Choi, Meagan Teague and Rosemary Fike have shown markets improve social relations and moral behaviour on most dimensions we can measure. In particular, societies with more economic freedom are less obsessed with material wealth than those with more regulation. Why might that be? In Basic Economic Liberties: John Rawls and Adam Smith Reconciled and my forthcoming book Neoliberal Social Justice, I argue that participation in voluntary market relations improves people’s sympathy for strangers and ultimately encourages them to weigh their interests in their personal moral calculus. Markets themselves generally make us more moral, not less.
But Armen Alchian and Lester Tesler could offer a much simpler explanation: the law of demand (I am much indebted to Brian Albrecht’s and Josh Hendrickson’s Economic Forces Substack for this insight). Presume that people generally care about fairness among other values. How much would they be willing to sacrifice to be fair in practice. It depends on how expensive being fair is. When the personal loss to them of being fair is low, they’ll be fairer. When it’s high, they won’t. Presuming diminishing marginal utility of wealth and income, a society composed of the relatively well-off will start to care more about non-material values. People will be slow to sacrifice money for food or rent for the sake of fairness, but they will be willing to give up on the prospect of having a second Tesla for the sake of benefiting the less advantaged.
Mark Carney is an in-person example. He is a multi-millionaire who has worked hard most of his life in finance. Even when acting as a public servant, he has benefitted enormously and unequally to his advantage from living in a commercial society. But now he can afford to worry about the bigger picture issues like fairness and what we will offer to future generations (although I guess he still likes to earn a bit of money on book sales while thinking big). So, if you want people to care about fairness, the lesson is not to bash markets: it is to make everyone as rich and comfortable as Mark Carney.
2 thoughts on “Millionaires against markets? That’ll be a change in demand”
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It seems Mark Carney may have had his finger on the scale-
“Looks like I’m gonna have to dive into the egregious misuse of RCP8.5 in finance Here is RCP8.5 claimed to be “aligned” with IEA CPS (TCFD 2017, Carney Report), which we have shown to be grossly incorrect, here: https://iopscience.iop.org/article/10.1088/1748-9326