Sunday, June 4, 2023

Social production of moral indifference - 9a

“Altruism, generosity, solidarity and civic spirit are not like commodities that are depleted with use. They are more like muscles that develop and grow stronger with exercise. One of the defects of a market-driven society is that it lets these virtues languish. Michael J. Sandel, What Money Can't Buy: The Moral Limits of Markets

Markets have become detached from morals and market values are moving into areas of life where they don't belong, eg. health, education, family life, nature, civic duties, etc. A market economy is inexorably turning into a market society. Michael Sandel writes in What Money can’t Buy, ‘The difference is this: A market economy is a tool — a valuable and effective tool —for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavour. It’s a place where social relations are made over in the image of the market.’ In The Market as God, Harvey Cox writes:

The latest trend in economic theory is the attempt to apply market calculations to areas that once appeared to be exempt, such as dating, family life, marital relations, and child-rearing. Henri Lepage, an enthusiastic advocate of globalization, now speaks about a "total market." . . . There seems to be nowhere left to flee from its untiring quest. Like the Hound of Heaven, it pursues us home from the mall and into the nursery and the bedroom.

It used to be thought — mistakenly, as it turns out — that at least the innermost, or "spiritual," dimension of life was resistant to The Market. . . But as the markets for material goods become increasingly glutted, such previously unmarketable states of grace as serenity and tranquillity are now appearing in the catalogues. . . Thus The Market makes available the religious benefits that once required prayer and fasting . . . 

All can now handily be bought without an unrealistic demand on one's time, in a weekend workshop at a Caribbean resort with a sensitive psychological consultant replacing the crotchety retreat master.

Markets promote certain vales and attitudes towards what is being priced. In standard economic theory, a transaction is fine if it results in some people being better off and no-one else is worse off. It assumes that putting a price on a good doesn't change the character of the good. Is this true in all situations? A growing body of research confirms that financial incentives and other market mechanisms can backfire by crowding out non-market norms. Sometimes, offering payment for a certain behaviour gets you less of it, not more. And when market norms displace social norms, the effects can be hard to reverse, as demonstrated in an experimental study in Haifa, Israel in the 1990s. 

Some child-care centres faced a familiar problem: parents sometimes came late to pick up their children. To solve this problem, the centres imposed a fine for late pickups. The parental response? Rather than arriving more promptly, twice as many parents started arriving late. Introducing the fine changed the norms. Before, parents who came late felt guilty; they were imposing an inconvenience on the teachers. Now the social norm of a moral obligation was viewed through a market lens as overtime fees. Rather than imposing on the teacher, they were simply paying him or her to work longer.

When the fine was removed, the number of late pickups rose higher still: the price had gone, but the guilt hadn’t come back. The temporary marketplace had, in essence, erased the social contract.  The price effect - when the price goes up, people buy less of a good, and when prices go down, they buy more - is generally reliable when material goods like PCs or mobile phones are being discussed. But  it is less reliable when applied to social practices governed by non-market norms. Sociologists argue that we live in two worlds, one where social norms dominate and the other where market norms dominate. 

The social norms are the actions among friends that are not based on money. For example we might help a friend move his couch without expecting any payment (in fact it would probably be rude to require payment). In contrast to the vague, unclear and implicit dealing of the social world, the market world is the opposite. Here we only deal with people who can benefit us and make us money. When social norms are involved, applying market logic often confounds expectations. Economics is about trade-offs and the trade-off between market and social norms is often ignored.

Depending on which norms we adhere to also affects our behaviour. Studies show that when people are in the social norm world, they are more likely to ask for help and help others. Whereas when people are in the market norm world, they are more self-reliant and self-focused. They are less likely to help strangers or explain things to confused fellow students. They are more likely to work alone and choose individual activities over teamwork. So when we think about money and put ourselves in the market norms world, then we behave as traditional economics expects.

No comments:

Post a Comment