Markets and Morals

June 27, 2012

While in the supermarket, watching my purchases slowly trundle down the conveyor belt to a bored-looking cashier, I happened to notice a young lady behind us in the queue wearing a black chador. This is not unusual; our part of North London is home to people from a wide variety of backgrounds; Turks, Persians, Albanians, Somalis and Poles, to provide a small selection. What could have been interpreted as unusual, certainly to those who believe that Islamic dress marks a woman as somehow ‘other’, was that she was leafing through a copy of Reveal. This is a magazine dedicated to the kind of mindless celebrity gossip typified by headlines like, “ADDICTED TO BAD BOYS!”, “HOW I LOST TWO STONE!” or, indeed, “SEX LIFE LOSING ITS SPARK!” There is a disjunction between the content of this magazine and the typical media portrayal of women from Islamic cultures as demure, subservient, and – in marked contrast to British women – uninterested in anything as tawdry as gossip.

I’ve recounted this incident because I want to discuss Michael Sandel’s ‘What Money Can’t Buy’, which was released a few months ago but which has been brought to my attention by Professor Pigliucci’s review of it. Sandel proposes we consider which goods we want to have a market for, and which goods we value independently of any potential price tag. He undertakes this analysis by considering the purposiveness of goods; whether if allowing a good to be bought and sold in a market undermines the purpose or role we see it as having. A clear example is friendship; we could certainly pay people to act as though they were our friends, but doing so is intuitively repugnant: our notion of friendship is based upon bonds of trust and reciprocity, not something that can be easily commodified.

There is a clear step before we undertake Sandel’s analysis, and that is to consider how we attribute value in the first instance; how we establish purpose. This is where Sandel’s advocacy of virtue ethics comes in: we attribute purpose in line with those actions which will best help us cultivate the virtues we wish to cultivate; purpose is derived from our desired character. Regular readers of this blog will know that this is a position I am rather fond of.

However, there is a step before this, and this is the meta-ethical question of how we identify the virtues we want to cultivate; how we determine the character we wish to possess. The reason for my recounting of the tiny tale of the Muslim and the Magazine is to capture the role that markets play in this process, and thus why our consideration of their ethical role must sit, at least initially, outwith the purposive framework Sandel advocates.

Markets require us to meet new people. We can try to shut ourselves off from modern society as much as we like, but eventually someone is going to notice that we have money we’re not spending, and try to contrive of a way of separating us from it. As part of this process, we will be exposed to the ideas, values and beliefs from out-groups, in much the same way as the lady in the supermarket was. This can take the form of an open debate with a contractor over hiring practices as some North London councils are doing with regard to the Living Wage, the potential realisation of a new want through exposure to its object, or the recasting of old ways of servicing values in the light of new information, as above.

This is important, because it stands in contrast to the kind of communitarism that Sandel advocates. Our values and beliefs are not wholly derived from our community or society, but from all the communities and societies with which we do business. In this context, markets provide a check upon our moral beliefs: do they stand up to scrutiny outwith the embedded norms of our community? For example, is discrimination against women a disadvantage when competing in the marketplace? (Answer: Yes.)

Debate within communities can provide a check, but given that your fellow community members will take positions derived from existing beliefs of that community it will necessarily be inadequate when compared to debate with an out-group. Trade and markets provide a way of facilitating that debate, a mechanism which has instrumental value in the context of the meta-ethical consideration of how we determine which virtues we want to develop.

Therefore, I propose the question that comes before Sandel’s consideration of the purpose of goods should be: which of our ethical claims can we be so confident of that we can risk excluding markets from them entirely? The answer to this, I suspect, will paint a very different picture to the one Sandel outlines.

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A new website has been launched by Clifford Singer, the excitingly named chap behind The Other Taxpayers’ Alliance and MyDavidCameron.com. It’s called whofundsyou.org, and attempts to highlight the transparency of the funding arrangements behind 20 prominent thinktanks.

As such, it’s something that fans of Public Choice Theory should welcome. For those not in the know, you can find an excellent primer on the subject on the website of the Institute for Economic Affairs. Broadly, it covers the application of the methods of economics to Government and to its influencing parties. It rests upon the key insight that incentives apply to the people that comprise Government and the interest groups that attempt to lobby them – not just markets. These incentives can lead to ‘Government Failure’ – regulation or Government action which fails to produce the outcomes it was ostensibly intended to deliver. This can be down to incentives on particular politicians or the corrosive influence of interest groups attempting to capture political action for their own cause. The primer puts it like this:

“In this struggle between interests, small groups with sharply focused interests have more influence in decision-making than much larger groups with more diffused concerns, such as consumers and taxpayers.”

“Because of the enormous benefits that can be won from the political process, it is rational for interest groups to spend large sums on lobbying for special privileges – an activity known as ‘rent seeking’.”

In order to be able to properly understand who is lobbying for special privileges, we need to understand who is spending large sums on doing so. In this context, whofundsyou.org is a welcome addition to the political landscape, by providing pressure upon interest groups to reveal their backers.

However, it has not been universally welcomed. This Guido Fawkes post highlights the response of the Adam Smith Institute to the site, which is to say that they have been ranked top for respecting donor privacy – the ‘E’ category of whofundsyou.org, reserved for the least transparent. This would be amusing, if the author of the primer on Public Choice Theory quoted above was not Dr Eamonn Butler, who is a Director of the Institute. It is difficult to not suppose that the large sums spent by the ASI on lobbying are being used to seek special privileges for their funders – not least for their advocacy of lower taxes for higher earners, which would directly benefit a minority.

Yet, somehow the ASI seems to be claiming that it is immune from incentives by declaring that it is independent and does not need to be transparent. It is bizarre for an organisation bearing the name of Adam Smith to claim that the fundamental insight of economics, that incentives matter, does not apply to it. It is difficult to believe that the kind of robust constitution advocated by Public Choice Theory advocates would not require any organisation seeking to influence Government policy to be wholly transparent, in order to ensure that all rent-seeking activities are on full display to the demos. Doing so is the best way of minimising the risk of Government failure, a fact to which the ASI seems to be blind.

 

Jimmy Carr, Tax Hero

June 19, 2012

Mr Carr avoids tax. By doing so, he reveals himself to be one of those gruesome rich people who refuse to pay their proper moral share of their income into the coffers of the Treasury. You see, it turns out that the Government can legislate morality, that the laws passed by our earthly Parliament can pierce the veil betwixt our world and the eternal Forms of Taxation and render it just that Jimmy Carr pays a 50% rate on his earnings over £150,000.

This is, of course, nonsense; I do not care in the slightest what Mr Carr does with his money as long as he doesn’t break the law. There is a strong argument that the rich do not necessarily need to recover their social consciences so much as recover their commitment to social cohesion; conspicuous consumption in a time of austerity doesn’t help prevent resentment for those upon whom the cuts fall most deeply. This is largely irrelevant to Mr Carr, though – I’ve canvassed his house (he wasn’t in) and it’s nothing particularly fancy.

One thing Mr Carr is, though, is a hero. By this single act of avoiding tax, he’s exposed the danger of presuming that comedians can be relied on to provide representation of your political views in a public forum. As I’ve previously discussed, politically aggressive comedy is about consumption, rather than representation. It’s not about changing the system, but rather providing its audience with an engaging political experience. Somehow, this has been interpreted in some quarters as comedians being better at representation and political scrutiny than politicians themselves.

This was never going to be the case, and Mr Carr has heroically demonstrated why. Comedians are only accountable for being funny; they’ll only lose market share if they stop being amusing. As long as they’re funny, it doesn’t matter if they’re inaccurate, if their analysis is shallow and misleading, or indeed if they fail to engage with politics at all. Mr Carr will continue to be a successful comedian, and there’s nothing the tax morality mob can do about it. He has sacrificed his personal standing with that particular section of society in order to bring this truth to the world, and for that, he is a Tax Hero.

Of course, I’m sure all the money helped Mr Carr make this virtuous decision, but I’m confident that was a secondary consideration.