MARKET REASONING RENDERS MORAL CONSIDERATIONS IRRELEVANT --- Episode 3

              LET'S RETHINK THE ROLE OF MARKETS 

   Even if you agree that we need to grapple with big questions about the morality of markets, you might doubt that our public discourse is up to the task. It's a legitimate worry. Any attempt to rethink the role and the reach of markets should begin by recognizing that there are daunting obstacles.
   One such obstacle is the persisting power and prestige of market thinking, even in the aftermath of the worst market failure in eighty years. Another obstacle is the rancor and emptiness of our public discourse. Those two conditions are not entirely unrelated. 
   The first obstacle is puzzling. At the time, the financial crisis of 2008 was widely seen as a moral verdict on the uncritical embrace of markets that had prevailed, across the political spectrum, for three decades. The near collapse of once-mighty Wall Street financial firms,and the need for a massive bailout at taxpayers' expense, seemed sure to prompt a reconsideration of markets. Even Alan Greenspan, who as chairman of the U.S. Federal Reserve had served as high priest of the market triumphalist faith, admitted to "a state of shocked disbelief" that his confidence in the self-correcting power of free markets turned out to be mistaken. { Edmund L. Andrews, "Greenspan Concedes Error on Regulation," New York Times, October 24, 2008. } The cover of The Economist, the buoyantly pro-market British magazine, showed an economics textbook melting into a puddle, under the headline WHAT WENT WRONG WITH ECONOMICS. 
   The era of market triumphalism had come to a devastating end. Now, surely, would be a time of moral reckoning, a season of sober thoughts about the market faith. But things haven't turned out that way.
   The spectacular failure of financial markets did little to dampen the faith in markets generally. In fact the financial crisis discredited government rather than the banks. In 2011, surveys found that the American public blamed the federal government more than Wall Street financial institutions for the economic problems facing the country --- by a margin of more than two to one.
   The financial crisis had pitched the United States and much of the global economy into the worst economic downturn since the Great Depression and left millions of good, decent people out of work. Yet it did not prompt a fundamental rethinking of markets. Instead, its most notable political consequence in the United States was the rise of the whacko Tea Party movement, whose hostility to government and embrace of free markets would have made Ronald Reagan blush. In the fall of 2011, the Occupy Wall Street movement brought protests to cities throughout the United States and around the world. These protests targeted big banks and corporate power, and the rising inequality of income and wealth. Despite their different ideological orientations, both the Tea Party and Occupy Wall Street activists gave voice to populist outrage against the bailout. 
   Then there's the moral vacancy of contemporary politics. This vacancy has a number of sources. One is an attempt to banish notions of the good life from public discourse. In hopes of 
avoiding sectarian strife, we often insist that citizens leave their moral and spiritual convictions behind when they enter the public square. But despite its good intention, the reluctance to admit arguments about the good life into politics prepared the way for market triumphalism and for the continuing hold of market reasoning. 
   In its own way, market reasoning also empties public life of moral argument. Part of the appeal of markets is that they don't pass judgment on the preferences they satisfy. They don't ask whether some ways of valuing goods are higher, or worthier, than others. If someone is willing to pay for sex or a kidney, and a consenting adult is willing to sell, the only question the economist asks is, "How much ?" Markets don't wag fingers. They don't discriminate between admirable preferences and base ones. Each party to a deal decides for himself or herself what value to place on the things being exchanged. 
   This nonjudgmental stance toward values lies at the heart of market reasoning and explains much of its appeal. But our reluctance to engage in moral and spiritual argument, together with our embrace of markets, has exacted a heavy price ; it has drained public discourse of moral and civic energy, and contributed to the technocratic, managerial politics that afflicts many societies today.
   A debate about the moral limits of markets would enable us to decide, as a society, where markets serve the public good and where they don't belong.  It would also invigorate our politics, by welcoming competing notions of the good life into the public square. For how else could such arguments proceed ? If you agree that buying and selling certain goods corrupts or degrades them, then you must believe that some ways of valuing these goods are more appropriate than others. It hardly makes sense to speak of corrupting an activity --- parenthood, say, or citizenship --- unless you think that some ways of being a parent, or a citizen, are better than others.
   Moral judgments such s these lie behind the few limitations on markets we still observe. We don't allow parents to sell their children or citizens to sell their votes. And one of the reasons we don't is, frankly, judgmental : we believe that selling these things values them in the wrong way and cultivates bad attitudes. 
   Thinking through the moral limits of markets makes these questions unavoidable. It requires that we reason together, in public, about how to value the social goods we prize. It would be folly to expect that a morally more robust public discourse, even at its best, would lead to agreement on every contested question. But it would make for a healthier public life. And it would make us more aware of the price we pay for living in a society where everything is up for sale. 
   When we think of the morality of markets, we think first of Wall Street banks and their reckless misdeeds of hedge funds and bailouts and regulatory reform. But the moral and political challenge we face today is more pervasive and more mundane --- to rethink the role and reach of markets in our social practices, human relationships, and everyday lives.