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Does the Free Market Corrupt People?

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The political theorist Michael J. Sandel is a popular teacher at Harvard, and his lectures circulate widely on YouTube and elsewhere. He attracted attention as a serious political theorist with his critical work on John Rawls, Liberalism and the Limits of Justice (1982). As most readers will know, I’m no fan of Rawls, and it’s easy to find poor arguments in his A Theory of Justice. But Sandel totally misunderstands him, and his attack on Rawls fails. From the dubious achievement of his book on Rawls, Sandel has descended to lower depths in his later works. I’d like to discuss some of his criticisms of the free market in one of those books, What Money Can’t Buy (2012). One of the things that money can buy is a copy of What Money Can’t Buy, but I advise against it.

I’d like to discuss Sandel's main argument against buying and selling goods and services in the free market. This is that buying and selling changes the meaning of what we do. What he has in mind is best explained by an example. Today, he tells us in angry tones, people can avoid waiting in long lines. They can hire others to stand in line for them. You might at first be tempted to think this a good thing. If you hire someone as a substitute, you are in your own judgment better off, because you prefer hiring him to waiting. In like fashion, the person who waits thinks that it is worth it to do so. Both parties to the trade are better off. What is the matter with that?

Sandel answers, “a lot.” He says,

Think again about the Public Theater's free summer Shakespeare performance [in New York]. “We want people to have that experience for free,“ said the spokesperson, explaining the theater's opposition to hired line standers….The Public Theater sees its free outdoor performances as a public festival, a kind of civic celebration. Charging for admission, or allowing scalpers to profit from what is meant to be a gift, is at odds with this end. It changes a public festival into a business, a tool for private gain.

But why should we think that performing a Shakespeare play in a park has as part of its meaning that admission to the play is free, with no paid line standers allowed? Couldn’t the Shakespeare play still be performed if paid line standers and scalpers were allowed?

Sandel would probably say that even if the play could be performed before a paying audience, it wouldn't be the same event as a performance before an audience that got in for free. But then he has simply built into the definition of the play's performance that the audience doesn’t pay admission. (Is it all right if the actors are paid? Are they required to donate their services?) With this definition, Sandel is correct that the meaning of the play will change with paid admission; but this is just the result of the way he has chosen to characterize what the performance of the play includes. Why should we be concerned with the play as Sandel defines it rather than a privately performed play? The paid performance is just a different social practice. Why is it worse than the free performance?

The answer to this uncovers the key assumption of Sandel's book. Though he doesn’t wish to abolish the market—he thinks, for example, that it is all right to for stores to rent videos—he regards economic freedom with deep distrust. He would not agree with the character in the novel It Pays to Advertise (1915), who says, “Cash…The most beautiful word in the English language.” To the contrary, he views the market as corrupting. People who try to make money put aside the nobler motive of sacrificing together with others for the common good.

Naturally, Sandel opposes “price gouging.” In another book, Justice: What’s the Right Thing to Do? (2010), he says that

Thomas Sowell, a free-market economist, called price gouging an “emotionally powerful but economically meaningless expression that most economists pay no attention to, because it seems too confused to bother with”….Higher prices for ice, bottled water, roof repairs, generators, and motel rooms have the advantage, Sowell argued, of limiting the use of such things by consumers and increasing incentives for suppliers in far-off places to provide the goods and services most needed in the hurricane's aftermath.

Sandel brushes aside Sowell’s wise remarks. Even if Sowell is right, allowing price gouging promotes “greed.”

Sandel's attack on money transactions frequently reaches absurdity. He opposes selling tickets for prime camping sites at Yosemite National Park on Craigslist at a higher price than the nominal cost set by the park service. He does so even though demand “is so intense, especially for the summer, that the campsites are fully booked within minutes of becoming available.” To allow the terrible free market to pollute Yosemite is to fail adequately to grasp the meaning of national parks. “They are places of natural wonder and beauty, worthy of appreciation, even awe. For scalpers to auction access to such places seems a kind of sacrilege.” Why people who pay to get into the park cannot view it with wonder and awe remains mysterious, but, for him, the natural beauty of the park must not be profaned by money. Like Jesus, Sandel would drive the money changers out of the temple. What he has given us here is not a reasoned argument, but an expression of a pseudoreligious faith.


Contact David Gordon

David Gordon is Senior Fellow at the Mises Institute and editor of the Mises Review.

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