Some Comments on Markets, Morality, Sandel and Kristof
I tend not to read Nicholas Kristof's pieces for the NY Times because he repeats himself over and over again. His piece today caught my attention. He makes a quick case that we have too many markets and this is undermining our democracy. Given that I was taught that more markets offer us more choice and thus improve our standard of living, his claim is an interesting one.
" Is it right that prisoners in Santa Ana, Calif., can pay $90 per night for an upgrade to a cleaner, nicer jail cell?
• Should the United States really sell immigration visas? A $500,000 investment will buy foreigners the right to immigrate.
• Should Massachusetts have gone ahead with a proposal to sell naming rights to its state parks? The Boston Globe wondered in 2003 whether Walden Pond might become Wal-Mart Pond.
• Should strapped towns accept virtually free police cars that come laden with advertising on the sides? Such a deal was negotiated and then ultimately collapsed, but at least one town does sell advertising on its police cars.
“The marketization of everything means that people of affluence and people of modest means lead increasingly separate lives,” Sandel writes. “We live and work and shop and play in different places. Our children go to different schools. You might call it the skyboxification of American life. It’s not good for democracy, nor is it a satisfying way to live.”
Now, Kristof is passionate about the subject of human trafficking. Suppose that the U.S government promised to use a chunk of the extra revenue it collects from such price discrimination (as the examples above illustrate) to fight human trafficking. Would Kristof still oppose such "tacky" products as the ads on police cars?
Sandel, of Harvard, appears to be making a logical leap without much evidence. He certainly is right that the 1% live in their own bubble away from Homer Simpson but did Prince Charles ever have much to do with Joe the Plummer? He appears to be celebrating an earlier time when the U.S featured more equality and less diversity. If the population wants to self-segregate into like minded (Tiebout) sub-communities, what is lost? Perhaps, he is embracing the Alesina-Glaeser view that there would be more support for redistribution if the wealthy connected and embraced the less fortunate?
Does Sandel support mandatory military service to force rich kids to integrate with other kids? If the population wants to self-segregate, what binding nudge is he proposing be implemented? Will he quit his position at Harvard and teach at Univ. Mass to interact with more people from different backgrounds?
If the rich pay their taxes and commit no crimes, what else do they owe society? As a citizen, what do you owe your fellow man?
Kristof and Sandel appear to believe that more markets means more segregation and less interactions across groups (Putnam's bridging social capital). They prefer a "pooling equilibrium" where every restaurant, church, neighborhood, school contains a representative sample of the U.S population. But, over and over again the population has revealed a taste for "sorting". To claim that individual's privately favorite choices cause social problems is to argue that there is a negative externality from allowing the rich to self segregate.
When Kristof and Sandel send their children to an income integrated public school (I don't know if they do), who benefits from this action? It would be wonderful if the answer is "everyone" but what is the evidence supporting that claim?
Again, if the rich have access to markets that allow them to view life in a "Sky Box" then should they be denied this ability to express their taste for this elite status?
In the case of pollution, we want to have a pollution tax on activities such as driving a Hummer that offer private benefits but impose social costs. When Don Trump wants to be in a Sky Box and is willing to pay extra for it, how does that hurt Joe the Plummer? Would Joe the Plummer be a more productive guy if he got to sit next to Don Trump at the boxing match?