I was delighted to see something that looked interesting on the radio, and listened to Michael Sandel host a debate about this subject with increasing dejection. I like Sandel; I appreciate what he says. I suppose it's partly because I already think what he teaches in his lectures than it always disappoints me to hear him: I wonder why I can't be a highly-respected philosophy professor.
But then, he writes academic articles as well as his more public teaching, which are probably a step apart.
Nonetheless, this debate annoyed me because I wasn't there to answer any of the points made. So here I will make my own case.
A banker should not be paid hugely more than a nurse. Even a perfectly operating market only tells us what is in demand and in short supply. It does not give us a moral outcome unless we explicitly state that we absolve ourselves of all responsibility for making general decisions and subjugate ourselves to the market. There are people who think that because a perfect market distributes resources efficiently we can deduce that they are necessarily moral.
I disagree. I am a fan of efficiency, as evidenced in daily life, writing and speech. But although I do seek efficiency in achieving my goals, and disapprove of inefficiency in others' achievements, I do not make it my only goal: it is always a necessary part of the means, but never an end. It can't be a goal in itself; we need to achieve something else efficiently. Distributing resources efficiently according to the balance of human decisions (and ability to pay) is not intrinsically moral. If everyone gets a vote in what is right then we can have the tyranny of the majority: the persecution of minorities and so on. We guard against this with constitutions and bills of rights precisely because this is not moral. This is the easy argument of principle even before we get onto rich people raising prices for goods that others get more from. Markets judge the usefulness of a good from what a purchaser pays for it. That means that those with less money get less say in what is useful, and in what is moral, if we assume that market distribution is moral. That seems to me like disenfranchisement and slavery. Markets are the means by which people acquire what they choose, once we have decided on moral entitlements.
Of course, this is the case even if we have perfect markets. We don't. This is an impossibility, and economists like to pretend that markets approximate efficiency despite their known imperfections (unknown ones are assumed not to exist). But when it comes to justice, is approximate good enough? Is it enough that someone from the right house is convicted of murder? Yes, I know that's a bit of a spurious comparison, but if a few people do inordinately well out of a system that works mostly well, it's a very poor argument to say that we should not make things fairer because the system we have approximates quite well to fairness and therefore should be taken as a proxy for it.
We use markets as a tool, not an end. Just like GDP, they are a marker for sensible distribution because the two are correlated for much of human experience. But as with GDP, the link is neither perfect nor does it necessarily extrapolate either into the future or further into even freer (anarchic) markets.
Should we decree that everything is chance, including talent and the timing of birth that makes the talent useful? I don't like this one either. It is true that it is only by chance that my parents' son has the talents I have, but anyone else with different abilities would not be me. I deserve the products of my talent and effort precisely because they are inseparable from being me. They define who I am. Timing seems irrelevant. Why should we deny everyone ipods because it is only through an accident of birth that they even have the opportunity to use one (rather than being born centuries ago)? The implicit assumption is that there is a soul sitting in a timeless zone that is sucked into the world with an equal chance of being any one baby, and that we should be judging souls, not people. I think that a person is inseparable from the skills and attributes with which he is born: they make the person.
If we decide that even the effort you put into work is not your own, because it is determined by parental encouragement and social background, we are effectively denying the notion of individual responsibility for one's actions. It's a common thing to do, but it has awfully wide implications. Crime, punishment, morality and justice are definitely nonsensical if we do this. We don't want to do this.
Splitting talent and effort is not easy. The two feed into each other. But even if we could, I don't think we should for questions of how much pay one earns.
Are bankers more talented? They possibly are more able than nurses, and could do a nurse's job given training. Do they work harder? Definitely not. They might put in the hours, but that doesn't compare to a 12-hour night shift turning oldies, getting shouted at and delivering medicine.
But then, he writes academic articles as well as his more public teaching, which are probably a step apart.
Nonetheless, this debate annoyed me because I wasn't there to answer any of the points made. So here I will make my own case.
A banker should not be paid hugely more than a nurse. Even a perfectly operating market only tells us what is in demand and in short supply. It does not give us a moral outcome unless we explicitly state that we absolve ourselves of all responsibility for making general decisions and subjugate ourselves to the market. There are people who think that because a perfect market distributes resources efficiently we can deduce that they are necessarily moral.
I disagree. I am a fan of efficiency, as evidenced in daily life, writing and speech. But although I do seek efficiency in achieving my goals, and disapprove of inefficiency in others' achievements, I do not make it my only goal: it is always a necessary part of the means, but never an end. It can't be a goal in itself; we need to achieve something else efficiently. Distributing resources efficiently according to the balance of human decisions (and ability to pay) is not intrinsically moral. If everyone gets a vote in what is right then we can have the tyranny of the majority: the persecution of minorities and so on. We guard against this with constitutions and bills of rights precisely because this is not moral. This is the easy argument of principle even before we get onto rich people raising prices for goods that others get more from. Markets judge the usefulness of a good from what a purchaser pays for it. That means that those with less money get less say in what is useful, and in what is moral, if we assume that market distribution is moral. That seems to me like disenfranchisement and slavery. Markets are the means by which people acquire what they choose, once we have decided on moral entitlements.
Of course, this is the case even if we have perfect markets. We don't. This is an impossibility, and economists like to pretend that markets approximate efficiency despite their known imperfections (unknown ones are assumed not to exist). But when it comes to justice, is approximate good enough? Is it enough that someone from the right house is convicted of murder? Yes, I know that's a bit of a spurious comparison, but if a few people do inordinately well out of a system that works mostly well, it's a very poor argument to say that we should not make things fairer because the system we have approximates quite well to fairness and therefore should be taken as a proxy for it.
We use markets as a tool, not an end. Just like GDP, they are a marker for sensible distribution because the two are correlated for much of human experience. But as with GDP, the link is neither perfect nor does it necessarily extrapolate either into the future or further into even freer (anarchic) markets.
Should we decree that everything is chance, including talent and the timing of birth that makes the talent useful? I don't like this one either. It is true that it is only by chance that my parents' son has the talents I have, but anyone else with different abilities would not be me. I deserve the products of my talent and effort precisely because they are inseparable from being me. They define who I am. Timing seems irrelevant. Why should we deny everyone ipods because it is only through an accident of birth that they even have the opportunity to use one (rather than being born centuries ago)? The implicit assumption is that there is a soul sitting in a timeless zone that is sucked into the world with an equal chance of being any one baby, and that we should be judging souls, not people. I think that a person is inseparable from the skills and attributes with which he is born: they make the person.
If we decide that even the effort you put into work is not your own, because it is determined by parental encouragement and social background, we are effectively denying the notion of individual responsibility for one's actions. It's a common thing to do, but it has awfully wide implications. Crime, punishment, morality and justice are definitely nonsensical if we do this. We don't want to do this.
Splitting talent and effort is not easy. The two feed into each other. But even if we could, I don't think we should for questions of how much pay one earns.
Are bankers more talented? They possibly are more able than nurses, and could do a nurse's job given training. Do they work harder? Definitely not. They might put in the hours, but that doesn't compare to a 12-hour night shift turning oldies, getting shouted at and delivering medicine.
Bankers' talent could be said to earn them more than nurses' effort. That might be what we want as a society: to reward talent heavily. But we're not. University professors are intelligent people, capable of being rich bankers if they choose. Doctors are usually intelligent people, easily rivals for bankers in the league of talents, but not paid as much. This is because we have market distortions.
Doctors' work is provided almost entirely by the state, at set levels of pay. Bankers' work isn't state-controlled, but they are in the special position of controlling the markets which set their pay. They share this position with company directors, who control selections onto remuneration boards. Most importantly, bankers, directors and others with economic power can afford the political donations, meals and lobbying (or campaigning, for those who get fully into politics) to suborn government into ensuring that their work is needed, allowed and well-rewarded.
Government doesn't directly set pay levels, but it does decree what is legal and what amounts to conning others, it sets and (supposedly) enforces tax rates and it (fails to) regulate companies that distort markets by becoming too large or engaging in unsound practices.
That our current system amplifies the differences in talent is obvious from the differences in pay. The top-earning bankers and executives are paid millions of pounds: each million is the pay of 20 well-qualified, talented people.
It is not believable to suggest that these people have more talent than 20 senior staff members, all of whom are good at their jobs, especially when evidence suggests that hedge-fund managers and directors are more products of chance (combined with enough sense not to be a disaster) than exceptional ability (I'm thinking of studies that show that you'd expect half of hedge-fund managers to do well if each time a decision crops up half of them choose each side, and that the numbers achieving notoriety and then failing are consistent with the random bobble of chance).
We have a system that rewards luck and enables those lucky enough to be catapulted into wealth to engineer things so that they do not lose it. That is very different from rewarding talent and effort.
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