The Boston Review recently hosted a forum titled, How Markets Crowd Out Morals, in which Michael Sandel wrote the lead essay, arguing that we as a society should be questioning which institutions we allow to be defined by market norms.
I took Sandel’s main argument to be, as he recently wrote in the Atlantic, “[W]e need to have a public debate about where markets belong—and where they don’t.” That is to say, I didn’t read Sandel as being anti-market but rather as opposed to the indiscriminate reliance on markets when there are compelling reasons we might want other norms to control. Another way of stating this might be that markets should be seen as means, not ends, and that we need to make sure they are the right means to the ends we as a society have chosen to pursue.
For this reason, I thought the objections raised by Gintis, Bowles, Welch, and Tomasi, while insightful, didn’t really address Sandel’s core argument. Pointing out that markets and market liberalization have accompanied development, religious tolerance, and other kinds of social progress is certainly an important part of the debate Sandel wants us to have. And economists have and will continue to bring a lot of informed perspective to that discussion. But this objection does not address the point that there are still places where markets are displacing other socially desirable norms and producing unintended and adverse consequences. (Sandel’s own response is here).
The United States’ current campaign finance system offers a clear, if not paradigmatic, example of how market reasoning can distort outcomes and crowd out other norms, such as democratic norms like political equality. I was actually a little surprised that our political system wasn’t discussed more prominently in this forum. Unlike many of the relationships Sandel describes as being corrupted by market norms, the United States actually has an explicit constitutional commitment to democratic norms and to political equality. The crowding out of these norms that has occurred as a result of our current campaign finance legal regime is, I would suggest, the most pressing example of an area where market reasoning should not be deciding outcomes.
Stated crudely, in order for democracy and political equality to coexist alongside the kinds of inequality Americans tolerate in the economic marketplace, some legal wall is needed to keep economic gains from buying outcomes in the political sphere. Anti-bribery laws, campaign finance restrictions, and lobbying restrictions have historically been an important part of this wall between the economic and political realms. Over the past few decades, however, that wall has been gradually (and intentionally) dismantled. Under current campaign finance laws, all that remains are quid pro quo bans, patchy disclosure laws, and contribution limits that serve as no deterrent on private giving.
In the current political landscape, this necessary wall between the economic and the political is virtually nonexistent. The SuperPAC form has become, quite literally, a mechanism for translating economic winnings into political access and influence. Given that SuperPAC spending appears to correlate negatively with voter participation, it is not merely speculative to assert that market norms have indeed crowded out democratic voices and displaced non-market norms in precisely the way Sandel warns.
It is helpful, and clarifying, to see this transformation of the American political system as the supplanting of democratic norms and norms of political equality with the winner-take-all logic of markets. The Supreme Court, the branch of government most instrumental in making this change take place, actually laid much of this groundwork with decisions like Buckley v. Valeo and Citizens United, and now our institutions are catching up. Through a series of sloppy metaphors—where money is speech and corporations are people—our “marketplace of ideas” has deteriorated into an absolute winner-take-all marketplace, no longer capable of asking whether political campaigns are one of those places where “markets don’t belong.”
Sandel gives two overarching reasons why markets have been resisted in a variety of different contexts: a fairness concern and a corruption concern. In his own words, “The fairness objection asks about the inequality that market choices may reflect; the corruption objection asks about the attitudes and norms that market relations may damage or dissolve.” Both of these concerns are extremely salient in debates and court cases involving money in politics.
The fairness or equality line of arguments, that one’s democratic voice shouldn’t depend on the size of one’s bank account, was reflected in decisions like Austin, where a majority of the Court recognized “the corrosive and distorting effects of immense aggregations of wealth.” More recently, in Citizens United and Arizona Free Enterprise Club v. Bennett, the conservative members of the Court have rejected all such fairness concerns as illegitimate efforts to “level the playing field.” It has been pointed out on numerous occasions that the market forces that increasingly dominate our political process are antithetical to the promise of political equality embedded in our Constitution and undermine the formal equality of our “one person, one vote” election system.
Anti-corruption concerns are also at the center of the ongoing legal debates regarding Citizens United, in which Kennedy wrote that, “We now conclude that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” There is a mounting body of both anecdotal and empirical work suggesting this conclusion is wrong. There is some chance that issue will be addressed again in the Montana campaign finance case currently being appealed to the Supreme Court, but the corruption objection to a political marketplace, is perhaps the decisive issue that will determine, at least for the short-term, the fate of campaign finance regulation in the United States.