Markets and morality

Paul Sweeney: Markets and morality is an interesting subject. It should be on every economics course, but is probably absent under the narrow regime of the neo-classical economics which dominates Irish universities (to our cost).

On BBC 4, Michael Sandel, Harvard Professor of Government, delivers four lectures about the prospects of a new politics of the common good. The series is presented and chaired by Sue Lawley. He is critical of economists and economic commentators.
He reviews three decades of market triumphalism, and argues that it is not sufficient to curb greed and set up new regulations. He argues that markets are not mere mechanisms, but have moral impacts. Market incentives can crowd out other norms, he says.

He says the incentive payment of $2 to read a book for US children in some schools has other impacts. He argues strongly against the marketisation of migration policy by influential right wing economist, Gary Becker. Becker advocates that US citizenship should be sold for $50,000 and this will bring in the best of foreigners – those who are skilled and ambition.

In the first lecture, given on Tuesday 9th June 2009, Sandel considers the expansion of markets and how we determine their moral limits. Should immigrants, for example, pay for citizenship? Should we pay schoolchildren for good test results, or even to read a book? He calls for a more robust public debate about such questions, as part of a 'new citizenship'.
In Sandel’s latest book, The Case against Perfection, Ethics in the Age of Genetic Engineering (2007) he argues against the use of genetic engineering to create designer children, and suggests that the genetic revolution will force spiritual questions back onto the political agenda. His new book, Justice: What We Owe One Another as Citizens, will be published in the autumn. He is also the author of Liberalism and the Limits of Justice (1997), Democracy's Discontent (1996), Public Philosophy: Essays on Morality in Politics (2005.

The lecture is 45 minutes long, is not taxing at all and is worth a listen.

Wealth in a downturn

Paul Sweeney: Most of the banks and financial sector economists, especially those paid under the banks’ Marketing Budgets (as apposed to those bank economists who are paid to add value to the banks’ decisions-making) have gone to ground. So it is surprising that the NIB, a Dankse Bank subsidiary, has come out with a report on Wealth. It did one before, at the peak of the boom. It made really interesting reading, I thought, though it was excoriated recently in the book on the property boom, Ireland’s House Party, by Derek Brawn, himself of an auctioneers!

Here, the new report asserts that Ireland’s wealth is down by a large €150bn in the past year. The fact is that it was never as high as the earlier figure. The market said it was, but the market got it wrong! Most economists don’t believe that the market can get anything wrong (though they do talk of market corrections… which also implies that maybe they do think that the market is not always right).

The boom was an illusion and we are still falling to ground – to realistic wealth levels. But in the meantime, I look forward to a government report into wealth distribution in Ireland. The Norwegian Minster for Finance, the leader of the Left party, has commissioned such a report. Ireland has a Tax Commission which will report in mid-summer, but under its terms of reference it is instructed not to examine wealth distribution.

I suppose this NIB report is the nearest we will get to such a report until we elect a progressive government. I’m sure many will perturbed to hear that the sale of helicopters has fallen from 66 in 2006 to only 2 (6, but 4 were flogged abroad) and luxury car sales are only one tenth of last year's figure.