Last year two important books appeared that discussed what a good life in a good society might look like. In a recent issue of Perspectives (Number 35, Winter 2013), the quarterly magazine of Scotland’s Democratic Left, David Purdy reviewed these books.

Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets (London: Allen Lane, 2012) pp 224, £20.00, ISBN: 978-1-846-14471-4

Robert Skidelsky and Edward Skidelsky, How Much Is Enough? The Love of Money and the Case for the Good Life (London: Allen Lane, 2012) pp 243, £20.00, ISBN: 978-1-846-14448-6

Critics of capitalism, particularly on the left, make two standard charges: that the system is inherently unstable and crisis-prone; and that it generates unacceptable inequalities in the distribution of income, wealth and social advantages generally. These two books offer a critique of a different kind, based on deeper ethical foundations. Without discounting either the gravity of the current slump or the chasm that divides rich and poor throughout much of the advanced capitalist world, both seek to stimulate public debate about what it means to live well and why contemporary capitalism puts the good life out of reach, even for the rich. Harvard philosopher Michael Sandel argues that the advance of markets and money into every aspect of social relations over the past thirty years obliges us to distinguish between a market economy and a market society. A market economy is a tool for organising productive activity. A market society is a way of life in which market values seep into every human activity and social relations are remade in the image of the market.

Focusing more specifically on capitalism with its inbuilt tendency to promote the accumulation of capital by expanding the production of commodities, Robert Skidelsky, acclaimed biographer of Keynes, and his son Edward, lecturer in philosophy at Exeter University, condemn the pursuit of “progress without purpose and riches without end”. Capitalism, they point out, is double-edged: it has brought about vast improvements in material living standards; but it has also exalted some of the most reviled human characteristics: greed, envy and avarice. The time is long overdue for us to rethink our obsession with economic growth in the light of what the greatest thinkers of all ages and all civilisations have understood by the good life.

Both books highlight the moral and spiritual vacuity of contemporary public discourse, attributing it to two widely held, but deeply flawed precepts: that the state must remain strictly neutral as between competing conceptions of the human good; and that I and no one else am the best judge of my own interests – the former a central tenet of modern liberalism, the latter an axiom of orthodox economics. Taken together, these precepts establish a presumption in favour of making the widest possible use of markets to conduct social transactions, relying on the state only to define and enforce property rights, uphold the rule of law and maintain public order.

Markets pass no judgment on people’s wants and preferences. If consenting adults are willing to buy and sell guns, drugs, sex, kidneys or the capacity to bear children, the only question for libertarians and economists is not whether such exchanges are desirable, but what price should be charged. And where the economy is designed to stir and serve desire rather than meeting need, recognising merit, observing propriety or cultivating the common good, no limit can be set to the growth of GDP, for human wants are infinitely expandable.

Creeping marketisation

Sandel describes the variety of ways in which, over the past thirty years, market norms and practices have spread to areas of life where they do not belong. Paying to jump the queue, for example, was once unheard of and is still taboo in public lavatories, where the rule remains first come first relieved. But nowadays you can pay to be fast-tracked through airport check-in desks, security screening and passport control. You can avoid the frustration and anxiety of waiting for medical appointments by paying an annual retainer to secure round-the-clock email or telephone access to a “concierge” doctor, with next-day appointments and leisurely consultations guaranteed. And if official vendors of tickets for top concerts or sporting events crack down on ticket touts, you can always hire someone to stand in line on your behalf.

Clearly, if money comes to buy more and more – political influence, good medical care, a home in a safe neighbourhood, access to elite schools – the distribution of income and wealth comes to matter more: inequalities carry a sharper sting. However, unfairness is not the sole or even the main problem with creeping marketisation.

Consider the growing use of cash incentives to induce behavioural change. In the West, we have long imposed fines for speeding or littering, while in China stiff financial penalties are visited on parents who breach the one-child policy. More recently, some US cities have introduced cash rewards to improve the attendance, conduct and performance of school students or to promote healthy lifestyles by getting people to lose weight or stop smoking. Questions of distribution arise in these cases too. Where fines are levied at a flat rate, varying only with the seriousness of the offence, not with the offender’s income, the rich may flout the law with impunity, effectively treating the fine as a fee. For this reason, in Finland penalties for speeding are proportional to the offender’s income. So far, the record for the most expensive speeding ticket stands at €170,000.

Market norms and non-market values

The power of money to subvert the intended effects of the law points towards a more general problem with the use of cash incentives: the monetary motive tends to displace higher motives. Good health, for example, is not just a matter of achieving the right cholesterol level or body mass index; it also requires us to develop the right attitude to mental and physical well-being and to treat our minds and bodies with respect. Bribes are manipulative, even when the behaviour they seek to induce is in our own best interests: they bypass our critical faculties and substitute an extrinsic reward for an intrinsic reason. They induce us to do the right thing for the wrong reason. And on a practical level, if we fail to acquire the attitudes and habits that promote good health, the bad old habits may return when the financial incentives end.

Similar issues arise in connection with carbon offsets and tradable pollution permits. Such “sin taxes” are designed to put a price on the damage our energy use inflicts on the planet and to oblige us to pay the price, person by person (or firm by firm) of putting it right. A laudable aim, one might suppose. But as with the sale of papal indulgences in the middle ages, the danger is that we come to regard them as a painless device for buying ourselves out of the more fundamental changes in attitudes, habits and ways of life that are required to tackle the problem of climate change.

There are, of course, some goods that money can’t buy: the Nobel Prize, say. There are also goods that money could buy, but shouldn’t: human kidneys, for example. The reasons, in each case, are connected. To attempt to buy an honorific good is to undermine it. Once word gets out that a prize has been bought, it no longer conveys or expresses recognition of merit or achievement. At first sight, the kidney case looks different. After all, a kidney will still function (assuming a good match) even if it is sold for money rather than being freely donated. But this is to ignore the cultural consequences of commercialisation. Introducing markets for kidneys degrades the object exchanged, along with the social norms and relationships involved.

In his book The Gift Relationship, Richard Titmuss (1970) compared the systems of blood collection in the US and the UK. Then as now, the US combined the commercial sale of blood with supplies donated by unpaid volunteers, while the UK relied exclusively on voluntary blood donation. The former system, Titmuss showed, is not only less efficient than the latter, with chronic shortages, higher costs, more waste and greater risks of contamination; it is also morally inferior because, besides exploiting the poor, it erodes people’s sense of obligation to donate blood, diminishes the spirit of altruism generally and undermines the gift relationship as an active force in social life.

Keynes’s prophecy

The Skidelskys’ contribution to the project of reconstituting economics as a moral science begins with Keynes’s prophetic essay, The Economic Possibilities for our Grandchildren, written in 1928, but not published until 1930 in the early stages of the Great Depression. Raising his sights above the immediate crisis, Keynes asks what wealth is for and, on the presumption that making money cannot be the permanent business of mankind, invites us to imagine life after capitalism. If, he argues, historical rates of capital accumulation and technical progress are maintained for the next 100 years, with no major wars and no significant increase in population, then by 2030 people in the West will be able to satisfy all their material needs at a fraction of existing work effort (3 hours a day or 15 hours a week). And having finally shaken off the “curse of Adam”, they will be free to devote their lives to leisure pursuits, understood not as passive, hedonistic consumption, but as spontaneous, purposive activity undertaken for intrinsic reasons rather than financial gain. At this point, there being no further need to develop the productive forces, capitalism can be put to rest, its historic work complete.

Keynes’s long-range prediction of output growth has proved roughly correct. But this was because, despite the destruction caused by the Second World War and a 30 per cent rise in population, he underestimated the growth of productivity (output per worker or per hour worked). The two mistakes cancelled each other out. As a result, over the 70 years after 1930, per capita income in the West grew fourfold, enough to raise the average incomes of manual workers to the level enjoyed by the professional classes in Keynes’s day, his informal benchmark of material sufficiency.

Hours of work, however, did not fall as anticipated. In 1930 people in the industrial world worked, on average, a 50-hour week. Today they work a 40-hour week. Hours worked per year fell by more than hours worked per week thanks to a rise in statutory holidays from one week in 1930 to four weeks now, though offsetting this gain in free time is the increase in time spent on commuting and household work (about 30 minutes more per week than in 1961 because time spent on shopping and childcare has risen by more than time spent on cooking and cleaning has fallen).

Averages can be misleading. There are sizeable variations between countries: average annual working hours are around 1,800 in the US, 1,650 in the UK and 1,400 in Germany and the Netherlands. There are also divergences in hours worked by different groups within each country: some workers are wholly unemployed; some, mostly lower paid, work less than they want; and others, mostly higher paid, work more than they need. (The workaholic rich have replaced the idle rich: social status no longer confers immunity from labour.) And we spend more of our lives in education and retirement than our forebears did. But since education nowadays is mostly training for jobs, it should be counted as work. Retirement, that expanding gap between work and death, is more naturally thought of as leisure. But it seems perverse to pack so much leisure into the last years of life when we are less able to enjoy it.

Keynes’s mistake

Why was Keynes wrong about the fall in hours of work? One problem is conceptual: Keynes failed to distinguish between wants and needs, using the terms interchangeably. Given that hours of work had fallen substantially between 1870 and 1930, he simply assumed that the more income people had, the less they would want (and need) to work. Contemporary economists, by contrast, have no use for the concept of need and deal only in wants, which, as noted earlier, are infinitely elastic and therefore insatiable.

In fact, working hours continued to fall in the post-war years, albeit far more slowly than before, but the trend levelled out in the 1980s and has remained flat ever since. The Skidelskys explain this as follows. Over the past thirty years, as the balance of market power has swung in their favour, the rich have appropriated most of the gains from productivity growth. Hence, in most countries, median income – that is, the income of the person in the middle of the distribution – has risen more slowly than average income. Indeed, in the US it has not risen at all. This fact alone accounts for much of the failure of working hours to fall as Keynes expected.

At the same time, “capitalism has inflamed our innate tendency to insatiability by releasing it from the bounds of custom and religion within which it was previously confined (p. 40).” Four inflammatory forces are identified: advertising, “the organised creation of dissatisfaction”; the spread of competitive, status-driven consumption, with its bandwagon effects, snob goods and conspicuous display; the hostility of free-market ideology to the idea of “enough”, variously condemned as effete, patronising and contrary to our natural desire to “better ourselves”; and the monetisation of the economy, which in enlarging the sphere of monetary measurement, calculation and comparison intensifies the love of money for its own sake. “Keynes’s mistake was to believe that the love of gain released by capitalism could be sated by abundance, leaving people to enjoy its fruits in civilised living” (p. 41).

Restating the case for the good life

The Skidelskys conclude that the only way to escape from the treadmill of growth is to retrieve the idea of the good life from centuries of neglect and distortion, drawing on the rich storehouse of pre-modern wisdom bequeathed to us by the greatest minds of both West and East, from Aristotle and medieval Christianity to the Brahminic, Confucian and Taoist traditions. These philosophies differ on many points, but all agree that commerce and wealth should be subordinate to politics and the life of the mind, and all regard the love of money for its own sake as a mental aberration. “Such agreement between three great and largely independent cultures ought to give us pause. In matters concerning the human good, the opinion of the world cannot err entirely” (p. 86).

Other contemporary critics of the growth juggernaut argue: (1) that it fails to make us happier; or (2) that it is environmentally disastrous. These claims, the Skidelskys note, may be true, but they fail to capture the deeper objection to endless growth: that it is senseless. “To found the case against growth on allegations that it is damaging to happiness and the environment is to invite our opponents to show that it is not damaging in these respects – an invitation they have been quick to take up” (p. 7). The limits to growth lie neither in the nature of the human psyche nor in the nature of the physical world, but in our capacity to restrain our appetites, expand our minds and re-organise our social world in accordance with our best collective judgment of what is good for us, both each individually and all of us together.

In their penultimate chapter, the Skidelskys outline the elements of the good life, conceived as a life worthy of desire, not just one that is widely desired. Noting that there is a wide consensus across cultures and ages about the “basic goods” that constitute living well, while acknowledging that any list of such goods is open to debate, they specify four criteria of inclusion. Basic goods are universal in the sense that they belong to the good life as such and not just to some particular, local version of it; final, meaning that they are good in themselves, and not just as means to some other good; sui generis, i.e. not part of some other good; and indispensable, meaning that anyone who lacks them may be deemed to have suffered a serious loss or harm.

Seven goods meet these criteria: health, security, respect, personal autonomy (the ability to frame and execute a plan of life reflective of one’s conception of the good), harmony with nature, friendship and leisure (understood not just as time off work, but as a special kind of activity in its own right). Growth might be pursued as a means to one or more of these basic goods.  Health requires decent food and medicine; leisure requires time away from toil; and so on. Or it might be pursued for short-term pragmatic reasons: during a recession, with high unemployment and public debt, growth is rightly a priority. But perpetual growth is not only unnecessary to achieving the basic goods: it may actually damage them. This is because the basic goods are essentially non-marketable: they cannot be bought and sold. An economy geared to unlimited commodity production will tend to crowd them out, replacing them with inferior marketed surrogates. The scale of what we might call social corruption in the UK and other rich countries is not something that can be precisely measured. But to judge by the various statistical proxies for the seven basic goods presented in Chapter 6, the general verdict is that while per capita income has more than doubled in Britain since 1974, the basic goods have either not grown at all or atrophied.

I find these arguments compelling. Of course, there is room for debate about what policies are required to provide basic goods for all and how such policies are to be enacted. The Skidelskys’ thoughts on these matters are little more than preliminary sketches. Nevertheless, the vision of the good life they offer is one that should appeal to anyone who is dismayed by the state of our society, rejects market individualism and aspires to raise the moral condition of the people. As they say (p. 218): “The greatest waste now confronting us is not one of money but of human possibilities. ‘Once we allow ourselves to be disobedient to the test of an accountant’s profit,’ declared Keynes in 1933, ‘we have begun to change our civilisation.’”

Reference

Titmuss, R.M. (1970) The Gift Relationship (London: Allen and Unwin)