What Money Can't (or Shouldn't) Buy: Part 1. Jumping The Queues

By Michael J. Sandel

The financial crisis did more than cast doubt on the ability of markets to allocate risk efficiently. Some say the moral failing at the heart of market triumphalism was greed, which led to irresponsible risk taking. The solution is to rein in greed, insist on greater integrity and responsiblity among bankers and Wall street executives and enact sensible regulations to prevent a similar crisis from happening again. While it is certainly true that greed played a role in financial crisis, something bigger is at stake. The most fateful change that unfolded during the past three decades was not an increase in greed, but the expansion of markets, and of market values, into spheres of life where they don''t belong.

Today, the logic of buying and selling no longer applies to material goods alone but increasingl governs the whole of life. We need to rethink the role that markets should play in our society. We need to think through the moral limits of markets. We need to ask whether there are some things money should not buy. The reach of markets, and market-oriented thinking, into aspects of life traditionally governed by nonmarket norms is one of the most significant developments of our time. 

Consider the pharmaceutical companies'aggressive marketing of prescription drugs to consumers in rich countries. Consider the reach of commercial advertising into public schools; the outsourcing of pregnancy to surrogate mothers in the developing world; the buying and selling by companies and countries of the right to pollute. Consider the number of private guards which doubled the number of public policy officers in United States and Britain. Consider the outsourcing of war to private military contractors in Iraq and Afghanistan (which actually outnumbered U.S. military troops). These uses  of markets to allocate health, education, environmental protection, procreation, and other social goods that today we take them largely for granted. 

Why worry that we are moving toward a society in which everything is up for sale? Two reasons: one is about inequality; the other is about corruption. 

Consider inequality. In a society where everything is for sale, life is harder for those of modest means. The more money can buy, the more affluence (or the lack of it) matters. As money comes to buy more and more political influence, good medical care, a home in safe neighborhood, access to elite schools; the distribution of income and wealth looms larger and larger. Where all good things are bought and sold, having money makes all the difference in the world. This explains why the last few decades have been especially hard on poor and middle-class families. Not only has the gap between rich and poor widened, the commodification of everything has sharpened the sting of inequality by  making money matter more. 

The second reason is not about inequality and fairness, but about the corrosive tendency of markets. Because markets don''t only allocate goods, they also express and promote certain attitudes toward the goods being exchanged. Paying kids to read books might get them to read more, but also teach them to regard reading as a chore rather than a source of intrinsic satisfaction. Hiring foreign mercenaries to fight our wars might spare the lives of our citizens but corrupt the meaning of citizenship. 

Economists often assume that markets are inert, that they do not affect the goods they exchange. But this is untrue. Markets leave their mark. Sometimes, market values crowd out nonmarket values worth caring about. People disagree about what values are worth caring about and why. So to decide what money should and should not be able to buy, we have to decide what values should govern the various domains of social and civic life. When we decide that certain goods may be bought and sold, at least implicitly, that it is appropriate to treat them as commodities, as instruments of profit and use. But not all goods are properly valued in this way. The most obvious example is human beings. Slavery was appalling because it treated human beings as commodities. Such treatment fails to value human beings in the appropriate way.  Or consider the rights and obligations of citizenship. If you are called to jury duty, you may not hire a substitute to take your place, nor do we allow citizens to sell their votes.  Why not? because we believe that civic duties should not be regarded as private property but should be viewed instead as public responsibilities. t outsource them is to demean them, to value them in the wrong way.

Those examples illustrate a broader point: some of the good things in life are corrupted or degraded if turned into commodities. So to decide where the market belongs, and where it should be kept at a distance, we have to decide how to value the goods in question -- health, education, family life, nature, art, civic duties, and so on. These are moral and political questions, not merely economic ones. To resolve them we have to debate case by case, the moral meaning of these goods and the proper way of valuing them.  

We drifted from having a market economy to being a market society. 

The difference is this: A market economy is a tool -- a valuable and effective tool -- for organizing productive activity. A market society is a way of life in which market values seep into every aspect of human endeavor.  It's a place where social relations are made over in the image of the market. 

The era of market triumphalism had come to a devastating end.  The spectacular failure of financial markets did little to dampen the faith in markets generally. Yet it did not prompt a fundamental rethinking of markets. In fact, the financial crisis discredited government more than the banks. The rise of Tea Party movement, whose hostility to government and embrace of free markets have made Ronald Reagan blush. In the Fall 2011, the Occupy Wall Street movement brought protests targeted big banks and corporate power, and the rising inequality of income and wealth.  Despite their different ideological orientations, both the Tea Party and Occupy Wall Street activists gave voice to populist outrage against the bailout. Disillusion with politics has deepened as citizens grow frustrated with a political system unable to act for the public good, or to address the questions that matter most. 

A debate about the moral limits of markets would enable us to decide, as a society, where markets serve the public good and where they don't belong. If you agree that buying and selling ceritan goods corrupts or degrades them, then you must believe that some ways of valuing these goods are more appropriate than others.  It hardly makes sense to speak of corrupting an activity -- parenthood, say, or citizenship -- unless you think that some ways of being a parent, or a citizen , are better than others. 

When we think of the morality of markets, we think first of Wall Street banks and their reckless misdeeds, of hedge funds and bailouts and regulatory reform. But the moral and political challenge we face today is more pervasive and more mundane -- to rethink the role and reach of markets in our social practices, human relationships, and everyday lives. 

Jumping the Queue

Nobody likes to wait in line. Sometimes you can pay to jump the queue.  In recent years, selling the right to cut in line has come out of the shadows and become a familiar practice. Some people object to the idea of selling the right to jump the queue, arguing that the proliferation of fast-track schemes adds to the advantages of affluence and consigns the poor to the back of the line. To an economist, long lines for goods and services are wasteful and inefficient, a sign that the price system has failed to align supply and demand. Letting people pay for faster service at airports and on highways improves economic efficiency by letting people put a price on their time. 

1.  Fast Track

Long lines at airport security checkpoints make air travel an ordeal. Those who buy first-class or business-class tickets can use priority lanes that take them to the front of the line for screening. But most people can't afford to fly first-class, so the airlines have begun offering coach passengers the chance to buy line-cutting privileges as an a la carte perk. Critics complain that a fast track through airport security should not be for sale. Security checks are a matter of national defense (not an amenity like extra legroom or early boarding privileges); the burden of keeping terrorists off airplanes should be shared equally by all passengers. The airlines reply that everyone is subjected to the same level of screening; only the wait varies by price. 

2.. Lexus Lanes

Many states, hoping to reduce traffic congestion and air pollution, created express lanes for commuters willing to share a ride. Solo drivers caught using the car pool lanes faced hefty fines. Some put blow-up dolls in the passenger seat. One hires a prostitute, not to have sex but to ride in his car. Today, many commuters can do the same, without the need for hired help. For fees of up to $10 during rush hour, solo drivers can buy the right to use car pool lanes. The toll typically varies according to the traffic -- the heavier the traffic, the higher the fee. Opponents of paid express lanes call them "Lexus lanes"and say they are unfair to commuters of modest means. 

FedEx charges a premium for overnight delivery, the local dry cleaner charges extra for same-day service. Yet, no one complain that it's unfair for FedEx or the dry cleaner. 

3. The Line-Standing Business

Even where you're not allowed to buy your way to the head of the line, you can sometimes hire someone else to queue up on your behalf.  In Washington, D.C., the line-standing business is fast becoming a fixture of government. When congressional committees hold hearings on proposed legislation, they reserve some seats for the press and make others available to the general public on a first-come, first-served basis. Depending on the subject and the size of the room, the lines for the hearings can form a day or more in advance, sometimes in the rain or in the chill of winter. Corporate lobbyists are keen to attend these hearings, in order to chat up lawmakers during breaks and keep track of legislation affecting their industries. But the lobbyists are loath to spend hours in line to assure themselves a seat. Their solution: pay thousands of dollars to professional line-standing companies that hire people to queue up for them.The line-standing companies recruit retirees, message couriers, and, increasingly, homeless people to brave the elements and hold place in the queue. The line standers wait outside. Shortly before the hearing begins, the well-heeled lobbyists arrive, trade places with their scruffily attired stand-ins.  The line-standing companies charge the lobbyists $36 to $60 per hour for the queuing service, which means getting a seat in a committee hearing can cost $1,000 or more. The line standers are paid $10 - $20 per hour.  The company LineStanding.com describes itself as a leader in the Congressional line standing business. Mark Gross, the owner of the company, compared line standing to the division of labor and claimed that linestanding is ultimately an honest job in a free-market economy. Oliver Gomes, a professional line stander, agrees. He was living in a homeless shelter when he was recruited for the job. CNN interviewed him as he held a place in line for a lobbyist at a hearing on climate change. He said that sitting in the halls of Congress made me feel a little better. It elevated me and made me feel like, maybe I do belong here, maybe I can contribute even at that little minute level. 

But opportunity for Gomes meant frustration for some environmentalists. When a group of them showed up for the climate change hearing, they couldn't get in. The lobbyists'paid stand-ins had already staked out all the available seats in the hearing room. Of course, it might be argued that if the environmentalists cared enough about attending the hearing, they too could have queued up overnight. Or they could have hired homeless people to do it for them. 

4. Ticket Scalping Doctor Appointments

The line-standing business has become routine at top hospitals in Beijing. The market reforms of the last two decades have resulted in funding cuts for public hospitals and clinics, especially in rural areas. So patients from the country-side now journey to the major public hospitals in the capital, creating long lines in registration halls. They queue up overnight, sometimes for days, to get an appointment ticket to see a doctor. The appointment tickets are a bargain -- only 14 yuan (about $2). But it isn't easy to get one. Rather than camp out for days and nights in the queue, some patients, desperate for an appointment buy tickets from scalpers. The scalpers make a business of the yawning gap between supply and demand. they hire people to line up for appointment tickets and then resell the tickets for hundreds dollars - more than a typical peasant makes in months. The LA Times described the ticket-scalping scene outside the registration hall of a Beijing hospital: "Dr. Tang. Dr. Tang. Who wants a ticket for Dr. Tang? Rheumatology and immunology."

There is something distasteful about scalping tickets to see a doctor. For one thing, the system rewards unsavory middlemen rather than those who provide the care. Dr. Tang could well ask why, if a rheumatology appointment is worth $100, most of the money should go to scalpers rather than to him, or his hospital. 

Economists might agree and advise hospitals to raise their prices. In fact, some Beijing hospitals have added special ticket windows, where the appointments are more expensive and the lines much shorter. This high-priced ticket window is the hospital's version of the no-wait premium pass at amusement parks or the fast-track lane at the airport -- a chance to pay to jump the queue.  But regardless of who cashes in on the excess demand, the scalpers or the hospital, the fast track to the rheumatologist raises a more basic question: should patients be able to jump the queue for medical care simply because they can afford to pay extra?

5. Concierge Doctors

Although U.S. hospitals are not thronged with scalpers, medical care often involves a lot of waiting. Doctor appointments have to be scheduled weeks, sometimes months, in advance. When you show up for the appointment, you may have to cool your heels in the waiting room, only to spend a hurried ten or fifteen minutes with the doctors. The reason: insurance companies don't pay primary care doctors much for routine appointments. So to make a decent living, physicians in general practice have rosters of three thousand patients or more, and often rush through twenty-five to thirty appointments per day. Many patients and doctors are frustrated with this system, so a growing number of physicians now offer a more attentive form of care known as "concierge medicine". Like the concierge at a five-star hotel, the concierge physician is at your service around the clock. For annual fees ranging from $1,500 to $25,000 patients are assured of same-day or next-day appointments, no waiting, leisurely consultations, and 24-hour access to the doctor by email and cellphone. And if you eed to see a top specialist, your concierge doctor will pave the way.

To provide this attentive service, concierge physicians sharply reduce the number of patients they care for. Physicians who decide to convert their practice into a concierge service send a letter to their existing patients offering a choice: sign up for the new, no-wait service for an annual retainer fee, or find another doctor.  MD Squared offers for a fee of $15,000 per year for an individual (or $25,000 for a family), the company promises absolute, unlimited and exclusive access to your personal physician. Each doctor serves only fifty families. The company website explains the availability and level of service we provide absolutely necessitates that we limit our practice to a select few.  MD Square waiting room looks more like the lobby of a Ritz-Carlton than a clinical doctor's office. But few patients even go there. Most are CEOs and business owners who don't want to lose an hour out of their day to go to the doctor's office and prefer instead to receive care in the privacy of their home or office.  MD VIP offers same0day appointments and prompt service (answering your call by the second ring) for $1,500 to $1,800 per year, and accepts insurance payments for standard medical procedures. Participating physicians cut their patient rolls to six hundred, enabling them to spend more time with each patient. For concierge doctors and their paying customers, concierge care is win-win solution. Doctors can see eight to twelve patients a day, rather than thirty, and still come out ahead financially. The drawback, of course, is that concierge care for a few depends on shunting everyone else onto the crowded rolls of other doctors. Therefore, it invites the same objection leveled against all fast-track schemes: that it's unfair to those left languishing in the slow lane. 

Market Reasoning

Is there anything wrong with hiring people to stand in line? Most economists say no. They have little sympathy for the ethic of the queue. 

The case for markets over queues draws on two arguments.

One is about respecting individual freedom; the other is about maximizing welfare, or social utility. The first is a libertarian argument. It maintains that people should be free to buy and sell whatever they please, as long as they don't violate anyone's rights. Libertarians oppose laws against ticket scalping for the same reason they oppose laws against prostitution, or the sale of human organs: they believe such laws violate individual liberty, by interfering with the choices  made by consenting adults. 

The second argument for markets, more familiar among economists, is utilitarian. It says that market exchanges benefit buyers and sellers alike, thereby improving our collective well-being, or social utility. The fact that my line stander and I strike a deal proves that we are both better off as a result, our utility increases. This is what economists mean when they say that free markets allocate goods efficiently. By allowing people to make mutually advantegous trades, markets allocate goods to those who value them most highly, as measured by their willingness to pay. Greg Mankiw, an economist author of one of the most widely used economic textbooks, uses the example of ticket scalping to illustrate the virtues of the free market. First, he explains that economic efficiency means allocating goods in a ways that maximizes the economic well-being of everyone in society. He then observes that free markets contribute to this goal by allocating the supply of goods to the buyers who value them most highly, as measured by their willingness to pay. 

If the free-market argument is correct, ticket scalpers and line-standing companies should not be vilified for violating the integrity of the queue; they should be praised for improving social utility by making underpriced goods available to those most willing to pay for them. 

But this argument ins unconvincing. The willingness to pay for a good does not show who values it most highly. This is because market prices reflect the ability as well as the willingness to pay. Those who most want may be unable to afford a ticket, and in some cases, those who pay the most for tickets may not value the experience very highly at all. Defenders of ticket scalping complain that queuing discriminates in favor of people who have the most free time. That's true, but only in the same sense that markets discriminate in favor of people who have the most money. As markets allocate goods based on the ability and willingness to pay, queues allocate goods base don the ability and willingness to wait. And there is no reason to assume that the willingness to pay for a good is a better measure of its value to a person than the willingness to wait. 

So the utilitarian case for markets over queues is highly contingent. sometimes markets do get goods to those who value them most highly; other times, queues may do so. Whether, in any given case, markets or queues do this job better is an empirical question, not a matter that can be resolved in advance by abstract economic reasoning. 

But the utilitarian argument for markets over queues is open to a further, more fundamental objection: utilitarian considerations are not the only ones that  matter. Certain goods have value in ways that go beyond the utility they give individual buyers and sellers. How a good is allocated may be part of what makes it the kind of good it is.  Think about the Public Theater's free summer Shakespeare performances.  We want people to have that experience for free, said the spokesperson explaining the theater's opposition o hired line standers. But why? How would the experience be diminished if tickets were bought and sold? It would be diminished for those who can't afford a ticket. But fairness is not the only thing at stake. Something is lost when free public theater is turned into a market commodity, something beyond the disappointment experienced by those who are priced out of attending. The Public Theater sees its free outdoor performances as a public festival, a kind of civic celebration, a gift the city gives itself. The idea is to make Shakespeare freely available to everyone, without regard to the ability to pay. Of course, seating is not unlimited, the entire city cannot attend on any given evening. 

We often associate corruption with ill-gotten gains. But corruption refers to more than bribes and illicit payments. To corrupt a good or a social practice is to degrade it, to treat it according to a lower mode of valuation than is appropriate to it. Charging admission to congressional hearings is a form of corruption in this sense. It treats Congress as if it were a business rather than an institution of representative government. Cynics may reply that Congress is already a business, in that in routinely sells influence and favors to special interests. So why not acknowledge this openly and charge admission? the answer is that lobbying, influence peddling, and self-dealing that already affict Congress are also instances of corruption. They represent the degradation of government int he public interest. Implicit in any charge of corruption is a conception of the purposes and ends an institution properly pursues. The line-standing industry on Capitol Hill, an extension of the lobbying industry, is corrupt in this sense. It is not illegal, and the payments are made openly. But it degrades Congress by treating it as a source of private gain rather than an instrument of the public good. 

What's wrong with ticket scalping? Why do some instances of paid queue jumping, line standing, and ticket scalping strike us as objectionable, while others do not? The reason is that market values are corrosive of certain goods but appropriate to others. Before we can decide whether a good should be allocated by markets, queues, or in some other way, we heave to decide what kind of good it is and how it should be valued. 

Consider this: Papal Masses for Sale. When Pope Benedict XVI made his first visit to the U.S., demand for tickets to his stadium masses in NY city and Washington D.C., far exceeded the supply of seats, even in Yankee Stadium. Free tickets were distributed through Catholic dioceses and local parishes. When the inevitable ticket scalping ensued -- one ticket sold online for more than $200 -- church officials condemned it on the grounds that access to a religious rite should not be bought and sold. There shouldn''t be a market in tickets, you can't pay to celebrate a sacrament.\

Those who bought tickets from scalpers might disagree. They succeeded in paying to celebrate a sacrament. But the church spokeswoman was trying, to make a different point: although it may be possible to gain admission to a papal mass by buying a ticket from a scalper; the spirit of the sacrament is tainted if the experience is up for sale. Treating religious rituals, or natural wonders, as marketable commodities is a failure of respect. Turning sacred goods into instruments of profit values them in the wrong way.

The Ethic of The Queue

Markets and queues -- paying and waiting -- are two different ways of allocating things, and each is appropriate to different activities. The ethic of the queue: First come, first served; has an egalitarian appeal. It bids us to ignore privilege, power, and deep pockets -- at least for certain purposes. Wait your turn, don't cut in line. We understand this well when we were children. 

But the ethic of the queue does not govern all occasion. Selling my house and waiting for a bus are different activities, properly governed by different norms. There's no reason to assume that any single principle -- queuing or paying -- should determine the allocation of all goods. 

Sometimes norms change, and it is unclear which principle should prevail. Think of the recorded message you hear played over and over as you wait on hold when calling your bank: your call will be answered in the order in which it was received. This is the essence of the ethic of the queue, as the company is trying to soothe our impatience with the balm of fairness. But don't take that recorded message too seriously. Today, some people's calls are answered faster than others. You might call it telephonic queue jumping. Growing numbers of banks, airlines, and credit cared companies provide special phone numbers to their best customers or route their calls to elite call centers for prompt attention. Is there anything wrong with answering the calls of your best customers first? It depends on the kind of good you're selling. 

Of course, markets and queues are not the only ways of allocating things. Some goods we distribute by merit, others by need, still others by lottery or chance. Universities typically admit students with the greatest talent and promise, not those who apply first or offer the most money for a place in the freshman class. Hospital emergency  rooms treat patients according to the urgency of their condition, not according to the order of their arrival or their willingness to pay extra. Jury duty is allocated by lottery; if you are called to serve, you can't hire someone else to take your place.

The tendency of markets to displace queues, and other nonmarket ways of allocating goods, so pervades modern life that we scarcely notice it anymore.