>>Michael Sandel: Here's a question we need to rethink together: What should be the role
of money and markets in our societies?
Today, there are fewer and fewer things that money can't buy.
If you're ever sentenced to a jail term in Santa Barbara, California -- just in case
that happens to you -- you should know that if you don't like the standard accommodations,
you can buy -- if you have the money, you can buy a prison cell upgrade.
[ Laughter ] >>Michael Sandel: It's true.
For how much would you guess?
What would you say?
How much would that be?
>> (Speaker is off microphone.)
>>Michael Sandel: $500?
Per night?
It's not the Ritz-Carlton.
It's not -- [ Laughter ]
>>Michael Sandel: It's just slightly -- it's $90 a night.
If you go to an amusement park, used to be at amusement parks part of the experience
was waiting in long lines for the popular rides.
Everybody had to do it.
But that's not really true today.
In most amusement parks, if you don't like waiting in long queues, you can buy a -- pay
more and buy a fast-track ticket straight to the head of the line.
In fact, it's not just at amusement parks.
There are more and more aspects of life today where you can buy your way to the head of
the queue.
You can do this even if you want to hear -- sit in on a Congressional hearing in Washington,
D.C. but you don't want to stand in the long line for the seats that are made available.
You can now go to a company.
One of them is called linestanding.com.
You pay them a certain amount of money.
They will hire a homeless person or someone else who needs the work to stand in the line,
overnight if need be, to make sure that you get a seat in the front row of the hearing
room, buying your way to the head of the queue.
But also, the role of money in markets is also shaping bigger institutions.
Take the way we fight our wars.
In Iraq and Afghanistan, there were more private military contractors on the ground than there
were U.S. military troops.
Now, this isn't because we had a public debate about whether we wanted to outsource war to
private companies, but this is what has happened.
Over the past three decades we've experienced a quiet revolution.
We have drifted, almost without realizing it, from having a market economy to becoming
market societies.
The difference is this: A market economy is a tool, a valuable and effective tool, for
organizing productive activity.
But a market society is a place where everything is up for sale.
It's a way of life in which market values and market thinking begin to invade and to
govern almost every aspect of life.
Why worry about this?
Should we worry about it?
That's the question I'd like to discuss with you today.
And I do mean "discuss."
I'd like to put to you a question and get your views about a novel use of a market mechanism,
a cash incentive, to achieve a social good.
In many schools around the world, there is the struggle to motivate young people to study
hard, to work hard, to aspire.
Especially schools with many kids who come from disadvantaged backgrounds.
In the U.S., many of the major urban school districts have been experimenting with the
use of a cash incentive to motivate academic achievement.
They've tried this in New York, in Washington, D.C., in Chicago.
Cash for good grades -- $50 for an "A," $35 for a "B" -- for doing well on standardized
tests.
In Dallas, Texas, they have a program that pays young children -- 8-year-olds -- $2 for
each book they read.
Now, I'd like to see what you think about this.
The aim is obviously a good one: To lift up academic performance.
And yet some people object.
So let's begin with a show of hands.
We'll take a quick poll here.
Imagine that you are in charge of a big school district and someone comes to you with this
proposal: Cash incentives for good grades, high test scores, or to read books.
How many of you here think that would be worth a try and how many, as the head of the school,
would object and would rule it out?
So let's see by a show of hands.
How many think it would be worth a try?
[ Show of hands ] >>Michael Sandel: And how many would be opposed
in principle?
[ Show of hands ] >>Michael Sandel: All right.
The majority here are opposed in principle, but a healthy minority think it would be worth
a try.
Let's begin by hearing from those of you who reject the idea outright, who don't even want
to give it a try, who have an objection in principle.
Who will start off our discussion?
We have people with microphones, so tell us -- someone who objects -- why do you object?
Yes.
Stand up and tell us why.
We'll get you a microphone.
>>> I think you should have children have intrinsic motivation, so I don't think there
should be incentives through cash.
>>Michael Sandel: And by -- tell us your name.
>>> I'm Amanda Jobbins from The Sage Group.
>>Michael Sandel: Amanda...
>>> Jobbins.
Amanda.
>>Michael SandelAnd Amanda, you say children should have intrinsic motivations to learn.
What do you mean by that?
What does that mean concretely, and why would money interfere with intrinsic motivations?
>>> Well, I think it's a life skill that you have to be -- you have to have intrinsic motivation,
so self-motivation, and I think cash reduces the chances that they'll develop motivation
on their own.
They'll always be motivated by external stimulus.
>>Michael Sandel: And so if you pay for good grades or to read books, what are they going
to learn?
What do you worry about?
>>> That they'll only ever do things for money and I think that life is about more than just
money.
>>Michael Sandel: Okay.
Thank you for that.
That's a strong objection.
Now, who thinks it would be worth trying the cash incentive scheme and --
Go ahead.
And what would you say to the argument Amanda has just presented?
>>> I think it is a very idealistic view.
I think people who come from unprivileged families will never be told that learning
is important, and if there is an incentive to make them grow and learn more about society
and give them opportunities, we should go full speed at it.
>>Michael Sandel: And what's your name?
>>> Veronique.
>>Michael Sandel: Veronique?
Amanda, here, stand up and speak.
Amanda, Veronique says you have a hopelessly idealistic view.
[ Laughter ] >>> I live in Europe.
I'm an optimist.
>>Michael SandelSee if you can persuade Veronique that this is -- that there's something wrong
with this.
>>> I suppose it just comes down to whether you think money is the only important thing
in life or whether people are only motivated by money.
So I'd like to think that people are motivated for other reasons.
I do understand that if you come from a family, perhaps, where education wasn't valued very
highly, that in certain circumstances that might prompt you, I guess, to take a move,
but it's also been my experience that people that have the opportunity for education, that
come from an underprivileged background, tend to value the education anyway and find their
own motivation as a consequence to work their way out of poverty.
>>Michael Sandel: All right.
So is there someone else who would like to disagree with Amanda who thinks it would be
worth trying, at least, to see if it works?
Yes.
Toward the back.
>>> 10 years ago, I was in a high school in Indiana and it was the same situation.
You saw people that were not really motivated taking part of the discussion, and the test
was not cash but candy, and it worked in the beginning quite well, so the people were raising
their hands, they were participating, but one day the teacher didn't have candy anymore
and, yeah, they just stopped.
It was conditioned, you could say.
Even like Maslow, you could say "Okay, there's no candy, why should I raise my hand and participate?"
>>Michael Sandel: So you're against?
>>> I'm against, but I saw in the beginning it worked.
So for the short term, I would say you can see an increase, and if someone would measure
in the beginning, it would be a positive thing, but --
>>Michael Sandel: But when the money stops or the candy --
>>> Yeah.
>>Michael Sandel: -- so, you fear, will the reading?
>>> Yes.
>>Michael Sandel: All right.
Is there anyone who wants to defend this?
Yes.
Go ahead.
Stand up.
>>> Hi, Michael.
I'm not sure "defend" is the right word, but I would say that all the people who say, you
know, cash incentives are wrong, bear in mind, anyone who's got kids, everything is a negotiation
of some sort of another, and kids get offered cars if they pass their exams --
>>Michael Sandel: Cars?
So cars.
That's more than $50 for an "A." [ Laughter ]
>>Michael Sandel: A car.
>>> You don't want to do that for everyone, but I'm sure there's enough people in this
room who have been through that, but -- >>Michael Sandel: Well, wait.
Let's see if that's true.
What's your name, by the way?
>>> Marco.
>>Michael Sandel: And were you paid to study?
>>> Yes.
>>Michael SandelYou were.
>>> I was incentivized to pass all my exams and I got a car.
>>Michael Sandel: A car.
>>> It was only a little car.
[ Laughter ] >>Michael Sandel: And so it worked?
>>> I think -- I mean, it worked on one -- on some level, but I think to Amanda's point,
there's still an intrinsic desire to succeed as well.
>>Michael Sandel: And do you pay your kids for good grades?
>>> Well, he's 3 at the moment, so -- >>Michael Sandel: 3.
[ Laughter ] >>Michael Sandel: Will you?
>>> I pay him with in Peppa Pig or something like that.
>>Michael Sandel: All right.
Well, thank you for that.
Thank you to everyone who participated in this discussion about cash for good grades.
[ Applause ] >>Michael Sandel: I should say something about
what happened with these experiments.
The results were mixed.
The cash for good grades and higher test scores in most cases did not result in higher grades
and test scores, but those kids who were paid $2 for each book did read more books.
They also read shorter books.
[ Laughter ] >>Michael Sandel: But the larger -- the larger
question -- the larger question is one that has emerged from this discussion.
The worry is -- and Amanda articulated it.
The worry is that somehow bringing money or a cash incentive into teaching and learning
will corrupt or undermine or drive out the intrinsic love of reading and learning.
And that's a question that we need to ask whenever we're considering whether money and
markets should be introduced in aspects of life that involve attitudes and values and
norms, lessons that may be non-monetary values.
A friend of mine pays his young children $1 for each thank you note they write, you know,
if they're taken out to dinner or are given a gift.
I've received some of these thank you notes and I can tell by reading them that they were
written under a certain pressure.
[ Laughter ] >>Michael Sandel: My wife and I look askance
at this practice.
We wonder how these kids will turn out.
Now, it could be -- this is the optimistic scenario -- that by being paid to write thank
you notes, they will get in the habit of it and they will eventually learn the real reason
for writing thank you notes -- to express gratitude -- in which case, when the money
stops, they will probably continue to write them and all will be well.
Or it could happen, as Amanda fears, that by being paid to write thank you notes, the
lesson they will learn is that writing thank you notes is a chore, a form of piecework
to be done for pay.
If that's the lesson they learn, then when the money stops, so may the thank you notes.
They may find it difficult ever to learn the virtue of gratitude and their moral education
will have been corrupted.
That's the question.
It's also a question that happens in larger settings throughout our societies.
Some years ago in Switzerland, they were trying to decide where to locate a nuclear waste
site.
No community wants one in its backyard.
They identified a small town in the mountains of Switzerland as likely to be the safest
place, but under the law, they had to get the approval of the residents, so before the
decision was made, a survey was done of the residents of this Swiss town and they were
asked: If Parliament chooses your town, would you be willing to approve the nuclear waste
site here.
Despite the risks, 51% said yes.
Then they asked a follow-up question.
They sweetened the deal.
They said suppose parliament chooses your town and offers financial -- annual financial
compensation to each resident of the town.
I think it was up to as much as 6,000 Euros a year, then would you vote to approve?
Now how many do you think said yes?
80%.
Fewer?
>>> Yes.
>>Michael Sandel: It dropped in half, from 51 to 25%.
Now, from the standpoint of standard economic analysis, this is a paradox.
Normally when you offer to pay people to do something, the willingness to do that thing
increases.
Why did it drop in half?
Anybody have any ideas?
It was the Swiss, you're saying.
[ Laughter ] >>Michael Sandel: But the question is: What
were they thinking?
>>> They felt corrupted.
>>Michael Sandel: They felt corrupted?
Well, they might have thought -- now, you might say, well, once they were offered money,
they thought this really could be more dangerous than I thought.
That could be one reason.
But it does seem -- it does seem that they tested and found that the estimate of the
risk before and after the monetary offer was about the same.
So there must be another explanation, which is probably to do with this idea of feeling
corrupted.
They asked the people, who changed their minds, why did you change?
And many of them said, We didn't want to be bribed.
We didn't want to be bribed.
See, before when the majority were willing to accept, they were willing to make a sacrifice
for the sake of the common good, out of a sense of civic responsibility.
But when money was offered, it changed the nature, the money changed the nature of the
transaction.
Now instead of a civic question, it was a financial or a pecuniary one.
They were not willing to sell out the safety of their themselves and their families for
money.
So here we have a range of cases that illustrate the way in which sometimes money and markets
and market thinking and market values can corrupt or undermine or crowd out non-market
values worth caring about.
There are two implications for this.
One is economics.
Economists often assume that markets are inert, that they do not touch or taint the goods
they exchange.
Now, this may be true enough if we are talking about material goods.
If you sell me a flat-screen television or give me one as a gift, the television will
work just as well either way.
The value of the good will be unaffected.
But the same may not be true when we're talking about activities such as teaching and learning
or of sacrificing for the sake of the common good.
When markets reach into non-material domains, we have to ask whether they may corrupt or
undermine or degrade or crowd out attitudes and norms worth caring about.
There's also a political implication of this.
Over the past three decades, during the time of rising market faith, something has happened
to democratic public discourse.
It has become increasingly hollowed out, empty of larger moral and ethical questions.
Our public life now is beset by quite narrow managerial and technocratic questions.
And it is almost as if we have lost the ability to engage in public life on big questions,
to do with justice and how to value goods and what it means to be a citizen.
And I think these two tendencies are connected.
Markets, the appeal of markets, is that they seem to be a neutral way of deciding fraught,
contested questions such as how to value teaching and learning or our bodies, if we are debating
whether there should and free market in organs, let's say, or civic life.
But this is a spurious appeal.
We need to engage in a morally, more robust kind of public debate from the kind to which
we're accustomed if we're to decide where markets serve the public good and where they
don't belong.
We can't avoid debating how to value goods, whether in health, education, family life,
personal life, civic life.
One of the most corrosive effects of the marketization of everything has been to commonality in the
sense of community because in a time of rising inequality, marketizing everything has led
to a condition in which people of affluence and people of modest means increasingly live
separate lives.
We live and work and shop and play in different places.
We send our children to different schools.
This isn't good for democracy, nor is it a satisfying way to live even for those of us
who may be able to buy our way to the head of the line.
Here's why.
Democracy doesn't require perfect equality.
What it does require is that men and women from different social backgrounds, from different
walks of life encounter one another, bump up against one another in the course of everyday
life because this is how we learn to negotiate and abide our differences.
And this is how we come to care for the common good.
And so in the end, the question of markets is not mainly an economic question.
It's really a question of how we want to live together.
Do we want a society where everything is up for sale?
Or are there certain moral and civic goods that markets do not honor and money cannot
buy?
Thank you very much.