Last summer I got to hear Michael Sandel speak on the morality of markets. Sandel teaches at Harvard and his class on Justice is one of the biggest draws on campus. What is amazing about Sandel is his ability to use a Socratic question and answer format to make a huge auditorium feel like a small graduate seminar. I saw Sandel do his magic and it's really impressive. I wish I could teach like that.
Harvard joined with PBS to film Sandel's Justice class. You can see the class in action at the course website where you can dip into the readings or watch entire classes. Sandel also recently published the book Justice as a companion for the filming. The book is a nice overview of political theory and ethics with lots of real world examples. I found Sandel's discussion of Kantian ethics to be particularly helpful.
Sandel starts the book Justice off with this moral issue:
In the summer of 2004, Hurricane Charley roared out of the Gulf of Mexico and swept across Florida to the Atlantic Ocean. The storm claimed twenty-two lives and caused $11 billion in damage. It also left in its wake a debate about price gouging.Obviously, many people were outraged by the price gouging. Florida did have price gouging laws on the books, and some penalties were handed out in the wake of Charley. But many economists argued that these laws and the public outrage over price gouging were misinformed. There is no such thing as a "moral" price, it was argued. The markets set prices via supply and demand, and if demand is high and supply is short prices will rise. Even during natural disasters. Many pushed back on this extreme version of free market ideology claiming that, during a natural disaster, people are entering into these market exchanges under duress. Sandel cites the argument made by the Florida Attorney General at the time:
At a gas station in Orlando, they were selling two-dollar bags of ice for ten dollars. Lacking power for refrigerators or air-conditioning in the middle of August, many people had little choice but to pay up. Downed trees heightened demand for chain saws and roof repairs. Contractors offered to clear two trees off a homeowner's roof--for $23,000. Stores that normally sold small household generators for $250 were now asking $2,000. A seventy-seven-year-old women fleeing the hurricane with her elderly husband and handicapped daughter was charged $160 per night for a motel room that normally goes for $40.
This is not the normal free market situation where willing buyers freely elect to enter into the marketplace and meet willing sellers, where a price is agreed upon based upon supply and demand. In an emergency, buyers under duress have no freedom. Their purchases of necessities like safe lodging are forced.So, Sandel asks, which version of justice should prevail in this case? Is price gouging immoral? Or is it amoral, a simple consequence of the markets? Interestingly, our answers to questions such as these reveal a great deal about our competing visions of the common good.