Damn it, Are You Still Alive?

Should We Allow Market Forces to Invade Our Lives?


Damn it, Are You Still Alive?
by varjavand

Would you be outraged if someone called you every once in a while and asked you if you were still alive? It is perfectly permissible in this country for someone to lure you into signing a contract that gives you a lump sum of money in exchange for your life insurance policy, and then the person waits impatiently for you to die so that he can cash in and collect on your death benefits. The sooner you die, the higher the return on his investment. One can imagine that this person will be very disappointed if you refuse to die because that is preventing him from making any money from his wager on your life. Welcome to the world of viatical industry, a legitimate offspring of free-for-all capitalism. Your employer may also collect a large sum of cash if you die of any cause, work related or not, because companies can take out life insurance policies on their employees without their consent or knowledge and name the company as the beneficiary. Who said companies are not people and thus cannot be made the beneficiaries of a life insurance policy? Sadly, this interesting arrangement may come down to your living your everyday life not knowing who or how many people wish you were dead!

Borrowing a phrase used in many television commercials: “But wait, there’s more.” Can you imagine people paying money to watch a video tape of “Octomom” self-pleasuring herself, or a business firm paying a sum of money to place an ad on your forehead or on the stomach of a pregnant woman? It is now a popular trend for post middle-aged men, particularly in some minorities, to use their riches to buy a younger wife from overseas and import her to the U.S. So the next time you see an old man with a young lady in a grocery store, be advised, she may not be his daughter but rather his wife. It is not hard to notice that potency drugs are the most heavily advertised product, especially during prime time news programs, as if ED (erectile dysfunction) was a relentless epidemic in this country and the loss of his sexual drive is the only problem a man should be worried about. If you don’t want to camp outside a venue for many hours to catch a glimpse of your favorite celebrity who is in town, you can hire someone to stand in line for you, thus buying you the right to cut in line before everyone else for a price. If you are a lax religious believer who is not performing your required religious rituals, you don’t have to worry because your surviving heirs will be able to buy a place in heaven for you after you die. All they need to do is hire someone to perform the missed rituals for you in exchange for money. If you think you can continue living a healthy life with one kidney, in some countries, most notably in Iran, you can sell one of your kidneys to the highest bidder either directly to a needy patient or to a human organ middleman. Can you think of anything that money cannot buy these days? If your answer is politicians, good luck telling that to Mr. Will Rogers! In Iran, there used to be a Farsi saying: “You can even build a bird’s nest on the top of the Shah’s head if you have the money.” As absurd as some of these example may seem, they are realities of our time.

Capitalism, devoid of morality and ethical values, is heading in a scary direction. The proliferation of strange ways to make money in this country has made some people wonder if the free-enterprise system is devolving and being dragged into denigrating territory due to our obliviousness to the reckless deeds of greedy people who are taking us for a dangerous ride again. Everything is up for sale in real or virtual markets. As economists say, as long as there is a demand there will be a supply. Is that what capitalism is supposed to be all about? Is money the only way to get ahead of others and the primary means of solving our problems?

Isn’t it time for us to ask, is money all that there is? Isn’t it time to question the appropriateness of market transactions involving things that should not be commoditized and their merit should be judged solely by moral and ethical standards? Should society place limits on what money can buy? Such concerns are becoming important, especially in the aftermath of the recent financial crisis—itself an outcome of deceitful practices—that plunged this economy into the deepest recession ever recorded. Although greed has been named as the main culprit, something more critical is happening in this economy, namely the infiltration of monetary forces into every aspect of our lives, creating a market that is overtaking society with its relentless material pursuits. The economic crooks who defrauded millions of us in the recent past and screwed up this economy, are coming back again with a vengeance, fobbing us off with new deceptive, more elaborate tactics. We have come to a very important crossroad and we have to make critical decisions. Which way we should go next and what kind of coping mechanisms are there to protect us from possible fallout?

Portentously, economists have low or no sympathy for non-market considerations such as ethical and moral values. The primary reason is that they want to make economics a positive, non-judgmental science. They tell us that economics does not make judgments about the preferences of consumers, what they wish to buy or not buy, or the merits of what is being traded in a market. Strict economics does not attach any non-economic worth to the goods and services we buy or sell. A dollar spent on education has the same merit as a dollar spent on harmful products like cigarettes. Economics just reports what happens and how people may change or modify their behavior in response to monetary incentives. It only analyzes people’s actions the way they are, not the way they ought to be. And, the primary function of the price system is to serve as a rationing mechanism when it comes to allocation of goods and services, and to balance the two sides of the market: demand and supply. If people have to stand in a long line to buy food, for example, this signifies a shortage of food supplies and thus the failure of the market. However, this may very well be a temporary phenomenon. At the heart of this argument, is an assumption that flexibility of market forces, especially of prices, serves to restore the balance between supply and demand thus eliminating shortages. All we need to do is to wait. But, what happens if the inherent inflexibility in some cases results in a continuous shortage and/or some consumers are not willing to wait? For instance, what happens if there are a limited number of seats available for a popular concert or a sporting event, a number far below the number of diehard fans who wish to buy tickets at any price? Some of them may be willing to pay ten times more for a ticket purchased from a scalper. Should society allow that to happen? Is there anything wrong with people using their monetary might to get ahead of others?

Is it unethical to let monetary forces of the market dictate who gets what and how income and wealth are distributed? To many non-economists, there are some fundamental problems with such a system. First, even though it has the appearance of free choice, it actually undermines free choice in some cases in the sense that it forces people into doing something for money that they otherwise would not do, such as selling a kidney to pay their bills. Second, it is unfair to those who do not have the money to influence the outcome of the market system and thus are deprived of having access to something that is supposed to be available to them at no cost. Some examples of this are being denied access to public goods/services because politicians are being paid by campaign donors and lobbyists to change rules and regulations to favor them rather than society as a whole, or the rich buying admission for their unqualified children to a top-rated state school thus denying admission to qualified students who cannot pay. Third, it promotes dishonesty and makes the market vulnerable to bribery and cronyism. Paying money to entice someone with little money to do something they wouldn’t normally do is tantamount to bribing them. Fourth, such an approach will exacerbate divisions in an already polarized society. The rich can use their financial resources to buy rights as well as privileges. They can afford to live an opulent life separated from the rest of us. And finally, allowing monetary influence to go unchecked sets a dangerous direction and opens a can of worms, so to speak. It becomes difficult, if not impossible, to prevent money from more widely and deeply invading our lives. It makes me wonder what is next, perhaps buying your prison sentence for a price?

The commoditization of everything in life is not something that we should condone. It is demeaning and alters the intention and the nature of many things that should not be objects of material gain, such as the right to vote, human organs, civic responsibilities, human life, children, romance, moral obligations, to name a few. These should not be viewed as ordinary pieces of regular assets that can be traded in a market. These are not properties; they are revered duties or inalienable rights of citizens.

Should we reconsider the roles and the realms of markets, especially after the financial turmoil of 2008 and the havoc that befell us due to the malicious deeds of profiteering entrepreneurs? Should we still trust the market to function fairly and equitably if left to its own device? Should we let our concern for freedom and individualism undermine the need for egalitarianism and respect for morality and ethical norms? And more importantly, why didn’t the crisis of 2008 impassion us to reevaluate the boundaries of the market so as to prevent it from taking us down the same destructive path again? Why don’t our government and politicians implement the critical barriers needed so that the evils we kicked out of the door cannot come back through the window? These are serious questions that need serious answers because we, as individuals and as a nation, cannot afford to sit idly by while we are “sold down the river” by greed-driven, self-serving opportunists.


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One more comment

by varjavand on

We used think that people do good things for themselves and for the society when they pursue their self interests. Even though this kind of thinking is still accurate, it seems that it is becoming the thing of the past , not all the choices made to satisfy self interest are consistent with social interest. People may use their money to buy political influence for personal gains, however, they hurt other people by doing so I don’t object to using market occasionally to alleviate some problems, however, if doing so becomes a norm or leads to socially objectionable outcomes, it create problems instead solving any. Then, people will no longer do what they are supposed to because they are expecting monetary reward. For example, your kids are supposed to study and do good at school, paying them to do so, as some parents do, may corrupt their intention.
There is something troubling with the notion that market should dictate everything we do. No question about the benefits of monetary incentives, but they should not be the foundation of every aspects of our life. We don’t want to pay for the things that are considered the moral/social obligations or our inalienable rights such as voting right. If we let market to take over everything, then we have to sacrifice all the good things that are the cornerstone of non-market deeds.

hamsade ghadimi

mr. varjavand, i did not

by hamsade ghadimi on

mr. varjavand, i did not claim that morality should govern some market transactions.

your words (not mine): "So, when you say that morality should govern some market transactions, whose morality you are talking about?"

i do not think that the iri government facilitated the sale of kidneys for the sake of economic efficiency.  we both know that there's not economic efficiency in iri.  they did it to exploit the poor and facilitate kidney transplant for those who are not poor.  the reason that the most efficient economies do not allow for sale of kidneys answers to the question that you posed (in quotation marks above).  these moral questions are answered through political channels and not economics (or at least economics alone).  the government has stepped in these efficient economies and not allowed it because kidney sale would create a market failure (by imposing unfair burden on the poor).  it's akin to anti-trust laws that puts constraints on monopolies as not to take advantage of society (market failure).

i think we should try to separate economic and political decisions.  in a democracy, the politicians (in theory) are representative and the voice of people and are in office to implement regulations where markets cannot provide a fair solution.  so the answer to whose morality? the majority of people's morality through political channels and effective legislation.  of course, there are many shortcomings in many democracies.  you've brought up very good points but i don't think all the issues you touched on can be solved in a purely economic paradigm.


Mr. Hamsadeh Ghadimi

by varjavand on

Thanks for your comments
The central theme of the article is whether or not the society should impose moral/ethical values on the markets. It is designed to generate a public discourse concerning the moral limits of capitalism. I wholeheartedly believe that we have come to the point when the faith in unfettered market is evaporating and justifiably so. Not everything should be allocated or traded through market even though doing so may enhance efficiency. Rationing goods or services through price system may serve as a supplement not a substitute to other schemes such as first come, first serve, need, merit, queue, and etc. In Iran, for example, is the only country in which market transaction of human kidney is legal and it is the only country that has alleviated the severe shortage of human kidney- needless to say, I am vehemently oppose to such system even though it helps to solve a problem. Such markets not only undermine the character of the underlying goods, in this case human kidney, they also corrupt the whole system. Why the wealthy people be able use their money to buy influence because market system allows them to do that?
So, the broader question is Should the government/society sanction the exploitation of market forces by greedy people simply because it makes sense economically or it is consistent with, or based on requirement of, the law of demand and supply?
I have no problem with imposing moral/ethical limits on market. However, my question is: whose morality should be imposed? Iran, is run by a theocratic government; the religious rulers of Iran believe that they are the representative of God and perfect example, and the guardian, of morality. Hence, they allow exploitation of the poor who need to sell a kidney to pay the bills. So, when you say that morality should govern some market transactions, whose morality you are talking about? Is it ok to buy and sell kidney because the Islamic value system says so? State it differently, who should determine what the right way of allocating goods and services is and what is the wrong way? What is the right way of earning money and the wrong way? Whose judgment matters?
Strict economics is value free and that is about to change

hamsade ghadimi

mr. varjavand, with all due

by hamsade ghadimi on

mr. varjavand, with all due respect, as an economist, you should know that where there's market failure, the government should step in with effective regulation.  therefore, if someone "lures" you into selling your life insurance to him; if the "luring" is conducted in a fraudulent manner, then there are already laws on the books to sue the person for fraudulent practices.  in addition, although there has been records of a company (or companies) buying life insurance on behalf of their employees without their consent; that particular company has been sued by the familiies of insured.  rules on buying insurance varies from state to state.  i would be curious to read a state's regulation on this matter where someone can buy insurance on someone else's behalf that is not related to him in any manner (kin or financial interest).  here's california's insurance code which stipulates that the insurer must have 'insurable interest:'  //www.leginfo.ca.gov/cgi-bin/displaycode?section=ins&group=10001-11000&file=10110-10127.18

furthermore, in this day and age we observe futures markets for all kinds of "unusal commodities" where the markets are designed explicitly to exploit information contained in prices.  for example, betting on facebook doing poorly in their ipo or betting someone will die sooner than he expects and being able to buy out their insurance policy.

if combination of human behavior and capitalism produces a market failure, then people who live in a democratic country have at least a venue by exposing that market failure and urging their government to step in.  however, if you're distraught that people pay money to see octomom pleasure herself, then unfortunately you don't have a case (at least in a democracy) and may have to move to a country that regulates that sort of moral monkey business.

p.s., i don't know what you mean by "strict economics;" however, in the field of economics, non-market valuation is routinely considered with regard to non-monetary aspects of commodities and services.