If you do not like your friends or do not have any close friends, should you be able to rent or pay someone to be a friend? Would you want to?
I teach an introductory microeconomics course. After discussing markets and teaching the basics of supply and demand today, I had a conversation with the class about the universal appropriateness of markets. Market, the price mechanism and the profit motive are great. When allowed to function, they offer quite a bit to society and largely account for our growing wealth and increased availability of goods and services, including advanced technologies we have come to enjoy and rely on today. However, do we want or need markets, the price mechanism and the profit motive dominating every aspect of our lives? Are there some things for which markets and prices should not be used?
I asked these questions and then showed a clip from the movie The Truman Show. In the movie, Jim Carrey’s character, Truman, is unaware that he lives in a movie set. His entire life has been displayed on TV. His wife and best friend are actors. The clip I show follows a scene where Truman has become suspicious about his existence. The show’s producer will stop at nothing to keep Truman on set, so he instructs Truman’s best friend, Marlon, to talk to Truman and convince him all is fine, with the words, “The last thing I would ever do it lie to you.” Is he really a best friend for Truman as a paid actor in the role of “best friend”? Should it matter to Truman? As outsiders watching the movie, do we care?
Michael Sandel, a Yale University philosophy professor, has famously written on this topic. See a TED talk he gave here. In his book, What Money Can’t Buy: The Moral Limits of Markets, Sandel writes,
“Today, the logic of buying and selling no longer applies to material goods alone but increasingly governs the whole of life. It is time to ask whether we want to live this way. … The most fateful change that unfolded during the past three decades was not an increase in greed. It was the expansion of markets, and or market values, into spheres of life there they don’t belong. To contend with this condition, we need to do more than inveigh against greed; we need to rethink the role that markets should place in our society. We need a public debate about what it means to keep markets in their place. To have this debate, we need to think through the moral limits of markets. We need to ask whether there are some things money should not buy.”
When I asked my students to give me examples of things they think money should not buy, many mentioned friends, family and love. These make sense. We want friends, family and love to be motivated by intrinsic considerations, not by extrinsic incentives. Money and other extrinsic incentives have a way of crowding out intrinsic motivation, a topic I have written about (here). Other students wanted markets out of education, insurance, health care, and some specifically mentioned textbooks. I can understand their frustration with textbooks, some of which are very, very expensive. But would education, insurance and health care be improved if markets were removed and providers and consumers were only intrinsically motivated? What if we taxed everyone and had the government pay for these services, would that improve things? We do that with national defense, so how about these other considerations? Lest there be confusion, this is not a question about whether goods are public or private but whether money and markets should govern their functions.
If you don’t want to rent-a-friend or meet and talk with real people, then consider the Tokyo Game Show. As reported by Yahoo! news, attendees can flirt with virtual women. Now, instead of paying someone to be your friend you can buy a machine who will talk with you and ask how your day went. Let’s hear it for the power of market incentives.