What the Market Does to Our Souls
We live in new times. For about thirty years American capitalism featured a small but not insignificant concession to social democracy, what we are taught to call “the welfare state”, in which government contributed to the provision of a degree of material security which the market alone cannot provide. Watered-down quasi-Keynesian economic policy provided social benefits that gave most Americans a standard of living higher than ever before. That arrangement has been under severe attack since the Carter administration as the social has been drastically reduced and material insecurity has soared. We are promised more of the same into the future.
The market has been resurrected as the sole provider of what’s best for us. Everything to do with government -excepting its martial and repressive powers- including public employees is under constant assault. Elites are now resolved to defeat organized labor, to reduce as much of the social wage as they can get away with and to do away with impediments to capital’s unlimited freedom to accumulate, i.e. to privatize public assets. The distribution of material benefits shall be, in the ideal case, determined entirely by the market.
We are witnessing the transition from a market economy to a thoroughgoing market society.
A certain kind of society tends to produce a certain kind of person. More precisely, it discourages the development certain human capacities and fosters the development of others. Aristotle, Rousseau, Marx and Dewey were the philosophers who were most illuminating on this. They argued that the postures required by successful functioning in a market economy tend to insinuate themselves into those areas of social intercourse which take place outside of the realm of the market proper. The result, they claimed, was that the arena for potentially altruistic and sympathetic behavior shrinks over time as society is gradually transformed into a huge marketplace. (Later on I want to call in question the very concept of altruism.)
This is a weighty claim, and it requires for its plausibility real-world examples. From the claim under consideration it does not follow, for example, that everyone in a capitalist society is determined to behave as if inhabiting a Hobbesian state of nature. Our conviction that society shapes character and social-relational possibilities can be rendered more precisely if we specify a mechanism by which certain valued human relations are undermined by the market.
The late great British sociologist Richard Titmuss argued that such a mechanism can be identified in persons’ responses to two different political-economic sub-systems within society, the system of blood donation prevalent in the US and Japan and the one in place in England and Wales. Titmuss’s book The Gift Relationship: From Human Blood To Social Policy is a classic in the field, named by The New York Times as one of the 7 best books of 1971. It elicited a number of revealing responses from disparate quarters, and I want to include some of these in my discussion. Especially interesting are the comments of the utilitarian philosopher and animal rights activist Peter Singer, and of the mainstream economists Paul Samuelson and Kenneth Arrow.
The Gift of Blood With and Without the Market
At the time the book was written, in the US and Japanese systems of blood donation persons were offered two choices. One could donate one’s blood without monetary compensation, or one could sell one’s blood at a commercial blood bank. By contrast, in England and Wales, there was only one choice: the only way to give blood was to donate it. If you wanted to give blood, you were not free to sell it, and if you needed blood you were not free to buy it. In England and Wales blood was not a commodity; there was no market in blood.
At first blush it appears that one advantage of the US and Japanese systems is that they expand the realm of freedom. You can choose to donate and you can choose to sell. England and Wales restrict your freedoms; you are not free to sell your blood if you want to. Since two freedoms are better than one, it seems clear that the system that includes the market alternative is superior to the one that withholds that choice. Here is yet another way in which markets expand freedom. But not so fast. Titmuss’s study reveals that there is no difference at all between these two arrangements with respect to the range of freedoms they make available. In order fully to appreciate this point, we must first have a closer look at the two systems.
Titmuss’s conclusions are based upon two considerations, a striking difference between England and Wales, and the US and Japan, with respect to the supply and the demand for blood, and an empirical investigation of the motivations of blood donors in England and a few other countries. The latter consists of a questionnaire survey of blood donors featuring a single question: “Could you say why you first decided to become a blood donor?”
In each of the three countries the demand for blood rose significantly shortly after the War, mainly because of the broader availability of health care in the postwar social democracies. But the supply of blood failed to rise in step with increased demand in the countries with markets in blood. In Japan and the US it was not just that voluntary donations failed to keep up with rising demand, they actually fell in absolute terms. Where blood was not a commodity, in England and Wales the supply of blood rose sufficiently to more than cover the increased demand.
Titmuss wondered whether making blood a marketable “product” tended to discourage voluntary donors. What he had found was not merely that the alternative of bringing your blood to market encouraged people to sell rather than donate, but that many who would have donated when blood could not be bought and sold chose not to give at all. Titmuss argued, based on data like the above and a classification of the characteristics of blood donors in the US, England, Wales, the Soviet Union, South Africa and other countries, and testimony from blood donors regarding their reasons for donating, that the commodification of blood did indeed discourage voluntary donation. Titmuss sometimes wrote of commodification as discouraging “altruism”, which is an understandable way of expressing the point, but I will question below whether ‘altruism’ is not itself a subtly commodification-infected term. Perhaps ‘solidarity’ is the better term. But later for that. Let’s first have a look at Titmuss’s procedure. Here I will distill what is most pertinent in Titmuss’s empirically and conceptually elaborate argument.
Blood Donors’ Reasons For Giving
Titmuss classified the answers to “Could you say why you first decided to become a blood donor?” under 14 main headings. Here is a brief sample of donors’ motivations: gratitude for good health (1.4 percent of all answers); reciprocity, e.g. the donor’s own life had been saved by a transfusion (9.8 percent of answers); replacement, e.g. donor thought someone in the family should give blood and were replacing a family member who could not give (0.8 percent of answers); duty, donors who referred to duty, conscience or feelings of moral guilt were they not to donate (3.5 percent of answers), donor was a member of a rare blood group (1.1 percent of answers); altruism (26.4 percent of answers).
More than one quarter of all respondents claimed altruism as their motive. This was the single largest motive for donation. If we consider the 7 of the 14 headings which clearly indicate a high sense of social responsibility towards the needs of other members of society, then almost 80 percent of donors were motivated by feelings of solidarity.
Here are three typical responses from “altruistic” donors: “You cant get blood from supermarkets and chaine stores. People them selves must come forward, sick people can’t get out of bed to ask you for a pint to save thier life so I came forward in hope to help somebody who needs blood.” “No man is an island.” “A desire to help other people in need.”
The Unique Significance Of Giving Something That Can’t Be Bought
If Titmuss is right, then for people in a society in which there is no market in blood, the ability to give something that cannot be bought is something very special, so special that were that ability to be withdrawn, for example by instituting commercial blood banks, the incentive to donate would be undermined. The question leaps to mind: What’s so special about giving a gift that can’t be bought? After all, it’s the same gift in each case, and in each case it can save a life. What’s the big deal about the gift being a non-commodity?
The unique significance of giving a gift that can’t be bought lies in the meaning or importance of the gift. You are giving a priceless gift. Of course a gift for which there is no market is a priceless gift in the obvious sense that it does not have a market price. That’s an unremarkable tautology. But this is not all that is built into the notion of a priceless gift. The point is that the importance of the gift, its significance or meaning for the recipient, will be very different where the gift cannot be bought. Moreover, a certain type of human relationship can be entered into when one gives a priceless gift that is unavailable to the giver of a commodified gift. Here’s why/how:
In England and Wales anyone, rich or poor, could get blood at the blood bank. If the recipient is well-off, her good financial fortune is irrelevant to the importance of the gift of blood. All the wealth in the world could not have bought that blood. If the blood is to be had, it must be donated. In a good many cases, the blood donation is literally a gift of life itself. In England and Wales neither the donor nor the recipient knew the identity of the other. The gift of blood was an act of human connectedness with another, the gift of life to a stranger. If this isn’t solidarity, what is?
In the US or any country where blood can also be bought and sold, the financial means of the recipient makes a decisive difference to the importance of blood as a gift. The well-off recipient could have simply purchased the blood she needed were no donation forthcoming. Donated blood would represent merely saving someone money.
This suggests a more revealing sense of ‘priceless gift’. A priceless gift is a gift whose importance depends solely on the need of the recipient. One cannot give a priceless gift of anything that can be bought. For if there is a market in that gift, then its importance will depend at least in great part on the class membership of the recipient. As a gift, it will be less important to the wealthy, who could buy her need anyway. But to those without the means to purchase blood, the gift becomes, as noted above, as important as life itself. Perhaps most importantly, where the gift of blood is priceless in this sense, a relationship of solidarity is established among people. To the extent that the range of this kind of relationship broadens, to that extent a new kind of society and a different kind of person is forged. To the extent that the market encompasses more and more aspects of life, to that extent a society of solidarity is ruled out, and the atomic individual is given a pat on the back.
Whether the Gift of Blood is Priceless Is Not Up To the Donor
We are inclined to think that when it comes to the significance or meaning of a gift, what matters is the donor’s state of mind or intention. If I give a pint of my blood without compensation and with the sole intention of addressing the need of the recipient, we tend to think, that suffices to determine the importance of the gift. I would not have given were it not for that need, so the combination of my altrusitic intention and the need of the recipient are enough to render my donation priceless, i.e. to make the need of the recipient the sole determinant of my gift’s importance. But this is flat out not the case.
Here we have a clear instance of the limits of individualist thinking, of political psychologism, and of the importance of social-structural factors in shaping both the significance of human choice and the character of the agent. Irrespective of the donor’s subjective intention, a gift of blood in a society where blood is commodified cannot be such that its importance depends solely on the need of the recipient, since, as we have seen, the difference the gift makes to the recipient will depend in large part on whether the recipient would have been able to buy the blood were it not donated. The fact of significant class disparaties in society makes it logically, not merely causally, impossible for relations of solidarity to be established where they are needed most. This is not to say that no relations of this kind can be established in class society. It does demonstrate that solidarity is severely restricted where the market mediates interpersonal relations in those social spaces where social solidarity benefits us most.
The Market, Culture and Character
It should not be surprising that if a market society shapes and limits the kind of relationship we can enter into, it also shapes the kind of people we can become. Titmuss argued that markets discourage altruism. In a market society there is an abiding disincentive to relate to one another out of fellow-feeling. Titmuss reasoned that this is what explains the deficiency of donations relative to need in societies in which public blood banks are “forced to co-exist” with commercial ones. Potential donors come to feel that in a mixed system their donation loses the significance it would have had if what they donate could not be purchased. Blood donation merely enables recipients to save money. If altruism is the inspiring motive of donors, they might not give at all if they felt that their gift could not have the importance they want it to have. In this way the market, behind our backs so to speak, makes us into certain kinds of people. The seeds of solidarity and altruism do not grow in the soil of the market.
The effect of commodification on both persons’ character and on social relations is also illustrated in a recent study by Israeli sociologists of the relationship between parents and the workers who attend to their kids at the day care center. The workers had complained that the chronic lateness of some parents in picking up their kids was forcing those workers to work beyond the end of the work day. To discourage lateness, a penalty fee was levied on parents who came for their kids after hours. This was observed to have no effect at all on the number of late pickups. So the penalty was significantly raised. The result was that the number of after-hours pickups increased. The parents felt that they could buy, for the price of a penalty, the right to force the day care employees to work during what should have been free, after-work time.
The Market and Freedom
Peter Singer pointed out that the market also produces related illusions about freedom. Capitalist culture has always portrayed the market as the best framework for maximizing freedom. A comparison of the US and Japan to England and Wales appears to illustrate this. In the US and Japanese systems you could choose to donate and you could choose to sell. England and Wales restrict your freedoms; you were not free to sell your blood if you wanted to give it and you were not free to buy it if you wanted to receive it. Since two freedoms are better than one, it seems clear that the system that includes the market alternative is superior to the one that withholds that choice. But not so fast.
There are in fact three freedoms at stake here: the freedom to donate blood, the freedom to sell blood and the freedom to give blood as a priceless gift whose value hinges solely on the need of the recipient, because it cannot be bought. That freedom was not available in the US and Japan. It was available and exercised in England and Wales. It turns out that each pair of nations contains the same number of freedoms, two, and in each pair you lose a freedom.
Which pair do you prefer, i.e. which freedom would you decide to give up? Shall we dispense with the freedom to sell your blood, or with the freedom to give a priceless gift? This is a decision about the kind of society we want to live in. To stylize the choice: do we want a market society, or do we want a non-market society? We know that non-market conditions of blood giving and receiving tap the resources of community feeling and solidarity, and that market arrangements suffocate them. Under market conditions many people who would give blood if it had no price will not do so if it can be bought.
Our question What kind of society do we want to live in? then becomes What kind of social relationships do we want to constitute this kind of society?
Contrary to the policy makers, social policy making does not merely determine “the distribution of utilities and disutilities among the population groups”; it makes certain kinds of people. The radical democrat asks What kind of people do we want to be? and What kind of society do we want to live in? in the same breath.
Mainstream Economists’ Response to The Gift Relationship
A brief discussion of two prominent mainstream economists’ impressions of Titmuss’s book tells us just about all we need to know about orthodox economics’s relevance to the moral and social-relational dimensions of human life. Paul Samuelson reviewed the book and Kenneth Arrow wrote an article attempting to undermine its most important contributions.
Samuelson’s entire review focused on Titmuss’s discussion of the health hazards associated with commercial blood banks. In the major cities of each country Titmuss researched commercial banks tended to be located in districts with a disproportionate population of drug addicts and other indigent and frequently unhealthy social outcasts. These donors often gave blood to finance their alcohol and drug needs. As one might expect, the quality of their blood was often poor. The blood available at non-commercial banks was on the whole better. Samuelson wrote as if this were the main point Titmuss made against the commodification of blood. “Blood is like love,” wrote Samuelson, “the kind you get for free is better than the kind you pay for.” I’ll buy that, but it’s quite beside Titmuss’s richest point.
Arrow’s article is uncomprehending and reveals an axiom of neoclassical economics that is bizarre on the face of it. Arrow complains that The Gift Relationship lacks even “a minimum of theoretical analysis. Why should it be that the creation of a market for blood would decrease the altruism involved in giving blood?” The answer to Arrow’s question, as discussed above, is implicit in Titmuss’s discussion of the connection between the motivation of voluntary donors and the limits a market in blood places on the significance the donor’s gift can have. The claim that in a market system the the importance of a gift of blood can never hinge solely on the need of the recipient is not even recognized, much less refuted, by Arrow. This blindness is helped along nicely by the following bizarre admission of Arrow’s:
“…like many economists, I do not want to rely too heavily on substituting ethics for self-interest… Wholesale usage of ethical standards is apt to have undesirable consequences. We do not wish to use up recklessly the scarce resources of altruistic motivation…”
This is right out of chapter 1 of Intro To Microeconomics. People make their way through life under circumstances in which everyone’s desires are unlimited and the resources we draw upon to satisfy those desires are limited. Hence competition is necessary. Lest competition degenerate into a Hobbesian war of each against all, the energies of contestation are best channeled through the circuitry of the market. Applying this metaphysics to the subject matter of Titmuss’s book requires that we think of fellow-feeling as a scarce resource like gold or oil. The more we depend on it, the less we have. But it is only bad theory that would move us to think of “altruism” that way. Singer suggests rather thinking of the motivation to address the needs of others the way we think of sexual potency: use it or lose it. It’s a renewable resource. When everyone around us acts egoistically, it’s hard to act out of interest in the needs of others. But when solidarity is expected of me, it’s easier to respond with empathy to the needs of others.
Is “Altruism” In the Arsenal of the Neoliberal Fifth Column?
Discussions of The Gift Relationship have trucked in the language of egoism and altruism. Titmuss himelf argues that markets discourage altruism. But is altruism as warm and harmless a concept as it appears? Might it not mislead by leaning on the same conceptual framework upon which the notion of egoism depends? If so, it might function to reinforce rather than challenge the metaphysics of liberal individualism. The philosopher Alasdair MacIntyre has argued that egoism and altruism are indeed political bedfellows. I think he’s right. This is why I have suggested that talk of altruism be replaced with talk of solidarity.
The going story is that we sometimes find ourselves having to choose between two motives. Shall we act out of self-interest, i.e., egoistically, or shall we be moved by altruism, an interest in the well being of others? But we are on the wrong track from the start. Is self-interest a motive at all? Is it that kind of thing, like revenge, gratitude, hunger or envy? When motives are identified in courts of law, self-interest is never among them. Getting clear on the actual employment of concepts like self-interest in the ebb and flow of human life can illuminate the connection between our conceptual biases and specific social and political institutions. Here examples are essential.
The same action, like eating or doing my job well in order to succeed, done from the same motive, like hunger or ambition, may or may not be accurately described as “done from self-interest”. It will depend on the social circumstances. In a situation where food is scarce and many persons need to eat, to consult only my hunger in deciding whether to partake would count as acting from self-interest. Similarly, in a context where my rising to a position of greater responsibility, prestige and compensation involves disregarding the legitimate claims of others, my consulting only my ambition would count as acting from self-interest. But the mere fact that I act from hunger or from ambition does not by itself establish that I acted self-interestedly. ‘self interest’ is a noun, and misleadingly appears to be the name of a thing, in this case a motive. Grammatically, ‘self interest’ is a noun, but its ordinary, non-philosophical usage reveals its concepual function to be adverbial. “He acted out of self-interest” obscures this. “He acted self-interestedly” illustrates it. The concept of self-interest indicates the way in which genuine motives can be acted on. This is not merely an Oxbridgean linguistic flourish. It helps us to avoid misconstruing the psychology of human motivation.
The concept of self-interest has application only to a particular type of circumstance, one in which it makes sense to describe behavior as competitive or non-competitive. Mainstream economic theory wants us to regard the human condition as always about contestation. As I hope the preceding examples show, this is plainly not the case. The use of the egoism-altruism dichotomy betrays that we have permitted the ideology of individualism to infect our ordinary ways of thinking. This is best seen when we consider the concept of altruism.
The going story, exemplified in Arrow’s remarks, sees self-interest as the cornerstone of human choice. Altruistic behavior is special, usually involving sacrifice, a choice to refrain from doing what comes naturally. This is supposed to attest to an especially admirable kind of behavior which puts others ahead of the natural objective, the pursuit of one’s individual interest. It is as if behavior called ‘altruistic’ were not a normal, common and unremarkable feature of life. But in fact very many of our everyday dealings with other people are of a cooperative, not a competitive, kind. Where this is the case, questions of egoism or altruism simply do not arise. Relations of trust, friendship, loyalty and cooperation pervade everyday life and carry with them commitments to others. We cannot help but be involved in relations of reciprocity like these. A field anthropologist from another planet would simply observe that relationships of this kind are among the things that matter to these humans. Construing human beings as homo economicus blinds us to this elementary feature of our condition. Shall we believe our eyes or Arrow’s theory?
It belongs to the nature of such relationships that they depend on the absence of solely self-seeking behavior. We don’t “make a sacrifice” when we refrain from selfish behavior in these relationships. We lose the relationship when we behave exclusively self-interestedly. Since we experience friendships and loyalties as partially defining our identity, we lose more than individual “utilities” when these relationships are unavailable.
Titmuss’s recognition of the market as tending to undermine the incentive to form relationships of reciprocity and solidarity reveals much about the intertwining of what kind of people we are, what kind of life we want to lead and what kind of society we want to live in. President Obama’s misconception of the point of health-care legislation illustrates blindness to all this. He has insisted that his health-care proposals aim to maximize the range of choices (of health care plans) available to us. It’s about another expansion of our freedoms. But regular folks know that the issue is affordability, not choice: too many people just cannot afford health care. For these unfortunates, choice has nothing to do with it. They lack the freedom to make any choice at all. With this truism in mind, we see the central question to be “What kind of society do we want to live in? One in which acess to quality health care is available to all irrespective of income, or one like ours?” We want the kind of life in which it is not possible that a health crisis suddenly takes the food from our table. When our political system supports a health care system disengaged from the market, and which treats us as equals, it is that much easier to see each other as equals, and not merely with respect to health care.
Does all this entail that markets have no place at all in an egalitarian social order? I’m not sure myself. But it’s one of the matters we must address when we argue that “Another world is possible.”
Alan Nasser is professor emeritus of Political Economy at The Evergreen State College in Olympia, Washington. His book The “New Normal”: Persistent Austerity, Declining Democracy and the Globalization of Resistance is forthcoming in 2013. His website/blogsite is www.alannasser.wordpress.com. He can be reached at firstname.lastname@example.org.