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Published: November 27, 2012
 / Winter 2012 / Issue 69


Best Business Books 2012: Capitalism

Sandel’s special talent is the use of simple, workaday examples to explain complex philosophical issues and to illustrate the corrosive tendency of markets. For instance, he tells the story of a day-care center that faced the problem of parents showing up late to pick up their children, necessitating paying a teacher to stay late until all the kids were fetched. To solve the problem in an economizing way, the center decided to impose a fine for late pickups to “incentivize” tardy parents to show up on time. The result: Late pickups increased. In another example, lawyers in one community refused to reduce their fees by 30 percent when a social welfare agency asked them to do so for impoverished clients, but the same lawyers later agreed to represent those poor folks pro bono.

Sandel uses such examples to demonstrate the powerful role social norms play in a community, and how readily those are lost when money enters into the equation. No radical, he calls for neither economic equality nor the redistribution of wealth; instead, he argues that values such as striving for fairness and holding certain things “sacred” (for example, national parks, human life, and access to education) need to be shielded from the market. When everything is for sale, he says the effect is to segment society between those who can afford access to basic and common goods and those who can’t — as the once democratic experience of attending a ball game has been corrupted by the ability of the wealthy to segregate themselves into the gated communities called skyboxes. “What matters is that people of different backgrounds and social positions encounter one another,” he writes, “for this is how we learn to negotiate and abide our differences, and how we come to care for the common good.” In essence, he is arguing that most policy decisions have moral as well as economic dimensions; hence, a reductionist pure market orientation will “crowd out nonmarket norms worth caring about.”

Gut Feelings

In focusing on Zingales and Sandel, I have run the risk of implying that their books are representative of the numerous volumes published this year on the future of capitalism. In fact, there were no “typical” books on the subject. For example, Zingales’s and Sandel’s volumes are nothing at all like ethicist Rogene Buchholz’s Reforming Capitalism: The Scientific Worldview and Business (Routledge, 2012), a fine scholarly text that examines the role business education played in creating the system’s current crisis, nor do they have much in common with the passel of management-oriented volumes on such related topics as conscious capitalism, benefit corporations, social entrepreneurialism, social capitalism, and the like. And, as the reader may have noted, Zingales and Sandel actually seem to agree about a few things, which makes their books quite unlike the others by economists that found their way to my desk this year, books representing an unfathomably — and, I dare say, absurdly — divergent range of opinions. In all, 2012 was such a banner year for books about capitalism that many are deserving of serious review. Yet I doubt that reading more of them would help bewildered readers, like me, decide whose arguments are closest to being correct. So, how is one to know?

According to psychologist Jonathan Haidt’s The Righteous Mind: Why Good People Are Divided by Politics and Religion, most of us find the logic of the arguments presented by economists and other experts irrelevant to our own process of deciding which (or who) is right. He presents strong evidence that where we find ourselves on the ideological spectrum is based on our emotions, and not reason, and that our feelings are largely (but not exclusively) determined by our genetic makeup. In the words of librettist W.S. Gilbert, we are each born either a little liberal or a little conservative, and there is not much even a Nobel laureate can say to convince us we are wrong.

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