Fair prices?

We live in a society that embraces the market in a pretty broad way. We accept that virtually all goods and services are priced through the market at prices set competitively. We accept that sellers are looking to maximize profits through the prices, quantities, and quality of the goods and services that they sell us. We accept, though a bit less fully, the idea that wages are determined by the market -- a person's income is determined by what competing employers are willing to pay. And we have some level of trust that competition protects us against price-gouging, adulteration, exploitation, and other predatory practices. A prior posting questioned this logic when it comes to healthcare. Here I'd like to see whether there are other areas of dissent within American society over prices.

Because of course it wasn't always so. E. P. Thompson's work on early modern Britain reminds us that there was a "moral economy of the crowd" that profoundly challenged the legitimacy of the market; that these popular moral ideas specifically and deeply challenged the idea of market-defined prices for life's necessities; and that the crowd demanded "fair prices" for food and housing (Customs in Common: Studies in Traditional Popular Culture). The moral economy of the crowd focused on the poor -- it assumed a minimum standard of living and demanded that the millers, merchants, and officials respect this standard by charging prices the poor could afford. And the rioting that took place in Poland in 1988 over meat prices is a reminder that this kind of moral reasoning isn't merely part of a pre-modern sensibility.

So where do contemporary Americans show a degree of moral discomfort with prices and the market? Where does the moral appeal of the principles of market justice begin to break down -- principles such as "things are worth exactly what people are willing to pay for them" and "to each what his/her market-determined purchasing power permit him to buy"?

There are a couple of obvious exceptions in contemporary acceptance of the market. One is the public outrage about executive compensation in banking and other corporations that we've seen in the past year. People seem to be morally offended at the idea that CEOs are taking tens or hundreds of millions of dollars in compensation -- even in companies approaching bankruptcy. Part of the outrage stems from the perception that the CEO can't have brought a commensurate gain to the company or its stockholders, witness the failing condition of many of these banks and companies. Part is a suspicion that there must be some kind of corrupt collusion going on in the background between corporate boards and CEOs. But the bottom line moral intuition seems to be something like this: nothing could justify a salary of $100 million, and executive compensation in that range is inherently unfair. And no argument proceeding simply along the lines of fair market competition -- these are competitive rational firms that are offering these salaries, and therefore whatever they arrive at is fair -- cuts much ice with the public.

Here is another example of public divergence from acceptance of pure market outcomes: recent public outcries about college tuition. There is the common complaint that tuition is too high and students can't afford to attend. (This overlooks the important fact that public and private tuitions are almost an order of magnitude apart -- $6,000-12,000 versus $35,00-42,000!) But notice that this is a "fair price" argument that would be nonsensical when applied to the price of an iPod or a Lexus. People don't generally feel aggrieved because a luxury car or a consumer device is too expensive; they just don't buy it. It makes sense to express this complaint in application to college tuition because many of us think of college as a necessity of life that cannot fairly be allocated on the basis of ability to pay. (This explains why colleges offer need-based financial aid.) And this is a moral-economy argument.

And what about that other necessity of life -- gasoline? Public complaints about $4/gallon gas were certainly loud a few months ago. But they seem to have been grounded something differently -- the suspicion that the oil companies were manipulating prices and taking predatory profits -- rather than an assumption of a fair price determined by the needs of the poor.

Finally, what about salaries and wages? How do we feel about the inequalities of compensation that exist within the American economy and our own places of work? Americans seem to accept a fairly wide range of salaries and wages when they believe that the differences correspond ultimately to the need for firms to recruit the most effective personnel possible -- a market justification for high salaries. But they seem to begin to feel morally aggrieved when the inequalities that emerge seem to exceed any possible correspondence to contribution, impact, or productivity. So -- we as Americans seem to have a guarded level of acceptance of the emergence of market-driven inequalities when it comes to compensation.

One wonders whether deeper resentment about the workings of market forces will begin to surface in our society, as unemployment and economic recession settle upon us.

China's Charter 08

The New York Review of Books has published an English translation of an important emerging document calling for political and legal reform in China. The document is called Charter 08 (in analogy with Czechoslovakia's Charter 77 in 1977). It is a citizen-based appeal for the creation of a secure system of laws and rights in China, and has been signed by several thousand Chinese citizens. The Chinese state has belatedly taken note of the Charter, and a number of lead proponents for the document have been detained by the police, including Liu Xiaobo, Zhang Zuhua, Gao Yu, and Liu Di. Perry Link provided the translation.

The central principles articulated in the Charter include:

• Freedom
• Human rights
• Equality
• Republicanism
• Democracy
• Constitutional rule

The specific points included in the Charter include:

1. A New Constitution
2. Separation of Powers
3. Legislative Democracy
4. An Independent Judiciary
5. Public Control of Public Servants
6. Guarantee of Human Rights
7. Election of Public Officials
8. Rural-Urban Equality
9. Freedom to Form Groups
10. Freedom to Assemble
11. Freedom of Expression
12. Freedom of Religion
13. Civic Education
14. Protection of Private Property
15. Financial and Tax Reform
16. Social Security
17. Protection of the Environment
18. A Federated Republic
19. Truth in Reconciliation

Perry Link makes the point that this is not a "dissident" document, but rather a public-spirited attempt to articulate a future for China's polity.

The Chinese government should recognize that these are precisely the reforms that China needs for the twenty-first century. China needs to find its way to a genuinely law-based society; this is the point of items 1-7 and 14. China needs to rebuild a spirit of legitimacy joining government and the governed. And China needs to end the environment in which corruption, both private and public, is the most visible manifestation of unjust power that is visible to virtually all Chinese people.

Here is a very interesting audio interview with Perry Link on the NYRB website about the context of Charter 08. Also of interest is a piece that Daniel Drezner has posted on Charter 08 on the ForeignPolicy blog. Drezner's view is that the goals of the Charter can only be realized through confrontation with a mass movement, not through consultation and negotiation. But there are other pathways through which a governing party has come to rethink the conditions of its grip on power in the past twenty years. Let's hope the Chinese government has the wisdom to recognize the suitability of these principles for China's future.

January 22: see this very extensive and illuminating analysis of the Charter by Rebecca MacKinnon at Rconversation.

Protests in China

Carrefour protest in Beijing

China has witnessed a visible increase over the past ten years in the number of protests, demonstrations, and riots over a variety of issues. Areas of social problems that have stimulated collective protests include factory conditions, non-payment of wages, factory closures, environmental problems (both large and small), and land and property takeovers by developers and the state.

It isn't surprising that social conditions in China have given rise to causes of protest. Rapid growth has stimulated large movements of people and migrant workers, development has created massive environmental problems for localities, and opportunities for development have created conflicts between developers and local people over land and property rights. Following the terrible earthquake in Sichuan and the collapse of many buildings and schools with tragic loss of life, there was a wave of angry protests by parents against corrupt building practices. So there are plenty of possible causes for protest in China today.

What is more surprising, though, is that the state has not been successful so far in muzzling protest, or in keeping news of local protests from reaching the international public.

We might say that the presence of protest in a society is actually a sign of rough and ready democracy as well: it indicates that public opinion is important and can be mobilized, it suggests that the state is unwilling to use the most repressive means available to crush protest, and it suggests that the state can be affected by public protest. So the rising frequency of protest in China might be seen as evidence of a growing importance of the sphere of civil society within Chinese politics.

YouTube provides a surprisingly wide window on protests in China today. It's worth viewing a sampling of clips from YouTube that surface when one searches for Chinese protest:

Unemployment for Chinese migrant workers



Labor protest in Shanghai



Shoe factory protest for back wages



Environmental protest in Xiamen



Protest about water pollution in Xiamen



Parents protesting children's death in Sichuan



Will the sociology of the future be able to use the contents of YouTube, Twitter, or Facebook as an important empirical indicator of social change in societies such as China, Malaysia, or Russia?

Paying for health

A person's income determines his/her access to many things he wants and needs: food, clothing, transportation, housing, entertainment, and the internet, for example. And people who have higher income are able to consume more of all of these categories than people with lower income, if they choose to. More affluent people shop for food at Papa Joe's or Whole Food; live in larger and more luxurious homes; buy their clothing from boutiques rather than Penny's or the thrift shop; and drive multiple handsome cars. Poor people can't afford the luxury end of these forms of consumption. And in some way our culture has judged that these sorts of inequalities of consumption are a legitimate and fair part of a market economy; if you judge that inequalities of income are justifiable (perhaps with some limits on extremes), then you pretty much have to support the idea of inequalities of consumption as well.

But what about goods that have a price but that are essential to living a decent human life? Food certainly falls in this category; if 30% of society could literally not afford to purchase enough calories to provide 2200-2900 calories per day for adults and 1800 calories for children, then we would probably have a different idea about the fairness of a market for food -- the principle that says "to each according to his/her earning capacity" doesn't seem very convincing in circumstances where it leads to malnutrition or starvation. In other words, if the normal workings of a market economy left a significant segment of the population without the ability to purchase enough food for subsistence, we would surely judge that this isn't a fair or socially just way of distributing income and food. And there is an important point to be noted here: there is hunger in America, and the system of producing goods and income isn't fully satisfying the subsistence needs of the whole population. (This is exactly what makes it compelling that our government needs to provide food assistance for the very poor, through food stamps or targeted income supplements.) So there is an important issue about the justice of current actual distributions of such basic goods as food, clothing, or shelter across the U.S. population.

But push a little deeper and consider the "market for health care". Supporting one's current healthy status is a costly effort; repairing the body in times of traumatic injury or serious illness is even more costly; and our society leaves a lot of the allocation of health care services to private purchasing power. Health insurance is the primary vehicle through which many Americans provide financially for their health care needs. Some people have insurance provided or subsidized through their employers; some families purchase health insurance through the private market; and many families lack health insurance entirely. Upwards on 45 million Americans are uninsured, including 20% of adults and 9% of children (CDC link). And this includes a wide range of Americans, from the extremely poor to the working poor to the solidly middle class.

It is clear that access to doctors, hospitals, nurses, and prescription drugs is a critical need that everyone faces at various points in life. It is obvious as well that one's future ability to live and work productively and to enjoy a satisfying life is conditioned by one's ability to gain access to health care when it is needed. It is also clear that uncertainty about the availability of health care is a major source of anxiety for many, many people in U.S. society today. So it is self-evident that decent health care is one of our most basic and unavoidable needs.

So what do people do when they lack health insurance and serious illness or injury occurs? This isn't a mystery anymore; families go into debt to doctors and hospitals, they face bankruptcy, they find some limited sources of free care (free clinics, pro bono doctors' services), and they forego "optional" treatments that may well extend the length or quality of life. And it is evident that this pattern results in very serious harms and limitations for people in these groups. People who have the least access to health care through our basic institutions may be expected to live shorter lives and to suffer more.

And what about people at the high end of the income spectrum? How do they relate to the problems of health? Here too the answers are fairly well known: they are able to seek out the best (and most expensive) specialists, travel to national centers for specialized treatment, and undergo advanced diagnostic tests that are not covered by insurance. (Here is a news story from CNN on boutique health care.) The affluent aren't able to assure their health through expenditure -- but they can certainly improve their odds.

In other words, ability to pay influences the quality and extent of health care that an individual or family is able to gain access to; and the health status of the family is affected by these variations in quality and access. So, to some meaningful extent, our social system places health care in the category of a market good.

But here is the question I'm working around to: what does justice require when it comes to health care? Is it right to look at health care as just another consumption good like shoes -- affluent people wear Gucci and poor people wear Dollar Store, but everyone has his/her feet covered? Or is health care in a special category, too closely linked to living a full human life to allow it to be distributed so unequally?

It seems a bitter but unavoidable truth that there are very substantial inequalities in the provision of health care in our society. One person's likelihood of surviving a devastating cancer may be significantly less than another person's chances, simply based on the second person's ability to pay for premium health care services. Further, it seems unavoidable that these inequalities are flatly unjust in any society that believes in the equal worth of all human beings. And where this seems to lead is to the conclusion that some system of universal health insurance is a fundamental requirement of justice.

Can America overcome racism?

The social and economic inequalities in America that are associated with race are staggering and persistent. Pick almost any category where you'd rather have more than less -- income, health status, property and home ownership, likelihood of having health insurance, life expectancy, or likelihood of having a favorable outcome in the criminal justice system. In all of these categories there is a wide gap between black and white Americans. And this remains true even when we control for income -- the health gap between white and black Americans earning more than $80,000 remains significant. So America has embedded a set of economic and social institutions that reproduce racial disadvantage. America remains a deeply racialized society.

These observations don't necessarily amount to a conclusion about racist attitudes and deliberate discrimination on the part of most Americans. Attitudes and outcomes need to be distinguished. It is likely enough that there has been a lot of progress in conscious attitudes about race since 1950 for the majority of Americans. But persistent discriminatory outcomes can arise without explicit racist attitudes or discrimination on the part of specific individuals. Central examples of these forms of embedded "structural" mechanisms of racial discrimination include residential segregation and unequal educational opportunities for black and white children, based on where they live. Segregation certainly arose in part through deliberate efforts at excluding black people from certain neighborhoods -- real estate "steering", mortgage and insurance redlining, and overt violence and intimidation. But the mechanisms sustaining segregation today may well be more impersonal. The fact remains that patterns of racial residential segregation help to reproduce the kinds of racial inequality mentioned above.

These racial inequalities are also deeply intertwined with the social geography of major American cities. The concentration of poverty, racial isolation, poor schools, poor health facilities, and high crime rates create a multi-stranded social mechanism for reproducing racial inequality. It isn't impossible for an African-American child to thrive and achieve in this environment -- but it is certainly much harder. And the probabilities are stacked against her.

So, back to the main question: can America overcome its racism? Several things are necessary if this can happen.

First, we have to honestly face the facts -- the outcomes mentioned above. We can't delude ourselves by saying "the problems of race are finished in America" because we've elected an African-American president. The facts of racial difference in life outcomes need to be recognized, and we need to be vigilant in uncovering the mechanisms that lead to these disparities.

Second, we have to recognize why it is so important for our political culture that we address and resolve these continuing racial inequalities. Most fundamentally, we believe in equality -- equality of worth and equality of opportunity. The persistent inequalities between black and white populations are a fundamental affront to these values. And we believe in democracy --but a democracy cannot thrive in circumstances of what amounts to two levels of citizenship.

But third, pragmatically, justice is a necessary component of social peace. Our country has seen violent outbreaks for over a century over the facts of contemporary race relations -- Watts, Chicago, Detroit, Harlem, Miami. It is only enlightened prudence to realize that we must aggressively and consistently attack the institutional realities that reproduce racial disadvantage. Securing racial justice is a good investment in future social harmony.

Finally, we will need to have the resolve it takes to provide the resources necessary to assure genuine equality of opportunity for all Americans. This will be the work of a generation. But it will lay the basis for a more sustainable, harmonious, and productive society.