Sunday, May 5, 2013


Assalaamu'alaikum Warahmatullaahi Wabarakaatuh

In his book 'What Money Can't Buy' the author Michael Sandel gave a few examples of new transactions taking place since Ronald Reagan of the United States of America and Margaret Thatcher of Great Britain introduced the Market Economy as the best answer to each of their nation's respective economic growths.
"The years leading up to the financial crisis of 2008 were a heady time of market faith and deregulation - an era of market triumphalism. The era began in the early 1980s, when Ronald Reagan and Margaret Thatcher proclaimed their convictions that markets, not government, held the key to prosperity and freedom. And it continued in the 1990s, with the market friendly liberalism of Bill Clinton and Tony Blair, who moderated but consolidated the faith that markets are the primary means for achieving the public good."
This is Michael Sandel's Introduction: Markets and Morals
There are some things money can't buy, but these days, not many. Today, almost everything is up for sale. Here are a few examples:
1. A prison cell upgrade: $82 per night. In Santa Ana, California, and some other cities, nonviolent offenders can pay for better accomoditiona - a clean, quiet jail cell, away from the cells for nonpaying prisoners.
2. Access ti the car pool lane while driving solo: $8 during ruch hour. Minneapolis and other cities are trying to ease trffic congestion by letting solo drivers pay to drive in car pool lanes, at rates that vary according to traffic.
3. The services of an Indian surrogate mother to carry a pregnancy: $6,250. Western couples seeking surrogates increasingly out-source the job to India, where the practice is legal and the price is less than one-third the going rate in the United States.
3. The right to immigrate to the United States: $500,000. Foreigners who invest $500,000 and create at least ten jobs in an area of high unemployment are eligible for a green card that entitles them to permanent residency.

4. The right to shoot an endangered black rhino: $150,000. South Africa has begun letting ranchers sell hunters the right to kill a limited number of rhinos, to give the ranchers an incentive to raise and protect the endangered species.
5. The cell phone number of your doctor: $1,500 and up per year. A growing number of concierge doctors offer cell phone access and same day appointments for patients willing to pay annual fees ranging from $1,500 to $25,000.
6. The right to emit a metric ton of carbon into the atmosphere: Euro13 (about $18). The European Union runs a carbon emissions market that enables companies to buy and sell the right to pollute.
7. Admission of your child to a prestigious university: Although the price is not posted, officials from some top universities told the Wall Street Journal that they accept some less than stellar students whose parents are wealthy and likely to make substantial financial contributions.
Not everyone can afford to buy these thintgs. But today there are lots of new ways to make money.If you need to earn some extra cash, here are some novel possibilities:
1. Rent out space on your forehead (or elsewhere on your body) to display commercial advertising: $777. Air New Zealand hired thirty people to shave their heads and wear temporary tattoos with the slogan "Need a change? Head down to New Zealand".
2. Serve as a human guinea pig in a drug safety trial for a phamaceutical company: $7,500. The pay can be higher or lower, depending on the invasiveness of the procedure used to test the drug's effect, and the discomfort involves..
3. Fight in Somalia or Afghanistan for a private military company: $250 per month to $1,000 per day. The pay varies according to qualifications, experience and nationality.
4. Stand in line overnight on Capitol Hill to hold a place for a lobbyist who wants to attend a congressional hearing: $15 to $20 per hour. The lobbyists pay line-standing companies, who hire homeless people and others to queue up.
5. If you are a second grader in an underachieving Dallas school, read a book: $2. To encourage reading, the schools pay kids for each book they read.
6. If you are obese, lose fourteen pounds in 4 months: $378. Companies and health insurers offer financial incentives for weight loss and other kinds of healthy behaviour.
7. Buy life insurance policy policy of an ailing or elderly person, pay the annual premiums while the person is alive, and then collect the death benefit when he or she dies: potentially, millions (depending on the policy). This form of better on the life of strangers has become a $30 billion industry. The sooner the stranger dies, the more the investor makes. 

An elaboration of this 7th business operation appears below. There are many objections of course.

What Money Can’t Buy - The Moral Limits of Markets
Michael Sandel@2012


We can examine these objections by considering another morally complicated use of life insurance that arose in the 1980s and 1990s, prompted by the AIDS epidemic. It was called the viatical industry. It consisted of a market in the life insurance policies of people with AIDS and others who had been diagnosed with a terminal illness. Here is how it worked: Supposed someone with a $100,000 life insurance policy is told by his doctor that he has only a year to live. And suppose he needs money now for medical care, or perhaps simply to live well in the short time he has remaining. An investor offers to buy the policy from the ailing person at a discount, say, $50,000, and takes over payment of the annual premiums. When the original policyholder dies, the investor collects the $100,000.

It seems like a good deal all around. The dying policyholder gain access to the cash he needs, and the investor turns a handsome profit – provided the person dies on schedule. But there’s a risk: although the viatical investment guarantees a certain payoff at death ($100,000 in this example), the rate of return depends on how long the person lives. If he dies in one year, as predicted, the investor who paid $50,000 for a $100,000 policy makes a killing, so to speak – a 100 percent annual return (minus the premium he paid and fees to the broker who arranged the deal). If he lives for two years, the investor must wait twice as long for the same payout, so his annual rate of return is cut in half (not counting additional premium payments, which reduced the return even more). If the patient makes a miraculous recovery and lives for many years, the investor may take nothing.

Of course, all investments carry risk. But with viaticals, the financial risk creates a moral complication not present in most other investments: the investor must hope that the person whose life insurance he buys dies sooner rather than later. The longer the person hangs on, the lower the rate of return.

Needless to say, the viatical industry took pains to deemphasize this ghoulish aspect of its business. Viatical brokers described their mission as providing those with terminal illnesses the resources to live out their last days in relative comfort and dignity. (The word “viatical” comes from the Latin word for “voyage,” specifically money and provisions supplied to Roman officials setting out on a journey). But there is no denying that the investor has a financial interest in the prompt death of the insured. “There have been some phenomenal returns, and there have been some horror stories when people live longer,” said William Scot Page, president of a Fort Lauderdale viatical company. “That’s sort of excitement of the viatical settlement. There is no exact science in predicting someone’s death.”

Some of these “horror stories” led to lawsuits, in which disgruntled investors sued brokers for selling them life insurance policies that failed to “mature” as quickly as expected. The discovery, in the mid-1990s, of anti-HIV drugs that extended the lives of tens of thousands of people with AIDS scrambled the calculations of the viatical industry. An executive of a viatical firm explained the downside of life-extending medication: “A 12-month expectancy turning into 24 months does play havoc with your returns.” In 1996, the breakthrough in antiretroviral drugs caused the stock price of Dignity Partners, Inc., a San Francisco viatical company, to plunge from $14.50 to $1.38. The company soon went out of business.

In 1998, The New York Times published a story about an irate Michigan investor who, five years earlier, had purchased the life insurance policy of Kendall Morrison, a New Yorker with AIDS who was desperately ill at the time. Thanks to the new drugs, Morrison had returned to stable health, much to the investor’s dismay. “I’ve never felt like anybody wanted me dead before,” said Morrison. “They kept sending me these FedExes and calling. It was like, ‘Are you still alive?’”

Once an AIDS diagnosis ceased to be a death sentence, viatical companies sought to diversify their business to cancer and other terminal illness. Undaunted by the downturn in the AIDS market, William Kelley, executive director of the Viatical Association of America, the industry’s trade association, offered an upbeat assessment of the death futures business: “Compared to the number of people with AIDS, the number of people with cancer, severe cardiovascular diseases, and other terminal illness is huge.”

Unlike janitors insurance, the viatical business serves a clear social good – financing the final days of the people with terminal illness. Moreover, the consent of the insured is built in from the start (though it’s possible that, in some cases, desperately ill people may lack the bargaining power to negotiate a fair price for their insurance policy). The moral problem with viaticals is not that they lack of consent. It’s that they are wagers on death that give investors a rooting interest in the prompt passing of the people whose policies they buy.

It might be replied that viaticals are not the only investments that amount to a death bet. The life insurance business also turns our mortality into a commodity. But there’s a difference: With life insurance, the company that sells me a policy is betting for me, not against me. The longer I live, the more money it makes. With viaticals, the financial interest is reversed. From the company’s point of view, the sooner I die, the better.*

Why should I care if, somewhere, an investor is hoping I die? Perhaps I shouldn’t care, provided he doesn’t act on his hope or call too often to ask my condition. Maybe it’s merely creepy, not morally objectionable. Or perhaps the moral problem lies not in any tangible harm to me but in the corrosive effect on the character of the investor. Would you want to make a living betting that certain people will die sooner rather than later?

I suspect that even free-market enthusiasts would hesitate to embrace the full implications of the notion that betting against life is just another business. For consider: If the viatical business is morally comparable to life insurance, shouldn’t it have the same right to lobby on behalf of its interests? If the insurance industry has the right to lobby for its interest in prolonging life (through mandatory seat belt laws or antismoking policies), shouldn’t the viatical industry have the right to lobby for its interest in hastening death (through reduced federal funding for AIDS or cancer research)? As far as I know, the viatical industry did not undertake such lobbying. But if it is morally permissible to invest in the likelihood that AIDS or cancer victims will die sooner rather than later, why isn’t it morally legitimate to promote public policies that further that end?

One viatical investor was Warren Chisum, a conservative Texas state legislator and “well-known crusader against homosexuality.” He led a successful effort to reinstate criminal penalties for sodomy in Texas, opposed sex education, and voted against programs to help AIDS victims. In 1994, Chisum proudly proclaimed that he had invested $200,000 to buy the life insurance policies of six AIDS victims. “My gamble is that it‘ll make not less than 17 percent and sometimes considerably better,” he told The Houston Post. “If they die in one month, you know, they [the investments] do really good.”

Some accused the Texas lawmaker of voting for policies from which he stood to profit personally. But this charge was misdirected; his money was following his convictions, not the other way around. This was no classic conflict of interest. It was actually something worse – a morally twisted version of socially conscious investing.

Chisum’s brazen glee for the ghoulish side of viaticals was the exception. Few viatical investors were motivated by animus. Most wished good health and long life for people with AIDS – except for the ones in their portfolio.

Viatical investors are not unique in depending on death for their livelihood. Coroners, undertakers, and gravediggers do too, and yet no one morally condemns them. A few years ago, The New York Times profiled Mike Thomas, a thirty-four-year-old Detroit man who is the “body retrievalist” for the county morgue. His job is to collect the bodies of the people who die and transport them to the morgue. He is paid by the head, so to speak - $14 for each corpse he collects. Thanks to Detroit’s high homicide rate, he is able to make about $14,000 per year at this grim work. But when violence wanes, Thomas faces though times. “I know that’s kind of weird to hear,” he said. “I mean waiting around for somebody to die. Wishing for someone to die. But that’s how it is. That’s how I feed my babies.”

Paying the corpse collector on commission may be economical, but it carries a moral cost. Giving the worker a financial stake in the death of his fellow human beings is likely to dull his ethical sensibilities- and ours. In this respect, it’s like the viatical business but with a morally relevant difference: although the corpse collector depends on death for his living, he need not hope for the early death of any particular person. Any death will do.

*Life annuities and pensions, which pay out a certain amount each month until death, are more closely analogous to viaticals than is life insurance. The annuity company has a financial interest in the recipients dying sooner rather than later. But annuity risk pools are typically larger and more anonymous than viatical investments, reducing the “rooting interest” in early death. Moreover, annuities are often sold by companies that also sell life insurance, so the longevity risks tend to be offsetting.

This abstract is from the book 'What Money Can't Buy' by Michael Sandel being an imprinted Penguin Books by Allen Lane available at bookshops or from Penguin Books Ltd., 80 Strand, London WC2R ORL, England.

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