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April 20, 2012 / politicsbitesize

Victor Frankenstein’s Money Monster

Boris Karloff as the Monster ('Frankenstein' 1931)

Boris Karloff as the Monster ('Frankenstein' 1931)

In the second debate for the Radio 4 programme the Public Philosopher, recorded at the London School of Economics*, Professor Michael Sandel asks ‘what counts as fair pay?’  The huge awards and bonuses received by bankers is considered a hot topic at the moment.  Bankers get paid millions of pounds in bonuses even though the economic crisis isn’t getting any better.  Professor Sandel suggests that the unrest in society is so high around this issue at the moment that not only did Fred Goodwin have to be stripped of his knighthood, but Stephen Hester also needed to turn down his bonus.  He then goes on to consider why we never hear of bonuses for nurses.

Professor Sandel asks his LSE audience for their contribution to the debate on whether big pay or big bonuses are unfair or unjustified. He proposes the question, ‘Is it fair that bankers are paid more than nurses?’  The first voice heard (a man called Jonathan) claims, ‘the most important thing in deciding how much someone should be paid is how much they contribute to well-being and, inherently, income inequalities are not good for well-being’.  Other arguments raised in the programme against bankers receiving high salaries highlighted the notion that pay is usually related to hard work, and many in the audience felt that bankers don’t necessarily work harder for their pay.

In the interests of a balanced debate, there are members of the audience who are pro-high pay for the bankers.  One of these arguments runs thus: ‘at the end of the day if the markets do decide that bankers create more material wealth for society, they should be rewarded more’.  Michael Sandel analyses this comment by suggesting that the person making it sees no correlation between the hard work someone puts in and the size of their income.

According to Professor Sandel, there are at least three ways of thinking about justice and fair pay.  One is effort (or hard work), another is how much a person’s job contributes to the well-being of society and finally there is the market (or the ‘aggregated choices of consumers’).  He points out that underlying the logic of this last ‘way of defining fair pay’ is the notion that those who create the most wealth for society deserve the highest pay.

The public philosopher then asks whether this is the fairest basis upon which to pay people, or should there be another basis?  He proposes that the intrinsic value to individual members in a society that a nurse possesses should be considered more important to society as a whole and, therefore, should be rewarded accordingly.  At present, this is not the case because a nurse does not make money (read profit) for someone else and the market doesn’t reward intrinsic value, it rewards only profit making.

A capitalist society is structured in such a way that profit/money making is considered the most important pursuit for individuals within the society. Therefore, it is logical that those who make the most profit/money are rewarded in such a way as to perpetuate the ideology that making profit/money is the most desirable way to live one’s life. So, if you make money you are rewarded with huge sums of money, which you then choose to spend on consumer goods and this, in turn, maintains the market’s ‘decision’ to continue to define high pay as ‘fair’ only if wealth is being generated.

This Radio 4 series of debates asks some critical questions of society and presents a fresh way of examining the big issues.  However, in this particular instance more could have been made of the philosophical concept of money and the value it has been ascribed by society as a whole.  As John Searle states in his book, Making the World Social, money is a social institution that is constructed using language and semantics.  According to Searle, ‘the human mind is able to create systems of symbolic representations’ and therefore social institutions using speech acts.  The speech acts we use to create institutions, such as money, are called Declarations, which ‘we use to make something the case by declaring it to be the case’.  He goes on to state that: ‘money is money because the actual participants in the institution regard it as money’ and it is given value in society according to those participants’ collective ascription of value.  In other words, money is recognised by each and every one of us as holding a certain denomination for exchange purposes, but it is also ascribed a ‘value’ in terms of the level of status a person can attain in society if he or she possesses enough of it.

In general it can be argued that people accept social institutions because they consider them as simply the way things are and not as a human/social construct that can be changed by collective design.  As it stands, the social institution of money has been given such power by its creators that it is understood as existing as a thing in itself, and this is happening to such an extent that the money markets are described as being able to ‘decide’ what is fair and what is not.  The structure of capitalist society is, at present, akin to the monster taking control of Victor Frankenstein!

* Michael Sandel – the Public Philosopher.  Radio 4, 10/4/2012 at LSE. See:


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