Justice: What's the Right Thing to Do?
by Michael J. Sandel
1. DOING THE RIGHT THING
In the summer of 2004, Hurricane Charley roared out of the Gulf of
Mexico and swept across Florida to the Atlantic Ocean. The storm
claimed twenty-two lives and caused $11 billion in damage. It also left
in its wake a debate about price gouging.
At a gas station in Orlando, they were selling two-dollar bags of ice
for ten dollars. Lacking power for refrigerators or air-conditioning in
the middle of August, many people had little choice but to pay up.
Downed trees heightened demand for chain saws and roof repairs. Contractors
off red to clear two trees off a homeowner’s roof—for $23,000.
Stores that normally sold small household generators for $250 were
now asking $2,000. A seventy-seven-year-old woman fleeing the hurricane
with her elderly husband and handicapped daughter was charged
$160 per night for a motel room that normally goes for $40.2
Many Floridians were angered by the inflated prices. “After Storm
Come the Vultures,” read a headline in USA Today. One resident, told it
would cost $10,500 to remove a fallen tree from his roof, said it was
wrong for people to “try to capitalize on other people’s hardship and
misery.” Charlie Crist, the state’s attorney general, agreed: “It is astounding
to me, the level of greed that someone must have in their soul
to be willing to take advantage of someone suffering in the wake of a
Florida has a law against price gouging, and in the aftermath of the
hurricane, the attorney general’s office received more than two thousand
complaints. Some led to successful lawsuits. A Days Inn in West
Palm Beach had to pay $70,000 in penalties and restitution for overcharging
But even as Crist set about enforcing the price-gouging law, some
economists argued that the law—and the public outrage—were misconceived.
In medieval times, philosophers and theologians believed
that the exchange of goods should be governed by a “just price,” determined
by tradition or the intrinsic value of things. But in market societies,
the economists observed, prices are set by supply and demand.
There is no such thing as a “just price."
Thomas Sowell, a free-market economist, called price gouging an
“emotionally powerful but economically meaningless expression that
most economists pay no attention to, because it seems too confused to
bother with.” Writing in the Tampa Tribune, Sowell sought to explain
“how ‘price gouging’ helps Floridians.” Charges of price gouging arise
“when prices are significantly higher than what people have been used
to,” Sowell wrote. But “the price levels that you happen to be used to”
are not morally sacrosanct. They are no more “special or ‘fair’ than
other prices” that market conditions—including those prompted by a
hurricane—may bring about.
Higher prices for ice, bottled water, roof repairs, generators, and
motel rooms have the advantage, Sowell argued, of limiting the use of
such things by consumers and increasing incentives for suppliers in
far-off places to provide the goods and services most needed in the
hurricane’s aftermath. If ice fetches ten dollars a bag when Floridians
are facing power outages in the August heat, ice manufacturers will
find it worth their while to produce and ship more of it. There is nothing
unjust about these prices, Sowell explained; they simply reflect the
value that buyers and sellers choose to place on the things they exchange.
Jeff Jacoby, a pro-market commentator writing in the Boston Globe,
argued against price-gouging laws on similar grounds: “It isn’t gouging
to charge what the market will bear. It isn’t greedy or brazen. It’s how
goods and services get allocated in a free society.” Jacoby acknowledged
that the “price spikes are infuriating, especially to someone
whose life has just been thrown into turmoil by a deadly storm.” But
public anger is no justification for interfering with the free market. By
providing incentives for suppliers to produce more of the needed
goods, the seemingly exorbitant prices “do far more good than harm.”
His conclusion: “Demonizing vendors won’t speed Florida’s recovery.
Letting them go about their business will.
Attorney General Crist (a Republican who would later be elected
governor of Florida) published an op-ed piece in the Tampa paper defending
the law against price gouging: “In times of emergency, government
cannot remain on the sidelines while people are charged
unconscionable prices as they flee for their lives or seek the basic commodities
for their families after a hurricane. Crist rejected the notion
that these “unconscionable” prices reflected a truly free exchange:
This is not the normal free market situation where willing buyers
freely elect to enter into the marketplace and meet willing sellers,
where a price is agreed upon based on supply and demand. In an
emergency, buyers under duress have no freedom. Their purchases of
necessities like safe lodging are forced.
The debate about price gouging that arose in the aftermath of Hurricane
Charley raises hard questions of morality and law: Is it wrong
for sellers of goods and services to take advantage of a natural disaster
by charging whatever the market will bear? If so, what, if anything,
should the law do about it? Should the state prohibit price gouging,
even if doing so interferes with the freedom of buyers and sellers to
make whatever deals they choose?
Welfare, Freedom, and Virtue
These questions are not only about how individuals should treat one
another. They are also about what the law should be, and about how
society should be organized. They are questions about justice. To answer
them, we have to explore the meaning of justice. In fact, we’ve
already begun to do so. If you look closely at the price-gouging debate,
you’ll notice that the arguments for and against price-gouging laws
revolve around three ideas: maximizing welfare, respecting freedom,
and promoting virtue. Each of these ideas points to a different way of
thinking about justice.
The standard case for unfettered markets rests on two claims—one
about welfare, the other about freedom. First, markets promote the
welfare of society as a whole by providing incentives for people to
work hard supplying the goods that other people want. (In common
parlance, we often equate welfare with economic prosperity, though
welfare is a broader concept that can include noneconomic aspects of
social well-being.) Second, markets respect individual freedom; rather
than impose a certain value on goods and services, markets let people
choose for themselves what value to place on the things they exchange.
Not surprisingly, the opponents of price-gouging laws invoke these
two familiar arguments for free markets. How do defenders of price
gouging laws respond? First, they argue that the welfare of society as
whole is not really served by the exorbitant prices charged in hard
times. Even if high prices call forth a greater supply of goods, this benefit has to be weighed against the burden such prices impose on those
least able to afford them. For the affluent, paying inflated prices for a
gallon of gas or a motel room in a storm may be an annoyance; but for
those of modest means, such prices pose a genuine hardship, one that
might lead them to stay in harm’s way rather than flee to safety. Proponents
of price-gouging laws argue that any estimate of the general welfare
must include the pain and suffering of those who may be priced
out of basic necessities during an emergency.
Second, defenders of price-gouging laws maintain that, under certain
conditions, the free market is not truly free. As Crist points out,
“buyers under duress have no freedom. Their purchases of necessities
like safe lodging are forced.” If you’re fleeing a hurricane with your
family, the exorbitant price you pay for gas or shelter is not really a
voluntary exchange. It’s something closer to extortion. So to decide
whether price-gouging laws are justified, we need to assess these competing
accounts of welfare and of freedom.
But we also need to consider one further argument. Much public
support for price-gouging laws comes from something more visceral
than welfare or freedom. People are outraged at “vultures” who prey
on the desperation of others and want them punished—not rewarded
with windfall profits. Such sentiments are often dismissed as atavistic
emotions that should not interfere with public policy or law. As Jacoby
writes, “demonizing vendors won’t speed Florida’s recovery.
But the outrage at price-gougers is more than mindless anger.
It gestures at a moral argument worth taking seriously. Outrage is
the special kind of anger you feel when you believe that people are
getting things they don’t deserve. Outrage of this kind is anger at
Crist touched on the moral source of the outrage when he described
the “greed that someone must have in their soul to be willing
to take advantage of someone suffering in the wake of a hurricane.” He
did not explicitly connect this observation to price-gouging laws. But
implicit in his comment is something like the following argument,
which might be called the virtue argument:
Greed is a vice, a bad way of being, especially when it makes people
oblivious to the suffering of others. More than a personal vice, it is at
odds with civic virtue. In times of trouble, a good society pulls together.
Rather than press for maximum advantage, people look out for
one another. A society in which people exploit their neighbors for financial gain in times of crisis is not a good society. Excessive greed is
therefore a vice that a good society should discourage if it can. Price-gouging laws cannot banish greed, but they can at least restrain its
most brazen expression, and signal society’s disapproval of it. By punishing
greedy behavior rather than rewarding it, society affirms the
civic virtue of shared sacrifice for the common good.
To acknowledge the moral force of the virtue argument is not to
insist that it must always prevail over competing considerations. You
might conclude, in some instances, that a hurricane-stricken community
should make a devil’s bargain—allow price gouging in hopes of
attracting an army of roofers and contractors from far and wide, even
at the moral cost of sanctioning greed. Repair the roofs now and the
social fabric later. What’s important to notice, however, is that the debate
about price-gouging laws is not simply about welfare and freedom.
It is also about virtue—about cultivating the attitudes and dispositions,
the qualities of character, on which a good society depends.
Some people, including many who support price-gouging laws,
find the virtue argument discomfiting. The reason: It seems more judgmental
than arguments that appeal to welfare and freedom. To ask
whether a policy will speed economic recovery or spur economic
growth does not involve judging people’s preferences. It assumes that
everyone prefers more income rather than less, and it doesn’t pass
judgment on how they spend their money. Similarly, to ask whether,
under conditions of duress, people are actually free to choose doesn’t
require evaluating their choices. The question is whether, or to what
extent, people are free rather than coerced.
The virtue argument, by contrast, rests on a judgment that greed is
a vice that the state should discourage. But who is to judge what is
virtue and what is vice? Don’t citizens of pluralist societies disagree
about such things? And isn’t it dangerous to impose judgments about
virtue through law? In the face of these worries, many people hold that
government should be neutral on matters of virtue and vice; it should
not try to cultivate good attitudes or discourage bad ones.
So when we probe our reactions to price gouging, we find ourselves
pulled in two directions: We are outraged when people get
things they don’t deserve; greed that preys on human misery, we think,
should be punished, not rewarded. And yet we worry when judgments
about virtue find their way into law.
This dilemma points to one of the great questions of political philosophy:
Does a just society seek to promote the virtue of its citizens?
Or should law be neutral toward competing conceptions of virtue, so
that citizens can be free to choose for themselves the best way to live?
According to the textbook account, this question divides ancient
and modern political thought. In one important respect, the textbook
is right. Aristotle teaches that justice means giving people what they
deserve. And in order to determine who deserves what, we have to
determine what virtues are worthy of honor and reward. Aristotle
maintains that we can’t figure out what a just constitution is without
first reflecting on the most desirable way of life. For him, law can’t be
neutral on questions of the good life.
By contrast, modern political philosophers—from Immanuel Kant
in the eighteenth century to John Rawls in the twentieth century—
argue that the principles of justice that define our rights should not rest
on any particular conception of virtue, or of the best way to live. Instead,
a just society respects each person’s freedom to choose his or
her own conception of the good life.
So you might say that ancient theories of justice start with virtue,
while modern theories start with freedom. And in the chapters to
come, we explore the strengths and weaknesses of each. But it’s worth
noticing at the outset that this contrast can mislead.
For if we turn our gaze to the arguments about justice that animate
contemporary politics—not among philosophers but among ordinary
men and women—we find a more complicated picture. It’s true that
most of our arguments are about promoting prosperity and respecting
individual freedom, at least on the surface. But underlying these arguments,
and sometimes contending with them, we can often glimpse
another set of convictions—about what virtues are worthy of honor
and reward, and what way of life a good society should promote. Devoted though we are to prosperity and freedom, we can’t quite shake
off the judgmental strand of justice. The conviction that justice involves
virtue as well as choice runs deep. Thinking about justice seems inescapably
to engage us in thinking about the best way to live.
What Wounds Deserve the Purple Heart?
On some issues, questions of virtue and honor are too obvious to deny.
Consider the recent debate over who should qualify for the Purple
Heart. Since 1932, the U.S. military has awarded the medal to soldiers
wounded or killed in battle by enemy action. In addition to the honor,
the medal entitles recipients to special privileges in veterans’ hospitals.
Since the beginning of the current wars in Iraq and Afghanistan,
growing numbers of veterans have been diagnosed with post-traumatic
stress disorder and treated for the condition. Symptoms include recurring
nightmares, severe depression, and suicide. At least three hundred
thousand veterans reportedly suffer from traumatic stress or major depression.
Advocates for these veterans have proposed that they, too,
should qualify for the Purple Heart. Since psychological injuries can be
at least as debilitating as physical ones, they argue, soldiers who suffer
these wounds should receive the medal.
After a Pentagon advisory group studied the question, the Pentagon
announced, in 2009, that the Purple Heart would be reserved for
soldiers with physical injuries. Veterans suffering from mental disorders
and psychological trauma would not be eligible, even though they
qualify for government-supported medical treatment and disability
payments. The Pentagon offered two reasons for its decision: traumatic
stress disorders are not intentionally caused by enemy action, and they
are difficult to diagnose objectively.
Did the Pentagon make the right decision? Taken by themselves, its
reasons are unconvincing. In the Iraq War, one of the most common
injuries recognized with the Purple Heart has been a punctured eardrum,
caused by explosions at close range. But unlike bullets and
bombs, such explosions are not a deliberate enemy tactic intended to
injure or kill; they are (like traumatic stress) a damaging side effect of
battlefield action. And while traumatic disorders may be more difficult
to diagnose than a broken limb, the injury they inflict can be more severe
As the wider debate about the Purple Heart revealed, the real issue
is about the meaning of the medal and the virtues it honors. What,
then, are the relevant virtues? Unlike other military medals, the Purple
Heart honors sacrifice, not bravery. It requires no heroic act, only an
injury inflicted by the enemy. The question is what kind of injury should
A veteran’s group called the Military Order of the Purple Heart
opposed awarding the medal for psychological injuries, claiming that
doing so would “debase” the honor. A spokesman for the group stated
that “shedding blood” should be an essential qualification. He didn’t
explain why bloodless injuries shouldn’t count.
But Tyler E. Boudreau,
a former Marine captain who favors including psychological injuries, offers
a compelling analysis of the dispute. He attributes the opposition to
a deep-seated attitude in the military that views post-traumatic stress as
a kind of weakness. The same culture that demands tough-mindedness
also encourages skepticism toward the suggestion that the violence of
war can hurt the healthiest of minds . . . Sadly, as long as our military
culture bears at least a quiet contempt for the psychological wounds of
war, it is unlikely those veterans will ever see a Purple Heart.
So the debate over the Purple Heart is more than a medical or
clinical dispute about how to determine the veracity of injury. At the
heart of the disagreement are rival conceptions of moral character and
military valor. Those who insist that only bleeding wounds should
count believe that post-traumatic stress reflects a weakness of character
unworthy of honor. Those who believe that psychological wounds
should qualify argue that veterans suffering long-term trauma and severe
depression have sacrificed for their country as surely, and as honorably,
as those who’ve lost a limb.
The dispute over the Purple Heart illustrates the moral logic of
Aristotle’s theory of justice. We can’t determine who deserves a military
medal without asking what virtues the medal properly honors.
And to answer that question, we have to assess competing conceptions
of character and sacrifice.
It might be argued that military medals are a special case, a throwback
to an ancient ethic of honor and virtue. These days, most of our
arguments about justice are about how to distribute the fruits of prosperity,
or the burdens of hard times, and how to define the basic rights
of citizens. In these domains, considerations of welfare and freedom
predominate. But arguments about the rights and wrongs of economic
arrangements often lead us back to Aristotle’s question of what people
morally deserve, and why.
The public furor over the financial crisis of 2008–09 is a case in point.
For years, stock prices and real estate values had climbed. The reckoning
came when the housing bubble burst. Wall Street banks and financial
institutions had made billions of dollars on complex investments
backed by mortgages whose value now plunged. Once proud Wall
Street firms teetered on the edge of collapse. The stock market tanked,
devastating not only big investors but also ordinary Americans, whose
retirement accounts lost much of their value. The total wealth of
American families fell by $11 trillion in 2008, an amount equal to the
combined annual output of Germany, Japan, and the UK.
In October 2008, President George W. Bush asked Congress for
$700 billion to bail out the nation’s big banks and financial firms. It
didn’t seem fair that Wall Street had enjoyed huge profits during the
good times and was now asking taxpayers to foot the bill when things
had gone bad. But there seemed no alternative. The banks and financial
firms had grown so vast and so entwined with every aspect of the economy that their collapse might bring down the entire financial system.
They were “too big to fail.”
No one claimed that the banks and investment houses deserved the
money. Their reckless bets (enabled by inadequate government regulation)
had created the crisis. But here was a case where the welfare of
the economy as a whole seemed to outweigh considerations of fairness.
Congress reluctantly appropriated the bailout funds.
Then came the bonuses. Shortly after the bailout money began to
flow, news accounts revealed that some of the companies now on the
public dole were awarding millions of dollars in bonuses to their executives.
The most egregious case involved the American International
Group (A.I.G.), an insurance giant brought to ruin by the risky investments
of its financial products unit. Despite having been rescued with
massive infusions of government funds (totaling $173 billion), the
company paid $165 million in bonuses to executives in the very division
that had precipitated the crisis. Seventy-three employees received
bonuses of $1 million or more.
News of the bonuses set off a firestorm of public protest. This time,
the outrage was not about ten-dollar bags of ice or overpriced motel
rooms. It was about lavish rewards subsidized with taxpayer funds to
members of the division that had helped bring the global financial system
to near meltdown. Something was wrong with this picture. Although
the U.S. government now owned 80 percent of the company, the
treasury secretary pleaded in vain with A.I.G.’s government- appointed
CEO to rescind the bonuses. “We cannot attract and retain the best
and the brightest talent,” the CEO replied, “if employees believe their
compensation is subject to continued and arbitrary adjustment by the
U.S. Treasury.” He claimed the employees’ talents were needed to
unload the toxic assets for the benefit of the taxpayers, who, after all,
owned most of the company.
The public reacted with fury. A full-page headline in the tabloid
New York Post captured the sentiments of many: “Not So Fast You Greedy
Bastards.” The U.S. House of Representatives sought to claw back
the payments by approving a bill that would impose a 90 percent tax on
bonuses paid to employees of companies that received substantial bailout
funds. Under pressure from New York attorney general Andrew
Cuomo, fifteen of the top twenty A.I.G. bonus recipients agreed to
return the payments, and some $50 million was recouped in all. This
gesture assuaged public anger to some degree, and support for the
punitive tax mea sure faded in the Senate. But the episode left the
public reluctant to spend more to clean up the mess the financial industry
At the heart of the bailout outrage was a sense of injustice. Even before
the bonus issue erupted, public support for the bailout was hesitant
and conflicted. Americans were torn between the need to prevent an
economic meltdown that would hurt everyone and their belief that funneling
massive sums to failed banks and investment companies was deeply
unfair. To avoid economic disaster, Congress and the public acceded.
But morally speaking, it had felt all along like a kind of extortion.
Underlying the bailout outrage was a belief about moral desert:
The executives receiving the bonuses (and the companies receiving the
bailouts) didn’t deserve them. But why didn’t they? The reason may be
less obvious than it seems. Consider two possible answers—one is
about greed, the other about failure.
One source of outrage was that the bonuses seemed to reward
greed, as the tabloid headline indelicately suggested. The public found
this morally unpalatable. Not only the bonuses but the bailout as a
whole seemed, perversely, to reward greedy behavior rather than punish
it. The derivatives traders had landed their company, and the country,
in dire financial peril—by making reckless investments in pursuit
of ever-greater profits. Having pocketed the profits when times were
good, they saw nothing wrong with million-dollar bonuses even after
their investments had come to ruin.
The greed critique was voiced not only by the tabloids, but also (in
more decorous versions) by public officials. Senator Sherrod Brown
(D-Ohio) said that A.I.G.’s behavior “smacks of greed, arrogance, and
worse.” President Obama stated that A.I.G. “finds itself in financial
distress due to recklessness and greed.”
The problem with the greed critique is that it doesn’t distinguish
the rewards bestowed by the bailout after the crash from the rewards
bestowed by markets when times were flush. Greed is a vice, a bad attitude,
an excessive, single-minded desire for gain. So it’s understandable
that people aren’t keen to reward it. But is there any reason to
assume that the recipients of bailout bonuses are any greedier now
than they were a few years ago, when they were riding high and reaping
even greater rewards?
Wall Street traders, bankers, and hedge fund managers are a hardcharging
lot. The pursuit of financial gain is what they do for a living.
Whether or not their vocation taints their character, their virtue is
unlikely to rise or fall with the stock market. So if it’s wrong to reward
greed with big bailout bonuses, isn’t it also wrong to reward it with
market largess? The public was outraged when, in 2008, Wall Street
firms (some on taxpayer-subsidized life support) handed out $16 billion
in bonuses. But this figure was less than half the amounts paid out
in 2006 ($34 billion) and 2007 ($33 billion). If greed is the reason
they don’t deserve the money now, on what basis can it be said they
deserved the money then?
One obvious difference is that bailout bonuses come from the taxpayer
while the bonuses paid in good times come from company earnings.
If the outrage is based on the conviction that the bonuses are
undeserved, however, the source of the payment is not morally decisive.
But it does provide a clue: the reason the bonuses are coming
from the taxpayer is that the companies have failed. This takes us to the
heart of the complaint. The American public’s real objection to the
bonuses—and the bailout—is not that they reward greed but that they
Americans are harder on failure than on greed. In market- driven
societies, ambitious people are expected to pursue their interests vigorously, and the line between self-interest and greed often blurs. But
the line between success and failure is etched more sharply. And the
idea that people deserve the rewards that success bestows is central to
the American dream.
Notwithstanding his passing reference to greed, President Obama
understood that rewarding failure was the deeper source of dissonance
and outrage. In announcing limits on executive pay at companies receiving
bailout funds, Obama identified the real source of bailout outrage:
This is America. We don’t disparage wealth. We don’t begrudge anybody
for achieving success. And we certainly believe that success
should be rewarded. But what gets people upset—and rightfully
so—are executives being rewarded for failure, especially when those
rewards are subsidized by U.S. taxpayers.
One of the most bizarre statements about bailout ethics came from
Senator Charles Grassley (R-Iowa), a fiscal conservative from the
heartland. At the height of the bonus furor, Grassley said in an Iowa
radio interview that what bothered him most was the refusal of the
corporate executives to take any blame for their failures. He would
“feel a bit better towards them if they would follow the Japanese example
and come before the American people and take that deep bow
and say, ‘I’m sorry,’ and then either do one of two things—resign or go
Grassley later explained that he was not calling on the executives to
commit suicide. But he did want them to accept responsibility for their
failure, to show contrition, and to offer a public apology. “I haven’t
heard this from CEOs, and it just makes it very difficult for the taxpayers
of my district to just keep shoveling money out the door.”29
Grassley’s comments support my hunch that the bailout anger was
not mainly about greed; what most offended Americans’ sense of justice
was that their tax dollars were being used to reward failure.
If that’s right, it remains to ask whether this view of the bailouts
was justified. Were the CEOs and top executives of the big banks and
investment firms really to blame for the financial crisis? Many of the
executives didn’t think so. Testifying before congressional committees
investigating the financial crisis, they insisted they had done all they
could with the information available to them. The former chief executive
of Bear Stearns, a Wall Street investment firm that collapsed in
2008, said he’d pondered long and hard whether he could have done
anything differently. He concluded he’d done all he could. “I just simply
have not been able to come up with anything . . . that would have made
a difference to the situation we faced.”
Other CEOs of failed companies agreed, insisting that they were
victims “of a financial tsunami” beyond their control. A similar attitude
extended to young traders, who had a hard time understanding
the public’s fury about their bonuses. “There’s no sympathy for us anywhere,”
a Wall Street trader told a reporter for Vanity Fair. “But it’s not
as if we weren’t working hard.”
The tsunami metaphor became part of bailout vernacular, especially
in financial circles. If the executives are right that the failure of
their companies was due to larger economic forces, not their own decisions,
this would explain why they didn’t express the remorse that
Senator Grassley wanted to hear. But it also raises a far-reaching question
about failure, success, and justice.
If big, systemic economic forces account for the disastrous loses of
2008 and 2009, couldn’t it be argued that they also account for the
dazzling gains of earlier years? If the weather is to blame for the bad
years, how can it be that the talent, wisdom, and hard work of bankers,
traders, and Wall Street executives are responsible for the stupendous
returns that occurred when the sun was shining?
Confronted with public outrage over paying bonuses for failure,
the CEOs argued that financial returns are not wholly their own doing,
but the product of forces beyond their control. They may have a point.
But if this is true, there’s good reason to question their claim to outsized
compensation when times are good. Surely the end of the cold
war, the globalization of trade and capital markets, the rise of personal
computers and the Internet, and a host of other factors help explain
the success of the financial industry during its run in the 1990s and
in the early years of the twenty-first century.
In 2007, CEOs at major U.S. corporations were paid 344 times
the pay of the average worker. On what grounds, if any, do executives
deserve to make that much more than their employees? Most of
them work hard and bring talent to their work. But consider this: In
1980, CEOs earned only 42 times what their workers did. Were
executives less talented and hardworking in 1980 than they are today?
Or do pay differentials reflect contingencies unrelated to talents and
Or compare the level of executive compensation in the United
States with that in other countries. CEOs at top U.S. companies earn
an average of $13.3 million per year (using 2004–2006 data), compared
to $6.6 million for European chief executives and $1.5 million
for CEOs in Japan. Are American executives twice as deserving as
their European counterparts, and nine times as deserving as Japanese
CEOs? Or do these differences also reflect factors unrelated to the effort
and talent that executives bring to their jobs?
The bailout outrage that gripped the United States in early 2009
expressed the widely held view that people who wreck the companies
they run with risky investments don’t deserve to be rewarded with
millions of dollars in bonuses. But the argument over the bonuses raises
questions about who deserves what when times are good. Do the successful
deserve the bounty that markets bestow upon them, or does
that bounty depend on factors beyond their control? And what are the
implications for the mutual obligations of citizens—in good times and
hard times? Whether the financial crisis will prompt public debate on
these broader questions remains to be seen.
Excerpted from Justice: Whats the Right Thing to Do by Michael J. Sandel. Published in September 2009 by Farrar, Straus and Giroux, LLC. Copyright © 2009 by Michael J. Sandel. All rights reserved.