Fracking and the moral limits of markets

The Prime Minister is going “all out” for fracking.  “Nothing would go ahead if there were environmental dangers,” he says, but he has clearly made up his mind that there is no danger – can be no danger!  So, millions of pounds will be thrown at councils to persuade them to accept fracking and, according to one report, “direct cash payments could be made to homeowners living near fracking sites”.

As the Guardian leader puts it, the Government’s enthusiasm for fracking “feels more like an ambush than an attempt to woo a public that is still uncertain what it’s being sold”.  CPRE’s Policy Guidance Note on shale gas, produced towards the end of last year, stated that we do “not oppose the exploitation of shale gas in principle provided it meets certain conditions”.  These include serious concerns about its impact on the countryside, carbon emissions, water pollution and much else.  We argued against a gung-ho embrace of fracking as a solution to the country’s energy problems, but that seems to be exactly what we are getting.

The suggestion that local authority support for fracking can be bought is particularly concerning.  CPRE believes that planning decisions should be made on their merits, uninfluenced by money.  That is our position on housing and wind farms, and it is our position on fracking.

But will people support fracking because there is money in it for them?  Michael Sandel’s What Money Can’t Buy: the moral limits of markets, suggests that they may have a deeper sense of what is right.  Ministers might consider Chapter 3, ‘How markets crowd out morals,’ with its warning that “sometimes, offering payment for a certain behaviour gets you less of it, not more”.  Sandel gives a number of examples.

In 1993, a Swiss village willing to accommodate a nuclear waste facility turned against it when cash was offered: “For the good citizens of Switzerland, the prospect of a private payoff transformed a civic question into a pecuniary one.  The intrusion of market norms crowded out their sense of civic duty.”

A childcare centre in Israel, faced with the problem of parents picking up their children late, introduced a system of fines.  Late pickups increased because “introducing the monetary payment changed the norms.  Before, parents who came late felt guilty; they were imposing an inconvenience on the teachers.  Now parents considered a late pickup as a service for which they were willing to pay.”

Finally, Richard Titmuss’s 1970 study of blood donation demonstrated the superiority of a system where all blood for transfusion is given by unpaid, voluntary donors, over one where blood is bought and sold on the market.  In Sandel’s words, Titmuss argued that “turning blood into a market commodity erodes people’s sense of obligation to donate blood, diminishes the spirit of altruism, and undermines the ‘gift relationship’ as an active feature of social life”.

In all these cases, the argument is twofold.  Introducing financial incentives where they do not belong is both ineffective and corrupting.

Only time will tell whether money will persuade councils and communities to accept fracking.  In the current climate councillors will think twice about rejecting millions of pounds – though they and their voters may also conclude that if a cash-strapped government is offering such large sums, the damage and destruction caused by fracking must really be pretty bad.

But whether or not financial incentives work, they can corrupt our finer ideals.  Sandel is not an unequivocal opponent of incentives.  “Bribery sometimes works….  But it is important to remember that it is bribery we are engaged in, a morally compromised practice that substitutes a lower norm… for a higher one…

“As markets and market-oriented thinking reach into spheres of life traditionally governed by non-market norms [including environmental protection]… this dilemma arises more and more often.  What should we do when the promise of economic growth or economic efficiency means putting a price on goods we consider priceless?  Sometimes, we find ourselves torn about whether to traffic in morally questionable markets in hopes of achieving worthy ends.”

Maybe.  But in the case of fracking (or wind farms or new housing estates) I would prefer the decision to be taken on its merits and not because the decision-makers have been offered a bung.  And I think most people would agree.

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