FOR my septuagenarian landlady, this is a year of revelrous cheers and remorseful tears.

The source of her erratic changes from cheers to tears and vice versa lies at the other side of a dilapidated wall separating her rundown apartment (which I rent for now) from a construction site on which a shining villa will rise next year.

The sprawling construction site is so close to our apartment (about two meters away) that dust, fumes and noise have become part of our life - day in and day out. Worse, the movements of monstrous machines like caterpillar earth-movers, drilling machines and cement-mixers threaten the very safety of our shelter. It shakes and cracks.

Make no mistake. We're not on the city's fringes where noise is the norm. We are in the quietest part, the former French Concession area.

My landlady was angry at first as the land developer tried to bully her into silence. She refused to budge, insisting on cash compensation for pollution and damages.

She got it, but tears soon ran down her cheeks as the sum fell far short of her expectation. After one sleepless night after another, she finally laughed as she got what she wanted and deserved, by making a daring move. She nimbly climbed the wall and straddled it until an agreement was made.

Tears found their way back to her furrowed face when she discovered in no time - much to her chagrin - that the developer had broken the promise of no drilling before 7:30am or after 8pm. Now the construction site rumbles from 6:30am to midnight, even to the wee hours, against city rules. Calls to government and media hotlines fell on deaf ears most of the time.

Guessing it would be hard to wring more compensation from the thuggish developer, she fled to a second apartment she owns, leaving me and my wife holding the bag of dust, noise and fumes.

One winner, many losers

In this game of bluffing and bargaining, there's finally one winner and at least two losers.

The developer wins as he has priced his way out of disputes. The compensation he paid to my landlady and other affected neighbors is negligible compared with the value of a multi-million-yuan villa.

On the surface, my landlady also wins, but ultimately she loses. On the one hand, her second apartment where she has taken refuge is much less convenient in transport and lacks some urban amenities. On the other hand, my wife and I will soon have to move to a new apartment, causing her to lose rent. No new tenant would consider moving in before the construction ends in a year.

My wife and I lose, of course, as dust, noise and fumes will have disturbed our life for too long before we can move.

Actually there are many other losers: Construction workers who inhale dust and fumes day and night; dozens of other neighbors who have no second homes to hide in; hundreds of pupils who go to school near the construction site; and last but not least, our air quality.

My landlady's futile fight with the developer could make the case for a failed free market where everything has a price but money cannot solve everything.

In his 2010 best-seller - "Justice: What's the Right Thing to Do?"- Michael J. Sandel, professor of government at Harvard University, asks: "How free are the choices we make in the free market? And are there certain virtues and higher goods that markets do not honor and money cannot buy?"

The United States of America certainly fares much better than the People's Republic of China in protecting people's rights to a clean and quiet life. A few years of study and living in America convinced me of that. But Uncle Sam has his own problems, as he struggles to reconcile the conflicting values of maximizing economic freedom and safeguarding human dignity.

A few examples from the book "Justice":

1. In 2004, Hurricane Charley caused death and destruction and inspired price gouging across Florida. Hotel rooms, ice and generators all sold for many times their usual costs. The author asks: Isn't taking advantage of people when they're most in need morally wrong?

2. Everyone is supposed to be patriotic, but the majority of today's army recruits come from low-income homes. Rich American taxpayers outsource their military duty to those who risk their lives in exchange for money and benefits. In the author's opinion, citizens' support of democracy erodes when they pay others to perform their civic responsibility.

3. True to free-market thinking, childbearing has become a business as commercial surrogacy gets more and more popular in the US and other countries like India. The author cites philosopher Elizabeth Anderson as saying that surrogacy "degrades children and women's labor by treating them as if they were commodities." He cites Kant as saying: "What matters is doing the right thing because it's right, not for some ulterior motive."

After critical analysis of the American way of life, professor Sandel says: "The way things are does not determine the way they ought to be." He calls for "a new politics of the common good," which challenges the nearly universal application of free-market thinking to human and social interactions like pregnancy or military service.

Markets, he says, may not be the best way to determine social values, and societies should not commodify human needs. Prices are not a sin per se, the sin is to price everything under the sun and to price your way forward anytime, anywhere. Oil companies are often fined heavily for their damage to the environment, but do they ever learn a lesson?

There're things you just cannot do. You cannot drill the earth like mad.

And in China, at least by law, you cannot give birth to more babies than allowed. You cannot wrong a person into jail. You cannot force residents to relocate. You cannot shovel farmers into cities. But all these can be done now because of the magic power of fines and compensations.

And because of our new-found faith in fines and compensations, lessons are hardly learned from collapsed buildings and bridges, exploded mines and factories, or fallen elevators and window glass.

Where there is a price, there is a way.

My septuagenarian landlady is at once a player and prey of a pricing scheme.