Liberty and Society

Welcome friends!

I don’t know how I got on the subject, probably the recent Christmas holiday and the annual rite of posing and gesturing for the good of all mankind, but I was just thinking how liberals tend to feel various social ills are best addressed through purposeful government action and conservatives (of the conscientious sort who actually think about such things) tend to feel these issues are more appropriately addressed through private charity.  A common argument one tends to hear on the conservative side is that the big advantage of their preferred approach is that it’s voluntary.  If one wants to help other people one is free to do so but no one is forced to part with their hard earned cash or let’s just say cash at the behest of some no good do-gooder.  In contrast the government policy approach favored by liberals generally involves the government’s power of taxation and hence ultimately its monopoly on the legal use of force and thus constitutes an affront to freedom and personal liberty.  Superficially it may seem they’re onto something.  Voluntary seems good.  Being forced to do anything seems bad.  But like much of the rest of conservative ideology upon deeper consideration the argument turns out to be a bit too simplistic.  Some other issues going on.  Big issues that get to the core of civilized society and democracy.  Not the sort of things people should really leave unsaid.  Let me explain what I’m talking about.

The first problem I have with the conservative take on this issue is that it seems a little lopsided or unbalanced in some way.  The private charity approach certainly seems consistent with the freedom of potential donors who can decide to give or not give as the mood suits them.  But this increase in freedom relative to the tax and spend approach seems to me counterbalanced by a commensurate decrease in freedom on the part of those on the receiving end.  Under a proper government program to address whatever social problems we’re talking about these people would be legally entitled to whatever it was and would be free to claim what would then be rightfully theirs.  Under a charitable regime they would of course not be entitled to anything in particular.  They would arrive hat in hand begging for alms.  Not really the same freedom-wise I wouldn’t think.  If we’re going to look at the net impact on freedom considering both groups of people I’d have to say I’m just not really sure.  One may think some people don’t really deserve more freedom so the calculation is really beside the point.  That’s fine with me.  We can discuss it.  But in that case let’s not present abstract freedom as an independent objective or consideration.  Let’s just say we’re interested in distributional systems.

Another problem with the private charity approach is that it appears to me a little sneaky or underhanded in some way.  We’ve set up together as a society through our political system our legal and economic institutions or if not set them up in the sense of bringing them into being then at least agreed together to modify them or not and to abide by them and so on.  However, if we’re talking about addressing some perceived social ills the way we’ve things up apparently has left a little something to be desired.  It’s not a big deal.  It’s not unexpected.  Hard to think of everything and to create a system that handles everything.  I suppose no society yet created is perfect and can carry on indefinitely without some remedial work now and then to keep it running more or less smoothly.  My point is simply that when I see people who make out very well indeed in our society accepting and supporting the system to the extent it works to their benefit but balking when it comes time to address the inevitable issues and imperfections associated with that system manifested typically in the suffering or relative want of their fellow citizens it looks to me like people shirking their duty to society.  It’s rather like eating a nice dinner and skipping out on the bill.  It’s fine to say I’ll only pay if I decide to volunteer a little something on the way out but in that case one shouldn’t be too surprised if the restaurant falls into disrepair or even ceases to exist one day.

And of course there is something inherently odd about setting up an economic system based primarily on monetary incentives and self interest and then trying to address social ills using a system that depends on people acting against those incentives at least in the short term.  Under a charitable system arguably good people who express their concern for others in a practical way by which I mean giving people money will lose out relative to those who choose to express a haughty disregard for the welfare of their fellows.  Sounds like a recipe to let problems go unsolved to me.  Sometimes people are willing to do things if we do them together and everyone pitches in but balk when they discover they’ll be doing all the hard lifting while their compatriots sit on the sidelines under very fancy canopies indeed cheering them on.  

A rather more fundamental issue is that I’m not at all convinced taxation really qualifies as any great assault on one’s liberty.  Goes with living in a human society.  Things need doing and it’s not really all going to be done through the magic of the marketplace.  But of course it depends on the form of government we’re talking about doesn’t it?  If we’re talking about monarchism or fascism or what have you then I suppose taxation might be rather arbitrary and arguable an assault on one’s liberty.  This is where the idea of democracy comes in.  We vote on things and then we abide by them whether that’s what we’ve personally voted for or not or in extreme cases we abide by them as much as we’re able within the bounds of our perceived moral duty because, well, that’s just the way society works.  One wouldn’t have a very effective society if everyone does only what they choose to do from one moment to the next.  Some places have tried that approach.  In practice it tends to lead to what I believe is known technically as a dysfunctional hellhole.  And in this context as well I’m struck by the distinctive imbalance inherent in much of conservative ideology.  Although often up in arms over the government’s use of force as it applies to enforcing the tax code conservatives rarely express concerns over the government’s use of force in other contexts such as for example enforcing our system of property rights.

Of course this imbalance really gets to the heart of the whole issue I suppose.  It has nothing to do with freedom or liberty and everything to do with haves and have nots.  Conservatives are enamored of the institutions surrounding the market and or current property arrangements.  They perceive no social ills under such a regime and nor do they care to receive the opinion of their fellow citizens delivered via the democratic political system.  In a sense they’ve become too cool for school.  It leads to that particular form of egotism by which conservatives imagine themselves a law unto themselves or in some cases the beneficiary of laws not made by their fellows but delivered from the cosmos by the forces of nature or helpful deities of one sort or another.  It’s the mindset that leads many conservatives to speak of government beyond that required to express and enforce the market institutions they find so attractive as a great evil with no apparent concern over what form that dark force may take be it democracy or fascism or communism.  Indeed many conservatives tend to use the terms interchangeably.  What they fail to appreciate is that the very system they excoriate as infringing upon their precious liberties is the system we used to set up and maintain the system of property rights and contracts they so adore but that others may find the source of suffering and want and injustice.  It’s a system of thought predicated on egotism and a defective and incomplete anti-social moral philosophy that results in selective perception expressed in peculiarly unbalanced reasoning in which government legitimacy and individual rights and duties appear and disappear like will-o’-the-wisps depending on one’s vantage point.  

We should all fight against conservatism and reaffirm our commitment to society, democracy, and the solving of social ills through purposeful co-ordinated collective action.  It’s time we gave up the ancient deist pipe dream of an invisible hand leading society to morally optimal results with no more effort on our part than assiduous attention to our own selfish wants and desires.  No mysterious providence guides markets to mutually desirable and salutary results.  Markets do what they do.  Some of it good for some.  Possibly even most of it good for most.  However,  under any reasonable system of moral ethics the market will be seen to allow some issues to remain unsolved.  We should recognize those issues and take steps to address them to make our system work for everyone.

Conservative Ideology and Socialism Two Ways

Welcome friends!

I must apologize for the breakdown in my scheduling the last few weeks.  It’s been a little crazy around here and I’m not just talking about President Trump and the Republican Party.  So let’s make up for lost time and dive right in shall we?  What caught my eye this week was an amusing online comment about wealthy American “socialists” who live in gated communities and high rises not caring that immigrants and “black” people are taking jobs from hapless “white” people.  Always fun to read these sorts of posts if one can get past the fractured syntax and inventive spelling because it’s a little window into how other people see the world and by other people I mean in this instance people one might not otherwise engage in conversation in everyday life.  Ah yes the beauty of the internet.  Bringing people together, right?  Of course I’m not entirely sure if I was connecting with a semi-literate American redneck or a professional Russian troll still learning the English language but anyway they seem to get along quite well these days so doesn’t really matter much to me.  I am on the other hand always interested in how conservatives use and understand others (such as Russian trolls for example) to use the term “socialism.” It occurred to me although all conservatives are trained from early childhood to despise “socialists” with a passion verging on clinical paranoia they quite often display certain socialistic tendencies themselves.  Ironic.  Anyway, I thought I’d say a few words about that this week.

When American conservatives excoriate  domestic “socialists” what they have in mind is what you and I might call liberal / progressive democrats who support social programs designed to help struggling people.  I’m sure we all understand the haughty Ayn Randian elitist conservatives who despise that sort of thing on the principle if struggling people are destined to die they should get on with it and reduce the surplus population.  That type of conservative has been common both here and abroad for a very long time most likely from at least the time of the ancient pharaohs.  I talk about those conservatives often enough but they’re not really the focus of this post.  No, there’s another species of conservative in the USA that is more of the economically struggling salt of the earth “populist” variety.  It’s a running joke of course the latter group of conservatives finds common cause with the former group because the former group clearly views the latter group as little more than a mildly amusing species of vermin they need to play with in the name of political expediency until they manage to sufficiently shrink and neutralize democratic government to render such distasteful interactions unnecessary.  It may seem superficially curious these struggling working class conservatives would have such a rabid hatred of the people who have their best interests at heart.  Some of these conservatives are convinced liberal “socialists” are only concerned about struggling immigrants and racial minorities and funneling resources to them in particular.  Humorous of course because although there may be a few programs specifically tailored to immigrants and racial minorities most of the programs under consideration are means tested programs available to all.  Others are convinced the reason some people are struggling is that liberal “socialists” are trying to help them and if we just got rid of the programs designed to deal with these social problems the problems themselves would evaporate.  Also rather comical because historically of course the social problems predate the programs designed to address them and there is no reason at all to suppose something has changed in the interim that would prevent them reappearing if we no longer attempt to address them.  But that’s the story fed to them by the traditional conservative elite that has never seen the need to deal with social problems or I suppose more accurately has always refused even to acknowledge social problems as such and that’s the story they’re going with.

The funny thing about recent developments of course is conservatives of the struggling salt of the earth variety have re-discovered their own version of socialism in the guise of former presidential advisor Mr. Bannon’s pet project“economic nationalism.” Many conservatives seem to be struggling to recognize this agenda for what it is.  So let’s just set the record straight.

The non-socialist traditional conservative elitist response to white working class Americans losing their jobs is a big shrug of the shoulders.  So what?  What happens to you or your family is none of our concern.  We’re not your nannies.  If you lose out in the modern competitive economy that’s your problem not ours.  If insufficient jobs are available on the free market then it’s right and fitting you not have a job.  You should just go someplace and die.  Did an immigrant take your job?  So what?  You competed and the immigrant was either willing to work for less or had some other advantage.  Did some sort of minority take your job?  So what?  No one is entitled to a job.  The non-socialist approach is open borders, free movement of labor, free markets both domestically and internationally, and whatever happens happens.

What one may call the traditional liberal or at least neoliberal brand of “socialism” is to have the same sort of free market for labor and goods and services traditional conservatives embrace but to acknowledge and attempt to address the rather obvious distributional issues associated with that approach by coming up with programs to help people who may be losing out or temporarily struggling.  We’re talking about help for people having trouble finding a job.  Help with education.  Help with housing or food if necessary.  The most drastic option is probably spending tax dollars to generate jobs that would otherwise not be forthcoming on the market.  As many people have pointed out these fixes aren’t the same as dumping money down a hole in the ground as many traditional conservatives might suggest.  When we find a way to get money to struggling people they spend it, consumer demand increases, and the economy inevitably grows.  People are a lot happier as well and that has to count for something.

The new / old “economic nationalism” implicitly acknowledges the drawbacks of the free market but instead of allowing it to function and trying to fix problems after they appear it attempts to manipulate the conditions surrounding the market to head off potential problems.  Examples of this approach would be laws to buy only products made in America (regardless of whether those products are the best or the cheapest) or to prevent companies relocating to other countries (despite the potential competitive advantages of doing so) or to prevent companies from automating or using labor saving technology (despite the potential cost savings).  Depending on the “society” this form of socialism is meant to address it might involve preventing people immigrating or I suppose even ensuring that members of some ethnic or racial groups get certain jobs, etc.  As any traditional conservative or neoliberal will tell you these types of market restrictions and manipulations come at a cost.  One may be unable to get the cheapest or most qualified worker.  One may lose out relative to foreign competitors.  The problems are in the same category as those associated with other more common market manipulations like minimum wage laws and union contracts.  However, this rigging of the market approach is one way to keep everyone or at least some people in the game.  Nothing is free in this world including trying to help struggling people.  And to the extent we’re getting money to struggling people we may at least still get the consumer demand effect.  My point in this post is not to adjudicate which type of socialism works best or makes the most sense.  It’s simply to point out they’re both forms of what is essentially socialism.  They’re both predicated on the proposition we should care what happens to other people in our “society” however we choose to define it.  We should care if our neighbor has a job.  We should care if people can afford housing.  Other people matter.

Now if one is truly opposed to socialism that’s fine with me.   Everyone is free to hold his or her own opinion on the matter.  I tend to think what happens to other people in our society is important.  Other people should have jobs and a way to make a living.  We need to keep thinking and working until we have a system that does that.  But that’s just me.  If one supports one type of socialism over another that’s also fine with me.  As I just explained I’m not entirely sure what would work best myself.  But you know what I really can’t abide?  Someone who rants on and on about the evils of socialism from one side of his or her mouth all the while promoting a form of socialism out the other side.  We’re not going to get anywhere at that rate.  Can we at least agree to try to talk sensibly about these issues?

Inequality, Fairness, and Poverty

Welcome friends!

Did you ever have one of those depressing moments when you realize a problem you noticed and delved into many years ago still exists in nearly identical form and no progress of any sort appears to have taken place in the intervening decades?  I had that sensation the other day while reading an article on economic inequality.  Apparently some researchers who study people’s attitude to wealth disparity discovered ideas of fairness or what we used to social justice can play a role.  To quote a younger and slightly more uncouth version of myself, “No shit Sherlock!”  Sorry to get all juvenile and sarcastic but is this really as far as we’ve advanced in terms of the social discussion of distributional issues?  One’s ideas about fairness may play a role?  Someone had to write it up in a newspaper article?  It’s especially disheartening to me because as I’ve probably mentioned before I feel distributional issues are behind a good deal of what’s wrong with human societies today.  I don’t mean just in terms of the ethical issues and costs associated with inappropriate distributions but also in terms of the social conflict and instability our inability to come to grips with distributional issues generate.  How to explain the feeling I was having?  To put the phenomenon in a different context let’s imagine one was concerned with some basic health issue, let’s say long term behaviors that reduce the risk of heart attack, and one noticed an article in a newspaper that looked potentially relevant only to find on closer examination the article revealed merely that some doctors suspect having a beating heart might be important for one’s health.  Just give me a moment to calm down again.  Perhaps I’m being unreasonable.  Given our collective aversion to any serious discussion of distributional issues most likely because the haves of the world don’t really like the have nots of the world talking or thinking about such matters perhaps it’s not really all that remarkable each generation has to discover rudimentary features of the issue and write newspaper articles informing one another of their insights.  But I can play that game too.  In the grand tradition of reinventing the wheel let me take a few moments this week to say a few words about distributional issues, again, and how ideas about fairness may play a role, again.  Hey, anything worth saying once is worth saying a million times, right?

Let me first just quickly summarize the article so we all know what we’re talking about.  By way of introduction the authors mention what most literate people must surely already know: the resources of the world are currently distributed very unequally and more so every day.  Indeed, the top one percent of the world’s economic elite apparently now controls about fifty percent of the world’s wealth.  However, they note some researchers have recently suggested income (and I suspect they also meant wealth) disparity itself may not be the “main problem.”  No, the researchers in question apparently feel the “main problem” may be unfairness and in particular how unfairness relates to poverty.  Yes, it seems a team of researchers from Yale University recently published a journal article establishing that people tend to prefer unequal societies because they find legitimate reasons for some degree of inequality and they feel having everyone attain exactly the same outcome would not be entirely fair.  These researchers noted that in the present day USA as well as much of the rest of the world there is so much inequality some people just assume it must be unfair and have started talking about inequality in the abstract rather than sticking with the more central issue of fairness.  They argue this complicates the situation and note there are three separate but related ideas that typically feature in discussions of inequality: 1) equal opportunity, 2) fair distribution, and 3) equality of outcome.  To make any progress addressing “inequality” they argue we should first reach some agreement on what aspect of inequality we have in mind.  They go on to suggest people pay too much attention to the relative standing of the one percent and so on and suggest we instead focus on helping people who are unable to improve their situation because of a lack of fairness.  The article cites Harry Frankfurt, professor emeritus of philosophy at Princeton University, who argues in his book On Inequality that the moral obligation in question should involve eliminating “poverty” and striving to make sure everyone has “the means to live a good life” rather than achieving “equality.”

Got the picture?  Then let’s dive right in shall we?  The first point I would make is it seems eminently plausible to me many people think fairness is relevant to distributional issues.  This makes it all the more remarkable the textbook defense of the distributional system associated with the generally market based system by which we conduct our affairs in this country and many others doesn’t really mention fairness at all but instead involves the competing philosophical framework of utilitarianism.  According to utilitarianism something that generates greater utility is preferable to something that generates less utility, which in practice and under the conventional philosophical versions of utilitarianism amounts to the notion it’s nice when people are happy.  (I suppose using the idiosyncratic and just plain peculiar version of utility that appears in neoclassical economic theory one might say when some person is happy since we might be talking about one of those superconductors of utility allowed for in that system.  If you’re not getting what I’m driving at here you should take a glance at any of my previous posts on this topic filed most likely under utility or economic theory or something of that nature.  I’d go over it again here but I’m afraid this post is already destined to be overly long).  In the utilitarian framework there isn’t really any discussion of whether the people (or possibly the person in the case of economic theory) in question ought to be happy or deserve (or deserves in the one person case) to be happy or even why we should be concerned with people being happy.

So how does one square the fact that although most people think fairness is relevant to distributional issue the main theoretical context in which we tend to talk about distributional issues, the neoclassical demonstration of the ostensibly desirable outcomes associated with a free market, says nothing at all about it?  Well, that gets to something I’ve discussed before many times and that I’ve long associated with conservative rhetoric and ideology in general.  Basically my perception is many conservatives don’t discuss issues in what one might call a real or genuine way.  They use words and arguments and theories strategically or rhetorically.  If it gets them where they want to go they don’t worry too much about the actual meaning.  They spout off about economic theory and what it says about markets not because they necessarily agree with the philosophical framework used in economic theory to talk about markets but because it happens willy nilly to support what they support on some entirely different basis they are unable or unwilling to discuss.  I suspect that must be the main reason they continue to use the flawed and implausible version of utilitarianism in economic theory no matter how many times I or anyone else may demonstrate its rather obvious shortcomings.  It just doesn’t really matter to them.  They don’t take it that seriously or to put in the context of the discussion of how arch conservative President Trump’s supporters view their champion, they may take it seriously but not literally.  It’s more in the nature of useful rhetoric than a serious intellectual endeavor.

Along the same general lines I can’t help but detect a certain straw man element in the focus of “inequality” in some abstract and absolute sense rather than in terms of acceptable levels of inequality.  I doubt very much if anyone expressing concerns about inequality has ever argued a need for absolute equality.  I strongly suspect most people who talk about such matters are more concerned with the level of inequality and in particular the level of inequality justified by concerns relating to fairness.  It’s hard to avoid the implication that like those who talk about the glories of the free market in terms of economic theory without really buying into the moral philosophizing that informs that theory the authors in this case are setting up some sort of irrelevant dichotomy between absolute equality and fairness as a way to basically encourage people to stop talking about inequality and to think about fairness in some implausible way that doesn’t involve inequality in the sense of relative outcomes.

I’m picking up a bit of the same feeling from the passage in which the researchers note the three separate but related ideas that typically feature in discussions of inequality: 1) equal opportunity, 2) fair distribution, and 3) equality of outcome.  These issues seem to me entirely complementary and compatible.  One may feel one prerequisite for a fair distribution is equal opportunity.  Similarly one’s feeling about acceptable levels of inequality may hinge on one’s notion of fairness.  I don’t really see any reason we can’t take up these interrelated issues as a unit or anyway simultaneously.  Again, it’s almost as though the authors are trying to separate out issues of equality and get people talking and thinking about opportunity and fairness divorced from inequality but I’m just not sure I can take that objective very seriously.  If we have a very unequal sort of society where some kids have all the advantages wouldn’t that affect one’s feelings relating to equal opportunity?  If we’re discussing what we think is a fair distribution based on some consideration X wouldn’t we want to know something about the relative standing of those possessing or expressing X relative to those who do not?  If it’s fair such a person has let’s say twice the economic power of the other person does it necessarily follow it must be fair that person has one million times the market power of the other?  Again it’s hard to avoid the feeling the authors are trying to build a sort of wall around inequality or offer up a sort of indirect defense of inequality rather than sincerely trying to improve our understanding of the subject.

I might also mention I’ve never been a huge fan of discussions relating to distributional issues that focus on “poverty” and things like “the means to live a good life” as opposed to relative economic power.  I get relative economic power but “poverty” seems so subjective and arbitrary and anyway is just as relative as just looking directly at inequality in general.  Most likely we’re all doing pretty well relative to let’s say some Stone Age tribe eking out a subsistence living in a jungle somewhere.  Does that mean all distributional issues have been resolved?  Not to my mind.  And what is a good life anyway?  Sitting in a lawn chair with a glass of wine and a nice book?  Actually that does sound pretty good to me but I wonder what other people have in mind.  A big TV?  A computer?  A vacation?  A nice car?  Superior health care?  No I think we’re going down the wrong path when we stop thinking about inequality in relative terms and start thinking about “poverty” and “the means to a good life.”

Let me just end with some random thoughts of my own on the topic of inequality and fairness.  I’ve probably mentioned most of these before but what the heck.  First of all, I don’t see any reason one can’t combine the utilitarian insight it’s nice when people are happy with the insight people like fairness as well.  Setting aside the peculiar super conductor conceptualization of utility used in economic theory I don’t see much wrong with the notion it’s nice when as many people have as much utility as possible relative to their own maximum utility.  If one also accepts the notion of diminishing marginal utility and the notion one tends to address one’s most basic and important needs and wants first I believe that does generate a certain tendency toward egalitarianism and spreading the wealth around.  But I also don’t see much wrong with supposing we’re also willing to give up some of that social utility to address fairness.  I suppose if one wanted to get all philosophical about it one could relate one’s feelings about a system expressing fairness to one’s utility from living in such a system and try to work it all out in that way but that sounds a bit of a parlor game to me.  I don’t have any particular problem mixing philosophical systems.  For example, even with respect to neoclassical economic theory I think it’s fine as far as it goes but as I’ve explained before it just doesn’t really go very far and certainly not as far as many people would like to present it as going.  I don’t see anything wrong with supposing maximizing utility is good as far as it goes with the proviso fairness is also important.   (Incidentally aside from utility and fairness the other big philosophical approach to thinking about distributions one tends to hear a lot about involves various conceptions of rights so if one wishes one can just imagine we’re including that line of thinking as well.  I’m not doing that literally here because we’re talking about inequality and fairness but if one wants to bump it up in one’s mind so to speak and think about distributions in general I think some of these same points probably apply there as well.)

So what are the issues that might justify at least some level of inequality on the basis of fairness?  As a general point I would say given my individualistic outlook on such matters the relevant consideration for the issue of fairness is whether an individual is doing something that suggests he or she deserves higher compensation than someone doing something else.  Let’s look at some specific instances of this general idea.

I think right at the top of the heap must be a willingness to accept the market incentive structure.  One might like writing poetry on a breezy hill top but if no one really wants to pay one to do that but is willing to pay one to do something else he or she finds more personally useful like let’s say digging in the old salt mine I guess it makes sense the person who agrees to work in the old salt mine should make more than the person who insists on the breezy hill top.  Trying to get along with other people and so on should probably count for something.  The nicest way to get money from other people is to do something they’re willing to pay one to do.  Of course other values may be involved as well and in this context I think one is in real danger of putting one’s ethical cart before the horse.  Depending on the distribution of economic power the most highly paid activity on the market might be something like, I don’t know, installing golden toilets in the palaces of the hereditarily wealthy.  I mean, if they have all the money and that’s what they value then that will be what the market recommends one spends one’s time doing.  Indeed under the right conditions that be the only activity called forth on the market.  However, taking a somewhat broader view I suppose one could make an argument a nice bit of poetry or something else like let’s say providing housing or health services or what have you for the poor or something like that might be more valuable to humanity in some ultimate way.  Of course, it’s quite possible the only way to pay someone to do things like that in a market system geared to gold toilet installation might be to tax those with money and subsidize the people doing those other things, which I suppose depending on one’s ethical frame of mind might seem a perfectly reasonable thing to do.  I suppose one could also directly alter the market incentive structure by changing the pattern of economic power if one could find some generally acceptable basis on which to do that.  In our example if a few poetry lovers and poor people had a bit of money that would also solve the ostensible problem.

It may be worthwhile to note this is where the perspectives of liberals and conservatives relating to the merits of democracies and market systems really begin to diverge.  To me as a liberal democracy must take precedence.  There is no legitimate distributional system until we set one up via democratic government and what makes it legitimate is we agree to support it.  If enough of us decide something isn’t working quite right it seems eminently reasonable to me we should be able to step in and redistribute resources in some way that makes a little more sense.  Tax a bit here.  Subsidize a bit there.  This sort of thing of course drives conservatives bonkers.  They see redistribution even resulting from democratic government as a great crime against the individual.  They believe once one sets up a distributional system it becomes sacrosanct and takes on a life of its own and the only legitimate political objective from that point on is to prevent democracy from altering it in any way.  Not surprisingly this view seems most attractive to those prospering under the current system and wanting to keep it that way but sometimes they manage to pull in people who feel they should be prospering under the current system but suspect other people have been interfering with it in some way that has prevented them from getting their due.  I personally think a more middle of the road approach is more attractive.  That is to say, I suppose it’s perfectly fine to say people who go along with what those with economic power want them to do should end up better off than those who do not but I wouldn’t want to go all crazy in that respect.

How much better would avoid the implication we’ve gone crazy in that respect?  Ah, well, that’s the tricky part isn’t it?  I wouldn’t expect someone trying to do something that isn’t called forth by the economic power expressed in the market to be justified in wanting to live like royalty.  I suppose a middling amount that leads to a more or less reasonable style of life?  Or I suppose rather less since they have the breezy hilltops.  Just throwing out ideas. It’s all relative. Some percentage of the average?  In a sense it depends on the other side of the coin.  How much better off should someone be who pays greater attention to market incentives?  Well, I don’t know.  I guess part of it might be what level of relative income can reasonably be expected to change what people decide to do.  Writing poetry on breezy hill sides sounds a lot more enticing to me than working at the old salt mine at least if one has some modicum of interest and ability with respect to poetry so I suppose without adequate relative compensation we might very well end up with an awful lot of questionable poetry and no one working at the old salt mine.  Doesn’t seem very reasonable.  We may arguably need a bit of poetry but we probably also need some salt.  So I don’t know.  Maybe some people don’t even like writing poetry on hill tops.  Double?  Triple?  Something like that?  Perhaps see what happens?  I would think the issues must be related in some way because of course if one expects the entire incentive system to crash if one alters relative compensation at all then one would might need to be very careful indeed with redistribution at least if one places some significance on the current distribution of economic power and hence the incentive patterns flowing from that distribution but on the other hand if one sees quite of a lot of flab in relative compensation in the sense everyone would end up doing pretty much the same things anyway then maybe it becomes more of an open question even if one were trying to maintain the significance of the current distribution.

I suppose another generally acceptable basis for at least some level of inequality must be one’s level of effort or let’s say willingness to work hard.  Now certainly in our system if two people have identical jobs and let’s say they do work of roughly comparable quality and one person is willing to put in more hours than another person it makes sense the person working more hours should end up better off.  I suppose relative effort while on the job holding hours equal follows a similar path as long as one is holding everything else equal but of course the problem there is in practice everything else is typically not equal, which raises the question of whether one thinks fairness in terms of effort has to do with effort relative to a person’s maximum effort or some sort of standard criterion like output.  For example, let’s say we’re looking at some sort of physical labor like I don’t know picking fruit.  If the aspiring Olympic athlete desultorily picks more fruit than frail and asthmatic grandma is it fair he is compensated more on the basis of effort?  Or would that involve some other consideration having to do with rightful compensation based on one’s contribution to the system?  I don’t know.  My general point is figuring out how hard work relates to inequality in realistic contexts gets pretty complicated pretty quickly because of differences in talents, abilities, and situations.  Some of the hardest working people I know work at some of the lowest paying jobs while some of the most casual workers I know work at some of the most high paying jobs.  Indeed some fat cats have sufficient money to invest they make quite a nice living expending no effort at all beyond the effort involved in hauling their fat behinds to the local wine bar every afternoon.  So yes I suppose I think differences in effort justify some level of inequality when it can be identified and the general level of inequality justified might be commensurate with the relative amount of effort in that case.  If someone works twice as long I suppose they should earn twice as much.  Do I suspect there are people out there putting in let’s say a million times more effort than other people?  No, not really.

I’m trying to think of some other things that would justify inequality on the grounds of fairness but I find I’m already starting to hit a bit of a wall here.  A good part of the reason is many of the things I suspect account for a good deal of the inequality we see in our system aren’t really based on any sort of commendable activity on the part of the people involved but are more along the lines of things that just happen to people.  Let’s go over a few of these.

A big one for me is inborn talents and abilities.  Let’s take intelligence as a prime example.  I hate to be the one to point it out but some people are just not very smart.  Unfortunately lots of fields require a bit of brains.  I think this has been changing over time.  At one point probably there may have been quite a lot of demand for relatively mindless labor.  However, now that many things are automated the emphasis is more on brain work.  So is it fair someone who was born a bit of a dummy be poor or suffer materially because of it?  What if he or she is a very hard worker and is willing to go along with market incentives or otherwise do what people want them to do to the extent of their abilities?  Again, I just don’t know.  Doesn’t seem particularly fair to me although I suppose if one switches to some other line of justification like output or contributions to the system then maybe it makes more sense.

How about environment and support provided by one’s birth family?  It’s no secret if one has the good sense to be born to wealthy and well connected parents one will end up with a much cushier life than otherwise.  Not only can they provide a nice environment to study and pay for the best education and keep one healthy and happy and so on but one would not feel compelled to make decisions based on helping them out or be in any particular rush to get a paycheck and one could probably afford to try some things with the expectation one should be able to recover from any missteps and one might reasonably expect some useful connections and introductions to be forthcoming that might smooth one’s way and indeed one might reasonably expect to be installed directly into a nice job at the family firm.  But of course one doesn’t really have any say with respect to one’s birth family.  One just pops out into the world one day and looks around and is either pleasantly surprised or a bit miffed.  Not sure I can see much inequality based on this consideration justified on the basis of fairness.

How about luck?  I think a big component of the inequality we really see in the world today is little more than being in the right place at the right time.  Honestly, many years ago when I actively studied such matters I found it rather interesting that even though the economic models meant to predict wages might include everything one might reasonably expect to be involved including the proverbial kitchen sink they could in fact only explain in a statistical sense a small portion of the observed differences in wages.  I always assumed that unexplained bit must just involve old fashioned luck.  Hard to think of what else it might be.  I’m not suggesting we banish luck but again I’m not sure I’d consider sufficiently related to fairness to justify much inequality on that account.

Maybe that’s enough talk for now.  To sum up I would suggest that as far as I can tell our current system has a good deal of both inequality and unfairness.  Not the worst system in the world of course.  I’m sure there are plenty of even more unequal and unfair systems out there.  But on the other hand I’m not ready to suggest we’ve hit the jackpot and have no room for further improvement just yet.  Even granting some level of inequality is justified due to considerations relating to fairness I don’t see the extreme levels of inequality we see here in the USA to be anywhere near the levels I would find likely to be justified by those considerations and indeed I see extreme inequality as presenting a significant and ever increasing impediment to fairness.  As such I don’t think we really need to get bogged down on parlor games involving what we really mean by inequality and so on.  We should probably just get to work.  Our system is out of kilter in the sense some people lay claim to more resources than can reasonably be justified on any ethical basis be it utilitarian or social justice.  Some undeserving people hoard billions of dollars.  Some deserving people suffer material want.  We could adjust the system to make it fairer and at the same time end up with a great many more happy people than we have now.  But do to do that we have to fight conservatives hell bent on defending the status quo levels of inequality both through fanciful anti-democratic rights based arguments of the sort that no matter how bad things get we have no ethical rationale or justification for changing anything because it’s all a matter of unchanging rights and also through purposeful attempts to obscure the issue and shut down the conversation including bogus appeals to the incomplete and let’s just say sham utilitarianism presented in economic theory and unnecessarily convoluted and unhelpful suggestions to first reach agreement on interrelated and complicated philosophical issues of questionable practical significance such as what one definition or aspect of inequality is most important.  Let’s try to keep it simple shall we? Fight conservatism.  Make the world a better place.

References

There’s a problem with the way we define equality.  Bryan Lufkin.  July 7, 2017.  BBC.  http://www.bbc.com/future/story/20170706-theres-a-problem-with-the-way-we-define-inequality

Economic Inequality And The End Of The World As We Know It

Welcome friends!

I probably mentioned the two reasons I often talk about distributional issues such as economic inequality, poverty, unemployment, etc.  One has to do with social ethics: equity, fairness, and so on.  The other has to do with social stability and sustainability.  I’ve talked often enough about the social ethics part.  Conservatives tend to buy into the idea that whatever happens on “the market” is above ethical reproach because of how the system is set up and therefore if some people are unemployed or poor or homeless or starving or sick and uninsured or what have you there’s really no problem with that and it’s exactly what we ought to see in an ethical society.  I along with most other liberals I presume most heartily disagree.  I suppose in some cases this rather notable difference of opinion could be from real differences in our underlying moral senses.  However, I can’t help but wonder if a big part of conservative thinking on the subject comes mostly from a lack of awareness of how real world markets actually operate (an issue that could equally well be expressed as a lack of awareness of the limitations of neoclassical economic theory) and perhaps more practically a deficiency in the variety of one’s life experiences or powers of imagination.  Listening to conservatives talk about social justice brings to mind little darlings emerging from gated cocoons and trying to explain why it’s natural and acceptable to find a dead hobo lying in the street.  Always a bit too quick to think they have an answer and always a bit too outraged when someone points out it doesn’t really make sense.  Of course, sometimes people just put self interest first and let their philosophy follow.  It’s called greed.  Lots of it about.  And you know for conservatives greed is good.  So that’s certainly another possibility.  Anyway, what I wanted to discuss today is not social ethics but the other half of the issue: the relationship between economic inequality and social stability.  Usually I just sort of state this as something that should be pretty obvious to everyone based on common sense and the most casual historical research.  However, this week I read about an article published a few years ago in which some social scientists developed a computer model for investigating social collapse.  They found the two engines of collapse are environmental breakdown and … drum roll please … economic inequality.  So there you go.  I’ve got at least one computer modeling geek on my side!  Regardless of one’s views on the ethics of the matter I would think even the most smugly self-adoring rich conservative might be a little concerned about social collapse.  So let’s talk a little bit about that this week shall we? 

Yes, it seems a systems scientist named Safa Motesharrei along with some colleagues published an article in 2014 that used computer models to delve into the causes of social collapse... Sorry but only selected archived (previous year) posts are currently available full text on this website.  All posts including this one are available in my annual anthology ebook series available at the Amazon Kindle Bookstore for a nominal fee.  Hey, we all need to make a buck somehow, right?  If you find my timeless jewels of wisdom amusing or perhaps even amusingly irritating throw me a bone now and then.  Thank you my friends!

Profiling and the Ethics of the “Free Market”

Welcome friends!

I was just reading an article on what sounds like a rather interesting book with the whimsical title Weapons of Math Destruction by Cathy O’Neil.  It got me thinking not only about racial profiling but also and more generally about the ethics of unregulated markets so I thought I’d say a few words about that this week.  I suppose I may be neglecting the antics and inanities of conservative presidential candidate Trumpo the Clown, who apparently is now tied with Hilary Clinton in the polls.  Remarkable in a way but just nothing very interesting.  I suppose it’s entertaining in the way reality TV is entertaining but it certainly presents one with precious little to think about.  It’s not like the man represents anything in particular.  He doesn’t really have a serious platform as far as I can tell.  Just some things he sometimes says and sometimes denies plus a lot of pouting and posturing.  Actually I suppose it’s more like a cheap horror movie.  I see stupid people.  Wait, that was actually a pretty good movie.  Well, you get the idea.  How about this one?  Only two things scare me!  One is nuclear war.  What’s the other you ask?  Stupid people!

Anyway getting back to my topic for today the subject of Ms. O’Neil’s book is the way certain formal or informal mathematical algorithms and models can have a rather large effect on one’s life even though one may not realize they even exist or know how they work or might find their use morally repugnant.  She’s talking about things like the models some banks use to set rates for loans that often include all manner of considerations such as one’s neighborhood, the models some employers use to determine suitable candidates for promotion based on personality tests and various other quantifiable characteristics, and the models some judicial systems apparently use to determine appropriate prison sentencing based on various characteristics of convicted perpetrators including not only prior convictions and previous police encounters but again their neighborhoods and the criminal records of family and friends.  Ms. O’Neil finds these common uses of statistical algorithms and models unfair and believes they perpetuate poverty along racial lines because they stack the deck against people living in certain neighborhoods.  Of course, she notes these algorithms can theoretically be used for good as well as bad so we can’t really fault mathematics or model building in general.  No, the problem lies in how we choose to use them. Basically the same situation we have with technology and other artifacts of human ingenuity.  We might have a hundred hate filled carnivals of stupidity in the conservative blogosphere but then we have my own blog in the liberal blogosphere like a shining beacon of light in the darkness.  The problem isn’t the existence of blogs; it’s what we make of them.

What we’re talking about here seems to me to be simply another form of the “profiling” we discussed previously in a law enforcement context.  (See my post Race and Bad Cops from July 14, 2016.)  The fascinating thing about this issue to me is that as Ms. O’Neil points out the issue is not that the statistical inferences are wrong.  I assume they’re probably true.  If for example we’re just talking about banks making up numbers and willy nilly charging people in some neighborhoods unnecessarily high rates for their loans one wonders why some other banks or other financial institutions don’t find it worthwhile to enter those markets and undercut those banks.  The interesting issues occur when the inferences are spot on but we just don’t like when people use them.

Now I should say having had the good sense to be born with a suitably pale complexion and having never travelled to the Dark Continent or spent much time in the various other darker hued portions of the world I’ve never really faced racial profiling per se but I’ve certainly faced the general concept in other contexts.   One example off the top of my head is that I recall as a young man who had finally attained whatever the age of majority was at that time, 18 years I suppose, I was legally entitled to enjoy a nice beer with my pizza but after a year or two of gastronomic bliss some policy wonk discovered adults of my age were statistically more likely to be involved in alcohol related car accidents than were older people and I was unceremoniously dumped back into the category of underage drinker.  Had there been a  problem with my drinking and driving in particular?  No, not at all.  The problem was I had something in common with some people who did, specifically that we shared the same age, and I paid the legal price for that unfortunate chronological affinity.  It was profiling of course but in a guise that passed largely without comment in the social discourse of the time.  And the interesting thing is without a crystal ball or some other special technology to assess my individual drinking and driving habits the statistical inferences were assuredly correct.  Based solely on my age I’m sure I was more likely to have been involved in an alcohol related accident than some other people.  I’m sure I can find similar arguments that could be used against me today but I suppose that’s one of the benefits of age.  Try that sort of thing on me now and one might just find oneself falling into the very same category one day.  You know, I’m sure everyone is better off not drinking but if we’re going to start prohibiting people from doing things I’d much rather it was you than me.

So if the statistical inferences are correct what’s the problem with profiling anyway?  Well, the problem is clearly it contradicts the common ethical principles of individual responsibility and innocent until proven guilty.  As a young man I didn’t appreciate losing my ability to have a glass of beer because some other young idiot drove his or her car into a tree.  Along similar lines I doubt any of us feel very comfortable penalizing someone who scrupulously pays his or her bills on time because he or she has the misfortune of living in a neighborhood with a bunch of deadbeats.  The information may be fine.  The statistics may be correct.  We just don’t like using information that way.  I basically feel about profiling the same as I did when I wrote about it in a law enforcement context.  Haven’t changed my opinion at all.  I have no problem with profiling per se if what we’re talking about is using whatever information we have to stop crime.  The police should pay more attention to people who are statistically more likely to commit crimes for whatever reason.  However, that doesn’t extend to police actions that negatively affect innocent people who fall into that category.  I don’t support police stopping people or harassing people or behaving in any way differently toward people based on their statistical likelihood of being a criminal.  Innocent until proven guilty.  That’s my motto.  But if you want to investigate a robbery it probably makes sense to start with the unemployed young man with the gun in his car before moving on to grandpa sitting on the porch swing reading the evening news.  We can’t banish common sense but we can prohibit treating people like criminals when we know they might not be and in fact most likely are not.

This time out since we’re discussing these issues in an economic context as well it occurs to me the business about the loan rates illustrates a general point I’ve tried to make about so-called free markets in many other contexts.  Markets do what they do.  If there’s information relevant to making a buck then businesses in an unregulated market will use it.  Normally that’s fine but in some funny cases like the one we’re discussing right now it’s not.  Markets aren’t magic.  There’s no invisible hand making everything come out right.  If one doesn’t see any ethical issues with what’s happening in a particular market then great; no need to do anything.  If one does see some ethical issues then one will want to get in there and regulate or do something to make it come out in a way one finds more ethically appealing.  It’s the same general sort of issue I usually discuss in the context of distributional issues.  The market will certainly distribute good and services.  Don’t worry about that.  But what matters for the market doesn’t necessarily correspond or anyway fully correspond to what one may feel ought to matter.  I guess my point is only a fool bases one’s ethics on what happens in a market rather than assessing what happens in a market using one’s ethics.  I know we all have different ethical opinions and so on but can we at least agree we’re going to discuss ethics and not get sidetracked into supposing the issue involves some technical aspect of economic theory?  How about this plan?  Why don’t you jot down what you find ethically appealing or repugnant as the case may be about how our labor market and other relevant markets such as the stock market and so on distribute wealth in this country?  I’ll do the same and discuss it in a future post.  We can compare notes.  It’ll be fun.  Let’s see how far apart we really are on these issues.  Plus I won’t have to talk about why economic theory is not a suitable basis for a coherent theory of social ethics yet again.  Happy days!

References

Math is racist: How data is driving inequality.  Aimee Rawlins.  CNN Money.  September 6, 2016.  http://money.cnn.com/2016/09/06/technology/weapons-of-math-destruction/index.html?iid=TL_Popular.

Freemarketcare II

Welcome friends!

Did you catch the story in the newspapers about US-based Turing Pharmaceuticals increasing the price of a drug used by some AIDS and cancer patients by about four thousand percent virtually overnight from about $14 per pill to $750 per pill?  It’s been in all the papers.  Seems the drug in question, Daraprim, has been around for decades but Turing only acquired the rights recently, hence the rather abrupt price adjustment.  The CEO of Turing, thirty-two year old multimillionaire and former hedge fund manager Martin Shkreli, defended the company’s pricing policy saying he was just trying to make a profit, claiming the previous owners of the drug had been “giving it away,” and calling a reporter who questioned his judgment on the matter a moron.  Which of course from the perspective of people like Mr. Shkreli is exactly what someone would be if he or she didn’t raise the price of whatever he or she was hawking to whatever the market would bear.  That’s just basic economics.  Supply and demand.  Now in Mr. Shkreli’s defense I see he was in the news even more recently saying that having heard the public outcry he now intends to reduce the price to something a bit more affordable although in the story I read he declined to say what that might be.  One assumes it would not be the previous give away price.  I should also point out the company claims it provides the drug to about half the people who use it at no cost whatsoever and has plans to expand its charitable drug program.  So apparently if you’re in whatever class Turing Pharmaceuticals believes deserves charity then you have nothing to worry about.  I’m not sure who that might be.  Unemployed bankers?  Just joking.  I’m confident they run a perfectly reasonable means based system.

One might have expected this situation to foster an interesting debate between economic conservatives who believe whatever happens on the free market is ethical gold from liberals who conventionally take a more nuanced stance on such matters and are equally conventionally branded economic morons by conservatives... Sorry but only selected archived (previous year) posts are currently available full text on this website.  All posts including this one are available in my annual anthology ebook series available at the Amazon Kindle Bookstore for a nominal fee.  Hey, we all need to make a buck somehow, right?  If you find my timeless jewels of wisdom amusing or perhaps even amusingly irritating throw me a bone now and then.  Thank you my friends!

The Pope, Greed, and Capitalism

Welcome friends!

Can we talk about greed?  I’ve been wanting to take this up again ever since Pope Francis appeared in the papers recently describing an “unfettered pursuit of money” in suitably anachronistic terms as “the dung of the Devil.”  The fact he would say such a thing seems unremarkable to me.  Isn’t that part of the whole Christian theme of respecting the poor?  One of the nobler sentiments of the whole enterprise in my opinion.  No, the interesting bit for me was not what the Pope had to say but what came after.  Many commentators at least here in the US immediately claimed the Pope had said capitalism was the dung of the Devil.  That got me thinking again about the tendency among certain economic conservatives to associate capitalism with greed and hence to believe greed is good presumably because one is ostensibly most useful to society if one is most attuned to the pecuniary incentives expressed in market forces and thus most liable to provide what society evidently values most highly.  I’m sure I must have said a few words about this idea before but it’s been a while so maybe it’s time for another go. It’s not like it’s going anywhere soon.

My first thought on this whole conservative greed is good narrative is that, yes, greed can operate as a driving force for human activity, which I suppose might sometimes be useful activity, by which I mean something other than selling drugs or stealing someone’s car, etc.  However, there would appear to be any number of other such wellsprings of human activity that would fall into pretty much the same category.  People can also be motivated by insecurity, egotism, a lust for power, hatred, fear, cruelty, and any number of other less than entirely savory emotions and feelings.  People can also be motivated by the nobler emotions: love, kindness, duty, honor, and so on.  So why are conservatives always so hung up on greed as the great motivating force?  Well, I don’t know.  It might just be that’s the motivation they’re most familiar with and it just falls out of the familiar tendency of rich conservatives to love and respect themselves and their own motivations and desires above all others.  However, given the close association between conservative ideology and certain branches of economic theory I’ve often wondered if some element of that theory or perhaps bastardization of that theory may have something to do with it.  That’s what I’d like to discuss today.

Let me just start out by saying economic theory does not explicitly or literally portray greed as good.  Therefore, trying to figure out how some people might have gotten this impression requires a bit of detective work.  I see two main suspects in terms of elements of economic theory that might plausibly be related to such a belief.  One is the common assumption within economic models that people have unlimited wants, that is, that holding everything else constant people tend to prefer more to less.  That might seem a little farfetched concerning particular goods.  I like hummus but how much of the stuff can one person eat?  But if we’re talking about money I guess that assumption seems rather reasonable to me.  I think most people could always do with a bit of extra cash even if they intend to save it for a rainy day, pass it out to loved ones, or even hand it out to whosoever they might think of as the deserving poor.  Is that what we normally mean by greed?  I don’t think so.  Greed to me carries the implication of countervailing ethical considerations and one inappropriately choosing mammon over more suitable goals.  I suppose that’s what the Pope was getting at when he mentioned the unfettered pursuit of money.  The pursuit of money fettered so to speak by an attention to ethical concerns is a whole different kettle of fish.

Let’s move on to our second suspect lurking within economic theory, which I feel must be this whole business of utility and so-called welfare economics and so on.  You know what that means, right?  Another opportunity for me to talk about one of my pet peeves: what I consider the incomplete if not entirely incoherent social philosophy represented by neoclassical economic theory or as I’m always careful to say possibly a mangled popular interpretation of that theory.

I think to appreciate what’s going in the endlessly fascinating world of economic theory it helps to understand a little something about the history of the discipline.  The first thing one needs to know is that Adam Smith and the other bewigged old timers who got the ball rolling were amateur theologians and ethicists as much as they were scientists. They were not concerned simply to predict human behavior.  No, these people were mostly what were known as “deists” and had the rather grandiose agenda of establishing the world had been set up by a benevolent deity in such a way the natural laws of human behavior would inevitably lead to optimal outcomes if only people could refrain from mucking up the works.  That’s why the imagery that clearly most resonated with these writers involved things like natural laws, invisible hands, clocks, and so on.  Now I feel it’s quite likely these early writers were indeed concerned to establish that a certain amount of greed was both natural and good at least under the right conditions.  No doubt they looked around and saw a whole heck of lot of greed and said to themselves, well, apparently greed is a natural condition for the human animal and must therefore fit into the divinely ordained social order.  It’s well known Mr. Smith at least was not so simple minded as to suggest greed was good always and everywhere.  He made some rather pointed remarks about greed.  But his general conviction was clearly if we set things up the way the good Lord intended, which he associated with nature despite the rather obvious human effort required to set up and maintain those particular natural conditions, then greed would function as nature had intended and would lead to beneficial results for us all.

Fast forward a few decades and both economic conditions and intellectual life had moved on.  Some people had been working to formalize economic thinking using the concept of utility, which was at that time defined within the field of economics pretty much the same as it was within the field of ethical philosophy.  However, something odd and clearly rather disconcerting for some people started to happen.  Serious philosophical ethical utilitarians began to cast doubt on the notion the results of any old free market were necessarily really what one ought to consider socially optimal.  Not all that surprising I suppose.  By this time the industrial revolution had made some people fantastically wealthy but had kicked many people up and down the street and some people right off the end of the pier.  Sort of like what information technology is doing today.  Anyway, after what must have seemed an interminable series of novels about suffering street urchins and so on some people began to wonder if they might have missed some important ethical principle along the way.  People were beginning to look askance at the prevailing social order based on free market ideology.  The field of academic economics was in crisis!

Fortunately an Italian fascist named Vilfredo Pareto stepped into the breach along with a number of other like minded souls.  The solution Pareto and others hits upon was to gut the concept of utility within economics by defining it in a way that made it irrelevant to ethical issues involving conflicts between the needs and desires of different people.  That is to say, they switched from using utility to mean a measure of welfare one could compare across people to more of a subjective feeling one could only meaningfully investigate in the context of a single person.  Comparing utility across people was recast as impossible in an (economic) utilitarian context but curiously enough not because they simply explicitly chose to redefine it that way but ostensibly at least because of practical measurement issues.  (The argument was that one could reliably infer someone preferred A to B if that person was given a choice and opted for A, but there was no comparable method for inferring utility across different people.)  The basic idea was that even if all outward appearances suggested one person might generate more utility from some resolution of some conflict of desires, say two people wanted a doughnut and one person was starving and really really needed the doughnut but someone else wanted the doughnut to hang on the dashboard of his or her horse and buggy, assuming such contraptions had dashboards, there was no way to tell which resolution was better based on utility because the subjective feelings of utility associated with the latter might very well be greater than the utility associated with the former.  That is to say, the buggy man or woman in this case might have been one of those superconductors of utility whose passing whims are associated with more utility and are thus more important under this conceptualization of utility than the seemingly more pressing desires of lesser mortals.  With this innovation the discussion of utility within economics and within serious ethical philosophy parted ways perhaps forever.

Economists had found a way to shut down pesky discussions of redistribution based on utilitarian concerns within the field of economics but had they thrown the baby out with the bath water?  Did economic theory still have sufficient intellectual content to convince people of the superiority of the status quo free market system?  Could they still establish interfering with the free market was always a big no no?  Well, that’s an interesting question.  They did and they didn’t.  Or let’s say they did to a small degree that was enough to get some people thinking maybe they did to a much larger degree.  What they established was if one is at a distribution that addresses all one’s ethical issues and so on, and certain conditions prevail (i.e. the well known conditions required for a so-called perfectly competitive market), and one does not currently have the institutions that go with a free market, then one can demonstrate using the stripped down version of utility with seemingly very little potentially divisive ethical content whatsoever that one should be able to improve upon one’s situation by moving to free market institutions.  Of course, that wouldn’t necessarily hold true if adopting those free market institutions moved one to some other distributional result that did not adequately address one’s ethical concerns or even if one’s ethical concerns included the relative standing of different people (because the result is based on demonstrating that under these conditions one could make at least one person better off while making no one worse off in an absolute sense, which of course is entirely consistent with making one person worse off relative to another person).

To further confuse the hell out of everyone economists also developed this notion that they were no longer even talking about social ethics in general terms.  They were simply talking as economists constrained by working with the peculiar stripped down version of utility we’ve been discussing and as such they didn’t have any basis to discuss the mysterious ethical concerns other people might have about how to resolve interpersonal conflicts and hence with distributional issues in general.  They never explicitly suggested other people could not or should not discuss these important and ubiquitous ethical issues.  To this day careful economists will always try to make clear that distributional concerns are outside their purview and if one has ethical beliefs relating to resolving interpersonal conflicts of desire then one should always feel free to redistribute to address those concerns.

But of course the devil is always in the details and in this case the details involved how economist spun their economic policy recommendations.  The underlying conceit was that as a first approximation we should treat all free market results as equivalent and just concentrate on getting to any one.  Once there we can then worry about adjusting for distributional issues as a second step.  The problem is that’s not consistent with how the world actually works at all.  Labor markets and distributional concerns are intimately mixed up with people’s feelings about what constitutes free market institutions and hence cannot really be separated out that way.  It’s entirely unrealistic to imagine one can talk about optimal economic institutions without at the same time bringing up the ethical issues associated with distributional concerns such as who should be getting what.

The practical result of this unfortunate mishmash is that we have some conservatives and economists stuck in the eighteenth century with Adam Smith and his buddies talking about natural laws and clocks and so on, we have some conservatives and economists stuck in the nineteenth talking about how capitalism maximizes total utility and fretting about capitalism versus communism and so on, and we have yet other economists and conservatives stuck in the middle of the twentieth century talking about how we’ve demonstrated the social optimality of free market institutions in general all the while acknowledging and then promptly dismissing distributional issues with a wave of the hand.  I think people in all three of these groups can very easily get the idea if things are going to be natural or socially optimal or whatever then we all need to act as much as possible like the simplified actors that feature in their economic models and respond and react only to the pecuniary and material considerations that are discussed in those models, in other words, that we all be greedy.

However, more careful economists and liberals know that’s not what we’re really talking about at all.  For one thing, even if one wants to muck about with the type of utility discussed in economic theory no one ever said that type of utility only arises from money or goods and services.  One could theoretically derive utility from anything including following one’s ethical beliefs about not being greedy.  Economic models address economic matters and thus concentrate on things like money and goods and services but the issues typically addressed in those models do not represent the totality of human experience.  For another thing, as I just finished discussing the ethical considerations one can imagine might serve as counterparts to greed fall into the category of ethical issues relating to distributional concerns and thus are explicitly not addressed within the context of economic theory.

Oh hell, let’s just have a practical example.  Let’s say one could make a buck putting desperately deprived kids to work in the old coal mine.  (Hey, I’m just trying to make it interesting by setting up a situation where there are some plausible countervailing ethical issues to making a buck.)  However, one has some moral reservations.  One thinks kids should really be sitting around on couches playing video games.  Does economic theory establish one has an ethical obligation to society to be greedy and haul the kids off to the mine?  No, it doesn’t.  One may get more utility from following one’s own ethical theories relating to what kids should be doing than from selling a boxcar of coal.  What about the unmet demand for coal and the fact that society was apparently willing to pay for coal but was not actually offering up anything to have kids sitting about playing video games?  Well, for one thing under the strictures set up within economic theory one can’t really compare the utility of the decider in this case to that of anyone else or any combination of anyone else so there’s no way to tell if the sort of utility discussed within economic theory would be higher if the kids play video games or work the old mine.  Second, all one really has is an indication that people value coal.  One doesn’t have information relating to the potential utility other people might derive from living in a society where kids are not working in coal mines.  That’s not a product one buys on the market.  One might be able to get at that issue indirectly through the political system maybe by seeing what sorts of labor market regulation people are willing to adopt.  And notice I’m not even talking about the utility of the kids because I wanted to abstract away from that issue.  (Yes, assuming the kids share one’s belief they should be playing video games rather than working in coal mines that would represent yet another of those pesky distributional issues I’ve been discussing.)  So does economics establish that greed is good in this example?  No, not at all.  Put briefly, the institutions we tend to call the “free market” or in the case of pugnacious old timers “capitalism” and extol based on the very limited demonstration of the optimality of those institutions in modern neoclassical economic theory does not really involve anyone necessarily being greedy nor does it recommend anyone be greedy.

But the story doesn’t end there although like you I rather wish it did as I’ve already written considerably more than I intended.  We also have the complicated collision of the scientific and ethical elements of economic theory or in the parlance of that old time philosophy I still feel makes a lot of sense, the positive and the normative.  The quasi-ethical stylings of welfare economics is really only one aspect of the field of economics.  Today there are many scientifically minded economists who think all they’re really trying to do with their models is predict behavior.  They’re not interested in trying to convince anyone that anything in particular is socially optimal.  Now according to the assessment of these people their models tend to work well enough to suggest we can think of people as behaving like the actors in those models.  In other words, according to many of these economists, economic theory establishes not that people should be greedy but that they are in fact greedy.  Now of course this by itself doesn’t support any ethical conclusions relating to greed.  Maybe the world would be a better place if economic models didn’t work so well.  However, I can imagine people thinking something along the lines of maybe people just can’t help being greedy so why fight it?  Or maybe everyone is doing it so what’s the big deal?  Indeed, I read about a study a little while ago that found exposure to economic theory was associated with an increase in greedy behavior.  But now I’m just talking about psychological issues like framing what one considers normal behavior.  I’m not talking about justifiable ethical conclusions relating to greed because of course there is no reason to suppose that even if one is in fact greedy one must remain greedy or that it is good for one to be greedy.  Again, economics interpreted as a modern social science does not and cannot establish that greed is good.

I suppose I’ve been going on long enough.  Let me just summarize and close it out.  Greed in the sense of preferring more to less if there are no ethical considerations involved seems unobjectionable.  And if it gets one off the couch then I suppose we can say greed is good in that particular context.  Greed in the sense of elevating the pursuit of material gain to a position of ethical preeminence is not necessarily good depending on how one feels about whatever other considerations we’re talking about.  Economic theory properly interpreted does not imply or rely upon people being greedy.  If one wants to follow the old timers and associate the free market institutions discussed within economic theory with something called “capitalism,” then capitalism also does not imply or rely upon greed.  Personally I’ve never seen much use for such an ambiguous and ill-defined term as capitalism given the limitations of the conclusions relating to free market institutions one can actually derive from modern economic theory.  I prefer to say if the necessary conditions hold (and they sure as heck don’t always) and no other ethical considerations are involved (by which I mean distributional issues that may be associated with one’s ethical beliefs be they utilitarian, rights based, or what have you, and there often are such issues) then free market institutions seem fine.  If the proper conditions don’t hold or one has ethical concerns then I suppose one might feel the need to change some things up.  Do we really need a term for that?  How about common sense-ism?  Get real-ism?  Whatever.  In other words, there might be a lot of greed about right now but there doesn’t have to be.  We can get along just fine without it.  On a more personal level let me just say I like to make a buck as much as the next guy but I think I have to agree with the Pope on this one: the unfettered pursuit of money is indeed the dung of the Devil if one wants to get all medieval about it.  And you know the Pope and I don’t always see eye to eye.  So that’s something.