Capitalism and the Monkey Cage
Unlike monkeys, humans are capable of deserving things for morally significant reasons. These reasons go far beyond simple Pavlovian conditioning or the whims of a capricious experimenter.
Humans form complex plans of all different kinds. As to their social consequences, some plans are good, and some are bad. But a given plan does not deserve reward or punishment based on some mysterious intrinsic property that it carries within itself, or because of some property of the person who conceived it — he may, after all, have been lucky.
But even a lucky plan still deserves reward or (in some cases) punishment. That’s because of what we hope to see in the future — because of the incentives that reward and punishment set up.[1] We punish murderers because we want less murder, and for that reason, any particular murderer deserves what he gets.
We reward successful entrepreneurs because we want more of them. They are the people in our society who have found ways to meet consumer needs while using fewer resources. This is a good thing, and we should want lots more of it. We should want lots more of it even if it does mean some unemployment. Unemployment can be fixed, but there’s no cure for arbitrarily refusing to improve economic efficiency.
The problem is that capitalism viewed from the outside looks morally arbitrary. There are very obvious winners and very obvious losers — for no obvious reason. And this looks like the monkey cage.
But that’s a false analogy. The efforts of entrepreneurs toward improving efficiency may not look like much, and we may be tempted to think that showering huge rewards on some of them is disproportionate.
In our society, that’s sometimes the case. Many so-called entrepreneurs make their fortunes through cronyism, favorable regulations, or shady business practices. But it’s also sometimes the case that entrepreneurs deliver a product more efficiently than the competition, at a lower price, or maybe with better quality.
The ways to improve economic efficiency are not obvious. If they were obvious, everyone would already be doing them. Entrepreneurs discover non-obvious, more-efficient things. That’s the essence of what they do. And when that happens, we should want to reward it. Even at the risk of appearing, from the outside, a little bit arbitrary. We still want more efficiency, so we should still reward it.
My sense is that the American people realize all this, and they also realize that whatever problems may exist within our incentive system, we have not reached the level of a cageful of monkeys.
To the extent that liberals make analogies like this one, they lose what little of my sympathy they had. To the extent that the Romney campaign actually makes a moral defense of capitalism, I’m… well, I’m newly intrigued.
[1] Addendum: I ought to have credited David Hume for this, even if it does open a theoretical can of worms:
Who sees not, for instance, that whatever is produced or improved by a man’s art or industry ought, for ever, to be secured to him, in order to give encouragement to such useful habits and accomplishments? That the property ought also to descend to children and relations, for the same useful purpose? That it may be alienated by consent, in order to beget that commerce and intercourse, which is so beneficial to human society? And that all contracts and promises ought carefully to be fulfilled, in order to secure mutual trust and confidence, by which the general interest of mankind is so much promoted?
Examine the writers on the laws of nature; and you will always find, that, whatever principles they set out with, they are sure to terminate here at last, and to assign, as the ultimate reason for every rule which they establish, the convenience and necessities of mankind.
I was thinking of writing a post saying pretty much the same thing a few days hence, but you beat me to it.
This is more or less exactly what I was thinking.Report
On the one hand you condemn that fact that:
“In our society, that’s sometimes the case. Many so-called entrepreneurs make their fortunes through cronyism, favorable regulations, or shady business practices.”
And on the other you promote Mitt Romney who did exactly that.Report
I am not promoting Mitt Romney. I am registering a slight increase in favorability toward him. This is by definition an act that an independent voter ought to be able to perform, in certain circumstances.
That said, I still have no intention of voting for him. I intend to vote for Gary Johnson, and I urge everyone else to do likewise.
That’s in part because I find Barack Obama at least as guilty as Mitt Romney in the perpetuation of cronyism. Whatever evidence you bring against Romney here — and I would like to see it — it will have to overcome everything Obama has done in the last four years, and that’s a very tall order.
Happily, I don’t have to vote for either of these clowns, and I’m not planning on it.Report
Happily, I don’t have to vote for either of these clowns, and I’m not planning on it.
This.Report
Perhaps the one thing on which we agree.Report
I think we agree on quite a few things, other than economics, evo psych, and the value of Texas.Report
James, I’m being hyperbolic. I suspect that you and I are much more alike than we are different. Also, I hate Texas. I genuinely hate it. I hate Houston, I hate Dallas, I don’t hate Fort Worth by I dislike it, San Antonio is about as boring as a city that size can possibly be, El Paso is OK but you have to go through like 50,000 miles of desert to get there, and East Texas is a cesspool of racism, intolerance, and just all around backwardsness. I’m not even particularly fond of Austin, even if it’s not really Texas. I remember when Austin was fun, so nostalgia makes me bitter towards its current incarnation.
I guess Big Bend is OK, but I come from a place that looks like this. I can’t trust a place without trees and green stuff.Report
Yes, but…tastes great or less filling?Report
I’d say the better hiring practices in the DoJ, and the better maintenance of CIA and FBI employees speak well to a President who is working against cronyism.Report
The MMS trumps that to a significant degree.Report
it was my general impression that was mostly “stupid bush appointees”/hires left over from the previous admin.Report
Funny, I haven’t seen much of a glowing report of cleaning that house.
Have you?Report
I just haven’t seen anything since the spill left the news. It could be a beacon of Goo Goo efficiency or an industry corporate retreat and I would have no idea.Report
I’ve been looking for one, and haven’t found it.
This doesn’t mean it isn’t there. But I would think “hey, fish these guys” would warrant at least a mention somewhere.Report
So Jason is working the “Stupid Act.” Pretending not to know what is obvious everyone.
Cronyism:
Would anyone know of Willard, if not for George Romney?
If a young Barack Obama had brutalized a white kid, would he be out of jail yet?
Schools, business, etc. etc. etc.
Not just Willard, McCain, and GW are also obvious cases of cronyism.
But “lower taxes” so everything is good.Report
Jason’s “Stupid Act” continued.
Favorable Regulation and Shady Business practices:
Willard has yet to release even one complete tax return.
Again, you know this, but pretend otherwise.
His tax returns would show a multitude of ways that he has benefited from favorable regulations and shady practices.Report
Many so-called entrepreneurs make their fortunes through cronyism, favorable regulations, or shady business practices.
And in a non-capitalist system that’s effectively the only way to make your fortune. The worst of the capitalist system is the norm of a non-capitalist system.Report
I don’t think that’s the worst of the capitalist system… I’d call many forms of advertising worse (and they might not be present in a non-capitalist system). Maybe that’s because lots of cronyism/bribery that exists in America doesn’t terribly bother me much.Report
Yep, capitalism helps channel the forces of human nature that can otherwise be destructive – greed, envy, ambition – into productive use by saying, ‘do something cool/productive, and go get that big pile of money!’
Non-capitalist systems try to repress these urges, but they pop out anyway, and without a pile of money to head for, they can head in more destructive directions.
You don’t *want* to know what the ambitious guy gets up to when he can’t legally go after the pile of money. He either goes after it anyway using unsavory means, or works to accumulate raw power over his fellow man in money’s stead.Report
You don’t *want* to know what the ambitious guy gets up to when he can’t legally go after the pile of money. He either goes after it anyway using unsavory means, or works to accumulate raw power over his fellow man in money’s stead.
And that never happens in a capitalist system.Report
I just wish we would stop talking as if we’re choosing between a capitalist and a non-capitalist system in contemporary American politics….Report
Indeed. The real choice is whether to move incrementally toward one pole or the other. But it’s not always obvious which direction a given policy pushes us. It’s still less obvious, to me anyway, which major political party is worse, once we factor in war and civil liberties and the rest.Report
A very heavily regulated capitalist system will incorporate the cronyism to a greater extent, because protective regulations will be sought by the rent-seekers, and regulatory privilege will be gained by the well-connected.
Yes, the American let wants the basics of a capitalist system, but they do not understand it well enough to understand the ways in which their proposals undermine some of its better qualities and reinforce some of its worse qualities. (Emphasis on “some,” folks; not “all.”)Report
If those caveats are necessary to preserve your statement, why make it? If I run around saying that “American Libertarians don’t understand the difference between abstract economic models and the real world. Therefore some of their policies are gratuitously cruel to the afflicted and heap rewards upon the undeserving comfortable,(emphasis on ‘some’)” am I not practicing some pretty poor rhetorical etiquette?Report
“If those caveats are necessary to preserve your statement, why make it?”
I thought it was conservatives who insisted on inflexible generalities over intellectual nuance.Report
How exactly is a discussion of what “The American Left” does and does not understand about the free market not an inflexible generality? My whole point was that “you guys don’t understand economics” (as opposed to “this policy that many of you guys support is wrongheaded because of reasons x,y, and z”) is an unhelpful contribution to discussion.Report
Don,
Because I know if I don’t make them, some liberal is going to point out that liberals are opposed to businesses stealing from people and dumping their effluent in the local stream. That’s a classic tactic to redirect attention away from the fact that most of their regulatory proposals would stifle the innovation that is the biggest value of capitalism.
And “you guys don’t understand economics,” ought to be a helpful contribution to the discussion; just like “you guys don’t understand science” ought to be a helpful contribution to the evolution/creation debate. But when the non-understanding side refuses to face up to their real lack of knowledge, then you’re right, it isn’t helpful.Report
I suppose my underlying problem is that I don’t think it’s useful to argue about whether or not economics supports this or that worldview, because the obvious answer is that economists disagree about lots of things, economics is incapable of making normative judgments about when and how we should make trade-offs between economic efficiency and other commitments, and because the basket of of policies encompassed by a given ideological label is far too large and complicated to be dismissed or endorsed in this way at this level of abstraction. I certainly agree that many liberals support some policies that make economists smash their heads on their desks. But then it’s also the case that many libertarians try to jump directly from the concept of deadweight loss to an endorsement of their entire worldview (not to mention the Paulites and their insane reverence for the Gold Standard).Report
Don,
All I’m really saying is that when its economics liberals are talking about, they probably ought to take the time to understand the subject. And any time we’re talking about economic regulation, we’re talking about economics. My beef is simply that liberals have beliefs about what economic regulation will do that are simply wrong. This isn’t about making the tradeoff between efficiency and other values (a point on which I agree with you absolutely, and which I always emphasize to my students). Nor is it about larger world views. It’s about understanding the actual effects of regulatory policy. And when it comes to those things, there’s an awful lot more agreement among economists than you realize. People see Krugman editorials where he’s calling other economists boneheads and come to the conclusion that economists are fundamentally in disagreement with each other, but it’s really not true. The issues where they are in disagreement are primarily the tougher, more complex issues, particularly the ones that are harder to analyze empirically (because we really can’t do controlled experiments with the macro-economy, and the number of great recessions/depressions is too low for meaningful statistical analysis).
We may ultimately choose certain policies despite their inefficiencies because we-legitimately–place greater weight on some other normative value. There’s nothing wrong with that (I don’t make my teenage daughter work and pay room and board, after all), but if the decision is made based on a misunderstanding of the cost of efficiencies, then it’s a bad decision-making process, and whether we make a good decision becomes a matter of luck, not reason.Report
In defense of liberals, I think the overall dynamic here involves liberals adopting a kind of shorthand for “these problems aren’t as bad as you claim, and anyway my moral commitments take me here regardless”, and it gets stated in a more absolute fashion precisely because Libertarians on the Internet ™ like to tell liberals how economics really works and disproves everything liberals believe about government. You are, however, correct that there is a great deal of general agreement among economists on a lot of topics, but it seems to me that you’ll find the same consensus among Liberals on the Internet ™ if you just ask instead of straw-manning.
Or, if you want a shorter version, my GD business card says “ECONOMIST” on it. I understand economics just fine.Report
Ryan,
I know that’s what your business card says. And I don’t doubt your facility at doing economic analyses of policies. But this is something I’ve seen before–economic analysts who are good at analyzing particular policies, but who I’m not sure got a good grounding in economic theory, the what’s it all about and what’s really going on big picture. I say that with trepidation, knowing it’s going to come across as insulting, and not wanting to insult you. But below you appear to use the success of the airline industry as the standard for evaluating deregulation. No doubt that standard can be used, and a very formally good analysis can be conducted based on that standard. But is that what the economy is really about? Is that what the purpose of competition is, so is that what the purpose of deregulation is?
Or as David Friedman put it in the first paragraph of his Hidden Order: The Economics of Everyday Life,
“To most people, economics is a dull science full of statistics and jargon, mainly concerned with money and designed to answer a narrow (but important) set of questions. To economists, economics is a powerful tool for understanding why armies run away, voters are ignorant, and divorce rates rise…its theme is not money but reason, the implications, especially the nonobvious implications, of the fact that humans act rationally.”
I’ve met many good people who can do fine economic analyses (which I can’t do), who do not think of economics in this way. They are economists, by trade and title, but not economists in the thought mode described by Friedman. From my perspective, having people who can do economic analyses better than I can is absolutely crucial, but I can’t help but think that the folks who can do the analyses but don’t understand economics in the way Friedman describes understand techniques without actually understanding economics.
I’m fairly confident I’m right about that in general. I’m not confident in saying that’s true about you, and I hope it’s not. But I think there’s a really important distinction there that gets overlooked.Report
For Pete’s sake, I’ve said TWICE that I’m not using the airline industry to contradict your point. I admitted, up front, that I was merely being pedantic because the airline industry is such a major basket case that it’s a poor example of much of anything. It’s fundamentally incapable of functioning properly, for any number of reasons (for the most part, we still aren’t totally sure what they all are), and so it’s just goofy. That’s it. That’s all I was saying. I wasn’t using it to demonstrate that deregulation is in general a bad thing, or even that it was a bad thing for the airline industry. Just that the airline industry is really crappy in systemic ways.Report
I don’t think you mean this in this way, but it sounds an awful lot like you’re saying that the only people that really intuitively understand economics are the ones that arrive at the policy preferences that you favor, and that even respected academic economists who don’t are mere technicians that don’t understand the underlying message of the discipline. Could you clarify it so that I’m not stuck with this reading?Report
Ryan, my apologies. I wrote that comment before I saw your explanation that showed I’d read your dereg comment in the wrong way.Report
Don,
No, I don’t mean that. I’ll try to clarify. This will have to be quick, as I need to get off to meet someone, so if it’s still not clear, let me know and I’ll try to do better when I have more time.
In a nutshell, a person can be a good economic technician, very skilled in cost-benefit analysis, for example, without ever thinking about economics in a conceptual way. And a person can be a good economic conceptualist without being particularly skilled in actually doing the cost-benefit analysis. Of course a person can be skilled in both, but it’s not necessary, and certainly not inevitable. So a person can be an excellent mathematical economic analyst without ever delving into the more conceptual literature on economics. It’s not particularly relevant to their day to day activities. I had a few debates online once with a guy who had worked for years as an economic analysis–so I assume he was quite good at his job–but he didn’t know Hayek’s critique of the socialist calculation argument, so he still believed centralized economic decision-making was more viable than decentralized market decision-making. He was wrong, but that type of knowledge had no effect on the types of business-policy specific analyses that earned him his keep. Even more, he was an economist, but he was wholly unaware of one of the most important issues in economics, without it affecting his professional abilities at all.
Me, I aced cost-benefit economics as an undergrad, but only took it because it was a required course (and in retrospect I’m damn glad they required me to take it–it’s hugely important, and I wish I’d followed up so I was better at it now). My interest was more conceptual—why markets vs. centralized decision-making–and actually grew out of a distrust of markets and a mild tendency toward socialism. And then it grew into an interest in how people respond to incentives. To be decent at this conceptual approach, I do need to understand the importance of cost-benefit analysis, but I don’t need to be able to conduct a good one.
So to make one thing clear, I’m not dismissing the importance of either approach, and the best folks are adept at both. But they are discrete, and it’s possible to be competent at one and not the other.Report
James,
That does the trick. Sorry for the previous uncharitable reading.Report
No worries. I’m inclined to blame the confusion on poor writing.Report
Sigh…of course it does. Wasn’t James’ original comment pointing these things are present to a degree in any system, but some systems are worse than others? I was simply amplifying that a bit, I thought.Report
ExcellentReport
Not sure what the point is, other than that (a little oddly) you don’t want to be compared to monkeys who seem to have an intrinsic sense of fairness. Unless the point is that, unlike monkeys, we can rationalize our narrow self-interest to such levels of vague abstraction that we can dispense with the idea of fairness. In any event, this isn’t a 30,000 foot view of capitalism as it exists here, it’s a view from another solar system or maybe another galaxy. Efficiency, entrepreneurialism, rewards, incentives – sounds nice, but what do those words mean today as applied to specific situations? Do we let the entrepreneurs do whatever they want, or do we let that icky monkey sense of fairness prod us to keep them in line in some areas? Without nodding at least a little in the direction of some of those questions, this post seems a bit meaningless.Report
I don’t want all human interactions involving incentive and desert to be likened to a set of highly constrained experiments involving animals that are not human, that do not reason as humans reason, and that are limited in what they receive to wholly unearned rewards.
Yep, guilty as charged. I don’t want to be compared to that, because the comparison is manifestly unfair. Hear that? Unfair.
Fairness isn’t about treating everyone exactly alike. It’s about distributing rewards and punishments where they are due, and in their proper measures.Report
It’s about distributing rewards and punishments where they are due, and in their proper measures.
That, strangely, is the monkey cage version of fairness. Outside of the monkey cage, there’s much more to it than that. Unless you’re B.F. Skinner, though I do sometimes think that many libertarians are.Report
Not really — determining where rewards are due turns out to be an extraordinarily difficult problem in the real world.
That’s why we have this observed preference for simplistic cases – cases in which no one works harder, no one goofs off, no one discovers anything noteworthy, no connection exists between the actions performed and the creation of the reward-object: How do you want to divide the pie? If you take away all the real-world considerations about how pies come into being, then of course the problem is so simple that even a monkey could solve it.
And in those circumstances, fine, divide things equally. In the real world, set up an incentive structure.Report
Oh, I agree, incentive structures are important, though which are more effective, and which less so, we can quibble about at a later date. My only point is that how incentives work, and in fact the role of incentives in a larger conception of the human condition, is not so straightforward.
I will note that there aren’t many people anywhere, ever really, suggesting that everyone get the same amount of everything as everyone else. I personally can’t think of anyone who is.
I think you might find this interesting, by the way:
http://pss.sagepub.com/content/23/7/796.abstractReport
I should have linked to a free version:
http://www.columbia.edu/~ks2884/Krishna_Savanis_Webpage/CV_files/Savani%20%26%20Rattan%20(2012).pdfReport
Still getting a feeling you really hate those monkeys. Didn’t we evolve from them, or at least are related to them? I thought the point of the study was to figure out how we’re wired and where it came from. Why be offended that it started with them? Can’t we get some insights about who we are from our evolutionary ancestors? I know we’re not monkeys, but jeez do we have to be so literal……Report
This has nothing to do with evolution. I am an atheist, and I am entirely unbothered by the idea that we are evolutionary cousins to the monkeys.
The problem is that their sense of fairness is primitive. It isn’t able to understand or relate to incentives at all. But incentives are where all the interesting things happen — the things that make us different from them. Holding up a monkey’s sense of fairness is about as wise, to my mind, as holding up his sense of cleanliness.Report
It’s also pretty clear, to the monkeys, that nothing they do affects whether they get a grape or a cucumber. Even the angry monkeys who threw their cucumbers away still got them. Even the bad monkeys who misbehaved still got grapes.Report
… those monkeys. Didn’t we evolve from them, or at least are related to them?
No, we did not evolve from monkeys, and Capuchins are new world monkeys, making them really distant relatives (just how much like your 5th cousin twice removed are you?). Our closest relatives are chimpanzees and bonobos, apes, rather than monkeys, and old world rather than new.Report
We still have a common ancestor, and it was still recent enough and monkey-like enough to make quibbling about it pedantic, so I just owned up to it.
Be warned, James. You’re about to be called a creationist. It’s the necessary implication, I’m told, if anyone espouses free-market economics while questioning the usefulness of a study conducted with monkeys.Report
We call it “Intelligent Design” now.
When it comes to Economics, it’s a compliment.Report
Harsh, but fair. I’ll allow it.
More than that, I am stealing it, and will be trying to work the phrase ‘Economic ID’ers’ into conversations from here on out. 🙂Report
It is possible to design emergent behavior. People who are generally proponents of ID seem to have forgotten this, and seem perplexed by what emergent behavior they generate.Report
I call it the “Big Kahuna”
The far left and the far right both worship the Big Kahuna. For the far right it is all knowing supernatural intelligent designer who master plans things. For the far left it is an all knowing intelligent government designer who master plans things. Same religion, different denominations.
PS this is not to deny the existence of either God or Government.Report
Hey, so it follows that if we just *combine* God & government, everyone will be happy, and all will be well!
See you all in Kahunastan! 😉Report
The Left has a healthy distrust of both God ‘n Gummint. How did Devo put it?
God made man but the monkeys applied the glue.
It seems to me the Libertarian worships at his own altar. Upon it stands a great mirror, that he may see the object of his veneration.Report
I see the Left’s distrust of God, but not gummint.
Once upon a time maybe, but the 60’s were long ago, and now the hippies ARE The Man, or at least are not averse to using The Man as their own personal enforcer.Report
Where they’re due? Who gets to say what Proper means? The rewards and punishments, who gets to set them up? You? Me?
You’ve talked yourself into a tautology. Life isn’t fair. That much is true. I used to have my own children shout it out when asked “What’s Rule #1?” as a parlour trick. By the same measure, we must also remove Due and Proper and Unearned from the discussion.
The grape experiment was set up to work out if monkeys would respond, not how people should respond. The monkeys, it seems, have worked out what the Libertarian has studiously avoided admitting, that unequal pay for equal work will result in a hail of cucumber slices directed at the — dare I say it?, heh — UNFAIR employer.Report
We don’t reward equal effort equally. That’s absolutely true, and that’s also how it should be.
What we should reward equally is equal usefulness. While it’s true that in practice we don’t do this, we should. The monkey study obscures all this, in part because the monkeys weren’t doing anything at all useful, and because the researchers were obviously uninterested in it.Report
There you go with these moral imperatives like Equal and Should and Useful. Be done with them all: they can’t be squared with your line of rhetoric. Either there is objective fairness, in which case equal pay is the result of equal work, or there isn’t.Report
“Objective” fairness is really just “subjective” consumer preference in disguise. I can live with that. The payoff for this bit of sleight of hand (which I’m not even doing personally, but just sort of tolerating from your side) is that people get more of what they want.
If it’s what they really want, they are happy. If it’s not what they really want, they still have choice, and they choose differently the next time. Fine by me.Report
The equivalence fails completely. Consumers prefer value for money. That makes them happy. What they don’t know about doesn’t bother them. If those two groups of monkeys had been segregated, they’d have gone on eating their cucumbers and grapes and been none the wiser.
Monkeys do prefer grapes to cucumbers by any objective measure. No subjectivity involved. We might ask why this is so, but then, any answer to that question would be irrelevant: objectivity is about truth and the monkeys truly prefer the grapes.
So when one monkey sees another monkey getting a grape where he only got a cucumber, he knows, for an absolute fact, beyond any subjective judgement, that passing that stupid rock back and forth results in a better payout for that monkey.
We’ve evicted any subjectivity from this discussion. The monkey isn’t a connoisseur of grapes. If it were a question of one monkey preferring a white grape and another preferring a red grape, then we could let subjectivity back into the discussion but we’re not.Report
But Jason, shouldn’t the guy who goes out and picks strawberries get paid more than the guy who did nothing but figure out that he could sell strawberries? After all, sitting in an air-conditioned shaded office doing math is easy. Picking strawberries for nine hours a day in the sun is hard.Report
“What we should reward equally is equal usefulness.”
This is why I’m in favor of having the mentally handicapped sell their organs. At least someone can get used to them.
On a less sarcastic note, you’re a smart guy but your posts today seem less full of interesting content and more emotings about those poor people ripping off the taxpayer.Report
“use from them”Report
Obvious strawman is obvious.Report
“I don’t want all human interactions involving incentive and desert to be likened to a set of highly constrained experiments involving animals that are not human, that do not reason as humans reason, and that are limited in what they receive to wholly unearned rewards.”
Elias was suggesting the concept of fairness is innate in humans. The fact that near biological relatives, living in the wild, have a minimal version of our concept suggests that it it innate.
Your railing in a bunch of different directions against straw men.Report
Elias was not merely suggesting that the concept of fairness was innate. That much would be obvious, uncontroversial, and not require anything to do with monkeys.
He was suggesting that the concept of fairness had an innate content to it, that its content was egalitarian, and that we could draw this conclusion from the study he referenced.Report
So *that* is what Elias’ post was all about? That all animals want more than they have, and that they often don’t even know what ‘more’ is, until they see it in someone else’s hand?
Profound…almost zen-like, in its sheer obviousness.Report
Kris,
I suggest you become familiar with Fiske’s Models of Human Relations. It reveals a hierarchy of how humans interact. Young children and primates are capable of evaluating relationships based upon hierarchy and equal outcomes. Rational adults are capable of evaluating human interactions on more complex levels including proportionality based upon contribution.
Elias is in effect suggesting that we devolve to the lower complexity level of infants, imbeciles and capuchins. Wonder how that will work for human prosperity?
http://www.sscnet.ucla.edu/anthro/faculty/fiske/relmodov.htm
PS. I think libertarians should read more about Fiske’s ideas. Very enlightening.Report
“Humans form complex plans of all different kinds. As to their social consequences, some plans are good, and some are bad. But a given plan does not deserve reward or punishment based on some mysterious intrinsic property that it carries within itself, or because of some property of the person who conceived it — he may, after all, have been lucky.
But even a lucky plan still deserves reward or (in some cases) punishment. That’s because of what we hope to see in the future — because of the incentives that reward and punishment set up.[1] We punish murderers because we want less murder, and for that reason, any particular murderer deserves what he gets.”
I tend to think of a poker anaology. You can make the wrong play and still win. You can make the right play and still lose. If you look only at outcome, you’d be incentivized to make more wrong plays and fewer right. If you realize the way that luck, randomness, and chance factored in, you’d realize that it is better to make more right plays than wrong. You shouldn’t forefeit your winnings from a bad play nor have your loses refunded from a smart one. But you also shouldn’t lose focus and incentivize the wrong type of behavior.Report
Kazzy,
Hmmm…
I am not sure about the poker analogy, but I have not had my first cup of coffee yet.
I’d go back to the comment that wages are signals of what is in demand. Everyone is capable of listening to the signal, as everyone is rewarded to do whatever they can to reorient their actions toward the collected voice of humanity which is reflected in the prices and wages. When following the rules of the game, profits and high wages are positive feedback. They say keep playing this way and consider playing it even more. Low wages say to try a different strategy.Report
That seems to imply that nothing has an inherent value.
Fuethermore, wages and value do not equate to work and effort.
You toil for 10000 hours and invent the widget.
I toil equally for 10000 hours and invent the fidget.
People like the widget more and are willing to pay more for it. You become rich. I don’t. Now, I don’t reject this reality. But to say the widget maker must have worked harder because he is rich and I am not… Does that really follow?Report
That seems to imply that nothing has an inherent value.
Exactly. Inherent value does not exist.
Fuethermore, wages and value do not equate to work and effort.
Exactly. If you spend your time performing work nobody values, your work doesn’t have value. The widget maker may not have worked harder, but he may have worked smarter. He may have had a better insight into what the public wanted. He may have just created a better fidget than you did. The point is that he created something the public valued more, so by definition he created more value.
This whole “hard work” thing is misleading, because it’s not a wholly literal concept. If I go out and assiduously dig holes and refill them all day, sure I’m working hard, but I’m not doing anything of actual value. As a shorthand term, hard work not only incorporates putting in real effort (as opposed to the person who works part time and tends to slack off while at work), but devoting oneself to something that is socially productive in the sense that it is of value to others.Report
I disagree that things are without inherent value. But that isn’t the prime focus here.
Working smarter, better insight, etc. Yes. All that matters. But sometimes you do get lucky. You made your widgets blue because you like blue; I made my fidgets green because I like green. No insight, no smarts… Just a preference. The public overwhelmingly prefers blue. You still win. Which is fine! I want nothing from your blur widget empire. But lets stop with the rhetoric, perpetrated almost exclusively, by the right, that some folks work hard and others don’t and that alone explains inequality.Report
Kazzy,
Vigorous disagreement on two points.
1) You made your widgets green because you like green. I made mine blue even though I like green because I figured the public liked blue. I was less self-absorbed and more socially perspicacious. That resulted in my creating more value than you. If it was simple luck, you would quickly change yours to blue also and sell as many as me. Real world example: I knew a record store owner in Eugene, OR, who only wanted to sell punk music. He was unsuccessful. He focused on what he liked, instead of what the consumer liked. I like punk, and I was in awe of his knowledge of the genre. And I say, fish him, his failure was well deserved.
2) What, besides water and air, could have inherent value? Things are valuable only if people value them. To say something has inherent value is to say that we humans can’t not value it.Report
1. Well now you are changing the parameters. In your scenario, I agree.
2. I’m thinking actions more than objects.Report
Are there actions that we humans can’t not value? I’m skeptical. I think the closest we can come to inherent value is something where we can reliably predict that humans will value it. But that’s still a step short of saying humans must, unavoidably, value it.Report
“But lets stop with the rhetoric, perpetrated almost exclusively, by the right, that some folks work hard and others don’t and that alone explains inequality.”
It seems more like you and Elias are making an absurd characterization of the far right. Luck matters. Only a total numbskull would sit back and count on it. Humans are rational beings that can prepare for the future and learn from feedback, part of which is luck. We should focus on the feedback and learning part of the process, not throw our hands up and refuse to play because the world is not totally predictable.
The reason I got so charged up on Elias’ OP is how absolutely totally bankrupt it is, both morally and intellectually. He undermined the concepts of fairness, feedback and just desserts. The fact that several admirable commenters such as you and Stillwater were impressed with his rhetoric is disheartening.Report
Roger-
Is it any more absurd than those who think I or the President think nothing is deserved and everything is luck and we should steal it all and split it up? I know manu folks, almost all conservatives, who think hard work explains inequality 100%. They are wrong. I also know liberals who think luck explains inequality 100%. They, too, are wrong.
I don’t remember lauding Elias’s OP. I weighed in on some subthreads but not the OP itself, mainly because the finer points confused me, especially the monkeys.
Here is my view: success or failure is dictated by things that are under your control and things that are not, in ratios that vary from instance to instance. How we respond to things out of our control is largely under our control, but there is a cumulative effect of things out of our control that can compound, positively or negatively. No man is an island. And no man is wholly a victim of circumstance. Insisting either is disingenuous.Report
And I should add that I don’t think government should necessarily be involved in correcting for luck.Report
I lauded his post on technical grounds: the prose, the argument structure, the creativity of bringing several disparate themes into the mix.
I also said I agree with it. But you and I have radically different understandings of what Elias was arguing. You think he was arguing for the demise of capitalism and all that’s holy. I think he was arguing that the conservative
beliefmyth that desert and effort are correlated 1:1 is false, but also that merely suggesting as much is viewed by conservatives (and libertarians too!) as advocacy for the demise of capitalism and all that’s holy.ReportAnd my poker analogy is far from pwrfect, but I use it to combat Jason’s argument that plans themselves lack inherent worth. Some folks do near everything right and still get screwed. Should the government correct for this? Probably not. Not in the ways often suggested at least. But we also shouldn’t say, “Well, clearly you didn’t work hard or didn’t have the right plan, else you would not have been screwed.” That is simply not reality. Sometimes the breaks go against you and we shouldn’t assume that output perfectly correlates with input.Report
I haven’t read Elias’s post you linked to, so perhaps I’m missing the “monkey-cage” context. So here are a few a-contextual thoughts that may or may not address Jason’s views exactly:
1. The bulk of a successful entrepreneur’s reward is and ought to be success at business, by which I mean money/profit. I suppose there are incidental attributes of success, but profit is what the successful entrepreneur, as entrepreneur, deserves for his/her success.
2. We do owe entrepreneurs decent treatment and respect for their rights to property and for their other rights; and we owe respect for their dignity as human beings. But I don’t believe we necessarily owe them any esteem or gratitude to entrepreneurs beyond being grateful that they exist. We might very well be grateful for the product they help manufacture, distribute, sell, or fix, too. I am very grateful to the owners of coin operated laundries in my neighborhood, for example: their existence makes it easy to do laundry. But we don’t *owe* that gratitude in the same way that we owe them, and everyone else, fair dealing.
3. In addition to those entrepreneurs who get what they get through cronyism, etc., there are those–most of them, I submit–who owe at least some of their success to others: the people who work for them, the customers who buy their product, the government that creates the physical and legal infrastructure that enables them to ply their business more easily, and things unseen or unknown or unquantifiable (upbringing, aptitude/intelligence, strength).
4. This fact in no. 3–if you accept it is a fact–does not by itself justify, for example, a steeply progressive income tax or more regulations or bankruptcy laws that are easy for businesses to use but hard for individuals to use; but it does–again, assuming you accept it–give cause to temper praise for entrepreneurs and entrepreneurship with a healthy dose of “you didn’t build that all by yourself.”
I’m not sure if any of this is inconsistent with what Jason has to say here. Just a few thoughts.Report
I generally agree with it, and particularly with 2. The price system is the mechanism by which efficiency gains should be rewarded. Not more or less.Report
For the record, I really *am* grateful for my neighborhood laundromats. Their sheer plenitude makes it very convenient for me as a customer.Report
Allow me to present a few alternatives to your #1:
1) Status/Power instead of pure monetary gain.
2) Shiny Toys! (why else build a business?? you want something neat, you go out and make it profitable, and let everybody have it cheap.)
Your #1 is far from a foregone conclusion, particularly when you start to account for people having FAR too much money to know what to do with. (the difference between someone with $10 million and someone with $20 million, in terms of standard of living is low)Report
I tend to think status/power are incidental to profit/money. I would also say–heck, I do also say–that especially shiny toys, and to some degree status and power, owe much to profit and money.
I would hesitate to grant any more power to an entrepreneur than I would to, say, a politician.Report
Hi Pierre, I don’t disagree that wealth & power are often correlated. But that is the reason that the guys with the guns (=government, run by the politicians, at least here in the US) should be kept from getting too close to the guys with the money (the entrepeneurs). I think you will find very few defenders of cronyism, anywhere on this site.
Granted that I am more afraid of the guys with the guns than I am the guys with the money. So to the extent that money transferred from the ‘money’ guys to the ‘gun’ guys further buttresses the position of the ‘gun’ guys, I am against it.
But to the extent that the ‘money’ guys manipulate the ‘gun’ guys to do their bidding and further buttress the position of the ‘money’ guys, I am also against it.Report
I don’t disagree.Report
Yeah, I don’t know WHO I was arguing with, there.
Subconsciously maybe I just want this post to get as many comments as the prior monkey post that I couldn’t make heads nor tails of.
I’m guess I am just a competitive primate that way. 😉Report
not at all…. I know enough people with high status and power that are on welfare, or otherwise subsidized by not their own earnings.
Shiny toys may cost money, but they need not cost a lot. $40 for a popcorn popper is a bargain, yeah?Report
Yes, yes yes, trusting the consumer is completely nonobvious. (10 pts if you get the company)
It is often the case that one can increase economic efficiency through monopolies. Ought we to reward those who openly and blatantly scheme to bury better products, by advertising alone? (20 pts if you get the company)
What about those delightful folks who steal other people’s ideas, and in the end increase economic efficiency? Ought we REALLY to be rewarding them? (30 pts if you get the company)Report
1. You’re right, trusting the consumer is nonobvious, at least to a policy wonk. For policy wonks, only their own tribe is to be trusted.
2. It is very rarely the case that one can increase economic efficiency through monopolies. There are a handful of “natural” monopolies out there, though I find very little natural about the historically contingent technological limitations that set them up, here and there, and even the ones we have I might like to see forced to compete, if possible.
3. Intellectual property is rightly regarded with skepticism. More often than not, it amounts to an artificial monopoly, and these are always relatively inefficient.Report
no points for you. ;PReport
I wasn’t playing.Report
so you are a bot!Report
“Intellectual property is rightly regarded with skepticism.”
…says the monkey, who believes that once he drops the banana it ceases to exist.Report
I am not against rewarding success or innovation especially when it is good. I do not begrudge the Bill Gates, Warren Buffets, Steve Jobs, Jeff Bezos, or Mark Zuckerbergs of the world. Same with loads of other inventors. Nor am I against highly-specialized professionals making significant salaries because of their skill or education. Highly-skilled lawyers and doctors probably do deserve salaries in the high six or low seven figures. I would like to be one of those highly-skilled lawyers one day.
When I talk about income inequality, I am not arguing that everyone should have their salaries capped at 100,000 USD a year. I once met a resident of the UK who moved to the United States. She was attending university later in life and explained that in the UK income discrimination is not allowed based on educational levels. I am not sure on the ins and outs of that particular law. At the least, I guess she means if two people have the same job, you cannot pay the one with more education a higher salary. She also seemed to imply that it covered promotions as well. She was angry at needing to go to university in the US.
I thought her stance was rather daft.
What am I against is the how the financial services industry has rigged itself with complex menchanisms which seem to be the equivalent of having your cake and eating it too. Or the general level of unaccountability from the so-called Masters of the Universe. Contrast what happened in the London Whale scandal v. The Barclays scandal. The CEO of Barclays was forced to step down, the CEO of Morgan Stanley was not. Did you see the e-mails from the LIBOR scandal which pretty much sounded like they were written by a 23-year old stoner? One that happens to have a very powerful job.
It is clear to me that something is rotten in the financial services industry and leaving them alone and to the magic of the market. As you said above, we punish murderers because we want less murder. I want bankers and investors to behave more like the fiduciaries they are. This means punishing the misbehaving ones.Report
Madmen were writing about the LIBOR “scandal” years ago… (complete with facts and evidence).Report
[Citation needed.]
Seriously, I’d be interested to read it, as long as your cite isn’t to some randomly chosen long, tedious, wholly unrelated file. As I’ve come to expect from you.Report
http://www.mediafire.com/?zwqk3i2mt2y
http://www.hoocoodanode.org/node/16267 — calc risk has it at “known by 2007ish”Report
Dealer,
Many good points. Yes, those valuing free markets wanted the” magic of the market ” to fulfill its role and punish the antics of those in the financial industry. Politicians not only jumped to their rescue, they subsidized the insanity. I am outraged at the cronyism.Report
I should write a post about how much I despise the phrase “the magic of the market.” On either side of the debate, I find it’s employed almost always by people who have little to no understanding of how markets work.Report
Like global warming predictions, they work via computer programs.Report
The term I would have used instead is “The discipline of the market”.Report
Thanks Roger, I was replying too but you said the same thing more pithily.Report
I would have much rather they saved the homeowners and innocent investors and let the banks fail personally.
That being said, I am not opposed to less regulation if it came hand in hand with a very robust welfare state and social safety nets. This was mentioned on a thread over the weekend. Sweden has a lot fewer economic regulations but they combine it with universal healthcare, good public transportation, and other aspects of the social contract.
This seems like a fair trade of to me. But there are many people in the US who find this trade-off unacceptable and want no or little regulation plus they think that the Government has no role in creating a welfare state with social safety nets. This to me is unacceptable and this is where political compromise should happen. The Libertarians get a bit of what they want and the liberals get a bit of what they want. No one gets everything.Report
NewDealer, unless laws were broken in which case criminal sanctions come into play, we should ‘punish’ them by letting them fail. Do not bail the institutions out. Bad decisions should have consequences. Let them lose their shirts first, then be sued into oblivion.
Make no mistake, there will also be collateral damage in this approach – there will be innocent investors who will lose everything.
This is unfortunate but necessary and will result in the long-term improvement of the system, as people (and institutions) who got burned once (or saw others get burned) learn not to do business with the failed institution (or one like it) again.Report
guns and cigarettes baby!Report
How do we know that people will learn from the crash? How long will the memory persist? If it were somehow proved to you that people would not learn from the crash, would that change your position?Report
We seemed to remember things for about two or three generations.
Then we promptly forget them and need to relearn the hard way.
Though there is always that group that likes to be bloody Bourbons who “remember everything and learn nothing.”Report
Don Zeko, I just can’t accept the premise. All animals learn; as the name implies, Homo Sapiens more than most. It took us a long time to stop using lead in our paint & pipes, mercury for every damn thing, bloodletting and exorcisms and trepanation and all sorts of nonsense. Superpowers that were designed around faulty premises ballooned then collapsed under the weight of their faulty design inside a single century. (How come nobody ever writes about the communism bubble?)
But learn we did.
All animals start out by pursuing pleasure and avoiding pain; as we get smarter, we realize that avoiding/minimizing pain sometimes means avoiding/delaying or attenuating pleasure, or accepting a smaller amount of pain now to avoid a larger pain later.
NewDealer is right that we also often forget these lessons over time, and have to re-learn.
We struggle, and we fail, and we re-learn. Such is progress. Such is life.Report
You can’t accept the premise, but I can’t bring myself to accept its converse. Sure, people will learn the lesson, but only in a form that is so narrow as to provide no safeguard against the same thing happening again. So while I don’t think we’ll see another tulip bubble, another tech stock bubble, or another mortgage derivative bubble, bankers will still have an easy time convincing themselves that This Time Is Different. And indeed, the proof of this is that speculative bubbles are a recurring bug in the capitalist system whether they are allowed to fail or not. The way out is stifling regulation of the banking sector.Report
Don Zeko, a computer bug is one way to look at it; another would be to look at it like a viral bug. A fever (a madness) that sweeps the body; an immune response is mounted; the system ‘learns’ and is no longer susceptible to that same virus (though a similar virus, just slightly different, is always around the corner).
Many investors lost their shirts in those bubbles; but how are the Netherlands doing? How is the internet doing?
Just fine, as far as I can tell.Report
You know what they say about the long run. To pick up your metaphor, I think that we have good reason to believe that there’s a reasonably effective vaccine available for this particular virus. If so, why not use it? Your line of argument is, I think, far too cavalier about the waste and suffering associated with a post-crash recession or depression – suffering that is, I might add, borne largely by those that had nothing to do with the bad decisions that created the bubble.Report
Yeah, the ‘cavalier’ charge is one that people of a libertarian bent get a lot, and I can see it. I wish there was a way that nobody ever had to get hurt. But that’s not realistic.
A fever is in part the body’s way of killing that virus. I don’t see ‘stifling regulation’ as a ‘vaccine’ so much as a ‘fever-reducer’. You can take medicine to reduce a fever (in extreme cases you must, or the patient will die); but otherwise, best to let the fever run its course, knowing that the fever itself is eliminating its own cause. It is self-correcting.
Basically my worldview is similar to Roger’s & Jason’s – the system we have, has proved demonstrably better at improving the lot of the poor (and everyone else) over time than any other system, ever. We over-restrict that system at our extreme peril. That system ‘learns’ like any other, though positive and negative consequences.
This system also sometimes ‘punishes’ the innocent by making them pay for mistakes made by others (or mistakes they themselves made). To the extent that we can mitigate the worst of that with reasonable safety nets, we should. To the extent that we can make those responsible for the mistakes bear the brunt of the punishment for same, we should. There will always be conflict on where to draw the line between these two goods.
But we need to be extremely careful about the incentives we are setting up. I am all for producing less ‘waste’, but the way to do that is not to produce less in the first place, it is to better allocate resources to the most efficient ends. And centralized top-down solutions made in an insanely complex system have a bad track record in this arena.Report
I’m not seeing the bad track record that you are. Take the particular question of financial sector speculative bubbles. We do, in fact, have a good example of a historical period in which the sorts of stifling regulations that I’m calling for were in effect: the run from the New Deal to around the mid-1980s to mid-1990’s. And you know what we saw? reduced financial sector profits, economic growth, and macroeconomic stability. Your argument works if the world is as hard and intractable as you claim, but it sure looks to me like recent history points to a way out of that bind.
oh, and p.s.: I also doubt that letting the banks fail is a politically feasible solution. The Tea Party can make whatever promises they want, but I just don’t see a Congress that has to run for re-election every two years stand by and do nothing while the financial system collapses.Report
Yeah, I agree it was not feasible politically. And I work in IT in the financial industry, so I have heard and semi-understood the apocalyptic arguments about what would have happened had we let them fail (Human sacrifice, dogs and cats living together… mass hysteria!).
I am willing to entertain the thought that it is entirely possible that the instinctively-understood incentives that work best on an individual level (let the fools fail!), don’t scale well to a macro one, in the way that ‘normal’ physics appear to break down at extremely small scales.
But man, it still doesn’t sit well, you know? Bailing those guys out WAS injustice, no matter how many smaller guys we may have saved in the process (and I maintain that we may have just prolonged the agony for everyone, rather than avoiding it).
The tech bubble did hurt some investors, but it also brought about a lot of the internet you and I are using right now. Waste can be a evidence of productivity. If you went into Michaelangelo’s studio there sure were a lot of stone chips on the floor. The sculpture is no less beautiful for that.
Dangit, there is that apparent cavalier-ness again, so I’ll stop now. 🙂
Thanks for taking the time, I appreciate the courteous and thoughtful replies.Report
It doesn’t sit well with me either. But then, that’s why I wanted to grudgingly bail them out, then stick in the knife with post-crisis laws that would make their whole parasitical business model a thing of the past. And I agree, the tech bubble did make us irrationally overproduce infrastructure that we’ll be glad to have going forward. Unfortunately, McMansions in the desert around Las Vegas are a lot less useful.Report
Don,
The post-WWII period were a time of relative economic stagnation for the U.S. What made it work for us was that we were rebuilding the world–we were one of only a handful of industrialized countries that didn’t suffer extensive war damage, so everyone essentially had to buy from us (and Canada, and maybe a couple other countries like Sweden).
But economic regulation stifled the airline industry, the shipping industry and the telecom industry.
As to that “macroeconomic stability,” we had multiple recessions during that time and the early-mid 70s were a real suckfest. Sure, we didn’t have a recession as bad as the current one, but you can take most 30 year periods and not find a recession as bad as this one. And again, the first 15-20 years of that era we were rebuilding Europe–that’s an economic bump that made that a highly unusual period, and one that we can’t expect (and surely don’t want) to happen again.Report
To be fair, it does appear that deregulation of the airline industry wasn’t exactly enough to make it successful. It’s a pretty schizophrenic industry that is still not profitable. I’m not arguing with your overall point, just being pedantic about one of my areas of relative (emphasis on relative) expertise.Report
Ryan,
Who gives a fig about the “success” of the airline industry? That’s not the point of deregulation–the point is enabling competition to work for the benefit of the consumer.
Sure, it sucks to fly today. We’re stuffed into a cattle car and given naught but peanuts on a 5 hour flight. But prior to deregulation, schlubs like you and me didn’t fly, couldn’t afford to. Airlines weren’t allowed to compete on price, so poor and middle class people were priced out of the market. Another example of government policy reinforcing inequality.
Airlines still had to compete for customers, though, so just as economic theory would predict they competed by giving customers great amenities, like free drinks and decent food. And that meant they were competing away the revenue from those higher prices, so they still struggled to be successful. So today the status of individual airlines is still always up in the air, passengers have a much worse experience, but the average person can actually afford to fly.
In all sincerity, I’m puzzled when liberals–who accuse others of being pro-corporation–use the success of corporations as their measuring stick for good economic results. The purpose of competition is not to create successful companies, but to produce more value for consumers. And if we’re using the wrong yardstick to measure economic outcomes, how are we going to make sensible policy proposals?Report
Again, like I said, I’m not arguing with your point. And please, don’t lecture me about how airline regulation worked. I have a decent enough idea.
The only thing I was indicating was the airline industry is systemically unprofitable. It’s indisputable that consumer outcomes have improved dramatically since deregulation, of course, but the long term trend is… unclear. This has nothing to do with individual corporations and their ability to make profits; it’s about the inability of the industry as a whole to function like an actual healthy industry. I am not trying to expand this argument to anything else, merely pointing out there are some weird sui generis characteristics of aviation that make it a pretty poor poster child for any discussion of capitalism.Report
Also, seriously, the sneering “you liberals” shtick is getting old super fast. Ted Kennedy spearheaded airline deregulation, for Christ’s sake.Report
Well, to be fair, on this blog I feel entitled to use the “you liberals” line once in a while.
Fair enough on the airline deregulation–it just looked like you were arguing that it wasn’t clear whether it was a good policy or not. And so I’m afraid you’re really going to hate me after my latest comment above.Report
Understood. What pisses me off about the “you liberals” business is that I try really, really hard to defend a conception of liberalism that takes seriously the very caricatures of liberalism that “you liberals” implies. It’s like getting caught in the crossfire of a battle you’re trying to stop.Report
James,
when I fly, i get free sodas, unlimited snacks… and legroom!Report
I’m not pro-bailout, but we should be honest about what political appointees can reasonably be expected to do. If Hank Paulson didn’t let the banks fail, I don’t think we can expect some other random Treasury secretary to let them go either. I know he gets portrayed as the quintessential Wall St crony, and unquestionably he had a typical right-wing Wall St worldview, but the reality is that he came to Washington anti-bailout and in the crisis he became pro-bailout. Geithner probably wouldn’t even have allowed Lehman Brothers to fail frankly.
We have to enact reforms prior to the crisis. Dodd-Frank is not the right solution at all. I have understanding bordering on sympathy with the public servants who had to make those tough choices in the second half of 2008. I’d have preferred that they let them fail, possibly liquidate or at least seize failing banks, let massive deleveraging occur via a failure of the counterparty system, and then go on from there. That our elected and unelected officials were unwilling to try this should surprise no one.
On this point, a little discussed corruption of the laws is that derivatives are expressly excluded from bankruptcy laws. This was lobbied by Wall St, but they were actually trying to make sure that they were limiting their counterparty risk by creating a bankruptcy-remote process to unwind derivatives rapidly. The result was to create systemic risk from all large derivative dealers, an outcome I truly believe was unintentional, a result of Wall St mutual distrust not cartel behavior (as is usually the case). I think that Paulson and Bernanke were ill-advised to allow Lehman to fail by filing Chapter 11, knowing full well that this would lead to an immediate derivative unwind – they should have seized the holding company in a similar fashion to the AIG takeunder that occurred in the following weeks. The explanation from Bernanke that he couldn’t do this because he lacked statutory authority is hokum – they thought that Lehman was obviously credit risky so the consequences of its failure were deserved and important to allow to occur naturally.Report
Perfect OP Jason,
Clear, concise and brilliant.Report
What Roger said. This post is as lucid to me as the prior monkey one was opaque. Thanks for the red meat for us.Report
In defense of liberals, I’d say that my basic approach to economic policy – and that of a lot of other liberals too – is basically Rawlsian: make the worst off the best we can. I have no principled objection to people getting rich – even filthily so – as long as we’re capable of channeling whatever they’re doing in a way that helps everyone else.
On this dimension, I suspect we agree more than we disagree (if you take a long view). Obama and Romney quite obviously agree more than they disagree (on this and many other things), which is comforting (or horrifying, if we talk about the other places they agree) and why I often find myself saying that I don’t think they present a particularly stark choice.
Where I see room for policy to do more than it does now is the provision of safety nets. Again, we probably have a lot of agreement here even after noting that I think we should have slightly higher tax rates and more robust social welfare programs than you do. I also think we need to think harder about how to combat stagnant real wages. The American underclass is still really, really rich in a world-historical sense, but the basic fact is that growing wealth doesn’t seem to be making the worst off better off. I like my Pareto improvements strict, in the sense that they make all parties strictly better off.
This is a weirdly long comment that doesn’t say much, but I just want to defend the notion that liberalism is a large space.Report
Like Roger and Jason, I’m not opposed to safety nets, but I think it’s worth pointing out that my impression is that liberals are much too sanguine about the incentive effects of safety nets. I think if they would get more serious, more realistic, about that, a lot of ground between us could be made up.Report
I would say that I’m less sanguine and more indifferent, to be totally honest. I fundamentally don’t care if poor people are Doing It Wrong. As long as they get to stay alive and enjoy doing that to some extent, I’m mostly not bothered about how they choose to go about it. We, as a people, are spectacularly wealthy. We can afford guaranteed minimum incomes for everyone, even if some people blow it on cigarettes or donuts or crack.
I realize this makes me an outlier. I’m okay with that.Report
See, I’m ok with taking care of those who need taking care of, and giving temporary help to those who need temporary help. God knows I’d like that stuff to be there if I’m in that position.
But I’m not ok with saying, “Oh, it’s all right if able-bodied Joe Smith decides he’d rather not be a productive contributor to society, but just wants to let the rest of us support him.” And I’m not all right with liberal arguments that making safety nets generous won’t deter people from looking for and accepting work, and consequently function as a drag on the very system of productivity on which they depend.Report
Well, in which case, I’m glad I’m not making that argument. I have no doubt that, at the margin, generous safety nets create incentives for people to work less. There’s basically no way around that conclusion. Of course, I also think conservatives and a lot of libertarians make kind of a mountain out of a mole hill here, in that they don’t create massive society-wide disincentives that will undermine our way of life and destroy civilization. I mean, say what you will about Europe’s year-over-year rate of economic growth, but Europe still exists.
As for the first part of the second paragraph, that’s more or less what I’m saying, so I’m guilty as charged. I just figured I’d celebrate ol’ Uncle Milty’s birthday by endorsing his negative income tax idea. Seems basically sound to me.Report
Is able-bodied Joe able-minded? Depression, GAD, bipolar, schizzophrenia?(Pretty common.) Low grade mental retardation? Is he addicted? Was he born into a culture or a family that didn’t teach him how to be disciplined? Did his parents teach him to succeed to help him graduate? Has he been imprisoned for ridiculously petty drug crimes? Is he able to find work that pays a decent wage within his area? (Not easy for the mentally handicapped, for excons, for depressed people with a junior high education, abused women, and so on,)
Most of the people who you have in mind who look like they can hold a job long-term can’t really do it, and it is because they are a product of their environment, usually a side effect of being born into poverty. (Do you think they really, in the heart of hearts, prefer to live on welfare rather than have a nice little job with a livable wage?) I feel bad for them. You seem angry at them.
There are people who misuse welfare systems. But many of them are the victim of very bad fortune in life. I hardly think of them as people who have been treated too well by our system. I generally feel bad for them that they are in a situation where living on welfare seems like a good idea, I certainly don’t feel exploited by them as you seem to. Certainly their use of the welfare system isn’t an injustice to me, even though I help pay for it. I’d be happy to pay more.
I suppose there are a few people who haven’t been set up to fail, who had good upbringings, who are really exploiting the taxpayer by getting welfare or aome social service. (Maybe this happens more in places with more generous welfare systems.) I doubt they do this for long as ther are better ways to live lazily and well.
But that kind of exploitation by a few welfare-manipulators absolutely pales in comparison to how the rich bend the system to exploit the rest of us.Report
How do you define “a productive contributor to society”? How about a relentless self-promoter whose job is making deals that are bad for everyone except themselves? (name the profession!)
Also, what is a generous safety net? Personally, the “workers” will always retain more prestige and social status than the people who don’t work. And because of that, people will continue to look for and accept work.Report
You may be missing a good part of the problem with safety nets – it would be oh-so-much-better if we had a minimum income than what we actually do. The reality is that we are routing a huge percentage of our national economy via govt, that is using the political process to allocate resources. If we had a person-light, statute-light federal govt that used its taxing authority to enact a minimum income, we wouldn’t have the problem where thousands of companies are created to skim of the public purse, creating a good bit of unmerited wealth.
I’m 100% with you on letting people control their incomes – if they buy the pet rock or want to send their kids to satanic schools using school vouchers, so be it. At some level, we need to trust our citizens to know their own best interest. Our current transfer payments are just nothing like that, and it is a major problem.
And then there is the incentive problem, which you just waive off, reinforcing the James Hanley point that liberals just waive it off far too easily.Report
+1. i hate the military industrial complex too.Report
Ryan,
” I also think we need to think harder about how to combat stagnant real wages. The American underclass is still really, really rich in a world-historical sense, but the basic fact is that growing wealth doesn’t seem to be making the worst off better off. I like my Pareto improvements strict, in the sense that they make all parties strictly better off.”
This is actually wrong. The worst off are the ones that are gaining the most. It is just that the worst off are the poor in developing nations. The last decade has by far been the best era ever for humanity. More people have risen out of extreme poverty than ever before. The less skilled laborers of the US were previously and arguably unfairly protected from third world competition in prior eras due to limited technology and limited globalism.Report
A fair point. I was restricting my purview to the American underclass. You are surely correct about the global underclass. I was trying to note the restriction I intended with my “world-historical” comment.
It can be valuable to talk about the global economy, but it can also be valuable to talk about the American economy. Especially when our context is the American political system and what it ought to do with respect to economic policy.Report
While I’m certainly happy to see the global underclass’s lot improve, I’m not convinced that it has to happen at the expense of the bottom 2/3 of the US. Beyond that, don’t you think that it raises any normative questions when the decision to take this trade-off is made largely by the upper crust of US society, which comes out well in the deal, and without the consent of the people whose livelihoods are disappearing in the bargain?Report
Don,
This is an entire paragraph of half truths and errors.
First, as a class, working wages have not been harmed, they just did not rise. In other words, they did what they did prior to the advent of free enterprise. Free enterprise raises living standards, but it does not do it in a straight line. The best decade for humanity came partially out of the removal of privileged position that American workers had in prior generations.
Second, when you look at it by demographic slice, everyone DID GAIN. (just not as fast)
http://www.thebigquestions.com/2012/07/30/the-numbers-racket/
Third, the trade off was not made by the upper crust, it was made by all of us. I chose to shop at Walmart and buy Chinese goods. I chose to buy IPads built in third world countries. I chose to outsource programming to Ireland. And there were people on the other end of each of these voluntary agreements that similarly chose to engage in the cooperation.
Fourth their livelihoods have not disappeared. See above. Granted the recession ha harmed people, but they always do. That is why politicians should not have disrupted the recovery with programs and benefits that substantially increase the cost of hiring low skilled workers.Report
Take a link, leave a link: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/31/wages-arent-stagnating-theyre-plummeting/
Beyond that, tell this to Michigan. Tell this to the unemployed workers that used to build furniture in North Carolina. Did they vote for NAFTA or CAFTA? Did they sign off on the whole WTO project? I do support free trade, for the record. But there’s no denying that these people got screwed. There was a place for them in the economy 30 years ago, but that place has disappeared and no help has been sent by those of us that came out ahead in the bargain.Report
Mr. Zeko, the Ezra Klein’s Wonkblog’s first graph is from the Economic Policy Institute, which is rather in the business of “proving” wage stagnation and the like.
http://www.weeklystandard.com/blogs/economic-policy-institute-dominated-labor-interests_552391.html
“By just taking a look at the EPI board of directors, we find that 10 of the board members are heads or former heads of national unions, including Richard Trumka (AFL-CIO), Randi Weingarten (American Federation of Teachers), Andy Stern and Anna Burger (SEIU), Ron Gettelfinger (United Auto Workers), and Leo Gerard (United Steelworkers of America). Consider also that one of the institute’s former senior economists, Jared Bernstein, is now the chief economist and economic policy advisor to Vice President Joe Biden.”
Not exactly fodder for the unconvinced.
Neither does the graph
http://www.washingtonpost.com/blogs/ezra-klein/files/2012/07/indexed_stagnation.jpg
support the headline
Wages aren’t stagnating, they’re plummeting
Oh, and BTW, Wisconsin’s public workers are underpaid.
http://www.epi.org/publication/wisconsin_public_servants_already_face_a_compensation_penalty/
Our problems remain epistemological.Report
Tell this to the unemployed workers that used to build furniture in North Carolina. Did they vote for NAFTA or CAFTA? Did they sign off on the whole WTO project?
Eh, you do realize that you’re asking whether they voted to end their privileged position, right? And in this case I don’t mean privileged compared to third world labor, but their legally protected monoposonistic position vis a vis consumers. They had a law that says Joe Citizen must buy from them or else pay a big-ass tax, and we’re supposed to feel sympathy that they no longer get to hold Joe Citizen by the short hairs?Report
I’m going to keep drinking coffee and just sit back and marvel at your responses, James. You are on fire today. Hats off to you sir!Report
Why is the concept that corporations in competitive industries are ultimately forced to be pro-consumer institutions so hard for people to understand? We really need to figure out the pedagogically optimal way to present such ideas.Report
because corporations systematically try to not be in competitive industries.
See my above point to Jason about attempting to create monopolies (particularly informational/advertising based ones)Report
Fine, but in seeking to make their industry non-competitive they often are forced to serve customers better, eg differentiating their product, doing something better in the view of the customer. I agree that there are illicit, antisocial ways to achieve this, including collusion and fraud.
It is difficult to draw a sharp line between advertising and fraud. Take Clorox – it’s just bleach, basically the same as the white label bleach in the supermarket. But it’s Clorox and people want it. Is that fraud or improving the customer experience? I lean strongly to letting the consumer determine their own preferences, and from a legal perspective I prefer a restrictive scope for fraud but then well enforced. In practice, too much of “consumer protection” is actually value-imposition by unenlightened policymakers. Take the pet rock – under my values the pet rock is just an awful, awful social-welfare reducing awful product. My point is that it’s really hard for me to accept that the pet rock sold like hotcakes to people who knew exactly what they were doing. But it happened. And with respect to political economy, I think we have to allow the pet rock. A really large amount of what humans want, truly want, is indistinguishable to me from the pet rock – lottery tickets and Ralph Lauren clothing and casinos and reality television and McDonald’s.Report
Ditto all of this, BobbyC.Report
Also, I’m not seeing any explanation of why the loss of privilege on the part of working class Americans is the cause of economic gains in the rest of the world. Sure, they happened more or less simultaneously, but that proves little.Report
Tariffs and quotas restricted imports from low-labor cost countries. The lack of competition enabled American workers to demand wages higher than they could in a system of more open trade. NAFTA and WTO reduced tariffs and quotas, opening up the U.S. to more imports, and so opening up American labor to more competition from low-labor cost countries. Hence, U.S. labor could no longer demand those higher wages, while labor in developing countries had more economic opportunities than previously.
(Note: The price of labor is not the primary issue, really, but the price relative to productivity. This is why American labor can still demand a higher price than third world labor, because it is more productive. But it can no longer demand a true premium on that productivity. Some folks here have occasionally made a big deal about efforts to outsource that didn’t go well, as though that somehow proved there was something systemically wrong, but such failures are to be expected in a system where everyone is experimenting in an effort to find the best price/productivity combination. Sometimes they’ll find that a lower price/lower productivity combo gives the higher returns, and sometimes they’ll find that a higher price/higher productivity combo gives the higher returns. It’s really basic economic theory and basic business theory, so it’s something of a mystery why people find it noteworthy.)Report
Free trade should help everyone, foreign poor and domestic poor by increasing productivity and therefore overall wealth.
The problem is that in the U.S., free trade has coinicided with a series ofpolicy changes undercutting the poor and lower middle class. We can reverse these policy changes and add other policies to ensure that the benefits from free trade in the U.S. benefit the poor more than the rich. (Higher taxes on the wealthy to pay for college for the poor, increased food stamp programs, socialized medicine for the poor, better UI for the poor, increased social security for lower wage earners., etc.$Report
Those policies aside, shifting from restricted trade to free trade could not possibly avoid being really disruptive. As long as U.S. manufacturing wages were artificially high, opening up trade was inevitably going to cause them to come down. That’s just inevitable.Report
I’m not so sure about that. You could’ve have had free trade that benefits the poor. As manufacturers cut costs to compete with low wage laborers, the government could step in and pay for benefits to the laborers. That is, as Widgetosity kills its health plan to cut costs to compete, the government creates a universl health plan. As Widgetosity reduces pay, causing workers to have trouble paying for their kids’ college, the government pays more for universal college, etc., etc. These programs would be paid for by taxing the new wealth produced by the productivity gains associated with free trade. (This is sort of what Clinton promised, IIRC.)
Free trade did hurt the bargaining power of unions (though lots of wealthy countriy’s unions have dome well compared to the U.S. even in free trade) so poor and working class people needed new ways to ensure their well-being.
We can have policies that benefit the worst off locally and globally.
I’d argue that it is legitimate for the U.S. gov’t to put interests of its own poor above that of foreing poor, though it should do a little more for foreign poor than it does already.Report
You could even have a relativized (details would be tricky) international minimum wage as part of free trade.Report
Free trade means cheaper goods. That benefits everyone who consumes them.Report
What we actually have isn’t free trade though. It’s state-corporate managed trade. Take a look at the IP regulations regularly embedded in those trade deals, for one.Report
Sure. We’ve never seen a perfectly free market. And even in North Korea, market incentives sometimes still exist.
Fine.
Here’s the real question, because talking about ideal types only gets us so far: Keeping everything else the same, when we make one incremental reform toward greater free trade, what happens?
So far, the answer has been that the economy grows.
Next question: Forgetting about ideal types for a moment, which direction should we move that needle?Report
Free trade means cheaper goods. That benefits everyone who consumes them.
Ceteris paribus, of course.Report
Ceteris paribus, of course.
All claims of economic theory are ceteris paribus. Of necessity.Report
Most claims about most anything are ceteris paribus, no?Report
“It’s really basic economic theory and basic business theory, so it’s something of a mystery why people find it noteworthy.”
Thinkhard make braintired.Report
“I’m not seeing any explanation of why the loss of privilege on the part of working class Americans…”
But I thought that white privilege was a bad thing…Report
@Roger: You wrote “The last decade has by far been the best era ever for humanity. More people have risen out of extreme poverty than ever before.”
Do you have a cite to this? It’s data that is really relevant and strikes me as an important piece of the puzzle.Report
Mark,
You might find the book Getting Better interesting. The author argues that even though income and GDP per capita are not always rising in third world countries (biggest focus is sub-Saharan Africa), life quality indicators such as access to clean water, child mortality rates, access to eduction, access to health care have improved substantially in recent years.Report
I’d be interested to see what countries got excluded — and what deaths got included in child mortality figures. Deaths from “shot by a machine gun, while wielding a machine gun” if you get my meaning…Report
Mark, My browser is acting up, but I was able to find these links.
http://yaleglobal.yale.edu/content/little-notice-globalization-reduced-poverty
http://www.un.org/millenniumgoals/11_MDG%20Report_EN.pdf
http://www.unmillenniumproject.org/documents/MainReportChapter2-lowres.pdf
The data that I read is that the last decade was by far the best decade ever for humanity, and that it exceeded the optimistic goals of the UN.Report
The global underclass would still be helped if the U.S. helped the poor to the degree that Sweden, Canada, etc. help them.
It’s not that we can’t help only foreign poor or local poor people. We can do both.Report
liberalism is a large space.
It is! And Rawls is among the very most reasonable thinkers on these topics.
He stumbles a tiny bit on luck and desert, I think, in ways that I don’t need to explain here. But he’s a hell of a lot better than any inferences we might want to draw from arbitrarily withdrawing or bestowing rewards on monkeys. Which makes me wonder – why lead with that? Why not lead with Rawls?Report
Well, it’s a large space. People show up all over it.
I think Elias is a great writer, a thoughtful guy, and an all-around treasure. We just disagree on some things.
Also, note that one of my early posts here was about switching to a consumption tax scheme. Maybe I’m just trying to get excommunicated.Report
“Why not lead with Rawls?”
Because if you’re arguing with what a philosopher said, someone can always cite a philosopher who said something different–and, as philosophy ultimately comes from humans, we’re all philosophers.
It’s similar to the reason that people quoting the Bible say it’s “God’s word” rather than “something some guy wrote about God”.Report
A much needed rebuttal, and deftly made I might add. Bravo, hear, hear and hoorah.Report
I’m not going to claim to speak for everyone on “my side”, but personally here’s my take.
I like entrepreneurs. They make cool stuff. I heartily endorse them making cool stuff so I can buy it.
I dislike cronyism and nepotism. I dislike “Captains of Industry” who are effectively trumped up middle managers with no additional skill set beyond the aforementioned cronyism and nepotism. I particularly dislike those who destroy shareholder value and the good names of companies and get massive payouts when they leave the smoking ruins behind. I extra particularly dislike that this doesn’t (as it would in any rational market) depress their career prospects or seemingly inconvenience them in any way. And I dislike that the next fellow will be paid even more to do the same thing in the name of “incentivizing ” and “attracting top talent” which is more often than not just code for “hiring one of the guys I know from school/golf/the board of some other company/his daddy”.
That doesn’t make me anti-capitalist. It makes me pro-capitalist. I just disagree that we have anything even like a capitalist system in this country (and vanishingly few elsewhere).Report
” I dislike “Captains of Industry” who are effectively trumped up middle managers with no additional skill set beyond the aforementioned cronyism and nepotism… I particularly dislike those who destroy shareholder value and the good names of companies and get massive payouts when they leave the smoking ruins behind. ”
So, not a fan of Steve Jobs then?Report
Problem with this comment #1: Steve Jobs was actually very good at designing consumer electronic devices. That makes the “trumped up middle manager” label a poor fit in his case.
Problem with this comment #2: Last I checked, thinking that Steve Jobs is not the pinnacle of Western Civilization does not render a political belief system invalid.Report
“Steve Jobs was actually very good at designing consumer electronic devices.”
According to people here–and yes, I do mean “here”, as in “in this thread”–all he did was draw a picture of a device, and then other people did all the work.Report
The first sentence doesn’t conflict with the second, so long as you rephrase the second to be what people in this thread are actually saying. Steve Jobs did work that was extremely productive but he didn’t work hard in the way that, say, the people who picked the tomatoes he ate or the people that built his house worked hard. So the point here (which ought to be incredibly banal) is that our economic system doesn’t not even begin to distribute rewards in proportion to hard work.Report
“So the point here (which ought to be incredibly banal) is that our economic system doesn’t not even begin to distribute rewards in proportion to hard work.”
…huh? (emphasis added.)
“Steve Jobs did work that was extremely productive but he didn’t work hard in the way that, say, the people who picked the tomatoes he ate or the people that built his house worked hard. ”
…so he did or he did not deserve all the money he had?Report
To quote the invaluable Snoop Pierson, deserve got nothin to do with it.Report
Snoop was just quoting Will Munny.Report
Yeah, but in my head I’m saying it with Snoop’s particular inflection.Report
“Man said if we wanna shoot nails, this here’s the Cadillac. He mean Lexus, but he ain’t know it.”Report
Jobs was a relentless self-promoter. he did far more than just draw a picture. Not much more that’s USEFUL mind.
Got a $2 bill, anyone?Report
I’m half a fan of Jobs.
His innovation was that he believed (really believed) that better design would drive greater customer satisfaction and larger market acceptance. He was wrong in many (many) cases. He had an obsessive streak, and his notion of better design tended to be “things that I like” with a strong dose of “things that people I respect tell me I should like”. He hit some droopers. He was rough on his people. He could be petty. But he did add value.
Is/Was he the only such visionary who could have done that? No. Was he more responsible for the success of Apple in the early days than, say, Woz? Maybe. Does he “deserve” what he made over the decades? Almost certainly.
I resent Gates frequently, and Jobs substantially less often. Of the two, I respect Jobs a great deal more, even as I see the feet of clay he most definitely had. That notwithstanding that I make a living with far more Microsoft products than Apple.Report
Steve Jobs is Walt Disney. Each could imagine things he didn’t have the skills to create themselves, be completely inflexible about accepting anything less, drive teams of more talented people to create his vision, and then grab all the credit for himself.Report
To be honest, the thing that I think Steve Jobs should be remembered best for is the iTunes store, which proved to music labels that digital-download music was workable. That was, in a lot of ways, the only big thing Apple did that was not entirely internal–the desktop computer, the iPhone, those were big but they were all Apple’s show.Report
In the story of the monkeys, do you relate to the monkeys or do you relate to the scientists?
When it comes to how you feel that society ought to be structured to address things, do you relate to the monkeys or the engineers?
When it comes to how you look at society, do you see society as the monkeys or as the scientists/engineers?
If it turns out that you see yourself as human and everyone else as inhuman, what the hell is wrong with you?Report
(1) I relate to the scientists in the sense that I know a bunch of them. It’s a tenuous relation, though.
(2) If the monkeys are given weapons and the humans are only allowed to defend themselves with the same weapons, and you make the monkeys a lot smarter… and… wait… oh, screw it. The experiment does not generalize anywhere near that far, and can’t be extended much past itself. To attempt to do so is bad science.
(3) I see society largely as a ridiculous mess that bears almost no relation to either the monkeys or the scientists.
(4) I’m broken? Wait… what if you see yourself as human and most but not all of everyone else as just fished up?Report
I’m currently in the transition between “I’m just making this up as I go along, I hope the grown-ups don’t notice” and “HOLY SHIT THE GROWN-UPS HAVE BEEN MAKING THINGS UP AS THEY GO ALONG!!!”.Report
One advantage of being a socially-inept nerd in formative years is that if you don’t turn into a mess, you quickly divest yourself of much (but not all) of an interest in external validation.
Once you divest yourself of much (but not all) of an interest in external validation, you start spotting how much everyone else relies on it heavily. You also are really able to spot when you do it.
I’ve never been big on granted authority. There are people who earn it, though.Report
I don’t know anyone who’d call Chuck Yeager a nerd, but he said pretty much the same thing.Report
It’s not just nerds who figure this out (and, it must be said, a goodly number of the nerds fail at this lesson).Report
humans are capable of deserving things for morally significant reasons.
I’m not sure that’s true. Moralists of every stripe have been trying to convince us of the futility, indeed the outright evil of believing in Things. The Buddhists call it Maya, the great delusion which gives rise to greed and ultimately despair.
And what’s with this “capable of” about? Either we deserve things or we don’t. I suppose I should let that slide: nobody’s incapable of deserving anything. But by whose lights can someone be declared deserving or undeserving? This is where the argument collapses in a flaming heap: the yardstick is just a Skinner Box and money is the only measure of success, absent some intangible and undefined aspects of success and failure, all of which require a conscious renunciation of certain aspects of success.
Most of us could cope with great fortune but few of us could cope with the curse of fame. With very few exceptions, great fortune seems to bring a host of hangers-on and anonymous wealth is damned near nonexistent.
I am an entrepreneur. I exist in context. My work is of no social consequence. Some of my work has been used to profoundly antisocial ends, implementing policies I don’t feel are morally justified. I’ve removed myself from ever working on weapons systems, telling my clients I can’t do such work on moral grounds. It hasn’t stopped me from writing systems which find reasons to deny people health care coverage. I’m a hypocrite. I am no hero and all the money I give to famine relief doesn’t make me one.
Successful entrepreneurs reward themselves. Nobody else rewards them. Consumers want stupid things all the day long and the entrepreneur is glad to oblige. Whence arises this myth of the Hero Entrepreneur? I laid this out in the second paragraph: the fame which fortune brings in its wake, undesired and often unintended.
Unemployment comes in several flavours. There’s short term unemployment, I don’t work every day of the year. I’m lucky if I’m working nine months a year and I never work more than ten for tax purposes. I’m really just a temp worker when you get down to it, I build something, I get out.
There’s longer-term unemployment: the worker who sat in a cubicle for ten years and lost her job. She’s in trouble. She’s trying to find another job in a cubicle. Good luck, sister. You’re going to need it.
Then there’s marginal employment. These people are actually working. Often they’re working several jobs: the clerk at the gas station and the waitress. Their jobs barely cover their rent and do not cover the rest of their meagre expenses, so they work multiple jobs. They don’t have benefits. These aren’t really jobs.
Why so serious? Don’t you see this society really is a monkey cage? I’m a Liberal. I’m a Capitalist, one of those Successful Entrepreneurs. You might take the Entrepreneur off that pedestal and look at him as he sees himself. I am the product of a society which wants to automate the living hell out everything. Not only do you live in a monkey cage, you’re trying to pretend the cage doesn’t exist.
Monkeys adapt to cages quite nicely because they live in well-defined territories in the wild. Trespass beyond those boundaries and that adventuresome monkey is usually killed. I used to have a vervet monkey, a tiny little thing my father rescued from the marketplace. Cost him two shillings and sixpence and she lived in our home, then out in the mango tree above the chickens. Eventually she took up with the local troop of vervet monkeys on the mountain behind our house. I suspect it was the troop from which she was taken. She came back, periodically, once with her babies. Wouldn’t let me touch the babies, but she did get on my shoulder and tell the other monkeys who I was. As long a monkey exists within a society, a troop, they’ll adapt to captivity beautifully.
We Liberals understand Freedom and the limits on freedom rather better than you suspect. Now I shall tell you another thing about monkeys: if you want to reduce a monkey to madness, take it out of the troop. Monkeys aren’t individuals, they require context. And so do you.Report
I’m not sure that’s true. Moralists of every stripe have been trying to convince us of the futility, indeed the outright evil of believing in Things. The Buddhists call it Maya, the great delusion which gives rise to greed and ultimately despair.
If it’s not true that we can deserve things for morally significant reasons, where do we get the punishment for theft? I really thought you’d at least be with Hume on this one.
Perhaps the Buddha sat by and allowed the thieves to take his belongings. But I’m not looking to justify a society composed entirely of otherworldly and perfectly indifferent saints. Such a society wouldn’t last long in the real world. Would it?Report
This, of course, depends on some arbitrary definition of Theft, say, one defined in law. The Buddha gave his things away: hard to steal from a man who has nothing by choice.
Your dismal world where Profits trump People has been rejected by enlightened souls since the world began.Report
My dismal world? I am suggesting that consumers’ welfare is the ultimate test of an economic system. If that’s profits trumping people… what does the other way around look like?Report
It is a dismal world. It’s petty and grubby and everything has a price tag attached. It’s a contemptible world. The only welfare in such a world is the consumer’s welfare and the rest are SOL.
You ask what my world might look like. The closest I’ve ever come to a moment of transcendence, a concept you would immediately reject, I’m sure — was in the heart of Munich, sitting outside at the Chinesischer Turm. All around me were people enjoying themselves: it was a sunny day in May. Lovers strolled on the grass, pretty girls on roller skates swirled by, cold beer by the litre. A happy moment, I thought.
In that moment, the superficial world was stripped away and the totality of human suffering was revealed to me. Everyone around me, even the happiest, were seen for what they truly were, mortal, fallible, often secretly miserable, often lonely, often labouring under burdens of guilt and shame and oppression. They were wounded shadows, all of them, every one of them longing for love and liberation from existence. It was among the most horrifying moments of my life and I would not wish it on anyone. I have never been the same since.
You may roll your eyes up and say I was just sublimating my own misery onto them. You would probably be right. But you did ask the question. What would a world look like if people came before profits? We should see ourselves as we are seen, we should love each other more and ourselves somewhat less. We would view our individual successes quite differently. We should see the world like those old Chinese paintings of mountains and rivers and roads through the clouds, with tiny figures of the travellers along the road.
This is degenerating into nonsense. This sort of talk will go nowhere with anyone else, least of all you, who believes consumption is the chief reward in life. Charity and human kindness are their own rewards. They are the last and most precious reward for a life well lived. Let history show what the wealthy do with their money once they’ve made enough of it. Carnegie said a man should divide his life into three stages.
To spend the first third of one’s life getting all the education one can.
To spend the next third making all the money one can.
To spend the last third giving it all away for worthwhile causes.
The consumer’s welfare be damned if it comes at the cost of human suffering. There is enough of that in the world, everyone you will ever meet in life is fighting a silent and secret battle. By my calculations and those of my son, there is no excuse for poverty anywhere in the world. I do not believe in redistribution so much as I believe exploiting the poor is a crime against our fellow man. Clearly you do not believe these things.
Enjoy your things. Trust an old man, once you’ve tired of your toys, you’ll grow up and find greater happiness in life elsewhere, beyond the masturbatory and illusory bliss of satisfying your own desires.Report
“In that moment, the superficial world was stripped away and the totality of human suffering was revealed to me. ”
Lighten up, Francis.Report
If ever there was a masturbatory, shit-flinging, inhuman, greedy little monkey, surely you are that monkey.Report
I move to start a trend whereby, at any time anyone here is having a totally unproductive exchange in the comments section that isn’t going to go anywhere in the future, the statement “Surely you are that monkey” is an automatic thread-ender.Report
We can only hope. I’m growing sick of the Duck.Report
“Surely you are that monkey.”
“Yeah? Go was your vagina.”Report
Blaise,
You crossed the line on that one. Total foot fault. I recommend you be ostracized from the league for twenty minutes.Report
Oh Roger. You’re such a card. Duck can dish it out all he wants. Nobody has anything to say about him, so why should I care about what you or anyone else says about me? Riddle me that.Report
We need an appropriate penalty flag .jpg to throw when this happens.
I just spent two minutes Google Imaging funny fish pictures (as in, “You Fished Up, Man!”), until I started feeling too self-conscious and silly.Report
Ah, with you Blaise it always comes back to this: “I’m older and wiser, and one day you will agree with me.”
One would think that if you really were older and wiser, you would be able to provide sufficient reasons rather than mere assertions, and in preference to the strawmanning you indulge in all across the last several paragraphs.Report
Sometimes knowledge is ineffable.
I do not say that sarcastically.Report
Eff knowledge.Report
And when you run out of argument, this is where you always go, to my shortcomings. There’s no shortage of them, it seems.
Face it, Jason, you know there’s more to life than consumer satisfaction. You asked, I answered. You didn’t like the answer you got. Tant pis.
You know what you remind me of? Old Minnie Pearl used to wear a hat with the price tag still attached.Report
Face it, Jason, you know there’s more to life than consumer satisfaction.
Of course there is. That’s why your yammering on about it is such a strawman. I’ve never disputed or disagreed with the assertion. To suggest that I have is insulting.
In the economy — which is not all of life — consumer satisfaction should come first. No amount of personal enlightenment should change that, either; even the Buddha firmly approved of caring for those who suffer. I just don’t think he really hit upon the right method of social organization to do it, that’s all.Report
In whose version of the economy? You’re already on record saying there are very obvious winners and very obvious losers — for no obvious reason. And this looks like the monkey cage.
The reasons are as obvious as a turd in a punchbowl. I am one of those Heroic Entrepreneurs, a man who pays his own subcontractors and employees a percentage of the gross, not as little as I can. For all your praise of these Entrepreneurs, you have never once stood in my shoes as an entrepreneur trying to get other people to believe in a business.
I pay my people more than three times what any other waiter makes in town and they’ve stayed with me for decades while other businesses have tried and failed to duplicate my success, without duplicating my motivational scheme. My people work hard because they feel they’re part of the business. Call it Socialism if you want, I also donate all the leftovers to a shelter for street children and some of those kids have come to work for me.
I swear, the best cure for the smugness and intellectual laziness of the Libertarians would be for them to run an actual business with actual employees. Drive out all those illusions in about three weeks.Report
You’re already on record saying there are very obvious winners and very obvious losers — for no obvious reason. And this looks like the monkey cage.
What I was referring to there was the fact that people who innovate don’t always innovate in obvious ways. Not everyone who makes life easier for the consumer is an Edison. That’s all.
The reasons are as obvious as a turd in a punchbowl. I am one of those Heroic Entrepreneurs, a man who pays his own subcontractors and employees a percentage of the gross, not as little as I can. For all your praise of these Entrepreneurs, you have never once stood in my shoes as an entrepreneur trying to get other people to believe in a business.
I pay my people more than three times what any other waiter makes in town and they’ve stayed with me for decades while other businesses have tried and failed to duplicate my success, without duplicating my motivational scheme.
Again, someone who drove by your business or casually observed it would not necessarily know this. Even competitors who learned about it might be skeptical that this particular innovation was the key. What’s obvious to you will not always be obvious to others.
Call it Socialism if you want, I also donate all the leftovers to a shelter for street children and some of those kids have come to work for me.
If that’s socialism, then I’m a socialist too.Report
Blaise – you seem to be attacking the money culture more than the system of classical liberalism.
Let’s say I argued that money is a good proxy for value, and we don’t really have anything better, so let’s just use that to keep score. He who dies with the most wins. Mitt Romney is a great guy who really has his values in order. You are doing great too it seems, except for the part where you piss away some precious on hungry, less fortunate people.
Then you could yell at me and I would think “yeah, I’m pretty dumb.”
But isn’t Jason, and like-minded folk, even if we’re half your age, saying that we think property rights and free exchange and all that actually help achieve the good stuff that you want for everyone? I’m not dismissing your call for transcendence, but maybe I’m questioning why in-that-transcendence you are bothered by Mitt Romney and others wanting to win big in the money culture? Is it because they pollute all of us via the culture? Or because they are intellectually inferior and therefore deserve scorn? Or just that the best perch from which to rain-on-the-money-culture is the Buddhist height nonpareil?
And last I checked with them, libertarians who start businesses grow MORE libertarian, kind of like an allergic response to all the godawful shit they have to deal with running a business. It’s not the “aha” moment you imagine it to be! (You should agree with this much … recall how confident they are … because, you know, they are right after all)Report
Out of all the posts and comments I’ve read from Jason, not once did I ever think Jason believes consumer satisfaction is all there is to this world. For someone to make this claim is incredible — it’s so out of left field, I don’t know how to explain it.Report
Profits are the voice of the people, Blaise. You need to pull out that copy of Mises and read it again.Report
Classical or bourgeois science depends on separation from context, a methodology quite often, in some sense always, fatal to the subject. Raised to the level of the defining morality and ethos of global civilization – as in the imagination of the vast majority of ordinary gentlepeople, including most of the self-styled “liberals” – this methodology becomes quite problematic. Where the idea has taken hold, conservatism is quite progressively re-defined and inverted: Instead of representing a principle of conservation, it becomes conservation of a principle of destruction. Modern or social liberalism, to the precise extent that it can be distinguished from its earlier incarnation, represents an attempt or set of attempts to restrain the universalization of bourgeois science for the benefit of living subjects, not because liberals hate success or envy the wealthy, and so on, but because social liberals – who in this respect include socialists, leftists, diverse anti-capitalists, and also traditional conservatives – are in favor of a decent society, a “context” worth living in, as inefficient as it needs to be.Report
I find that “context” to be the ultimate in luxury goods.Report
Yes, it seems you do, or at least your discourse does.Report
indeed, when he declines to play the game I was offering upthread, and instead responds as if refusing to play was doing anything other than radically misinterpreting what I was talking about.Report
CK,
Where did you learn to write this way? The word that comes to mind is “baroque.”
It seems you are saying that modern liberals are trying to push back the excesses of science and free enterprise to achieve a decent society. Is this a valid interpretation? What specific restraints are you in favor of?Report
Some “modern liberals” (I dislike that terminology since “modern” and “liberal” also refer to an entire era) are motivated by resistance to those “excesses” or reaction to their results, in favor of a decent society. As for the specific restraints I might favor, my answer would depend on “context.”
(It occurs to me that “You didn’t build that!” can also be understood as “There was a context!”)Report
“Where did you learn to write this way? ”
It weighs upon me as gobs of wet skin, some words dense as they may be, yet inviting in a way that asks the question “hast thou more than this?” One wonders in a chilled moment, the coolness of inquiry, prepared for the long hot day ahead, and there, there, I see the answer, stumbling as a drunkard come home to a waiting child.
So, as a liberal I seek the essence that excess has repressed. Contextually, that is.Report
Sounds like too much time reading 20th century continental philosophy. Heroin is less damaging.Report
Classical or bourgeois science
The people’s science has higher aspirations than mere testability/repeatability, if one looks at history. I suppose we should have higher aspirations than the mere reaching of conclusions based on outcomes when we examine the achievements of proletarian science.Report
Indeed.Report
When you talk about social liberals advocating a “decent society” which is as “inefficient as it needs to be,” a natural question is whether this is a desired outcome in society or a policy agenda. Seems more of a mission statement that a policy agenda to me. My view is that social liberals want a certain type of society and then advocate economic policy which utterly fails to achieve it. Not to be pithy, but witness Greece.
I don’t think that you should interpret classical liberals as making the mistake of wanting to maximize things like GDP/capita using an inhuman “bourgeois science” – it is easy to see arguments about economic efficiency as disrespecting human values and needs. I’m sure some such bad arguments have been made. But that criticism misunderstands the case for liberalism. The argument for liberalism rests on the notion that real living humans have individual wants and needs which are best understood and expressed by themselves, as opposed to defining and meeting those needs by having a policy expert design a “context worth living in” for them.Report
Yes.Report
BobbyC,
To condense two centuries of criticism into one sentence, what the ideologues of the free market seem to miss when they hold out their wonderfully productive system is that they are just another set of “policy experts” with prescriptive, irrationally rational designs – as much utopians as anyone else. Whatever actual answers will be worked out concretely, combinatorily, most likely provisionally. If history is any guide, the process will also be, or continue to be, quite violent and even catastrophic. Any prescriptive design, including the free market prescription, will be altered by contact with reality, and subject to equal and opposite reactions, among other laws of nature.Report
Ok – I have to recap because not sure we understand each other.
You said, “bourgeois science depends on separation from context” and “social liberals … are in favor of a decent society … as inefficient as it needs to be” which I understand to mean that classical liberals are making a mistake, which social liberals set out to fix this mistake for the benefit of people. There was that whole run-on sentence about how social liberalism was new in this restraint on misusing classical liberalism.
I said, you are misunderstanding the argument for classical liberalism, because you think that liberalism is ignoring context and people, but actually it attempts to address the real problems associated with pluralism.
You replied, basically, classical liberals are utopians, and like all ideologies it doesn’t capture the fullness and reality of human society.
Isn’t that a cop-out? You asserted a specific mistake with classical liberalism, to which I challenged by saying you misunderstand the argument being made. You replied that all ideologies are deficient. In particular, do you think that the ideology of social liberalism corrects a mistake in classical liberalism? How can you maintain that criticism when faced with the reality of heterogeneous human values and preferences?
I’m not saying that your criticism is unsophisticated – actually it reminds me of how John Gray moved away from classical liberalism – but I’m asking if it isn’t simply wrong (essentially allowing the insights of cultural relativism to frustrate the logical implications of pluralism).Report
BobbyC, I expect to be able to provide you with a reasonably concise reply sometime later today or perhaps tomorrow.Report
I expect to be able to provide you with a reasonably concise reply
For some values of “concise.” 😉Report
BobbyC (@ https://ordinary-times.com/blog/2012/07/capitalism-and-the-monkey-cage/#comment-312792 )
I do understand social liberalism as a response, beginning in the 19th century, to the perceived failure, insufficiency, or incompleteness of classical liberalism, and more specifically to the failure of the typical bourgeois liberal order of self-regulating free market, parliamentary democracy, and rule of law state – a.k.a., the System. Social liberalism identifies “society” as the repository of values, or needs and wants beyond valuation, that the liberal order had, at a minimum, proven unable to comprehend adequately. Phrases like “decent society” and “inefficient as it needs to be” were indeed intended as reminders, or you may take them as assertions, that the mode of production exists for us, not the other way around, that we don’t seek a “better market” or a “more productive economy,” or even “good government” or “democracy,” as ends in themselves.
I would not argue, however, that social liberalism actually does or can correct the liberal “mistake.” This would be in part, but only in part, because the System may be intrinsically anti-social, not merely inadequately socialized. There are many reasons why that might be so: Proposing the Market-based system as a solution to “heterogeneous human values and preferences,” for instance, already acknowledges a contradiction between the rationalizing processes of market economies and the irregularity (and “inefficiency”) of pre-existing social, economic, and political institutions. It also ignores market-limiting and market-vulnerable natural or ecological conditions. Even the phrase “individual wants and needs” seems to refer to particular early modern concepts of the human being (as fundamentally or initially asocial) that may not, along with the political orders they justify, bear up under philosophical and anthropological scrutiny. I’ll want and may need to know what these concepts leave out, and I’ll want and may need to understand the costs of overcommitment to them. These questions also prompted some of my earlier comments regarding bourgeois science and the suppression of context, which were motivated by the insistence, in my view, on that same “bad argument” whose prevalence you seem to discount (including in your own statements).
Further consideration of the System’s destructive and eventually self-destructive tendencies might take the form of an updating of Karl Polanyi’s thesis on the “stark utopia” of the “self-adjusting market”:
In short, for Polanyi, long before the market reaches its ideal end state – which might be seen as pure unimpeded “signaling” comprehending all needs and wants – human beings and the natural world rebel. Measures associated with liberalism and social democracy are one example of resistance or self-protection, but the rebellion takes many forms, creating a picture over time of multiple, somewhat overlapping, “combined and uneven” rebellions occurring across the political and physical landscape, with the potential to merge into a true systemic crisis akin to the collapse of the Eurocentric order from 1890 to 1945. In our own day we glimpse this possibility as “financial crisis,” “climate crisis,” “vulnerability of the global supply chain to disruption,” “mass destructive terror,” even “crisis of self-confidence and public institutions,” and so on, although I think the “stationary state” scenario, in which global capitalism, instead of dying suddenly by its own invisible hand, more or less fades away like a good cowboy, also has a lot going for it.
I wasn’t familiar with John Gray, but I’m intrigued and am putting him on my reading list.Report
Ok – I’m pretty sure that I understand you (even the part about how, given how Polanyi understands the liberal order, he concludes that it is self-defeating).
What I’m saying to you is this – you are objecting to a straw-man, not the actual ideology of liberalism. Your arguments are dispositive objections to a materialist worldview, and especially one which advocates a utopian conception of the free-market system on the basis of meeting material needs better than other systems. But liberalism need not be a materialist worldview – it is orthogonal to such considerations really. It is an argument for a particular form of social cooperation on the grounds that voluntary exchange comports with pluralism; it is NOT an argument that we can meet material needs really well by organizing ourselves that way. Do you see that point? I think you are attacking the latter concept, which is properly an argument about the efficacy of free-market capitalism to produce stuff, which is a misconception of the case for liberalism. It’s sort of an important distinction.
As for the notion that a utopian conception of a capitalism system would be self-defeating, it’s worth considering. I probably believe that of any utopian system. On the level of moral philosophy or political philosophy, ideologies can make big claims without being ridiculous. When we take a model or description of how society works and claim that it could actually work just that way in messy reality, well then we’ve entered the ridiculous. Not that I find being ridiculous so objectionable, but it will tend to get pointed out to you, as it seems to me Polanyi is doing to ideologically committed pure capitalists.Report
The “actual ideology of liberalism” according to whom?
Here’s how Leo Strauss defines liberalism at one point – though he doesn’t claim this definition as the only conceivable and appropriate one:
Here’s the Wikipedia definition:
The question concerning satisfaction of wants and needs had more to do with your justification of liberalism in your comment at https://ordinary-times.com/blog/2012/07/capitalism-and-the-monkey-cage/#comment-311965 – where you say that “the argument for liberalism rests on the notion that real living humans have individual wants and needs which are best understood and expressed by themselves.” Since the statement came in the immediate context of economics – including a mention of Greece and the notion you rejected of a “policy expert” designing a better system to meet those wants and needs, the implication was material satisfaction of material wants and needs. By the time you get to “voluntary exchange” in your comment immediately above this one, it seems clear you’re talking about material goods again. In short, I’m not really sure why you’re introducing the question of “materialism” here.
Now, like pluralism, voluntary exchange – the two elements whose mutual comportment you identify with liberalism as “form of social cooperation”- would seem to be a necessary implication of protection of rights. Human beings, given liberty, will tend to adopt or pursue divergent and heterogeneous aims and ideals, meaning that of liberalism, short of harmonic convergence of apocalypse, must entail tolerance of a plurality of views and belief systems. There are some problems with this perspective, but we can perhaps set them aside for now.
As far as economic rights are concerned, most libertarian and conservative commenters at the League, and probably even most of the self-styled left or center-left ones, seem to interpret the primacy of freedom as necessarily implying free exchange in markets, alongside some disagreement about the point at which economic rights may conflict with other rights. Whether you consider “universal human rights” initially from a political or from an economic perspective, the free market remains a realistically necessary implication or consequence of them: People have material needs and wants, and will seek to satisfy them via exchange, thus creating an at least initially free market. Put differently, once the old order is deposed, and as long as the temptation to indulge in social-political is avoided, the free market will arise and flourish.
As for Polanyi, he devotes substantial attention to the free market, and was particularly concerned with a tendency for the liberal order to subordinate society to economy – or, as he put it, to “embed” society within the market rather than the reverse. He was was at the same time very interested in other key elements of the liberal order as they arose historically during the 19th Century, especially the gold standard and free trade. In other words, he eventually settles on an historical or concrete rather than a formal definition of liberalism – more Wikipedia 2 than Wikipedia 1 or Strauss, though he clearly understands the market as a system rather than, say, as a simple social and economic setting. He was writing during World War II, so could only anticipate rather than explain the order that eventually emerged.Report
First, when I say the “actual ideology of liberalism” I don’t mean some private definition – the Strauss definition is reasonable enough (and the Wikipedia one is probably unacceptable to everyone!). By liberalism I mean classical liberalism. The objection that I raised was that liberalism is not a set of ideas which asserts that life is to be equated with material life. I see your objection to classical liberalism as attacking that other notion, which I called materialism (and I mean economic materialism, like Madonna’s “I’m a material girl living in a material world” not Marx’s dialectic materialism or some metaphysical claim!).
Getting on with the discussion – It matters whether classical liberalism is guilty of forgetting about people and their non-material needs. I don’t think that it does. I like material things, but I also need and want immaterial things like expressing myself and knowing that I get to make my own choices. I am not living under some delusion that I invented myself and live outside of history and context, but I do take responsibility for myself and I want that responsibility. In the real world, liberalism and the policy proposals of classical liberals need to be held to the standard of whether they work for people. I think we agree there. But in the realm of ideas, we can ask whether classical liberalism is flawed, and in particular whether social liberalism corrects it in some way. And it matters if people who are willing to consider such ideas still think that classical liberalism is foremost concerned with meeting material needs, when it is in fact put forth as a way to organize society to meet the full range of human needs, material and non-material, individual and collective. It seems to me that social liberalism, seen as a criticism of the aims of classical liberalism, misses the point and is ignorant of how the case for liberalism rests on pluralism and the respect for individual liberty.
I find the historical accounts of where liberal ideas originated, as well as accounts of early capitalism, informative. They do not speak directly to the logical and philosophical issues, but they suggest understanding these ideologies as ways that humans reacted to, sought to understand, and to shape their world.Report
BobbyC, you seem to making the broadest conceivable claim for “classical liberalism” – that it’s “a way to organize society to meet the full range of human needs, material and non-material, individual and collective.” You seem to be further asserting that it not only is “put forth” in this manner, but that it can be taken to be comprehensively successful. I don’t agree that liberalism – classical, social, neo-, or other – succeeds in the former, which means I can’t believe the latter either, though that doesn’t foreclose adoption of a “good enough” or “least bad” practical position on it. I can even see an argument for social liberalism, or possibly social democracy, as best for me or for people like me without necessarily equating it with the best possible political order in general or for all times and places, and also without maintaining perfect confidence in its prospects.
Anyway, there is, to say the least, an extensive literature critiquing liberalism on both scores – ideally and practically – beginning, for example, with the claim that it excludes important, possibly the most important, “human needs,” the ones that must be addressed prior to the establishment of any liberal order or even of a liberal discourse; that alone provide any given liberal order with its substance or content; and that, in the extreme case, can overwhelm liberalism and may also survive its failure. There are also diverse phenomenological, ontological, post-“ontological,” etc., critiques of the liberal conceptions of the self , the will, though not every author aims for a complete, immediate, and final overthrow of liberalism.
Don’t really expect to do more than scratch the surface in a near-dead comment thread, and we’d have to start all over and reserve plenty of time to attempt a discussion from first principles. For now, I’ll refer you to the critique of liberalism from a self-consciously philosophical perspective (yet with careful attention to contemporary American and global contexts) by Paul W Kahn at Yale, which he has developed in a series of books over the last ten years or so. The one most clearly on-topic for our discussion would appear to be PUTTING LIBERALISM IN ITS PLACE: I’ve read only its introduction – which you can download for free – but it seems to address many of the same themes explored in his more recent books SACRED VIOLENCE and POLITICAL THEOLOGY (good intro here: http://rorotoko.com/interview/20110425_kahn_paul_political_theology_four_new_chapters_concept_sovereignty/?page=1 ), both of which I read with great interest and have found quite useful.Report
You know, it is possible to overcontextualise or over-historicise things. Not everything is a historical problem. When we ask ourselves whether there is any right way of doing things, or any proper arrangement of social institutions, we don’t always have to refer to some specific tradition our thought springs from, etc. Looking at the literature is useful to get an overview of the theoretical problems that one faces. It is nevertheless possible to over do it. Not all attempts to deal with a particular issue need to be dealt with. Consider the issue of trying to identify fundamental moral principles. Strictly speaking, we do not need to refer to any other philosopher to identify the correct moral principles. The arguments that establish said principles succeed or fail in their own right. Their success does not depend on what has gone before. So, when asking whether neoliberalism or libertarianism is just, all we have to do is identify the principles of justice and determine whether libertarian institutions best instantiate those principles. when it comes to determining the principles of justice, we either have a sound argument (logical validity + true premises) or we don’t.Report
I don’t know what you’re saying here. No intellectual proposal exists in a vacuum. That’s not how things work. Evaluating a contemporary proposal against it’s predecessors is not only fair game, but necessary to determine in what ways the new proposal actually constitutes an improvement on previous ones.
I mean, sure, someone – even a monkey on a typewriter! – might write down the complete list of all true sentences in the English language. But we’d still want a method of determining which particular monkey actually did it.Report
But we’d still want a method of determining which particular monkey actually did it.
Why? It’s not like the critter’s likely to repeat the feat. 😉Report
True enough, but we could honor his effort by giving him something. A cucumber or a grape. Or tax cuts.Report
Careful, you’ll make the other monkeys jealous and they won’t work anymore.Report
That’s why we have to convince them that effort doesn’t matter. It’s only the successful monkeys who can justify their deserts.Report
No intellectual proposal exists in a vacuum.
Some exist in a vacuum to a greater degree than others (even if not completely so).
Stillwater, how many times in the many arguments that we have had about political theory have either of us invoked the historical context of the debates surrounding the question? (At least in the way that CK Macleod seems to want us to do so. There might be some trivial ways in which we introduce the topic by starting with he said she said, but as mentioned, they are trivial)
But we’d still want a method of determining which particular monkey actually did it
But we don’t need to know which monkey did it in order to find out if what was typed is in fact true. Unless I’m mistaken, either CK Macleod thinks that all political questions are of the which monkey did it or why did the monkey do it or how did the monkey manage to get it right type in which case historical context matters, or he thinks that historical context matters even in questions like: is there anything that is objectively good? Which of the things in the world are objectively good? What does this imply for us? Which societies do a good job of instantiating the good?
Evaluating a contemporary proposal against it’s predecessors is not only fair game, but necessary to determine in what ways the new proposal actually constitutes an improvement on previous ones.
That’s different I think from what CKM is proposing. When he says that defenders of neoliberalism are being ahistorical or are ignoring context, he is saying something different from the comparatively trivial point that we should evaluate a contemporary proposal against its predecessors (what else would we evaluate it against?). I can even grok the idea that when comparing current systems with the past, we should be careful to separate the effects of better technology from the effects of different social and political institutions. But since he hasn’t really tried to justify the assertions, I cannot pinpoint with any kind of accuracy exactly what claims he is making and whether his assertion has any merit at all.Report
Don’t have the time to respond in detail right now, Murali, but you appear to me to be interpreting the word “context” rather literally. My original comment on this sub-thread was a response to BlaiseP, who was using the term loosely, in the sense of environment or circumstances, as in “social context.” I placed the word or variations in quotation marks, in order to emphasize that we were talking about something larger. There is a philosophical school devoted, to put things crudely, to the “textuality” of existence, but I don’t want to get caught up in that manner of thinking. This difference in our orientations should recall for you the discussion we were having the other day over two different definitions of “neoliberalism.” The historical “context” matters, but in the sense of its having shaped and being alive within and as the actual and concrete circumstances of the present day, not, say, as storehouse of past ideas and terminated processes.Report
The historical “context” matters, but in the sense of its having shaped and being alive within and as the actual and concrete circumstances of the present day
I get that the sense in which you speak of historical context. (I think) I just think that the set of questions for which it matters is a much narrower set than you do. Let’s say that it is the case that the historical context has shaped ad is alive within the actual an concret circumstances of the present day. Why should I care about this fact? i.e. why can’t I ignore it? What’s so bad about being ahistorical in this sense?Report
Murali,
I’ve re-read the thread and I really don’t know what the hell the subject is. So I have to retract my earlier comment due complete confusion.
I do agree with what you wrote here, and just above, tho. Which leads me to believe I got things wrong earlier.Report
Your questions could be answered philosophically, but the answer would likely run several hundred pages, probably be in German, and would remain open to interminable re-considerations and refinements. “The true shape in which truth exists can only be the scientific system of such truth.” It could be answered prudentially – observations as to why it would be wise for you to pay attention to real processes and events that will completely overwhelm you and your intentions, because they constituted both you and them in the first place. I might then make reference again to our prior discussion on neoliberalism and the global system.
Maintaining a focus on the language we’re employing – in the context of these actual exchanges – I would say that, speaking of “history” in the full sense, as that which has shaped and is alive within and as the actual and concrete circumstances of present actions, it could not be either bad or good to “be ahistorical,” because “to be” would mean “to be historically,” just as “to mean” would mean “to mean historically,” to enter history or become or realize history. The words “bad,” “good,” “should,” “care,” and even “I” would obtain whatever content from history alone – from and as against whatever context. In other words, your only reason to become conscious of your expressions and actions as articulations within historical context would rest on whatever desire you recognize, or intention you pursue, for your statements or actions to be of any interest to anyone else.
Is speech without an intention to be understood actually speech or is it just noise? Is action without effect actually action? Understanding and effect are both properties of and inherently establishment of context, and every context is also as an object of thought knowable only as within a next higher or larger context up to the absolute context or context of the absolute whose articulation within time is another definition of “history.”Report
for your convenience, Murali, prior comment responds to your comment at https://ordinary-times.com/blog/2012/07/capitalism-and-the-monkey-cage/#comment-313004Report
“…it would be wise for you to pay attention to real processes and events that will completely overwhelm you and your intentions, because they constituted both you and them in the first place. ”
Awesome line! This line says more on the nature of self and will than most full books on the subject.Report
Let’s say that the historical context has shaped not only the circumstances within which you find yourself, but also the way you perceive them. Let’s further say that you aren’t particularly happy with your current circumstances, but given how you perceive them, you don’t see a clear way out of them (or a clear way to alter them for the better). Do you think understanding the historical context might help you in this case?Report
If understanding historical context informs the beliefs shaped by historical context, then historical context is not the determiner of beliefs.
If the sentence “Understanding historical context will inform your beliefs” is true, it is not made true (???) by historical context.Report
Stillwater, it is not the only determiner, but nothing you say rules out it being a major one.Report
Excellent post Jason.
(I also find the quotation from Hume interesting, and helpful in fleshing out your conception of natural law and natural rights.)Report
Oh good, an invitation to talk about Hume.
Hume’s quote is often taken as part of his fatal case against natural rights, understood as grounded in man’s nature.
I would view his claims as necessarily resting on some basic, universal facts about mankind, including “people act according to incentives” and “human actions proceed according to plans that are developed in the mind.”
Nothing terribly metaphysical, in other words. Possibly nothing that Hume himself would have termed a part of natural law tradition at all.Report
Just say this.
Yes I agree. I think a reductionist account like Hume’s is actually quiet amenable to natural law views. Not the robust, a priori stuff he’s rejecting, of course. But a minimalist account of them: that ultimately rights and conventions are justified insofar as they serve the interests of beings like us. They’re contingent, yet necessarily follow from (contingent) natural properties.
I’ll agree with that. {I reject that they’re a priori derivable tho… 🙂 }Report
Oh, agree about everything, except for the a posteriori derivation. Things like “people respond to incentives” and “people are rational animals” — the last understood as having the capacity to be rational — are almost impossible to falsify. Hume’s requires these things and almost nothing else.
The same is true of Austrian economics, which is where I got the idea, but that’s yet another can of worms.Report
It strikes me that a great deal of the discussion about Capitalism degrades into a different Book of the Prosperity Gospel. Call it the Book of Adam
Book 1.
1:1 “The Market determines Value”
1:2 “Value begets Wages”
1:3 “Wages beget Wealth”
1:4 “Wealth begets Investment”
1:5 “Investment begets Innovation”
1:6 “Innovation begets Value”
1:7 “And thus is the Circle of Wealth complete”
By this model, anyone who has Wealth implicitly deserves it and should be lauded for their acumen in acquiring it.
I don’t like it when it has God allocating Wealth any more than when the Market is doing it. Because I believe in the minions of opposition, whether they be Demons or Oligarchs and Petty Tyrants.Report