Thursday, April 16, 2009

Taking political philosophy back from the economists

Former Harvard philosophy undergrad and current superstar political blogger Matthew Yglesias had a nice response to the post below:
I think that the questions that political philosophers have taken to debating professionally in recent decades have a limited relevance to contemporary politics. But I think a number of fairly abstract misguided ideas in ethics, political philosophy, and economics have come to have extraordinary cultural and political power in the United States and to a lesser extent elsewhere in the English speaking world, all to incredibly pernicious effect. What’s more, though most of these ideas are propounded, originally, by people whose degrees are in economics most of them are really ideas of a philosophical character.

Which ideas?

Well I’d say one important set of ideas is the perverse notion that it’s wrong or inappropriate to subject people to moral criticism for making selfish decisions as long as the decisions don’t involve breaking the law...

...Another example is that, as Brad DeLong pointed out yesterday, economists’ protestations that they’re doing value-free social science actually embeds an implicit idea that “that shifts in distribution are of no account–which can be true only if the social welfare function gives everybody a weight inversely proportional to their marginal utility of wealth.” In other words, under guise of eschewing values, economics has adopted a philosophical value system which says that the well-being of rich people is more important than the well-being of poor people. Nobody ever says “social welfare function” when engaging in practical political debate, but the idea that not caring about distribution constitutes some kind of neutral middle ground is an important underlying premise of much practical political debate, and its viability stems from the fact that everyone remembers being taught that this is true in their Economics 101 courses.
The take-home message for you and me is that economists have managed to convince people of indefensible views on normative topics such as what it's rational for individuals to do, what's an appropriate object of moral criticism, and what would be a good distribution of resources. I don't know how many of them would, when pressed, defend these sorts of claims -- their discipline isn't supposed to be one that makes normative claims.

Saying you're not making any normative claims is, of course, a good way of getting people to accept the normative claims you make. A lot more in this sort of thing depends on the sorts of emotions that get communicated as people talk about stuff and the loaded words you use. Pareto optimality, for example, has 'optimality' built into it, and who doesn't like optimality? Of course, as Rawls tells us, a distribution where one person owns all tradable goods and services while nobody else has anything is Pareto optimal.

In any event, this is the kind of thing we ought to be concerned about, both as citizens and as philosophers. While ideas from other parts of academia can't get out to the public, economists are convincing people of ridiculous theses in moral and political philosophy that their research doesn't even support. (It probably helps that widespread social acceptance of these theses is favorable to the interests of very wealthy people.) I'm not really sure what we can do about the spread of bad political philosophy through economics 101, but there's got to be something.

14 comments:

Brock said...

"that shifts in distribution are of no account–which can be true only if the social welfare function gives everybody a weight inversely proportional to their marginal utility of wealth."

I know it's Delong's sentence and not yours, Neil, but can you explain this sentence?

Brock said...

their discipline isn't supposed to be one that makes normative claims.When I was in grad school (University of Rochester), I ended up sitting through part an early-term Econ 101 lecture for some reason. (I think the philosophy class I was TAing was right after it, and I showed up early for some reason.)

The lecturer actually defined "economics" as "the science that answers normative questions".

Needless to say, as a philosophy student I found that risible.

Neil Sinhababu said...

Suppose you weight each person's welfare equally, as you should. Then you're going to say that some shifts in distribution make things better. Take $10,000 from a millionaire and give it to a poor person, and the poor person is way better off while the millionaire only has a minor decrease in personal well-being. Things are better.

How do you set it up so that this shift in distribution doesn't make things any better? Well, if you consider the welfare of the millionaire to be colossally more valuable than the welfare of the poor person. Maybe you'd see things this way if the millionaire was your friend. But as a way of running social policy, this is a position that's either crazy or evil.

Setting aside good folk like Brad Delong, we might do well to define economics as the science that answers normative questions incorrectly. Scary anecdote, btw.

Matt said...

As someone working more along the lines of behavioral science, I'm concerned with the way economists have insinuated the assumption of perfect information (and zero value of time) into debates about the proper role of the regulatory state and the obligations of consumers.

The problem seems most acute within the Law and Economics academic/judicial/political complex, members of which typically combine theories of perfect information with Pareto optimality to produce a perfect blizzard of fantasy jurisprudence.

Jim said...

But as a way of running social policy, this is a position that's either crazy or evil.

It's not necessarily crazy or evil. We'll call the rich person 'Ant' and the the poor person 'Grasshopper'. We can see then that your wealth transfer is nothing more than a reward to idleness and over the longer term brings a society more harm than good. That seems hardly crazy or evil.

Certainly the fable of the Grasshopper and the Ant is an oversimplification, and not fully applicable. It may only be true in a small part. At the same time, it is the sign of a lazy mind to casually dismiss a viewpoint held by many as 'crazy or evil'.

WWasse said...

The emphasis on "acting on the margin" always struck me as a crude version of act utilitarianism-- with preference maximization at the margin really a minor variation on hedonistic act utilitarianism. Reducing "reason" to this is a dangerous and pernicious suggestion. Simply ignoring everyone from Bishop Butler to Max Weber to Bernard Williams.

dkearns72 said...

Secular thinkers-- like economists-- just convinced everybody that they were neutral compared to religious thinkers. Until we reject the notion that there are ANY neutral, "non-religious" worldviews, the economists will continue to win with arguments they claim are based in science and nature rather than so-called "religion."

Anonymous said...

We'll call the rich person 'Ant' and the the poor person 'Grasshopper'.

No, no, no there any number of other candidates for the rich and the poor - we could call the rich
a) "Halliburton who got rich through feeding off the taxpayer siphoning off war contracts against shoddy performance",
b) "the 200 million-dollar CEOs of AIG, Lehman Bros other wall street superheroes
c) the Enron con-artistes
d) the Arthur Anderson (remember them) auditors

and the poor, the regular folk, your children's teachers, your firefighters, nurses, lawn mower guys, plumbers who live their subsistence salaries and live by the rules.

Your Ant and Grasshopper and Ayn Rand fables are the myths of capitalism - spun to keep the common man starry-eyed and uncynical while the crooks are picking their pockets.

Anonymous said...

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/01/BAN017TOP0.DTL

Are these the "poor" firefighters to which you are referring? Whatever happenned to a fair days wage for a fair days work.

Anonymous said...

Are these the "poor" firefighters to which you are referring? Whatever happenned to a fair days wage for a fair days work.

No these were the ones I was talking of - http://seattletimes.nwsource.com/html/localnews/2008076982_firechief28m.html

Every profession has its CEO-layers who take an undeserved multiple of what the actual workers make - I was talking of the ones who live on subsistence salaries and sometimes land up giving their lives for your million dollar homes -

Anonymous said...

Neil S. said

Suppose you weight each person's welfare equally, as you should. Then you're going to say that some shifts in distribution make things better. Take $10,000 from a millionaire and give it to a poor person, and the poor person is way better off while the millionaire only has a minor decrease in personal well-being. Things are better.

no,no. You can't ignore the "why" the rich are rich and the poor are poor. that $10k given to the poor man will be spent and at the end of the day he will be back in the same position. whereas, the same money in the hands of a rich man may well be invested in ways which will create a job for the poor man.

"Give a man a fish and you feed him for a day; teach him how to fish and you feed him for a lifetime."

Cougian said...

But why is "investment" better than consumption? Explain why the $10,000 the rich man invests in a failed tech company or hedge fund is inherently better than that same $10,000 spent at Wal-mart. At the end of the day, they are both counted toward GDP equally, and I would argue that the velocity of the $10,000 would be much greater at the bottom of the economic pyramid than the top.

w said...

There are never enough rich to win an election in a democracy with free elections, but the Republicans in the US have mastered the art of conning the little guys to vote for them.

Wikipedia:
"Trickle-down economics" and "trickle-down theory" are terms of political rhetoric that refer to the policy of providing tax cuts or other benefits to businesses and rich individuals in the belief that this will indirectly benefit the broad population.[1] The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."[2]

Proponents of these policies claim that if the top income earners invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals.[citation needed] Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that "trickle-down" policies generally do not work,[3] and that the trickle-down effect might be very slim.[4]

Today "trickle-down economics" is most closely identified with the economic policies known as Reaganomics or supply-side economics. Originally, there was a great deal of support for tax reform; there was a dual problem that loopholes and tax shelters create a bureaucracy (private sector and public sector) and that relevant taxes are thus evaded. During Reagan's presidency, the Democratic controlled House, which, according to the Constitution, is responsible for introducing all bills related to taxation, cut the marginal tax rate on the highest-income tax bracket from 70% to 28%. [5][6]

A major feature of these policies was the reduction of tax rates on capital gains, corporate income, and higher individual incomes, along with the reduction or elimination of various excise taxes. David Stockman, who as Reagan's budget director championed these cuts but then became skeptical of them, told journalist William Greider that the term "supply-side economics" was used to promote a trickle-down idea.[7]
“ It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory. [8] - David Stockman, Ronald Reagan's budget director

Sam said...

I agree with the statement: While ideas from other parts of academia can't get out to the public, economists are convincing people of ridiculous theses in moral and political philosophy that their research doesn't even support.
Philosophy research paper