Economics and Social Context

I don’t have any economics degree, and I’m not competent to discuss advanced econometrics and the like, but I am quite interested in the philosophy behind different approaches to economics. This I feel somewhat competent to discuss, since, after all, economics is a social science and has certain things in common with other social sciences.

The main thing one needs to remind oneself of is that the the economy is a result of human preferences and choices. Thus, an economist should, presumably, be aware of the context in which such preferences are formed and choices are made. Where economists tend to go wrong is in assuming a more or less rigid, or static, set of preferences. This is not surprising, however, if one has the goal of reaching the kind of scientific rigor that a mathematical model can provide. On the other hand, there are a few economists who try to reach “axiomatic” certainty in economists by basically assuming nothing about human behavior, save that it is always goal-directed, purposeful, or the like.

The problem with the first view is that it only gives valid results as long as the original assumptions hold. In some unfortunate cases the economist might simply make assumptions about how he or she would like people to behave, and if people don’t actually behave as the resulting model would suggest, it is up to the politicians to devise institutions that make sure people change their behavior.

The problem with the second, or “axiomatic”, view is that it covers all possible behavior. In other words, no matter which situation (or economic policy) we observe, it will always be in line with the stipulated economic “laws”. And when there are no possible cases which might in principle falsify the theory, the theory seems to be of little value. A parallell example would be a theory that says that people always act selfishly, even if they give all their money to charity or donate their organs to strangers. They were selfish because these acts gave them the satisfaction of having helped people. In other words, everything we do is a result of our preferences, and since our preferences are by definition our own (and no one else’s), we always act selfishly no matter what we do.

It seems, then, that an interesting conception of economics must steer its way between these pitfalls. It has make some assumptions about human behavior, but be aware that such assumptions are limited to a particular social context. One might, for instance, claim that raising the minimum wage would increase unemployment. And it might be true, in a particular context. It would depend, for instance, on what kind of profits entrepreneurs expect – we might call that “level of greed”. Keeping the level of greed constant, it might be true that they would refuse to hire people who they perceive to have a lower “marginal productivity” than the raised minimum wage warrants. In another context, they might be willing to modify their level of greed for some other sake. The minimum wage might, for instance, be raised in a time of war, and patriotic feelings might induce entrepreneurs to lose some profit in order to give jobs to people who have volunteered to fight for the country.

A starker example of the importance of context could be an economist working in a thoroughly racist or misogynist context and simply assume that this is the way people are going to continue to behave. This might be relatively innocuous as an armchair activity. But economics is seldom an armchair activity. It influences politicians. And if the politicians are led to believe that economic models recommend certain institutions in line with people’s racist or misogynist behavior, we are not really talking about an economic science anymore, but about an ideology disguised as science.

In summary, economists (like other social scientists) must be open to the fact that preferences change, depending on the social context. But on the other hand, a theory which claims that preferences are infinitely malleable might – if true, which is implausible – be irrelevant to pressing political concerns (i.e., too utopian). A practical way of achieving balanced economics might, for example, be to provide for a few alternative scenarios in their models, in which preferences are changed in different directions, for instance, towards more or less altruism.

Why I’m not a Libertarian

There seems to be this idea among libertarians that their philosophy is plainly right, if you only listen to the arguments, and that it’s the only consistent political philosophy out there. And this somewhat self-righteous stance is fuelled by the fact that many non-libertarians do a poor job arguing against it. But to me, it is not hard to argue against it. The main thing is to focus on the fundamental idea behind libertarianism, namely the “non-aggression principle” (thus, adherence to this principle is how I define libertarianism in this post).

The non-aggression principle simply states that any initiation of physical harm against people or their property is immoral. Obviously you cannot punch or rape anyone, but you cannot tax them either, or tell them how they should use their bodies or their property, for instance by stopping them from taking drugs or hiring someone at wages of their choosing . This means, by extension, that the state is immoral, be it democratic or not. (By this, it is implied that I am in reality talking about the kind of libertarianism that is often called “anarcho-capitalism”.)

So how does one refute this in the most effective way? Well, the acceptance of the non-aggression principle hinges on the proof for it. As far as I know this is usually done in two ways. One is simply to rely on intuition. We all have the intuition that robbing, killing and raping is wrong – the argument goes – so if we just apply this intuition consistently we arrive at the libertarian position. In other words, if we all believe that it’s always wrong to rob, kill or rape, it must also always be wrong for the representatives of a state to do these things.

The problem with this argument is that it’s simply wrong. Most people do not have the intuition that it’s always wrong to rob, kill or rape. Many think that there are extraordinary circumstances where it would not be immoral to kill one person to save many others, or (which is probably somewhat less extraordinary) where it is not immoral to steal to help other people. In principle one may also think that it could be moral to rape as well, but I admit that it would be hard to find realistic examples of this.

Of course, the libertarian could retort that even if there are some who do not have the libertarian intuition, at least most people have them, which is good enough. But that would simply make morality a majority-rule situation, which I’m sure most libertarians would reject, just like they reject that a law could be moral just because it is supported by a majority.

The second way of arguing for the non-aggression principle is more cunning. It does not simply invoke moral intuitions, but attempts to prove “rationally” that the principle is correct. An argument of this kind might be hard to refute for a philosophical layperson, since it involves some advanced logic and metaethics. Since I cannot delve into these matters here I will simply state why reject libertarianism on such grounds. In short, I am a proponent of metaethical non-cognitivism, which means that I don’t think any moral position can be proven to be right or wrong (i.e., to be “true” or “false”) – not even the utilitarian doctrine which I myself support.

In conclusion, there are three ways in which a libertarian could convert me to her position. (1) She could make me realize that I actually share its intuitive grounds. This is rather unlikely to happen, since moral intuitions are probably hard to change. (2) She could prove by logical reasoning that libertarianism is the correct position. This is also unlikely to happen, at least in my case, since I have studied a great deal of metaethics; so my non-cognitivist position would be hard to shake. But also keep in mind that it would not be enough simply to prove that cognitivism is correct (which is hard enough); it would also be necessary to prove that libertarianism is the “objectively” right position, and not one of its competitors. Lastly, (3) she could prove that even though I do not share the non-aggression principle, utilitarianism itself points to the fact that acting on the basis of it would maximize pleasure. This would be the most promising way for a libertarian to convert me; but I don’t think I have ever seen a libertarian make that argument (although there are libertarians who, albeit unsuccessfully, build their argument on preference utilitarianism).


What Can We Learn from Conservatives?

You might think that a professed leftist might have little to learn from conservative thinking. But the fact is that one can learn a lot from some conservative authors. Recently I have been reading books by Robert Nisbet (1913-1996) and Irving Babbitt (1865-1933). They both have interesting things to say about modern life, and they raise problems about loss of community and alienation that cannot be dismissed easily.

Nisbet laments the loss of established small-scale communities, like families, parishes or guilds, i.e., collective entities which took care of important practical matters for their members, but which also provided hierarchy and authority (although not of an oppressive kind). Babbitt’s main complaints about modern life appears more “intellectual”: in the face of lost “standards” (provided by moral authorities), people have lost all sense of restraint and lost themselves to superficial consumption while things like good journalism and art disappear from their radar.

I think complaints like these are worth taking seriously. Community and fellowship are, no doubt, important to human beings, and there are certainly aspects of modern life which make these things harder to achieve. And there is certainly a danger in a culture which becomes more and more superficial every day. Babbitt is correct in thinking that we need to nurture a “higher self”, and that we need to think about how politics can contribute to this.

Conservative solutions to these problems are, however, more problematic. Nisbet seems to think that small-scale communities need to regain some of the practical functions they have lost, which means that the state must withdraw from those functions. Babbitt puts his hopes in democratic leadership of higher quality, for instance, a Supreme Court with people of high moral stature.

I think these solutions are at best naive and illusory. There are reasons why certain old ways of life disappeared, and it is futile to think that their positive aspects can be revived without also reviving their negative aspects. And since the negative aspects, like stifling social control and censorship, are potentially more dangerous (than the negative aspects of modern life), this is a wager we should not engage in.

But I think we must do something to increase a sense of fellowship and community. Just continuing to live in a consumerist capitalist society under liberal-democratic (or semi-democratic) rule won’t do the trick. I think one way forward would be a more deliberative and participatory democracy. We must retain some faith in the idea that we can all meet in civil discourse, and that a few hours of political discussion with people from the neighborhood could be worth more to us than the things we usually spend our time doing. The main problem is how to induce more people to see the beauty of that idea.

Only a Democratic Revolution Can Save Us

There are many problems in the world to day, which seem to get worse. There are, of course, the environmental problems that relatively few care about sincerely. But there are also large economic inequalities that by themselves are unjust, but that also contribute to a general feeling of increasing insecurity in the face of the sorts of criminal activities that poverty often engenders. Solutions to this sort of insecurity is to a large degree sought in right wing populism, which depicts immigration as the only significant problem in society.

Meanwhile, many people retreat into their private lives, seeking satisfaction in consumption rather than in community. That is probably why people seem to prefer tax cuts instead of increased investment in the public sector (which is sorely needed). Especially the middle class seem to think that private (but publicly funded) alternatives when it comes to education and healthcare are preferable to institutions where people of different classes and backgrounds can interact. More and more, the people who manage to escape the worst consequences of modern neoliberalism attempt to insulate themselves from the “dirtier” aspects of society.

All this makes it easy to become pessimistic about the future. There does not seem to be any awareness anymore that solving common problems requires effort and some sacrifices. These efforts and sacrifices may seem burdensome in the short run, but they pay off in the long run. The Welfare State, for instance, does not perpetuate itself automatically. It takes a certain degree of commitment to sustain it. The same could be said for other achievements of “civilization”: science, the arts, etc. If there is no realization that these are common achievements, reached by interaction and a sense of a shared human condition – not by isolated individuals or families pursuing their consumerist interests – then these things can be lost.

If one is to turn the pessimism into optimism, one has to realize that there are no simple solutions to these problems. If it is a revolution we need, it is not a revolution with any specific content. Wo don’t need elaborate utopias. What we need, first and foremost, is a democratic revolution. We need increased participation and more arenas for public deliberation. In short, we need to come together and discuss our problems, instead of retreating to our own private spheres and hope that experts will take care of things. This may require some extra effort from all citizens; but we need to makes this effort, or else we are doomed.

Gun Ownership and Utilitarian Fascism

I just read a (relatively) recent article about gun control, which gave me reason to briefly discuss a couple of common misconceptions about utilitarianism. The author in this case claims that the issue of gun control can’t be decided by utilitarian reasoning alone, but rights-based thinking must be involved as well.

The main misconception I’m thinking of here is that according to utilitarianism, “[a]ny right can be infringed upon if its consequences are sufficiently positive”. This is, says the author, “[n]ot a cool train of thought to go down; I would say utilitarianism has certain fascist tendencies, that we should avoid at all costs”.

However, if we assume that utilitarianism should be realized in a democratic context (which I think we ought to assume), there are certain rights that cannot be infringed, regardless of the utilitarian results. Certain rights are simply necessary for a democratic system to function: rights to free speech, right to peaceful assembly, etc., but also the rights implied in the Rule of Law (no retroactive sentencing, no punishment for unavoidable actions, and so forth). In a democratic utilitarian state you do have rights.

But of course, even if you have some basic rights, it is surely the case that sometimes your interests will be sacrificed in the interests of the many. Or as our author puts it: “the happiness of the few can be sacrificed for the happiness of the many”. Rights-based thinking, on the other hand, “doesn’t run in to this problem”.

Except that it does – and perhaps in a more serious way. For isn’t it the case that if utilitarianism potentially sacrifices the happiness of the few, rights-based thinking potentially sacrifices the happiness of the many? If it would maximize happiness to ban gun ownership, the happiness of the gun owning minority might be lowered (although I think it wouldn’t be lowered much in the long run). But if we were to refrain from doing that for their sake, the happiness of the (vast) majority will be lowered. Hence, the happiness of the many are sacrificed for the happiness of the few. Is that really better than sacrificing the happiness of the few for the happiness of the many? Isn’t the rights-based option more “fascist” than the utilitarian option?

So, to argue for gun ownership with the aid of rights, one should be able to demonstrate that gun ownership is a necessary democratic right. In that case we wouldn’t be warranted in outlawing it (at least as long as we regard democracy as the only legitimate form of rule). But there are many (more or less) democratic states that seem to function well without a general right to own guns, so such an argument does not seem convincing.

Defending the Enlightenment

“The Enlightenment” has received a lot of criticism through the years. Sometimes it is critique from the left, as when feminists accuse the Enlightenment of being inherently misogynist or when critical theorists accuse it of being antithetical to human nature through its technocratic/instrumental ways of relating to the world. Sometimes it is critique from the right, like when it is claimed by conservatives that the Enlightenment undermined organized religon and traditional hierarchies, or when (“classical”) liberals claim that it leads directly to totalitarian attempts to create “perfect” people (mainly by discarding the millions of non-perfect people).

I think, however, that most of those critiques are misdirected. As I discuss in my new (Swedish) book, Upplysning, etik och feminism, it is hard to see how at least the left-wing and liberal critiques can be construed at hitting the correct target (there might be some truth in the conservative claim that the Enlightenment undermines some forms of religion and traditional ways of life, because that’s the whole point of it).

It is hard, of course, to reach consensus about a definition of the Enlightenment. But if we strip it down to its essential elements, I think one has to assume that the main value of the Enlightenment can be summed up by the phrase sapere aude, which literally means “dare to know”, or more loosely “dare to think for yourself”. This phrase became associated with the Enlightenment through Immanuel Kant, but he was not the first to use it in the 18th century.

The Enlightenment “attitude”, as I like to call it, can also be conceived as a recommendation to, so to speak, see the world with open eyes. This means following reason rather than authority or tradition. This means acting on the basis of knowledge and experience rather than whim or instinct. It also means furthering the dissemination of reason and knowledge in the world, allowing more and more people to dare to think for themselves.

So, assuming this view of the Enlightenment attitude, where do the critiques go wrong? Firstly, this attitude is not an enemy of feminism and other “progressive” causes. For instance, questioning tradition gender roles, expectations, and relations seems to be perfectly in line with the idea to use one’s own reason and question tradition and authority. Secondly, the Enlightenment attitude can hardly be associated with the kinds of totalitarianism that liberals (and most other people as well) deplore. The totalitarian regimes of the 20th century, for example, can hardly be said to have been built on respect for the idea of free rational discussion and individual development of critical faculties. These things are, on the contrary, what totalitarian regimes fear the most.

It is interesting to note that Michel Foucault himself, who has inspired a lot of critique against the Enlightenment, seems to have changed his mind in later years. One scholar summarizes the earlier view with Foucault’s claim that the Enlightenment “paved the way for the ‘sciences of man,’ i.e. the sciences of discipline and normalization, of surveillance and control of bodies and souls, of marginalization and exclusion of the deviant, the abnormal, the insane”. The later view, however, sees the Enlightenment project as “a permanent reactivation of an attitude – that is, of a philosophical ethos that could be described as a permanent critique of our historical era” (M. Passerin d’Entrèves, in the anthology The Enlightenment and Modernity, 2000).

“Permanent critique” is indeed part and parcel of the Enlightenment attitude. And this attitude is not exactly the best handmaid to those who want to maintain an oppressive status quo.

Recap on core principles

The ethical theory that underlies my political views is hedonistic utilitarianism. Utilitarianism is a view which claims that we ought to maximize good consequences (and, of course, minimize bad consequences). The hedonistic element adds that the good that is supposed to be maximized is pleasure and the bad that is supposed to be minimized is pain. (The theory is called “utilitarian”, because one ought to choose the action that has the most “utility” when it comes to maximize pleasure.) Furthermore, pleasures and pains can be of different kinds: they can be mostly physical or mostly mental, they can have different duration and intensity, etc. Of course, one could also talk about maximizing “happiness”, provided that people are aware that we’re actually talking about pleasure.

A utilitarian theory differs from, for example, deontological theories, in that the latter sort sees some absolute duties regardless of the consequences. A deontologist might, for instance, believe it is absolutely wrong to lie to people, or physically harm people, regardless of the consequences. A utilitarian might abide by certain general rules of thumb regarding such actions, but be willing to break them when the consequences demand it. One might, for instance, have to harm (or even kill) someone to prevent an even bigger evil. A more trivial example is the use of white lies to spare people’s feelings.

In politics, a utilitarian outlook has certain consequences. It would, for instance, be absurd to regard punishments as a matter of “revenge” without looking at the effects on wider society. If one form of punishment does not deter very much from further crimes among the populace at large, while at the same time it’s draining the society’s resources, as well as destroying the life of the criminal who could instead go through a program of rehabilitation and become a productive member of society again, then it is not a good form of punishment. It would’t have the best consequences for society at large.

When it comes to economic issues, a hedonistic outlook must compare the pain of being poor to the pleasures of being rich. If one could raise the pleasure levels of the poor by lowering the pleasure levels of the rich by a smaller amount, then that appears to be a net gain for society. It is often assumed – correctly, I think – that the same amount of money (let’s say $200 a month) would make a bigger difference for the happiness of a poor person than a rich person. This is probably because it is easier to alleviate pains than to raise pleasure levels. Not having to worry about how to pay the rent, medical bills etc. makes a huge difference for people, while having to choose a slightly less luxurious car, or only being able to take one vacation abroad per year, makes a much smaller difference for overall happiness (keeping aside the environmental impact of a rich lifestyle). One could even argue that beyond a certain point extra riches brings hardly no gains in pleasure at all (there might even be a reduction in some cases). In short, economic redistribution based on progressive taxation is a very good idea from a utilitarian perspective.

But we must also keep in mind that mental pains comes from other things than lack of money. Bullying, discrimination, harassment, etc. are big sources of pain. They prevent us from being who we truly are (to speak in clichés). Using our capabilities and realizing our creative visions is important for happiness (much more so than being rich) and oppressive social structures might stand in the way of this.

The richer a society gets the more important it is to focus on the things that prevent us from living our lives in a manner that suits us. This means fighting against such things as sexism, homophobia, racism, and nationalism. And we should not, through, for instance, upbringing and education, pigeonhole people in ways that constrict their choices in life. This entails that common institutions that allow for different perspectives on life to be exposed to each other are beneficial, for instance schools where people from different backgrounds can meet – as distinct from different groups separating themselves in private schools. Furthermore, a welfare state is beneficial when it comes to enabling people to escape many forms of social oppression, since one is not as economically dependent on one’s relatives.

These ideas might seem rather left-wing; and I think that, indeed, hedonistic utilitarianism renders basically left-wing policies when consistently applied, and in view of the experiences of the 20th century. But this is, of course, an empirical matter. If convincing evidence could be given that right-wing politics maximizes pleasure it is something we would have to consider. But I don’t think such evidence have been seriously put forward in modern times. Add to this the fact that statistics consistently show that social-democratic states (especially in northern Europe) provide the most life-satisfaction (which is not exactly the same as pleasure, but at least gives some indication). Conversely, it might be argued that the left-wing policies argued for here are not left-wing enough – that a communist revolution to introduce common ownership of the means of production would be the best route to maximize happiness. Currently, I see no empirical evidence to suggest this either – and communists usually don’t appeal to maximization of happiness to defend their views.

It might, however, be adduced that not all people become happy in the same ways. Some people might not mind being poor at all, some people might feel an incredible rush of pleasure every time they make an extra million to pile upon their billions, and yet some other people would be happy living with a religious cult who tells them exactly what to do. To this I would answer that it is not possible to adapt a society to the exact needs of everyone (this is true no matter what kind of society we’re talking about – there is no utopia that harmonizes everyone’s interests). We have to accept the fact that most people are reasonably similar and that certain policies benefit the vast majority of people. Add to this that all politics, be they utilitarian or not, should be realized in a democratic context, which means that certain rights cannot be taken away from people, regardless of perceived gains in aggregated pleasure. The option to join a (peaceful) cult, or to be a poor but free vagabond, will always be open to the few who actually want it (although the choice to be a billionaire might not be).

To conclude, I think the main message behind politics based on hedonistic utilitarianism is that no one has a “right” to be selfish (at least not beyond a reasonable threshold). Instead, we all have a “duty” to contribute to the sum of happiness in the world. And if people won’t perform their duties we have the right to use (democratic) politics, as well as social pressure, to make them perform them, at least as long as it won’t be counter-productive.