Intentions vs. Consequences

One of the advantages of arguing for libertarianism based on consequences rather than natural rights is that nearly everyone desires similar consequences, whereas there is much more disagreement concerning which rights people are entitled to enjoy. We would expect economics, not ethics, to have a wider acceptance.

But consider the current uproar over outsourcing. Clearly, this should be an open and shut case, as free trade hasn't been controversial among most economists for nearly two hundred years. Yet economists have done a terrible job imparting this knowledge to the general public, and even to many intellectuals who should know better. This is not to say that economists haven't tried; rather, as Paul Krugman argues in his essay on Ricardo's Difficult Idea, the idea of comparative advantage is similar to the idea of evolution through natural selection; both seem simple and compelling to those who understand them, but impossibly difficult to those who do not.

The same is true regarding minimum wage laws, sweatshops, and a whole host of other issues relating to globalization and poverty. While those who oppose globalization and support things like a "living wage" are no doubt well intentioned, the consequences of the policies they support are harmful to very people they are trying to help.

One of my favorite quotes on this issue comes from Murray Rothbard:

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

And indeed Rothbard is right. But so what? We run into the same problem we had with natural rights. The whole point of focusing on consequences rather than libertarian rights is that more people agree on the former than the latter. But economics requires a certain amount of knowledge, and if people do not have that knowledge and refuse to acquire it before having a "loud and vociferous opinion" about what they do not know, then even if every economist in the world can prove, using complex mathematical models or irrefutable logical deductions, that minimum wage laws increase unemployment among low-skilled workers, or that trade restrictions harm both the U.S. and India, what good is economic knowledge?

This problem is further magnified by the fact that we live in a democracy, and as David Friedman has argued, under a democratic government, good law is a public good and bad law is a private good.

That is, there is little direct personal incentive to lobby for laws that benefit everyone, but a strong personal incentive to lobby for laws that benefit special interests at the expense of everyone else. In contrast, under anarcho-capitalist institutions, good law is a private good and bad law is a public good. That is, by patronizing a firm which protects oneself, one reinforces the existence of socially beneficial law; but there is little incentive to "lobby" for the re-introduction of government. As Friedman explains, "Good law is still expensive - I must spend time and money determining which protection agency will best serve me - but having decided what I want, I get what I pay for. The benefit of my wise purchase goes to me, so I have an incentive to purchase wisely. It is now the person who wishes to reintroduce government who is caught in a public goods problem. He cannot abolish anarchy and reintroduce government for himself alone; he must do it for everyone or for no one. If he does it for everyone, he himself gets but a tiny fraction of the 'benefit' he expects the reintroduction of government to provide."

And indeed Friedman is right. But so what? While this may be one reason to favor private law over public law, it doesn't really help us in our current situation. Voters, as individuals, pay no cost for voting for protectionist candidates, and have no incentive to spend the time and effort necessary to inform themselves about why protectionism is a bad idea. And as Loren Lomasky has argued with his expressive voting model, the very act of voting has little to do with consequences and much more to do with emotions and intentions:

Private activity, whether motivated by narrow concerns of self-interest or by altruism, is consequential. By choosing to buy beans I give up the opportunity instead to indulge in charitable relief-and vice versa. By way of contrast, voting is largely inconsequential. What I relinquish through my vote is only an infinitesimally small expectation of affecting outcomes. Since that is so, the logic of voting itself militates against the assumption that voting behavior marches to the beat of the same drummer as behavior in markets and other contexts of private activity.

Because voters are unlikely to "get anything" from the direction of their votes, they have reason to indulge incentives that are not oriented toward outcomes. In the context of electoral behavior, these incentives loom very much larger than they do in arenas of private choice. Thus, even if it is reasonable for the theorist examining ordinary economic exchanges to discount incentives that are not oriented toward outcomes, it is not similarly reasonable to do so when trying to understand how democracies function.

Lomasky likens voting to cheering for the home team: few people cheer because they think it will actually help their team win. Rather, people cheer because cheering is fun - it's a way to express solidarity with others who share similar interests. Similarly, despite what people are taught in elementary school civics class, and despite what people continue to tell themselves and each other, people do not vote because they think their vote will affect the outcome of the election. People vote because voting makes them feel good: they can express their disgust over homosexuality by voting for constitutional amendments. They can express their compassion for the poor by voting to raise the minimum wage or ban sweatshops.

And, of course, it doesn't matter if raising the minimum wage and banning sweatshops actually hurts the poor, because the point of voting isn't the consequences. It the expression, the intention that one wants to help the poor.

The reason why I bring all this up is because I've been bashing my head against a wall trying to show some online lefty acquaintances why their support for certain policies like minimum wage laws is misguided. But this can be just as futile as trying to convince someone that they should accept libertarian ethics.

When I tell them that the vast majority of economists--even leftists like Paul Krugman--oppose minimum wage laws, how do they respond? They tell me--and I quote verbatim--that "your line of thinking comes across as completely inhumane." They tell me that "cold hard facts don't leave much room for truly seeing what should be for the world." They tell me that my claims "all boiled down to cold, inhumane arguments that had nothing to do with life as we know it." One wrote,

I commend you on your studies in economics. Unfortunately, school can't teach you about the things that are truly the most important.

What matters in politics, according to them, is the appearance of concern. Intentions, not consequences, are of overriding importance.

Here is how I responded, although I might as well be pissing into the wind:

Suppose a mother believes that through prayer and prayer alone, she can save the life of her child who is suffering from cancer. The doctors explain to her that without an operation, her child will most certainly die from cancer, and prayer will do no good. But the mother doesn't want to hear the doctor's cold, inhumane arguments which have nothing to do with life as she knows it. She has been told all her life by her friends and family that prayer conquers all, and that appealing to modern medicine demonstrates a lack of faith and empathy.

What would you tell this woman? Wouldn't you sympathize with her and realize that she truly believes that she is helping her child, but also realize that she is terribly misguided and that her attempts to help are actually tremendously harmful? Don't you think the doctor would feel frustrated and hurt that the mother accuses him of being cold and inhumane, even though he wants to help save the child just as much as she does?

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its a religion(democracy).

its a religion(democracy). nothing more, or a cult. everything you quoted could be ascribed word for word to the retard and inbred behavior of religions/groupthink. the coneheads that join groups of any kind can easily be lured into that kind of argument. even the responses are the same. its uncanny, and the weird strange part is THEY ALL THINK THEY ARE RIGHT!?!? i'm amazed by the fact that there are people like you attending university in this world who don't promote that kind of thinking. its a rare trait. OT my only memory of Georgia is the 'okeefenokee swamp'in 1973, which we drove near on the way to DisneyWorld. i hope its still there. it seemed very mysterious for a kid from Saskatchewan. Peace , from Vancouver

Qwest, Exactly right. In the

Qwest,

Exactly right. In the Krugman piece I linked to above, he draws an analogy between the idea of comparative advantage and the idea of evolution through natural selection. And of course, the arguments against these ideas, both protectionist and creationist, are eerily similar.

Immediately after writing this post, I came across a post by a biologist debunking a claim made by a creationist. It seems almost identical to something one would say about a protectionist:

    I wouldn't be at all surprised to learn that Mr McEwen is a decent, sincere person in addition to being a fervent believer in his religious dogma. However, he has been consistently misled. His sources have lied to him. And he is working hard to propagate those same lies to more people. That's the real tragedy of creationism, that it is a fabric of outright dishonesty that persuades good people to do wrong, all in the name of their religion.

The solution is to teach

The solution is to teach basic economics at school. People used to hold equally vociferous opinions that the world was flat, or that the wind was caused by a divine being, or that lead could be transmuted into gold by simple chemical procedures. The spread of education has eliminated those ideas in most civilised societies - anyone now attempting to support the three ideas above would be laughed at and ridiculed even by the rankest ignoramus.

Undisputed economic laws must achieve this status, such that the moment any politician proposes minimum wage laws, or restrictions on trade, or a bill to outlaw offshoring, the entire population laughs and shakes their head at this economically illiterate moron who doesn't even know basic scientific facts that everyone was taught at grade school. Only then will some kind of rationality enter the political arena when it comes to economics.