On God and the Devout

As Micha and Sean point out below, evangelism and religious belief are not limited solely to the theists, but is an equal opportunity mindset.

Don Boudreaux extends and illuminates this point by examining a recent article by Richard Layard promoting a return to 19th century utilitarianism as a cure for all that ails us and as a general model for society (and of course, using an omnivolent government to achieve his broad societal goals):

... [L]et's give Layard as much benefit of the doubt as possible; let's try to imagine the best possible mind-set that he might experience to prompt him to offer such recommendations. He sincerely wants people’s lives to be improved.... he genuinely wants to help them.... he prays for happy outcomes.

Yes, he prays. He doesn’t think of his ruminations and demands for intercession as prayer, but I submit that that’s just what they are: prayers.

[...]

People like Layard, I dare say, have in their heads some image of government much like that of an all-powerful, all-benevolent deity. See a problem, turn government loose on it. Sure there are countless administrative details that must be chosen, implemented, and monitored when government tackles a problem, but we can trust the good motives, the democratic spirit, and administrative-law judges to somehow, sort of, well-enough typically kinda ensure that these dull but all-important details are dealt with wisely. And government being mostly good, we need not fear that it will abuse its power.

This kind of devout belief in the ability of government to solve social ills is at once irritating, dangerous, and somewhat inexplicable given the historical record of the 20th century. For most people who aren't policy wonks or historical buffs, I suppose you can chalk up the devotion to emotive responses and such, but for those who don't have that excuse I sit somewhat bewildered.

Take Matthew Yglesias for example. Obviously not a dim bulb, and educated in history & philosophy, he nevertheless has a strange lack of skepticism of state power. Even though he recognizes that Layard's thesis is flawed and incomplete (at least as a justification for more government intervention in society), he nevertheless wholeheartedly advocates an unapologetic and wholesale expansion of government intervention into society; believing, I suppose, that if the right correct people get into government then we can assume everything will go to plan and work out well. This is despite the fact that he knows exactly what happens when the wrong kind of people get a hold of this power. What explains this triumph of hope over experience?

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What explains this triumph

What explains this triumph of hope over experience?

Lack of proper incentives. I love answering rhetorical questions.

I haven't read you guys

I haven't read you guys enough to know how you feel about Social Security. But programs like that, and much of the New Deal, are what give hope to people like Yglesias and myself. In those cases, the government's policy wonks did a great job. Once you get honest, empirically oriented people in power (or people who trust those people) you can design effective ways to get around the diminishing marginal utility of money and collective action problems and market failures and all the other problems that occasionally keep markets from maximizing welfare in our messy world. We've had some really smart folks designing programs in the past -- I'm reminded of those government Social Security actuaries, back at the very beginning of the program, who predicted that the percentage of the population aged 65+ would rise from 5.4% to 12.65% by 1990. When 1990 rolled around, it was 12.45%, their program was still running strong, and millions of people had avoided the poverty that afflicted so many old people in worse times.

(Maybe you guys aren't into maximizing welfare and you're just running that irreducibly-rights-oriented don't-touch-my-stuff a priori libertarian thing. Now that's what I call religion!)

Ethical, If the purpose of

Ethical,

If the purpose of Social Security is to redistribute money from the rich and relatively better off to the poor and relatively worse off, there are much better ways of accomplishing that goal than forcing everyone to contribute 12% of their income just to get it back with less-than-market interest when they retire (if they don't die first). While I speak only for myself and not for my fellow Catallarchists, here is my favored Social Security reform plan. Simple. Yellow. Different.

"When 1990 rolled around, it

"When 1990 rolled around, it was 12.45%, their program was still running strong, and millions of people had avoided the poverty that afflicted so many old people in worse times."

Post hoc ergo propter hoc?

"(Maybe you guys aren’t into maximizing welfare and you’re just running that irreducibly-rights-oriented don’t-touch-my-stuff a priori libertarian thing. Now that’s what I call religion!)"

A fair portion of us are consequentialists, which loosely translates into welfare maximizers. We simply find it hard to believe that destabilizing property rights increases net welfare.

Could you explain how an a priori right-to-welfare-oriented welfare-maximizing thing is less religious than an "irreducibly-rights-oriented don’t-touch-my-stuff a priori libertarian thing?"

"Once you get honest,

"Once you get honest, empirically oriented people in power (or people who trust those people) you can design effective ways to get around the diminishing marginal utility of money and collective action problems and market failures and all the other problems that occasionally keep markets from maximizing welfare in our messy world."

I know of no public choice proof that shows governments tend to increase market efficiency. Perhaps you know of one. I'd be very interested to learn.

We are not interested in what could be done with the right people with the right information--nor are we concerned with how useful circular rivers would be to the hydroelectric power industry. Rather, we are interested in what the results of a system will be considering what we know of human behavior. Not in what the government could do--rather what it will do.

That is to say, do you not detect a vague whiff of utopianism in your "once you get honest, empirically oriented people in power..."?

After all, qui custodiet ipsos custodes?

Ethical, It seems that you

Ethical,

It seems that you conflate existence with good consequences. Social Security can be considered two things, neither of which SocSec is particularly good at. As a forced savings plan, the returns are terrible and the savings does not become working capital as private savings do. As a welfare plan, the funding is a regressive tax (even by the Right's standards!) and as such hits the poor and middle class harder than the wealthy.

There is considerable evidence that the New Deal prolonged the Depression (the U.S. did not get back to "normal" until 1947) and further empowered existing big business to the detriment of small businesses and non-union labor. I fail to see how empowering the aristocracy in D.C. and the top tiers of the Fortune 500, at the expense of the poor and middle class, can be a good consequence.

On top of that, the right guy is often not going to get into power. I present 2000 and 2004 as examples.

Ethical, LIke Dave, I'm not

Ethical,

LIke Dave, I'm not exactly sure that Social Security is very good at either of its primary stated reasons for existing- eliminating/ameliorating elderly poverty and as a supplemental pension system.

The payroll tax is a horrific means of financing the program and really only helps ensure that the government gets a steady stream of money; it depresses employment among lower income earners and, I suspect, is a major reason for salary disparities beyond the arbitrary $90,000 cut off.

In any case, social security aside the federal government's programs have been remarkably unsuccessful in achieving even modest goals placed before them, let along the Great Society and New Deal goals set.

(as an aside, it is ironic that modern day lefties are dedicated to protecting 'the New Deal', when practically the only thing left from the New Deal after 1945 *was* Social Security; Truman got rid of the New Deal a looooong time ago. But it sounds & feels better, I suppose, to stand with FDR than with the rat bastard LBJ.)

There is a plethora of books on the inherent failures of bureaucratic and government action (aka Public Choice political economy) as well as reams of empirical data, the combined effect of which should make any reasonable individual highly skeptical of the power of government. You'd at least think we'd get better arguments than warmed over Johnsonism ('collective action problems', please) in the face of this experience.

Brian Doss, I definately

Brian Doss,

I definately agree. The payroll tax can send you to the poorhouse quick.

The two great blunders of Bismarck's career were launching German militarism and creating a pension system that most of the West modelled their pensions systems on.

Scott, To come to Ethical's

Scott,

To come to Ethical's defense here, I do think that he has a point about actual a priori defenses of a right to property, and I'm not really sure that the same point could be applied to his consequentialism. A consequentialist does not (or at least can't consistently)argue that there is any sort of right to welfare of whatever sort. That there ought to be welfare is instead an empirical claim based on consequences. As any good economist will tell you, money has a diminishing marginal value. So there is at least a prima facie reason for thinking that taking it away from those who have lots of it and giving it to those who don't have very much will maximize happiness.

Now don't get me wrong; I know that the economic story is more complicated than this. There are legitimate worries about motivation and subsequent stagnating of the economy. I suspect that we agree that the latter is a bad thing on consequentialist grounds. So there would need to be some balancing between redistribution and robust markets.

If you are also a consequentialist, then at bottom, the disagreement here is an empirical one and not a fundamental theoretical one. Now if you were to refuse to acknowledge than any interference in the market could ever be justified on utility-maximizing grounds, then you could, I think, be justly accused of a religious belief in a fundamental right to property. But as long as the right to property is purely a contingent one, justified by appeal to the good consequences of laissez-faire markets, then we simply disagree about empirical facts. I will refer you to Charles Dickens or Friedrich Engels to point out the limitations of laissez-faire economics in 19th C UK. You will argue that Corn Laws were actually to blame and point me to Hayek or Friedman, etc.

Note that this discussion

Note that this discussion shows up some of the limits of consequentialism. *Whose* welfare is the welfare-maximizing government supposed to be maximizing? What, as the mathematical optimizers would say, is your objective function? If it's some sort of sum over total utilities, how do you morally justify the implied interpersonal utility comparison, or even measure the individual utilities with any accuracy?

In particular, Ethical W. hits one of my buttons by mentioning diminishing marginal utility; I've seen a great many people use this as an argument for redistribution without ever addressing either the fact that different people's marginal utilities diminish at different rates, or the need to justify the implicit interpersonal utility comparisons. The fact that A's 10 millionth dollar is worth less to A than his 10 thousandth dollar does not by itself imply that it's worth less than B's 10 thousandth dollar.

Moreover, suppose your interlocutor comes out and states explicitly the definition of overall welfare that should be maximized. Then you have to argue why that's the right definition-- and you *can't do that consequentially*, not unless you're willing to appeal to some meta-premise about how to come up with welfare definitions, and then you have to justify that in turn. So either you get an infinite regress, or else you must at some point have a non-consequentialist axiom set to start from.

Nicholas, I agree with you

Nicholas,

I agree with you entirely that interpersonal comparisons of utilities are difficult at best. But don't you think that you're overstating the case a little bit. Consequentialist accounts are in no worse position than any economist in this regard. Economists have gotten around interpersonal comparisons by using money as a proxy for happiness or preferences or whatever we decide we're measuring.

Certainly you are right that I might turn out to value my millionth dollar just as much as you value your ten-thousandth. But we can only stretch that point so far before it reaches absurdity. You don't really want to defend the claim that there are actual people from whom the billionth dollar will have the same value as someone else's second, do you? That, it seems to me, is the more modest point for a consequentialist to make. One need not go as far as Peter Singer to see that at least some redistribution is going to be justified. How extreme that redistribution will be is going to turn on empirical questions; I understand that economists have some skill at these sorts of issues.

As far as a justification of consequentialism is concerned, yes, you are right that at some point, a consequentialist has to appeal to some feature of human nature that is itself not inherently consequentialist. What you are asking for, in effect, is a conception of the good; all consequentialists must account of the good to be maximized. And no, it will not be possible to offer a consequentialist account of the thing to be maximized. I'm not sure why that should be required, though. A consequentialist who says, for instance, that happiness is the only intrinsic good is making a claim that, while controversial surely, is not so terribly implausible.

The difference between consequentialists and non-consequentialists (and the one that, I think, underlies Ethical's point about a priori religious beliefs) is that the consequentialist begins with a conception of the good. Non-consequentialists (especially rights theorists) begin with a conception of the right. A consequentialist conception of the good has some hope of being justified via empirical grounds. I've not yet seen a conception of the right that has such promise.

Micha, your plan sounds

Micha, your plan sounds pretty good to me. Some of the weird features of the current system exist, I've heard, because FDR wanted to make Social Security impossible to get rid of. I'm happy for those features because they stop people from killing the program, but in a world without Republicans your way might be better. The current payroll tax system is explained by Mark Schmitt as a way to keep the somewhat-wealthy from revolting.

Scott, there's not even a propter here. Just pointing out that smart government actuaries can make good predictions. If they're being listened to by benevolent people, I'm happy with my future in their hands.

A bunch of the other New Deal reforms are still with us -- the FDIC keeps the banking system secure (though we have to regulate them so we don't end up in another S&L crisis), the Fair Labor Standards Act stopped child labor and set a minimum wage (which keeps corporations from using monopsony power to crush wages), the SEC keeps public corporations transparent, and the Fed was allowed to regulate margin buying (without that I might've blown myself up in the Nasdaq bubble).

Being a Benthamite myself, I greet my fellow consequentialists among you. Here's my defense of hedonic utilitarianism, briefly: I'm skeptical of moral intuitions (pretheoretical gut-feeling moral judgments) of any kind -- I don't think they're a reliable way of getting us to true beliefs about morality. The irreducibly-rights-oriented libertarians, I think, are just running off of some intuitions about force and consent. But looking inward at our sensations is a reliable way of forming true beliefs about our sensations, and this is a completely different process of belief-formation than the one involving intuitions. We can discover the goodness of pleasure and the badness of displeasure this way. This, moreover, seems to me the only thing we can learn about what's intrinsically good through a reliable process of belief-formation.

It's true that the right guy often doesn't get into power. When Republicans come into power, they're just going to do Republican things with their power, no matter who came before them. Maybe there's some power in setting precedents, but with an administration like the current one I wouldn't rely on that. When my Democrats get into power, I want them to use that power, not unilaterally disarm and do nothing until they get swept away.

Werewolf, If the government

Werewolf,
If the government does all these things so well, why don't we have a totally centrally planned economy? Wouldn't it work even better than the one we've got?

Oh, no! I only want the

Oh, no! I only want the government to get involved in some cases of market failure (adverse selection, monopolies, collective action problems like pollution and overfishing, etc.), and where redistribution is necessary. There are plenty of smart people in private industry too. Sometimes, like in the 1990s computer hardware industry, market forces are wonderfully motivated to deliver an intricate range of options and the government should stay out. But sometimes, like with annuity pricing today, you want central planning so you can get around the adverse selection problems that arise from asymmetrical information between annuity consumers and sellers. It's a messy world and a patchwork of strategies is the way to go.

Joe: the claim I would

Joe: the claim I would defend is not that A's billionth dollar might have the same value as B's second, but that on a moral level A's utility and B's utility are fundamentally incomparable quantities-- apples and oranges. People are not equal but incomparable.

But suppose I accept that some level of limited, fuzzy comparison is justified. It still doesn't follow that empowering government to redistribute is good-- not without a theory of government which explains why government could be expected to do more justified than unjustified redistribution if given this power. Since real governments do the vast majority of their redistribution from somewhat-richer to somewhat-poorer people, not from billionaires to beggars, this theory would fly in the face of the evidence. It also doesn't follow that the level of justifiable redistribution is an empirical question. The only reason we're having this discussion at all is that utility is near-impossible to measure directly and, while money is the least bad proxy we have, it is a very bad one indeed.

You're right that consequentialists begin with a conception of the good. But the problem is that they generally don't say what exactly that conception should be and why. And this gives them an unfair argumentative advantage over non-consequentialists, who must explicitly lay down their idea of the right and defend it in detail. Consequentialists all too often get to handwave over key foundational questions. In particular they get to smuggle in assumptions about the equal (and thus comparable!) moral worth of different individuals which are not justified.

the FDIC keeps the banking

the FDIC keeps the banking system secure (though we have to regulate them so we don’t end up in another S&L crisis),

The FDIC is very much like the old FSLIC, which did not protect squat, and required transfers from the poor and middle class to the wealthier savers in the bailout.

the Fair Labor Standards Act stopped child labor
Child labor was already something of a pariah in business in the U.S. before the act. Do you really think a democracy (or a republic) would get such laws unless the practice was already in serious decline? How?

set a minimum wage (which keeps corporations from using monopsony power to crush wages
and oddly enough, holds wages down itself. I'm looking forward to research on the "living wage" craze sweeping leftist towns here on the west coast. These minimum wage laws are clearly above market clearing wages, unlike the federal minimum wage. Anecdotal evidence thus far seems to point to small businesses closing their doors and employment within the "living wage" juisdiction decreasing.

the SEC keeps public corporations transparent
Enron, Tyco - the SEC isn't working as advertised.

Fed was allowed to regulate margin buying (without that I might’ve blown myself up in the Nasdaq bubble).

I'm glad that such rules protected you, but how can you know whether they haven't harmed others?

I am rights oriented for a variety of reasons, one of which is that every time somebody violates those rights for some higher good, the only "good" that comes from it goes to some would be aristocrat.

Nicholas, I'm just not sure

Nicholas,

I'm just not sure that I can buy the claim that A's utility and B's utility are fundamentally incomparable. Although comparisons are often pretty vague, I can have some idea of how much happiness that, say, unexpectedly bringing home roses to my wife will bring. To concede that interpersonal comparisons of utilities are in principle impossible would seem to me to undermine the entire basis of economics.

It also strikes me that the claim is just empirically false. I don't want to open up too much of a metaphysical can of worms here (or is it can of metaphysical worms?), but I think that happiness must have some sort of brain-state analogue. As we learn more about the brain, we find more links between certain brain activity and certain mental states. This is not to say that I think a hedometer is right around, but I wouldn't put such a thing out of the realm of possibility.

As far as redistribution is concerned, I think that you're still overstating the case considerably. I gave the billionare to beggar example only to point out the coherence of the claim that marginal utilities can be compared; I don't think that one has to go that far to make realistic comparisons and I doubt that, at the end of the day, you do either. Plenty of redistribution moves from those making, say $100,00 a year to those making $12,000 a year. It would be pretty disingenuous to claim that there aren't any good grounds for thinking that the latter gets a higher marginal value from $1 than the former would get.

I don't think that government does a perfect job at redistributing wealth either. But I would submit that it does a better job than private charity alone can do; the fact that there are far fewer desperately poor poeple in America post welfare state than pre seems to be good evidence for the claim. Believe it or not, many liberals really are motivated by a concern for others, and many are firmly grounded in empiricism; if a system actually produced more desperately poor people, liberals (at least thoughtful ones) would be lining up to dismantle it.

I would be happy to go with some alternative system of redistribution were there such a thing out there. But markets simply do not always allocate wealth equitably. Consequentialism demands some redistribution, and government is the best (so far) alternative out there.

I do take exception to the final claim that consequentialists do not bother to articulate or defend a conception of the good. The better part of consequentialist moral theory for the past 50 years has been devoted to just that task. You are right that few consequentialists mention those defenses when talking about policy, but that's hardly a knock against them. No one, after all, expects a full-blown defense of rights rooted in some metaphysical conception of human nature each time a libertarian opines on some issue. Meta-ethical work is being done, just not always by the same people doing the work in applied ethics.

Joe, A hedometer would do

Joe,

A hedometer would do nothing to address my objection. The question is not whether A's pleasure has the same (or an analogous) level of physical consequence to B's. The question is whether A's pleasure should be weighted the same in the overall conception of the good as B's. Again, you're smuggling in a moral comparability premise here: the idea that one unit of A's utility is worth just as much as a unit of B's utility. There is no way of evading the moral comparability question by appealing to some physical quantity.

Appeals to our judgments about the utility of those really close to us don't help either, not if you're trying to justify State redistribution. If indeed we know something about how our loved ones' utilities work, it's precisely because of our intimate, special knowledge of them. The State is by nature a large, impersonal entity which can have no such special knowledge about anyone. IMO there is really nothing that you or I can know about J. Random Stranger's utility with enough confidence to justify taking his stuff by force.

And denying interpersonal utility comparability need not undermine economics. Exchanges for mutual benefit can be seen to be good without any comparability assumptions at all, and market economics is based on the study of just such exchanges.

Note also that you seem to be contradicting yourself on the question of what level of comparison is OK. Two posts ago you said

"Certainly you are right that I might turn out to value my millionth dollar just as much as you value your ten-thousandth."

But now you claim that a $100,000 to $12,000 comparison, a much narrower one, is fine (which, "disingenous" or not, I'd certainly disagree on). Which is it?

You have a fair point on the existence of attempts to justify consequentialist conceptions of the good. But I'm not objecting to people stating consequentialist premises and then reasoning from them without defending them. I'm objecting to people making arguments that implicitly depend on consequentialist premises without even *stating* what exactly their premises are. I think that radical libertarians, and defenders of minority viewpoints in general, really do tend to state their premises much more often and much more precisely, because we know better than to assume others will just nod their heads in agreement!

Nicholas, You are correct

Nicholas,

You are correct about the appearance of a contradiction. Yes, I will concede that it's possible that A values his millionth dollar more than B values her ten-thousandth. But I think that such a situation is extremely unlikely. Consequentialists do have to admit the possibility of individuals who require massive amounts of resources in order to derive even minimal satisfaction. It's a common objection to consequentialism. Typically such individuals are called 'utility monsters' and are intended as non-existent but logically possible entities. So while such a creature is possible, he is, I think, pretty unlikely.

I'm not sure, though, that I quite understand your central complaint at this point. Why is it that you think I need to prove that one unit of A's happiness is equivalent to one unit of B's happiness? Once you start talking in units, you're talking measurables. If we're talking about one unit of A's pleasure and one unit of B's, then aren't we kind of by definition talking about equivalent things. The objection usually is that it doesn't make sense to talk about one unit of happiness, that goods themselves are incomensurable. You seem to say that the goods are comparable, but that two goods of the same size are not necessarily morally equivalent.

Suppose that I were to say, for instance, that I agree that you have a right to your property and that I have a right to my property, but that I need some sort of argument to show that these two rights are morally equivalent to one another. You would (rightly) respond that my position is incoherent; the rights are equivalent because we are talking about just one thing that inheres in two different people. Well, the same is true of happiness. One unit of happiness in A is equivalent to one unit of happiness in B because we're talking about the same thing in both cases. It's one unit of happiness; that it's your unit of happiness seems to be morally insignificant. I'll admit that there is a problem in figuring out what activities create one unit of happiness in you, since that same activity will produce a different number of units of happiness in me. But given that we're talking about one unit in each case, I can't see why I need an argument to show that they are morally equivalent. With all due respect, I think that yours is the counter-intuitive position in need of some sort of defense.

I'm not sure that the mutually-beneficial exchange story that you give above really does justice to the problems of market economics. Classical economics may assume that all transactions are ideal, and if the real world worked out that way, I'd probably be a libertarian, too. I like Nozick and think it would be great if he were right. But in the real world, many exchanges are not ideal; there are externalities, both positive and negative, that attach to many exchanges. Those are real things and an account of economics needs to accomodate them. But it can't do that without making interpersonal comparisons.

You might be right that, in the world of practical politics, consequentialists are less likely to state their premises up front. My view of things is probably warped by my perspective; in academic philosophy departments, consequentialism is a minority view. Rawlsians, Kantians and other sorts of contractarians dominate the scene. So of the consequentialists that I encounter, most adopt the very strategy you suggest is common to radical libertarians.

By the way, are you really serious that you don't think that you can compare the $100,001st to the $12,001st dollar? As someone who has been on both those ends (and no, no one pays academic philosophers that well; dual income family and all), I certainly find it pretty implausible. That dollar that I plop down for my son to ride on the electric horsy-thing outside the grocery store sure meant a lot more back when I was $3 short on the electric bill. Why you would think that wouldn't obtain between me now and someone else $3 short on the bills is a mystery to me.

the WRONG ?!?/ kind of

the WRONG ?!?/ kind of people? they're ALL THE WRONG KIND OF PEOPLE, and they've been that way forever. its bordering on unbelievable that a intelligent adult cannot see the history and why it goes wrong EVERY TIME, not just a few times.

In this debate between Joe

In this debate between Joe and Nicholas, I would not object as strongly to interpersonal comparisons of utility, and focus more on the objection that the costs associated with maintaining a government system for redistribution are greater than any utility gained from that redistribution. Money controls politics; the extremely wealthy don't pay all that much in taxes, and its mainly the upper middle class paying the lower middle class. Things like Social Security and property taxes for public schools are mostly cases of redistribution from like groups to like or from the relatively poor to the relatively rich. Farm subsidies, steel subsidies, military subsidies, strong patent and intellectual property protection, are all cases of redistributing from the poor to the rich.

The fact that there are far fewer desperately poor poeple in America post welfare state than pre seems to be good evidence for overall increase in productivity, technology, and wealth, and not clear evidence for the success of the welfare state.

Micha, Most of your

Micha,

Most of your objections here seem to be problems with specific sorts of redistribution. I'm with you on property taxes and corporate subsidies as really bad redistributive schemes, though I'm a bit surprised at the objection to patents and intellectual property protections. Certainly I would agree that some effects of those practices (high drug prices, for example) harm the poor and the relatively poor. But I would worry that removing such protections would eliminate incentives for highly capital-intensive research. In particular, I have concerns about motivation for the sorts of hard scientific research that is often a prerequisite for profitible engineering-oriented research.

But if your concern is mostly over the inefficiencies of many of our mechanisms for redistribution, what (if anything) would be your objection to more efficient mechanisms, say, a highly progressive income tax coupled with maybe an equally progressive capital gains tax? One could raise those rates while eliminating less progressive tax schemes as well as most sorts of subsidies. (I don't know what you mean by military subsidies; I don't mind paying for soldiers and tanks within reason.)

As for increased productivity, technology and general wealth, these strike me as good explanations for an increase in average income. What they don't explain by themselves is a reduction in the absolute numbers of desperately poor people. The welfare state explains why relatively more of that increased wealth finds its way to the poor and relatively poor than was the case in the 19th century, which also say tremendous gains in average wealth, productivity and technology, but which saw an actual increase in the total numbers of desperately poor people.

Joe, I think this goes back

Joe,

I think this goes back to Scott's original objection above: your argument relies on the premise that "once you get honest, empirically oriented people in power," or once you get an educated electorate that is willing to consistently vote in favor of the candidates and policies you prefer...

We have to take into account the fact that voters are rationally ignorant and that the power of political office consistently attracts people that may not want to use that power in ways you find desirable. So we must take into account the risk that granting the government the power to do what you want it to do also entails granting the government the power to do what you do not want it to do. Is that a risk worth taking? Given the government's track record, I am extremely skeptical.

Yes, creating incentives for drug research is important, and this is one reason I am not entirely convinced yet that IP is a bad idea, but we must realize that even if we grant the importance of some level of government granted monopoly, it is still a monopoly, and once produced, the optimal price is marginal cost, which is effectively zero for intellectual property. We need to be more skeptical of the benefits of IP and more aware of the costs to consumers. Drug regulation, especially the FDA approval process, and the expense of going through this process to enjoy a short monopoly tends to create an oligopolistic pharmeceutical industry where only three or four firms are able to afford the astronomical costs of bringing a new drug from the idea stage to the market, and this oligopoly leads to regulatory capture, where the regulators were previously employed by these three pharmaceutical firms and where the employees of the three pharmaceutical firms were previously employed as regulators. This close-knit incestuous relationship favors the status quo firms at the expense of new entrants to the market, by increasing the barriers to entry with greater and greater regulations and expense.

"The welfare state explains

"The welfare state explains why relatively more of that increased wealth finds its way to the poor and relatively poor than was the case in the 19th century, which also say tremendous gains in average wealth, productivity and technology, but which saw an actual increase in the total numbers of desperately poor people."

Source?

Micha, I'm right with you on

Micha,

I'm right with you on the pharmaceutical industry, and although I'm sometimes skeptical of deregulation, I think that the FDA might be a good place to start (or at least scale back). The cost of bringing drugs to market is obscenely high (something like $800M and 15-20 years). Europeans and Canadians (hardly bastions of deregulation) get drugs to market considerably faster and at less cost. I don't, however, see this is a problem that markets alone can handle. Certainly it will be the case that the market will eventually select for effective drugs. But I'm pretty sure that I don't want to be the guy who discovers the drawbacks of Vioxx the hard way. I don't know how to get the regulators out of bed with the giant companies, but I worry that the answer is unlikely to be fewer regulations.

I also share your skepticism about both informed voters and power attracting the wrong sorts of people (surely these days liberals and libertarians can agree to that if nothing else!) And I agree that hoping for a fully educated electorate is probably naive. But I wonder if you are giving enough credit to the corrective potentials of democracy. Sure government can, for a while, do things that we don't want it to be doing. But if we do decide that we don't like those sorts of things, there's always another election.

I would suggest that there are ways of improving the electoral process. I'm a fan of the single transferable vote, which would allow me to cast my ballot for whomever I wanted nationwide. Such a system would be conducive to third (and fourth and fifth) parties, as libertarians, greens and the like nationwide could vote for a few candidates. The idea would be that Congress would look, roughly, like the population itself. I think, for the record, that this is the modern equivalent of the factions that Madison advocates in Fed. X.

While this solution is by no means perfect, it does increase the variety of representation making, I think, less likely that anything catastrophic can happen.

By the way, isn't the fact that voters are rationally ignorant a good reason for thinking that libertarianism is a bad idea? The fact that people do not alway realize what is in their best interests (even if we concede that they behave rationally insofar as they pursue what they take to be their interests, which is, I think, doubtful) seems to be good reason for thinking that some sort of safety net is a good idea. It also seems like a good argument for state-funded, compulsory education; if we're going to hold people responsible for their bad (even diastrously bad) choices, then I would think that we have some obligation to ensure that they had a real chance to learn how not to make disastrous decisions. Pure libertarianism would seem to entail that I might be held responsible for actions I committed from ignorance when it was my parents, say, who decided that education wasn't worth the cost and thus didn't provide me with one. That doesn't sit well with me.

I don’t, however, see this

I don’t, however, see this is a problem that markets alone can handle. Certainly it will be the case that the market will eventually select for effective drugs. But I’m pretty sure that I don’t want to be the guy who discovers the drawbacks of Vioxx the hard way.

Why do you think markets can't handle this? If you don't want to be a test subject, you can choose to only take those drugs that have been around long enough to be safely tested. If, on the other hand, you have a rare degenerative disorder and your doctors tell you that you only have a few years to live, what do you have to lose? Different people have different levels of risk preference, and there is no reason for a one-size-fits-alls regulatory system. A private system of competing regulatory bodies could much more efficiently accomplish this task, without the kind of collusion between the regulators and the regulated we see now.

But I wonder if you are giving enough credit to the corrective potentials of democracy. Sure government can, for a while, do things that we don’t want it to be doing.

Democracy (voice) may be a better corrective mechanism than nothing at all, but in general I find competition (exit) better still. The reasons why Exit is generally a better corrective mechanism than Voice is a common theme here at Catallarchy.

But if we do decide that we don’t like those sorts of things, there’s always another election.

Unfortunately, democracy doesn't really work like that, for public choice reasons. Take agricultural subsidies, which have existed in this country for at least 100 years and have existed in parts of Europe since before Adam Smith's time. Why are agricultural subsidies so hard to get rid of, even though everyone other than politicians and corporate farmers agrees that they are net cost for society? Because the benefits of these subsidies are concentrated in a small but politically powerful group of farmer-lobbiests, while the costs are widely dispersed among millions and millions of consumers. Who really cares whether their sugar bill is $1 or $5 when it is such a small part of their total spending? But the sugar farmers certainly care - by stealing a penny or two from millions of individual consumers, they can make a hefty profit. And all they need to do is pay off a few congressmen.

I would suggest that there are ways of improving the electoral process. I’m a fan of the single transferable vote, which would allow me to cast my ballot for whomever I wanted nationwide. Such a system would be conducive to third (and fourth and fifth) parties, as libertarians, greens and the like nationwide could vote for a few candidates. The idea would be that Congress would look, roughly, like the population itself. I think, for the record, that this is the modern equivalent of the factions that Madison advocates in Fed. X.

Why in the world would either of the two major parties do something to make it easier to create third parties, thus creating the risk of competition? That's like asking the pharmaceutical industry to lobby for a repeal of regulations to make barriers to entry lower. It's against their interests to do so.

By the way, isn’t the fact that voters are rationally ignorant a good reason for thinking that libertarianism is a bad idea? The fact that people do not alway realize what is in their best interests (even if we concede that they behave rationally insofar as they pursue what they take to be their interests, which is, I think, doubtful) seems to be good reason for thinking that some sort of safety net is a good idea.

Just the opposite, in fact. You may want to look up the term "rational ignorance," as you don't seem to be using it correctly. It refers to the fact that voters are rationally ignorant - that is to say, it would be irrational for voters to inform themselves of the important details of the election, because their single act of voting is extremely unlikely to effect the outcome of the election. People tend to spend more time and money researching those things they have control over, and spend very little time and money researching those things they have no control over. Thus, democracy demands that each and everyone one of us voluntarily contribute to the public good of "good government" by informing ourselves of political information, even though there is absolutely no individual return on this investment. By shifting decision making from Voice to Exit, from democracy to competition, we are thereby internalizing the positive externality of voting and making what was formerly a public good into a private good.

Pure libertarianism would seem to entail that I might be held responsible for actions I committed from ignorance when it was my parents, say, who decided that education wasn’t worth the cost and thus didn’t provide me with one. That doesn’t sit well with me.

Cause we all know that the existing educational system is doing such a great job making people less ignorant. :roll:

If you go up to one of my first posts in this thread, in response to Ethical Werewolf, I give a link to my Social Security reform plan which also includes my education reform plan. Both are designed to make liberals, conservatives, libertarians, and nearly everyone but bureaucrats happy.

"I don't want to be the guy

"I don't want to be the guy who discovers the dangers of Vioxx the hard way." Sorry. There is no way other than the hard way. The only reason you think a drug is safe is because some other person preceded you into the unknown of experimental medicine. No matter what amazing miracles you believe government has the magical power to work, it can't change the fact that you benefit from the risk that someone else took.

Micha, "Why in the world

Micha,

"Why in the world would either of the two major parties do something to make it easier to create third parties, thus creating the risk of competition?"

Yes, that's true. But that seems to be an objection to anything other than the status quo. If selling an idea to entrenched interests is a necessary condition for an idea to have merit, then I hate to say it, but libertarianism is pretty much doomed, too. Neither major party is likely to do anything to make it easier to eliminate government all together, either.

"Democracy (voice) may be a better corrective mechanism than nothing at all, but in general I find competition (exit) better still."

First, let me say that I like the formulation between exit and voice. The conception of exit that I seem to be finding on the rest of the site (and I haven't explored thoroughly; I just discovered the place a few days ago) seems to be vaguely Lockean. Specifically, it seems to be about respecting negative freedom (only) and with providing exit as one's only real way of demonstrating dissent.

Assuming of course that I haven't misunderstood the concept, it would seem to share some of the features of Locke's tacit consent. It would also seem to share the weaknesses of Lockean tacit consent. John Simmons rather famously (well, famous in philosophy circles) points out that tacit consent through residence fails spectacularly. He argues that for tacit consent to count as legitimate, five conditions must be met. These are
1. The situation must be such that it is perfectly clear that consent is appropriate and that the individual is aware of this.
2. There must be a definite period of reasonable duration when objections or expressions of dissent are invited or clearly appropriate, and the acceptable means of expressing this dissent must be understood by or made known to the potential consentor.
3. The point at which expressions of dissent are no longer acceptable must be obvious or made clear in some way to the potential consentor.
4. The means acceptable for indicating dissent must be reasonable and reasonably easily performed.
5. The consequences of dissent cannot be extremely detrimental to the potential consentor.

Now the first three of these aren't really too much of a problem for exit as it seems to be conceived here. The problem comes in with 4 and 5. To make exit morally viable, it will have to be the case that exit is not particularly costly nor does it have especially harmful consequences. Monopolies, for instace, would seem to put me in a situation in which I cannot really be said to tacitly consent via continued participation; if the commodity being supplied is one that it is extremely hard to do without in my society, and in those cases in which providing that commodity on my own would be too costly, then I am stuck. I must either buy the product or do without. But I'm not so sure that my consent is really given, even tacitly, since the situation violates principle 4 & 5.

By the way, it's because I accept Simmons' criteria that I, like Simmons, am a philosophical anarchist, though it's likely that I mean something different by the term than many of you. I mean only that I have no moral obligation to obey the law, though I still think that there are a number of pragmatic and/or prudential reasons for having a government and for doing what it says. I simply think that the fact that X is the law is not in itself a moral reason for doing X.

"Just the opposite, in fact. You may want to look up the term “rational ignorance,” as you don’t seem to be using it correctly."

Point taken. I would have called what you describe a collective action problem; it's rational for me to want something to happen even though it is not rational for me actually to do it. Since that same reasoning applies to everyone, things that we would like to have happen won't happen. The irony here is that collective action problems are typically difficulties for libertarians. After all, it's rational for me to want an army to protect me from all of the non-libertarian nations out there. But provided that I live in, say, the middle of my land-mass, it's not actually rational for me to contribute, since any army that my neighbors pay for will have to protect me, too. (A police force might not have this problem, though there are some difficulties there, too.) The usual response to collective action problems is coercion, of the sort that Nozick requires for the nightwatchman state. I would be interested to hear how you hope to use markets to solve these sorts of worries.

I would also take some issue with your claim that consumers actually do research things that are under their control. Certainly some do; many, however, base their decisions on pretty trivial reasons. Consumers today, for instance, can use exit strategies to affect a lot of changes; few attempt this not, I think, out of some rational preference, but because of ignorance about most of the things that they buy. I'm thinking here of those who buy "American" cars without knowing that GM makes a good portion of its cars in Canada and Mexico while Honda makes almost all if its U.S.-sold cars in the U.S. Or of those here in SE NC whose economy has been decimated by moving textile companies overseas but who stroll into stores and buy offshored Nikes rather than domestically made New Balance. (Don't get me wrong; I'm a fan of globalization here. I'm just pointing out that many people are not rational about markets).

I'll also point out, contra your point about rational ignorance, that plenty of people do in fact show up to vote. If people actually did behave as your collective action problem predicts, then elections wouldn't have any turnout. Plenty of people behave non-rationally. We could complain about that fact and try to change it (I teach logic and critical thinking every semester), but until most people actually do behave rationally (and when do you think this is likely to start?), I don't see why political theory can't (shouldn't?) be developed around people as they actually are.

"Cause we all know that the existing educational system is doing such a great job making people less ignorant."

Have you been grading my essays? Yes, I know that our educational system is in need of significant overhaul. But I would point out that the British private school system in the 18th and 19th C was really terrible: Latin, Greek, classics, theology, a bit of math and you're done. Those schools are much better now. Why? Competition. But not from other private schools. Private schools were all run by graduates of other private schools; no one involved much wanted change. Eventually they had to because state-funded public schools started producing better graduates (science and engineering types who were desperately needed for the industrial revolution). I'm not saying that private competition wouldn't also have worked. I'm just saying that for 150 years, it didn't. Public education revolutionized private education in just a few years.

Scott, Can I get back to you

Scott,

Can I get back to you on the source next week when I'm back in the office? I wrote on this a few years ago, but I don't have any of it with me. As I recall, the problem was that increased productivity in agriculture and increased imports from British colonies sharply reduced the need for agricultural workers just as industrialization suddenly reduced the need for cottage industry. Many of the poor and relatively poor suddenly found themselves without work in the country. The result was a massive migration to the cities. But the efficiencies of industrialization meant that not nearly everyone who moved to the cities was needed. Britain had a massive labor surplus, with the expected result: wages were driven through the floor. Often families could not live on the father's wages, fueling child labor under pretty awful conditions.

In effect, Britain was hit with two social revolutions at once, and the result was to leave many, many people who used to work productively without any employment. Private charity was overwhelmed (and often misdirected at things like cleaning up the gin houses rather than feeding the poor) and workhouses were brutal (and often inescapable once there). All of these problems might, eventually, have been resolved by the market, but that's little consolation to the generation that starves in the meantime. This isn't, I think, a failure of the market. It's just a limitation. And I'm just not opposed to requiring everyone to ante up a bit to protect those who slip through the cracks of the market.

But I'll get you some hard references some time next week.

Lisa, Your claim isn't

Lisa,

Your claim isn't entirely true, or at least, it's true only within certain limits. Look, there is dangerous and then there is dangerous. I'm simply not competent to really assess the risks of most new medicines; to do that really adequately, I would need to take lots more science courses and maybe do some work in medical school as well. While I might be able to do those things, I'm not particularly interested in doing so; if I'd wanted to be an M.D., I would have been. But I prefer philosophy.

Since I'm not really qualified to judge the risks of a drug, I need someone else to help out. So you are right that every new drug will have some risk. But I rely on regulatory bodies to rule out the new drugs whose risks are tremendously high. Moreover, many new drugs are not designed for the terminally ill who are desperate for any hope at all. Relatively little research, in fact, is aimed at such problems. There is far more money to be made in lifestyle drugs (Vioxx, Viagra, Prozac, etc.) There you lack a pool of nothing-to-lose patients. It's in precisely these sorts of situations that I want someone (and I'll admit that the FDA is not my first choice here) who can force the manufacturer into full disclosure of risks and who can help me to understand those risks by mandating certain limitations and requirements for clinical trials.

I'm not asking for anything foolproof. And, to the extent that companies actually make exchanges transparent, I'm not a fan of suing drug companies for defective products. (For the record, there is some good evidence that Merck didn't actually make exchanges transparent with Vioxx.) But sans regulation, one gets the Tuskegee experiments. With regulation, one might sometimes get Vioxx. We can do regulation better; but Tuskegee seems much, much worse.

Scott, I tracked down some

Scott,

I tracked down some of my older sources more quickly than I thought I would be able to. Basically, the debate about standards of living in the British Industrial Revolution boil down to a group of self-described 'optimists' v. a group of self-described 'pessimists.'

The pessimists allow that on some measures, standards of living for the poor increased. Wages remained flat, but, in general, prices for some things fell. Unfortunately, increases in population more or less kept up with or outpaced economic growth, so that all-things-considered, standards of living remained pretty much flat or declined from the mid-18th until the mid-to-late 19th C. Moreover, much of the economic growth was limited to those who were actually employed in industrial sectors. But unemployment skyrocketed during the same period described above, and only began to fall after 1840. At times, unemployment in some industrial cities would be as high as 50%, with some professions being as high as 89% (Hobsbawn).

Optimists dispute the claim that standards of living decreased. They note, however, that on even the most optimistic reading, there were significant periods in which the laboring classes did fare worse in real terms than pre-industrial peoples (Ashton; Deane). Hartwell, who enthusiastically defends the benefits of industrialization, notes that "since the average per capita income increased, since there was no trend in distribution against the workers, since (after 1815) price fell whiel money wages remained constant, since per capita consumption of food and other consumer goods increased, and since government increasingly intervened in economic life to protect or raise living standards," it is safe to conclude that real wages increased.

It is worth noting that while there is widespread agreement that after about 1850, conditions for the poor began to improve, 1834 marked the first major revision to the Poor Laws, which moved charity from private hands to the state.

For documentation, see essays by Thomas Ashton, Eric Hobsbawm, Ronald Hartwell, and Phyllis Deane, collected in The Industrial Revolution in Britain (Lexington, MA: D.C. Heath and Co, 1970).

Joe, The Tuskeegee

Joe,

The Tuskeegee experiments were done *by the government*. I'm not sure how no regulation creates that problem.