August 31, 2010
The Conservative Left
John Stuart Mill once remarked:
“…the enemies of religious freedom, when hard pressed, occasionally accept this consequence, and say, with Dr. Johnson, that the persecutors of Christianity were in the right; that persecution is an ordeal through which truth ought to pass, and always passes successfully, legal penalties being, in the end, powerless against truth, though sometimes beneficially effective against mischievous errors.”
Mill thought this was nonsense. To assume that an idea or argument would triumph in civil society simply because it is true (or valuable) was complacent and false. Persecution could destroy truth; there was no guarantee that right would overcome might. The counter-measure was to guarantee free expression and the conflict of ideas, without fear of persecution, so as to provide the best chance for true – or valuable - ideas to flourish when they might otherwise be suppressed and lost.
The correlate to Mill’s suspicion is the realisation that victorious ideas – often meaning the ideas we now take for granted – will win not because they were right or the best, but because they had the most powerful backers at crucial junctures of history.
Hence, although the American Founding Fathers were clear that they were setting up a republic and explicitly not a democracy, America now presents itself as the leader of the Free World, membership of which requires express commitment to democratic political arrangements. Indeed, on a day when American troops officially pull out of Iraq, many of that conflict’s apologists will claim that the hundreds of thousands dead are a price worth paying for “democracy in the middle east”.
Somewhere and somehow between 1776 and 2010, democracy went from being a byword for anarchy and disorder to the only legitimate form of government in the world – and the rise of American power is at the heart of that tale.
For better or for worse, we now often assume that democracy must have triumphed in the course of history simply because it was right to triumph. We don’t tend to pause and consider just how slippery a concept “democracy” really is. Nor do we often reflect upon the extent to which democracy’s victory was the direct result of two totalitarian states waging a war of mass attrition 70 years ago. It’s easier not to think about complexities; nicer to assume that if things turned out this way, that was because they deserved – and all is better because they did.
Yet how one thinks about the rightness of a set of ideas will often influence how one thinks about its consequences. For example: if one believes that free-market orientated Thatcherism won the battle of ideas in the 1980s because it was the best option for the country, that perhaps makes the resulting socio-economic inequalities 30 years down the line easier to swallow. By contrast, if the British rightward shift post-1979 is perceived as having more to do with the contingencies of a disorganised and suicidal Labour Party than the absolute superiority of right-wing market ideology, then the victory of Thatcherism may seem rather less ordained, and the consequences rather more open to criticism.
Given the importance and power of ideas regarding what people find acceptable, open to criticism, or positively sacrosanct, it’s unsurprising that battles of ideas are frequently waged by powerful figures. This eye-opening New Yorker article illustrates the extent to which the billionaire oil baron Koch brothers fund and direct right-wing campaigns designed to push anti-government libertarian agendas, whilst co-ordinating covert attacks on the Obama administration. The Tea Party movement brands itself as grass roots, but its string-pullers are a tiny, plutocratic capitalist elite.
And this observation of a Tea Party leader seems entirely correct: “Ideas don’t happen on their own. Throughout history, ideas need patrons.” Certainly. For if truth and veracity are insufficient to secure victory, then ideas will indeed need patrons. And the wealthier, more connected and successfully organised those patrons, the better.
But ideas don’t just need patrons, they also need energy. Passion, commitment, fervent belief and a sense of righteous purpose. The Tea Party movement and the ever-more radical American right clearly has these in abundance – even if it presently lacks control, direction or sanity. But even here in the UK, political energy and dynamism has been – for as long as I’ve been politically aware, at least – the property of the political right (in which I include the rightward drift of New Labour and its liberalising, pro-market reforms and acceptance of the Thatcherite settlement).
The left, when not campaigning (usually with futility) on single issues like the Iraq War or climate change, expends most of its energy fighting a rearguard defence against attacks on the welfare state and the remaining non-marketised areas of society. This rearguard defence is made more difficult by the evident fact that the modern left – following the collapse of even the pretence of a viable socialist alternative post-1989 – has no co-ordinated vision of what to put in place of the dominant right wing advance. As usual, the late, great Tony Judt put it best:
“The real problem facing Europe’s Socialists (I use the term purely for its descriptive convenience, since it is now shorn of any ideological charge) is not their policy preferences, taken singly. Job creation, a more ‘social’ Europe, public infrastructural investment, educations reforms, and the like are laudable and uncontroversial. But nothing binds these policies or proposals together into a common political or moral narrative. The Left has no sense of what its own political success, if achieved, would mean; it has no articulated vision of a good, or even of a better, society. In the absence of such a vision, to be on the left is simply to be in a state of permanent protest. And since the thing most protested against is the damage wrought by rapid change, to be on the left is to be a conservative.”
August 29, 2010
Elsewhere
Recovering from a rather wonderful wedding yesterday, where I also picked up some rather less wonderful food poisoning. Nobody else seems to have got it, however, so I suspect conspiracy.
Yesterday I had a piece up at The Guardian appealing for people to donate to Prisoner Ben’s PhD appeal.
The comments over at CiF are a phenomenal display of the worst and best aspects of human behaviour. From compassion, forgiveness and generosity to hate, anger and the vindictive desire to hurt.
That, and bad grammar.
August 27, 2010
Bernard Mandeville vs. Phillip Hammond (Or, How Many Deaths is OK?)
You can tell some important things about a person from the number of lives they are prepared to sacrifice. For example, Tony Blair’s willingness for thousands to die in order to secure his “legacy” is more informative about his fundamental worldview than whatever propaganda he puts in his new book.
But let’s not talk about The Evil Goblin today. Let’s talk about the seriously under-rated early 18th century thinker, Bernard Mandeville. (There is, however, a contemporary political point coming, so stay ‘til the end).
Mandeville thought that duelling was, on balance, rather a good thing, as he argued in his Fable of the Bees. Although the practice was coming under sustained criticism in the early 1700s, our hero thought this terribly short-sighted. Whilst critics claimed duelling represented a sort of false honour, Mandeville disagreed: when men accepted to duel and put their lives on the line, they were living up to the highest standards of honour, trumping even the fear of death.
This was important for Mandeville. He believed – like his intellectual predecessor, Thomas Hobbes – that fear was one of the only things that could keep selfish, greedy, warlike men in co-operative peaceful society for sustained periods of time. Fear of death (at the hands of the authorities in return for law-breaking) usually did the trick. But some things men feared even more than death.
A prime example was to be excessively dishonoured in the eyes of one’s neighbours. Because man was a proud and vainglorious animal, he could not stand to be scorned beyond certain limits. And one of these was to be thought a coward.*
These two factors – fear of death, and fear of dishonour – interacted in the case of duelling. On the one hand, people were generally afraid to die. But they were also afraid of being publicly dishonoured by being thought cowards. Thus, they were incentivised not to go around provoking others in ways that would lead to a challenge for satisfaction. After all, the fear of being killed in a duel was bad enough – and the fear of being thought a coward if one was challenged and then ran away made it even worse:
“Nothing civilizes a Man equally as his Fear, and if not all…at least most Men would be Cowards if they durst: The dread of being called to an Account keeps abundance in awe, and there are thousands of mannerly and well-accomplish’d Gentlemen in Europe, who would have been insolent and insupportable Coxcombs without it.”
Not only did duelling ensure everybody was more civil and courteous, it also reduced the murder rate: fewer people went around provoking each other to (unanticipated) spontaneous violence when the threat of the duel was in place. Hence, unsociable warlike man was made better able to live in peaceful society.
Of course, Mandeville realised that the threat of being called to account would not prevent all duels taking place:
“I confess that though it [duelling] happens but seldom, it is a Calamity to the People, and generally the Families it falls upon; but there can be no perfect Happiness in this World, and all Felicity is an Allay. The Act itself is uncharitable, but when above thirty in a Nation destroy themselves in one Year, and not half that Number are killed by others, I do not think the People can be said to love their neighbours worse than themselves. It is strange that a Nation should grudge to see perhaps half a dozen Men sacrific’d in a Twelvemonth to obtain so valuable a Blessing, as the Politeness of Manners, the Pleasure of Conversation, and the Happiness of Company in general[.]”
In sum: 6 lives lost each year to duelling was an acceptable number for the wider social benefits of the practice, and indeed was less than would die if the practice were to cease.**
Which brings me to the present Conservative Transport Secretary, Phillip Hammond. As part of his pledge to “end the war on motorists”, Hammond is cutting funding for speed cameras. This is despite his department’s own research concluding that speed cameras lead to 100 fewer deaths each year. And subsequent analysis by the TUC indicating that the poor are more likely to die in road accidents than the better off.
In sum: Hammond thinks 100 more dead people (most of them poor) a year is an acceptable number for the wider social benefits of…what, exactly?
Mandeville had a complex story underpinning his defence of duelling, rooted in a worldview of man as un-sociable, aggressive and in need of manipulation and control through fear.
Hammond cuts an altogether shallower figure (no surprise, I admit). For him, 100 more dead people a year is the price we must pay so that pillocks like Jeremy Clarkson and his army of cretinous fans can drive around as fast as they like, sticking two fingers up at those whose lives they put at risk.
Or looked at another way: 100 more dead people so that the Conservative Party can further secure the votes of (predominantly) selfish middle-aged white men who bizarrely believe themselves to be persecuted because other people would rather they drove their polluting, potentially lethal weapons in moderately more responsible ways.
Which just goes to show, it’s the important freedoms that really matter to this government.
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*What makes the story even more interesting is that Mandeville thought that politicians and magistrates had judiciously cultivated a sense of honour in men that encouraged pleasant etiquette and mutual non-aggression, championing these things as “virtues” over and above baser instincts to attack and dominate. As a result, man’s natural non-sociability was over-come and peaceful society made possible through systematic manipulation.
For nerds: this is (I think) an important part of the story that gets us from Hobbes’ Leviathan to David Hume’s Treatise of Human Nature, Book III. But that’s a long tale…which you can however look forward to sometime in 2014.
** I don’t know if these figures are accurate. Mandeville might have been fudging the stats.
August 26, 2010
Please Donate
This is a quick plug for Prisoner Ben.
If you don’t already read Ben’s Prison Blog, then you should.
The details are all up over there, but suffice to say: Ben has been in prison for 30 years. He does not deny that he committed a terrible crime when he was 14 – murder. However, Ben has been trying to rebuild his life from inside prison, in particular by pursuing education.
As Ben admits, this is partly to improve his meagre job prospects when he is released. But as he himself says, it is also part of his felt duty to atone for his crime, by making of himself a valuable member of society that can contribute to the wider good.
Ben has been unable to pursue his PhD studies for the past year because the prison where he is currently held has made his educational pursuits impossible. However, he needs to find the money for his next year’s PhD study but cannot go back to the private donors and charity organisations that have so far funded him because he has nothing to show for the last year.
Ben is trying to raise £1,650 within the next 30 days to secure his PhD funding, with the hope that his scheduled move to a less constrained prison will allow him to resume his studies.
I would, therefore, like to ask all the readers of Bad Conscience to visit Ben’s blog and consider making a donation to this effect.
The Banality of Institutions
I’m increasingly interested in the role of institutions in people’s lives, and the way those institutions affect the moral choices and outcomes people find themselves committed to – or implicated in.
In particular, I think we should pay attention to the ways in which people find themselves compelled to do questionable acts, or participate in dubious programmes, because of institutional allegiances they’ve already committed to.
I have two examples in mind.
Nick Clegg now finds himself in a sticky situation. Having played king-maker and put the Conservative Party into office, the Lib Dems are complicit in a programme of “austerity” heavily criticised by the Institute for Fiscal Studies for being deeply regressive. (Indeed it’s worth stressing – as Larry Elliott does – that George Osbrone’s “emergency budget” is set to hit the poor hardest not just proportionally, but in straight cash terms).
Clegg’s is faced with holding together a party most of whose members would never have agreed to the Coalition if they’d known this would be the outcome. The Lib Dems were supposed to be a “moderating” influence on the Tories – but this increasingly looks like a naive, self-serving fantasy the Liberals told themselves to justify a share of power.
Nonetheless, many senior Lib Dems are committed to supporting policies they deeply disagree with. Even if only by remaining silent, figures like Vince Cable and Charles Kennedy are compelled to support ends they would rather oppose. To figures like Clegg, the burden falls heavier. He must go into print, publishing a nonsense attack on Britain’s leading impartial economic think tank (which he’d formerly heaped praise on). Clegg must ludicrously claim that regressive impacts on the poor will be offset by job creation, despite Osborne’s emergency budget being most likely to increase unemployment.
But the phenomenon goes wider than politics, and here’s another example. Increasing numbers of my friends are training to become teachers. Some of these friends – though of course not all – have previously been known to indulge in some light substance recreation. Usually just a spliff here and there, or maybe the occasional E on special occasions. No scenes from Scarface, just party prescriptions.
None of these friends ever died, killed anybody, raped anybody, committed serious crimes or did anything untoward when under the influence. They simply had a good time, left everybody else alone, and went about their evening. Yet when these friends become teachers, they will be compelled – by the institutional system they marry into – to stand in front of dozens of teenagers every year, and lecture them about the life-destroying evils of illegal drugs.
In other words, my friends will have to become systematic liars and hypocrites. Yet their lies will be disbelieved by future generations of kids, whose personal experiments will teach them far more than the propaganda of the school room. More widely, the bizarre social hysteria about recreational substances – other than violence-inducing alcohol, of course – will go on. Those who know very well that society’s attitude to drugs is founded on bullshit, will become the proverbial bulls.
As regards Nick Clegg’s dubious actions, we can perhaps be harsh. He played king-maker, this is politics, and now he must live with the consequences. We might, however, have more sympathy for more reluctant coalition figures like Cable and Kennedy. Surely not even in their worst nightmares did they expect it to be this bad after just a 100 days. Nonetheless, Lib Dem members who ever believed their party could be a force for social justice ought now to be considering their positions.
As regards my friends who must become hypocrites, they’ll no doubt learn to live with it – just as their own teachers did before them. And yet the consequence of everyone learning to live with this hypocrisy is the perpetuation of a drugs policy exhibiting collective social madness.
Hannah Arendt famously concluded that evil is characterised by banality. She was talking about something far worse than what I’ve drawn attention to today. But nonetheless, insofar as we want to understand life’s little lesser evils, and the banality that lies behind them, an examination of the commitments individuals find themselves reluctantly fulfilling because of the institutions they’ve pledged allegiance to will take us a long way.
August 25, 2010
Fish, Barrel
With perfect timing given today’s earlier guest post, platinum imbecile Chris Mounsey – leader of the UK Libertarian Party – has given an interview to Total Politics magazine in which he claims his “political idol” is Adam Smith.
You will recall that Mounsey was recently humiliated on national television when Andrew Neill quizzed him about the slanderous and obscene nonsense that Mounsey wrote at Devil’s Kitchen.
So in truth, I don’t really need to link through to the recent posts showing why Adam Smith is no friend of modern libertarians (and especially not of the crude UKLP sort) – though what the hell.
All I actually need to do is point out that Adam Smith wrote a book called the Theory of Moral Sentiments, which puts sympathy with others at the heart of its account, and in large measure reads as a good-etiquette guide to interacting with other human beings. By which I mean: it’s hard to imagine Adam Smith taking too favourable a view of the violent pornographic obscenity Mounsey used to polute the internet with – at least before his national public humiliation.
Verdict: epic fail.
How to think about…The Wealth of Nations
The I recently posted some thoughts about why Adam Smith’s Theory of Moral Sentiments tells against any crude reading of Smith as some sort of libertarian, neoclassical economist avant la lettre. In the comments, Jonathan Buss left a detailed and very interesting reply focusing on The Wealth of Nations, and the extent to which it stands in sharp contrast to much modern neoclassical economic theory. Jon has kindly tidied up and formalised his comment, and accordingly I’m publishing his response as a guest post.
Enjoy.
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Paul’s original post on how Adam Smith “was a more complicated figure than the libertarian caricature allows for” took the position that Smith was primarily “a moral and political philosopher”, and his discussion of the ways in which “Smith’s ideas stand in tension with much modern free-market right wingery” reflected this. I have no reason to disagree with Paul’s assessment of Smith as being more philosopher than economist. Nevertheless, his writing on economics are definitely worth taking seriously, and as such I thought I might offer an economist’s perspective on the issue.
As far as I can tell, Smith offers three main economic arguments in favour of ‘free markets’ as a way of organising economic activity.
Because of extensive misquoting of the “invisible hand” phrase, people think that Smith gives some sort of proto-Walrasian argument as to how markets promote ‘efficiency’, or something. He doesn’t – you won’t find any tangent indifference curves in The Wealth of Nations (tWoN). Also, the “invisible hand” comment isn’t given much importance by Smith – he doesn’t elaborate much upon it, and it’s buried deep in a paragraph in one of the more obscure chapters of Book 4 (specifically, chapter II, ‘Of Restraints upon the Importation from Foreign Countries of such Goods as can be Produced at Home’). And most interestingly, Smith uses it to describe almost the exact opposite phenomenon to what people always assume he meant; he describes the ‘home bias’ of investors, how even in the face of potentially higher profits abroad, they will consistently prefer to invest their capital at home, and thereby benefit domestic industry “as if by an invisible hand”. So Smith uses the “invisible hand” specifically to refer to parochial conservatism in investment strategy, rather than utility-maximising arbitrage.
So, on to Smith’s actual arguments. At least one is a bit rubbish: it’s his famous quote about how it can never pay an individual to produce for himself what he can obtain cheaper elsewhere, and “what is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom” (again tucked away in book 4). This is an argument based on ‘absolute advantage’. But 1.) it’s pretty simplistic, 2.) it is, technically-speaking, wrong (or at least, highly incomplete), as Ricardo later showed with his more sophisticated stuff about ‘comparative advantage’, 3.) I don’t really like the ‘fallacy of composition’ thing going on there; if there’s anything Keynes taught us about economic methodology, it’s not to use microeconomic parables to answer macro-level questions.
So Smith really gives two interesting arguments for free markets which are worth looking at. They appear right at the start of the book, in probably the two most important chapters of tWoN from a modern economics point of view, and the interesting thing about them is just how different they are to modern ‘neoliberal’ arguments.
The first is kind of a technical argument, in Book 1, Chapter III (‘That the Division of Labour is Limited by the Extent of the Market’). Smith considers the most important determinant of productivity to be the extent to which production is characterised by the division of labour. He then claims that “the division of labour is limited by the extent of the market” (i.e. it’s probably not worth organising your pin factory based on an elaborate system of intra-firm specialisation if you’re restricted to selling in a small market town in the Scottish Highlands, because you’ll only be able to sell a small fraction of the extra production you’ll be able to generate; it’s definitely worth it if you can sell 100,000 pins a day). A ‘free market’ with no restrictions (either domestically or internationally) then allows access to greater markets, and by this fact allows a greater division of labour, and thus greater productivity.
This is an ‘increasing returns to scale’ (IRS) argument if ever I saw one. Modern neoclassical economists are still quite scared of IRS – if you include it in formal models, it often means competitive equilibria don’t exist. Perhaps even more scarily, it’s easy to make arguments in favour of protection/against competition if you appeal to IRS (whether those arguments are any good is another question, but they can certainly be made on that basis). More generally, James Galbraith (son of the late, great JK) contrasts ‘Smithian’ with ‘Ricardian’ arguments for free trade (both domestically and internationally). Roughly, the latter take resources and technology (i.e. how inputs are transformed into outputs) as given, and point to the how free trade supposedly secures a ‘good’ allocation of these fixed resources; the former point to how free trade itself enhances the amount of resources available for distribution by e.g. affecting technology (increasing the amount of output attainable from given inputs, as with Smith’s division of labour argument). Modern ‘neoliberals’ tend to stick to the ‘Ricardian’ arguments; ‘Keynesians’ are more inclined to the ‘Smithian’. I think the latter are generally more important in explaining actual ‘gains from trade’.
Secondly, and most interestingly, there exists a kind of ‘moral’ argument in Book 1, Chapter X, (‘Of Wages and Profit in the Different Employments of Labour and Stock’), which is an argument based on equality. Here Smith talks about the determinants of wages, and the reasons why they vary between different trades and industries. This chapter basically invents what modern labour economists would call the theory of ‘compensating differentials’ (or ‘hedonic wage theory’) – indeed, modern labour economics textbooks often admit as much.
Smith says that, in competitive labour markets where workers can freely move around unrestricted, then:
“The whole of the advantages and disadvantages of the different employments of labour and stock must…be either perfectly equal or continually tending to equality. If in the same neighbourhood, there was any employment evidently either more or less advantageous than the rest, so many people would crowd into it in the one case, and so many would desert it in the other, that its advantages would soon return to the level of other employments”
He gives five factors which “make up for a small pecuniary gain in some employments, and counter-balance a great one in others”, namely 1) “ease or hardship, the cleanliness or dirtiness, the honourableness or dishonourableness of the employment”, 2) “easiness and cheapness, or the difficulty and expence of learning the business”, 3) “constancy or inconstancy of employment”, 4) “small or great trust which must be reposed in the workmen”, and 5) “probability or improbability of success”.
So the point is: yes, free labour markets produce pecuniary inequalities, but these are just compensating for non-pecuniary aspects of employment, so that markets produce a tendency towards the total (ie. pecuniary plus non-pecuniary, ie. “The whole of the advantages and disadvantages…”) rewards to labour being everywhere equal. He says basically the same of profits in different sectors.
Now that doesn’t look like a ‘trickle down’ argument of the sort Paul suggested Smith is making. It’s not so much “yes commercialism increases inequality, but this doesn’t matter because the poor are better off in absolute terms anyway under a Smithian system”; it looks suspiciously like “commercialism is desirable because it produces a tendency towards perfect equality”, and indeed equality of outcome, measured in terms of psychic utility or whatever.
Smith’s argument against the ‘policy of Europe’, then, is that typical restrictions like the Statute of Artificers or the granting of government monopolies to certain corporations accords arbitrary privilege to particular economic actors by preventing these equalising forces from coming into play.
Now of course neoclassical economists would also argue strongly against such restrictions. But the arguments they use are very different. Imagine a massively simplified neoclassical two-sector labour market where in one sector some mechanism contrives to keep the wage rate above the ‘equilibrium’ rate – everyone who’s studied any economics beyond A-level will probably have seen the diagram showing how this causes either wages in the ‘non-privileged’ sector to be well below those in the privileged sector (as the surplus labour that can’t be profitably employed at the privileged wage-rate floods into the non-privileged market), or if wages in the non-privileged are not flexible downwards, then it causes unemployment there. This is a silly model of the labour market which largely misses the point about how wage, and especially employment, levels are set in actual labour markets. But nevertheless it’s something of a neoclassical benchmark.
Now when the neoclassical economist explains why he objects to the ‘sectoral-privilege’ situation, he will probably point to a little triangle on the diagram and tell you that this represents a ‘deadweight loss’ (the idea that the cumulative monetary gain to those in the privileged sector from this particular wage-fixing arrangement is less than the monetary loss to those excluded from that sector), and that this arrangement is thus ‘Kaldor-Hicks inefficient’ (or possibly ‘Pareto inefficient’).
However, Smith didn’t have these now-widely-used efficiency concepts; economics had to wait until the early 20th century before these concepts became widely accepted. Instead, when arguing for the desirability of removing such sectoral wage-fixing arrangements, Smith didn’t appeal to the idea that the re-equilibrating movements in wages following this liberation of markets would improve ‘Kaldor-Hicks efficiency’, but rather to the fact that it would increase *equality*.
Superficially at least, that argument looks pretty far from a standard neoliberal argument for free markets. And the obvious implication to draw is that, if one accepts Smith’s premises, but markets don’t work to increase equality in the way he thought they would (which they don’t: Smith ignores the demand-side of the labour market, for example), then ‘commercialism’ is perhaps not as desirable as he thought it would be.
As if to stress how important equality seems to be to Smith, I count about 40 uses of the word ‘equality’ or variants thereon in that single chapter. Try the same on a piece of Cato Institute market-cheerleading, and see how many hits you get.
Turning to a couple of miscellaneous points, if you look at specific ‘policy prescriptions’ in Smith, then again and again you find stuff that would give any modern neoliberal a coronary. Paul has already pointed out on another post what Smith says on taxes and how the rich should pay proportionately more. But it’s also worth noting that Smith was strongly in favour of very tight usury laws: “The legal rate…ought not be much above the lowest market rate”, which would imply in current circumstances banks being banned from charging rates much above 0.5%.
Moreover, in order to avoid charges of being anachronistic, I should point out that the arguments he gives in favour of usury laws are remarkably modern and could probably be applied to modern credit markets: he recognises that at very high interest rates, only “prodigals and projectors” with highly risky speculative investments will want to borrow, which would be a waste of the nation’s scarce capital, i.e. basically an ‘adverse selection’ argument. This is a primitive intuition of the fact that when there are heterogeneous ‘types’ of participants or goods in the market, and market participants have imperfect info about which type is which, then even competitive market outcomes can be highly inefficient, from both the private and social point of view – and indeed this is precisely the stuff Joe Stiglitz won his Nobel Prize for (e.g. ‘Credit Rationing in Markets with Imperfect Info’, Stiglitz & Weiss, 1981, appeals to exactly the same ‘sorting’ role that the rate of interest plays as Smith does).
Finally, Smith, and indeed classical economics in general, is very much preoccupied with ‘class analysis’ – this used to be the way of doing economics (it being particularly useful for considering distributional issues). But neoclassical economics has abandoned this in favour of the ‘representative consumer’ approach, and has almost entirely abandoned serious interest in questions of distribution. For example, the bits of tWoN that everyone skips over, namely the very lengthy historical digressions, are mostly pretty boring, but Blaug points out that they develop a kind of proto-‘Marxist’ theory of the state as being basically an instrument for protecting the property of the rich. And of course it goes without saying that Smith is incredibly cynical about the motives of these economic elites, “the masters” as he calls them. Indeed quotes about how they “combine” to basically screw everyone else over are so easy to find in tWoN it’s ridiculous.
To conclude, my favourite quote about Smith is from the great Chicago economist Jacob Viner:
“If we draw up a list of the defects that Smith admits in the ‘simple system of natural liberty’ – the conflicts of interest, the cases where the pursuit of private gains leads to socially undesirable results – we should have sufficient ammunition…for several socialist orations”.
August 24, 2010
Fairness, Drugs and the Dole
Does fairness dictate that we should support mooted Coalition ideas (stolen from New Labour) to force drug addicts and alcoholics to attend sessions aimed at kicking the habit?
The basic idea behind much recent egalitarian thinking might suggest so. What has become known as “luck egalitarianism” takes, as its starting point, the sensible idea that equality must track the choices for which people are responsible.
If you are rich and I am poor, the egalitarian must surely want to know a little more before deciding if the inequality is objectionable. If you are rich because you have worked very hard, and I am poor because I have done nothing but surf the beautiful Pacific and live on the beach for the last 15 years, then it seems fair that you should have more money/wealth/material resources than me. If I have chosen to be a beach bum, then it seems wrong to equalise the inequalities between us.
By contrast, if you and I have both worked equally hard throughout life, but you inherited piles of cash from your rich grandfather, whilst I was raised by a single mum in poverty, then insofar as inequalities between us reflect “brute luck” not our respective responsible choices, it would seem there’s a stronger case for taking some measures to equalise our situations.
So what happens if we apply similar thoughts to the idea of withdrawing benefits from addicts who won’t get clean?
A crude reasoning process might go like this: drug addicts have chosen to become addicted, and they are responsible for that; insofar as they demand support from the rest of us it is fair that they kick their addictions before we pay up.
Is that the end of the matter? No. For at least two reasons.
First, it may well be fair in principle to expect benefits-recipients to reciprocate by not only looking for work, but also by not spending state money on drugs. But fairness may be trumped by a more important value: respect. The case for this has been made by Jonathan Wolff, in a paper criticising some aspects of “luck egalitarianism”. Wolff’s core point is that although fairness is one important value, the over-rigorous pursuit of it can lead to practices that unacceptably demean and humiliate those they come into contact with.
Similarly, we might consider that subjecting drug and alcohol addicts to prying tests and conditional benefits is simply too disrespectful. That placing people under threat for not succeeding in overcoming addiction – a difficult enough process at the best of times – is unnecessarily cruel and invasive. Sure, drug and alcohol addiction at the expense of the state is not something many will be happy with. But the state should nonetheless resist the vindictive urge to punish vulnerable people; it should rise above the base and vicious instincts of the demagogic gutter press.
Secondly, pursuing fairness may be important, but consequences may matter more. Attempting to force people off drugs or alcohol by threatening to remove their benefits seems unlikely to succeed. Addiction is a powerful thing (and the meagre state dole of £65.45 a week alone isn’t enough to feed a serious habit anyway). Taking benefits away will simply push addicts deeper into crime, in order to further feed their addictions. There’s much to be said for fairness – but not if it means worse social consequences whose financial costs are likely to outstrip any meagre savings on offer.
However, don’t fail to note a certain irony in any discussion of whether its “fair” to withdraw benefits from some of society’s most vulnerable, impoverished and miserable.
If this government – or society generally – were really interested in “fairness”, we would get rid of private schools. We would massively increase inheritance tax rates. We would take measures to reverse the trend – growing since the 1980s – that says if you are born poor, you will most likely live and die poor.
But as a society, we’re not really interested in fairness. We’re interested in beating the vulnerable with big sticks. Sticks which we like to give names to. Names like “personal responsibility“, or “the importance of individual choice“.
August 23, 2010
Just Boring
I don’t regularly play Medal of Honour, but a lot of my friends do. The various instalments are something of a phenomenon, not least as the advent of high-speed internet has allowed 24-hour game-play with live opponents across the world. Though apparently Call of Duty is much better.
Is MoH like real war? Obviously not. For a start, it’s a computer game. When you play you experience fun, rather than extreme, colossal fear. When you “die” in MoH multiplayer, you do not even have to sit out the rest of the game; you merely wait 10 seconds to “respawn” and carry on playing.
Sure, the object is to “kill” your opponents. But in that respect MoH is no different to the archaic Space Invaders. The graphics, game-play and complexity are all vastly superior, but the basic principle is the same: fire dots at pixels and make them go away.
MoH – like Space Invaders – is entertainment, and nothing more or less than that. When my friends play MoH, they don’t “identify” with the soldiers they are controlling or shooting. Because it is just a game, a diversion, a way to pass the time.
Which makes Liam Fox’s outraged comments about the latest MoH multiplayer – which allows people to play as the Taliban versus British troops – especially dumb. Nobody actually playing MoH thinks for a second that they are the Taliban, or has any sense of empathy for them, or desire to glory in the killing of British soldiers. This isn’t even a case for arm-chair Freudianism. Players are not secretly revelling in the illicit or forbidden, they’re just playing a game.
For the same reason that none of my friends have become stalwart Nazis or Communists after role-playing as the Wehrmacht or Red Army in Call of Duty, none of them are now going to become pro-Taliban. Or for that matter, scorn the lives of their mates – some of whom happen to be fighting in Afghanistan for real in our pointless, never-ending, unwinnable war.
But we’ve been here before, haven’t we? At least once a year there’s some uproar about computer games twisting the youth into psychotic murderers. And when it’s not allegations of electronic psycho-zombie-rearing, it’s hysteria over some other popular demon. Rap music is a tested favourite (think NWA to Eminem), but occasionally dance or metal does the job too (think Prodigy’s Smack my bitch up,* or Slipknot weeing on each other).
Indeed popular freak-outs about drugs are often of the same order. What’s that, lots of kids are taking mephedrone, then hugging each other, keeping themselves to themselves and not bothering anybody else? Cue media lies about meph-induced deaths, political demagoguery, and a whole bunch of new substances rendered illegal so they can be sold by organised criminals and cut with who-knows-what to make them actually dangerous. Success!
We know why politicians target computer games/music/recreational drugs. Haranguing about such things enables them to point to allegedly simply solutions to what are usually complex problems. Like intergenerational alienation, mass hysteria about hidden forces corrupting society from the inside, youth apathy, estrangement, and tragic cases of individual loss – things that no one political initiative is going to understand, let alone solve. Nonetheless, recourse to the official government ban allows politicians to make it appear they are doing something meaningful – with the bonus of keeping the Daily Mail happy.
Yet I can’t help wondering if we’ll ever get tired of this. Because let’s be honest, it’s all so boring. We’ve been here before; we’ve seen it all already. The correct response is not outrage. The correct response is a big, fat yawn. As they used to tell us in primary school: just ignore Liam Fox, he’s simply not worth it.
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* “Smack my bitch up” referring, of course, to the taking of heroin, not to domestic abuse. But don’t let that bother the self-righteous media moral orgy that normally couldn’t give a toss about battered women.
August 22, 2010
Here’s some I made earlier
I’m still busy, and nothing is worth blogging about anyway. Charles Kennedy defecting to Labour, indeed.
In lieu of getting my act together ahead of next week, here’s some I prepared earlier.
New nerd posts: why Aristotle’s “mistake” about justice may not have been as stupid as is often supposed; why Hobbes is certainly not as stupid as some of his critics suppose; and why a certain take on “Republican” freedom may be more stupid than some of its proponents potentially suppose.
Have a nice Sunday.
