I know I said before I don’t like to double up on my posts but seems I’m at it again. Maybe I should just stop saying that? Apparently my mind really does work as glacially as some people have long suggested. Hard to change course once it’s on its way. Anyway, you may recall my last post dealt with some ethical issues I argued were obscured by using distributional issues as a shorthand way to refer to all the myriad ethical issues associated with resolving interpersonal conflicts of needs and desires generated by our inability to make interpersonal utility comparisons using the definition of utility we use in economic theory. I mentioned thinking of those ethical issues only in terms of distributional issues glosses over the practical difficulties associated with the artful manipulation of the distribution of economic power required to make things turn our right on the market according to any given system of ethics particularly given the continuous distributional mechanisms of the labor and capital markets. In case I’m coming off a bit too much like the old Cheshire Cat, let me just explain that was my rather arch way of suggesting economic theory is often misinterpreted or badly taught in such a way that it turns out to seem not quite as indifferent to distributional issues as it really is but instead is perceived to lean rather heavily toward distributional ethics consistent with the distributional mechanisms of labor and capital markets. I also argued treating the ethical issues as distributional in nature also ignores ethical issues involving entities that cannot currently effectively wield economic power on their own behalf, such as future generations and non-human animals and so on. In that sense, the ostensibly ethically simple and non controversial case of one person acting in isolation to fulfill his or her own preferences isn’t quite as simple as badly interpreted or taught economic theory might lead one to suppose.
However, it now occurs to me there is another more conceptual component to the ethical issues relating to resolving interpersonal conflicts involving people fully capable of wielding economic power on their own behalf, which is that the distributional mechanisms we usually have in mind tend to be based on the characteristics and behaviors of the individuals involved that go beyond their role in whatever conflict or transaction we may be considering in the moment, while certain ethical beliefs relating to resolving interpersonal conflicts may be more situational in nature and may be difficult to relate to more general personal characteristics and behaviors of the people involved. For example, if one thinks of an interpersonal conflict between two people, A and B, and let’s say something someone might find of ethical significance is going on, for example, let’s say the exercise of A’s economic power causes B to drop dead on the pavement, the ethical issue at hand doesn’t necessarily involve the characteristics and behaviors of the individuals involved that go beyond their behavior in that particular moment but something a little more general. That is to say, we could exchange A for B and end up with essentially the same problem. This sort of issue would seem to be impossible to address using the artful manipulation of the distribution of economic power but rather more straightforward to address by simply taking that particular interpersonal conflict out of the realm of interpersonal conflicts appropriate to being resolved via the market mechanism and putting it instead in the realm of interpersonal conflicts one feels are more appropriately resolved using some non-market mechanism.
This is yet another reason why economists should acknowledge the full extent of the implications of the impossibility of making interpersonal utility comparisons using utility as it is defined in economic theory and in particular should acknowledge it implies indifference to even using market mechanisms and non-market mechanisms to address interpersonal conflicts in the first place. It’s intellectually dishonest to pretend they have it all covered by simply assuming the ethical superiority of the market mechanisms, suggesting all potentially controversial ethical issues are distributional in nature, then promptly making those issues disappear by sprinkling them over with the fairy dust of hypothetical transfers that would be difficult or impossible to implement or even imagine.
Had quite enough of this issue for now? Fine. I’ll think of something else to talk about next week. It’s not as if I’m likely to run out of funny bits to discuss when it comes to the bad ethics implied by neoclassical welfare economics, is it?
However, it now occurs to me there is another more conceptual component to the ethical issues relating to resolving interpersonal conflicts involving people fully capable of wielding economic power on their own behalf, which is that the distributional mechanisms we usually have in mind tend to be based on the characteristics and behaviors of the individuals involved that go beyond their role in whatever conflict or transaction we may be considering in the moment, while certain ethical beliefs relating to resolving interpersonal conflicts may be more situational in nature and may be difficult to relate to more general personal characteristics and behaviors of the people involved. For example, if one thinks of an interpersonal conflict between two people, A and B, and let’s say something someone might find of ethical significance is going on, for example, let’s say the exercise of A’s economic power causes B to drop dead on the pavement, the ethical issue at hand doesn’t necessarily involve the characteristics and behaviors of the individuals involved that go beyond their behavior in that particular moment but something a little more general. That is to say, we could exchange A for B and end up with essentially the same problem. This sort of issue would seem to be impossible to address using the artful manipulation of the distribution of economic power but rather more straightforward to address by simply taking that particular interpersonal conflict out of the realm of interpersonal conflicts appropriate to being resolved via the market mechanism and putting it instead in the realm of interpersonal conflicts one feels are more appropriately resolved using some non-market mechanism.
This is yet another reason why economists should acknowledge the full extent of the implications of the impossibility of making interpersonal utility comparisons using utility as it is defined in economic theory and in particular should acknowledge it implies indifference to even using market mechanisms and non-market mechanisms to address interpersonal conflicts in the first place. It’s intellectually dishonest to pretend they have it all covered by simply assuming the ethical superiority of the market mechanisms, suggesting all potentially controversial ethical issues are distributional in nature, then promptly making those issues disappear by sprinkling them over with the fairy dust of hypothetical transfers that would be difficult or impossible to implement or even imagine.
Had quite enough of this issue for now? Fine. I’ll think of something else to talk about next week. It’s not as if I’m likely to run out of funny bits to discuss when it comes to the bad ethics implied by neoclassical welfare economics, is it?
Addendum
This is an issue I will later come to call the “extent of the market,” the ethical decision of when to use economic power in markets to resolve certain interpersonal conflicts of preferences or desires or needs, which I will later describe as another sort of “distributional issue,” albeit one involving the distribution of a particular good or service possibly in some particular situation rather than the distribution of economic power by people that can then be used to resolve interpersonal conflicts relating to goods and services on the market. For example, see my post on Law Over Anarchy In Neoclassical Welfare Economics from June 2, 2021.
