This is just getting comical at this point but, yes, I’ve thought of yet another thing to say about fake distributional indifference in misinterpretations of neoclassical welfare economics as a component of the outer layer of the onion of bad economics. It’s short, which is something to be thankful for anyway, but significant if not exactly sweet, and definitely worth saying. It occurred to me the other day one way the purveyors of bad economics run off the rails in this area is by mixing up distributional indifference, the element of economic theory meant to avoid the controversial ethical issues associated with resolving interpersonal conflicts and the distribution of economic power that is used to resolve interpersonal conflicts in markets, with the ethical proposition or argument that all ethical beliefs relating to distributions or more broadly resolving interpersonal conflicts are unjustified or unacceptable according to economic theory because utility as defined in economic theory cannot be used to address such situations. This, I think, is fairly characterized as a type of fake distributional indifference because it takes what should be theoretical indifference to ethical issues, a determination to not get involved or to assess or evaluate those arguments, a determination to be neither for nor against any such theory, a determination to not be a player in distributional disputes, and turns it into something else entirely, specifically an ethical proposition in its own right that says no one else’s ethical beliefs relating to distributional ethics or more generally the resolution of interpersonal conflicts are acceptable under economic theory, that they’ve all been assessed within economic theory and found lacking.
If one thinks about it seriously for five minutes the argument that economic theory expresses the positive ethical proposition that all ethical beliefs relating to distributional ethics are unacceptable is rather comical. Interpersonal conflicts will always be resolved one way or another in any society, economic power will always be distributed one way or another, and goods and services will always end up someplace and not someplace else, so the argument that economic theory says ethics cannot be involved portrays economic theory as making a general argument for amorality in human relations. But, of course, it’s a pretty basic impulse for humans to want to treat other people ethically, and it’s a safe bet everyone or just about everyone does in fact have beliefs and opinions about what that means, so the best one could say about a general ethical argument for amorality as far as the distributional issues that play into the way interpersonal conflicts are revolved in markets is that it would clearly be absurdly philosophically controversial and hence entirely at odds with the ostensible intent of economic theory to avoid ethical controversy, and really it doesn’t seem much of a stretch at all to just say bluntly that it seems entirely philosophically implausible. In practice, of course, no one uses this argument consistently. It’s something that is pulled out of the bag whenever a purveyor of bad economics perceives some ethical argument about distributional issues he or she doesn’t like and put back in the bag when things are going more along the lines of what he or she finds acceptable. In other words, it functions in practice more as a rather transparent bit of rhetorical nonsense than as a serious bit of ethical philosophy.
Of course, it’s not difficult at all to see how the philosophically inept might end up getting the wrong end of the stick on this issue. Honestly, who writes a partial theory of social ethics anyway? Who makes a big deal talking about utility and bringing to mind complete ethical theories based on utility but then defines utility so that it is relevant to only a small subset of the ethical issues one actually encounters in our world? Who attempts to establish or explain what economic arrangements are socially optimal while avoiding the controversial ethical issues that are obviously involved? It’s bad economics surely, a misinterpretation of what economic theory really says, but it’s based on the awkward structure of economic theory itself, which seems tailor made to support such misinterpretation. When I say we should fix bad economics I understand one can’t make a silk purse out of a sow’s ear, but we can certainly try a little harder to explain what neoclassical welfare economics really says as an antidote to the errors peddled by the typically glib and arrogant purveyors of bad economics.
