I was talking about “efficiency” the other day and it reminded me of a funny tale I heard in an old seafarer’s tavern one day about three sailors marooned on a desert island inhabited by the spirit of a powerful economist. Want to hear it? Fine. I’ll tell it.
Seems three old tars washed ashore one day on a desert isle. While waiting for their ship to come in they split up to look for food. All they could find was three caches of coconuts. One had one hundred coconuts in it and the other two had one each. They were about to consolidate and dole out their coconut booty when one of them, Sharky the Pirate, a cold and egoistic fellow, who had found the cache with one hundred coconuts, objected and declared he should keep his cache and the other two theirs. Sharky, who had attended a few economic lectures as a callow youth, informed them. “Our current allocation is efficient, and in times like these, we should concentrate on what’s efficient, not stray from that path.” “Efficient for what?” the other two asked incredulously.
“Efficient for total health and wellbeing? Because under our current allocation we two will likely starve before the ship comes in.” “No, not efficient for that,” said Sharky.
“Efficient for the total production of coconuts? Because if we two get more, we’ll have the strength to search again and likely find more than you could ever find on your own.” “No, not efficient for that,” said Sharky.
“Efficient for general human welfare or satisfaction? Because we two will surely value our second coconut more than you value whatever is left after the ship arrives.” “No, not efficient for that,” said Sharky.
“Efficient for the production and promotion of an ethical society, peace, goodwill between us? Because we have ethical beliefs we think should really be considered.” “No, not efficient for that,” said Sharky.
“Efficient for what, then?” they exclaimed. Eager now to show his erudition, Sharky explained, “It’s just Economics 101, my lads. Efficient for maximizing ‘utility’ as defined by economists. Economic efficiency.” “Say what?” his companions asked, slack-jawed.
Sharky couldn’t say exactly, but he had heard tales the spirit of a powerful economist haunted the isle, so he summoned the spirit with arcane chanting, strange runes, and offerings of coin. Suddenly, in a thick haze of black smoke, The Economist appeared! “Yes, my children,” the spirit proclaimed. “Sharky is correct. The distribution of coconuts is economically efficient. That’s because economic efficiency is defined with respect to a very special sort of ‘utility’ only we economists use. Economic efficiency defined with respect to ‘utility’ means simply I cannot move anyone up his or her preference rankings, or increase his or her ‘utility’ as we say, without moving someone else down his or her preference rankings, decreasing his or her ‘utility.’”
“So ethics are not relevant at all?” the other two asked, still mystified.
“Whose ethics?” the spirit replied slyly. “My ethics? As an economist, even in spirit form, my own ethical reasoning is confined to the ‘utility’ on which neoclassical welfare economics is based. Sharky’s ethics? Well, if Sharky had preferences based in ethics consistent with your own, consideration of ‘utility’ may have worked out to your favor. However, I can assure you he does not, so interpersonal conflict is inevitable.”
The two were about to despair when one remembered something he once read on an old message board about economics being an ethical half-theory. “And what about us? Our ethics? Are you saying we should accept what’s economically efficient, no other ethical considerations matter?”
The spirit glowered. “You have spoken the magic words! No, economic efficiency is not ethically dispositive. Indeed, it addresses only the most insignificant of ethical issues, here blocking the preferences of Sharky with no benefit to you. Pursuing economic efficiency is rarely a controversial ethical goal unless one sees ethical issues with another’s preferences, but it’s quite rare to find a situation where that’s the only issue, where resolving an interpersonal conflict of preferences is not also involved. No, the resolution of the significant, controversial ethical issues associated with how interpersonal conflicts of preferences over scarce resources are resolved, such as your current dispute over the disposition of the life-giving fruit, is up to you to decide.” With that, the spirit vanished, leaving only the acrid smell of sulfur in the air.
One of the coconut challenged old tars said, “Seems we’ll need to find a way to address our ethical differences on our own. I suggest parley, followed by democratic vote.”
Sharky fumed. “I suggest you two mind your own damn business, and if ever you get any of my coconuts, it will be from my cold, dead fingers. I see your sham ethics, all about greed, self interest, survival, but I have an ethical right to dispose of my coconuts as I will. If you two had a hundred coconuts each, and I one, you would surely tyrannically seize my one to split between you, and I would starve. Your ethics are false, what’s real is a perpetual war of all against all for resources or anyway ethics based in rights not granted by you.”
A violent melee then ensued in which Sharky tried every underhanded fighting trick in the book to prevail over his companions, but driven by ethical indignation, the will to thrive, and finally abject hatred, two succeeded where one failed. After due deliberation and reasoned debate, they voted and adopted the distribution of coconuts the majority found ethical, they all shared the coconuts and lived to sail another day, friends thereafter, but it was a near run thing. Or that’s the version I heard, anyway.
