Level Issues, Economics, And Democracy

I thought I might have another go at anti-democracy sentiment in the USA as it relates to bad economics in the conservative style and its sequelae this week. How about them level problems?

As I mention, often, neoclassical welfare economics is an ethical half-theory (at most) because it does not address the ethics of resolving interpersonal conflicts. In economic contexts, those ethics relate to economic power: the definition, distribution, use of economic power.

The definition of economic power concerns laws relating to property, ownership, legal property “rights,” who owns what and why, under the law. Neoclassical welfare economics does not contain an ethical theory of who should own what or why. If one imagines the results of any set of laws about who owns what and why and changes it around so rich become poor, poor become rich, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.

The distribution of economic power concerns laws governing the pattern of economic power and includes all those legal arrangements, mechanisms that play into that, as labor markets (with or without unions, market failure, etc.), capital markets, inheritance, policies, etc. Neoclassical welfare economics does not contain an ethical theory about how economic power should be distributed, for example, it does not present an ethical theory proposing one’s economic power should correspond to one’s productivity or contribution to profits or what have you. If one imagines the results of any set of distributional mechanisms and then changes it around so rich become poor, poor become rich, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.

The use of economic power concerns whether, in any given instance of resolving an interpersonal conflict of preferences, allocating some good, society goes with markets or something else. For example, in the case of scarce vaccines, we allocated by medical need not via markets. Neoclassical welfare economics does not contain an ethical theory that says given the choice between resolving some conflict of preferences, allocating some good, via economic power in markets versus some other system one should choose markets. If one imagines the resolution of any particular interpersonal conflict of preferences using markets, then changes it around to give a different resolution, neoclassical welfare economics will not be able to rank the two outcomes as far as normative or ethical superiority.

What neoclassical welfare economics does is set aside all or most of the thorny ethical issues addressed by democratic government, law, then discuss some typically relatively trivial issues that apply once those more significant issues are off the table. This structure has created a great deal of confusion over the years. One common idea is that because neoclassical welfare economic theory does not take up the ethics of economic power, those issues are unimportant for evaluating real economic systems, outcomes, policy. So, for example, one may find bad economists saying it doesn’t matter who owns what, as long as someone owns it, or economic power plays no role in market outcomes, or that market solutions are inherently superior to non-market solutions, and so on.

The segregation and suppression of the role of economic power and the ethics of economic power lead many to view markets as peculiarly free of power interactions and examples of simple voluntary cooperation. Everyone agrees the poor kid may buy a crust of bread, etc. The illusion is obviously helped if one agrees the laws relating to the ethics of economic power one is attempting to suppress awareness of, push into the background, segregate. If one sees problems or issues, the ethics of economic power does tend to become rather more visible. The segregation and suppression of the role of economic power is what gives the rhetorical power to more stridently anti-democracy forms of bad economics and sequelae, such as “libertarianism,” in which markets are meant to be “freedom” and democratic government “tyranny.” It also informs the form of fake anarchism that, rather than taking certain laws for granted, proposes once democratic government, law, is out of the way, people will naturally and organically agree all the ethical issues democracy, voting, law were meant to address. (There’s an unrelated form of utopian anarchism which neither takes laws for granted nor supposes laws relating to economic power will arise naturally but welcomes the violent struggle over resources that accompanies real anarchy as a sort of social Darwinist test of merit.)

What’s happening is they’re trying to push the role of government, law, in resolving interpersonal conflict, allocating resources, the ethics of economic power, into the background, take if off the table, segregate it as different in kind from government, law at later stages. Basically, they’re trying to reproduce in reality the presentation of markets in the ethical half-theory of neoclassical welfare economics as transmitted via false, misleading, anti-democracy bad economics in the conservative style. In reality,  there is no essential conceptual difference between addressing ethics relating to economic power, resolving interpersonal conflicts, allocating resources, at one point in law or another. One may allocate vaccines by medical need without overhauling markets generally. It’s basically a form of what I call a “level issue” in which the same concept, here laws relating to economic power, resolution of interpersonal conflicts, allocation of resources, may appear at different points of an argument, theory, system, creating confusion.

If one accepts laws relating to economic power are based ultimately in democratic government, there is no obvious rationale for rejecting later revision by democratic government. Not accepting that basis of law suggests anti-democracy sentiment that may well imply criminality. When some discover in a democracy laws may be generated affecting economic power they don’t personally approve, it becomes clear that although at one level acceptance of democratic government may be voluntary, at another level the laws produced may not be always to one’s liking. This makes some propose democracy a form of tyranny in which others may use state power to enforce their will on one. They dream of a system more like their false image of markets, in which interactions are ostensibly purely voluntary, power irrelevant. However, there is no such system. The ethics of resolving interpersonal conflicts of preferences, allocating scarce resources must be addressed, and will  be, one way or another, in any economic system. It’s simply another level issue, where and how is it done and by who? Thus may one be led either to fascism, the hope a like-minded authoritarian despot will support only laws relating to economic power one personally approves, or to utopian anarchism, the notion without democracy everyone will naturally agree those ethics, laws on economic power.

Fighting anti-democracy sentiment means first and foremost fighting anti-democracy bad economics in the conservative style and its sequelae, differentiating them from neoclassical welfare economics, addressing the confusion and conflict academic economists have so long promoted.

Equity and Efficiency, Again

I read someone blathering on about efficiency and equity recently, and it made me wonder if I should do another extended storm on the whole issue of “utility” and “economic efficiency” and so on. Sure, why not? Too soon? Who cares? Alrighty then. Let’s do it.

Equity relates to a class of ethical issues to which “utility” as defined in neoclassical welfare economics cannot be applied. In that theory, one never gives up “utility” to get equity. If one may discuss a tradeoff involving the two ethical considerations, it’s not about that. Indeed, as a corrective, one may note it makes just as much sense to propose an increase in “utility” as a decrease when revising market arrangements in pursuit of equity. (Both are nonsense if talking about preference rank utility, both sensible if perception utility.) Just to briefly review that whole issue, if “utility” is defined as preference ranks of any given individual, it obviously doesn’t make sense to talk about how overall or total “utility” changes when some move up their individual preference ranks and others down theirs. However, if one thinks of “utility” as, say, inaccessible internal perceptions of satisfaction from preference fulfillment that one may only empirically infer via preference ranks as revealed by choices, then it may make sense. However, in that case, it’s inherently unknowable. Those two interpretations of “utility,” preference rank utility and what I call perception utility, are really the only sorts that work with neoclassical welfare economics and preserve the prohibition against “utility” being used in interpersonal contexts. One or the other. Outside neoclassical welfare economics there’s a whole universe of ethical philosophy in which one may define “utility” any way one finds appealing and sensible. Just beware potential equivocation on the term “utility” when discussing neoclassical welfare economics.

Given its significance for economics, one may wonder why academic economists can’t simply decide and talk consistently about either preference rank utility or perception utility accessible only through individual preference ranks. The ethical arguments in the two cases differ. Carrying along two possibilities complicates discussion and evaluation of the ethical reasoning involved and the demonstration of ethical half-theory status. Why the indecision? One supposes it just doesn’t matter for their own ethical program or indeed advances it. It’s yet another indication economists aren’t real or sincere ethical utilitarians. Frankly, my dear, they don’t give a damn what utility is, as long as it’s eliminated from interpersonal ethics and economics is thus rendered an ethical half-theory. Why? Why indeed. I suppose they may do that to create confusion by then fostering the error of supposing neoclassical welfare economics a full ethical theory, thus allowing the sly introduction of exogenous interpersonal ethics as in anti-democracy bad economics in the conservative style. Academic economists may be unrigorous or incompetent ethical philosophers and at the same time clever, sly rhetoricians. It just depends on one’s goals, how one conceives of one’s intellectual responsibilities, one’s attitude toward sincerity of intent and presentation.

To return to our main issue, we have two distinct ethical issues: 1) Is some result equitable (ethical, fair, just, etc.)? 2) Is some result economically efficient defined with respect to “utility” (can someone move up his or her preference rank without someone else moving down)? The exogenous nature of the first issue is why, in careful explanations of neoclassical welfare economics, one will always find equity broken out as a legitimate reason within that theory to revise any real iteration of a market, in addition to and separate from market failure. Note here the distinction between equity issues being exogenous to the ethical half-theory of neoclassical welfare economics and the proposition that theory contains an argument against equity as suggesting it’s baseless or one must give up “utility” to get it. A great deal of confusion often occurs at this junction involving failing to appreciate neoclassical welfare economics as an ethical half-theory. Economists, qua economists, to the extent they base their recommendations on neoclassical welfare economics, are meant to be indifferent, have no opinion, on market interventions based on equity concerns, not to oppose them because the basis is undeveloped in economic theory. Neoclassical welfare economics is a normative theory that sets aside a certain class of ethical considerations relevant in the real world. It’s not a full ethical theory recommending amorality in interpersonal contexts. That would be philosophically, ethically absurd.

Deciding the merits of an equity argument is exogenous to neoclassical welfare economics, and in that broader philosophical context, external to economic theory, one may propose a sort of tradeoff between different ethical considerations, including economic efficiency. However, in that context of general ethical reasoning, the issue of equity, that is, fairness, justness, ethics applicable to resolving interpersonal conflicts is clearly vastly more significant than the issue of economic efficiency. Not much of a tradeoff, if we’re being honest. I suppose few would seriously propose it more ethically significant to know if individual X might have attained a somewhat higher preference rank under some random ethics relating to resolving interpersonal conflicts of preferences than to assess, evaluate those ethics. It’s like saying one finds the issue of whether an impoverished slave can indulge his slight preference for corn pone over grits a much more significant ethical issue than slavery, the ethical basis of economic power, if he can indulge a much greater preference for other foods. I’ve argued before attending to “economic efficiency” in general seems ethically unobjectionable, but if one is setting aside on that account the lion’s share of ethics, which relates to interpersonal conflict, that seems very much a case of the tail wagging the dog. It’s not the job of economists, even those acting in their role as economists and not simply providing their own normative or ethical views under cover of their economic credentials, to recommend or give policy advise on the basis of such an absurd ethical proposition as that.

I propose an economist per se fretting about equity efficiency tradeoffs suggests bad economics in the conservative style, calculated to promote amorality (that equity shouldn’t matter) or the equity arrangements associated with an instance of an economically efficient outcome.

Plain Talk About Neoclassical Welfare Economics

Maybe this week I can talk plainly about ... um ... talking plainly ... in the context of neoclassical welfare economics. You know, saying things directly, honestly, clearly? Not playing rhetorical word games? It’s one of my pet issues. Academic economists often rather fatuously laud themselves for their supposed intellectual rigor. Must refer to them using math in the context of theory or engineering models because, if you read my posts at all, one may wonder how rigorous they really are on other matters.

Consider the following proposition: Policy A results in everyone reaching his or her own highest ranked preference possible, given exogenous, external, pre-existing ethical decisions relating to how we should resolve interpersonal conflicts of preferences. Also, we’re assessing Policy A not in the real world but in an artfully contrived world explicitly involving false factual premises, and thus pertaining only to what might be termed theoretical ciphers, not real people. How high an individual preference rank can any given cipher thus attain, given ubiquitous interpersonal conflicts of preferences, scarce resources? Perhaps not very high at all, depending on exogenous ethical inputs relating to resolving interpersonal conflicts of preferences. On the other hand, some ciphers may manage very high individual preference ranks indeed, may get everything they want, again depending on the exogenous ethical inputs relating to resolving ubiquitous interpersonal conflicts of preferences over scarce resources.

Does that seem reasonably clear, rigorous? Exogenous ethical inputs? So for example, exogenous decisions relating to whether to use markets to resolve particular conflicts of preferences or, as with vaccines, some other system of distribution, allocation. Or also exogenous ethical decisions on how we define and distribute economic power, so labor and capital markets, unions, inheritance, lotteries, tax policy, government programs of various sorts, Social Security, and so on. So, if we assume all issues relating to the ethical resolution of all interpersonal conflicts of preferences have been addressed (by someone or other), as the definition, distribution, use of economic power for that purpose, then Policy A has the advantages we discussed earlier.

Now consider the following potential restatements of our proposition: 1) Policy A is efficient. 2) Policy A leads to a socially optimal result. 3) Policy A maximizes social welfare. 4) Policy A maximizes total social utility. 5) Policy A is Pareto optimal or efficient. Also, Policy A is still assessed in an artfully contrived world explicitly involving false factual premises, theoretical ciphers rather real people, but may be presented as a meaningful approximation of the real world for normative or ethical purposes. 

Did you get the same impression from those restatements? It’s a bit trickier, isn’t it? One reason is because they use special economic interpretations of words like “efficient,” and “welfare,” and “utility,” and “social,” and even “optimum.” The terminology is recondite. A good deal of neoclassical welfare economics involves taking up specialized economic definitions of common words, using them in new and confusing ways, then lambasting others for misinterpreting them, which others and often economists themselves often seem to do. Also, there seems a confusing issue relating to the significance to the real world of a normative or ethical theory using false factual premises, a potential inappropriate application of methods from positive engineering models relating to false but simplifying assumptions. It all seems unnecessarily awkward and rhetorical, like a big old circle of nonsense. Start out with something simple enough, then complicate it by using words oddly, applied in odd contexts, then propose to laboriously explain all the unnecessary complications, terms, etc.

Why do you suppose they do that? To promote intellectual rigor and logic? To bring the light of positive science and math to ethics and philosophy? Or something a bit more prosaic? To pull a fast one on the people? Pull the wool over their eyes? Trick them? Con them? Or perhaps it’s more defensive than offensive? A laying down of logical and linguistic impediments, roadblocks, traps to prevent non-economists getting involved in economists’ special province? To keep other interfering with economists’ self-defined role as ethical arbiters?

Do I propose neoclassical welfare economics, with its tricksy word play, unclear relation to reality, is “bad” economics? Well, it’s misleading, arch, rhetorical, confusing. However, if one attends to the terms, conditions, it says what little it says, it’s not “bad” that way. On the other hand, it does seem purpose built to support the errors and confusion that lead to bona fide bad economics in the conservative style, which presents neoclassical welfare economics as saying something other and more than it does. So might we say, “bad-ish?”

Economists: Talk plainly. Take the Don’t Say Utility Challenge. Explain how the ethics of resolving interpersonal conflicts of preferences enters or does not enter into your theory. Stop talking rot in an effort to mislead and deceive. Fulfill your intellectual responsibilities.

Non-economists: Wise up. Don’t sit there like wide-eyed children when conservative economists try to con you, waving their arms, getting all defensive and weird whenever challenged. Think critically. Don’t just accept whatever you’re told, or you’ll be told nonsense, and how.

Positive Economics

I thought this week I might step outside my usual area of interest and take up positive, predictive economics, and the normative influences on that, philosophy of science, that sort. There are a few moderately interesting issues there, as well.

In an academic economic context, if one expresses any interest in the normative aspect of economic theory, one will quite likely quickly be shuttled to discussions in philosophy of science, under the conceit economics is a science and that’s where such issues are discussed. Let’s just play along today. As I’m normally concerned with normative neoclassical “welfare” economics and related bad economics in the conservative style, let’s first take up the issue of whether neoclassical economic theory, used for empirical prediction, is a proper “science.” I find that question, about neoclassical economic theory specifically, rather easier to discuss than whether “economics” is a science because “economics" is a pretty general category, and some parts of it may be rather more scientific than others.

So let’s consider what to make of neoclassical economic theory ostensibly used for the positive purpose of predicting empirical economic phenomenon. I typically characterize it as an “engineering model,” but others have it a “science.” Let’s briefly discuss. I suppose a proper scientific theory should reflect or incorporate what we know about the world, which is what leads to its accretive quality, its ability to grow piecemeal as research takes up this or that part of the puzzle and then synthesizes those data and results. Attempting to account for any awkward divergence of reality from what particular scientific theories might present, express, suggest, predict is what fuels much research in any real science. But the final test of a scientific theory must involve successful empirical prediction.

An “engineering model” used for predictive purposes seems to me to stand in a different relationship to reality than a scientific theory. For one thing, it makes no presumption that the “simplifying assumptions” on which it is based reflect reality. They’re arbitrary, made up. For another thing, incorrect empirical prediction is not necessarily a problem because one is making an ostensibly self-conscious decision involving simplicity, tractability, and predictive ability. Predictive failure does’t necessary imply any presumed need to revise a model. When it comes to engineering models, the evaluation is a softer matter of advantages relative to other engineering models for that purpose, and unless one is presenting a better, sufficiently simple, tractable theory, there may be no perceived problem with the existing model. I would suggest those are the primary reasons neoclassical economic theory, price theory, doesn't seem to exhibit the piecemeal, accretive quality of a real science. Indeed, quite the opposite. It has existed in the same basic or general form for literally decades.

Importantly for my concerns and interests, engineering models give researchers relatively more leeway than proper scientific theories to construct models they find useful as they subjectively weigh criteria such as descriptive realism, simplicity, and predictive results. This greater leeway of researches using arbitrary engineering models to pick and choose models and elements of models they find useful in the moment clearly allows much more scope for normative interests and biases to be reflected in such models than in proper scientific theory. I noted before the basic form of neoclassical economic theory has remained the same for decades. It raises the question, is it because of its combination of predictive ability and simplicity, success relative to competing models for the very practical purpose of prediction? Or may there just be something about the model itself some researchers find appealing? Its elegance, simplicity, beauty, intuitive appeal? Or indeed its use in normative or evaluative economics, in applied neoclassical “welfare” economics, often lumped with the positive form? Or, going yet a step further, might it involve its rhetorical usefulness for promoting anti-democracy bad economics in the conservative style, the dodgy normative theory based on flawed interpretations of normative neoclassical welfare economics? Within economics, there does seem a curious fascination with, or exaltation of, one particular, arbitrary, engineering model, a curious lack of interest in presenting engineering models with entirely different false but simplifying assumptions to be used for predictive purposes. And certainly it seems unusual, notable the same neoclassical economic theory can be used for normative, evaluative purposes in the guise of neoclassical “welfare” economics as well as positive, predictive purposes. It’s not dispositive, but suggestive, surely.

This has led some or let’s just say many to suppose it folly to try to draw any distinction between positive and normative economics in the context of neoclassical economic theory. And, I see the issues, the difficulties, that generate such sentiments. But I must disagree. As I’ve argued many times, I feel a useful distinction can be drawn between positive economics, at least ostensibly about empirical prediction, which may have normative influences, and normative economics, about evaluation, goals, values, ethics, appealing storytelling. The big controversies about economics are about normative economics, ethics, values. Although economists may also be bad at empirical prediction, may slavishly adhere to models inadequate to the task for some old reason, may pretend to be scientists, that’s really a side issue.

Normative Propositions and Actors and Roles

Can we revisit the issue I call “actors and roles” as it relates to normative propositions in the artfully fabricated world of the ethical half-theory of neoclassical welfare economics, the Fairy Land of Economic Theory, versus reality? It’s a fun issue.

I usually discuss this issue in the context of ethics of economic power as it relates to resolving interpersonal conflicts of preferences in markets. In the ethical half-theory of neoclassical welfare economics, economists as such are meant to not express opinions on such ethics. Of course, a running joke in economics is that bad economists in the conservative style do exactly that, all the time. Indeed, one supposes occupying the bully pulpit to disseminate such views is what draws many bad economists to economics in the first place. But that’s really tangential to my issue today. Serious economists, or most of them anyway, understand they’re not really meant to be doing that. No, my topic today involves who economists suppose are not meant to be doing that and doing other things I’ll discuss a bit later on.

The normative or ethical proposition in neoclassical welfare economics is a bit ambiguous on that particular issue because preferences on interpersonal ethics, such as those relating to economic power, aren’t usually ascribed to the theoretical ciphers of the Fairy Land. It seems a conscious feature of the artfully constructed Fairy Land meant to eliminate certain ethical issues, but awkwardly it mimics or parallels what for economists is an ethical proposition about what they’re meant to be doing as economists. Back in reality, one suspects some economists may get a bit confused and suppose it's an ethical proposition they’re meant to promote to real people, encourage real people to act more like the ciphers of the Fairy Land and thus also have no interpersonal ethics. What was meant to avoid contentious issues in the ethical half-theory of neoclassical welfare economics becomes transformed via philosophical ineptitude into a risibly implausible proposition in the ostensibly full ethical theory of bad economics in the conservative style.

However, that’s just one example of a general class of such issues. Another example I’ve discussed before is the role of greed. In the Fairy Land, greed under certain conditions, in certain carefully constructed contexts, by certain actors in certain roles, is cast as beneficial. In the context of bad economics in the conservative style, in contrast, Greed is Good wafts in like a poisonous miasma from the Fairy Land to become a risibly dodgy general ethical proposition in the ostensibly full ethical theory of bad economics in the conservative style. One may wonder if bad economists themselves are meant to express that normative proposition. May we assume they just say whatever people have paid them the most to say, with no regard for other values such as truth, honesty, as they suppose Greed is Good? 

But the example I thought about recently that really prompted my discussion today concerns the normative proposition de gustibus non est disputandum. Sorry about that, but it is conventionally conveyed in Latin. And you know what that means, right? Red flag! It just means economists as such or qua economists are not meant to tell subjects what their preferences should be but rather just accept them as givens. Which subjects? The ciphers of the Fairy Land or real people? And preferences about what? Ethics? Let’s discuss.

In reality, of course, non-economists expend vast amounts of economic power forming, shaping, shifting, changing others’ preferences in various ways, via advertising, marketing, political rhetoric, serious argument, all sorts. For them, de gustibus est disputandum, and how. But those aren’t the actors the normative proposition in neoclassical welfare economics is meant to address, are they? It’s meant for economists, not others, nor even economists acting as private individuals rather than in their role as economists. Again the issue may get a bit opaque because in ethical theorizing appropriate to the Fairy Land, one doesn’t normally take up potential preferences of some ciphers to manipulate or change the preferences of other ciphers. It’s just not part of that artificial world. And again, are economists meant to propose real people behave more like the ciphers of the Fairy Land? Are the ciphers meant to be acting under a dodgy normative proposition economists must then transmit to real people? I wouldn’t have thought so, but some may think so.

It leads to a notable absurdity one finds commonly in economics in which economists, using arguments involving the de gustibus proposition, dispense advice to others on what economic arrangements, systems, goals they should prefer, browbeating all who oppose them. One wonders if they suppose their role as economists in reality must differ from their role as economists in the Fairy Land because reality and the Fairy Land differ in ways significant for the normative propositions involved? Normative propositions must be added in application? When these economists think about the normative content of neoclassical welfare economics, one wonders if they have in mind only the content relating to ciphers in the artfully constructed Fairy Land, or also the propositions added during application of the theory to reality.

The opaque, often dodgy ethical reasoning in normative economics is at least as interesting, and I would suggest rather more interesting, than the more commonly discussed potential normative biases that may intrude upon the engineering models of positive economics. When one thinks about normative economics, one shouldn’t make the mistake of focusing on the discussion of normative biases and so on derived from the philosophy of science. Rather look at the big issues: the explicit ethical propositions, arguments in normative economics.

Fourth Anniversary

Seems my fourth anniversary fighting anti-democracy fascism, theocratism, and anarchism by addressing the differences between neoclassical welfare economics and bad economics in the conservative style has rolled around. Let’s do a fun one this week. I generally like to share stories from my life in the mountains on my anniversary. Did I tell you about the time I met bad economics and one of his little minions on a particularly windy path in the foothills one day, not long ago? It was funny. No? Fine. I’ll tell it.

Yes, I remember it well, ’twas in the merry month of May, or maybe June, I don’t remember, and it doesn’t matter. Anyway, I had ventured down the mountain to view the flowers and a young man approached unexpectedly and began to speak. He was a rather excessively well-nourished young fellow with shiny skin and flowing golden locks that cascaded from under a bright red cap and over the collar and shoulders of his richly appointed orange robe with trim that looked to be of pure gold. A remarkable sight.

“I say there! Are you the one they call the Old Man of the Mountain Paths?” he shouted at me. 

“Yes. And other things.” 

He surveyed my shabby attire. “The Hobo at the Gate, is it? But it’s the paths I’m concerned about, not the gates. Do you know which way is up? Or rather down?”

I grew concerned. “Should you be here with no prior study, no knowledge? These mountains can be treacherous. Some paths turn suddenly slippery, sloping downward toward dangerous cliffs, others become steep, rocky, difficult to scale. You should respect the mountain.”

“Is that so?” the young man scoffed. “Rest easy, old man. Have no care. I see no real difference between positive and normative and believe just whatever I like. Others may believe whatever they like. It makes no difference to me,” he declared smugly, beaming at me. At that, I grew wary, looked about. As I suspected, bad economics, adorned with the bones of those who have died from hunger and want amid plenty, was sitting on its haunches a short distance away, perfectly still, inert, unmoving, blending into the background, all but invisible.

“Surely you accept some facts are distinct from your preferences about them,” I ventured. 

“Not a bit of it,” the youngster replied, excitedly. “For all I know, I’m a figment of the brain of a butterfly in a vat dreaming of a cave in which you are but a mere shadow on the wall!”

“Indeed, but do you propose what you seem to perceive has no significance because of it? You may safely take any path you prefer? Whatever seems right, good, and proper to you just now? Because I recommend most earnestly you take the path bending gently to the left ahead. That path leads to stable ground and on to the pleasant valley, a warm hearth, a good drink, a hearty meal. The paths that veer sharply to the right and left are treacherous. Many have perished on those paths, never seen again by friend nor family. I hope you may choose wisely.”

At that, the young man grinned and strode off confidently to his fate. I watched to see which path he took and was satisfied to see it the correct one. Awkward if he had developed a preference for one of the others, and I faced an awkward dilemma because of it. Would I have boldly stood by, in the name of liberty, freedom, while the young man under some delusion marched off to his certain demise? Would I have tried to intercede, if successful ensuring him a chance to think it through another day? What would you have done? Concerned it might be difficult, even dangerous to intervene? Not necessarily, but it might be. Why? Does it matter? Not sure why one would even ever consider it? Difficult to say. More so for some than others, of course. Common human sentiment, perhaps? The moral sense? As it was, I had no call to evaluate his state of mind, rationality, level of knowledge, intentions. No awkward interpersonal conflict of preferences nor questions of respective ethical responsibility marred that sunny afternoon and all was well for us two in the moment.

I looked to bad economics, sitting inert as ever, unmoving, unmoved, but now glaring at me in sullen disapprobation. The hair on its sinewy body and forelimbs bristled. “Droll,” I said. It appeared to speak but made only a low sound in some old and arcane tongue. I stepped toward it, but it vanished straightaway in a cloud of fog and mist. Back to the Fairy Land, I supposed. I keep watch now also for lost boys and girls on the mountain, but I’m only one man and the mountain vast. As long as bad economics is free to roam, danger lurks. 

Maybe one day you’ll choose to join me here. Take the Way of Philosophy through the low foothills, find the hidden gate to the high mountain paths, look for signs, portents, and you might catch a glimpse of bad economics, grasp it, say the words, end its reign of terror.

Anti-Democracy Conservatism And Economic Power

I thought this week I might delve a bit into the anti-democracy movement in the context of conservatives with and without economic power and their attitudes toward the economic status quo, issues I think create much confusion among liberals and “leftists.”

When thinking of the relationship between anti-democracy conservatives and the economic status quo, the economic establishment, it seems advantageous to distinguish initially between economically weak and economically powerful conservatives, as their views are quite different. Of the two groups, I suppose the easiest to understand is that composed of economically powerful conservatives, who seem clearly to oppose democracy because they suppose their own economic power may be negatively affected by voters enacting unwelcome economic policies. One important way voters may do that is by using the authority of democratic government to tax the economically powerful and use that money for programs, policies that help the economically weak. So this group is typically all about opposing taxation and government spending. Although they may prefer democratic government not exist, at least if they feel they can reliably dominate whatever authoritarian government does exist, as a fall back positions they may support small, inactive, inert democratic government or one dominated by economic power. As for views on the ethics of economic power, they support their own economic power, often relying on bad economics in the conservative style or its sequelae, proposing it the result of ethically dispositive markets, their own merit, and so on. So are these economically powerful anti-democracy conservative pro or anti status quo, pro or anti establishment? Well, that seems a judgment call. They support it well enough, to a certain degree, but they suppose they might do rather better still if we eliminated democracy. Differences between this group and liberals are the usual suspects: the ethics of economic power, the nature of ethics in general, and the role of voters, democracy, the US Constitution in addressing those ethics, generating laws, and factual issues relating to real markets.

The more interesting case, to me at least, is the group composed of anti-democracy economically weak conservatives. They often hold similar views on economics as their economically powerful comrades but their relationship can be complex and fraught. Economically weak conservatives tend to see markets as ethically dispositive, join the economically powerful in opposing other economically weak people trying to use democratic government to improve their situation, feel it unethically diverts economic power away from themselves. However, things get more interesting in the context of attitudes toward the currently economically powerful, where attitudes may become complex, divisive, one factor surely encouraging these conservatives to focus more on the easy case of attacking the (other) economically weak.

One faction opposes the economically powerful, sees their economic power as also generated by their influence over democratic government and thus also unethically diverting money away from themselves. They propose fighting democracy is also fighting the economically powerful. One disagreement this group has with liberals is liberals support democracy and see the answer to the influence of economic power over democratic government as reducing that influence, making democracy better, while these conservatives see that as impossible or ill-advised. When they see it as ill advised, it again likely has to do with that fact that even if the role of economic power in our democracy were reduced, the demands of the economically weak delivered via voting would remain for them a significant problem. Another disagreement involves the nature of the proposed alternative form of government this group of conservatives proposes superior to even improved democracy, its resistance to economic power, and the ethics and facts of the markets it is meant to create and enforce.

The other faction supports the currently economically powerful and may be further divided into corporatist and pro-“free market” factions. The corporatist faction supports the influence of economic power in government, likes monopoly, Citizens United, that sort. While these conservatives may not be pro-“free market” in one sense, they may be at least pro-market in another sense, seeing real, existing economic results, markets in ethical terms. They’re often business and technocratic types who worship economically powerful businesspeople. Disagreements with liberals for this group includes not just the role of democracy, but even conventional economic thinking about the potential benefits of competition and so on, with ethics focusing more on Social Darwinism, natural selection, etc. 

The faction that supports the economically powerful on a pro-“free market” basis is also divided. One group ignores the role of economic power in our current economic system and supports those with economic power because they propose we have ethically special markets now. Disagreements between this group and liberals involves the ethics of economic power, the role of democracy, but also factual matters relating to real markets, the extent to which they currently reflect theoretical “perfectly competitive” markets. Then we have a final group of pro-“free market” conservatives who support those currently having economic power not because we already have an ethically special market now, but because they suppose the economically powerful are trying to create one against their own interests. This group envisions a conservative authoritarian government, small fascism, they suppose may enforce ethically special “free markets” against both the demands of economically weak voters and the machinations of the economically powerful operating through democratic government. Disagreements between this group and liberals includes the ethics of economic power, the role of democracy, and again the nature of the proposed conservative authoritarian government meant to be immune from economic power that oversees ethically special “free markets.” All the various factions of anti-democracy conservatives who promote ostensibly ethically special “free markets” may be incorrectly referencing arguments relating to theoretical “perfectly competitive markets” in the ethical half-theory of neoclassical welfare economics.

Why am I saying all this? I’m just trying to establish the anti-democracy conservative movement even only as it applies to economic matters, setting aside bad religion and racism, is a complex, multi-faceted affair. A Hydra with many heads. It must be addressed accordingly.

Bad Economics In The No Conflict Case

I generally discuss the problem of bad economics in the conservative style in the context of interpersonal conflicts of preferences but only rarely in the ostensible no conflict case. However, it causes problems even there. Maybe we can discuss that this week.

The easy case as far as the normative argument expressed in neoclassical welfare economics is when there are no interpersonal conflicts of preferences to resolve and indifference to others’ choices based on their individual preference ranks is meant to be ethically a slam dunk. The idea one has no ethical justification for interfering in another’s behaviors, choices, if they don’t conflict in a sufficiently serious way with one’s own situation or those of others, is a commonly accepted ethical proposition in our society. However, and this is really my theme for today, the issue is not nearly as simple or straightforward in reality as it is in the context of the normative argument of neoclassical welfare economics, ethical propositions meant for what I often call the Fairy Land of Economic Theory. Why? Because neoclassical welfare economics involves the assumptions the ciphers standing for people in that theory are perfectly rational and have perfect information, which essentially eliminate any awkward, potentially problematic cases in that area.

Note in the context of normative economics those assumptions are not presented as factual premises. If they were they could easily be proven false. They’re arbitrary assumptions used to define the context in which the ethical propositions are meant to be considered, evaluated. Note also we’re specifically not discussing positive economics about predicting empirical phenomena. I’ve commented before on the legitimate use of “false but simplifying assumptions” in predictive engineering models, if not social “science,” per se. That’s not our issue today. In the context of normative economics, problems occur when one conflates the Fairy Land for reality, that is, mistakes what in realistic contexts is the ethical half-theory of neoclassical welfare economics for the ethical full-theory of bad economics in the conservative style. These problems notably occur when one considers realistic situations involving people who are not perfectly rational or do not have full information and proposes, discusses, evaluates arguments relating to one’s ethical responsibilities toward those people.

Let’s have an example to consider. I recently watched a TV program about hoarding behavior that included commentary from both a mother, who had suffered severe psychological trauma as a child and likely as a result had developed hoarding disorder, and her adult daughter. The daughter explained she had long resisted becoming involved or trying to intervene in her mother’s situation because she felt it was not her place; it was simply her mother’s preferences, her choices, and she had no real ethical justification to get involved herself. Interestingly, after seeing the results of her non-involvement, observing her mother’s struggles, mental anguish, suffering, she changed her ethical thinking on the issue. She said she now rued the long years of inaction and benign neglect, wishes she had gotten involved sooner. The mother, for her part, was adamant no one else was to blame for her situation and she had simply chosen to engage in hoarding behavior. It was her own volition, her own choice, she insisted over and over again, clearly full of feelings of deep shame and self-loathing. One may see immediately the typical ethical perspective associated with bad economics in the conservative style even without confirmation the case involved a place and social milieu that experience suggests might be particularly susceptible to such rhetoric. 

They both developed a new ethical perspective once science entered the room in the form of a psychologist, who explained mental disorders as hoarding were not rational personal choices but often had subconscious psychological origins that must be dealt with on that basis. The ending seemed happy enough. The daughter determined to help her mother more with her issues, and the mother appeared to finally let go of some of the shame and self-hatred that prevented her seeking help. Just one case, obviously, but it seemed to me of wider application. The initial ethical reasoning of mother and daughter are a common enough conservative perspective that could just as easily have been applied outwardly to, say, a homeless person sleeping rough. “Why does she choose to do that? What is it anyone’s business if she lives or dies?” And the homeless person herself, maybe also full of shame, self-hatred, determined to establish to herself and others she accepts full responsibility for her behavior, choices, agreeing she deserves to suffer, but maybe taking something to ease the pain when she can. Any serious ethics must address the fact real people are not fully rational and rarely if ever have full information. It must confront the awkward, difficult cases when people are irrational, mentally unwell, confused, misled, conned, ignorant, addicted, under duress, and so on.

And consider the role of interpersonal conflicts of preferences, so significant in neoclassical welfare economics. Was there not a conflict of preferences between a daughter wishing her mother well and her mother’s preferences under hoarding disorder, a conflict based on love? Is it even sensible in the real world to propose an absence of sentiment toward others in one’s society? To propose no conflict of preferences when one sees another under duress, suffering, possibly ignorant or not thinking correctly, engaged in self harm? I’m not sure it is. So in reality the situation in which no interpersonal conflicts of preferences exist is really just whenever one determines, based on one’s ethics and true factual premises, one should not interfere in another’s behavior. It’s not objective fact but subjective ethical judgment. Here again one may easily lose the plot in reality when thinking of the ethics for the Fairy Land as studied in neoclassical welfare economics. Do the ciphers in the Fairy Land even have preferences about ethics? Are they even meant to have or know about ethics?

Back in reality, one doesn’t care to interfere in another’s behavior, but also one doesn’t care to reject one’s love and concern for those who may be struggling nor allow the strong in some way to prey upon the weak. It’s a bit more complicated than individual preference ranks. Just some things to mull over some cold winter's night: the differences between the Fairy Land and reality, ethical full-theories and ethical half-theories, the normative program of neoclassical welfare economics and of bad economics in the conservative style.

What Puts The Far In Far Left And Far Right?

I’d like to talk a bit more this week about a question I posed in a poll a while back about what people suppose the “far” in expressions like "far right” and “far left” refers to. I find it an interesting issue that complicates political discourse in the USA.

“Left” and “right” in the USA are conventionally defined in economic terms, specifically the ethics of economic power, although other issues, random cultural issues, a surprising number of them, are often added on, one supposes for rhetorical effect. If one hews closely to the economic foundation of right and left in the USA, one may reasonably wonder what to make of discussions of the far left and far right. Who cares? Only there seems some underlying controversy about it in the USA.

I propose one common take is people enter the Realm of Far when they’re so concerned to express their views on the ethics of economic power they demand their view prevails, stop supporting democracy, so authoritarian fascism far right and authoritarian communism far left. Under this view, there is a very powerful far right in the USA, with one of our two major political parties, millions of party members, more-or-less openly fascist, opposed to democratic government, keen to support conservative views on the ethics of economic power. Also under that definition, one may say there is currently basically no far left in the USA. No prominent politicians or parties, very few voters, endorse or promote communism as authoritarian government in ostensible support of leftist views on the ethics of economic power.

Interestingly, however, many far right (under this definition) anti-democracy fascists in the USA propose their opposition to democracy is required to fight what they propose is a very powerful far left. Are they just talking rot or using words in a different way? Might anti-democracy conservatives interpret the “far” in far left to refer not to views on democracy but something else, say particular views on the ethics of economic power or economic policy they find especially offensive? Voters seem to have various views on the ethics of economic power, economic policy, the proper goals of the economy, and so on, so if some subset of those may be designated “far left,” then one might propose the USA does indeed have a powerful “far left.”

One may suppose, in that case, to support what some may view as the momentous decision to oppose democracy, the US Constitution, one must perceive a very notable difference between acceptably left views on the ethics of economic power and especially noxious far left views. But I can’t say I honestly have any notion what that distinction is meant to be. We seem to be having the same sort of economic discussions we’ve had for years relating to the ethics of the definition, distribution, use of economic power. What is this new element of “far?” The mystery of the distinction of left and far left may suggest we’re on the wrong track. On the other hand, if conservatives don’t care much about democracy, the US Constitution, they will not see opposing those a momentous decision but a rather trivial affair. Indeed, if democracy is insignificant, far left may just be a rhetorically exaggerated way of saying left, one may have nothing particular in mind with the qualifier, may just slap it on to be dramatic. So perhaps the question is simply the significance of democracy?

I think perhaps what conservatives who profess to perceive a far left in the US are saying is simply other voters have views on the ethics of economic power they disagree and they feel justified opposing democracy to stop them. It’s not a matter of limits on acceptable left-ness. Indeed, I suppose it likely many conservatives have no particular notion of far left in mind and use it merely as a rhetorical device, perhaps hoping others may equivocate on terms and suppose far left means anti-democracy, authoritarian communism. 

When one hears alarming talk about a supposedly powerful far left operating in the USA, one should stop, take a breath, think about how one would define the far left oneself, and then think about what others may have in mind, and how it relates to political democracy.

Oh, the poll results? About 67 percent thought the “far” in far right and far left referred to the rejection of democracy, as fascism and communism. However, 22 percent thought it referred to particular takes on economics and 11 percent to relative enthusiasm. (N=9)