The Establishment

I thought I might discuss another facet of our modern political discourse and rhetoric this week. I was talking to a southern conservative, briefly (what?), who thought it odd I would describe Musk and Trump as "establishment billionaires." Let's discuss why one might say so.

It obviously wouldn’t seem odd to liberal, progressive, democratic leftists to call them “establishment billionaires.” They’re billionaires with ties to the highest echelons of business and finance, while their elite social status makes them contemptuous of laws, voters, political systems. But for conservatives of the sort one commonly finds especially in the southern USA, it does. Why? I suppose it’s due to our mixed economic system with markets and non-market regulations, programs, policies giving people the opportunity to associate the “establishment” with either. Liberals tend to associate the economically powerful and their market utopian ideology and rhetoric, hatred for the poor, hatred for democracy and for law they don’t control entirely, with the “establishment." In the liberal view, the “establishment" would be rather happier without democracy, law. Conservatives, in contrast, especially southern ones, are under the influence of the market utopianism of anti-democracy bad economics in the conservative style and still follow the Reagan-era mantra that democratic government is the ultimate evil and the source of all social, economic problems. Conservatives seem to like the liberal left notion of being opposed to the “establishment,” like to be rebels, bad boys, agents of change, but to make it work with their ideology they must then re-define the “establishment” to mean political democracy, the US Constitution, US law, voters. Following fascist ideology, conservatives don’t see authoritarian conservative government as shoring up the (economic) establishment, the status quo, but as a revolutionary agent of change against a political “establishment” of fusty old democracy, constitutions, law, voters, that sort. So where liberals see figures like Musk and Trump as representing all the worst features of establishment power, likely to perpetuate and accentuate all the worst elements of the status quo, many conservatives see them as anti-establishment rebels changing the status quo in positive ways. Conservatives see plutocrats, oligarchs, mobsters, fascists in a positive light as “anti-establishment” rebels, want to help them take control of the USA, reasoning that if democratic government is evil, incompetent, inefficient, ineffective, then non-democratic government must be the way to go.

Of course, a funny point I've mentioned before is that only some conservatives oppose democracy because they view it as an “establishment” that supports the status quo. Other conservatives oppose democracy for the opposite reason: they’re concerned voters can use it to change the status quo. Conservatives, Republicans manage to appeal to both by rhetorically focusing on their shared hatred for democracy, their love of fascism / gangsterism (in so many words) without dwelling on whether it’s meant to change or perpetuate the status quo, make struggling people better off or worse off. Although in the liberal perspective, and I suppose in common understanding, the “establishment” is meant to prosper under and thus support the status quo, I suppose one adept at conservative word play may propose an “establishment” that is trying to inappropriately change a laudable status quo. It’s the sort of seemingly outlandish but possibly effective rhetoric one sees also in Republican politicians, who having control of the White House, the Congress, and the Supreme Court, continue to talk rhetorically about a liberal, progressive, Democratic “regime” they must struggle against.

A more general point is to just appreciate that the thinking of liberals and conservatives, Democrats and Republicans, pro-democracy and anti-democracy sorts, anti-fascists and fascists, is so different in the USA right now even common term and expressions may have wildly different interpretations. It’s no reason to stop talking and reach for the nearest bomb, gun, knife, stone, stick. However, it is a good reason to slow down, talk carefully, watch for terminological equivocations where people seem to be talking about the same thing but really aren't. Say it differently, when in doubt. If you’re interested at all in trying to communicate with conservatives, right wingers, Republicans, don’t assume any common ground as values, morals, ethics, words, language. Talk to them as though they had just dropped in from an alternative realm, some other plane of existence. And take it slow.

The False Equity Efficiency Tradeoff

Let’s do a more serious economic topic this week, shall we? Have you heard about an “equity efficiency tradeoff?” Then you’re familiar with anti-democracy bad economics in the conservative style. Because that’s not real neoclassical welfare economics. Let’s discuss. 

Modern neoclassical welfare economics is an ethical half-theory that self-consciously sets aside the lion’s share of ethics, interpersonal ethics, to investigate what results one can derive from some simple normative propositions about individual preference ranks under certain unreal conditions. “Equity,” a term referring to interpersonal ethics as justice, fairness, weflare, that sort of thing, is external or exogenous to the normative argument in neoclassical welfare economics. There is no “tradeoff” discussed within that theory involving equity and other values. In particular, so-called “economic efficiency,” a certain result relating to individual preference ranks (under the confusing name “utility”), is not presented in that theory as something that is “traded off” for “equity” as interpersonal ethics. Rather, equity issues move one beyond what one is able to express based on individual preference ranks (the prevalent definition of “utility” in modern economics) or can say on the basis of inaccessible internal perceptions of satisfaction from preference fulfillment (an older legacy definition). It is nonsensical (or in the older form of “utility” impossible) to say what happens to “utility” when one changes interpersonal conflict resolutions based on equity or interpersonal ethical concerns. In the latter case, it may go down, stay the same, go up. It’s exogenous. There is no tradeoff. So what’s with this notion from bad economics in the conservative style we’re discussing a “tradeoff” between equity and (economic) efficiency? It’s an elaborate and intentionally misleading play on words designed to disguise or misstate the ethical argument in neoclassical welfare economics. It’s meant to obscure the ethical half-theory structure of neoclassical welfare economics by suggesting one must make a “tradeoff” between conclusions from its limited ethical arguments and conclusions from full ethical arguments that take up interpersonal ethics.

There are an infinite number of (economically) “efficient” outcomes corresponding to every possible set of beliefs about equity or interpersonal ethics. There is not just the one “efficient” position consistent, implicitly or explicitly, with one set of beliefs about equity issues. Nor is there anything very ethically significant about any particular (economically) “efficient” solution defined relative to some distribution of economic power if one objects to the underlying distribution of economic power or associated outcomes on markets and thus interpersonal ethics. For example, there is an (economically) “efficient” outcome defined with respect to individual preference ranks under equity beliefs A relating to the definition and distribution of economic power, and one corresponding to set B. But a tradeoff of “efficiency” A for equity B? If one is at (economically) inefficient B, theory suggests it may be uncontroversial to try to get to efficient B under certain unreal conditions, but choose efficient B over even inefficient A, if one supports A, because efficient B is “efficient” in some general sense? That’s not the argument. It’s the equivalent of saying something like, “I oppose gangsterism on ethical grounds, but the evil boss seemed happy or anyway did whatever he wanted, so …” I mean, probably, but is one seriously putting that forward as an ethical argument for gangsterism? Nor is one necessarily closer to efficient A by being at efficient B rather than inefficient B or A, nor is it necessarily convenient, easy, even feasible to move from efficient B to efficient A without passing through inefficient B or A. 

So how do people get pulled into that sort of thing? By thinking indifference or neutrality to exogenous interpersonal ethics translates to rejecting its significance or relevance, so that one is being indifferent or neutral if one supports an existing or particular distribution of economic power. But that’s not true neutrality or indifference in the context of neoclassical welfare economics. It’s favoring and supporting the status quo allocation of economic power, whatever it may be, or maybe some other allocation, and expressing “neutrality” only in rejecting all alternatives to it. It’s in that duplicitous, uni-directional, fake indifference or neutrality one sees the hand of conservative rhetoricians. Rather than argue for a particular distribution of economic power, more generally equity propositions, they would have one support it indirectly by ostensibly being “neutral.” Another version of this sort of fake indifference is to present it as a stand-alone full ethical theory but just for economists, so one is just giving ethical recommendations “as an economist (and bad philosopher),” and others may disagree, of course. In that case, the false equity versus efficiency tradeoff becomes something like a “conclusions from the ethical theory of neoclassical welfare economics” versus “conclusions from other ethical theories that include equity” tradeoff.

The old economists who came up with neoclassical welfare economics, like the Italian fascist Signore Pareto, seemed intent on coming up with a theory that others might mistakenly suppose replicated conclusions from untenable classical economics but with convenient dodges. Don’t fall for it. Neoclassical welfare economics is not a full ethical theory proposing we ignore equity, interpersonal ethics, in favor of pursuing (economic) “efficiency” defined relative to individual preference ranks under a particular distribution of economic power (and consistent with certain equity beliefs). Don’t confuse the limited, constrained, unreal, ethical half-theory of real neoclassical welfare economics with the expansive conservative, right wing, rhetorical program of anti-democracy bad economics in the conservative style. They’re two different things. Wise up or be played for a fool.

Freedom, Liberty, And Bad Economics

Tough to decide between fun political issues or more significant albeit drier economic issues like the limitations of real neoclassical welfare economics and how it differs from ubiquitous bad economics in the conservative style. Maybe politics this week? The rhetoric of liberty?

The element of liberty versus tyranny rhetoric I find interesting is the bit dealing with political versus economic power. The definition, distribution, use of economic power rests on law, property rights, contracts, decision to use markets, etc., which come from government, hence political power. In that sense, one may say political power is logically prior to economic power and defines, establishes, distributes, enforces, and provides parameters for using it to allocate resources. So one element of the liberty versus tyranny rhetoric is the definition, distribution, use of political power. In that context, one may say nothing is logically prior to political power beyond the normative views of various people about political power including the governed. So one may say in that context, the “liberty” of the governed involves them having a say in politics, government, law, and so on. “Tyranny” in that context might be the governed being unable to get a word in edgewise because someone or some group of bigwigs posing as ethical arbiters for society is dictating the necessary normative inputs underlying laws relating to economic power, etc. That’s how liberals might define it.

Conservatives put it the other way around. They start with favored laws relating to the definition, distribution, use of economic power as fundamental to their “liberty” and perceive changes to their preferred legal arrangements generated perhaps by voters, democratic government, as “tyranny.” That’s how so many conservatives end up talking about the ostensible “tyranny of democracy” or “tyranny of liberalism” while lauding the liberty or freedom conferred by laws consistent with conservative views on the definition, distribution, use of economic power. This is also what leads conservatives into their muddled support sometimes for explicit fascism, with the right sort making the correct laws, sometimes for fake or real anarchism, with the correct laws ostensibly arising spontaneously or the people naturally obeying correct virtual laws.

Reject misleading rhetoric involving words like “liberty” or “freedom” or “tyranny” in general, vague, ill-defined, simplistic terms. Those are manipulative straw man arguments. The question always is whose liberty and freedom to do what, exactly, and how are others involved. Pay no attention to simplistic, manipulative, tricksy, false conservative, Republican political rhetoric cooked up by sleazy advertising types and fascist propaganda outfits. Think about real issues in a serious way. The world already has plenty of hot air to go around. Don’t worry about that.

Normative and Positive

Can we take a step back this week and discuss the normative versus positive distinction? I hardly know what’s necessary to discuss these days, but I have noticed a certain amount of confusion relating to normative and positive propositions, so maybe worthwhile?

Positive propositions are about what is, in a factual sense, not what one supposes ought to be the case or what one ought to do. So a statement about observable reality, or at one step removed science depending on empirical verification, or what the heck, maybe also formal systems as math. The point of a proposition being called positive is it is capable of being refuted with reference to some objective standard. So statements of fact, science, are meant to be assessed relative to shared reality, while statements in formal systems relative to some agreed definitions, rules. Everyone around the world can discuss proposed facts, scientific theories, mathematical or logical problems, and agree on their proper mode of evaluation or assessment. 

Normative propositions are about ought rather than is. They’re humans expressing their own personal judgments about what they or others ought to do based on their subjective moral senses or sensibilities. They’re not really refutable per se, although one may evaluate, discuss, dispute them. Now in a normative context one may attempt to create a false criterion for objective evaluation by simply declaring some theory, book, creed to be dispositive in a normative sense, write it into law, enforce it, etc. However, that’s not agreement of criteria in the philosophical sense. No breaking of prior agreements relating to arbitrary terms or definitions, no bit of illogic, no affront to shared factual reality is involved if someone says he or she thinks it should really be some other theory, book, creed that should be normatively dispositive. It’s subjective opinion.

A while back, a great deal was made of interactions between positive and normative in generally positive or normative theories. For example, ethical theories are normative theories but if they’re addressed to the real world they will involve factual premises about the world, which are positive. Or again, ethical theories typically have some logic to their arguments. Do the positive elements mean ethical theories are not “normative theories?” I wouldn’t say so. The conclusions are normative propositions about one ought to do and must involve normative evaluation at some point. On the positive side, a great deal was made about potential normative influences on the conduct of positive science as far as motivations, interests, imagination, resistance to findings and theories, and so on. I recall a great deal was said about in the philosophy of science circa 1970s. Does it suggest we can’t really call scientific theories as positive? Again, I wouldn’t say so. At the end of the day, they’re about reality and intended to be evaluated on that basis. They’re positive theories, but they can interact with normative propositions via bias, motivations, etc.

The culmination of that bad philosophy was the contention there is no difference between positive and normative propositions, which the scientifically illiterate embraced as justifying their anti-science views and the philosophically illiterate embraced as suggesting ethics are objective facts. One still sees the influence of that bad philosophy especially in the philosophically clueless field of academic economics, in which some suppose neoclassical welfare economics is not a normative theory because it involves math or logic, others conflate it with predictive modeling. A typical example of such confusion in the context of normative and positive economics is conflating “false simplifying assumptions” in the predictive engineering models of positive economics with “false factual premises” in the ethical arguments of normative economics.

My primary concern is normative economics, the normative or ethical arguments made in neoclassical welfare economics about socially “optimal” economic arrangements, policies, what people ought to do, and how that is twisted in normative anti-democracy bad economics in the conservative style. I contend that is the bit of economics that accounts for most of the controversy, confusion and conflict relating to real economic issues and policies, the bit academic economics typically fail to adequately address, the bit fueling anti-democracy sentiment and dodgy ethical thinking. I’m not very interested in positive economics, predictive modeling mostly, although I have some residual interest in the difference between predictive engineering models (and related storytelling) and real cumulative science, from a youthful brush with the philosophy of science. In the old days, if a student expressed any interest in normative economics, they were shuttled into philosophy of science under the conceit economics is a science, so the only normative content must be potential interactions with normative propositions as discussed in the philosophy of science. I didn’t know enough at the time to object, so chalk that up as one more intellectual mugging at the hands of academic economists in the devious old men versus naive teenagers division. But I do now. That’s not the “normative economics” I mean to discuss. I mean the other one: the ethical theory.

Utility

Maybe we can start reviewing some topics in neoclassical welfare economics and associated misinterpretations in anti-democracy bad economics in the conservative style this week. How about “utility,” am I right? Utility is a fun one because it’s the focus of a great deal of idiosyncratic oddness in neoclassical welfare economics and unsurprisingly a great deal of misleading, manipulative rhetoric, word play, equivocation, conflation of issues, in anti-democracy bad economics in the conservative style. An academic economist once told me to not worry what “utility” means because it can mean anything one likes. I thought that funny. To assess the concept in a normative or ethical context one must know the definition and no, not every possible definition fits with neoclassical welfare economics.

In classical economics, “utility” was handled in a fairly conventional way as one might find in the ethical theory of utilitarianism in proper philosophy, so some notion of human welfare that policies might have some “utility” in terms of advancing, so “utility” morphed into “welfare.” Classical economics came under fire as critics wondered if human welfare was being advanced as advertised, and in response conservative economists did what they do best, played word games, in this case re-defining welfare, utility, to ignore commonly accepted observable indications of welfare.

An intermediate formulation translated “utility,” still as welfare, into a sort of internal sensation of satisfaction from preference fulfillment. In that context, “utility” was meant to exist but be inaccessible by definition, so external indications, technology, brain scans, etc., irrelevant. This was the initial context in which a very important principle in neoclassical welfare economics was formulated, which was that the relevant definition of “utility” cannot be applied in interpersonal contexts, that is, no “interpersonal comparisons of utility.” At that point, “utility” as a sort of internal “welfare” was still meant to be defined in interpersonal contexts, it was meant to exist and theoretically be subject to interpersonal comparison, it’s just that there was meant to be no practical, scientific, real way to do it. The point was to remove “utility” from the lion’s share of ethical thinking, which is about resolving interpersonal conflicts of preferences, allocating resources, etc. For that reason, neoclassical welfare economics became only trivially “utilitarian,” really more about opposing utilitarianism. This is the reason I tend to call references to “utility” in neoclassical welfare economics as fake utilitarianism, or another way I often say it is that unlike what is typically meant to be the full ethical theory of utilitarianism, it’s an ethical half-theory (really less than half surely). Comically, it’s not uncommon at all to hear confused critics inappropriately lambasting serious ethical utilitarianism on the basis of rejecting the conclusions of bad economics in the conservative style’s incorrect take on the fake utilitarianism in neoclassical welfare economics. Who said what?

Later and now conventionally “utility” in neoclassical welfare economics came to be seen as simply an indication of preference ranks of a given individual, so indexed by individual. Thus, it is not really defined in an interpersonal context, so a utility(A) and a utility(B), but no just “utility.” Comically, economists seem often confused about which definition of utility they’re using, awkward because the fundamental arguments in favor of socially “maximizing” it differ depending on which definition one is using, which tellingly seems a matter of utmost indifference for most of them. Specifically, one often hears economists who profess to be using preference rank utility discussing the impossibility (rather than the undefined nature) of interpersonal utility comparisons, or even more notably providing schemes to “weight” preference rank utility, add it up across people. Again, it’s indicative of an insincere, unserious use of “utility” as an ethical concept in a philosophical sense. Really, they’re just using the term to express a rather different ethical argument about respecting preferences of individuals, and both definitions get the job done well enough. One understands the waffling. Inaccessible internal “utility” cannot support a plausible ethical theory (imagine dreaming the preferences of a super conductor of “utility could be measured), but preference rank “utility” makes it painfully obvious they're dealing with an ethical half-theory.

Bad economics in the conservative style then plays off the effective removal of utility and welfare from interpersonal ethics by underhandedly promoting certain ethical views on economic power, resolving conflict, allocating resources in realistic conditions, in rhetorically clever ways. Needless to say, the peculiar quality of “utility” in neoclassical welfare economics and the ample opportunities to equivocate on the term as used in serious ethical philosophy and to conflate issues relating to preferences and welfare are of great use in bad economics in the conservative style. I’ll talk more about it in the future, don’t worry about that. 

Perhaps one last indication of the insincerity of academic economists? I suggested some time ago a Don’t Say Utility Challenge, in which I challenged economists to replace the fraught term “utility” with what they meant by it. I assumed for most that would mean replacing “utility” with “preference rank of individual X,” although in some cases I suppose with “inaccessible internal sensations of satisfaction from preference fulfillment.” I suggested it to avoid equivocation, conflation. Do you suppose many took me up on the offer? Have you heard many expressing themselves in those terms? Why do you think not? Perhaps because they often rely a lot on misleading word play to express their own normative or ethical views, to promote bad economics in the conservative style?