Amoral Egoism and Egoistic Morality

I had a thought relating to egoistic morality versus amoral egoism the other day, an issue that often trips me up when thinking about conservative values of the sort expressed by Republican voters. Maybe just a short one today? It’s summertime? When the living is easy?

Imagine person A gets the drop on person B and steals B’s wallet. If B is an amoral egoist, he or she would surely object. However, if B subscribes to egoistic morality, he might find the result ethically acceptable. It’s fair. Person A got the drop on B, did what he should have done. Some may suppose conservative, Republican voters are simply amoral egoists looking out for number one, maybe supporting economic establishment elite power and fascism because they suppose once democracy is gone, they’ll get more gold from the deal via market utopianism, trickle down, etc. However, another possibility is some, many, all conservatives, Republicans are actually moral egoists who suppose as long as economic establishment elite power acts in a thoroughly egoistic way, then whatever results flow from it are ethically correct and optimal. It’s about egoism writ large. Some conservatives simply might some not care their lack of power makes their own egoism impotent. They’re greedy as hell; they just can’t get much. It’s fine. Their greed abides. But they would never criticize or object to anyone else seeking power any old way to further his or her own greed. 

If one considers the arch way self-interest and profit maximization is handled in anti-democracy bad economics in the conservative style, one may readily see how familiarity with that sickly rhetoric and loosely related neoclassical welfare economics may generate confusion in that area. How often have you seen people equating individuals choosing things higher in their own preference rank (“utility maximization” in econo-speak) to self-interest? How often profit maximization equated to self interest or indeed “utility maximization?” How often “utility” equated to money? How often have you heard the conservative faux economics mantra, “greed is good,” with no reference to the theoretical limitations, requirements in neoclassical welfare economics relating to when people expressing preferences or firms maximizing profits may be considered ethically, morally good? It’s confused, dodgy ethics to be sure, but hardly spontaneous, more like carefully manufactured, created. One suspects many conservative suppose they’re displaying a knowledge of economics by proposing as long as everyone is as greedy, self-interested as possible, in every context, all is well.

Just something to think about. However, I will say this much: one important basis, I suspect the most important basis, of anti-democracy sentiment in the USA right now is bad economics in the conservative style, a false, loose, confusing rhetorical gloss on neoclassical welfare economics. If anyone cares to really address anti-democracy sentiment in the USA and elsewhere, one might learn about the rhetoric of anti-democracy bad economics in the conservative style, how it works, where it draws its power, how it relates to neoclassical welfare economics. Also, it’s a lot of fun.

Economic Efficiency

Someone got me going the other day on the supposed “efficiency” of markets, which made me realize I haven’t actually done a storm on that yet this cycle, so how about that this week? “Economic efficiency” in models of perfectly competitive markets and in reality?

“Efficiency” in economic contexts relating to the supposed advantages of markets generally means so-called “economic efficiency,” that is, “Pareto efficiency,” defined with respect to individual preference ranks (or “utility,” as uniquely and rather oddly defined in neoclassical economic theory). Don’t know what any of that means? Never heard of old Italian fascist Mr. Pareto? You just suppose “free markets” are good because they’re “efficient?” That’s funny. Maybe don’t ape the language of economic theory without knowing what it actually means? For the rest of us, let’s get into it a bit.

“Economic efficiency” or “Pareto efficiency” is about a situation where one cannot move one person up his or her individual preference ranking without moving someone else down their own preference ranking. The kernel of truth is it seems a nice thing to have, unless other issues. Why not? That’s not the tricky bit, although someone was recently arguing to me against placing normative significance on economic efficiency, an argument I’m not really familiar with and won’t be going into today. No, for me the tricky bit is how the concept is used or let’s say misused in real situations.

Economic efficiency has great significance within the confines of the ethical half-theory of neoclassical welfare economics because interpersonal ethics are purposefully excluded, so the only issue left is individuals and their preferences. In reality, the significance is rather different. The typical context this is discussed in the Fairy Land, as I call it, is to compare some random market outcome which is not Pareto efficient to one that is and, as one has no other normative basis to distinguish the two outcomes, to declare the Pareto efficient outcome “socially optimal.” Another typical context in the Fairy Land is to consider two Pareto efficient outcomes, wonder which to choose, remember there is no basis in that ethical half-theory to choose because all relevant interpersonal ethics issues are exogenous, and to be indifferent, say either will do just fine.

The significance of Pareto optimality is quite different in reality, of course. In real contexts, people may have ideas relating to interpersonal ethics, equity, fairness, justice, welfare, and so on, and those may well take precedence over considerations of Pareto or economic efficiency. When interpersonal ethics, so-called equity issues involving issues like fairness, justice, welfare variously defined, that sort, are added back in, one may prefer not only one Pareto efficient outcome to another, but one may prefer some non-Pareto efficient outcome to some Pareto efficient one. For example, given existing arrangements, Pareto optimality may mean ensuring the Tsar can buy a jeweled Easter egg, which he prefers to a jeweled cigarette case. However, in the presence of interpersonal ethics, one may not really care very much, at least until certain other issues are addressed.

In the context of bad economics in the conservative style, this calls forth various misleading rhetorical arguments to get around the obvious ethical limitations of real neoclassical welfare economics when applied in reality, typically involving fake indifference or what I call roadblocks. I discuss those often enough, and if I did again now I’d probably go over, so this time let me just observe there is nothing in real neoclassical welfare economics that justifies economists qua economists telling other people they should not distort or interfere with markets. That’s bad economics.

More generally? Surely “efficiency” doesn’t always mean “economic efficiency” or “Pareto efficiency?” No, indeed. Just keep in mind nothing is efficient for every possible goal or objective. Things are efficient for one thing, not another. Ask always, efficient with respect to what? A joke I like to tell about efficiency is to answer the question of what’s the most efficient way to the bottom of the cliff by saying jump off it. Oh ... you mean while remaining alive? That’s a different issue. You didn’t say that the first time. Different answer, of course. When you hear something like “markets are efficient,” and you don't think you’re talking about “economic efficiency” or “Pareto efficiency,” ask yourself, efficient for what? Maximizing human welfare? Addressing material want? Generating human happiness? Maximizing production? Making a just society?