Wednesday, January 16, 2008

Radically Conventional

A recent trend in "pop" economics is a slew of books that challenge conventional wisdom by offering counterintuitive solutions to seemingly intractable problems. One successful book in this genre is Freakonomics by Steven Levitt. Among its chapters was the suggestion that crime rates declined in the 1980s not because of more or better policing, but because of higher levels of abortion during the 1970s among a population whose children that would be statistically more likely to commit crimes. It was to this argument that William Bennett inadvisably referred during his radio show in the context of properly criticizing a pro-life argument on the basis of lost revenue from aborted babies.

A more recent book in this genre is More Sex is Safer Sex: An Economic Case for Promiscuity by Stephen Landsburg. According to Landsburg, HIV could be more effectively combated not by abstaining from promiscuity, but rather by increasing the promiscuity of the more sexually conservative. The stupidity of this argument isn't worth exploring at length, but we should note that its apparent radicalism (most obviously intended to sell books than persuade anyone) masks its utter contemporary conventionality, namely the assumption that more is better than less, that submitting to appetites is superior to self-governance, that the only metric for happiness is hedonic.

The utter conventionality of this genre - reflecting the deepest unquestioned orthodoxies of modern economics, the one discipline of the "human sciences" which seems to brook no exploration of first principles - is seen with utter clarity in an op-ed by Landsburg in today's New York Times. Questioning the wisdom of the promises by candidates like Romney to combat the outsourcing of jobs, Landsburg seeks to argue that such a course is unthinkable, even immoral. First, he raises the issue of "goose/gander": those who benefit from free markets are not in a position to criticize them when they experience economic hardship:

"All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?

"Um, no. Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?"

Note that it is unquestioned that what constitutes "winning" is cheap prices and more cheaply produced stuff, not the dignity that comes from work and production or the contributions we might make to our own communities, even at greater cost. Also, the only economic options are either "subsistence" or excess. Not exactly an easy choice, to be honest, but more importantly, not really the only choice.

Unsurprisingly, Landsburg finds it incomprehensible to imagine any reason why one would prefer to make what one can more easily buy:

"I doubt there’s a human being on earth who hasn’t benefited from the opportunity to trade freely with his neighbors. Imagine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother’s home remedies for health care....

(Here he also mistakes that trading with one's neighbors is essentially the same as trading with anyone at the expense of your neighbors. There is no medium, only complete self-reliance or globalization. Huh?)

But things get really annoying when he invokes "morality" as the basis for always and everywhere preferring cheaper prices to the exclusion of every other consideration. He writes:

"One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web.... When you eat at McDonald’s, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives."

This argument is disingenuous beyond reckoning. First, how can one assume that "what is done" constitutes "moral instincts" and not, in fact, their absence or neglect - or, indeed, that our instincts may rarely if ever actually be moral? What's inherently moral about buying items that are more cheaply produced - manufactured often by taking shortcuts that rest on what we might regard as the immoral abuse of our natural world or the immoral neglect of the burdens we are placing on unborn generations?

Even more galling is the claim that we ought not to advance a "public policy" that we "all reject every day," (i.e., seeking to defend productive jobs vs. pursuing as unquestioned bounty cheaper prices) as if those decisions take place in a public policy vacuum and are enacted in a wholly neutral and hence "moral" realm. As if current policy doesn't in fact favor decisions that advantage cheap prices at the expense of communities, that do not force producers of cheap products to pay many of the externalities that are easier to hide from a distance (e.g., waste and pollution and other forms of environmental degradation we wouldn't be willing to brook closer to home)? And what of calculating into those prices those more intangible benefits of the local pharmacist or the local diner - the familiarity, the memory, the care for place and people, the space designed for gathering and not merely the gorging with mass-produced food? Yes, in many instances - lamentably - we have, as a culture, made decisions in favor of CVS and against Mr. Gower's pharmacy, and for McDonald's and against Alice's Diner, but let's not pretend that these decisions by default reflect "moral intuitions" - at least not until we entertain the possibility that these choices are more aptly attributable to the sins of avarice and sloth, "intutions" certainly that come natural to us but against which culture, education and public policy might rightly seek to govern, correct, and combat.

I'm guessing that this possibility is not about to be debated in Prof. Landsburg's Econ 101 class tomorrow. Such a scandalous idea would be truly unorthodox, the last thing permissible inside an economics classroom.


brierrabbit said...

The Playboy Philosophy applied to economics. As usual, nothing matters except how cheap can I get it, and will my resposibility end when i am finished with the transaction. Economists live in an abstract world where people are just numbersin a computer, or on a chalkboard. I wonder how he would feel if his children felt that as a elderly person, that they ought to pick senior care for him, as if they were shopping at Walmart. I wonder how life in a nursing home run along the lines of "efficiency" and "lowest cost" would appeal to him, when he's been "outsourced" to such a place.

Oengus said...

Patrick: "…its utter contemporary conventionality, namely the assumption that more is better than less, that submitting to appetites is superior to self-governance, that the only metric for happiness is hedonic."

This is pretty much the core of the matter.

I've been watching your blog for a while, and I must say you are both thoughtful and interesting.

Black Sea said...

"The stupidity of this argument isn't worth exploring at length . . ."

This also lies at the core of the matter. You're probably right to suspect that his opinions are driven in part by the desire to drum up attention through a sort of adolescent "shock value."

We've all run across characters like this, who style themselves as unfettered iconoclasts, but whose pronouncements are so idiotic that they can't be taken as anything other than utterly run-of-the-mill.

For example, he asks us to, "Imagine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother’s home remedies for health care...."

Don't the rhetoricians have a term for this sort of flawed logic, false dilemma, or something like that? As if our only choice is to produce EVERYTHING by ourselves, something unknown even in hunter-gatherer socities, or to produce as little as possible and live off the sweat of someone else's brow, preferably someone unseen and halfway across the world. Then we'll have the resources and the leisure to endlessly amuse ourselves with all the loot we've picked up at Walmart.

Why, it's a vision of Paradise!