Welcome friends!
I read an article the other day that got me thinking about distributional issues once again. I know, doesn’t seem to take much, does it? Why can’t I just accept things as they are? Why am I always rethinking things that have all been hashed out and resolved long ago? Why am I not a conservative? Well, gosh, I don’t know. Maybe because I think these issues are important and there’s a lot of room for improvement? Ready for another go around? OK then, let’s get to it!
Now did you see the article about the rather alarming number of suicides that were associated with the so-called Great Recession ushered in a few years about by conservatives’ ongoing love affair with Wall Street tycoons and by their unalterable conviction nothing bad can ever come from unregulated markets? Apparently the economic downturn led to at least an additional ten thousand people offing themselves in the US, Canada, and Europe alone. You know, that’s the type of thing I’m talking about. Economic matters are important. People die from economics. That’s what makes the intellectually lazy, wooly headed, laissez faire, whatever happens happens, half-assed social philosophizing of conservatives so damned irritating to liberals like me. Whatever happens happens just isn’t good enough. When people lose their jobs and their livelihoods that’s a humanitarian crisis or it can be one anyway depending on how much wealth the people involved have socked away and how well they’re able to weather the storm. For many people it’s a pretty big issue. We should be thinking about it like the outbreak of a war or the advent of some new disease. And distributional issues are a big part of it because when economic calamities happen we generally just let all the hardship fall on the unfortunate few, don’t we? We could rally as a society and look out for one another in cases like this. We could spread the hurt around a little so we all come out of it all right. But that’s not how it usually plays out. Not by a long shot. It’s more like every man and woman for himself or herself. And we all thank our lucky stars it’s the other guy whose number came up and not ours.
But hey, we don’t have to be talking about people killing themselves to see the importance of distributional issues. Indeed, I read another interesting article about some research that found one’s “emotional well-being” goes up with income but the main effect takes place in a range up to about seventy-five thousand dollars after which additional income doesn’t really add all that much. I must say that comports rather well with my own observations and life experience. I mean, it’s kind of hard to exude a whole lot of emotional well-being when you’re wondering where you’re going to get your next meal or where you’re going to sleep for the night or what’s going to happen to your kids or whatever. Did you ever notice that? Those are the sorts of things that can really set one on edge. But once one scrapes together a little something then hey presto emotional well-being suddenly becomes a lot easier to come by. Indeed, after a while it becomes more a matter of maybe I’ll buy this or maybe not or maybe I don’t really need it or oh I’m just not really sure if I want that or not. For most people I suspect getting a bit of additional money is very, very important at certain levels of relative economic power but becomes a lot less important at other levels.
I would suggest this result implies public policy should probably focus on getting as many people as possible to incomes approaching seventy-five thousand dollars. I mean, it’s fine if some people go over, but in terms of overall happiness we’re probably not getting as much bang for the buck in those cases. Of course, that’s not really how we typically think about economic policy in this country, is it? Or let me put it this way, when was the last time you heard someone discussing the best approach to getting the most people possible to income levels around seventy-five thousand dollars? No, our conversation about economic policy seems to be running on an entirely different track. On the one hand we have plenty of people who want to just talk about total GNP and GDP and XYZ and whatnot with the implication it doesn’t really matter too much where it all goes because distributional issues either don’t really matter or have already been satisfactorily resolved. Then we have the people who think the point of economic policy should be to ensure a handful of people can become enormously rich because in their estimation that’s what life is all about. Those are the people who are so fascinated by metrics such as how many billionaires we produce compared to other countries. People like me who would just like to live in a society where as many people as possible are happy don’t really have much to do with economic policy here in the US. I suppose that explains why despite our relatively high third place ranking in terms of average net worth, which is just total wealth divided by total population, we basically stink in terms of median net worth, which is the wealth of the person exactly in the middle of our wealth distribution such that half the population has more and half less. We’re not so bad in terms of average wealth because our economic policy wonks are concerned about total wealth creation. We stink in terms of median wealth because our policy wonks don’t really care where the wealth goes. Or maybe stink is too harsh a word. I’m sure there are plenty of countries that manage to do an even worse job of looking after the little guy than we do. Let’s just say we rank surprisingly low given our overall level of economic development. Oh, you thought America was Number One? Yeah, sure, we’re Number One right after Australia, France, Italy, United Kingdom, Japan, Switzerland, Finland, Norway, Singapore, Canada, Netherlands, New Zealand, Ireland, Spain, Denmark, Taiwan, Sweden, and Germany. Yep. The median citizen is better off in any of those countries than here in the US.
I suppose you know or can guess I put a lot of the blame for this unfortunate state of affairs squarely on conservatives and their ideological enablers the academic economists. Why bring economists into it? Because of their risible insistence on confining their attention to that subspecies of “utility” that has the curious quality of not being defined relative to a given individual but of being presumed to exist in some objective and interpersonally valid sense. When one works with that particular definition of utility knowing two people are about as happy as they can be turns out to be irrelevant. The real issue is thought to involve not how each person feels relative to how they might feel but how the feelings of one person compare to those of another. In the twisted and confused ethical world of academic economics it’s not people who are important, it’s disembodied utility. Forget about trying to make everyone as happy as possible given a particular level of resources. With the type of utility economists talk about the socially optimal thing to do might very well be to sacrifice everyone else if doing so happened to suit the desires of some superconductor of utility. I think it’s safe to say that’s a version of ethical utilitarianism only an academic economist could take seriously.
But do they take it seriously? Yes, interesting question. A well known feature of economic theorizing is that even though these types of interpersonal utility comparisons are presented as ethically relevant there is fortunately no accepted way to actually get the information one would need to make them! In other words, it’s an ethical theory whose utter implausibility is saved by the fact it cannot be implemented anyway. So why be interested in such a theory at all? Well, as I have suggested many times before I suspect the answer is that economists don’t really have any sincere interest in that sort of utility. They support it because it supplants and thus negates other more ethically relevant forms of utilitarianism that might get people thinking about distributional issues and get in the way of their policy prescriptions. Why focus on a negation of philosophically serious utilitarianism? Because one has ethical theories that are incompatible with serious utilitarianism one doesn’t care to discuss explicitly. The academic focus on the peculiar sort of utility I just described is basically a rather elaborate way to shut down the social conversation about the important economic issues associated with the distribution of resources. You know I’m always happy to discuss anything with anybody so the idea people may want to discuss distributional issues from different perspectives doesn’t bother me at all. But you know what does? Talking funny to prevent other people from discussing issues when discussing those issues could lead to a lot more happiness in this world and in some cases a lot fewer dead people as well. That’s just irritating. So let’s set aside academic economics and the conservative ideology it supports and discuss some real economic issues for once, shall we?
References
How much do you need to be happy? Jeanne Sahadi. CNN Money. June 5, 2014. http://money.cnn.com/2014/06/05/news/economy/how-much-income-to-be-happy/index.html?iid=HP_LN
America’s middle class: Poorer than you think. Tami Luhby. June 13, 2014. CNN Money. http://money.cnn.com/2014/06/11/news/economy/middle-class-wealth/index.html?hpt=hp_t2
Cost of Great Recession: 10,000 + lives. Alanna Petroff. CNN Money. June 12, 2014. http://money.cnn.com/2014/06/12/news/suicides-recession/index.html?iid=HP_LN
