Welcome friends!
I’ve been away the past few weeks but I’m back and ready to resume my battle against the rampaging multi-headed beast of international conservatism. Anything been happening since I’ve been away? Just more of the same you say? Yeah, that’s what I thought. Time goes by so slowly sometimes doesn’t it? Well here’s something new and fun. I was checking out You Tube the other day just to see if that do-it-yourself video venue had begun to feature any serious economic, social, or philosophical content of any sort. I read somewhere young people don’t read much and of course some older adults never have so I wondered if do-it-yourself video might be becoming a serious form of intellectual expression. I didn’t really expect much beyond the inevitable dancing cats, people falling over, and that sort of thing, but seems it’s evolved a bit beyond that. Indeed, I did manage to uncover a few videos dealing with economic and social issues although they were mostly in what I would consider the elementary to sophomoric range. On the other hand, I did run across a rather lengthy video by a fellow named Hansel Krankepantzen that dealt with economic theory and distributional issues in very much the same vein as I’ve talked about them here for several years so that was somewhat interesting. If I’m being honest I couldn’t have said it better myself. I know I talk a lot about economic issues and I really need to spend a bit more time on other elements of the liberal or progressive humanist agenda but maybe this time I’ll just do a quick summary of some of Mr. Krankepantzen’s main points to get that out of my system for now.
One important point he made was that the ostensible goal of neoclassical welfare economic theory, maximizing utility, is ethically implausible or at least highly controversial if one considers the word “utility” to refer to something that actually exists such as for example subjective perceptions of happiness or that sort of thing. Mr. Krankepantzen does a little thought experiment where he draws out the implications of maximizing utility under that interpretation of utility to establish that point. Nailed it as young people might say. That leads to the alternative interpretation of the word “utility” in which it refers to nothing really but becomes simply a word economists have gotten into the habit of using to express some unrelated and rather less controversial ethical propositions and goals. Interesting stuff because of course in that case there’s no reason in the world economists should continue to express themselves using the word unless they’re basically trying to mislead people in some way.
Another good point he made was when one goes looking for the value or ethical propositions that function as assumptions into economic theory in order to evaluate the conclusions relating to socially optimal outcomes and so on one can’t just look at just the propositions expressed or associated with the word “utility.” Economic theory also involves some other ad-hoc value propositions that seem to come out of nowhere one must consider as well. One example he provided was the implicit prohibition within economic theory against considering the utility of second parties who may have opinions, preferences, or desires about what other people are doing. My goodness what a mess we’d be in if we included utility from that source right? Goodbye revealed preference. But why should utility from that source not matter? Why indeed. And then of course we have the property rights required to set up any sort of market system. No real justification for that in terms of utility either. Criminals and would-be criminals are people too but apparently their utility is no good here. No worries. Tack it on to the rest of the miscellaneous value propositions. As I’m writing this it occurs to me another one he probably should have included but did not was the notion that utility associated with relative economic power or rank doesn’t count either. If that were the case we could throw so-called Pareto Optimality upon which much of modern welfare theory rests out the window. If it’s been a while that’s the bit that assumes if a change makes at least one person better off and no one worse off we know we must be increasing utility and hence improving social welfare. It’s how you get to perfectly competitive markets being optimal once you take out distributional issues or perhaps that should be other distributional issues.
The final few sections of the video address some common ways people misstate or misrepresent what economic theory actually says. For example, the idea we should consider “economic efficiency” and hence adopting a perfectly competitive market structure a sort of global objective because once we get to any such market outcome we can address any distributional issues as a sort of second step never diverging from economic efficiency, which he compares to finding the mythical unicorn in one memorable sequence. Another example is the idea that policies addressing distributional concerns introduce “inefficiencies” or “distortions” that inevitably make everyone worse off as well as the idea that if one is neutral on distributional issues one should oppose any attempt to change them. Good stuff.
The conclusion of Mr. Krankepantzen’s little lecture will be familiar to everyone who really understands neoclassical economic theory but may come as a bit of a shock for those who think they do but don’t. The theory of welfare economics with its recommendation we adopt perfectively competitive market structures to arrive at socially optimal results is fine and dandy if one sees no distributional concerns with the results but it’s totally irrelevant if one does. It doesn’t establish we should ignore distributional concerns because addressing them would interfere with the free market or create distortions or economic inefficiencies that would make everyone worse off. If only economists could learn to talk straight we wouldn’t need people like Mr. Krankepantzen to clear these issues up in funny You Tube videos but, of course, one head of the conservative monster, economic conservatism, has long been heavily involved with economic theory and academic economics, and we all know or should know by now how conservatives at all levels of education treat intellectual discourse as merely a rhetorical tool to get what they want, so I suppose it should come as no surprise at all many economists are every bit as committed to intellectual dishonesty and doubletalk as their conservative admirers and patrons. So I suppose funny You Tube videos it is. And my blog of course. Can’t forget that.
