Economics and Ethics

Rutgers Law Journal symposium on Amartya Sen's The Idea of Justice

Mark D. White

The latest issue of the Rutgers Law Journal (43/2, 2012) features a symposium on Amartya Sen's The Idea of Justice. As stated in the foreword by John Oberdiek:

The Rutgers Institute for Law and Philosophy, in conjunction with the Rutgers Law Journal, was honored to host a symposium on The Idea of Justice in May 2011 at the Rutgers School of Law–Camden. Sen’s intellectual acclaim, not to mention his well-known personability and grace, made it easy to attract a stellar roster of political philosophers from across the country: David Estlund from Brown, Samuel Freeman from Penn, Gerald Gaus from Arizona, Erin Kelly from Tufts, Henry Richardson from Georgetown, and Debra Satz from Stanford, all of whom, save for Estlund, have contributed an article to the present issue. Sen responded to each paper in turn at the conference, and we are delighted to be able to publish in this volume his full and considered written reply. This marks the first time a Nobel Laureate has been published in the Rutgers Law Journal.

The papers included in the symposium are:

Ideal Theory and the Justice of Institutions Vs. Comprehensive Outcomes, Samuel Freeman

Mapping Out Improvements in Justice: Comparing Vs. Aiming, Henry S. Richardson

Social Contract and Social Choice, Gerald Gaus

Amartya Sen's The Idea Of Justice: What Approach, Which Capabilities?, Debra Satz

Public Reason as a Collective Capability, Erin I. Kelly

A Reply, Amartya Sen

The Greatest Invention?

Jonathan B. Wight

Hans Rosling, one of the founders of Gap Minder -- the source for brilliant visual data analysis -- asks: "What was the greatest invention of the industrial revolution?"

Rosling makes the case for the mundane washing machine. With newly designed graphics, Rosling shows the magic of economic growth for improving womens' lives, and for turning a boring wash day into an "intellectual day of reading" for enhancing human capital.

Click the photo to watch the presentation:

Amartya Sen on India and China (in New York Review of Books)

Mark D. White

In the new issue of The New York Review of Books (May 12, 2011), Amartya Sen has an article titled "Quality of Life: India vs. China" about the meaning (or lack thereof) of the comparison between GDP growth rates in India and China:

The steadily rising rate of economic growth in India has recently been around 8 percent per year (it is expected to be 9 percent this year), and there is much speculation about whether and when India may catch up with and surpass China’s over 10 percent growth rate. Despite the evident excitement that this subject seems to cause in India and abroad, it is surely rather silly to be obsessed about India’s overtaking China in the rate of growth of GNP, while not comparing India with China in other respects, like education, basic health, or life expectancy. Economic growth can, of course, be enormously helpful in advancing living standards and in battling poverty. But there is little cause for taking the growth of GNP to be an end in itself, rather than seeing it as an important means for achieving things we value.

It could, however, be asked why this distinction should make much difference, since economic growth does enhance our ability to improve living standards. The central point to appreciate here is that while economic growth is important for enhancing living conditions, its reach and impact depend greatly on what we do with the increased income. The relation between economic growth and the advancement of living standards depends on many factors, including economic and social inequality and, no less importantly, on what the government does with the public revenue that is generated by economic growth.

Unfortunately, the article is not free online (though the $6.00 charge does not seem unreasonable).

Consequences of Economic Downturn -- Part IV: Borrowing & personal responsibility

Martha A. Starr

Today’s topic is one on which Mark has much to say: personal responsibility. Looking back at the years before the financial crisis, a big question is why households were increasingly borrowing via ‘exotic’ mortgages and other high-cost methods, even though such borrowing was pushing their debt burdens towards all-time highs. Accumulating evidence from behavioral economics suggests they may not have understood what they were doing: because people’s financial choices seem to be very sensitive to how options are presented, perhaps lenders were tilting them into products that maximized their profits, but saddled consumers with exorbitant debt costs.

Enter U. Chicago scholars Cass Sunstein and Richard Thaler, who argue that a good way around this problem is to “nudge” consumers towards good decisions -- by making “good” choices the default option and “bad” choices available by special order only. Some view this idea as nicely balancing consumer protection and personal freedom. But if this idea of “libertarian paternalism” rubs you the wrong way, you’ll love Mark’s chapter in Consequences of Economic Downturn, which eloquently slams it on several accounts. For one, “nudging” assumes the government can effectively identify what’s best for consumers, despite  great variations in their circumstances and the fact that government’s expectations for the future have no special claim to accuracy over those of consumers. For another, it ignores realities of government policy-making, whereby powerful institutions lobby Congress in favor of rules and regulations that best protect their interests. Finally, by taking responsibility for decision-making away from people, nudging actually cements any tendencies towards “cognitive flaws” they may have, and disregards fundamental concerns about building social environments that promote people’s agency, dignity and autonomy. {What do you say, Mark: Should Mr. Burns take the donuts out of the break room at the nuclear power plant?}

Deb Figart’s chapter takes a swing at a different proposed solution for curbing ‘imprudent’ borrowing: “financial literacy” programs, which have been rolled out by all sorts of government agencies, financial institutions, and nonprofits since the crisis. Most claim to aim to help consumers understand how to scrutinize financial products, identify those with low costs and risks that best meet their needs, and structure their spending, saving and borrowing patterns to minimize chances of financial distress. Yet as Deb points out, many do not actually focus on helping people become fully participating agents in control of their own economic and financial lives. Rather many aim to make them into orderly consumers, still taking for granted that the dominant work-and-spend lifestyle is the proper one and that ‘responsible’ use of borrowing products is fine. As with Mark’s view of ‘nudging’, Deb is skeptical as to whether these kinds of financial literacy programs actually respect people’s agency and enhance their capabilities. But whereas Mark thinks more can and should be expected of the individual, Deb objects to the assumption behind financial literacy programs that it’s up to the individual to make good financial decisions, avoid unscrupulous actors, attain financial security, etc., assuming that government and financial institutions do not also share responsibility for maintaining an orderly financial system that enables people to conduct their financial affairs without needing to constantly be on guard against risks of financial ruin. Thoughts, Mark?

Journal Watch: Utilitas, 23 (1), March 2011

Mark D. White

The latest issue of Utilitas (23/1, March 2011) contains some very interesting articles; it was very difficult to select just a few to highlight, but here they are:

MOZAFFAR QIZILBASH, Sugden's Critique of the Capability Approach

In comparing Sen's work with Mill's, Sugden criticizes Sen's capability approach because it may be applied in such a way that society or theorists judge what is best for people and potentially restrict liberty on that basis. Sugden cites Nussbaum's work as evidence in making his case. Sugden's critique of Sen's approach succeeds on a narrow reading of it. On that reading Sen is also critical of it because it does not leave enough room for liberty. On a broad reading, the critique has less force. Nussbaum's approach follows Mill in allowing people freedom to act on whatever desires they have if this does not harm others. This neutralizes the central element of Sugden's critique as it applies to her approach to some degree. Both Sen and Nussbaum nonetheless recognize the danger of illiberal restrictions in application which motivates Sugden's critique.

BEN COLBURN, Autonomy and Adaptive Preferences

Adaptive preference formation is the unconscious altering of our preferences in light of the options we have available. Jon Elster has argued that this is bad because it undermines our autonomy. I agree, but think that Elster's explanation of why is lacking. So, I draw on a richer account of autonomy to give the following answer. Preferences formed through adaptation are characterized by covert influence (that is, explanations of which an agent herself is necessarily unaware), and covert influence undermines our autonomy because it undermines the extent to which an agent's preferences are ones that she has decided upon for herself. This answer fills the lacuna in Elster's argument. It also allows us to draw a principled distinction between adaptive preference formation and the closely related – but potentially autonomy-enhancing – phenomenon of character planning.

SANDRINE BERGES, Why Women Hug their Chains: Wollstonecraft and Adaptive Preferences

In a recent article, Amartya Sen writes that one important influence on his theory of adaptive preferences is Wollstonecraft's account of how some women, though clearly oppressed, are apparently satisfied with their lot. Wollstonecraft's arguments have received little attention so far from contemporary political philosophers, and one might be tempted to dismiss Sen's acknowledgment as a form of gallantry. That would be wrong. Wollstonecraft does have a lot of interest to say on the topic of why her contemporaries appeared to choose what struck her as oppression, and her views can still help us reflect on contemporary problems such as the ones identified and discussed by Amartya Sen. In this article I will argue that a close look at Wollstonecraft's arguments may lead us to rethink some aspects of Sen's discussion of the phenomenon of adaptive preferences.

KEITH HORTON, Fairness and Fair Shares

Some moral principles require agents to do more than their fair share of a common task, if others won't do their fair share – each agent's fair share being what she would be required to do if all contributed as they should. This seems to provide a strong basis for objecting to such principles. For it seems unfair to require agents who have already done their fair share to do more, just because other agents won't do their fair share. The philosopher who has written most about this issue, however, Liam Murphy, argues that it is not unfair to do so, at least in the standard sense of that term. In this article, I give Murphy's reasons for saying this, explain why I think he's wrong, and then say a little about why this issue might be important.

MATTHEW TEDESCO, Intuitions and the Demands of Consequentialism

One response to the demandingness objection is that it begs the question against consequentialism by assuming a moral distinction between what a theory requires and what it permits. According to the consequentialist, this distinction stands in need of defense. However, this response may also beg the question, this time at the methodological level, regarding the credibility of the intuitions underlying the objection. The success of the consequentialist's response thus turns on the role we assign to intuitions in our moral methodology. After presenting the demandingness objection to consequentialism and revealing the underlying methodological stalemate, I break the stalemate by appealing to research in the cognitive neuroscience of intuitions. Given the evidence for the hypothesis that our moral intuitions are fundamentally emotional (rather than rational) responses, we should give our intuitions a modest (rather than robust) role in our moral methodology. This rescues the consequentialist's response to the demandingness objection.

EZEQUIEL SPECTOR, Do You Deserve To Be Talented?

Are inborn characteristics deserved or undeserved? Using Bertrand Russell's theory of descriptions and Peter Strawson's objection to this theory, I argue that this question does not make sense. In order to know whether a person deserves something she has, it is necessary to evaluate what she did before having it. But people did not exist before their birth, so they did not exist before having their inborn characteristics. Therefore, talking about people deserving their inborn characteristics does not make sense: these characteristics are neither deserved nor undeserved.

Should Science Determine Our Values?

Jonathan B. Wight

David Hume be damned, the answer is "yes" according to Sam Harris, in The Moral Landscape: How Science Can Determine Human Values (Free Press, 2010). Harris argues that all values reduce to "facts" that science can provide.

Harris is a utilitarian, seeking to reduce "needless human suffering." In his view, science allows "us"—that is, well-educated liberal Westerners--to decide on the meaning of "moral progress." It should be clear, he argues, what human flourishing means and that we can adopt a definition and measurement using scientific methods. In short, there is an absolute moral standard of right and wrong, as illuminated by the "science" of human well-being.

Aside from Harris' arrogance, there is a huge dose of condescension. There is no fair conception here of what the human experience means in non-Western cultures. To Harris, the measure of human progress appears to be externally-driven by caloric intake and clothes (he rails against the "sacks" that Islamic women wear). I haven't read the book, but I am curious if Harris is aware of Nozick's Experience Machine that could make and keep us perfectly pleasured. Is that an ideal life? It would seem so to Harris.

If you don't want to buy the book, you can get the essence of his message in this TED talk.

Gwartney and Connors, "Economic Freedom and Global Poverty" (from Accepting the Invisible Hand)

Mark D. White

Today we continue our preview of Accepting the Invisible Hand: Market-Based Approaches to Social-Economic Problems with Chapter 3, "Economic Freedom and Global Poverty," by James D. Gwartney and Joseph Connors. (Chapter 2 by John Meadowcroft was discussed here, Chapter 1 by me was discussed here, and the preface was posted here.)

From the chapter:

Over the period 1980–2005 many developing countries achieved remarkable increases in economic growth. Real per capita income increased substantially in countries that had experienced only modest increases in living standards for a century or more prior to 1980. Recent scholarship has pointed to the adoption of institutional and policy changes more consistent with economic freedom as an important, if not the most important, explanatory factor underlying the recent economic growth of developing countries. But economic growth and increases in real per capita GDP only provide information on how average income figures are changing. They may be a misleading indicator of what is happening to the living standards of the poor. Did the rapid growth of 1980–2005 lead to lower poverty rates? How does economic freedom affect poverty? What can be done to accelerate reductions in poverty rates? This chapter will address all of these issues. (p. 43)

Gwartney and Connors use recent World Bank data on extreme and moderate poverty to analyze the effect of institutional factors associated with economic freedom--"personal choice, voluntary exchange, open markets, and protection of privately owned property" (pp. 47-8)--on poverty rates in various regions of the world.

While economic freedom is commonly held to be associated with higher growth (for reasons reviewed on pages 47-9), the authors also recognize concerns that this higher growth does not increase the well-being of the poorest members of these societies. After analyzing the data from the World Bank together with the Economic Freedom of the World index (and controlling for factors such as foreign aid), they find that increased levels of economic freedom are correlated with lower poverty rates:

Compared to those that were less free, countries with higher economic freedom ratings during 1980–2005 had lower rates of both extreme and moderate poverty in 2005. More importantly, countries with higher levels of economic freedom in 1980 and larger increases in economic freedom during the 1980s and 1990s achieved larger poverty rate reductions than economies that were less free. (p. 56)

This chapter provides valuable empirical support to arguments (such as in Amartya Sen's book Development as Freedom) that changes in institutions and governance that enhance people's freedom and capabilities are crucial to ameliorating global poverty.

Call for Papers: Market and Happiness (Civic Virtues and Human Capabilities)

Mark D. White

Speaking of Luigino Bruni, he just sent me the following call for papers (longer call with submission details and deadlines here), featuring our own Irene van Staveren as a keynote speaker:

Market and Happiness

Do economic interactions crowd out civic virtues and human capabilities?

Econometica and the HEIRs Association, in collaboration with the Economics Department of Milano-Bicocca and Irec (International Review of Economics), are organizing, on June 8-9 2011, an International Conference on "Market and Happiness. Do economic interactions crowd out civic virtues and human capabilities?" with the aim of eliciting contributions on the nexus between wellbeing, economic interactions, civil virtues and human capabilities.

Call for Papers: On Sen's "The Idea of Justice"

Mark D. White

The open access, online journal Rationality, Markets and Morality has issued the following call for papers:

Amartya Sen's recent book The Idea of Justice is put forward as a challenge to what Sen holds to be the predominant approach to justice in contemporary philosophy and marks as 'transcendentalism'. Justice is a matter of reason, but, argues Sen, there is no and cannot be a reasoned agreement on the nature of perfect justice. Moreover, no ideal conception of 'spotless' justice will help us solve the numerous problems of injustice easily identified in the real world. So Sen promotes a different 'comparative' account of justice whereby societies, practices and states of affairs are judged against actual and possible alternatives drawing on a plurality of views and conceptions of the good as expressed and argued for in public debate. Thorough economic and political analysis is at the heart of such moral reasoning. In expanding on and arguing for his conception of justice Sen expounds and integrates many of his well known ideas about welfare, capabilities, equality and liberty, democracy and human rights.

The Idea of Justice has immediately attracted the attention of the scholars in the field. Without doubt, it is an exceptionally resourceful and important contribution to the philosophy of justice. It is most instructive and illuminating but there is also plenty to argue with.

More details at the journal's website (linked above).

What is “development”?

Jonathan B. Wight

A student of mine is finishing up her Honors Thesis on substantive measures of development. One measure she examines is cell phone ownership as a proxy for infrastructure.  One can argue that in a rural areas without land lines, access to cell phones enables one to live a life of greater affiliation and connectedness to those you love (e.g., many husbands migrate and may return only once a year). Having the capability of communicating with loved ones can be considered an important aspect of human development.  What do you readers think?

Amartya Sen writes provocatively about substantive measures and his book, Development as Freedom (1999) offers great insights. 

But Paul Krugman’s quote still captures the issue most succinctly:  

     “Feudalism with cell phones is still feudalism.”

Anyone want to share other pithy quotes on this subject?