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December 2018 posts

The Good Place

By Jonathan B. Wight

Speaking of ethics and art, dear readers, have you seen the Netflix comedy, The Good Place

A selfish young woman dies and goes to the afterlife.  There she has to learn how to fit in, and especially she must learn how to become a more ethical person. 

ChidiThe show is hysterical, made funnier by William Jackson Harper (photo), who brilliantly plays a … drumroll… professor of moral philosophy--a Kantian as it turns out.  

Here is a brief and incomplete list of topics that are cleverly woven into the plot:

            Socrates

            Plato

            Aristotle

            Kant (yes, lots of Kant)

            Consequentialism

The Trolley Problem

            Jonathan Darcy and moral particularism

While the show is funny, the moral philosophy presented is, as you might expect, pretty shallow.  We are told, repeatedly, that ethics always centers on putting others first.  That doesn’t sit well with me, since prudence in virtue ethics does require that we take a healthy concern for ourselves and our futures, although in proper balance with our other duties. 

While I’m on the edge of my seat as these ethics topics appear on the show, hoping that I can assign them in class, most of the time they are too short (or too problematic) for pedagogical use.

The issue of Utilitarianism arises a lot.  Is it moral to hurt one person to produce benefits for others?  

TrolleyProbably the best episode for teaching is the Trolley Problem (Season 2, Episode 5), where Chidi, the moral philosophy professor, is put inside a trolley hurtling down the tracks and has to decide whether to switch onto the side path and save four workmen’s lives at the expense of killing one.  This visual portrayal raises the emotional stakes, and might make it fun for students to watch.

The bottom line is a good one:  even moral philosophy professors struggle to be ethical, and may fail more spectacularly (at times) than those who've never picked up a philosophy text.  We also learn that those who pontificate about moral philosophy may be hard people to like.  That does not diminish the importance of the endeavor, of striving to understand what it means to be ethical and how to be that ethical person --> but take it all with humor and a grain of salt.

[Photo credits: https://www.nbc.com/the-good-place/credits/cast and the show.]


King Lear

By Jonathan B. Wight

Amazon Prime, in collaboration with the BBC, released a new rendition of King Lear (set in the present time), starring Anthony Hopkins and Emma Thompson. 

It is highly recommended if you don’t mind the dark story line.  The king is aging (and going insane) and plans to divide his kingdom between his three daughters. 

LearThe key plot line unfolds when the King asks each daughter in turn, “Who loves me the most?” The first two daughters say all the right flattering things.  The youngest and his favorite, Cordelia, refuses to play this game of trying to measure her love against others.  (Turns out she does love him the best, but is unwilling to assert this.)

If, instead, he had asked “Do you love me?” there would have been no problem.  But trying to draw our superlatives he unleashed a nightmare.  So all hell breaks loose from that point.

Shakespeare was a genius at exploring the depths of human depravity, fueled by lust, jealousy, and the quest for power and wealth. 

I just wish Cordelia had lied to her old man, and told him what he wanted to hear (that she loved him the “most”).  Is there any harm in flattering a hoary and dying man?  Instead, her insistence on truth and virtue unleashed a nightmare. 

Such is the world of absolute moral philosophies. 

[Photo credit: adapted from https://www.amazon.com/King-Lear/dp/B07GGCWSN3]


Is the Market Wage the Just Wage?

By Jonathan B. Wight

Do markets have the incentive and the capability to achieve a “just” wage?  This seems problematical over the past half century, given that labor productivity has far outpaced wage growth. Why aren’t workers enjoying the fair fruits of their greater outputs? 

The theory of income distribution according to marginal productivity of labor is a can of worms, full of contradictions as noted by many critics over the ages.  The rise of Trump may to some degree be tied to concerns over this, exemplified (wrongly, I think) by the attack on global markets. 

Peter Boettke, Rosolino Candela, and Kaitlyn Woltz take a stab at pushing back against some of this criticism in “Is the Market Wage the Just Wage? A Reassessment of Factor Pricing and Distributive Justice,” in the Erasmus Journal for Philosophy and Economics (Autumn 2018). 

The authors argue that criticizing the market using the static equilibrium framework of neoclassical economics is misguided; instead, one must use a “comparative institutional” framework more akin to the classical model.  In essence, they argue that modern critiques of a neoclassical approach are about “the  failure  of  a particular model of  the  market  to  deliver  just  wages,  not  the  market properly understood as a process of equilibration within an institutional framework  of  private  property  and  freedom  of  contract  under  the  rule of law” (p. 141). 

Maybe so.  The authors are correct to highlight the institutional context in which markets operate.  But even granting all of the above institutional restraints, rent-seeking is so powerful a force that it seems impossible to ever separate the economics of distribution from raw political power. 

Consider the most recent tax cut that benefits the top 1%, on the promise of a huge investment boom that would trickle down to benefit workers.  As the Wall Street Journal notes this week, “One year later, benefits from [the] corporate tax cut seem muted.”

Is anyone surprised?  A huge redistribution policy (for which no hearings were held) is sold like snake oil on the basis of rose-colored projections concocted by lobbyists on K-Street.  This is the institutional context for analyzing income distribution. As long as powerful market participants have huge incentives to game the system, the system will be rigged. 

Fighting against this system, and achieving greater balance in income distribution, will be very difficult, because the tendency to over-shoot can destroy the market and lead to decades of disruption and inefficiency.   Wiser statesmen and stateswomen would presumably want to address growing inequality before this happens, but showing restraint--when the other side has gone to extremes--will be politically difficult.  

Despite all this, Merry Christmas!  Enjoy this great re-distributive holiday that takes from parents and gives to kids, and keeps retailers in business for another year. 


The Ethics of a Government Shutdown

By Jonathan B. Wight

I understand the idea of doing a fast—going without any solid food calories for a day or two as a part of a colonic cleansing.  It’s probably good for most people to give their liver and kidney and digestive systems a rest.  Moreover, it shrinks one’s stomach and perhaps develops self-control to resist unnecessary calories later on.  So, there is something to be said for periodic withdrawals from the caloric cycle. 

Can the same logic be used periodically to shut down government?  Wouldn’t that be cleansing and useful for budget management? 

No.  A thousand times no.

The ridiculous looming shutdown is a gimmick.  Here’s why.

Congress makes the spending and taxing laws that the President signs.  These combined laws, by their own actions, lead to a certain level of government debt. 

There is absolutely no reason to require the passage of a separate law to raise the debt ceiling!  The debt is increased by the tax cut already enacted.  If you are a lawmaker worried about the debt level, don’t pass the initial tax cut!  Or, cut the actual spending. 

To push all government services into shutdown because of this non-issue of the debt ceiling is hugely inefficient, unfair, and reckless.  It penalizes some workers horrendously, like air traffic controllers, who have to work anyway without pay.  It erodes confidence in our Treasury’s ability to function. 

America is a great country and does not really have any huge economic problems that we can’t fix.  We do have political problems that make us look like Argentina—that rich nation in 1900 that slowly self-destructed over the following century.    

UPDATE:  Jonas correctly (and politely!) noted that I got myself confused on this, conflating this shut-down threat with one caused by a debt ceiling.  Thanks, Jonas!  The key point is still relevant, that the U.S. has political problems that far exceed our economic ones. 


Environmental Clean Up in New Jersey

By Jonathan B. Wight

The Wall Street Journal reports on the clean-up costs of the Vietnam-era defoliant Agent Orange, these many decades later. It’s not a pretty story.

The factory that produced the poison was in New Jersey, and apparently, a lot of the leaked chemicals were washed down the drain and into the Passaic River, where they sank to the bottom as toxic sludge. 

The original company and its factory were bought and eventually owned by an Argentine company that sold off the assets (presumably distributing gains to the shareholders) and then … declared bankruptcy.  Who is left to clean up the nearly $12 billion environmental liability? 

The Journal reports that:

“Other interested parties, including another company that shares the liability, are up in arms over the maneuver. They say the subsidiary was a puppet company emptied of value and left to take the fall for the Passaic River. Creditors sued YPF in June, alleging it improperly bled Maxus dry, intending to use its subsidiary’s bankruptcy filing to ditch its cleanup obligations.”

This is an excellent reason why Ronald Coase resisted the effort to use his “Coase Theorem” to argue against government regulations. 

The Coase Theorem does not apply in many cases.  Only if property rights are clearly owned, and only if the transaction costs for enforcing those rights are minimal, will the private market have an incentive to solve environmental problems. 

In this case, a public waterway does not have clear property rights, and the legal costs for enforcing responsible parties to pay for their messes are astronomical.  The ploy of companies to defile the environment and then declare bankruptcy has unfortunately been common overseas in gold mining and other areas.  The EPA and courts in the U.S. have generally resisted the bankruptcy gambit, but the legal costs and the time given to litigation are huge (while the pollution spreads).

Government regulations on effluents, which might include monitoring and requiring escrow accounts of clean-up funds, would seem a high price to pay, but perhaps are far cheaper than what ultimately may be required when the true costs of polluting are dumped in the public’s lap.

The bottom line:  Don’t ask the market to solve environmental problems when the companies involved do not have an incentive to solve them.


California Dreaming

By Jonathan B. Wight

Who would move to a place beset by wildfires, earthquakes, horrible traffic, and high taxes? 

I’m speaking of California, and particularly Los Angeles and San Francisco. 

The answer is: lots of people need to be here because of their work.  Our friends in Hollywood need to be there to meet face to face with producers, writers, and others.  Our friends in Silicon Valley need to be near others who work on the latest software projects. Many others find jobs in agriculture in the Valley, although mechanization may eventually reduce that need.

Perhaps because of all the calamities I listed above, California is losing population due to domestic outmigration; but it is more than making up for this by being a beacon of welcoming light for foreign immigrants. It has been the Ellis Island of the 21st century: 27% of California’s population is foreign born, compared to 22% of New York’s, and 12% of Virginia’s.

As I tooled around California a few weeks ago, and pondered the hard living situations of many low wageworkers, there is no question that the state may be a harbinger of new approaches to housing, transportation, and other relevant areas.  In housing, we may return to a concept of the 19th century, which is rooming houses, in which unmarried people rent (singly or shared) a room, share a bathroom, and eat meals provided by the host or eat out.  This dramatically increases density in an affordable way. 

The square footage of housing per person in America has been skyrocketing. In 1950 the average American used 983 sq. ft. of living space.  That number has doubled or tripled by today, partly because of zoning laws and partly because of demand.  I predict (and hope) that this number comes down, so that affordable alternatives will be available for low income people. 

It isn’t clear that more space increases happiness or other indices of well-being.  A decade ago my wife I had to downsize dramatically for 12 months because our house became uninhabitable during reconstruction.  We moved into a much smaller abode and were happy as clams.  Yet, in a fit of irrationality, we all think we would be better off with more rooms and bigger rooms. 


No Free Thinking

By Jonathan B. Wight

Economists are conditioned to understand the notion that there is "no free lunch."  What if there is a broader concept of this relating to our minds and our thoughts?

“All thinking obviously is conditioned; there is no such thing as free thinking. Thinking can never be free, it is the outcome of our conditioning, of our background, of our culture, of our climate, of our social, economic, political background. The very books that you read and the very practices that you do are all established in the background, and any thinking must be the result of that background.”

--J. Krishnamurti