Wednesday, 23 October 2013

Amia Srinivasan's 4 questions for Free Marketeers

1. Is any exchange between two people in the absence of direct physical compulsion by one party against the other (or the threat thereof) necessarily free?
No. Free Market theory says people will be better off if they can freely exchange goods and services under the following conditions; there is perfect information & perfect competition, with independent preferences, no non-convexities or externalities or uncertainty. .
If you say yes, then you think that people can never be coerced into action by circumstances that do not involve the direct physical compulsion of another person. Suppose a woman and her children are starving, and the only way she can feed her family, apart from theft, is to prostitute herself or to sell her organs. Since she undertakes these acts of exchange not because of direct physical coercion by another, but only because she is compelled by hunger and a lack of alternatives, they are free.
Question. Can this woman and her children, at some future point, earn enough to repay a loan taken out today? If yes, then they can borrow if there is a free market in credit. If no, then they can either ask for charitable assistance or an arbitrage opportunity for a moral entrepreneur is created. Provided there are some people with means who would prefer to see them fed rather than starving, then their needs will be met in that way. Suppose, the majority of people in the area don't like looking at starving children. They can create a fund to maintain the indigent under a Tiebout model. Furthermore, if people feel prostitution or organ sales are morally repugnant, they can take collective action by making such activities illegal. Alternatively, by stipulating that all organ sale contracts be 'balanced' (i.e. equitably divide gains from trade) and such as would prevent the development of a 'repugnancy market' then that may be a superior alternative.

In any case, the woman in the hypothetical is never really free even if the choices facing her are of the following kind- either buy Chanel and send the kids to Eton while flying round the world as a super model OR teach Eco-Feminist philosophy at Oxford while sending the kids to the local Comp.-quite simply because we might still suspect her of being the prisoner of gender roles or some such shite.

The point about the market is that it increases the number of options from- (starve or get fucked) to (starve or get fucked or get a low paid job)  to (starve or get fucked or get a dead end low paid job or get a low paid job which leads to something) etc, etc.

2. Is any free (not physically compelled) exchange morally permissible?
No. Fraud is not permissible. Actions in restraint of trade are not permissible. Provision of goods or services which change the preferences of the consumer too may be either praiseworthy or punishable- it depends.
If you say yes, then you think that any free exchange can’t be exploitative and thus immoral. Suppose that I inherited from my rich parents a large plot of vacant land, and that you are my poor, landless neighbor. I offer you the following deal. You can work the land, doing all the hard labor of tilling, sowing, irrigating and harvesting. I’ll pay you $1 a day for a year. After that, I’ll sell the crop for $50,000. You decide this is your best available option, and so take the deal. Since you consent to this exchange, there’s nothing morally problematic about it.
You are a local monopsonist- that's restraint of trade plain and simple. Your laborer should hire a lawyer and get a penal settlement out of you. Alternatively, if the legal code in your country is not in line with current Free Market thinking, an arbitrage opportunity for a Social Entrepreneur exists such that the system decreasingly oscillates around the 'repeated game' optimum. 
3. Do people deserve all they are able, and only what they are able, to get through free exchange?
No. What we think people deserve has nothing to do with what they have or what they are able to get. 
If you say yes, you think that what people deserve is largely a matter of luck. Why? First, because only a tiny minority of the population is lucky enough to inherit wealth from their parents. (A fact lost on Mitt Romney, who famously advised America’s youth to “take a shot, go for it, take a risk … borrow money if you have to from your parents, start a business.”) Since giving money to your kids is just another example of free exchange, there’s nothing wrong with the accumulation of wealth and privilege in the hands of the few. Second, people’s capacities to produce goods and services in demand on the market is largely a function of the lottery of their birth: their genetic predispositions, their parents’ education, the amount of race- and sex-based discrimination to which they’re subjected, their access to health care and good education.

It’s also a function of what the market happens to value at a particular time. Van Gogh, William Blake, Edgar Allan Poe, Vermeer, Melville and Schubert all died broke. If you’re a good Nozickian, you think that’s what they deserved.
Either you have a theory of what people deserve or you don't. I suppose a person who believes in an Occassionalist God, or a believer in Karma, might say 'whatever people get is what they deserve' but this is independent of the sort of economic system obtaining at the time. Srinivasan may not have a full fledged theory of what people deserve but she does think that some people get more and others less than what they ought to do. She is welcome to do a bit of 'Mechanism Design' such that the outcome she desires arises out of the operation of the market. To persuade us to adopt this Mechanism she might, thanks to her brilliance, throw in some new piece of technology she has invented to sweeten the pot.
4. Are people under no obligation to do anything they don’t freely want to do or freely commit themselves to doing?
Yes! MORAL obligation arise solely by one's free choice and commitment- anything else is Kantian heteronomy.
If you say yes, then you think the only moral requirements are the ones we freely bring on ourselves — say, by making promises or contracts. Suppose I’m walking to the library and see a man drowning in the river. I decide that the pleasure I would get from saving his life wouldn’t exceed the cost of getting wet and the delay. So I walk on by. Since I made no contract with the man, I am under no obligation to save him.
Clearly, you felt no moral obligation to save him because you didn't save him. I might say 'you should have felt a moral obligation' but that judgment is an expression of the Moral code to which I have chosen to subscribe. I might go further. I might say 'I'm going to cut pieces out of your brain till your bad moral code is removed. Then I will insert pieces into your brain till you voluntarily choose a moral code similar to mine'. However, most people would feel that my moral code is just as bad, if not worse, than yours.  The Market Solution is not lobotomies or lectures but Mechanism Design so that Incentives and Penalties line up with the sort of outcomes we value.

Mario Rizzo Says:
  1. There is a long tradition in the common law that refuses to recognize a legal duty to help strangers in emergency situations: the so-called Good Samaritan duty. It is not because the common law judges were heartless and did not recognize moral duties. It is because they recognized that state compulsion or legal liability should be used sparingly. They also recognized a whole host of practical problems in enforcing Good Samaritan duties.
    Not to recognize a distinction between the moral obligations of individuals and the role of the state is an error of profound consequences.
    The liberal wants a society in which people who do not share the same moral values can live together and prosper.
  2. Vivek Iyer Says:

    Quite right. India has an activist Supreme Court which is stretching constructive due process in precisely this very dangerous manner such that innocent third parties can be jailed simply because they were ignorant of something which the Court decides it was their duty to know about.
    In ancient times, entire communities were held jointly accountable for any thing bad that happened in their locality. Far from preventing crime and destitution and so on, this merely gave rise to a corrupt form of tyranny.
    The philosophical argument Srinivasan presents hinges on an assumption of agent homogeniety.
    Actually, a Positive Duties argument, obeying the rules of what we would recognize to be a deontic logic, which stipulates that there is at least one general duty of benificence binding upon all possible agents is also an argument that either nullifies or forbids its own use.
    This is because a possible agent may interpret the general duty as entailing the making of this very argument. Either this is a legitimate or else an illegitimate entailment. If it is legitimate, then the argument has neither intentional nor intensional content because it is uttered only because it is a binding duty. On the other hand, If it is an illegitimate entailment then deontic logic forbids its use.
    In ordinary life, we recognize that agents are diverse. We expect more from some than others. Positive Duties are enjoined on people we deem ‘respectable’ or ‘virtuous’ or ‘capable’. We expect less of a person of impaired judgment, reputation or character.
    Economic theory explains how and why heterogeneous agents get canalised, some towards ‘repugnancy markets’ others towards ‘merit goods’. The benefit of offering contracts which are ‘balanced’ rather than exploitative- in the sense of equitably sharing the gains from trade- is reputational and dynamic. Some agents gain more by taking this ‘high road’ while others, by reason of entitlement defect or pathological preferences, remain confined to the ghetto of ‘repugnancy markets.’
    Thus, the sort of deontic logic that matches with a sophisticated ‘Whig’ type of theory (like that of Ken Binmore) is not going to suffer the defect of the argument put forward by this lady.
Srinivas's argument boils down to this- 'You, the reader, believe a Positive Moral Duty exists which conflicts with the Negative Rights of the Free Market.' Thus either you are immoral, in ignoring your own moral intuition, or stupid.'
It's basically a 'gotcha' argument of a puerile sort so the proper way to combat it is to accuse her of advocating the use of tax payer dollars to subsidize the environmentally unsustainable sodomisation of ethnic minority fetuses which is what Obamacare ineluctably entails- at least on her premises. This is because everybody has the Positive right to terminate the genetically cloned fetus with high sodomization preference and ethnic minority status, which the State had to provide for them, as part of their Positive right to happiness, and the fetus has the Positive right to be kept alive and regularly sodomized as per its genetically programmed wishes, all at the State's expense. This is clearly environmentally unsustainable because everything is.


Anonymous said...

Srinivasan is talking about Free Market MORALISTS not Free Market theorists who either argue from a notion of 'self ownership' or else subscribe to Nozick's earlier work.
Thus your criticism misfires.
A Positive Duties argument does not, as you suggest, 'forbid or nullify' its own use. Take the Duty to report a crime. Suppose there is a person who believes that this duty entails making a particular type of argument. How does this fact 'nullify or forbid' the reporting of a crime?

windwheel said...

The Free Market is theoretical concept and those who claim to base their Moralizing on it need to keep up with its contemporary canonical expression.
Are you saying there is a Positive Duty to report a crime? Suppose I was raped by my neighbor's cat. If I report this crime I will make myself a laughing stock and also have to return a lot of kitty litter. Clearly there can be no general beneficient duty of the sort you mention.

Anonymous said...

Srinivasan isn't writing an academic paper, just a Newspaper op-ed. There are plenty of people who believe in Ayn Rand's 'Objective' philosophy and who do make arguments of the sort she describes.
In general, there is a Positive Duty to report a crime. I suppose it is up to you whether to treat an assault on your person as a crime or not. In any case, discretion should be maintained in the treatment of victims of certain sorts of crimes. So, this Duty does still exist and ins't 'nullified or forbidden' by anything.

windwheel said...

The Duty may exist but surely it doesn't entail rejecting the Free Market? That can't be the 'common sense ' view. Yet, Srinivasan suggests that if you believe a duty exists to do things you don't want to do, then this creates a scandal for Free Marketeers. Suppose, there is a consistent system of deontic logic which can express the notion a Positive Duty binding on all possible agents. Then, for a technical reason, the paradox can arise that the articulation of a Duty can forbid or nullify the action it otherwise enjoins.

Anonymous said...

Aah these Bong-Tam(???) other similar hybrid abominations with their fancy degrees and supercilious attitudes. Blood boils when they mimic the whites and produce "theories","opinions",backed by whites invariably to nix Indians openly or surreptitiously.Should be made to talk to a few peasants and farmers to get their heads fixed.

Old Odd Jobs said...

Wow, an interesting blog post in which you refrain from using the phrase "worthless cunt" !!