Dirk Philipsen elbowing out the Public Good

Prof. Dirk Philipsen has an article in Aeon titled 'Private gain must no longer be allowed to elbow out Public Good'.

 Philipsen gains by getting this publicity for a book he has recently written.  But, it is a private gain. Does it elbow out 'Public Good'? Yes. At the margin, time spent reading Philipsen's article, or money spent buying his book, represent a sub-optimal use of resources. There is a better article or book, Society should have taken notice of. Thus, 'private gain' has caused 'allocative inefficiency' and reduced the Public Good. However, there is a 'market discovery' process here which may be 'dynamically efficient'. In other words, everybody competing to write articles and books may promote the Public Good more than would have been the case if the most suitable author to write on this topic had been selected by a benevolent Public Agency and if the resulting product had been distributed on the basis of Social Interest, not Private greed or lust for fame.

 'Dynamic efficiency' may have to do with innovation or streamlined production. But, there is another reason why we might prefer the allocative inefficiency associated with competition to write worthless shite based on greed for money or fame. That reason has to do with the value of freedom in and of itself. Asserting our right to write shite even when we don't feel any great compulsion to do so is a way of ensuring we will be able to write shite at some future time when we might become incapable of committing any other type of public nuisance so as to relieve our feelings. One reason this right is important is because if we lack it then some Public body may write and talk shite on our behalf. But that shite is likely to be even more noisome.

The alternative to everybody having rights and being able to exercise them in a self-interested or egoistic manner is our subordination to the stupidity and ignorance and penchant for pi jaw of public officials. It may be argued that it is better that bureaucrats talk worthless shite rather than that ordinary people do so. The problem is that bureaucracies tend to foster
1) Monopolies
2) Mercantilism
3) Militarism
at least this was the experience of Northern Europe in the Seventeenth and Eighteenth Century. Thus the alternative to Absolutism terminating in disastrous wars was laissez faire Liberalism. The Finnish clergyman, Anders Chydenius is emblematic of the new type of Political Economy upon which the liberty, prosperity and relative equality of the West is founded.

Sadly, Professors tend to ignore books written by non Professors- like Chydenius's 'The National Gain' which was published a decade before Smith's 'Wealth of Nations'. 

Adam Smith had an elegant idea when addressing the notorious difficulty that humans face in trying to be smart, efficient and moral. In The Wealth of Nations (1776), he maintained that the baker bakes bread not out of benevolence, but out of self-interest. No doubt, public benefits can result when people pursue what comes easiest: self-interest.

Smith was critical of Mandeville's 'Fable of the Bees' , published before he was born, because bad motivations- greed, hatred, envy etc.- are bad in themselves. They are likely to cause cognitive biases- e.g short-sightedness- and lead to bad consequences. Self-interest ought to militate against cognitive biases because impulsive or short-sighted actions can boomerang upon us. However, hypocrisy is not self-interested. There is no good reason to pretend we are shitting higher than our arseholes, morally speaking.

To act in a self-interested, as opposed to an impulsive, thymotic, manner is not 'what comes easiest'. The thing requires discipline and motivation and rationality. What comes easiest is a deluded type of mimetic behavior- e.g strumming air guitar rather than doing your Maths homework in the expectation of becoming a Rock Star rather than a Cost and Management Accountant like Dad.

The thing which comes easiest is mimicry- doing what others are doing. Rational Self-interest works differently in a place where everybody is mimicking a short-sighted sociopath rather than a far-sighted entrepreneur. On the other hand, as Mandeville pointed out, a puritanical Society which valorized thrift and Godliness, apart from being very boring, would also lack economic dynamism. It is better not to be in denial, or to indulge in hypocrisy, regarding human motivations. Liberalism assumes that freedom will permit human flourishing simply through the pursuit of rational self-interest. There is little reason to believe this will happen. Still, provided there is unrestricted 'Entry' & 'Exit' to different 'Tiebout Models'- in other words, so long as people can relocate to places with the right fiscal mix of taxes and public goods- including 'rule sets'- then there is room for hope.

On the other hand, Societies have to cope with catastrophic events. Liberal Institutions are seldom 'robust' unless they aren't Liberal at all but simply mimic best practice under exigent circumstances.

There is no 'logic' to Social Choice any more than is a 'logic' to the evolution of a Species. Only the fitness landscape- which is radically uncertain- matters.

And yet: the logic of private interest – the notion that we should just ‘let the market handle it’ – has serious limitations.

Economics could be considered to represent 'the logic of private interest'- it tends to neglect the fitness landscape and thus generates stupidity- but it does recognize the existence of externalities, non-convexities, information asymmetry, Knightian Uncertainty etc, etc. By following the correct 'Muth Rational' regret minimizing course we can overcome such limitations albeit with tradeoffs. One has to do with 'hysteresis'- path dependence. We know this is inefficient yet there is expensive to get rid off. One example is the way in which countries with recent experience of a coronavirus outbreak had 'Institutional Memory' such that the problem was more quickly contained. Other countries, without the lived experience, could have created Administrative Capacity against that contingency on the basis of mimetics. But they didn't because the attempt to do so soon created a bureaucratic cluster fuck. The US, because of its size, was a particularly egregious example.

Particularly in the United States, the lack of an effective health and social policy in response to the coronavirus disease (COVID-19) outbreak has brought the contradictions into high relief.

The US had a plethora of pandemic plans. But they were crap. Both the CDC and the NIH appear to be wholly dysfunctional. But the UK, which has a very different approach, too, appears to have been woefully unprepared. Some blame distraction posed by Brexit.                         

Around the world, the free market rewards competing, positioning and elbowing,

This may be true about politics but it isn't true about open markets- i.e. one's where all agents are price-takers. Markets don't get to be open unless freedom increases. Capitalism is a work in progress.

so these have become the most desirable qualifications people can have.

as opposed to what? being as rich as shit and having a massive dick? I don't think so.

Empathy, solidarity or concern for the public good are relegated to the family, houses of worship or activism.

But families and Churches and Activist groups do worse if their members stop doing useful stuff and go in for empathy and solidarity and concern for the public good. That's why useless people with no friends should definitely go in for it- if they want to remain lonely and useless.

Meanwhile, the market and private gain don’t account for social stability, health or happiness.

Very true. Instead of hiring workers, motivated by private gain, Governments should employ slaves motivated by fear of the whip.

As a result, from Cape Town to Washington, the market system has depleted and ravaged the public sphere – public health, public education, public access to a healthy environment – in favour of private gain.

Cape Town? What is this cretin saying? Apartheid South Africa built up the public health and education system. Then a bunch of uppity niggers took over the country and started hiring people through the market and paying them the going wage. This neo-liberalism ravaged the country. Fuck you Nelson Mandela! Why couldn't you just know your place?

COVID-19 reveals a further irrational component: the people who do essential work – taking care of the sick; picking up our garbage; bringing us food; guaranteeing that we have access to water, electricity and WiFi – are often the very people who earn the least, without benefits or secure contracts.

But they aren't slaves or subjected to Apartheid type restrictions. Sadly, they are rational and thus won't do shitty jobs- like caring for the sick as opposed to caring for very healthy and beautiful nymphomaniacs- unless they can't get anything less shitty.

On the other hand, those who often have few identifiably useful skills – the pontificators and chief elbowing officers – continue to be the winners.

Not to mention Professors like the author. He's got the pontificating down pat. Whom did he have to elbow to get tenure?

Think about it: what’s the harm if the executive suites of private equity, corporate law and marketing firms closed down during quarantine?

What's the harm if this Professor's Department closes down permanently? We don't know and don't care unless we are footing the bill. What other people do with their money is something we know less about, and thus are in a worse position to judge, than they themselves.

Unless your stock portfolio directly profits from their activities, the answer is likely: none.

So, the Professor is asking about the harm to you if some other guy can't go to work. He thinks there is no harm if you lose no money. But we might equally ak 'what's the harm if some guy who isn't making you richer is enslaved or shot in the head?' The answer is, assuming you don't mind slavery or murder, is that if it can happen to him, it could happen to you. It is in your interest to see harm in the curtailment of freedom of somebody else even if they belong to a different identity category.

But it is those people who make millions – sometimes as much in an hour as healthcare workers or delivery personnel make in an entire year.

So we are supposed to hate people if they are richer than us. But we are richer than some other set of people. After we have stripped those above of us of their freedom, we may find our freedoms are the next to go.

Simply put, a market system driven by private interests never has protected and never will protect public health, essential kinds of freedom and communal wellbeing.

Public health protects the market system- not the other way around. The same is true of essential kinds of freedom and 'communal well-being'. Why? Healthy, free and happy people want the market system so as to flourish even more. On the other hand, if they are sick, enslaved and fucking miserable, they may evince great love for the Supreme Leader.

Many have pointed out the immorality of our system of greed and self-centred gain, its inefficiency, its cruelty, its shortsightedness and its danger to planet and people.

A few people can make a little money talking this stripe of shite. The magic of the market-place is that even the most boring and stupid people can profitably connect with those who wish to become equally boring and stupid.

But, above all, the logic of self-interest is superficial in that it fails to recognise the obvious:

the logic of this Professor's self-interested argument is indeed superficial. But then, if he recognised the obvious he'd be out of a job.

every private accomplishment is possible only on the basis of a thriving commons – a stable society and a healthy environment.

But a thriving commons is not possible. Unless enforceable property rights are introduced, there will be a tragedy of the commons.

How did I become a professor at an elite university?

You told us already. It involved elbowing and pontificating.

Some wit and hard work, one hopes. But mostly I credit my choice of good parents; being born at the right time and the right place; excellent public schools; fresh air, good food, fabulous friends; lots of people who continuously and reliably provide all the things that I can’t: healthcare, sanitation, electricity, free access to quality information. And, of course, as the scholar Robert H Frank at Cornell University so clearly demonstrated in his 2016 book on the myth of the meritocracy: pure and simple luck.

No. The American people made good choices. They didn't toss a coin to decide not to listen to this Professor's brand of shite. They used their common sense and experience of the world to reject silly arguments.

Commenting on how we track performance in modern economies – counting output not outcome, quantity not quality, prices not possibilities – the US senator Robert F Kennedy said in 1968 that we measure ‘everything, in short, except that which makes life worthwhile’.

But measuring the things which make life worthwhile is not worthwhile. Governments keep track of Domestic Production of goods and services so as to r raise taxes. Thus GDP is relatively easy to compute.

His larger point: freedom, happiness, resilience – all are premised on a healthy public.

And a healthy public is premised on the production and availability of goods and services so we are back with GDP.

They rely on our collective ability to benefit from things such as clean air, free speech, good public education.

But it costs a lot of money to keep air clean. Countries with high per capita GDP can afford to have cleaner air. London once had terrible air quality. The Great London Smog of 1952 killed 5000 people. Rising GDP meant that a trend which had been worsening since the 13th Century started reversing itself.

In short: we all rely on a healthy commons.

No. That third, or half, of the population which died during the Black Death relied on a healthy commons. On the other hand, their Doctors were for shit. It's taken a lot of money and a lot of greed to get us to a situation where, as is happening in India, mortality declines during a pandemic because the lockdown reduces traffic accidents. 

And yet, the world’s most powerful metric, gross domestic product (GDP), counts none of it.

It could easily measure changes in that respect and consider it a type of depreciation so as to arrive at Net Domestic Product which is linked to National Income.

The term ‘commons’ came into widespread use, and is still studied by most college students today, thanks to an essay by a previously little-known American academic, Garrett Hardin, called ‘The Tragedy of the Commons’ (1968). His basic claim: common property such as public land or waterways will be spoiled if left to the use of individuals motivated by self-interest. One problem with his theory, as he later admitted himself: it was mostly wrong.

Resources where no property rights exist may be too rapidly depleted. Communal ownership may be an effective solution. What matter is whether it can exclude third parties

Our real problem, instead, might be called ‘the tragedy of the private’.

No it mightn't.

From dust bowls in the 1930s

at least partly caused by the Government which believed 'rain follows the plow'

to the escalating climate crisis today,

at least partly caused by Government policies

from online misinformation

at least partly caused by Professors

to a failing public health infrastructure,

wholly caused by Governments

it is the insatiable private 

and insatiable Government

that often despoils the common goods necessary for our collective survival and prosperity.

So people, whether in the private or public or voluntary sector screw up because they have foolish beliefs.

Who, in this system based on the private,

or in the Soviet system based on the public

holds accountable the fossil fuel industry for pushing us to the brink of extinction?

If people are wrong and the result of their being wrong is the same whether they are Government people or private individuals then the problem has to do with people being wrong not with whether they were greedy private citizens or diligent public servants.

What happens to the land and mountaintops and oceans forever ravaged by violent extraction for private gain?

The same thing that happens when they are ravaged by the Government.

What will we do when private wealth has finally destroyed our democracy?

The same thing we will do when public intellectuals have finally destroyed our ability to think.

The privately controlled corporate market has, in the precise words of the late economics writer Jonathan Rowe, ‘a fatal character flaw – namely, an incapacity to stop growing. No matter how much it grew yesterday it must continue to do so tomorrow, and then some; or else the machinery will collapse.’

But the same could be said of this author's favorite availability cascade. 

To top off the items we rarely discuss: without massive public assistance, late-stage extractive capitalism, turbocharged by private interest and greed, would long be dead.

Because the private sector does not pay taxes to the public sector. The Government does not tax anybody at all. It just hands out money to wealthy people. But the scandal does not stop there. See that young guy with thick hair and a sculpted body? The reason he looks so much better than me is because the Government gives him youth and good hair and it transfers all the muscles I acquire weight training to him.

The narrow kind of macroeconomic thinking currently dominating the halls of government and academia invokes a simpleminded teenager who variously berates and denounces his parents, only to come home, time and again, when he is out of ideas, money or support.

What about this simple-minded Professor who berates and denounces the Private Sector despite the fact that it pays for Government expenditure?

Boeing, Goldman Sachs, Bank of America, Exxon – all would be bust without public bailouts and tax breaks and subsidies.

But the Treasury would have been much worse off if they hadn't been bailed out. Incidentally, Trump inflicted a 5 billion tax bill on Goldman Sachs.

Every time the private system works itself into a crisis, public funds bail it out –

Because public funds come from the private system. The parasite has to keep its host alive.

in the current crisis, to the tune of trillions of dollars. As others have noted, for more than a century, it’s a clever machine that privatises gains and socialises costs.

Very clever indeed! It's like how muggers enrich their victims by putting money into their wallets. Yet, muggers get sent to jail. How ironic!

When private companies are back up and running, they don’t hold themselves accountable to the public who rescued them.

Just as the victims of mugging don't hold themselves accountable to the muggers who very kindly treated their head wounds and stuffed money into their wallets. Instead, some of these mugging victims try to get their benefactors sent to jail! 

As witnessed by activities since the 2008 bailouts at Wells Fargo, American Airlines and AIG, companies that have been rescued often go right back to milking the public.

the way rape victims milk rapists of their semen.

By focusing on private market exchanges at the expense of the social good, policymakers and economists have taken an idea that is good under clearly defined and very limited circumstances and expanded it into a poisonous and blind ideology.

But 'policy makers' work for the Government. So the problem is with the Government. It can allow the public to be 'milked'. But greedy private citizens won't allow themselves to be robbed anymore than they will allow themselves to be raped. 

Now is the time to assert the obvious: without a strong public, there can be no private.

And without a chicken there can be no egg or vice versa. 

My health depends on public health.

I won't die so long as the public does not die.

My freedom depends on social freedom.

I can't be put in jail so long as Society remains free. 

The economy is embedded in a healthy society with functional public services, not the other way around.

The Pilgrims, landing at Plymouth Rock, immediately enrolled in the Public Health Service. They received free Education and Training. Then they set up what would become the American Economy.

This moment of pain and collapse can serve as a wakeup call;

Indeed. Ask yourself, if you get infected with this virus would you rather have look after you- a Medical Doctor or this Academic whose Doctorate is in something useless? This should be a wake-up call for those who pay attention to credentialized cretins.

a realisation that the public is our greatest good, not the private.

Yet, to beat this pandemic, we must accept lockdown in our private apartments. Our fear of getting infected makes us all safer. 

Look outside the window to see:

empty streets. People are cooped up within their own four walls.

without a vibrant and stable public

life, we are all safer. True, for economic reasons, we will have to go back to work- but we will still have to be careful and keep our distance from each other.

Otherwise

life can quickly get poor, nasty, brutish and short.

At least for those of us who are no longer young or who have pre-existing medical conditions.

What prevents life from being poor is zeal for Private Gain. It is perfectly possible for everybody to have tremendous Public Spirit but for most people to have nasty brutish and short lives because 'Games against Nature' aren't being played in increasingly smart ways. Our species does not inhabit a Moral Universe. It inhabits an uncertain, wholly indifferent, physical fitness landscape which has no means of distinguishing praiseworthy Public Spirit from despicable Private Greed. But then this is equally true of genuine Economics. That's a good thing. It can focus on mechanism design rather than scolding the Species while expressing empathy for the Universe.