Colleges exist because, where teaching is beneficial, it becomes even more beneficial where a number of teachers and a number of students compete and cooperate with each other in a manner that advances Knowledge.
Similarly, Markets exist because, where exchange is beneficial, it becomes even more beneficial if the thing is done such that a large number of buyers and sellers are represented and a 'market clearing' price can be struck.
Sadly, some College Professors are too stupid to understand that Markets are like Colleges. Exchange of an epistemic or economic type becomes more advantageous in College or through the Market. But if the exchange is repugnant- as when a University Department dedicates itself to shite availability cascades- then both College and the Market should be disintermediated.
Regulating markets, like having the power to authorize or forbid exchanges, can yield rents. Claims that such regulations are morally necessary may be rewarded with a little money. But such claims don't matter very much. What matters is whether enforcing regulations yields a benefit greater than the cost.
Michael Sandel, in his book 'Justice- what is the Right thing to do?, asserts that there is a 'standard case' for free markets. This is false. Markets of various degrees of freedom have existed even absent the sort of Justice system where 'cases' are argued. Moreover, those who currently make the case for free markets do so on the basis of diverse mathematical arguments supported by various types of econometric evidence. In an earlier time, some Academic Economists ignored Knightian Uncertainty and arrived at 'Fundamental theorems of Welfare Economics' which however made absurd assumptions about 'perfect information' such that there would be no need for markets, or language, or money. Everybody would already know the what exchanges to make throughout the day. You'd go into the grocery store and pick up what you need without paying for it. Then you'd go to a strange house, walk in and fix the plumbing without any words being exchanged or payment being made. You go to a restaurant. A stranger sits down beside you. You laugh at each others jokes without actually telling any jokes. How come? Everybody has perfect information. In trying to prove Markets are efficient, Economists only showed they would not be necessary under their standard assumption.
Sandel may be thinking of that old, foolish, availability cascade when he writes-
The standard case for unfettered markets rests on two claims—one about welfare, the other about freedom.
Freedom is only valuable if the Future is unknown- indeed, in some important respects, is unknowable. Only if Knightian Uncertainty obtains is it 'regret minimizing' to invest resources in 'keeping one's options open'. Freedom is either costly or it is meaningless.
Markets are valuable in that they can provide 'hedges'. In this sense there is a link between welfare and markets via the concept of regret minimization.
First, markets promote the welfare of society as a whole by providing incentives for people to work hard supplying the goods that other people want.
This is not the case. It is either biology, which causes us to feel hungry and disposes us to sexual competition and kin selective altruism, or the threat of being beaten or otherwise humiliated, which supplies the incentive to work hard. Markets don't supply incentives. They are a mechanism- an incentive compatible one which may have certain efficiency properties.
Slavery is a mechanism. The Command Economy is a mechanism. So is the Market Economy. Getting cool stuff in return for working hard is one type of incentive. Not being sent to the Gulag is another type.
Regulations are all very well in their way but there can be a slippery slope to Gulags. There isn't much profit in stopping people from doing stuff they want to do. There is a lot of profit in forcing them to do stuff they would normally want a substantial reward for. Thus Regulation has always had great appeal. The problem is people may run away from Regulated areas. So you have to factor in the cost of stopping them from running away- e.g. by machine gunning those who try.
(In common parlance, we often equate welfare with economic prosperity,
as opposed to equating it with a red hot poker up the bum
though welfare is a broader concept that can include noneconomic aspects of social well-being.
like a red hot poker up the bum.
Second, markets respect individual freedom; rather than impose a certain value on goods and services, markets let people choose for themselves what value to place on the things they exchange.
This is not true. A Society where everybody has been brainwashed would still have markets. Indeed, puritanical sects have often taken the lead in establishing efficient markets. By contrast, serial 'memoryless' transactions may be highly inefficient. Markets are places where information is better aggregated and signalling and screening mechanisms can evolve such that 'externalities' are 'internalized'.
It is foolish to confuse unconscionable transactions with the market mechanism. It is like confusing crime with the Justice system.
Not surprisingly, the opponents of price-gouging laws invoke these two familiar arguments for freemarkets.
Only if they are stupid. What economists actually say is that price gouging (which means unconscionably extracting consumer surplus) represents a market failure arising out of lack of competition. There is a non-coercive mechanism which can improve outcomes.
How do defenders of price gouging laws respond? First, they argue that the welfare of society as whole is not really served by the exorbitant prices charged in hard times.
This is foolish. Why not simply say 'Society is ill served by hard times. Boo to hard times! Times should be soft and sweet and should give plenty of kisses and cuddles to vulnerable sections of the population.'
Even if high prices call forth a greater supply of goods, this benefit has to be weighed against the burden such prices impose on those least able to afford them. For the affluent, paying inflated prices for a gallon of gas or a motel room in a storm may be an annoyance; but for those of modest means, such prices pose a genuine hardship, one that might lead them to stay in harm’s way rather than flee to safety.
This is the reason Sandel splits his income with poor people. If he did not do so, they may suffer hardship whereas he would merely suffer annoyance. If price signals increase the supply of necessities, that is a good thing. Rich people are welcome to share their income with those who would otherwise suffer hardship.
Proponents of price-gouging laws argue that any estimate of the general welfare must include the pain and suffering of those who may be priced out of basic necessities during an emergency.
This is irrelevant. By making an activity illegal, it does not disappear. Rather, professional criminals take it over. They are likely to be able to intimidate witnesses. Organized crime may own dirty cops and corrupt Judges.
Second, defenders of price-gouging laws maintain that, under certain conditions, the free market is not truly free. As Crist points out, “buyers under duress have no freedom. Their purchases of necessities like safe lodging are forced.”
Unconscionable contracts may be struck down in Common Law jurisdictions. However, even if anti-gouging laws exist, what is to prevent vendors selling their entire supply to a gangster who then acts as a local monopolist? The vendors may claim they did so under duress. No doubt, the gangsters may find it profitable to provide 'safe lodging' to customers at an attractive price, provided they are also buying drugs and prostitutes.
If you’re fleeing a hurricane with your family, the exorbitant price you pay for gas or shelter is not really a voluntary exchange. It’s something closer to extortion.
So, let organized crime handle the business. Make it illegal.
So to decide whether price-gouging laws are justified, we need to assess these competing accounts of welfare and of freedom.
No. We need to look at the cost of enforcing proposed laws and their unintended consequences.
But we also need to consider one further argument. Much public support for price-gouging laws comes from something more visceral than welfare or freedom. People are outraged at “vultures” who prey on the desperation of others and want them punished—not rewarded with windfall profits.
So rational businessmen figure in the 'reputational effect' of such practices. There is an 'externality' here which it pays to internalize. Of course, it must be said, people get outraged by all sorts of things. Back in the Thirties, it might be the fact that G.M sells top of the range cars to Black people.
Such sentiments are often dismissed as atavistic emotions that should not interfere with public policy or law. As Jacoby writes, “demonizing vendors won’t speed Florida’s recovery.”
Sentiments don't speed shit.
But the outrage at price-gougers is more than mindless anger. It gestures at a moral argument worth taking seriously.
Why does it merely 'gesture'? Is it coz it is mindless? A gibbering idiot may gesture at its genitals. Does this mean there is a moral argument, which should be taken seriously, that you should perform oral sex on the idiot in question?
Moral examples may, quite sensibly, be taken seriously. But any three year old can make a moral argument. Why take them seriously?
Outrage is the special kind of anger you feel when you believe that people are getting things they don’t deserve.
Like how some people feel when they see Gay Men kissing, or infidels prancing around without their heads having been chopped off, or women drivers.
Fuck outrage.
Outrage of this kind is anger at injustice.
Nonsense! It is bigotry.
Crist touched on the moral source of the outrage when he described the “greed that someone must have in their soul to be willing to take advantage of someone suffering in the wake of a hurricane.”
Plenty of people were morally outraged by Charlie Crist's career of reckless populist opportunism. It is a miracle he didn't bankrupt Florida by his interference in the Hurricane insurance market.
He did not explicitly connect this observation to price-gouging laws.
But Spandel, by doing so, is implicitly endorsing Crist's own playing to the gallery of the Christian Right by talk of 'souls' which, of course, is related to things like the sinfulness of Gay Marriage and Abortion and so forth. Crist has become a Democrat and is back-peddling on these issues. Still, the fact remains, moral outrage at price gouging and usury and the Deicides who supposedly practice both is seamlessly imbricated in stuff like being nasty to Homosexuals and forcing rape victims to bear the children of their abusers.
Implicit in outrage type arguments is being a stupid cunt seeking political or epistemic power of a mischievous type.
But implicit in his comment is something like the following argument, which might be called the virtue argument: Greed is a vice, a bad way of being, especially when it makes people oblivious to the suffering of others.
Saying shit is a vice is itself a vice. Go fuck yourself you vicious cunt. You seem completely oblivious to the infinite suffering you inflict on me by being nasty. Get cancer and die you nasty nasty sinner! Everybody should be nice and behave exactly as I want them to. If they aint nice, they be nasty. They should immediately chop off their own heads and shove them up their arseholes because their behavior is at odds with civic virtue.
More than a personal vice, it is at odds with civic virtue. In times of trouble, a good society pulls together.
Whereas a bad society tosses itself off alone and apart. However, whether a Society is good or bad doesn't matter. What matters is whether it has made adequate provision against 'times of trouble'. If it hasn't, 'pulling together' may mean it is wiped out. Running the fuck away in several directions, however, may mean it can reconstitute itself under more favorable conditions.
Rather than press for maximum advantage, people look out for one another.
Quite true. But this also means that Sandel is wasting his and our time by virtue signalling. How would he like it if we constantly admonished him to wash his hands properly and take regular showers and not stink up the place all the time? Also, he should not shove objects up his arse incessantly. Such behavior is not conducive to civic virtue. Furthermore, how come I can't find my stapler? Did Sandel keyster it? That's so not cool, dude.
A society in which people exploit their neighbors for financial gain in times of crisis is not a good society.
It is also a society in which a lot of people find their houses have mysteriously gone up in flames. On the other hand, a bunch of neighbors who get together to fuck over people who live far away are likely to have stronger bonds and mutual loyalties.
Excessive greed is therefore a vice that a good society should discourage if it can.
Why not encourage smartness by discouraging people studying stupid shite? How about discouraging murder and rape and people farting in crowding elevators?
Price-gouging laws cannot banish greed, but they can at least restrain its most brazen expression, and signal society’s disapproval of it.
Lots of small scale Communities signal disapproval of all sorts of shite by passing crazy laws. But those 'Gemeinshafts' degenerate into kooky cults or end up tourist-trap freak shows.
By punishing greedy behavior rather than rewarding it, society affirms the civic virtue of shared sacrifice for the common good.
Like giving up your precious Netflix time to perform your Social duty of burning witches at the stake or stoning adulterers to death.
To acknowledge the moral force of the virtue argument is not to insist that it must always prevail over competing considerations.
Greed is bad- sure enough. But attaching a price tag to things curbs greed. I want all the candy in the store. I may get pleasure seeing the other kiddies crying their little eyes out as I ostentatiously gobble chocolates. But, if I have to pay for sweets, then I only buy one or two chocolate bars.
The problem with relying upon the virtue of others for their providing goods and services is that they may insist that you provide a moral argument for your receiving a portion of those goods and services. It is safer and more convenient merely to pay them.
You might conclude, in some instances, that a hurricane-stricken community should make a devil’s bargain—allow price gouging in hopes of attracting an army of roofers and contractors from far and wide, even at the moral cost of sanctioning greed.
If there is a community, why does it not pool resources to buy what is needed wholesale and pay for its distribution to those in need? Why should it rely on entrepreneurs?
Repair the roofs now and the social fabric later. What’s important to notice, however, is that the debate about price-gouging laws is not simply about welfare and freedom.
It is about populist politics which also makes a big deal about 'virtue' and 'souls' and why abortion is wrong and why homosexual marriage is an abomination before the Lord.
It is also about virtue—
coz politicians like Crist really cultivate virtue!
about cultivating the attitudes and dispositions, the qualities of character, on which a good society depends.
A good family, or community, may depend on character and virtue precisely because its internal transactions are non monetary. But a global economy does not depend on all of us having the same ideas re. what is virtue and what type of character is admirable. It does, however, depend on open markets.
Some people, including many who support price-gouging laws, find the virtue argument discomfiting.
Some people find the presence of people of a different race or type of sexuality discomfiting. Fuck them.
The reason: It seems more judgmental than arguments that appeal to welfare and freedom.
Stupidly so.
To ask whether a policy will speed economic recovery or spur economic growth does not involve judging people’s preferences.
Yes it does. It valorizes the preferences of those who want economic recovery and ignores those who would prefer to see everybody hungry and naked.
It assumes that everyone prefers more income rather than less,
That is a judgment re. preferences- a reasonable one.
and it doesn’t pass judgment on how they spend their money.
Yes it does. It says maximising utility or minimizing regret, which is what most people do with their money, is a good thing. That's a judgment.
Similarly, to ask whether, under conditions of duress, people are actually free to choose doesn’t require evaluating their choices.
Because, 'duress' means not being free. Similarly, to ask whether, under conditions of being dead, people are free to pursue a career in Cost and Management Accountancy, requires being as stupid as Sandel.
The question is whether, or to what extent, people are free rather than coerced.
Or dead or fictional.
The virtue argument, by contrast, rests on a judgment that greed is a vice that the state should discourage.
In which case it isn't an argument at all. It is merely an assertion.
But who is to judge what is virtue and what is vice? Don’t citizens of pluralist societies disagree about such things? And isn’t it dangerous to impose judgments about virtue through law? In the face of these worries, many people hold that government should be neutral on matters of virtue and vice; it should not try to cultivate good attitudes or discourage bad ones.
This is foolish. Existing contracts have clauses which require moral behavior and the cultivation of certain virtues and the avoidance of certain vices. We don't want those who hold political office to fuck up the economy by talking stupid shite and passing crazy laws.
So when we probe our reactions to price gouging, we find ourselves pulled in two directions: We are outraged when people get things they don’t deserve; greed that preys on human misery, we think, should be punished, not rewarded. And yet we worry when judgments about virtue find their way into law.This dilemma points to one of the great questions of political philosophy: Does a just society seek to promote the virtue of its citizens? Or should law be neutral toward competing conceptions of virtue, so that citizens can be free to choose for themselves the best way to live?
The Law is a service industry. 'Incomplete Contracts' use morality clauses and have a notion of culpa levis in abstracto. People, not politicians, should develop their own notions of virtue and vice and what represents good character so as to make their interactions more mutually beneficial.
According to the textbook account, this question divides ancient and modern political thought.
Like dividing shite is a worthwhile activity.
In one important respect, the textbook is right. Aristotle teaches that justice means giving people what they deserve.
No he doesn't. His teaching is incoherent and self-contradictory. But Courts already existed and Jurisprudence developed independently of the Academy.
And in order to determine who deserves what, we have to determine what virtues are worthy of honor and reward.
No we don't. Nobody gives a flying fuck about our opinion on these matters. Even suppose you happen to be the new Tzar of Russia. In theory you are an autocrat. But there are certain people who feel they deserve certain things who will fuck up your shit if you try to take those things away from them.
In Game theory, there is the concept of the 'bourgeois strategy'. It makes sense to fuck up- perhaps in company with others similarly affected- anybody who tries to deprive you of your just deserts. If you can't do so, then exit to another jurisdiction.
Aristotle maintains that we can’t figure out what a just constitution is without first reflecting on the most desirable way of life.
But we can't reflect on shit without first figuring out what proper reflection consists of. Aristotle, like other academics, had shit for brains. That's how come he taught adolescents for a living.
For him, law can’t be neutral on questions of the good life.
But it can be useless in promoting any such beastie.
By contrast, modern political philosophers—from Immanuel Kant in the eighteenth century to John Rawls in the twentieth century—argue that the principles of justice that define our rights should not rest on any particular conception of virtue, or of the best way to live. Instead, a just society respects each person’s freedom to choose his or her own conception of the good life.
As a matter of fact, the great mass of people have turned their backs on Kantian or Rawlsian shite. Freedom to choose means freedom to tell philosophers to go fuck themselves.
So you might say that ancient theories of justice start with virtue,
Or you might choose to say something closer to the truth, like- 'some ancient academics were as shite as modern academics. Still, people understood that proving you acted virtuously was a defence in Law. Thus virtue is important, character is important, doing the right thing is important. Proving that you are virtuous, of good character and that you did the right thing can affect the outcome of a court case in which you are accused of a crime or a tort.
while modern theories start with freedom.
But freedom is reduced where a Justice System prevails. Stupid German philosophers may have thought there was a way of proving that Slavery was Freedom and being a German philosopher didn't mean having a brain full of shit, but they were wrong. Still, Kant was higher I.Q than Rawls who, in turn, was less shite than Sandel. This is an availability cascade which continues to degenerate. At one time, one could say it is just as shite as Econ. But Econ has moved on. So Philosophy is now merely a type of Special Needs education for really special, really precious, little snowflakes.
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