Sodom, Gomorrah & Adam Smith's Jehovah

Should it be a crime to help poor or desperate people? Certainly, there are people in the Governments of Italy and Hungary who think so. They feel that those who help refugees find safety should be prosecuted and sent to jail.

 I admit that laws of this sort may be perfectly justified- indeed, they may prevent great harm- but, in this case, the thing sits uneasily with me.

Why?

I am put in mind of the orthodox Jewish interpretation of the story of the destruction of Sodom & Gomorrah which, contrary to popular belief, had nothing to do with buggery.

In the Hebrew tradition, the two Cities were 'affluent societies' endowed with lush oases and straddling important trade routes. They believed maximising per capita income involved restricting immigration to the very rich- people like Lot who had vast flocks- and letting their own poor starve to death.

Plotit, the daughter of Lot, who was married to a prominent Sodomite, once saw a poor man who was so hungry that he was unable to stand. She felt sorry for him. From then on, she made sure to pass him every day on her way to the well, and she would feed him some food that she had stashed in her water jug. 

People wondered how the man managed to live. Upon investigation, they discovered her act and prepared to burn her. Before she died, she turned to G‑d and cried, “Master of the world, carry out justice on my behalf!” Her cries pierced the heavens, and at that moment G‑d said, “I will go down and see if what they have done is as bad as the outcry that has reached Me.”

 Suppose Jehovah were made in the image of Adam Smith. Would he have approved of what he saw in the Cities of the Plain?

Briefly, the answer is no. It is a good idea to have a class of parasites whom you feed gratis. Why? This boosts effective demand beyond the 'selfish' satiation point. Hence there will be over-supply of food and other essentials. In the event of a negative shock, the parasites are left to starve while the affluent suffer no dimunition. The Poor we must always have with us if we are Selfish and regret minimizing.

It may be argued that one could over-produce essentials by some other mechanism and simply destroy the surplus from time to time. The problem here is that of cheating. The one way you can all be sure there is spare food is if you see indigents are actually getting enough free rations to survive.

What happens to an affluent but selfish society under an exogenous shock? Well, some coalition of producers will always find it advantageous to jack up prices to a point where the population collapses. Naturally, fear of this outcome would cause people to hedge, through hoarding, but this might cause the market to fail and domestic production to collapse.

One way round this problem is to have insurance contracts. The problem here is that if there isn't a 'social minimum', the insurer may try to delay payment on one excuse or another till the claimant starves. There is another, more technical, reason why pervasive insurance and reinsurance contracts can have a perverse effect. Essentially, Uncertainty shouldn't be tamed too much. Volatility of a certain type drives markets and makes 'Parrando games' possible- i.e. Society has a 'ratchet' at the macro level though no one can know if they are personally protected by one.

A 'Muth Rational' Sodom & Gomorrah would have featured hypocritical alms houses and charity handouts and a larger, not smaller, crowd of indigent parasites than a God fearing town. Why? Good people want to help the poor to rise up to a position equal to themselves so they too may practice Charity. Faridudin Attar has described just such a 'workfare' paradise in Nishapur before the Mogol invasion.

Interestingly the Sodomites would have welcomed a 'Sen-tentious capabilities' approach to welfare. They would have wanted their parasites to express their capabilities but to no economic purpose. Thus the budding scientist should get not just bread but also the chance to study a pseudo-science requiring as much mental effort as the genuine, utile, article.

Rational Sodomites should be charitable. Yet, the Bible tells us they weren't at all. Since Robert Aumann has shown us game theory in the  Old Testament, let us try to think why its Sodomites should have been so irrational.

There are two possible ways of answering this question

1) Sodomites may have thought doing good, even hypocritically, might be addictive- i.e. a rational course of action would subvert rationality itself

2) The Sodomites only apparently were wealth maximizers. What they were really interested in was destroying life- even their own. Their behaviour would have led sooner or later to their own extinction. The Lord, it turns out, was merciful even to them.


Both these are actually perfectly reasonable, indeed highly ethical, propositions. If you are a Sodomite don't act like  decent person. Also make sure you and your ilk go extinct as soon as possible.