Utilitarianism is a Stupid Idea

I don’t know what it is about utility but I just can’t seem to read anything about it, with the exception of my boring old “mainstream” economics textbooks, without getting supremely disturbed.  I have spent a lot of effort trying to explain to Austrians how they don’t understand the concept as it is used in mainstream economics.  But whenever I read something by Sumner on the subject I find myself much more sympathetic to their (still misguided) complaints.  To be fair to Sumner, he might be the best monetary economist in the blogosphere and he is about as “conservative” a one as you will find anywhere.  So I agree with much of what he says on most subjects but he frequently disrupts my adoration by reminding me of his utilitarian ways.  Though he often claims to be a libertarian (and in many ways he is), in my opinion utilitarianism in its most common applications is inherently incompatible with individual liberty.

First, let me say that the standard economic definition of utility has nothing to do with utilitarianism.  In a strict economic sense, utility is meant only to represent a rank ordering of a person’s preferences across different bundles of goods or states of nature.  In this context it is nonsensical to compare one person’s utility (or marginal utility) to another’s nor does it matter if marginal utility is diminishing as the same ordinal preferences can be represented by many utility functions with either increasing, decreasing or constant marginal utility in any particular good.  This is all explained in any decent text and I am sure Sumner would not dispute this (I’m not accusing him of not understand the concept).

However, what utilitarians have in mind is something different.  It is the idea that “utility” represents some measure of happiness or satisfaction.  They further suppose that this happiness increases at a decreasing rate as consumption increases.  (It is worth noticing that Austrians also indulge in this assumption of diminishing marginal utility but they do so in an even more annoying way because they simultaneously deny the definition which makes it possible.)  The utilitarian then further supposes that the marginal happiness gained from additional consumption at different levels of consumption is roughly comparable across individuals and they still further suppose that, even though it is not measurable or observable in any way, it is the proper role of government to try to maximize the total utility of all people in society by redistributing wealth (or consumption if you prefer) among them.  This last supposition is where it becomes destructive.

Here’s an example.  A billionaire might get a great deal of satisfaction from a 400-foot yacht if his rival billionaire has a 300-foot yacht.  There is data that shows happiness increases all the way up the income scale.  So I do buy that argument.  But I would insist that roughly the same enjoyment would be gained from a 300-foot yacht if his rival had a 200-foot yacht.  If an 80% consumption tax reduces each billionaire’s consumption proportionately, then could it really impact their happiness?

Even though this definition of utility as a measure of happiness/fulfillment/satisfaction etc. is not useful scientifically, it is appealing because it seems like it reflects reality.  I’m not saying it doesn’t.  I agree that, in a very loose, non-scientific sense, the happiness I would gain from having an additional loaf of bread would be much less than that of a starving man who received the same loaf.  And what’s more, I act like a utilitarian to some degree in my personal life.  Every time someone donates food to the hungry or gives the foul ball they caught at a baseball game to the kid in the seat next to him, they are acting out of some form of this sentiment.

However, in those cases, they are still acting in accordance with their own personal preferences, it is just that those preferences have what might be called a utilitarian dimension to them.  They get more happiness out of giving the bread to the hungry than out of eating it or out of seeing a child smile and imagining him lying in bed clutching the foul ball and dreaming about being a major league ball-player than they would from throwing it in their closet and probably forgetting about it.

The problem with utilitarianism is when you try to apply it by force via the government.  The government I think Sumner would prefer is one which leaves people alone to make decisions about how to live their lives in most cases but just does a few things to spread the wealth around to increase total utility.  And I think Sumner’s ideal world would be a lot better than what we’ve got now.  But the problem is that that is not a suitable moral/philosophical foundation for such a system because this notion of utility is entirely imaginary which means it is entirely subjective which means that it can be used to justify any breach of individual property rights.

This way of thinking suggests that someone has a moral right to the possessions of others by virtue of being poorer than they are.  So while it is functionally possible that we could have a specific “progressive” tax system along with an entirely libertarian everything else and that would work pretty well if we had it, it would never lead to that.  The same notion of forced utility maximization across individuals, once accepted, would be (and for that matter is) used to justify all manner of other government interferences in the lives of individuals.

The land your house sits on might generate more “utility” with a highway there, or for that matter a shopping mall.  You will have higher utility if you save more money for retirement but you are too stupid to realize it so the government will just take some out of your paycheck and use it to pay you back later if you survive long enough (and to pay other older people in the interim).  Sure, maybe you could live another year or two if you got the million-dollar treatment for your cancer but would the utility you derived from that extra year really be more than that derived by all the poor children we could feed with that (“your”) money?  Yes, we’re sending you, against your will, to fight and probably die in a foreign country but your sacrifice can’t be compared to the extra utility that will be secured for future generations.  It’s not that we want to tell you what to put in your body, it’s just that when (certain) drugs are legal, crime increases and you can’t possible argue that the added utility you get from smoking dope outweighs the indirect harm that legalizing it does to your neighbors.  Plus we know that drugs are actually hurting you anyway, you are just, again, too stupid or weak to realize it, so we’re actually increasing your utility by taking them away too.  It’s win-win!  I could go on but hopefully you get the picture.

Utilitarianism, at its core, is just a made-up method of collective reasoning.  This type of collective reasoning is at the heart of every usurpation of individual liberty.  It is the foundation of every form of socialism, communism, fascism, etc.  The only alternative to collectivism is to elevate the rights of the individual above all such notions.  This means we have to be willing to look at a rich guy and a poor guy and think that it would be better if the rich guy cut back on his yachts to buy a house for the poor guy without also thinking that we aught to force him to do it.  Once you start down that path, forever will it dominate your destiny.

 

 

Penn Jillette on Government

Trying to help this go viral.  If you had to say everything we need to know about government in 250 words, I don’t think you could do much better than this.

It’s amazing to me how many people think that voting to have the government give poor people money is compassion. Helping poor and suffering people is compassion. Voting for our government to use guns to give money to help poor and suffering people is immoral self-righteous bullying laziness.

People need to be fed, medicated, educated, clothed, and sheltered, and if we’re compassionate we’ll help them, but you get no moral credit for forcing other people to do what you think is right. There is great joy in helping people, but no joy in doing it at gunpoint.

People try to argue that government isn’t really force. You believe that? Try not paying your taxes. (This is only a thought experiment — suggesting on CNN.com that someone not pay his or her taxes is probably a federal offense, and I’m a nut, but I’m not crazy.). When they come to get you for not paying your taxes, try not going to court. Guns will be drawn. Government is force — literally, not figuratively.

I don’t believe the majority always knows what’s best for everyone. The fact that the majority thinks they have a way to get something good does not give them the right to use force on the minority that don’t want to pay for it. If you have to use a gun, I don’t believe you really know jack. Democracy without respect for individual rights sucks. It’s just ganging up against the weird kid, and I’m always the weird kid.

-Penn Jillette

From an August 2011 editorial on cnn.com.

Aim Beyond the Target

There is a subtle game being played with our constitution.  Recall when President Obama said he wished we had a charter of positive rights, which said what the government must do for us (see the second bill of rights) but unfortunately we only have this charter of negative rights saying what the government can’t do to us (see the first bill of rights Note: I don’t trust some of the details in this article).  The natural response of a conservative is to be alarmed by his desire for a different constitution but at least a little placated by his recognition that the actual document does in fact not conform to his ideal.  However, the real problem with this is that it still mischaracterizes the nature of the constitution in an important way.

Gimme Back My Bullets

For full effect open this in another window while reading (if you’re a lefty open this instead).  The mayor of Baltimore proposed a new tax of $1 for every bullet sold.  This is absolute proof that the people supporting these things are either complete idiots or actually purposely want to tear down the last line of defense between the people and a tyrannical government.  I’ve gotta start with the basic argument for the right to bear arms.  I’ve been over this before but if you’re listening to the second song, chances are this has never occurred to you. (I’ve never heard a “liberal” say “yes an armed citizenry is important to secure liberty but I just think it’s worth sacrificing that safeguard to reduce crime a little.”  They alway say something like “well all you NRA people want everyone to have a bazooka.”  Seriously that’s the exact line they all say every time….)

On Earth, liberty is the exception!  Most people who have lived on Earth have lived under poverty and oppression.  The few examples of societies that have valued and protected individual liberty have been the result a concerted intellectual effort to determine how such a thing could be achieved and a significant physical struggle to implement it.  It requires military force to implement and protect it!  Leftists should know this, after all it was their hero Mao that said “all political power grows from the barrel of a gun.”  In order to have any kind of prosperous society you must have a government to enforce property rights and enforce contracts.  This function requires the government to have enough physical strength to overpower any individual or small group of individuals.  But when you create this apparatus, there is a constant threat that it could be used to enslave the people rather than ensure their liberty.  The only way to prevent this is for the people collectively to have enough physical strength to overpower the government should they lose control of it and to have some mechanism in place to organize them into action if the government crosses certain lines.

Obviously, in America the collective action mechanism is what is encapsulated in the constitution and the keystone that makes it possible is the 2nd amendment.

A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed

Most Americans today were born into (relative) freedom and therefore take it for granted.  I don’t think most of them have even given a though to what systems are required to protect their liberty, they just think that because it’s always (since they can remember) been there that it will always be there.  This causes them to make poor decisions.  Consider the bullet tax.  As I see it there are 3 reasons a person would support such a tax.  1.  They don’t think weapons are important for protecting our liberty, either because they haven’t even thought about it or they reject the above argument for some reason, they don’t care about guns and they think it will reduce crime.  2.  They agree with the above argument but think the expected reduction in crime is worth the risk to liberty.  3.  They agree with the above argument and they actually want this safeguard removed.  (They also may just want more money for the government but Rolley denies this so let’s take him at his word….)

If you fall into one of the first two categories (which I will lump together from now on), then banning guns sort of makes sense.  I don’t think it would reduce crime that much and obviously I don’t think it’s worth it but at least it’s possible to see why someone might believe differently.  But consider the effects of a bullet tax.  What behavior is this expected to change? According to Rolley it increases the cost of committing a crime.  This is true but let’s put our economist hats on and consider how much this increase in price is likely to reduce the quantity of crime.

How many bullets do you think the average drug dealer shoots in a year?  I have no idea but let’s be pretty liberal and imagine he shoots 100 bullets per year in the course of committing crimes.  So you increased the cost of being a drug dealer by $100/year (I’m assuming here that he doesn’t just go outside Baltimore to buy his bullets because no doubt if they get it there they will suddenly realize that it doesn’t work unless it’s done at the Federal level and call up Cass Sunstein).  Is this going to put drug dealers out of business?  I think not.

But wait, maybe it affects the number of bullets they use.  Maybe the drug dealer upon finding himself in a situation where he would otherwise be willing to take the life of another human being for whatever reason, will now stop and reconsider because of the extra dollar that this will cost him…..No you don’t think that’s very likely?  Well maybe a person who has finally decided to off their spouse will change their mind because of that dollar?  The guy robbing liquor stores will have to spend an extra $10 to fill up his clip maybe this will make him get a real job instead.  And certainly the people who shoot up schools and workplaces and then commit suicide will be deterred when they find that they will have to spend an extra $50 on bullets.  Stop me when I’ve made my point…. Just try to imagine a single crime that will be prevented by a $1 tax on bullets.  If you can think of one please post it in the comments so that I will have a comment and everyone can see the mental gymnastics that your side is willing to go through to justify this nonsense.

So what would a $1 bullet tax likely accomplish?  Two things that I can see.  First of all, people who have guns are still going to have guns.  What they probably would do is not train as much (possibly not at all).  Currently range ammo for a 9mm runs about 20-25 cents, so if you go to the range and shoot a hundred rounds it costs you $25.  A little more than going to a movie but it doesn’t break the bank.  Now add a $1 tax per bullet and it costs you $125.  Think that will have an effect on the amount of practice people have?  So that’s a great idea, let’s reduce the training of all the gun owners in the country, that will make us a lot safer.

Second, people who actually think guns are necessary for the defense of liberty tend to stockpile a lot of ammo.  Obvioulsy, the ammo is an important component to the collective defense of liberty.  Add a $1 tax per bullet and this will drastically decrease people’s willingness to stockpile ammo.  But why would you want that?  These bullets sitting in the safe’s of NRA members are not increasing crime, they are just sitting there providing a safeguard against tyranny.  So which do you think it is 1, 2, or 3?  For most people I think it’s 1 actually, those people have to wake up.  But the politicians who propose this stuff must have thought about it enough to realize that there’s no way this will reduce crime.  If not, they are stupid.  I mean really, really stupid.  Ether one should bother you.

A War on Two Fronts

As I learn more and more about economics and things like monetary policy and politics, there is one very interesting conclusion I am coming to which is a little difficult for me to accept.  The left is right…. sort of.  Now let me point out that in the last post I admitted that mainstream Keynesian economists were right…. sort of.  What I mean by the left is not these people it is people who say things like this (notice the poster’s name).  They are right that society is controlled by a small number of elites who use the existing power structure to enslave the masses for their personal profit.  The problem is that they surround this basic truth with all sorts of profound logical and moral confusion. 

It’s actually staggering how naive these people can be.  They seemingly make no effort to understand the real constraints that exist in the world or the real moral distinctions regarding property rights and liberty.  Instead they just make up things that sound nice and they say them over and over again as if this made them true.  For instance, they say that collective liberty and individual liberty are the same thing because saying this allows them to avoid the inconvenient fact that if people are really free, the government can’t force them to do whatever it wants.  But the concept of a collective goal requires this ability.  Notice what they say about this.

For individuals, human liberty must be maximized.  People should be allowed to do whatever they please, moral or immoral, as long as they do not harm another person or another person’s possessions. 

Ok, that’s perfect.  Now stop talking!  But alas, they go on…

At the same time we need to recognize that people do come together to form collective groups, this may be at work, in the political realm, in associations, school or wherever. (!)  When people do congregate, there are new dynamics.  Whether people realize it or not, these groups are working collectively toward some end. 

You see what they’re doing here.  They say the right thing in simple terms that anyone can understand so you go “oh yeah that makes sense, it’s simple and everyone loves freedom and liberty, this sounds like a good idea.”  And then they go on to imply the exact opposite but they do it in vague terms that convey no real meaning.  Everything in this quote is correct (except for the existence of such a thing as a “collective end”).  People do come together to form groups, this does create new dynamics, we should recognize this.  The question is, what should be done about it.  The answer: blank out.  They pay lip service to individuality while simultaneously denying the existence of any individual achievement. (They even go out of their way to dismiss the founding fathers!)  They act like you can be free in your personal life but a slave in your social life and these are not contradictory.  But notice the areas of your life in which you are part of a collective group: work, school, politics, associations, wherever….  Is your house part of a neighborhood of some kind?  What part of your life is the private part that these people think you should have liberty over?  It’s not particularly clear is it?

Everything you do affects someone else in some way (or at least it can be imagined to).  When you stand in the supermarket trying to decide whether to buy an apple or a banana, that decision has ramifications for all sorts of people.  It affects the demand for apples and bananas.  It affects the profit of the supermarket.  It affects your health which affects your children and your employer and your coworkers and your doctor.  They are right to recognize that we are all part of a larger collective organism.  But this realization raises the fundamental question one faces when deciding how to organize a government.  Given that people’s actions affect other people, who should have the right to make decisions regarding those actions?  In other words, how are property rights defined?   And this is the question which they always avoid.  The correct answer is what they say first.  That people should have property rights over their own body, and mind and the produce of their own body and mind, and they should make decisions regarding these themselves so long as they do not directly harm another person’s property.  But they act like you can have this decision-making power and the collective can also have it at the same time.  This is both a logical fallacy and an attempt to avoid the entire issue at hand.

The second, even more childish thing that these people do is to imagine a fantasy world where there is no scarcity and everyone does whatever they want all the time and there are no constraints on our lives whatsoever and then assume that the only reason we don’t live in that world is because we are being oppressed by the elites.  This is complete nonsense.  Ok we are being oppressed by elites but if we weren’t being oppressed, it wouldn’t mean we would live in some sort of Garden of Eden society.  We would still have to work, (the same guy has a video called “Work Sucks“) we would still get sick and die, when you pricked us we would still bleed, life would still be hard sometimes and tragedy and injustice would still happen. 

But these people do not want to deal with difficult questions so they avoid them.  By assuming that there would be no scarcity if we were all free, they avoid the question of how scarce resources would be allocated.  The answer is not complicated, it’s the same answer as above, but this would contradict their broad themes like “equality” and laziness which make their creed so attractive to college students, aging hippies and others with little desire or ability to actually think something through. 

Finally, they don’t fully realize who the elites are and they are not very careful about figuring out what people and institutions are really worthy of demonization.  For instance, they don’t like the Fed.  Neither do I.  But they go from that to hating bankers and banking institutions and money all together.  That’s stupid.  Banks are a legitimate business that serves a real purpose in a world of scarcity.  Of course, by assuming scarcity is just a construct of capitalism, they avoid dealing with any questions like “how will people store wealth and how would capital flow to its most useful purposes without banks?”  and “how would trade take place without money?

Even worse, they hate “capitalism.”  The reason they seem to do this is that they just call what we have capitalism and they don’t like what we have.  Alright, I don’t like what we have either, but it’s not capitalism.  Capitalism is the answer to our problems not the cause of them but they don’t see this because they don’t take the time to consider what capitalism really means.  But assuming that there is no real difference between individual rights and collective rights, they avoid questions like “If people own their own lives and property which implies that they can trade them however they want, how is that not capitalism?”  or alternatively “If the economy isn’t capitalist, how can it be true that people are really free?”

They turn “we are being oppressed by rich elites” into anyone who is rich is oppressing us and therefore they hate all rich people.  But all rich people aren’t bad.  Most of them are great people who create significant benefits for society.  And if you are a thinker you would consider questions like “if people are free and they own themselves and their property, then aren’t people free to become rich?”  The only way around this question is to assume that scarcity is a construct of “capitalism” and therefore wealth is a construct of capitalism so if we were free everyone would simultaneously be equal and have everything they wanted.  But this is a complete fantasy!

When I first started this blog, I said that I take freedom as a value in itself and that goal of the blog is to explore the cost of freedom.  They completely avoid this question by assuming that freedom has no cost.  In doing this, they eliminate the need to value it. 

Ok, so what do we do with these people?  I don’t know exactly… On one front we have elites who are screwing us over.  Their power is becoming weakened in some ways and that is encouraging.  But at the same time we have these people who have been trying to collapse this system for years and now they are smelling blood.  The problem is that if they got what they wanted, they would establish something even more crazy. 

I think many of them can be turned.  The reason I think this is that the only way they are able to believe these things is that they haven’t thought them through carefully.  Therefore those of us who have thought them through can politely help them understand.  If they understood the contradictions involved in this kind of thinking, many of them would probably come around.  But there can be no compromising with them.  Their weapon is that people want to believe what they are offereing them.  People want to believe that freedom is free and that scarcity isn’t real.  Our weapon is that we are right.  Their weapon requires people to not think too hard.  Ours requires the opposite.

In total, these people make up a small minority.  These are the people who believe something strongly without having thought carefully about it.  By contrast, most people haven’t thought carefully about it and therefore have no strong feelings.  These are the people we are now competing with the left over and we have a major advantage in the fact that what we believe  (by we I mean myself but to some extent I think also what I would call “real” libertarians)  is consistent and makes sense.  We can make an argument that a reasonable person who applies themselves to thinking things through, which people are beginning to do, can realize is correct.  But the key is to develop our principles.  Scarcity is real.  Individual rights and collective rights are different.  Work is not slavery.  Profit is not evil.  There can be no compromising of these principles.  Everybody loves freedom and individuality, that is why they have to pretend that they believe in these things.  But their beliefs are completely irrational.  You won’t convince anyone that you are sane by negotiating with a lunatic.