What if equality and growth were compatible?
How one economist could change egalitarian distributive justice forever
An interesting article in the Santa Fe Reporter last week on an economist whose work has major implications for theories of economic distributive justice. Samuel Bowles of the Santa Fe Institute, a research institution dedicated to the study of complexity, is one of the leading economists in a movement challenging the assumptions of the Milton Friedman/Chicago School of free-market economics.
According to the Chicago School, distributive inequality is an inevitable consequence of economic growth. Bowles challenges this notion, claiming that while the theories of the Chicago School may work in ideal models, in the real world the story is much different. The Chicago School assumes an economy that is efficiently organized. But in reality, economies are actually quite inefficient, those with greater inequality, Bowles contends, particularly so. Instead of the distribution of wealth being dependent on economic growth, economic growth is dependent on the distribution of wealth.
Is the homebuyers tax credit immoral?
Should government incentivize/disincentivize behavior?
My girlfriend dragged 
me to a bunch of open houses on Sunday. At each, the real estate agent eagerly advertised the federal government’s homebuyer tax credit, which gives up to $8000 in tax credits to first-time homebuyers and long-time homeowners buying a replacement principal residence before April 30, 2010.
The tax credit is an example of the government incentivizing certain behavior - in this case purchasing a home in order to stimulate the economy. And it got me thinking: what other kinds of behavior does the government incentivize…and should it? Read more
Justice? Yes, but at what cost?
How far must society go to accommodate the blind?
Driving around DC this weekend, I noticed for the first time signs along one street that read “Blind Child.” Intrigued, I did some research and discovered that that many states will, if requested, post street signs around the houses of deaf and blind children alerting drivers to be extra cautious. Such signs are a relatively inexpensive way society can help increase the safety of children for whom circumstance has unfairly made dangerous the most basic of activities.
The signs got me thinking. What else could society do to help eliminate some of the unequal consequences of blindness? Read more
Subsidizing spiritual healing
Non faith-based reply to Marc
Marc argues that a strong moral argument exists to require insurance companies to cover spiritual healing. He writes that, “When risk is involved, the bearer of the risk should ultimately make the decision.” Since patients in need of care bear the risk of the success or failure of the procedure, if they desire a spiritual healing, insurance companies ought to cover the cost, Marc argues. This argument fails because the insurance companies—and all the fellow members of the insurance plan—are the people covering the cost and bearing the risk.
The purpose of insurance, Marc writes, “is to prevent bad luck from having a negative impact on our life circumstances.” The way it does that is by spreading the costs of bad luck and accidents. The individual who selects a faith healing procedure does not bear the risk alone; everyone shares the risk, at least financially. Assuming that those individuals who select faith healing procedures would have the opportunity to select science-based procedures should the former fail, the end result would be higher premiums for everyone. Why should others have to subsidize other people’s religious beliefs via a science-based insurance company? If the faith healing procedures were the same price or cheaper than the science-based procedures—and people who selected them couldn’t then see a medical doctor as well—it would be a different story. But even were that the case, I don’t see why such an option should be mandated by the government.
Chait’s culture war
Jonathan Chait has a new piece on Ayn Rand at The New Republic that attempts to tie together Rand’s philosophy with current conservative psychology. Much of it reflects standard and well-worn critiques of Rand, but it’s worth dwelling on one line of attack.
Chait’s strange turn is to attempt to completely divorce measures of productivity from compensation. He writes, “Is income really a measure of productivity? Of course not….Most of us perceive a world with its share of overpaid incompetents and underpaid talents. Which is to say we rightly reject the notion of the market as the perfect gauge of social value.”
I’m not sure that even strict Randians would argue that the market perfectly sets “social value,” whatever that is. Chait surely does not point to modern conservative commentators that have done so. Markets obviously prize skills differently.
Chait’s mistake is to conflate created economic value which is, indeed, measured financially by those willing to pay for services, with “social value.” He brings out the rather tired comparison of Donald Trump’s salary to “a thousand police officers.” Instead of revealing a shocking defect in the character of the rich, Chait has really just shown that rich people are good at things that make them rich, while many others are incapable or unwilling to do those things.
A good Randian would likely believe that Chait has missed the point completely. It’s not that economic value leads to social value; it’s that social value is not necessarily the end goal. Rand critiques the core principles that Chait, a good Liberal, would stand on - good of the many, wellbeing, fairness, etc. Without debating first principles, Chait’s piece appears to be a bit of a personal smear piece against Rand, her followers, and “The Rich” in general.
High time for a change?
The philosophy behind the arguments for legalizing drugs
In The Washington Post, Peter Moskos and Neil Franklin argue for the legalization of all drugs, explaining that the consequences of keeping drugs illegal far outweigh the benefits. Any argument for the decriminalization of drugs, like the one presented in the aforementioned article, will appeal to at least one of two philosophical principles. Read more
Cash for Morality
Should government bail out failing business?
Much has been made the last few days on the Cash for Clunkers program, which provides a rebate to people who trade in a car in order to purchase a more fuel efficient one. While the program has multiple goals, one central purpose is to help stimulate the struggling auto industry. This raises the obvious question: should government bail out failing businesses or industries?
There seem to be two clusters of opinion on this question. The first camp - I’ll call them the “morality as outcome” camp - would argue that government should act to bail out business if the resulting outcome (say, the distribution of wealth or the aggregate level of freedom) is more just. The second camp - I’ll call them the “morality as process” camp - would claim that government should not intervene in the free market, even if the outcome of such intervention was itself more just. Read more
What morality “means”
Do definitions matter?
One of our commenters on Friday raised an interesting question in response to Marc’s post about the morality of brain-enhancing drugs:
When you imagine that the use of brain enhancing drugs might be immoral, what conception of morality to you have in mind? Is it that this is immoral in the same sense of the term in which murder and torture are immoral? I mention this because it seems to me that there is serious question whether the terms ‘moral’ and ‘morality’ are always used to refer to the same thing. One thing that a public philosopher might profitably do is to call attention to this, and consider what alternative conceptions of morality seem to underlie various uses of these terms, and what we should think about the merits of and relations between these different conceptions.
It’s true that we’ve been a bit fast and loose with the word “morality” here at The Public Philosopher. In this post, I’m not sure I can offer a comprehensive or even uncontroversial account of some of the definitions of morality that I think are relevant to politics, but I can give some cursory thoughts about some of them. Perhaps this will provide some good fodder for continued discussion.
Is the regulation of payday lenders justified?
Slate has a piece up describing the results of new research from the University of Chicago on payday loans:
So presenting borrowers with a clearer explanation of how costly it will be to carry the loan might save some folks from falling into the payday debt trap. But what about the other 90 percent of borrowers, who even when presented with evidence of the long-term costs still took the loan? For many of these borrowers, no amount of information will deter them. These may be candidates for what Richard Thaler and Cass Sunstein call a “nudge” out of payday borrowing. Economists Dean Karlan and Jonathan Zinman have proposed just such a nudge: mandating a cooling-off period before a payday loan clears to discourage impulsive borrowers (though this runs somewhat counter to the purpose of a payday loan, which is for people who need money now).
Is Karlan and Zinman’s proposal justified?
This proposal is philosophically distinct from the “nudge” the author references. The classic “nudge” is auto-enrolling employees in a retirement savings plan. Doing so does not impose any particular burden — a decision needs to be made at this particular inflection point (to enroll or to not enroll). Participants can, of course, choose to dis-enroll in the program at will. The program reaches a socially optimal outcome without compelling or preventing action.
The situation is different in the case of the proposed payday loan cooling-off period. Karlan and Zinman would have the government prevent borrowers from doing what they have already chosen to do, that is, get money now regardless of the costs. Cooling-off periods might be justified for activities such as buying a handgun, because the danger is that the weapon will be used to harm others. However, it is not clear that payday loans harm anyone other than the borrower, and certainly not to the same violent extent.
Regulation of this market places a clear imposition on a freely-determined course of action; it’s not clear what philosophical principle could justify this restriction. Thoughts?
Who should pay for health care reform?
The role of redistribution
As the health care reform debate heats up in both houses of Congress, the question of who will foot the bill for the current $1 trillion package has taken center stage. The House draft of the bill is expected to finance the proposal with a 3 percent surtax on households with incomes topping $250,000. The Senate has gone back and forth on a few different options, but is apparently still considering a surcharge on health benefits to the highest earners and a Medicaid capital gains tax. The Obama administration has proposed scaling back tax deductions offered to the wealthiest Americans.
Although legislators will endure tough negotiations to actually craft a revenue-neutral health care package, all of the proposals on the table will ultimately have little impact on the vast majority of Americans. Households that earn higher than $250,000 make up less than 2 percent of the population (about 2.5 million total households). Because the new health plan is expected to cover up to 50 million uninsured Americans, it would be wealth redistribution on a massive scale.
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