There aren't many surprises here. The notion of there being a trade-off between equality and efficiency is very old and I've addressed it myself; Mankiw chooses Pareto efficiency, like any other fairly conservative economist, as a starting point for distributive justice. He references Stiglitz' work on equality of opportunity, and paints it as a legitimate goal before pointing out that it's basically impossible because of both tangible factors like IQ and intangible ones like behavior of parents in the household.
The beginning analogy, which he writes as if it's revolutionary, is a direct copy of Nozick's Chamberlain Argument as applied to well known contemporary names like Jobs, Spielberg, and JK Rowling. And yet, he doesn't mention Nozick at all, despite later bringing up Nozick's arch-competitor, John Rawls. Why? Possibly because he doesn't want to remind the reader that his argument is less original than a paint-by-number portrait of a sailboat.
Naturally, plenty of people aren't buying this. A featured comment at The Economist points out a number of problems with the paper from a perspective more sympathetic to Rawls and without the parroting of Nozick; this seems to be the standard response from those on the left. But a particular irritant of the entire business to me is the constant referencing from both commentators like this one, and from Mankiw in his paper, about "just desserts".
We know this idea intuitively: you earned what you have because of your contribution to society. Mankiw thinks the markets reflect this. The left thinks it's a crock of shit. (also on that page: CEO's that look like movie villains! Gotta love the Huffington Post.)
This is one reason I was on the left for so many years. The just desserts concept is garbage.
You know perfectly well that you did not choose the circumstances you grew up in, the upbringing you got, the genes you inherited, the experiences you lived through. The "distribution" of all these things both makes us who we are and is completely arbitrary, lacking in metaphysical justification. We are products of circumstance. That doesn't affect the reality of the equality-efficiency trade-off or the need to legitimize a hierarchy to preserve order and get shit done, but it makes for a tremendous propaganda line to get people riled up about how they aren't getting "what they deserve".
Here's the thing, though. Just because our place in the world stems from arbitrary circumstance doesn't mean that it implies egalitarian wealth distribution or some other institutional policy is in order to ease people's pain. Nihilism doesn't imply anything. If we're talking helping people who are in a bad spot as a matter of personal ethical principle, institutionalizing help just depersonalizes the entire experience of altruism. That altruism has value precisely because it was a choice, not because it was a gun-to-the-head requirement of a mob-rule government. The people who say differently have chosen to place their preferred institution - government - above the institutions built on consent, like business, religion, and family. They've chosen populism over individual rights... when it suits their purposes. It's a power grab, and nothing more. In the big scheme, there are no "just desserts", and manipulating that concept is equally disingenuous on both sides.
A Better Defense
The liberal perspective is the one related to social justice ideas. The anchor for these ideas has been driving egalitarians for years: the economy exists to create maximum utility for all involved, and the benefit of an extra dollar of income for those making very little is much greater than for those with serious wealth. From the Rawlsian "original position", this is intuitively fair.
We need not discuss how ad-hoc and deceptively unimaginative the Rawlsian original position is. Basically, it's an endorsement for government by empathy, and therefore, government with equality as a perpetual goal; there is no built-in limit of how far you can take redistribution for the sake of people's utility. Rawls didn't say that, but that's how it works out when you place things like "self-esteem" as entitlements your culture owes you; the wealth gap can shrink to a fraction of what it is now, and still, that CEO earning twice your fast food income might just make you feel bad about yourself.
And that has to be an issue here, because this debate features some of the worst elements of relativism on both sides. I can say with confidence is that the American people are not getting ripped off by the private sector in their economy. The vast bulk of this country's population, including those in low-level occupations, can afford a home of some kind with power, running and heated water, HVAC, plush carpet and plusher beds; they can afford two cars with insurance; they can afford to frequently eat out two meals a day; they can afford Starbucks lattes and two dollar bottled water, web-connected iPhones and clothing that costs 200% more than comparable stuff because of the name on the label. They waste enough to keep the storage unit industry, a business made up largely of storing crap people buy and don't use, earning $22 billion annually. Think about all the places this money could be going, but isn't. Meanwhile, they expect someone else, employer or government, to handle their education, healthcare, and retirement expenses as a matter of living in a civilized country. The recession hasn't affected this very much that I can see.
The 1% typically invest their money into new industries, and that's a standard feature of a capitalist system. They aren't doing it now because spending is down. If the idea here is to boost spending through redistribution using Keynesian logic, and supposedly kick off a recovery, then we've tried it already. The price tag was $787 billion dollars. The liberals complained that it wasn't enough. Sorry, I'm not shedding any tears about the government not having enough economic influence. But the upside of our increasing taxes and stinginess with government money is that we've made progress in trimming this year's projected deficit to just $744 billion. If there's a reason to raise taxes, that's it. I don't really object to more taxes on the rich; the actual number is also arbitrary and people get used to it, whatever it is. But I object to the leftist thinking used to justify changing it.
The real reason why the distribution of wealth isn't "unjust" is much simpler and much more devastating and it will never sell. It's because justice is subjective, and we are not supposed to impose self-serving, subjective viewpoints on individuals here, as a matter of the system's philosophical consistency. This country's entire legal structure is based on individualism. Markets are the way our economy creates wealth, and markets operate individualistically. Whether or not it's "just" for people to get out of the markets what they can is irrelevant so long as they do so under conditions of consent.
The justice question will always come down to the personal opinion of whoever you ask, and that gets really messy, really quick. Your opinion can be affected by whether you grew up in LA or Kentucky, by whether your third cousin got laid off last week, by your decision to skip breakfast this morning. It's just a personal opinion; you wouldn't know enough about these people to determine what they deserve, even if you had a consistent ideal. The government doesn't exist to serve your personal opinions. It exists to preserve order, and everything else is a matter of convincing people to take action within the context of consent. If people wanted to take money away from the 1%, they should organize and stop buying the wares that the wealthy are peddling; if they can't stop, then it's time to accept that they've been bought and paid for, or that the system is working. Every purchase is a stamp of approval on what that business is doing.
Liberals hate this kind of individualism, which they consider an excuse to not care about people. But when the conversation shifts from economic policy to social policy, that goes right out the window. The family can get burned to the ground to give women more social power, and the losers in this situation are told "tough shit". Religion can get beaten into submission by secularism, undermining the value of religion in culture and probably dooming it in the long run while implicitly encouraging the ostracism of its followers, and they think they're doing the world a favor while destroying not only centuries of tradition, but a huge part of the basis for community identity. Old people can rot in nursing homes, as long as they get their fucking Medicare; no one, including their children, has to treat them with respect, as the prevailing culture of raw narcissism undermines the values of the elderly at a rapid pace. You can believe what you want, say what you want, fuck who you want, speak out against everything, no matter who it offends or alienates. Individual obligations to others have gotten no help from liberalism.
Only by looking at "caring about people" as a matter of giving them comfort and material possession, the most vapid possible definition of care imaginable, can liberals square this circle. They have to become hedonistic nihilists, allowing a culture of pure permissiveness out of a sense of compassion, in order to "do the right thing" here. The right thing is, invariably: prop up the weak, attack the strong, burn your traditions, abandon cultural identity, let everyone do what they want.
Liberal social policy is ALL ABOUT creating a totally individualistic society. It's ALL ABOUT protecting the most repugnant people from criticism and picking winners as a matter of attention span rent-seeking from media and education institutions. Liberal social policy has enabled more people to look at their society's values and tell it to go fuck itself than any other force in American history. So explain to me why I should give a shit, why I should be required to give a shit, about some people's subjective understanding of what constitutes "social justice" in the economy, by all means.
Having said all this, I wish Mankiw would have kept his mouth shut. In the game of public relations, hierarchy simply loses today and nothing this twit has said will make the slightest difference to that. In fact, by saying his little peace, he's thrown gasoline on the liberal self-righteousness fire, giving them something to point to and scream about. From a strategic perspective, it's stupid and counterproductive.
Mankiw's an idiot, although his ideas can be hilarious. That guy writing at the Economist was right: the 1% needs better defenders. ANY other defenders would do, really.
What's wrong with the liberal individualism you describe? I'd say it's okay for a government to only "care about people" in terms of comfort and material possessions. Everything else in life is a matter of personal choice and influence from other people.
ReplyDeleteWow, been a while since I looked these over. On the off chance you still give a shit, here goes:
DeleteThe ideal of a people freed from material deprivation and left free to value whatever they like in other areas of life sounds great, of course it does. Thinking of that as an entitlement of some kind fundamentally devalues the others who have to spend large portions of their lives working to maintain the system to provides it, but we can put that aside for now, because I don't feel like getting into some argument about how productivity for nothing should be an act of love or pride for some people, or how greater portions of wealth would justify their time and attention being spent in service. Let's just stick to personal choice and social behavior.
We have a precedent, and that's in the domain of violence. In the Bad Old Days, protection from violence was largely a broad social and personal responsibility. This is why some Americans still think everyone should have a gun. Military and police have largely made them irrelevant for most people, which should make them respected institutions in society, right?
Obviously not.
Violence is now seen as a pure pathology and those institutions are seen, by the people who gain the most from them, as root causes of the problem. There is no respect. There are protests and demonization. Rhetorically, they are players in a cycle of violent reprisal, actively creating exactly what they ostensibly exist to stop. The kids can think this way precisely because violence is so alien to them. Nonviolence is now considered normal, deviations of it a mark of mental problems created by a corrupt social environment, and their protectors are now oppressors creating demand for themselves by spreading a psychological abnormality that flies in the face of people's "natural" abhorrence to violence.
This is historically idiotic and denies the controlling power of violence and its role in all social order, but they think of it as the definition of sanity.
Can this be extended to economic welfare? I think it can. In fact, I know it can. You read in the post up there how people are blowing off any obligation to church and family, right? There is an economic component to that. The church and the family are support systems, and their stability over time has come from their necessity. Parents not only cared for their children, but expected their children to care for them in old age, and to deny that duty was considered shameful. Religion was essentially the brand name of altruism for the needy prior to the creation of the welfare state.
Now they aren't needed, and those institutions are dying. So much the better, you might say: people should not subscribe to a religion for the fringe benefits and should not love their family because they might need them some day. Love should not be based on exchange, it should be free. Right?
No. Soldiers and cops DO still protect. Violence would still make sense to sane people if it were not met with threat of further violence. And the ties that bind a people are, in part, economic. Turn material comfort into an entitlement, and this continues and probably gets worse over time. It looks like alienation, self-absorption, and a complete disregard for those who are old, unattractive, or lacking in charisma. It leads to further shallowness. And I don't think it is an accident that this disproportionally hurts men.
The economic demand to share the burden of work builds social cohesion. On pure psychology, entitlements create isolation, while sharing hardship creates meaning. It gives choices relevance that they have consequences. Take that answer if the obvious exploitations of the productive by the nonproductive don't work for you because you don't see them as "fair". It's a big, diverse game. You can choose the work and the goods that you consider fair, but if you consider them to have any value at all, you shouldn't demand a system that lets you take them for granted.