Wednesday, February 8, 2012

Stephen Moore's idea of fairness

I am more and more disappointed by the quality of the stuff that get printed on the opinion pages of the Wall Street Journal. A particularly egregious example is the piece by Stephen Moore called "A Fairness Quiz for the President" that appeared on Tuesday. It includes some plainly inaccurate statements. For example, he claims that "in 27 states workers can be compelled to join a union to keep their jobs." This was outlawed in 1947. Workers may have to pay a fee to the union for representing them in negotiations with the employer, but they are not forced to join. And of course, they are not forced to work in a unionized workplace at all. His assessment of the administration's economic policy takes 2007 as its benchmark, when Obama did not take office until January 2009. On energy subsidies, he takes the very not-conservative view that tax expenditures (special industry breaks and loopholes) are not subsidies when they benefit the oil industry. He claims that most Americans are "denied the free choice" to send their children to elite private schools as the Obamas do. But anybody with the money can send their kids to private school (I'm sure the Obamas pay), and financial aid is available for many without the money. Tax dollars are not being used to subsidize those who now can't afford to repay their mortgages, as Moore claims. You have to be current on you mortgage to get benefits under any of the current programs. You'll find more howlers like this if you look.

But worse is the twisted idea of fairness that Moore seems to hold. He claims it is unfair that the richest 10% of Americans pay 65% of the income taxes. But of course they should pay a disproportionate share, because they receive a disproportionate share of the income, and have an even more disproportionate share of discretionary income. He claims it is not fair for people to pay estate tax when they die. But what exactly is supposed to be fair, or even economically efficient, about people inheriting millions of dollars that they did nothing to earn? The estate tax is one of the fundamental foundations of capitalism. It preserves the incentives for the scions of wealthy families to work and save and contribute to the economy, rather than becoming leeches on their families. It also prevents the emergence of a hereditary aristocracy, and the revival of a feudal political and economic system. It promotes equality. It is the essence of fairness.

Is it fair that those who work pay taxes to support unemployment benefits? Is it fair that young people have to pay into Social Security? Of course it is! Workers paying those taxes now will need those benefits if and when they are laid off or retire. They are paying a premium for a form of social insurance that the market will not provide.

If this strange notion of fairness is common now (and almost 4000 people recommend this article on the WSJ website), I fear for our country. True moral understanding is vanishing among us, beginning with elementary truthfulness, but including democracy and equity.

Tuesday, February 7, 2012

Why Virtue Ethics?

I have been thinking and reading a bit lately about virtue ethics, especially focusing on applications to economics.  My motivation for doing so is complicated, but one way of explaining the motivation is to respond to Will Wilkinson's argument against virtue ethics, one brand of which is what he is calling Eudaimonism:

The eudaimonist says that eudamonia is the aim of life and the ultimate end of practical reason. Eudaimonia is often translated as "happiness," but it's better understood asflourishing or functioning excellently as the kind of thing one is. Acting in accordance with certain virtues is thought to be both instrumental to and constitutive of flourishing or excellent functioning. Both Long and Vallier accept a version of the unity of the virtues thesis, according to which the content the virtues can be fixed only by reference to the content of the others. 
My trouble is that it is hard to make sense of eudaimonia within a Darwinian worldview, and that there is no good argument to the effect that eudaimonia, whatever it is, ought to be the aim of action. 
You are not an instance of a natural kind. You are a member of a genetic line. You have no essence. If you can be said to have a natural telos, it is to maximize inclusive fitness. But that is not only not in any sense a rationally mandatory aim, it's a completely stupid aim. Making copies of your genome is, in an important sense, what you are for. But it has next to nothing to do what what you ought to try to do with yourself.
Relatedly, there is no non-stupid natural fact of the matter about what it would mean for you to realize or fulfill your potential, or to function most excellently as the kind of thing you are. 

The problem with his argument, as you may immediately see, is that humans are an instance of a natural kind, we do have an essence.  Humans do have a natural telos, and it is not to maximize inclusive fitness.  Moreover there is a non-trivial vision of what it would mean for humans to realize their potential, to function excellently, and it is central to what it means to act ethically.  That is, without rejecting Darwinian biology or natural selection, I still have to reject the larger Darwinian worldview that Wilkinson takes as his starting premise.

Our tradition has good answers to these fundamental questions.  That is, virtue ethics, as many have discovered, provides an ethical language that fits extremely well with Christian theology.  My hope is thus that integrating virtue ethics with economics will help make progress integrating theology with economics.

Friday, February 3, 2012

Consumer Complicity and Competition

Perhaps John was not intentionally calling me out in his last post, but I have to register an argument in favor of Barrera's view, though I have not yet read Barrera's book.

In a competitive market, producers can be constrained to either participate in the market using the lowest-cost production methods, or not participate at all.  This is why we like competition.  This competition has a dark side, however, when low-cost production methods involve some sort of ethical compromise.  In industries that are not competitive, producers might be said to bear some large amount of the moral culpability for legal but unethical production practices, but in competitive markets, it seems, we have to either maintain that no-one is culpable, or that the culpability is wider, encompassing the entire industry, and perhaps the government and consumers as well.

Ideally industry organizations or governments would regulate business practices so that competitive pressure is directed toward ethical production practices.  This type of regulation, incidentally, is the topic of a paper abstract I have submitted to the ASE world congress.  Absent this type of regulation, and especially when the state does not share all of the ethical convictions of a religious community, it seems that consumers, by paying attention only to prices and product quality, are morally complicit in, individually or collectively, the ethical harm.  Even if one consumer cannot change the practices of an industry, they can support, with their dollars, alternative production methods.

John uses the contraceptive example, but my area of focus is, of course, the food industry.  It would be odd to say that agriculture, and animal husbandry, is an industry that Christians should not participate in, and yet industrial animal agriculture, with all of it's ethical problems, is the only way to make a living for most farmers.  Competition in the market for poultry and pork necessitates that farmers either sell at 50% above the market price, or adopt the standard industry practices.  It is possible that similar arguments could be made about labor treatment in other agricultural markets as well.  If we want to condemn these practices, and I do think we need to condemn some of them, then we will usually end up pointing fingers back at ourselves, either as consumers, for supporting firms that are competitive because they are unethical, or as voters, for not properly regulating these industries.

There is more to be said here.  The biggest hole in this argument so far is that I have not discussed the possibility of industry self-regulation.  I will have to deal with this in my paper, but it is a larger topic that would take me in a different direction.

Market complicity and contraception insurance

I've been reading Al Barrera's new book Market Complicity and Christian Ethics, to review it for Faith and Economics. Al makes an elaborate argument in the style of Catholic Scholasticism that any time we make a purchase that facilitates some kind of harm to others, however indirectly, we are culpable for that harm. The degree of guilt depends on the directness of the causation. So buying a sweatshirt implicates us in the sweatshops of Saipan, and buying a Japanese car makes us guilty for the plight of the unemployed American autoworker.

As a Protestant and an economist, I find this position rather extreme. As a Protestant, I resist being held guilty for decisions made by others without my direct participation, decisions that could have gone another way. As an economist, I have done research on this issue (for my dissertation, a long time ago) and found that boycotting bad companies has no effect on their behavior without some direct political action to go along with a collective boycott. Without such action, my personal boycott has no discernible effect.

Reading Al's book helps me understand the Catholic bishops' position on the requirement that non-church religious institutions must provide insurance coverage for contraception to their employees. The bishops hold that contraception is immoral, and they don't want to indirectly facilitate others' decisions to use it by buying the insurance. This would involve them in the guilt of contraceptive use.

But understanding the position does not mean I agree with it. I do not believe the bishops are guilty of contraception because they buy health insurance that includes contraceptive coverage. Nor do I believe that contraception is immoral. In this I stand with not only almost all Protestant Christians, but also almost all Catholic laypeople, who research shows use contraception at the same rate as the rest of the population, in spite of the bishops' teaching.

The Obama Administration has in this case chosen to stand with those who see this new rule as promoting the health of women, rather than those few Catholics who see contraception as wrong and market complicity as real. The larger meaning is this: the biggest part of Jesus' public ministry involved healing people. It seems that is what he spent most of his time doing. Seeing to people's health is an important ministry, and health care and health insurance are not just regular private economic goods like chocolates and bicycles and car repairs. Finally we are committing ourselves to taking care of each other as a community. We will get some things wrong in the process, but the commitment is of surpassing importance. The bishops should stand up for that commitment.