Greed is not good. There, I said it.
At least, it's not good alone. Greed, in combination with a strong sense of fair play, can be very good. It's the latter part that was and is missing from the Madoffs of this world.
We learn early in microeconomics that individual agents acting in their strict self-interest will under certain conditions produce Pareto-efficient outcomes. Among the necessary conditions are a lack of force or fraud in the exchange relationships; eliminating those factors is a serious problem for real-world governments.
But there is a deeper issue: Pareto-efficiency is not equal to welfare-maximization. This has long been an open question in ethics, whether decreases in some people's welfare can be traded for a larger increase distributed across the population. Utilitarians say yes; Lockeans say no. I think both could agree, however, that we would be willing to set the laws such that those whose greed leads them to attempt to circumvent the system will be stymied.
If people believe in fair play (or if laws induce people to act as if they believe in fair play), then pure, unadulterated greed could actually cause the world's Madoffs to produce useful things for society in order to fulfill their desires. Otherwise, we are rewarding cleverness for its own sake-- at our own expense.
Friday, April 3, 2009
Sunday, January 11, 2009
On the need for safety nets
If another person commits to work toward the common good of my polity, I have a duty to ensure he doesn't starve, has a place to live, and has a shirt on his back.
Unless redistribution toward the poor actually would destroy the economy--not just slow down, not just "stagnate," but actually fall apart--we have a responsibility to ensure these things for anybody who tries to hold up his/her end of the bargain.
Otherwise, we are forgetting that money provides the tools but not the substance of living, as Aristotle says. If my pursuit of money is only possible by making others live in poverty while willing to work, it is not worth it. If I have extra tools and somebody else does not, I can be happy with less while he cannot be happy without more.
The state, to be properly called such, lets us focus not on living but on living well. All of us.
Unless redistribution toward the poor actually would destroy the economy--not just slow down, not just "stagnate," but actually fall apart--we have a responsibility to ensure these things for anybody who tries to hold up his/her end of the bargain.
Otherwise, we are forgetting that money provides the tools but not the substance of living, as Aristotle says. If my pursuit of money is only possible by making others live in poverty while willing to work, it is not worth it. If I have extra tools and somebody else does not, I can be happy with less while he cannot be happy without more.
The state, to be properly called such, lets us focus not on living but on living well. All of us.
Saturday, January 10, 2009
The time-cost of political participation
When we evaluate the governments of ancient states, we need to remember that they drew their leaders from the set of people who had free time.
If a lot of people can take time off from plowing while not starving, then democracy may be possible. Athens, with its moderate climate and fertile soil, provides a solid example. On the other hand, as Jared Diamond notes in Guns, Germs, and Steel, if a leader can easily deprive her enemies of resources, it's easier to maintain a monarchy, as in Egypt.
To evaluate a government, we first have to examine the empirical conditions under which that government existed. Then, out of that feasible set, we can rank the existing government against the others.
In a more modern context, we should consider ways to minimize the (time) cost of acquiring information about government so that we can maximize citizens' effective free time and make our government more participatory. Many commentators have said that Americans just don't care; I think it has as much to do with the complexity of the subject matter as anything. When you have to dig deep into the Department of Labor website to find anything of value--and when the responses are as useful as
President Obama showed during his campaign that people want to believe, want to participate, want to be part of the national mission. We just need to make it easier.
If a lot of people can take time off from plowing while not starving, then democracy may be possible. Athens, with its moderate climate and fertile soil, provides a solid example. On the other hand, as Jared Diamond notes in Guns, Germs, and Steel, if a leader can easily deprive her enemies of resources, it's easier to maintain a monarchy, as in Egypt.
To evaluate a government, we first have to examine the empirical conditions under which that government existed. Then, out of that feasible set, we can rank the existing government against the others.
In a more modern context, we should consider ways to minimize the (time) cost of acquiring information about government so that we can maximize citizens' effective free time and make our government more participatory. Many commentators have said that Americans just don't care; I think it has as much to do with the complexity of the subject matter as anything. When you have to dig deep into the Department of Labor website to find anything of value--and when the responses are as useful as
then it's not surprising that nobody knows or cares what goes on in government until it's directly relevant to their lives.Question: How many hours is full-time employment? How many hours is part-time employment?
Answer: The Fair Labor Standards Act (FLSA) does not define full-time employment or part-time employment. This is a matter generally to be determined by the employer. Whether an employee is considered full-time or part-time does not change the application of the FLSA.
President Obama showed during his campaign that people want to believe, want to participate, want to be part of the national mission. We just need to make it easier.
Friday, January 9, 2009
To the stars
As political entities grow, from individual to household to city to country and beyond, their goals expand in parallel.
Aristotle notes in the Politics that at the level of the city (polis), the smallest self-sufficient entity existing in his day, the citizens ought to be truly united in pursuit of their common goal of promoting the good life.
Perhaps the city could self-sufficiently pursue the good life in his day. With the advent of nuclear weapons (at the latest), this dynamic changed: we no longer can be secure in our pursuit of the good life without engaging in some kind of multi-city strategic alliance--typically a country.
In fact, even beyond the security requirement, the challenges of today require greater common effort to solve. Ultimately, unless we're comfortable with individual countries establishing colonies in space to the exclusion of others, the effort to move off-world will require some unified planning. Thus, we have to take a broader view of our "fellow-citizens" than Aristotle did.
No longer can we simply be citizens of a city or a country. The future lies in recognizing our common humanity.
Aristotle notes in the Politics that at the level of the city (polis), the smallest self-sufficient entity existing in his day, the citizens ought to be truly united in pursuit of their common goal of promoting the good life.
Perhaps the city could self-sufficiently pursue the good life in his day. With the advent of nuclear weapons (at the latest), this dynamic changed: we no longer can be secure in our pursuit of the good life without engaging in some kind of multi-city strategic alliance--typically a country.
In fact, even beyond the security requirement, the challenges of today require greater common effort to solve. Ultimately, unless we're comfortable with individual countries establishing colonies in space to the exclusion of others, the effort to move off-world will require some unified planning. Thus, we have to take a broader view of our "fellow-citizens" than Aristotle did.
No longer can we simply be citizens of a city or a country. The future lies in recognizing our common humanity.
Thursday, January 8, 2009
Setting the bar
Your average happiness throughout your life is determined in your first few years.
Major events can move the needle a little this way or that, but in general, you're stuck. This can be a positive thing, if you happen to have a high baseline happiness. Or it can be quite negative, if you have to experience a major event just to qualify as "happy."
This effect highlights the necessity of involved parenting in the early years. If a parent can convince a child that the world is fundamentally a place in which to be happy, that positive things can and do happen to people who try hard, and that happiness is an internally-determined quality, you're setting them up with a high baseline.
Otherwise, they will have to rely on good uncertainty.
Major events can move the needle a little this way or that, but in general, you're stuck. This can be a positive thing, if you happen to have a high baseline happiness. Or it can be quite negative, if you have to experience a major event just to qualify as "happy."
This effect highlights the necessity of involved parenting in the early years. If a parent can convince a child that the world is fundamentally a place in which to be happy, that positive things can and do happen to people who try hard, and that happiness is an internally-determined quality, you're setting them up with a high baseline.
Otherwise, they will have to rely on good uncertainty.
Wednesday, January 7, 2009
Good uncertainty
Anything can be boring.
In an important way, success is only success because of the possibility of failure. Winning a prize means nothing if you cannot lose. Discovery, progress, and health are so wonderful in large part because we understand and have seen the lack of each. Anything can be taken for granted.
Eliezer writes,
The key, however, is the uncertainty. If the events weren't surprises, they would still probably be pleasant (though perhaps impatience would diminish or eliminate the benefit), but not quite the same.
That's why taking risks is so important. Without them, we can and will see only small changes in our happiness over time. The spikes of unexpected success--particularly when contrasted with the troughs of temporary failure--constitute a memorable life.
In an important way, success is only success because of the possibility of failure. Winning a prize means nothing if you cannot lose. Discovery, progress, and health are so wonderful in large part because we understand and have seen the lack of each. Anything can be taken for granted.
Eliezer writes,
What we need to maintain our interest in life, is a justified expectation of pleasant surprises.The hardest part about that goal is that expectations are justified only by experience, so that if your life has had few pleasant surprises so far, it's hard to perceive the world that way. However, for those whose lives have had substantial pleasant surprises mixed in with the normal trials of life, this expectation seems rather reasonable.
The key, however, is the uncertainty. If the events weren't surprises, they would still probably be pleasant (though perhaps impatience would diminish or eliminate the benefit), but not quite the same.
That's why taking risks is so important. Without them, we can and will see only small changes in our happiness over time. The spikes of unexpected success--particularly when contrasted with the troughs of temporary failure--constitute a memorable life.
Tuesday, January 6, 2009
Monopolistic energy
Is energy the ultimate natural monopoly?
In the short term, the answer is clearly no: there are many methods of producing electricity, for instance, and none of them necessarily benefit from the natural monopolistic arrangement.
But long-term, when we've stopped using coal and even are depleting our nuclear supplies, when we've tapped the major sources of hydro power and wind power, etc... is solar power best produced in a monopolistic setting?
While many natural monopolies come from distribution issues (water) or public goods (defense), the solar monopoly would be due to the vast differences in geography between high-quality and low-quality sites. The middle of the Arizona desert, I'm told, is a fantastic place to collect solar energy; Seattle, not as much.
In fact, in the real long-term, solar panels may need to be either placed in space or covering a substantial fraction of the Earth's surface. In either case, the defense requirements of the arrangement are such that it may be impracticable for private companies to support the whole grid.
Perhaps this can be the issue that the world unites behind as the 21st century progresses.
In the short term, the answer is clearly no: there are many methods of producing electricity, for instance, and none of them necessarily benefit from the natural monopolistic arrangement.
But long-term, when we've stopped using coal and even are depleting our nuclear supplies, when we've tapped the major sources of hydro power and wind power, etc... is solar power best produced in a monopolistic setting?
While many natural monopolies come from distribution issues (water) or public goods (defense), the solar monopoly would be due to the vast differences in geography between high-quality and low-quality sites. The middle of the Arizona desert, I'm told, is a fantastic place to collect solar energy; Seattle, not as much.
In fact, in the real long-term, solar panels may need to be either placed in space or covering a substantial fraction of the Earth's surface. In either case, the defense requirements of the arrangement are such that it may be impracticable for private companies to support the whole grid.
Perhaps this can be the issue that the world unites behind as the 21st century progresses.
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