Economics, Literature and Scepticism

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I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.
Showing posts with label Political Philosophy. Show all posts
Showing posts with label Political Philosophy. Show all posts

Wednesday, November 11, 2009

Will Hutton's LSE Lecture

Posted by Simon Halliday | Wednesday, November 11, 2009 | Category: , , | 0 comments

Last Wednesday evening I attended a lecture by Will Hutton at the LSE titled 'Them and Us: How Capitalism without Fairness is Capitalism without a Future' [podcast]. Though some did not like it, I appreciated the talk, but I got the sense that it was, as Hutton said at the outset, the first time he was discussing in public the topics he intends to put into his next book and he was therefore not as structured nor as well-articulated as I expect him to be once he has the book done and dusted.

Hutton covered several broad areas of interest ranging from a theory of justice based on fairness and equality of opportunity (relating to an open access society as he articulates it), improved democracy, a better functioning market, increased government investment in innovation and technology, and improved regulation of financial markets. That was a lot to cover in one lecture, and I think he lost a few people because of being a bit all over the place. Nevertheless, I have rarely come across a lecturer who so closely mirrors my own position on things.

First, he articulated how, consistent with Marc Hauser's Moral Minds, humans seem to have a native, persistent and seemingly ubiquitous moral intuition about most things that affects us regardless of our stated rational positions. Though we may think rationally otherwise, we seem to have an inclination to punish those who infringe social norms, and reward those who we believe act responsibly and exert effort. Hauser backs this up with experimental evidence and surveys. I believe more in experiments, and I'm not so big on straight surveys for this kind of stuff. Anyway, the basic point stands: human moral judgements seem to be based on biological rather than purely rational pathways of thought and emotion. Hutton argues that this moral intuition oddly enough mirrors a sentiment that Marx articulated early on - from each according to his ability, to each according to his contribution - note contribution and not need. Moreover, he proposes an argument for equality of opportunity - or an open access society - that I thought was similar to John Roemer's in his Equality of Opportunity - control for luck, allow for personal responsibility over effort. [I asked Hutton about this connection during the question time and he replied that the contemporary milieu calls for a re-annunciation of Roemer's theory, which was apposite when it appeared in 1998, but even more apt and urgently needed now.]

Second, to reform contemporary politics and capitalism we need to embrace this human inclination to interpret others' behavior relative to ourselves and to our intuitions about fairness. Thus, partisans on the left and right need to re-conceive their thinking on phenomena such as CEO pay - what value do they really provide? are their paychecks accurate representations of their productivity or grotesque arms-race style rewards? - of single mothers on benefits - at what point are they responsible? at what point is it bad luck? - and progress from here to redress the function of the political system in the UK (and, I hope, abroad). This reminded me of some of the prescriptions in Eric Beinhocker's The Origin of Wealth in which Beinhocker argued for a role of complexity economics, social preferences and advances in theoretical biology that seem to better approximate how people think and act rather than the polarized partisan positions that people take on issues independent of the evidence.

Third, Hutton goes on to argue that, at their best and most competitive, markets are the optimal way to elicit the value of contributions that people make to society. But the competitiveness of markets has been undermined by political shenanigans, rent-seeking, monopoly power, and the connections of political interests to corporate interests rather than the interests of the citizenry - our democratic votes are in no way as powerful as the money of the capitalist elite. Consequently, though, value has been corrupted, the notion of just reward undermined, and our sense of rightness and fairness has been contravened by the actions of commercial oligarchs acting in their own interests to the detriment of the population at large. *Applause* I couldn't agree more. The problem relates to how we conduct policies in modern democracies, to lobbying and to political clientelism that pervades both the developed and developing worlds. What can we do about it? I favour grass roots collective action. To some extent Obama's presidential campaign showed the power of such tactics and I wish that more people would adopt such action for other important causes, reforming democracy itself for example. On this, Hutton advocates diminishing the power of the executive in the UK, delegating more power to local authorities, and increased participation by citizens.

Hutton made several additional points, but I thought that these three general areas were the most interesting and relevant. I believe, particularly, in a system that better approximates equality of opportunity and does allows people to move beyond the context in which their parents were born - a system of zero intergenerational transfer of inequality of opportunity. Unlikely, but at the moment it is something towards which I am inclined. I am not entirely sure how to get there, but the ideas that Hutton conceived seemed, to me, at least a contemporary utterance in a conversation that needs to continue.

Wednesday, September 16, 2009

Little's 'Understanding Society'

Posted by Simon Halliday | Wednesday, September 16, 2009 | Category: , | 0 comments

http://imagecache5.art.com/p/LRG/13/1338/PB8S000Z/paul-brent-red-cityscape.jpgUnderstanding Society is a blog I recently began to read. I have been impressed with the author, Daniel Little, and his command of a several subjects within the social sciences. Little touches on topics that relate predominantly to philosophy (political, philosophy of science), and to sociology, anthropology, and economics. Little blogs the ideas he plans to discuss in a new book that he is writing, which I assume will be called Understanding Society.  I thought I'd comment on some of his posts by way of introduction to the blog.

In Wealth Inequality, Little touches on the challenges of inequalities in wealth (not just in income), i.e. property, assets, etc, that pervade US society and most contemporary capitalist economies. He provides additional related posts that on Poverty, Growth and Sustainability and on Social Mobility. In his discussion on social mobility he highlights the myth that Americans in the US believe of the US being the most mobile society, which is empirically false. In the US, a parent's socio-economic status, is a strong predictor of a child's socio-economic status, which, for those who believe in some kind of material equality can be problematic.  Little also assesses Popper's discussions of falsifiability and historicism in his post Revisiting Popper, another illuminating contribution in which he highlights the problem of tackling the condition of 'falsifiability' in the social sciences where so much varies, and little can be properly controlled.


http://www.flickoff.org/system/files/u8/corporation.jpgIn this post, Little discusses the notion of corporations as analysed by Charles Perrow in his book Organizing America: Wealth, Power, and the Origins of Corporate Capitalism. Why is this apt? Well, the supreme court in the US is trying to grapple with whether corporations should have free speech (in the same way that people do), and thus whether they should have unlimited ability to promote their speech as people do. I hope they resolve that corporations do not have free speech, but more on that another time. I found Little's discussion useful and enlightening.

http://ecx.images-amazon.com/images/I/41JX8FMGNZL.jpg Here, Little discusses Michael Polanyi's notion of 'tacit knowledge'. I have not yet read Polanyi, though his brother, Karl Polanyi, has been on my reading list for some time - I might have to give both brothers a chance now. Nevertheless, Little's post intersects well with two books I've been reading: Friedrich Hayek's The Fatal Conceit and Matthew Crawford's Shop Class as Soul Craft. Though Polanyi affiliated himself differently to Hayek (and would have affiliated himself differently to Crawford I suspect), his notion of tacit knowledge, which Little recounts and teaches well, is crucial to understand the operation of everyday business: people learn how to do things without http://www.britannica.com/blogs/wp-content/uploads/2009/08/shop-class.jpg`knowing' what they know. It's a kind of knowing 'how' rather than a knowing 'what'. More specifically, Little wants to interrogate (or wants others to get off their bums and interrogate) the extent to which social knowledge is tacit, is experienced, or somehow embodied (I assume). To what extent do individuals fail or succeed when expressing tacit social knowledge? For example, some think me tactless, when I think myself honest and in continuous pursuit of truth, am I simply failing in my understanding of tacit social knowledge?

Anyway, I have found the blog edifying and I have enjoyed the posts, though they often require more time to read and think about than your average blog.  I find that I disagree with the author, but I'd like to surround myself with clear thinkers who think differently to me in order to understand better my position. 

Tuesday, July 21, 2009

Roemerian Policy in the UK?

Posted by Simon Halliday | Tuesday, July 21, 2009 | Category: , , | 0 comments

There have been a series of articles in the British press recently discussing the report by Alan Milburn on class barriers and inequality in the UK. As a UK citizen and someone moving to the UK soon (from Italy) I think I'm 'entitled' to comment.

http://www.vannattabros.com/adospics/axe.jpgOne of the most interesting quotes for me came from an article in The Guardian, 'Student fees for those who live at home should be axed'. The article quotes Milburn as saying, "Some universities are taking the context of pupil's educational achievement into account in deciding who gets a university place … a kid in a struggling inner-city comprehensive who manages to get one A and two Bs has probably had to work harder than a kid who gets the same result in a wealthy part of town." This is pure Roemerian theory of 'equality of opportunity'. John Roemer articulated his theory in his book Equality of Opportunity. The basic idea hearkens back John Rawls and other political philosiphers when they articulated the different approaches to 'equality of opportunity'.

Equality of opportunity can be separated into two distinct ideas. First, a non-discrimination principle (i.e. your colour, creed, orientation should not affect the commutative justice that you receive when engaging in contracts with others (employment, exchange, etc). Miller (2003, 76) characterizes this well saying, "Justice is a matter of each individual person being treated equally...a central aspect of justice is that people must be treated in a non-arbitrary way: there must be consistency in how one person is treated over time and there must be consistency between people." Second, a 'leveling the playing field' principle in which the goal is to ensure that each person, as much as they can, faces the same 'playing field' that each other person faces. Roemer's theory fits into this second discussion.

http://farm1.static.flickr.com/33/52660320_5190e570e5.jpgWhen you discuss 'leveling the playing field' you need theory to deal with several different aspects of individual motivation. The two pertinent ideas here are the endowments and ambitions of the individual. Your endowments are those things you are 'given' when you arrive in this world: genetics, parents, social economic status, etc. The exact scope of endowments often differentiates the extent to which people agree or disagree on a particular policy. For example, if I have 'poor' genetics (for which I am surely not responsible) and I have something like sickle-cell anaemia as a consequence, many people would argue that there is then scope for a central body (government) to assist me in dealing with this disadvantage. But what if I live in a single parent household and my parent is alcoholic? Am I, as a child, responsible for that? To what extent should the state attempt to help me 'rectify' that endowment? It becomes hazy. What we try to establish is an area in which we have clarity about what an individual does and does not have control over.

http://www.soschildrensvillages.org.uk/imgs/content/P1010152.jpgHaving established an area of control, we can introduce the second ingredient for adequate policy on leveling the playing field: 'ambition sensitivity'. Ambition sensitivity means that our policies must be sensitive to individuals, who, in given circumstance, choose to exert effort to obtain an outcome. Take South Africa. Observe children growing up in 'black', two parent homes, where both parents have 8 years of education, and they live in a township. Let's say that all of these things are 'out of the child's control'. We then assess the levels of effort asserted by these children, say while attending school. There should be some variation over how much effort is expended. We could say that it would be just to reward those children who exert more effort, given their circumstances. The 'measured outcome' of their effort could be 'high school marks', where those who exerted the most effort get Cs on average, whereas those who exerted less effort received Ds or did not finish high school. Contrast this with children growing up in a 'white', two parent household, where both parents have university level education. Again, we say these things are out of a child's control. We observe the children's effort levels. We see some exert a lot of effort, obtaining As, others, Bs, Cs, Ds, and some do not complete high school. Should we reward those children who obtained Cs in the first circumstance in a similar manner to those who obtained As in the second circumstance? Should we reward similarly those people lower in the distributions, given their circumstances and the effort they exert?

Roemer (1998, 6) argues as follows, "equalizing opportunity for educational achievement requires redistributing educational resources in such a way that the diff erential abilities of children to turn resource into education achievements are compensated for, where those abilities are determined by circumstance beyond the control of the individual." So he would say, reward the Cs as the As and equivalently down the distribution. Now, the problem becomes an empirical one, how do you divide people into types? How do you measure effort? How is effort distributed in groups? All of these are important, but the intuition of rewarding those who expend effort given a certain level of endowments seems to be at the core of this policy proposal and why I thought a brief discussion of it worthwhile.
http://press.princeton.edu/images/k6818.gif
For those interested, similar work can be found in Meritocracy and Economic Inequality (Arrow, Bowles & Durlauf) and Unequal Chances (Bowles, Gintis & Osborne-Groves). There are tons of books on the subject, but those consider some of the relevant empirics and theory.

Sunday, May 31, 2009

Leeson on Pirates

Posted by Simon Halliday | Sunday, May 31, 2009 | Category: , | 1 comments

http://beplayful.files.wordpress.com/2008/05/pirate-ship.jpgNot too long ago, Peter Leeson published a paper, 'An-arggh-chy', on the internal governance structures of pirate societies in the 17th & 18th centuries.  I recently presented the paper to my PhD class 'Institutions of the Capitalism' with Professor Sam Bowles. You can download my presentation here.   Leeson produced a great piece of economic history, combining good discursive writing with high quality institutional analysis. 

Leeson provides evidence to indicate that pirate ships ran with democratic institutions (elected captains and quartermasters), that they obeyed unanimously ratified constitutions, and that they had universal suffrage for crew members regardless of race or gender (approximately 25-30% of crews were black and they all had equal voting rights).  If you have the time, read the paper, it is a highly commendable piece of work and should be relatively easy to read for the non-economist, though it may require you to look up some ideas like 'principal-agent problems'.

Monday, March 23, 2009

South African Scores an Own Goal for Democracy

Posted by Simon Halliday | Monday, March 23, 2009 | Category: , , | 0 comments

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe_vDcByKodTeNZ1QJ8lygqu1RHRRxoQMq2tMgoWG5neblrs5DzK9xwqPtZXlq3tWGuXff7F1uMGUIrg4dlfwuT5Z6hH1TCR_-SMPJq9vyEkCkF49HL2IskwTxCSWnREdmlGoA0Q/s400/wtf.jpg
Wow! Denying the Dalai Lama a visa, that's what I call self-righteous.

Or maybe it suppresses speech, shows South Africa kowtowing to Chinese interests and promotes illiberal politics inconsistent with the South African constitution. 

I could be wrong though.  it could be 'an independent, sovereign decision' as Ronnie Mamoepa says.

Hmm... methinks kitty represents my opinion well.   
 

Tuesday, December 23, 2008

This Makes Me Happy

Posted by Simon Halliday | Tuesday, December 23, 2008 | Category: | 0 comments

The UN general assembly signed in a declaration for the universal decriminalization of homosexuality. The action was opposed by the US, the Holy See and by a conglomeration of Islamic Countries.

Anyway, I understand that this kind of thing is not binding, but it is a step in the right direction for the promotion of LGBT rights. I am in favour.

See the article from the UN Dispatch here.

Saturday, July 12, 2008

The Libertarian Candidate

Posted by Simon Halliday | Saturday, July 12, 2008 | Category: , , , | 4 comments

Michael Munger's speech as a libertarian candidate for NC 08:



He says that libertarians are 'for giving people a chance to realise their full potential', but they are also 'for no one being able to take away the fruits of your labour'. How, therefore, do they propose making sure that everyone is able to realise their potential without taking away the fruits of some people's labour? It's logically inconceivable for them to be able to do both. You cannot have reasonable equality of opportunity without some kind of revenue system. Unless he is talking, simply about non-discrimination which cannot, by any stretch of the imagination, result in any system that is 'for giving people a chance to realise their full potential'.

We need to create a just society first. We can't just assume that society will self-correct. The evidence weighs in heavily against the libertarian ideal of social mobility exists in the United States, especially with the current distributions of wealth and education. Munger makes no comment on how society would allow individual flourishing, as something accessible to all Americans, without any taxes.

Munger comments on "A couple who live on land that they own. that they control and that they can defend." Who regulates what constitutes 'defence'? Moreover, he says later that individuals cannot inflict violence on one another, who would regulate this?

He says too that individuals would be able to drive cars because they own them, but would not have to carry licences. How do we ensure then that individuals have some minimal level of capability? Do we just assume that society is comprised of 'responsible individuals' as Munger wants us to? Has he met any teenage boys? As much as I would like to think that individuals would self-regulate, I have no empirical reason to do so.

If I am misconstruing what he says, or misunderstanding some crucial concept of libertarian theory then please help me to gain clarity.

Friday, July 11, 2008

Cohen Pt. 2

Posted by Simon Halliday | Friday, July 11, 2008 | Category: , , , , | 0 comments

http://www.capitalism.co.il/wordpress-he/wp-content/uploads/2007/06/asaurn.jpgThis is the second in my series of posts on G.A. Cohen's Self-Ownership, Freedom and Equality. The first post was on Nozick's Wilt Chamberlin example.

A central argument in Nozick's Anarchy, State and Utopia is that a proletarian who has a choice between death by starvation and working for a capitalist is free as a consequence of self-ownership.

He argues, furthermore that joint ownership the world's resources (a typical socialist ideal) results in the nullification of self-ownership.

The two positions are as follows. For the first, consider a world in which there are individuals ranked throughout society, from the richest capitalist to the poorest proletarian, say a particularly rich hacienda-owner, Cortés, and the landless worker on the hacienda, Peone. Nozick argues that, as long as this distribution came about as a result of a Lockean Proviso-type land acquisition rule, then it is just. Both Cortés and Peone are self-owning and are 'free' to choose.
http://www.photius.com/images/ph03_03g.jpg
Contrast this with the second situation situation where two individuals are shipwrecked. Neither of them owns any land on the particularly lush and fertile island. The one individual was disabled in the ship-wreck, the other is able-bodied. Call them Able and Infirm. They decide to own the island jointly, such that neither can make production decisions without the other. As Able cannot produce without the permission of Infirm there are five possible outcomes (see Cohen, 1995:95 for the exact details). I discuss the two interesting outcomes.

iv) Able produces, the amount produced determined independent of his choice, and it exceeds the amount required to sustain both Able and Infirm. They bargain over this surplus.
v) Able can produce a surplus, but he can vary its size; bargaining takes place over both surplus and the amount produced.

The image “http://jg.socialsciences.manchester.ac.uk/Images/sorgo.jpg” cannot be displayed, because it contains errors.Depending on the disutility of labour for Able and the disutility of infirmity for Infirm we should get an egalitarian distribution of resources. Egalitarian because the distribution does not depend on Able's talents, he gets nothing 'extra' because it is him and not Infirm who is producing. (ibid, 96). However, what we see in this example is that, even though individuals are self-owning, Nozick would argue that Able does not have effective self-ownership. As Cohen points out, "joint world ownership renders nugatory the self-ownership with which we had hoped to combine it. Self-ownerships is not eliminated, but it is rendered useless." (ibid, 98)

Cohen's contribution to this argument is that either
1) Nozick wants individuals to have effective freedom, or
2) Nozick wants individuals to have self-ownership in name alone: formal self-ownership.

Cohen argues that Nozick has a double standard for judging joint-ownership against private ownership of unowned resources. For joint ownership, the individual has self-ownership but is not effectively self-owning contrasted with the situation where the proletarian must work for a capitalist or die, and thus also has self-ownership, but is not effectively self-owning. Either Nozick wants individuals to have effective self-ownership or formal self-ownership. Which is it?

The consequence of which is that we should probably understand that what Nozick actually wants individuals to have is autonomy: control over their own lives. Which, Cohen argues, implies that there must be constraints on individual self-ownership in order for individuals to have autonomy. This may seem counter-intuitive, but the examples described give us a fair understanding of what formal self-ownership vs. effective self-ownership actually mean.

Consequently, accepting autonomy as our goal requires not only an abandonment of Nozickian self-ownership, but also an abandonment of the traditional socialist precept of joint ownership of the world's resources.

Thursday, July 10, 2008

Roemer and Supergirl

Posted by Simon Halliday | Thursday, July 10, 2008 | Category: , , , | 0 comments

bookjacketI don't know how many of you out there have read John E. Roemer's (1998) book Equality of Opportunity, or the article of the same name in Arrow, Bowles, Durlauf (eds, 2000) Meritocracy and Economic Inequality. Anyway, I have been trying to think about his arguments for a while (as I am currently researching this topic) and I have a little hypothetical that I want to test to see if anyone thinks it's valid. First I will discuss Roemer's proposal, then on to my hypothetical.

Roemer first argues that there are two types of equality of opportunity.
  1. the nondiscrimination principle
  2. leveling the playing field
The image “http://www.loveequality.com/Images/Love_equality.png” cannot be displayed, because it contains errors.He says that much has been written on the former, but not enough (rigorously) on the latter. Roemer argues for an algorithm, of the sort which takes individuals circumstances into account and then partitions them into typesets, where 'type' is meant to be indicative of level of advantage. He then goes on to argue that the individual's level of effort within their type set is what should determine our policy for receiving benefits. Everyone in the top centile of each type should receive similar outcomes. He argues therefore that his algorithm (which he sets up mathematically I should add) would therefore take types into account and provide for each individual contingent on the effort that they choose to expend and reward them accordingly - a just desert if you will. Now, this is a summary, and a poor one at that, but I think that it is quite an interesting proposition. One of the consequences of which is that disadvantaged individuals will require dramatically more compensation in order to get them to an equivalent level of say education as those who are historically advantaged. Note though that he argues that his EOp mechanism should apply in terms of admissions to schools, universities, etc, but should not apply for professions where a specific level of excellence is required (such as say, surgery, dentistry, high level physics and mathematics). At this point the nondiscrimination principle should be implemented.

[Aside: he comments how this makes him enemies on the right and left either because he goes too far, or not far enough]

Anyway, considering how it is effort that needs to be expended in order for an individual to be rewarded I came up with the following hypothetical which baffled me a bit.

Hypothetical
Consider a hypothetical individual who is, by virtue of her circumstances (genes, family, etc) excellent at everything. So excellent, in fact, that the effort required by her to perform any task to some pre-defined level of excellence or achievement (say building a car, or coding a computer program) is absolutely minimal. So minimal in fact that it is indistinguishable from effortlessness. Because this person, by virtue of their abilities (qua circumstances) cannot expend more effort, say to the equivalence of others in a different type, how will they be remunerated or rewarded?

Roemer's rule for allocating them to university, employment, 'future earnings capacity' would not allocate them (or at least allocate them to the lowest positions) because they expend (virtually) no effort (or epsilon's worth of effort).

Moreover, as the individual is unique, i.e. they cannot be classified in terms of the given type set, how do we classify them in terms of a decile of effort? Do they necessarily fall in the last decile of some imagined group of super-individuals? Surely that would be inaccurate because, if this group existed, none of them would be able to spend more than (epsilon or) near zero effort.

Any ideas? Am I just crazy, or because this would only be a problem for superpeople is it not worth considering in the political philosophy of real people? I suppose this is just a variant on the 'not rewarding people who are talented' problem, but the issue for me here is that even if they wanted to they (superpeople) couldn't expend more effort. Conundrum. But quite possibly a trivial one.

Tuesday, July 08, 2008

Cohen Pt.1

Posted by Simon Halliday | Tuesday, July 08, 2008 | Category: , , , , , , | 0 comments

Yesterday I published the bibliography and some of the ideas for my research program over the next few months, and realistically as a basis for the next three years. I didn't give many details on account of it simply being a publication of what I am planning to do for the next while.

Today I am going to start some of this with a discussion of the first few chapters of G.A. Cohen's (1995) Self-Ownership, Freedom and Equality which will involve a few posts over the next few days. Cohen's main intention in the book is to strip down and assess the concept of self ownership, to relocate the ideology of socialism without self-ownership as proposed by Marx and to argue that Nozick's argument for self-ownership as effective freedom are flawed and that he applies double standards in terms of the arguments Nozick makes in Anarchy, State and Utopia.
The image “http://www.favianna.com/images_dl/sticker_libertad.jpg” cannot be displayed, because it contains errors.
Cohen spends his first chapter discussing Nozick's Wilt Chamberlain example. He first proposes that a proper translation of Nozick's proposal that:
"Whatever rises from a just situation by just steps is itself just." (1)

Robert Nozick (1971, 161-2)
to:
"Whatever arises from a just situation as a result of fully voluntary transactions on the part of all the transacting agents is itself just." (2)
G. A. Cohen (1995, 21)
Leaving aside the discussion of slavery arguments that pertain to the above, Cohen voices discontent with Nozick's argument and declares he would be disturbed if,
"we can see what the agent thinks he is gaining, but we know that what he will gain is not that, but something he think less valuable; or that what results is not only the gain he expects but also unforeseen consequences which render negative the net value, according to his preferences and standards, of the transaction."
G. A. Cohen (1995, 23)
Moreover, it is necessary for us to attempt to understand whether individuals would have made a decision if they understood the aggregate effects of their choice ex post. For which Cohen issues a re-translation of (1):
http://artfiles.art.com/images/-/Wilt-Chamberlain---Rim-Action-Photograph-C12874120.jpeg"Whatever arises from a just situation as a result of fully voluntary transactions which all transacting agents would still have agreed to if they had known what the results of so transacting were to be is itself just. " (3)
Cohen, (1995, 23)
With which, it is understandably difficult to argue, the capitalist economy may not be the best able to deal (or any system for that matter, but that is another debate entirely). For which it is also necessary for us to understand that, not only do the Chamberlain fans get to see Chamberlain, but, having paid him, the aggregate result is one that endows Chamberlain with powers over them through the amount of money to which he now has access. It is this effect that Cohen argues would be preferred to be prevented by those living in a socialist society. Cohen argues that a society in which this occurs would be "a society of equality in danger of losing its essential character" Cohen (1995, 26)

Notwithstanding whether one finds the above argument credible or not, Nozick proposes that third parties, not privy to concern about the transactions of others, remain entirely unaffected by the Wilt Chamberlain - Fans transaction. Cohen argues that this is untrue and I believe him. Third parties lose relative position and power without any form of recompense (the fans at least get to watch the game).

Then he proposes a further argument, which I think is more convincing and progresses as follows: could we conceive a world in which individuals paid some price to watch Wilt Chamberlain, but who knew, in addition, that their payment would be taxed and that Chamberlain would not gain disproportionate wealth and power as a consequence (an option that was supposedly not considered by Nozick)? If we assume normal economic rationality then Chamberlain will play if he sees that the wage he receives is adequate relative to the effort he puts in. Moreover, he could enjoy playing for its intrinsic worth to him, i.e. the joy of being a fantastic professional basketball player for which he gains everything from adulation to sheer exhilaration (I grant that such theorizing can lead to tautologies, but this does not mean that it is irrelevant - work selection endogeneity is still neglected in economics).

The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics
The criticism that follows this is one to do with the psychology of individuals living in the socialist state Cohen argues that "The people in Nozick's state of nature areintelligible only as well.socialized produc.ts of a market society." (1995, 29) He proposes that individuals in a socialist society would hold to different values such that "incessant vigilance against 'capitalistic acts'"(ibid.) would be unnecessary. Cohen asserts that there are different concepts of human nature inherent in Nozick than in socialism. The human nature that would be more prevalent in socialism would be more pro-social. This is, I believe, a flawed argument, for no other reason than the fact that biological and other evidence generally supports individuals being altruistic towards kin and in-groups, rather than all individuals [See, for example, Choi and Bowles (2007) on Parochial Altruism and War, or at the evidence discussed in Eric Beinhocker's The Origin of Wealth if I recall accurately]. So, I think this argument is weak.

In general, Cohen seems to produce a number of valid criticisms of Nozick in this, the content of the first chapter of his book. He also delineates additional arguments on side constraints and on the role of the proletarian in a capitalist society who has freedom, but is effectively unfree. I will probably refer to this topic at a later date when discussing Nozick's idea of self-ownership for individuals in a jointly-owned world and contrasting this with his argument for the freedom of the proletarian. Right now, back to reading.

Monday, July 07, 2008

Research Program

Posted by Simon Halliday | Monday, July 07, 2008 | Category: , , , | 4 comments

My research program this vacation is, firstly, to complete an essay for the History of Economic Thought seminar course I took with Ernesto Screpanti this past quarter on Equality of Opportunity. Secondly, subsequently and probably somewhat concurrent with that, as the themes overlap, I am pursuing reading and research on group inequality which is the general area I have decided to research for the articles for my thesis.
Black/white handshake contest image[Aside: I was originally trying to decide between research into either the evolution of cooperation, or into group inequality/segregation, I am passionate about both, but chose to do the latter as it relates more to South Africa.]

The implication of which is that I will be blogging about the books and articles that I am reading and the attempts that I make to write about them. With respect to the equality of opportunity essay, and equality generally, I am currently reading or have been reading:

Bowles, Arrow and Durlauf (eds) (2000) Meritocracy and Economic Inequality
Roemer, John, (1998) Equality of Opportunity
Roemer, John, (1996) Theories of Distributive Justice
Cohen, G.A. (1995) Self-Ownership, Freedom and Equality
Rawls, J (2005 (1971)) A Theory of Justice
Nozick, R (1974) Anarchy, State and UtopiaPolitical Philosophy: A Very Short Introduction (Very Short Introductions)

As a political philosophy autodidact the base texts that I read to give myself an introduction were:
Kymlicka, Will Contemporary Political Philosophy: An Introduction
Wolff, Jonathan, An Introduction to Political Philosphy
Miller, David, Political Philosophy A Very Short Introduction

I know that some of the above are a bit simple (eg. the very short intro), but I found it useful to look at slowly advancing texts when I was teaching myself the basics, before getting on to reading the genuine article of Rawls, Nozick, etc.

So that you know one of the main reasons that I am really trying my best to get to grips with these topics is because I believe strongly in having some kind of consistent theory behind the work that I intend to do in economics. Without this grounding I don't know whether the work I do will be out of anything more than curiousity. I agree furthermore with John Roemer when he says that,
"Unfortunately, too few graduate students today who work in political philosophy or welfare economics have an understanding of both methods. I think that to do good political philosophy o welfare economics it is essential to be cognizant of the main issues and ideas in both disciplines, if not to have both sets of techniques in one's tool kit. Political philosophers with too little knowledge of welfare economics frequently try to reinvent the wheel, usually with bad results. Welfare economists who are poorly read in political philosophy often waste their time on technical questions that philosophy shows have no interest for the study of human welfare."
John Roemer, 1998:i, Equality of Opportunity
So, if you are interested in these topics, I am using a somewhat altered version of Jonathan Wolff's reading list on equality.

With respect to group inequality, I am using two reading lists, the first is from Glenn C. Loury for his course on group inequality at Brown, and the second list (which now no longer appears to be online) is from Rajiv Sethi's Inequality course at Columbia.

If you have any suggestions then please feel free to supply them I am open to all kinds of ideas on the abovementioned topics.