Monday, November 9, 2009

The Free Market and the Tragedy of the Commons

Last post I commented on how the theory of the free market demands that people act without compassion.

Now I want to discuss another failure of the free market. This is a failure that does not require the free market to operate in any way at odds with the descriptions given by free market theorists.

It is a failure that should concern people, however, because the tragedy of the commons affects all.

The basic formulation of the tragedy of the commons is in the same terms as the free market. Here's how it's described in Wikipedia:

The tragedy of the commons refers to a dilemma described in an influential article by that name written by Garrett Hardin and first published in the journal Science in 1968.[1] The article describes a situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately destroy a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen.[2]

To repeat: "Multiple individuals acting independently,...consulting their own self-interest." This is the basic formulation of free market behavior, and is what is touted by free market proponents as what will solve all our problems by increasing wealth.

The tragedy of the commons becomes much more significant when we realize that all our most important resources are ultimately limited. There may be vast reservoirs, but no matter how vast the reserve, exponential growth will rapidly exhaust the resources.

The air is a common resource. Water is a common resource. The free market will destroy these.

One way out, implicit in the formulation of the tragedy of the commons, is that we take shared resources and give them into possession of an individual entity. Of course this is a way of avoiding the tragedy of the commons that would appeal immensely to someone who has the resources to feel confident that they will be able to possess their own share.

We can see again how the loss of compassion will play a role in this free market dynamic: loss of compassion drives people to act in selfish interest rather than common interest, and thus the resource is destroyed. If compassion drove people, then the resource would not be exhausted.

Of course there are times when a limited resource is so limited that there is not enough for everybody. This is, of course, a difficult solution.

But, first of all, it is abundantly clear that individuals acting out of compassion and concern for the group welfare will sacrifice their own needs and desires for the greater good. We honor such people as wartime heroes or as peacetime saints. But they're scorned by free market theory (Adam Smith himself comments that people acting for the public good do little, showing his scorn). While self-sacrifice is not necessarily a palatable option, it is one that tends towards a communally sustainable path.

Secondly, it is worth remembering that, at least at the present, large problems of accumulation of wealth and resources exist. So at least for the moment, it is not as much an issue of overall scarcity, but rather localized or individualized scarcity. The commons are currently sufficient, provided a good distribution.

In any event, the next time someone says that the free market will solve our problems, keep in mind the tragedy of the commons.

Wouldn't it be great if people actually associated the tragedy of the commons with the free market, and with what they're voting for?

Saturday, November 7, 2009

The Free Market and the Death of Compassion.

George W. Bush called himself a compassionate conservative. Which suggests that compassion is a virtue. And is recognized as such even by the most conservative of voters.

I believe in compassion myself. I think the world would be a better place if people were more compassionate.

What is compassion?
1. sympathetic pity and concern for the sufferings or misfortunes of others. (Oxford American Dictionary)
2. The deep feeling of sharing the suffering of another in the inclination to give aid or support, or to show mercy. (American Heritage Dictionary)

Anyway, the Republicans value compassion (or say they do); the Democrats value compassion (or say they do).

I have compassion. And that's one reason the American condition--the U.S. condition--sickens me: I feel concern for the sufferings of others. There are many suffering, and the dominant discourse is not a discourse of compassion at all. It is a discourse in which "the free market" dominates.

The free market is looked upon as an inevitable force of nature: as long as we let the market alone, it will drive innovation, and thus improve the lot of all. This, at least, is the crude version.

Or here's how it was represented to me by a friend of a friend in a little Facebook debate:

Free Market. I know those on the left think the free market is evil but the free market has produced tremendous benefit for the US and thus for mankind. Is it perfect? Of course not and it's a common trick of the left to wheel out examples of the disadvantaged or downtrodded as evidence that the entire system needs to be dismantled. But, this is absolute nonsense in that it ignores the overwhelming good that comes from the free market. Where in your examples is anything approaching the innovation of the US and it increasingly threatened free market system?


Note the belief in an "overwhelming good that comes from the free market."
And actually, you can see in the long quote exactly the pathology that I want to discuss: notice how the author dismisses the difficulties of the disadvantaged and downtrodden. Their individual concerns are nothing in the face of the "overwhelming good."

Let us assume for a moment that the free market does in fact lead to such innovation that it produces overwhelming good. My objections to that facile claim are numerous, but let's ignore them for a moment and accept that the free market does produce overwhelming good.

I want to focus on the relationship between the free market and compassion. Let's look at Adam Smith's own words, where he invokes the famed invisible hand, in the passage that describes how the free market will lead to improvement of the social good:

He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security ; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

-- Wealth of Nations, Book IV, chapter II

We can see repeated through this passage the notion that "he" (whose role is not entirely defined here, but has been defined variously by Smith and other economic theorists) is selfish. He is not thinking about the public good. He is thinking about his own gain his own situation. Smith says that concern for the public good is not common among merchants, and he suggests that this is not a problem because it promotes the overall good.

So this notion that that overall good is promoted matches the earlier claim that the free market leads to "overwhelming good."

Let us assume that all this is true. Where is compassion in this? Does not Smith explicitly say that people should act in their self-interest without concern for the social good? Does, in fact, the system not depend on people acting without compassion?

We can certainly see that this is a reasonable conclusion--one drawn by the great economist John Maynard Keynes: "foul is useful and fair is not; avarice and usury and precaution must be our gods" (quoted in E.F. Schumacher, Small is Beautiful).

So what we have here is a description of society where the social good is maximized when everyone acts in their selfish interest and without concern for the social good. In otherwords, a society without compassion. Read what Keynes says again: "avarice and usury... must be our gods"! It's all very well for Keynes to say it, but then he was an agnostic. How does that sit with a Bible-reading Christian?

No man can serve two masters: for either he will hate the one and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.

-- Matthew 6:24

What kind of society would be best: one where everyone is wealth, but all compassion, all interest in the difficulties of others has been banished? Or one where wealth is less, but all tried to help the other?

The notion that one cannot serve two gods is not just a biblical injunction--in many cases it is logical imperative. Economic theory--including all free market theory--relies on the notion of opportunity cost, which is essentially the same concept: either one can put your money into the bank to earn interest, or one can invest it in another project. But one cannot do both. Similarly, one cannot make the free market work without abandoning compassion.

And so, in the name of the greater good, apparently we will leave those less able by the wayside to die. The free market insists on it. And the free market is going to serve our ovewhelming good.

Thus the death of compassion.

Wouldn't it be great if people thought that a society with less wealth and more compassion would be better? Wouldn't it be great if people worked together to solve our problems?

I don't have time for it now, but a discussion of how free market attitudes lead to the tragedy of the commons is a worthy effort, too.

Thursday, November 5, 2009

U.S. culture

Sometimes it seems to me that the culture of the U.S. is driven by Ignorance, Greed, Fear and Hate.

When I was a kid, I would watch Superman on TV and it was always introduced with the narrator speaking of Superman's fight for "truth, justice and the American way."

When I was a kid, I thought that meant that truth and justice were the American way, or at least part of the American way, and the rest of what the American way was was basically being good to people and fighting evil.

Now, the cynical part of me wonders whether the American way has anything to do with goodness or truth or justice. What I see in the common discourse is at best a rearguard action for truth, justice and goodness.

The part of this that saddens me the most, perhaps, is that the good people of America are being driven unknowing into this culture of hate and greed. And, in their ignorance, they don't even see it.

Recently a friend of a friend--a Republican--was telling me why the Democratic plan for health care is no good. He is, I believe, a well-intentioned, kind-hearted person but the reasons he cited were just a shallow repetition of what the media presents as the Republican position.

And that position, basically, is one intended to generate fear: "death panels", "rationing of health care", "growth of large government bureaucracies", "extravagant costs". And behind that fear, there are the excuses: "The US is too big; the US is too diverse; we need to preserve the free market; etc." Fear and excuses why we're not even going to try to do care for people in need. And this from people who claim to be Christian--a religion that speaks at great length of charity to the poor being one primary tenet.

The fear is fueled by ignorance. When's the last time the news gave any real coverage to any of the many different systems by which other industrialized societies provide health care for all their people at lower per capita costs, and with a better recent history of medical innovation? Do the majority of the people who are following the Republican agenda have any real idea about how medical care is delivered in other countries? Do they have any idea of where the money is going in this country?

On a deeper level, do they have any real idea of what they're talking about when they invoke the "free market"? Given my extensive studies of economic theory and market theory (not at the Ph.D. level, perhaps, but well beyond an undergraduate degree in economics), not to mention my more general philosophical interests that have a distinct bearing on any theory (epistemology, philosophy of mind, cognitive science), I feel pretty safe in saying that if the people of the US understood what they were supporting, they would not support it.

The free-market agenda is one of Greed. Greed is what fuels the "free market" according to theory--each man acting in his own self-interest, said Adam Smith; "foul is useful and fair is not; avarice and usury and precaution must be our gods" said John Maynard Keynes.

And hate. This is the one that frightens me the most. The bombast that fills the discourse of the U.S.--especially the right-wing commentators--is a discourse of broad hate and demonization. "I hope he fails," said Limbaugh of Obama, despite the fact that Obama's failure would cause millions suffering. The debate about health care is filled with cautions about how illegal immigrants will overload the system--fear and hate. Where is the debate about how one should love thy enemy (Matthew 5:44) or do unto others as you would have them do unto you (Matthew 7:12)? What about the debate about how we want to be a merciful nation because, according to Christian doctrine, "blessed are the merciful" (Matthew 5:7)? How about "If thine enemy hunger, feed him; if he thirst, give him drink" (Romans 12:20)?

Wouldn't it be great if our discourse in the U.S. was actually interested in how we could help each other? A discourse that suggests that the people who aren't like us (and who may not agree with us) are actually people we should try to meet with understanding, mercy and forgiveness (as Jesus suggested)? Wouldn't it be great if the gods that guided us were truth, justice and the golden rule (do unto others as you would have them do unto you)?

And wouldn't it be great if people saw through the greed, fear and hate, so that they understood how their decisions are adversely affecting all of us?

Tuesday, November 3, 2009

sacrifice

You can't always get what you want.
You can't have your cake and eat it, too.

OK, yeah, it would be great if these weren't true, but they are.

What really amazes me is how my peers--highly educated, apparently intelligent--seem to make so little change in their lives with respect to environmental issues.

They drive all the time; they're always jetting here or there on business or pleasure. It surprises me how rarely I hear them say in any of their deliberations, "wow, maybe we should limit that because of environmental considerations."

And the ones with children seem to be the ones least concerned, as if the world will always be beautiful and wonderful for their children, despite what the scientists say about global warming.

And these are not fundamentalist Christians, these are people who are mostly agnostic or atheist, who would say they believe in science, who would ridicule a creationist. I mean, it just boggles my mind: at least a creationist is intellectually consistent in believing that climate changes is not a problem. How one can actively believe in evolution and science generally, and then basically ignore a scientific conclusion supported by a vast amount of research, and a conclusion that will really matter in their lives...

I don't get it.

Voting for Obama will not solve the climate change problem if all the people who voted for Obama continue to drive all the time. Yeah, sure, a Prius is much better than a Hummer, but just switching to a Prius ain't gonna solve the problems.

People--especially the gluttonous Americans--my peers--need to stop consuming so freakin' much!

Well, I ain't got not kids, so I'm not leaving my kids a mess. But still, I have nephews; I have friends with kids, and wouldn't it be great if we left them a world as beautiful as the one we were raised in? Wouldn't it be great if the children of today could still go out and enjoy a beautiful sunny day when they're adults? Wouldn't it be great if their children, too, could grow up enjoying the same beauty of the world that we knew?

I think the saddest irony of all is that the sacrifices that we really need to make probably aren't more than a sacrifice of luxury. We could still have plenty, if we were willing to give up (sacrifice!) the gluttony.

Monday, June 15, 2009

Health Care

Lately Republicans are arguing that a government health care plan would lead to "rationing of health care." Never mind that the current system is largely based on companies whose profit depends on withholding health care.

Wouldn't it be great if those in government were interested in providing health care for their constituents instead of profits for their corporate donors?

Thursday, March 5, 2009

"I hope he fails."

I know I'm a couple of months out of date on this, but I try to ignore Republican political rhetoric as much as possible. I hear that Rush Limbaugh has been saying "I hope he fails" about Obama. It's a nice insight into how Republicans think. Limbaugh apparently would rather have the US economy fail, have the US make major strategic military mistakes and generally have its government's plans fail than to give credit for a plan that works.

We can't defend Limbaugh by saying "well, he just doesn't believe Obama's policies could work." This is clearly not a question of whether Limbaugh doubts the efficacy of Obama's plans. It cannot be a question of Limbaugh believing that Obama's plans will be bad for America in the long run. "I hope he fails," Limbaugh said. This is not about Obama creating new problems.

The California Republicans who refused, for many months, to make any concessions on their points while California had no budget and was going to shut down many public projects (at a great cost to the state), are of the same ilk. It is not about cooperation; it is about them getting what they want at any cost.

I suppose they might argue it's about principle. But these are the same people who would vilify Democrats for not working on bipartisan efforts, and who would vilify the same Democrats for being wishy-washy and not having principles.

Although they are closely connected to the Christian religion, a religion that preaches love, I see little love in the Republicans.

Wouldn't it be great if the Republicans actually cared about people? Wouldn't it be great if they were actually interested in helping needy people? Wouldn't it be great if they actually wanted America and Americans to do well, instead of just their political cronies?

What would really be great is for a someone to actually convince me that the Republican voices--the Rush Limbaughs and Ann Coulters--really do believe in charity, in loving one's neighbors and one's enemies--you know, some of the basic tenets of the Christian religion, on which they so often call. I'm open to being convinced, but there's a lot of explaining to be done to explain how Rush Limbaugh's "I hope [the president of the United States] fails," is actually a patriotic sentiment, and not a petty, selfish one.

Thursday, February 19, 2009

Standard of Living and Quality of Living

The other day I read some article about how Americans have to get used to a lower standard of living, because basically we're not as rich as we used to be (for many reasons, including having run up such a massive debt that paying interest on it is now a major portion of our income).

That's kind of a frightening idea, I guess. Until you think about the difference between quality of life and standard of living.

I don't think that the American standard of living, as high as it is, is anywhere close to maximizing the possibilities for quality of life. The wealth that we have is misused and abused. I'm not saying that wealth doesn't contribute to quality of life, but the two are definitely not locked hand in hand.

What would happen if Americans suddenly had much less money to spend? What would go first? Well, we know that people are going to eat, regardless, and they still need clothes and shelter and warmth. People will still need to be creative--so they will still need tools that they can use. What's left? Luxury toys and expenses. If there's less gas/electrical power available, what gets turned off first: the heat, the stove, the computer or the plasma TV? (Side note: the plasma TV is an energy-sucking beast: from http://www.thedailygreen.com/green-homes/eco-friendly/tv-energy-star-47020520: "The Wall Street Journal recently published this amazing fact: 'A 42-inch plasma set can consume more electricity than a full-size refrigerator – even when that TV is used only a few hours a day.' For those keeping score at home, the refrigerator is (or was) the appliance that demands the most electricity.")

And, back to appliances to turn on or off: which of them would improve our quality of life by being turned off (or at least turned off more)? TV, surely.

A lower standard of living would mean that people would not look to answer all their problems by buying something new. I don't even know how many times I've heard someone say "my life would be complete if I could just buy X, or visit Y, but I don't have the money." When I hear that kind of logic, I think, first, of Social Distortion's line in "Ball and Chain:" "Wherever I have gone, I was sure to find myself there; You can run all your life and never go anywhere." And then I think that it's not about the life being "complete" anyway: it's about living well, about a process that engages one and helps one grow and be healthy and happy.

Anyway, it seems to me that there is an opportunity present to us, even in times of scarcity (or, really, scarcity relative to the incredible wealth to which we are accustomed): we have an opportunity to think about what is really important and focus on that.

For the most part, Americans are unfamiliar with living in real scarcity--where there is real difficulty feeding yourself or your children. And I pray that the reduction in the American standard of living will not be so severe that there is not enough food to feed the people. But as we know, there's plenty of food grown--and much of it gets thrown away in the name of profit.

Wouldn't it be great if Americans learned that there was something more important than our standard of living and how much money we have made? If you don't know how to appreciate what you have, then there is little value in wealth; it will just make you fat and unhappy instead of thin and unhappy.

Monday, January 12, 2009

Are these people crazy?

I just saw a headline about oil prices falling "on nagging energy demand worries."
Are they kidding me? Maybe if your vision of the future includes about the next three months, because I have a lot of trouble imagining how the ten billion people on this planet aren't going to want a bunch of energy over the coming years. There's plenty of demand for energy.

As far as I'm concerned, a slight reduction in the sense of entitlement to luxury would serve the American public well.

Wouldn't it be great if people were able to learn to live with a bit less luxury, and the corresponding reduction in environment-changing waste?

Saturday, January 10, 2009

Peace

Wouldn't it be great if we could find other ways to solve problems than to kill each other?

Of course many who are motivated to kill, do so precisely because they feel there is no other choice. But wouldn't it be great if we could find other options?

Israel is invading Gaza and warning of escalation. Hamas retaliates the only way they know how. And in the middle are people dying. Wouldn't it be great if there were another way?

I am not debating the practical efficacy of violence--but there are many who do. There are many who would say that violence does solve problems; there are also many, though fewer, I imagine, who would say that violence breeds problems.

We can view problems in many different ways. Is the problem the immediate threat of one individual or one nation? Or is the problem the pattern that creates a new problem in the course of resolving the old pattern?

There is no abstract logical foundation for either choice of framing--to some extent both framings have validity and one chooses between them on the basis of assessments of probability. Such decisions are tied into the most fundamental ways we see the world.

If we can see that, then we can also see that we have to make a choice: what values do we wish to espouse? What outcomes would we most like?

The choice to focus on paths to peace is centered on the desire for an alternative to violence--only by believing beforehand that violence is not an acceptable or efficacious solution--does it make sense to seek alternatives. We have to believe that peace is really important to provide the foundation for actions that will promote peace.