Theme: Incentives

Interesting posts on Modeled Behavior in response to this post by Bryan Caplan on Econlog

Suppose there are ten people on a desert island. One, named Able Abel, is extremely able. With a hard day’s work, Able can produce enough to feed all ten people on the island. Eight islanders are marginally able. With a hard day’s work, each can produce enough to feed one person. The last person, Hapless Harry, is extremely unable. Harry can’t produce any food at all. Questions: 1. Do the bottom nine have a right to tax Abel’s surplus to support Harry? 2. Suppose Abel only produces enough food to support himself, and relaxes the rest of the day. Do the bottom nine have a right to force Abel to work more to support Harry? 3. Do the bottom nine have a right to tax Abel’s surplus to raise everyone’s standard of living above subsistence? 4. Suppose Abel only produces enough food to support himself, and relaxes the rest of the day. Do the bottom nine have a right to force Abel to work more to raise everyone’s standard of living above subsistence? How would most people answer these questions? It’s hard to say. It’s easy to feel sorry for the bottom nine. But #1 and #3 arguably turn Abel into a slave. And #2 and #4 clearly turn Abel into a slave. I suspect that plenty of non-libertarians would share these libertarian moral intuitions. At minimum, many would be conflicted. Yet bleeding-heart libertarian Jason Brennan doesn’t seem conflicted. At all. He begins by quoting one of his earlier posts:

Imagine that your empirical beliefs about economics have been disconfirmed. Imagine that a bunch of economists provide compelling evidence that life in a strictly libertarian polity would go badly. Imagine that they showed conclusively that if people everywhere were to live in a Nozickian minimal state or a Rothbardian anarcho-capitalist civil society, with everyone strictly observing property right rules, that 10% of people would starve (through no fault of their own), 80% would be near subsistence (through no fault of their own), and only 10% would prosper. However, imagine that they also show that in a liberal social democracy with significant redistribution or social insurance, most people would prosper, just as many people living in such welfare states are doing pretty well right now.

In a followup, Brennan adds:

If you are a hard libertarian, you respond to this thought experiment by saying, “Well, that’s too bad things turned out that way. But, still, everyone did the right thing by observing property rights, and they should continue to do so.”… If you have at least some concern for social justice, you respond by saying, “If that happened, that would be strong grounds to change the economic regime. In that kind of society, it’s unreasonable to ask people to observe the basic institutions and rules. They have a legitimate complaint that the rules works as if they were rigged against them. Perhaps we’d need to tweak property rights conventions. Perhaps we’d even need some sort of redistribution, if that’s what it took.”

This is a good example of what puzzles me most about bleeding-heart libertarians: At times, they sound less libertarian than the typical non-libertarian.* I’m not claiming that the “hard libertarian” intuition is certainly true. But in a thought experiment with ten people, the hard libertarian intuition is at least somewhat plausible. And once you start questioning the justice of the islanders’ treatment of Able Abel, questions about the justice of the modern welfare state can’t be far behind. Needless to say, bleeding-heart libertarians usually sound a lot more libertarian than the typical non-libertarian. Yet this just amplifies the puzzle. Unjust treatment of the able may not be the greatest moral issue of our time. (Then again…) But unjust treatment of the able is a serious moral issue. And it’s a serious moral issue that mainstream moral and political philosophy utterly ignores. My question for bleeding-heart libertarians everywhere: Why don’t your hearts bleed for the able slave? * The most egregious example is Andrew Cohen’s musings on parental licensing.

Lets extend the Parable a bit: If Able needs to wear a shirt to get into a store, that’s an exchange. Cause and effect. It is a cost of entry. If Able needs to respect property rights to participate in the local market. That is a price of entry into the market. If Able needs to respect manners, ethics and morals, then that is a price of entry into the group that cooperates — even if their only cooperation is negative: to respect life and property by avoiding theft, fraud and violence. If able wants something that he canot produce, he must exchange something for it. These are all voluntary exchanges. If Able works harder than others, and they take from him, that’s involuntary taking. It’s a theft. If Able works harder than others and others exchange something with him for it, It’s not a theft. It’s voluntary exchange. If others are materially unproductive, and have nothing to trade with Able, then what else do they have? They have status. Status signals increase Able’s opportunity to be even more productive by assisting him in concentrating human capital. With that human capital he can exercise his mind, his abilities and his knowledge further. He can eventually control 80% of the resources simply because he knows best how. And others have voluntarily given that control to him. Status also improves his access to desirable mates. Desirable mates further increase his status. And with that status people who are not productive like Able, will attempt to imitate him. Since, that is the purpose of status in our evolutionary system: to inform others who to imitate. Status is our natural compensation. Status has been our compensation since before we had money, and a division of knowledge and labor. Very likely before we had speech. Perhaps before we were sentient. But wait. Now, what happens in the Parable of the island? Instead, one of the other nine people specializes not in being productive, but in preaching. In preaching redistribution. His name is Cain. Cain makes the argument that it is a moral duty to support the less productive people. Cain offers Job and Lot jobs if they forcibly take from Able in order to fulfill the moral demands of the non productive that Cain has been preaching. Cain then redistributes half of what he takes from Able, and demonizes Able for his reticence. Able is deprived of the status, the future productivity he could create with control of his assets, his influence on the others in making them more productive through imitation, and deprived of the mates he could enjoy. And his genetic legacy is even deprived of the better genes he might capture. Not only is he deprived of these things, but Cain has now stolen that status. Job and Lot have stolen his productivity, and status. This has all been involuntarily transferred (stolen) from Able, in order to profit Cain, for the benefit largely of Job and Lot, and for some symbolic benefit of everyone else. On the horizon are nine other islands. Eight of those islands succumb to the proces of involuntary transfers. One does not. On that one Island Erik is ten times as productive as all the others, and they herald Erik at the quarterly festivals. Erik organizes the other people on his island in exchange for the product of his efforts. Over time, the people on Erik’s island become increasingly more productive, and genetically more competitive. On the other islands, the opposite happens. Because it’s dysgenic. Humans object to involuntary transfers and are highly agitated by them. If the taxes are used for purposes that the productive agree with, then this objection usually disappears. But status is the human currency and money and ‘objects’ are just means of obtaining it. Because in the end, we are just gene factories algorithmically searching by trial and error for better solutions than those we have today. And we cannot alter that behavior. We will simply create black markets. This is the insight of the Propertarians. That human nature is little more than emotions attached to changes in property. On another much bigger island, the Crusoe tribe develops respect for property, but then, afterward Kevin discovers a hoard of coal that can be used for cooking fires on his property. And simply sells buckets of it at high prices to everyone on the island. The Friday tribe wants it very badly and so the Crusoe tribe must defend it. Furthermore, the Crusoe tribe already pays the cost of respecting property by forgoing opportunities for theft fraud and violence. These are a high cost for any society to develop. So, since they pay to defend the territory, and pay for property rights, they see his high prices as an involuntary transfer. The locals object because the resource is part of the island, the product of Kevin’s labors. They are comfortable paying a high price for his labor, but not for the resource, in which by any and all accounts they are shareholders. He’s not actually adding anything of value. He’s just created a toll booth, and an expensive tool booth, in order to gain access to a precious resource. He’s no different from an extortionist. This parable can be extended to answer all moral and ethical questions of politics. The reason for that explanatory power, is that human nature is propertarian in origin. We are property calculators, and our emotions reflect changes in the state of our perceived property. THe primary difference between individuals is just which property we categorize as shareholder, and what we see as individual. But emotions are descriptions in changes in state of individuals’ perceptions of property. We could not have evolved as sentient beings otherwise. It would be impossible. The change in politics over the past century and a half, has been driven largely by the inclusion of women into the work force and the voting system. They have expanded government. They have done so by using the government not to resolve conflicts in priorities, and not to concentrate productive capital, but to redistribute from the productive to the non productive using the artificie of government. The classical liberal model of institutions was designed for farmers heading nuclear families: business owners who participated in the market. But very few people actually participate in the market as business owners today. Most sell effort or skill for wages, or join bureaucracies to seek rents rather than participate in the market and its risk. And the productive class who participates in that market cannot defend itself from the unproductive classes using the institutional model built for egalitarian farmers. So the society polarizes as the factions compete over futures that are diametrically opposed to one another: one which appropriates money without status compensation, and one wich desires status compensation, and control over norms, in exchange for money. Mediterranean, Russian and Slavic men have abandoned their societies because of endemic corruption. i.e., because of Involuntary transfers. The black market won and the society is not impossible to fix. Status signals in southern italy, spain and greed are anti-social. In ireland they’re anti-productive Luddic signals. In the states, vast numbers of hispanic and african american males have developed alternative masculine signals outside of the market and outside of the nuclear family. These signals are spreading to other males who are disenfranchised. Males over 50 are dropping out of the work force (and not voting over 50 and under 34) out of hopelessness. The wealthy abandoned society in the sixties, and have been out of sight since then. We do not even know their names. Many people do not know that they even exist. Their status has been totally appropriated. And they are only members of society in sense that they reside here. You can redistribute money, but not status. Status, not money is our motivator. Society is constructed of a web of signals. otherwise it’s just a mechanical process that we each exploit for our individual benefit.