‘Where have you been? Have you been hiding from me?’ I saw it was Jim speaking when I looked up from reading the paper. I hadn’t exactly been avoiding him, but then I hadn’t really missed not seeing him for a few months.
Jim asked me if I could give him a lift home. He gave me some long and convoluted explanation about why he needed a lift, but I thought he was probably just looking for a captive audience - someone to talk to about something that was on his mind.
He certainly did have something on his mind. As soon as we started off he asked me what I thought of the outcome of the Copenhagen climate change summit. I admitted that I thought it was fairly predictable. Given the way western governments were approaching the issue it would have been hard for China and India to accept that they were serious about achieving concerted action even if the science was settled. I said that if governments thought the stock of greenhouse gas emissions was a serious problem they would be focusing on the incentives needed to develop technologies that would reduce the stock of emissions, rather than just attempting to cap the growth of emissions.
Jim said: ‘I thought that emissions trading schemes, like the one Kevin Rudd is proposing were meant to provide appropriate incentives for firms to develop better technologies.’ I responded that in my view Rudd’s ETS stood for Enormous Transfer Scheme. I suggested that the Australian government was attempting to confuse welfare issues with environmental issues in order to smuggle income redistributions into the scheme. I added that it was crazy for Australia to go it alone without concerted international action and that if we are concerned about incentives for developing new technologies we should be thinking in terms of explicit taxes rather than cap and trade systems.
Jim said: ‘Ah, that’s Warwick McKibbin’s view isn’t it.’ While I was still pondering whether I had under-estimated Jim’s knowledge of the topic, he pointed to a house we were just passing. ‘Look at that abomination’ he said. I assumed that he was referring to the solar panels that covered a substantial part of the roof. I said: ‘I don’t think they look too bad, actually’. ‘It’s not how they look’, he replied. ‘Every time I pass that house it reminds me that the government subsidies that encourage people to put those things on their roofs are an abomination. Solar panels are about the most costly method there is of generating electricity. If governments were really serious about climate change they would be spending taxpayer’s money more wisely so we get bigger bangs for our bucks.’
I observed that Jim’s comment must mean that he was obviously not a fan of Tony Abbott’s winner-picking proposals to reduce CO2 emissions. Jim said: ‘I wouldn’t mind so much if Abbott could actually pick a winner to subsidize. The technologies that he has picked so far are either proven losers or have no track record. If he really wanted to pick a technology that had some hope of competing with fossil fuels without huge subsidies he would advocate the nuclear power option.’
I couldn’t help asking: ‘Does that mean that you would support revival of the proposal to build a nuclear power station at Murray’s beach on Jervis Bay?’ When I glanced across to see how Jim was reacting to the idea of a nuclear power station in his own back yard, he growled: ‘Look where you are going!’
After what seemed like a long silence, Jim asked: ‘What do you think of no regrets policies?’ I replied: ‘What, like the federal government’s home insulation scheme?’ Jim replied: 'I think the government might actually be regretting introducing that scheme with so much haste last year. No, what I meant was a great big new tax on carbon emissions'.
I was dumbfounded. When I asked Jim to explain how this could be a no regrets policy he asked me whether I had supported the introduction of the GST as a broad-based tax to replace less efficient forms of taxation. When I nodded he then asked: ‘Do you think a tax on carbon emissions would be a more efficient way of raising revenue than existing taxes on insurance and stamp duties on property transfers?’ I had to admit that it would probably be more efficient than some other taxes. Jim then said: ‘So wouldn’t it make sense to introduce a great big new tax on carbon emissions to replace other taxes? If we do this we might even be able to have an impact on global emissions by persuading governments in some other countries that this is a good idea’.
While I was pondering how to respond Jim laughed and said: ‘I don’t expect you to see anything about this on your blog. Judging from what you have written there about climate change I expect that the polar ice caps would need to melt before you would support introduction of a tax on carbon emissions as a precautionary measure’.
Thursday, February 25, 2010
Sunday, February 21, 2010
Does persistence provide a basis for morality?
Before I write anything further I should clarify what I mean by persistence in this context. Survival is probably the most appropriate synonym. The question was prompted by Martin Walker’s book, ‘Life! Why we exist ... and what we must do to survive’ (2006). More information about the author can be found on his blog.
Martin Walker’s book is an extremely well-written attempt to promote a better understanding of the fundamental principles that explain why we exist and to use those principles as a basis for thinking about how we can live meaningful lives. The book begins with a story about a child watching two old men playing chess and wondering who is winning. Most of the book has been written from the standpoint of a person who is observing the game of life in order to infer the most basic rules and then to consider what implications those rules have for the way the game is played.
The main message of the first part of the book is that the evolutionary principles that explain material existence and the emergence of life are ‘the principles of coming into being and persistence’. In later parts of the book the author uses those evolutionary principles to make moral judgements.
I expect that some other readers would share my initial concern that the concept of persistence does not seem to be a particularly appealing basis for a system of ethics. The problem arises in part because persistence is associated with survival of the fittest and concepts like the selfish gene and even ‘might makes right’. However, the author manages to argue that we should have regard to the effects of our actions on the community and species, and on other living things. He suggests: ‘To answer any moral question pertaining to living organisms we must ultimately determine whether the act of choice will tend to make a positive contribution to the persistence of life as a form’ (p. 81).
How does Martin make the transition from the persistence principle, as an explanation of what ‘is’, to the persistence principle, as an ethical principle providing guidance on how we ‘ought’ to behave? It may be worth noting in passing that he rules out the idea that there is merit in acting in accordance with an ultimate purpose that lies behind persistence. He claims that material existence has no purpose (p 31-2). Martin’s transition from ‘is’ to ‘ought’ is based on parallels between moral choices made by humans and the survival instincts of non-conscious organisms that lead them to act in ways that will benefit their own persistence or the persistence of their relatives or communities. He writes: ‘As conscious organisms, we use concepts of good and bad to guide our actions, a process that simply extends the non-conscious process’ (p. 65). The final step in the transition from ‘is’ to ‘ought’ is made with an explicit value judgement:
‘That which contributes to our persistence, or the persistence of our species, or the persistence of life as a form is definitely better than that which does not. Contribution to persistence is good, detriment to persistence is bad’ (p. 65-6).
In my view it would be difficult for anyone to mount a convincing argument against such sentiments - except perhaps on the grounds that they do not go far enough. Persistence is good, but flourishing is better!
This brings me to my only critical point. While reading this book I found myself wondering at various times how the author’s views relate to those of Aristotle, Ayn Rand, Robert Nozick in ‘Invariances’ and Matt Ridley in ‘The Origins of Virtue’. The part of ‘Invariances’ dealing with ethics seems highly relevant (I have written a very brief summary here). I think many of Matt Ridley’s observations in ‘The Origins of Virtue’ are also highly relevant. I would particularly like to see further discussion of Ridley’s view that environmental ethics do not come naturally to humans: ‘Yet the conclusion that seems warranted that there is no instinctive environmental ethic in our species – no innate tendency to develop and teach restrained practice. Environmental ethics are therefore to be taught in spite of human nature, not in concert with it. They do not come naturally’ (p 226). I wonder whether that claim is supported by people who have conducted research on environmental norms, e.g. Elinor Ostrom.
If Martin Walker had spent more time in his book considering the views of other people I would have found that illuminating. It would, however, have made the book longer and more difficult to read. I think the main virtue of this book is in providing a clear and simple exposition of a point of view that deserves serious consideration.
Martin Walker’s book is an extremely well-written attempt to promote a better understanding of the fundamental principles that explain why we exist and to use those principles as a basis for thinking about how we can live meaningful lives. The book begins with a story about a child watching two old men playing chess and wondering who is winning. Most of the book has been written from the standpoint of a person who is observing the game of life in order to infer the most basic rules and then to consider what implications those rules have for the way the game is played.
The main message of the first part of the book is that the evolutionary principles that explain material existence and the emergence of life are ‘the principles of coming into being and persistence’. In later parts of the book the author uses those evolutionary principles to make moral judgements.
I expect that some other readers would share my initial concern that the concept of persistence does not seem to be a particularly appealing basis for a system of ethics. The problem arises in part because persistence is associated with survival of the fittest and concepts like the selfish gene and even ‘might makes right’. However, the author manages to argue that we should have regard to the effects of our actions on the community and species, and on other living things. He suggests: ‘To answer any moral question pertaining to living organisms we must ultimately determine whether the act of choice will tend to make a positive contribution to the persistence of life as a form’ (p. 81).
How does Martin make the transition from the persistence principle, as an explanation of what ‘is’, to the persistence principle, as an ethical principle providing guidance on how we ‘ought’ to behave? It may be worth noting in passing that he rules out the idea that there is merit in acting in accordance with an ultimate purpose that lies behind persistence. He claims that material existence has no purpose (p 31-2). Martin’s transition from ‘is’ to ‘ought’ is based on parallels between moral choices made by humans and the survival instincts of non-conscious organisms that lead them to act in ways that will benefit their own persistence or the persistence of their relatives or communities. He writes: ‘As conscious organisms, we use concepts of good and bad to guide our actions, a process that simply extends the non-conscious process’ (p. 65). The final step in the transition from ‘is’ to ‘ought’ is made with an explicit value judgement:
‘That which contributes to our persistence, or the persistence of our species, or the persistence of life as a form is definitely better than that which does not. Contribution to persistence is good, detriment to persistence is bad’ (p. 65-6).
In my view it would be difficult for anyone to mount a convincing argument against such sentiments - except perhaps on the grounds that they do not go far enough. Persistence is good, but flourishing is better!
This brings me to my only critical point. While reading this book I found myself wondering at various times how the author’s views relate to those of Aristotle, Ayn Rand, Robert Nozick in ‘Invariances’ and Matt Ridley in ‘The Origins of Virtue’. The part of ‘Invariances’ dealing with ethics seems highly relevant (I have written a very brief summary here). I think many of Matt Ridley’s observations in ‘The Origins of Virtue’ are also highly relevant. I would particularly like to see further discussion of Ridley’s view that environmental ethics do not come naturally to humans: ‘Yet the conclusion that seems warranted that there is no instinctive environmental ethic in our species – no innate tendency to develop and teach restrained practice. Environmental ethics are therefore to be taught in spite of human nature, not in concert with it. They do not come naturally’ (p 226). I wonder whether that claim is supported by people who have conducted research on environmental norms, e.g. Elinor Ostrom.
If Martin Walker had spent more time in his book considering the views of other people I would have found that illuminating. It would, however, have made the book longer and more difficult to read. I think the main virtue of this book is in providing a clear and simple exposition of a point of view that deserves serious consideration.
Wednesday, February 10, 2010
How far can Ayn Rand's ethical egoism be defended?
In a post a few months ago I discussed whether Ayn Rand actually viewed selfishness as a virtue. I suggested that in arguing that selfishness is a virtue she was adopting a peculiar view of selfishness because the heroes of her novels did not seem to me to be particularly selfish.
The point was explained more clearly by Neera Badhwar in the recent discussion of Ayn Rand’s ethical thought on Cato Unbound (What’s living and dead in Ayn Rand’s moral and political thought):
‘Like Aristotle, Rand holds that the virtues, including justice, are not only means to the agent’s happiness, but also an essential, constitutive part of it. Julia Annas calls Aristotle’s ethical egoism a “formal” egoism because it essentially incorporates regard for others. Rand’s eudaimonistic egoism, likewise, is a formal egoism’.
Some other participants in the Cato discussion were not so sure that Rand viewed the virtues as an essential, constitutive part of the agent’s happiness.
Roderick Long noted that Rand appears to waver between treating virtue as a constitutive part of the agent’s own interest and as an instrumental strategy for attaining that interest: ‘The constitutive approach predominates in her novels: the chief reason that Rand’s fictional protagonists ... do not cheat their customers, for example, is pretty clearly that they would regard such parasitism on the productive efforts of others as directly inconsistent with the nobility and independence of spirit that they cherish for themselves, and not because they’re hoping that a policy of honesty will maximize their chances of longevity’. He suggests, however, that in her philosophical writings that ‘her emphasis began to shift, though never unequivocally, to the instrumental reading’.
Other participants suggested that Michael Huemer had an instrumental reading of Rand's views in mind in his initial contribution to the discussion. Huemer suggested that: ‘ethical egoism posits that the only thing that ought to matter intrinsically to me is my own welfare—for me, my own welfare or happiness is the only end in itself. It follows from this that I ought not to regard other individuals as ends in themselves; rather, I should see them only as means to my happiness—just as I see everything else in the world. This is a very simple and straightforward implication of the theory. I cannot hold my own well-being as the only end in itself, and simultaneously say that I recognize other persons as ends in themselves too’.
In defending the constitutive interpretation, Neera Badhwar made the point that ‘Rand shows her philosophy in the worlds she creates in her novels better than in her non-fictional statements’. I think this is a good point. Rand’s ongoing influence stems mainly from her novels rather than her philosophical writings.
Much of the Cato discussion centred on the question of whether what is good and right for one individual can ever conflict with what is objectively good and right for another individual. Douglas Rasmussen expressed his view that ‘if human flourishing is individualized and agent-relative ... then this would mean that human flourishing is different for each person, and thus it is possible for there to be conflict—that is, there is no way that one can in principle rule this out’.
Roderick Long was closest to endorsing Rand’s view that there can be no conflicts between two people’s rational interests: ‘One’s individual nature can make the requirements of human nature more specific, but it cannot contradict them. ...So the fact that the human good is individualized differently for different people doesn’t entail that one person’s good can conflict fundamentally with another’s.’
Neera Badhwar responded by suggesting that such fundamental conflicts, including situations where there are two equally good candidates for one job, occur frequently.
I think it is appropriate to give Douglas Rasmussen the final word in this highly selective summary of a complex discussion:
‘I do think that it is possible for people to cooperate peaceably. This is why basic negative rights are so important, but the issue here between me and Rand seems to be whether the existence of such rights depends on the assumption that what is objectively good for one individual cannot ever conflict with what is objectively good for another. I don’t assume this. She did.’
Postscript:
When I think further about the example of two equally qualified job applicants competing for one position it seems to me that this is a fairly trivial example of conflict of interest because the convention that the employer should choose between the applicants is not in question.
However, not all conflicts between what is good or right for different individuals can be easily resolved by reference to widely accepted conventions about the rights of various parties. For example, individuals can make rational decisions about the kind of music that is good for their families to listen to and yet come into conflict with their neighbours if they play that music loudly enough to interfere with their neighbours’ enjoyment of peace and quiet. Some might try to argue that such conflicts cannot occur among rational people because rational people would not play their music loudly enough to upset their neighbours. I think that stretches the definition of rationality too far because it implies advance knowledge of how neighbours will react. In my view people who find themselves involved in such conflicts are likely to be able to negotiate better solutions if they openly acknowledge their different interests and, most importantly, view mutual respect and peaceful co-existence as of over-riding importance.
The point was explained more clearly by Neera Badhwar in the recent discussion of Ayn Rand’s ethical thought on Cato Unbound (What’s living and dead in Ayn Rand’s moral and political thought):
‘Like Aristotle, Rand holds that the virtues, including justice, are not only means to the agent’s happiness, but also an essential, constitutive part of it. Julia Annas calls Aristotle’s ethical egoism a “formal” egoism because it essentially incorporates regard for others. Rand’s eudaimonistic egoism, likewise, is a formal egoism’.
Some other participants in the Cato discussion were not so sure that Rand viewed the virtues as an essential, constitutive part of the agent’s happiness.
Roderick Long noted that Rand appears to waver between treating virtue as a constitutive part of the agent’s own interest and as an instrumental strategy for attaining that interest: ‘The constitutive approach predominates in her novels: the chief reason that Rand’s fictional protagonists ... do not cheat their customers, for example, is pretty clearly that they would regard such parasitism on the productive efforts of others as directly inconsistent with the nobility and independence of spirit that they cherish for themselves, and not because they’re hoping that a policy of honesty will maximize their chances of longevity’. He suggests, however, that in her philosophical writings that ‘her emphasis began to shift, though never unequivocally, to the instrumental reading’.
Other participants suggested that Michael Huemer had an instrumental reading of Rand's views in mind in his initial contribution to the discussion. Huemer suggested that: ‘ethical egoism posits that the only thing that ought to matter intrinsically to me is my own welfare—for me, my own welfare or happiness is the only end in itself. It follows from this that I ought not to regard other individuals as ends in themselves; rather, I should see them only as means to my happiness—just as I see everything else in the world. This is a very simple and straightforward implication of the theory. I cannot hold my own well-being as the only end in itself, and simultaneously say that I recognize other persons as ends in themselves too’.
In defending the constitutive interpretation, Neera Badhwar made the point that ‘Rand shows her philosophy in the worlds she creates in her novels better than in her non-fictional statements’. I think this is a good point. Rand’s ongoing influence stems mainly from her novels rather than her philosophical writings.
Much of the Cato discussion centred on the question of whether what is good and right for one individual can ever conflict with what is objectively good and right for another individual. Douglas Rasmussen expressed his view that ‘if human flourishing is individualized and agent-relative ... then this would mean that human flourishing is different for each person, and thus it is possible for there to be conflict—that is, there is no way that one can in principle rule this out’.
Roderick Long was closest to endorsing Rand’s view that there can be no conflicts between two people’s rational interests: ‘One’s individual nature can make the requirements of human nature more specific, but it cannot contradict them. ...So the fact that the human good is individualized differently for different people doesn’t entail that one person’s good can conflict fundamentally with another’s.’
Neera Badhwar responded by suggesting that such fundamental conflicts, including situations where there are two equally good candidates for one job, occur frequently.
I think it is appropriate to give Douglas Rasmussen the final word in this highly selective summary of a complex discussion:
‘I do think that it is possible for people to cooperate peaceably. This is why basic negative rights are so important, but the issue here between me and Rand seems to be whether the existence of such rights depends on the assumption that what is objectively good for one individual cannot ever conflict with what is objectively good for another. I don’t assume this. She did.’
Postscript:
When I think further about the example of two equally qualified job applicants competing for one position it seems to me that this is a fairly trivial example of conflict of interest because the convention that the employer should choose between the applicants is not in question.
However, not all conflicts between what is good or right for different individuals can be easily resolved by reference to widely accepted conventions about the rights of various parties. For example, individuals can make rational decisions about the kind of music that is good for their families to listen to and yet come into conflict with their neighbours if they play that music loudly enough to interfere with their neighbours’ enjoyment of peace and quiet. Some might try to argue that such conflicts cannot occur among rational people because rational people would not play their music loudly enough to upset their neighbours. I think that stretches the definition of rationality too far because it implies advance knowledge of how neighbours will react. In my view people who find themselves involved in such conflicts are likely to be able to negotiate better solutions if they openly acknowledge their different interests and, most importantly, view mutual respect and peaceful co-existence as of over-riding importance.
Sunday, February 7, 2010
Who can tell the history of the future?
Jacques Attali thinks he can. Attali, author of ‘A Brief History of the Future’, is an eminent French economist who was an advisor to President Mitterrand during the 1980s and has since become a big wheel in microfinance. On the cover of the book, Alvin Toffler is quoted as describing Attali as ‘one of the most brilliant, original minds in Europe’. That is one of the reasons why I bought the book.
As the title suggests, Attali has written the book as though he is writing the history of what is going to happen over the next century or so. And the book is written as though ‘history’ drives what happens in the future. For example, near the end the author suggests: ‘History will thus drive the integration of collective intelligences into a universal intelligence; it will also be endowed with a collective memory that will preserve and accumulate its knowledge. ... Universal intelligence will even be able to conceive of machines in its own service, defending the common good on its behalf. ... Universal intelligence may next bring about an intelligence peculiar to the species, a hyperintelligence that will act in its own interests ...’ (2009 edition, p. 273).
I strongly support attempts to consider the possible future implications of economic and other factors that are impacting our lives and the environment in which we live. At its best, this is what Attali’s book does. At its worst the book seems to me to read like a work of science fiction with inadequate plot development.
The first part of Attali’s book contains a history of capitalism as a story in which the economic core moved progressively from one city to another – beginning in Bruges around 1200 and moving in turn to Venice, Antwerp, Genoa, Amsterdam, London, Boston, New York and Los Angeles. I found this part of the book to be interesting and illuminating. I think the author makes the point fairly convincingly that new core cities often benefit as much from adversity affecting existing cores and potential rivals as from their own intrinsic advantages. Nevertheless, Attali has not convinced me that it makes sense to think of the current world economy as having a single city core in Los Angeles, despite all the technological advances that have occurred in California in recent decades.
The main phases of Attali’s history of the future are: the end of the American empire; the emergence of a stateless planetary empire (an oxymoron ?) characterized by global markets, individualist values and narcissistic ideals; then a series of wars and possibly hyperconflict; and finally, the emergence of planetary hyperdemocracy.
Why can America’s influence be expected to wane? Attali writes, unconvincingly in my view, of ‘irretrievable scarcities’ and ‘stagnating technology’, but he also suggests that like other major economic powers in the past America will ultimately be brought down by a financial crisis. According to Attali’s timetable, this is likely to occur around 2025 or 2030. That seems to be well within the realms of possibility if fiscal deficits and associated foreign borrowing are not brought under control. Unlike many other countries, however, the U.S. has a reasonable track record over more than a century of returning to responsible fiscal management when a major fiscal crisis threatens. While America seems likely to become more like Europe during the next few years, I think the odds are that fiscal responsibility will be restored in the U.S. before it reaches the stage where Greece, for example, now finds itself.
What happens after the end of the American empire? It begins promisingly enough with fulfillment of what might be called an anarcho-capitalist’s dream - big governments collapse, like piles of wet manure, as provision of services such as health care, education and security are handed over to the private firms.
Attali suggest that insurance companies would play a major role in this globally privatised society. They would gradually come to dictate planetary norms by penalizing smokers, drinkers, the obese etc. who represent high insurance risks. They would require clients to refrain from behavior that might increase insurance risks and introduce surveillance systems to ensure that contract conditions were met. That sounds like a healthy dose of reality to me. Why should people whose behavior makes them high insurance risks be subsidized by others? Those wanting to avoid surveillance would presumably have the options of paying higher premiums or carrying their own risks.
However, Attali’s vision of the globally privatised society is alarming. He suggests that while Africa vainly struggles to construct itself , the rest of the world will begin to deconstruct itself under the ‘hammer blows of globalization’. He writes: ‘Tomorrow’s Africa will therefore not resemble today’s West. Rather, it is tomorrow’s West that will resemble today’s Africa’ (p. 184). I don’t think readers are ever told why this will happen. Attali suggests that weakened states will no longer be able to afford to provide income support to the poor, but supporting the poor will not be a burden if globalization provides widespread economic opportunities. At one point (p. 255) he suggests that ‘market democracies have travelled a large part of the road predicted by the author of Das Kapital’. Perhaps he is implying that we should look for an explanation of his fantasy about the effects of globalization in the predictions of Karl Marx about the consequences of technological change and capital accumulation.
The next part of the story is about wars. To cut a boring story short, Attali tells us that there will be disaffection everywhere and it might all end in hyperconflict. After that, however, everyone will live happily ever after in a world characterized by microfinance and voluntary organizations run by nice people a lot like Mother Teresa and Melinda Gates. Attali’s version of utopia (thankfully he refrains from calling it hyperutopia) sounds OK to me. I do have concerns, though, that the hyperintelligence, ‘that will act in its own interests’, might actually be the ultimate Leviathan of big government. As in ‘Star Wars’, the empire strikes back!
Perhaps the most appropriate way for me to end this review is with a message for readers living in the next Century: May the Force be with you - and protect you from the hyperintelligence.
As the title suggests, Attali has written the book as though he is writing the history of what is going to happen over the next century or so. And the book is written as though ‘history’ drives what happens in the future. For example, near the end the author suggests: ‘History will thus drive the integration of collective intelligences into a universal intelligence; it will also be endowed with a collective memory that will preserve and accumulate its knowledge. ... Universal intelligence will even be able to conceive of machines in its own service, defending the common good on its behalf. ... Universal intelligence may next bring about an intelligence peculiar to the species, a hyperintelligence that will act in its own interests ...’ (2009 edition, p. 273).
I strongly support attempts to consider the possible future implications of economic and other factors that are impacting our lives and the environment in which we live. At its best, this is what Attali’s book does. At its worst the book seems to me to read like a work of science fiction with inadequate plot development.
The first part of Attali’s book contains a history of capitalism as a story in which the economic core moved progressively from one city to another – beginning in Bruges around 1200 and moving in turn to Venice, Antwerp, Genoa, Amsterdam, London, Boston, New York and Los Angeles. I found this part of the book to be interesting and illuminating. I think the author makes the point fairly convincingly that new core cities often benefit as much from adversity affecting existing cores and potential rivals as from their own intrinsic advantages. Nevertheless, Attali has not convinced me that it makes sense to think of the current world economy as having a single city core in Los Angeles, despite all the technological advances that have occurred in California in recent decades.
The main phases of Attali’s history of the future are: the end of the American empire; the emergence of a stateless planetary empire (an oxymoron ?) characterized by global markets, individualist values and narcissistic ideals; then a series of wars and possibly hyperconflict; and finally, the emergence of planetary hyperdemocracy.
Why can America’s influence be expected to wane? Attali writes, unconvincingly in my view, of ‘irretrievable scarcities’ and ‘stagnating technology’, but he also suggests that like other major economic powers in the past America will ultimately be brought down by a financial crisis. According to Attali’s timetable, this is likely to occur around 2025 or 2030. That seems to be well within the realms of possibility if fiscal deficits and associated foreign borrowing are not brought under control. Unlike many other countries, however, the U.S. has a reasonable track record over more than a century of returning to responsible fiscal management when a major fiscal crisis threatens. While America seems likely to become more like Europe during the next few years, I think the odds are that fiscal responsibility will be restored in the U.S. before it reaches the stage where Greece, for example, now finds itself.
What happens after the end of the American empire? It begins promisingly enough with fulfillment of what might be called an anarcho-capitalist’s dream - big governments collapse, like piles of wet manure, as provision of services such as health care, education and security are handed over to the private firms.
Attali suggest that insurance companies would play a major role in this globally privatised society. They would gradually come to dictate planetary norms by penalizing smokers, drinkers, the obese etc. who represent high insurance risks. They would require clients to refrain from behavior that might increase insurance risks and introduce surveillance systems to ensure that contract conditions were met. That sounds like a healthy dose of reality to me. Why should people whose behavior makes them high insurance risks be subsidized by others? Those wanting to avoid surveillance would presumably have the options of paying higher premiums or carrying their own risks.
However, Attali’s vision of the globally privatised society is alarming. He suggests that while Africa vainly struggles to construct itself , the rest of the world will begin to deconstruct itself under the ‘hammer blows of globalization’. He writes: ‘Tomorrow’s Africa will therefore not resemble today’s West. Rather, it is tomorrow’s West that will resemble today’s Africa’ (p. 184). I don’t think readers are ever told why this will happen. Attali suggests that weakened states will no longer be able to afford to provide income support to the poor, but supporting the poor will not be a burden if globalization provides widespread economic opportunities. At one point (p. 255) he suggests that ‘market democracies have travelled a large part of the road predicted by the author of Das Kapital’. Perhaps he is implying that we should look for an explanation of his fantasy about the effects of globalization in the predictions of Karl Marx about the consequences of technological change and capital accumulation.
The next part of the story is about wars. To cut a boring story short, Attali tells us that there will be disaffection everywhere and it might all end in hyperconflict. After that, however, everyone will live happily ever after in a world characterized by microfinance and voluntary organizations run by nice people a lot like Mother Teresa and Melinda Gates. Attali’s version of utopia (thankfully he refrains from calling it hyperutopia) sounds OK to me. I do have concerns, though, that the hyperintelligence, ‘that will act in its own interests’, might actually be the ultimate Leviathan of big government. As in ‘Star Wars’, the empire strikes back!
Perhaps the most appropriate way for me to end this review is with a message for readers living in the next Century: May the Force be with you - and protect you from the hyperintelligence.
Friday, February 5, 2010
Does the concept of national character make sense?
In my last post I noted that J S Mill argued that Jeremy Bentham did not qualify as a ‘true teacher of social arrangements’ because he was unable to point out how ‘national character’ ... ‘can be improved, and how it has been made what it is’.
It is clear that Mill saw national character as fundamental to human flourishing: ‘That which alone causes any material interests to exist, which alone enables any body of human beings to exist as a society, is national character: that it is, which causes one nation to succeed in what it attempts, another to fail; one nation to understand and aspire to elevated things, another to grovel in mean ones; which makes the greatness of one nation lasting, and dooms another to early and rapid decay’ (Bentham, 1838).
What is national character? A few years earlier, Mill had provided a sketchy outline of factors influencing national character in the context of considering the limitations of Bentham’s approach. He wrote: ‘A theory, therefore, which considers little in an action besides that action’s own consequences, will generally be sufficient to serve the purposes of a philosophy of legislation. Such a philosophy will be most apt to fail in the consideration of the greater social questions—the theory of organic institutions and general forms of polity; for those (unlike the details of legislation) to be duly estimated, must be viewed as the great instruments of forming the national character; of carrying forward the members of the community towards perfection, or preserving them from degeneracy’ (Remarks on Bentham’s philosophy, 1833).
What Mill had in mind in writing about national character seems to involve, among other things, what Douglass North has referred to as informal institutions or informal constraints. North’s institutional economics does not attempt to provide the explanation of national character that Mill criticized Bentham for not providing. By focusing explicitly on institutions, however, North has been able to make substantial advances towards a framework for analysis of social progress.
North writes: ‘In our daily interaction with others, whether within the family, in external social relations, or in business activities, the governing structure is overwhelmingly defined by codes of conduct, norms of behavior, and conventions’ (‘Institutions, Institutional Change and Economic Performance’, 1990: 36). He has explained the influence of such informal institutions on economic performance in the following terms: ‘Effective traditions of hard work, honesty and integrity simply lower the cost of transacting and make possible complex productive exchange. Such traditions are always reinforced by ideologies that undergird those attitudes’ (p 138).
Where do these ideologies come from? North suggests that our subjective perceptions ‘are continually being filtered through existing (culturally determined) mental constructs’. (p.183). At the level of the individual, ideological change can occur in a variety of ways. For example, it can occur as a consequence of changes in economic conditions that cause people to change their mental models of how the world works, changes in communications costs that influence how easily people can share their values and perceptions with others, and through institutional changes that influence the cost of expressing convictions that are at variance with conventional wisdom.
It seems to me that North provides a useful framework in which to consider the concerns that Mill expressed about mass media leading to the ‘growing insignificance of the individual in the mass’ which ‘corrupts the very foundation on the improvement of public opinion itself’ (See: Are J S Mill’s view about progress still relevant today?). Mill was concerned that the growth of the mass media would result in the weakening of ‘the influence of the more cultivated few over the many’. Paradoxically, those whom Mill would have viewed as ‘cultivated’ - people like himself - subsequently had a strong influence on public opinion on issues such as slavery and the emancipation of women. Nevertheless, I doubt whether Mill would consider that there has been much improvement in ‘national character’ since his time.
Mill’s approach seems quaint today because he was asserting that the views of a particular class of educated people should be considered to be cultivated and set above those of others. In my view he was right to recognize that some opinions deserve more respect than others but it is up to individual members of the public to decide for themselves whose views deserve respect.
Even if the public could be confident that opinions of experts are founded on a basic respect for truth there would remain the huge problem in choosing between conflicting expert opinions on complex topical issues. How can differing expert views be evaluated in a context which informs public opinion and discourages intervention by those seeking to confuse issues for economic or political advantage? How can the informal rules of the game of public discussion of topical issues be improved to encourage the development of public attitudes on public policy issues that are consistent with widely-accepted ethical values? Can the informal rules be changed so that overt populism is exposed in the media as disrespect for the intelligence of the public rather than viewed as clever politics? What changes in the rules of the game would encourage Australia's political leaders to make thoughtful contributions rather than presenting inane gibberish under headings designed to convey the impression that they are preparing for challenges of the future?
It is clear that Mill saw national character as fundamental to human flourishing: ‘That which alone causes any material interests to exist, which alone enables any body of human beings to exist as a society, is national character: that it is, which causes one nation to succeed in what it attempts, another to fail; one nation to understand and aspire to elevated things, another to grovel in mean ones; which makes the greatness of one nation lasting, and dooms another to early and rapid decay’ (Bentham, 1838).
What is national character? A few years earlier, Mill had provided a sketchy outline of factors influencing national character in the context of considering the limitations of Bentham’s approach. He wrote: ‘A theory, therefore, which considers little in an action besides that action’s own consequences, will generally be sufficient to serve the purposes of a philosophy of legislation. Such a philosophy will be most apt to fail in the consideration of the greater social questions—the theory of organic institutions and general forms of polity; for those (unlike the details of legislation) to be duly estimated, must be viewed as the great instruments of forming the national character; of carrying forward the members of the community towards perfection, or preserving them from degeneracy’ (Remarks on Bentham’s philosophy, 1833).
What Mill had in mind in writing about national character seems to involve, among other things, what Douglass North has referred to as informal institutions or informal constraints. North’s institutional economics does not attempt to provide the explanation of national character that Mill criticized Bentham for not providing. By focusing explicitly on institutions, however, North has been able to make substantial advances towards a framework for analysis of social progress.
North writes: ‘In our daily interaction with others, whether within the family, in external social relations, or in business activities, the governing structure is overwhelmingly defined by codes of conduct, norms of behavior, and conventions’ (‘Institutions, Institutional Change and Economic Performance’, 1990: 36). He has explained the influence of such informal institutions on economic performance in the following terms: ‘Effective traditions of hard work, honesty and integrity simply lower the cost of transacting and make possible complex productive exchange. Such traditions are always reinforced by ideologies that undergird those attitudes’ (p 138).
Where do these ideologies come from? North suggests that our subjective perceptions ‘are continually being filtered through existing (culturally determined) mental constructs’. (p.183). At the level of the individual, ideological change can occur in a variety of ways. For example, it can occur as a consequence of changes in economic conditions that cause people to change their mental models of how the world works, changes in communications costs that influence how easily people can share their values and perceptions with others, and through institutional changes that influence the cost of expressing convictions that are at variance with conventional wisdom.
It seems to me that North provides a useful framework in which to consider the concerns that Mill expressed about mass media leading to the ‘growing insignificance of the individual in the mass’ which ‘corrupts the very foundation on the improvement of public opinion itself’ (See: Are J S Mill’s view about progress still relevant today?). Mill was concerned that the growth of the mass media would result in the weakening of ‘the influence of the more cultivated few over the many’. Paradoxically, those whom Mill would have viewed as ‘cultivated’ - people like himself - subsequently had a strong influence on public opinion on issues such as slavery and the emancipation of women. Nevertheless, I doubt whether Mill would consider that there has been much improvement in ‘national character’ since his time.
Mill’s approach seems quaint today because he was asserting that the views of a particular class of educated people should be considered to be cultivated and set above those of others. In my view he was right to recognize that some opinions deserve more respect than others but it is up to individual members of the public to decide for themselves whose views deserve respect.
Even if the public could be confident that opinions of experts are founded on a basic respect for truth there would remain the huge problem in choosing between conflicting expert opinions on complex topical issues. How can differing expert views be evaluated in a context which informs public opinion and discourages intervention by those seeking to confuse issues for economic or political advantage? How can the informal rules of the game of public discussion of topical issues be improved to encourage the development of public attitudes on public policy issues that are consistent with widely-accepted ethical values? Can the informal rules be changed so that overt populism is exposed in the media as disrespect for the intelligence of the public rather than viewed as clever politics? What changes in the rules of the game would encourage Australia's political leaders to make thoughtful contributions rather than presenting inane gibberish under headings designed to convey the impression that they are preparing for challenges of the future?
Saturday, January 30, 2010
How much was J S Mill's view of progress influenced by personal experience?
In my last post I suggested that while J S Mill assisted in the triumph of the idea of progress, he was concerned that public opinion was becoming more powerful without becoming much more wise. One of the remedies he suggested in the article ‘Civilisation’, published when he was about 30 years of age (1836) was for universities to become dedicated to inspiring an intense love of truth.
The mental crisis that Mill suffered when 20 years old seems to have played an important role in the subsequent development of his views, including his views about progress. Mill recounts in his autobiography that the crisis involved, among other things, the sudden realization that he would not feel happy if all the ‘changes in institutions and opinions’ that he had been looking forward to were to be effected instantly.
The explanations that have been put forward for this crisis include depression and boredom. I think Richard Reeves is probably on the right track, however, in suggesting that Mill ‘suddenly saw the hollowness of the philosophical religion to which he had subscribed’ (‘John Stuart Mill, Victorian Firebrand: 63). This philosophical religion was Benthamite utilitarianism. It seems likely that Mill would not have been filled with joy about the prospect of instantaneous implementation of the reforms he had been advocating because he perceived that they would have done little to improve ‘national character’. In his essay, ‘Bentham’ (1838) Mill argued that Bentham did not qualify as a ‘true teacher of social arrangements’ because he was unable to point out how ‘national character’ ... ‘can be improved, and how it has been made what it is’. Mill suggested that Bentham’s philosophy ‘can teach the means of regulating the merely business part of the social arrangements’, but Bentham ‘committed the mistake of supposing that the business part of human affairs was the whole of them’.
Elijah Millgram has drawn attention to another aspect of Mill’s mental crisis that seems to have influenced the subsequent development of his views (here). Mill ascribed his recovery to, among other things, thinking his way through what we now call the problem of determinism. Millgram makes a strong case that Mill was suffering from a sense of moral unfreedom.
In ‘A System of Logic’ (1843) Mill wrote: ‘Now, a necessitarian, believing that our actions follow from our characters, and that our characters follow from our organization, our education, and our circumstances, is apt to be, with more or less of consciousness on his part, a fatalist as to his own actions, and to believe that his nature is such, or that his education and circumstances have so moulded his character, that nothing can now prevent him from feeling and acting in a particular way, or at least that no effort of his own can hinder it. ... But this is a grand error. He has, to a certain extent, a power to alter his character. ... His character is formed by his circumstances (including among these his particular organization); but his own desire to mould it in a particular way, is one of those circumstances, and by no means one of the least influential. We cannot, indeed, directly will to be different from what we are. But neither did those who are supposed to have formed our characters, directly will that we should be what we are. Their will had no direct power except over their own actions. If they could place us under the influence of certain circumstances, we, in like manner, can place ourselves under the influence of other circumstances. We are exactly as capable of making our own character, if we will, as others are of making it for us’ (Book VI, Ch. II).
Mill’s recovery may have been helped by realization that his upbringing had not condemned him to be an apostle of Benthamite utilitarianism, irrespective of whether or not that was what he wanted to be.
In my last post I note that Mill castigated the English universities for acting as though the object of education was to inculcate the teacher’s own opinions in order to produce disciples rather than thinkers or inquirers. I wonder whether thoughts about his father’s inculcation of Benthamite utilitarianism in Mill’s own education would have passed through his mind when he wrote that.
One way or another Mill managed to form a strong view about the purpose of education. This passage from ‘Civilization’ is worth quoting more than once: ‘The very corner-stone of an education intended to form great minds, must be the recognition of the principle, that the object is to call forth the greatest possible quantity of intellectual power, and to inspire the intensest love of truth: and this without a particle of regard to the results to which the exercise of that power may lead, even though it should conduct the pupil to opinions diametrically opposite to those of his teachers’.
The mental crisis that Mill suffered when 20 years old seems to have played an important role in the subsequent development of his views, including his views about progress. Mill recounts in his autobiography that the crisis involved, among other things, the sudden realization that he would not feel happy if all the ‘changes in institutions and opinions’ that he had been looking forward to were to be effected instantly.
The explanations that have been put forward for this crisis include depression and boredom. I think Richard Reeves is probably on the right track, however, in suggesting that Mill ‘suddenly saw the hollowness of the philosophical religion to which he had subscribed’ (‘John Stuart Mill, Victorian Firebrand: 63). This philosophical religion was Benthamite utilitarianism. It seems likely that Mill would not have been filled with joy about the prospect of instantaneous implementation of the reforms he had been advocating because he perceived that they would have done little to improve ‘national character’. In his essay, ‘Bentham’ (1838) Mill argued that Bentham did not qualify as a ‘true teacher of social arrangements’ because he was unable to point out how ‘national character’ ... ‘can be improved, and how it has been made what it is’. Mill suggested that Bentham’s philosophy ‘can teach the means of regulating the merely business part of the social arrangements’, but Bentham ‘committed the mistake of supposing that the business part of human affairs was the whole of them’.
Elijah Millgram has drawn attention to another aspect of Mill’s mental crisis that seems to have influenced the subsequent development of his views (here). Mill ascribed his recovery to, among other things, thinking his way through what we now call the problem of determinism. Millgram makes a strong case that Mill was suffering from a sense of moral unfreedom.
In ‘A System of Logic’ (1843) Mill wrote: ‘Now, a necessitarian, believing that our actions follow from our characters, and that our characters follow from our organization, our education, and our circumstances, is apt to be, with more or less of consciousness on his part, a fatalist as to his own actions, and to believe that his nature is such, or that his education and circumstances have so moulded his character, that nothing can now prevent him from feeling and acting in a particular way, or at least that no effort of his own can hinder it. ... But this is a grand error. He has, to a certain extent, a power to alter his character. ... His character is formed by his circumstances (including among these his particular organization); but his own desire to mould it in a particular way, is one of those circumstances, and by no means one of the least influential. We cannot, indeed, directly will to be different from what we are. But neither did those who are supposed to have formed our characters, directly will that we should be what we are. Their will had no direct power except over their own actions. If they could place us under the influence of certain circumstances, we, in like manner, can place ourselves under the influence of other circumstances. We are exactly as capable of making our own character, if we will, as others are of making it for us’ (Book VI, Ch. II).
Mill’s recovery may have been helped by realization that his upbringing had not condemned him to be an apostle of Benthamite utilitarianism, irrespective of whether or not that was what he wanted to be.
In my last post I note that Mill castigated the English universities for acting as though the object of education was to inculcate the teacher’s own opinions in order to produce disciples rather than thinkers or inquirers. I wonder whether thoughts about his father’s inculcation of Benthamite utilitarianism in Mill’s own education would have passed through his mind when he wrote that.
One way or another Mill managed to form a strong view about the purpose of education. This passage from ‘Civilization’ is worth quoting more than once: ‘The very corner-stone of an education intended to form great minds, must be the recognition of the principle, that the object is to call forth the greatest possible quantity of intellectual power, and to inspire the intensest love of truth: and this without a particle of regard to the results to which the exercise of that power may lead, even though it should conduct the pupil to opinions diametrically opposite to those of his teachers’.
Friday, January 29, 2010
Are J S Mill's views about progress still relevant today?
John Stuart Mill assisted in the triumph of the idea of progress in the 19th Century but he also had concerns about the future that still seem relevant today. Richard Reeves comments: ‘Mill was not a knee-jerk critic of what Ruskin dismissed as the “steam whistle society”, but nor was he a blind advocate of industrialization for its own sake. As an avid botanist and walker, he was acutely sensitive to what would today be called environmental concerns’ (‘John Stuart Mill, Victorian Firebrand’: 233).
I will focus here on the views on progress and, in particular, concerns about public opinion that Mill put forward in ‘Civilisation’, published in 1836, when he was about 30 years old.
Mill identified three characteristics of civilisation:
• the development of commerce, manufactures and agriculture;
• people acting together for common purposes in large organisations; and
• peace being maintained within society through arrangements for protecting the person and property of members.
He suggests: ‘Wherever there has arisen sufficient knowledge of the arts of life, and sufficient security of property and person, to render the progressive increase of wealth and population possible, the community becomes and continues progressive in all the elements which we have just enumerated’.
Mill goes on to argue that the most remarkable consequence of advancing civilization is ‘that power passes more and more from individuals, and small knots of individuals, to masses: that the importance of the masses becomes constantly greater, that of individuals less’. He gives several reasons: economic growth results in the growth of a middle class and the dispersion of knowledge; the development of habits of cooperation and discipline in large organizations enable development of associations of different kinds, including benefit societies and trades unions; and improved communications through newspapers that enable people to learn that others feel as they feel.
Mill argued that political reform would follow inevitably: ‘The triumph of democracy, or, in other words, of the government of public opinion, does not depend upon the opinion of any individual or set of individuals that it ought to triumph, but upon the natural laws of the progress of wealth, upon the diffusion of reading, and the increase of the facilities of human intercourse’.
Mill’s concern about the growth in power of public opinion was that the individual would become lost in the crowd; although the individual depends more and more on opinion (reputation) he is apt to depend less and less upon the well-grounded opinions of those who know him. Mill suggested that with the growth in power of public opinion ‘arts for attracting public attention formed a necessary part of the qualifications even of the deserving’. His main concern was that ‘growing insignificance of the individual in the mass’ ... ‘corrupts the very foundation on the improvement of public opinion itself; it corrupts public teaching; it weakens the influence of the more cultivated few over the many’.
One for the remedies that Mill proposed was ‘national institutions of education, and forms of polity, calculated to invigorate the individual character. Mill then proceeded to castigate the English universities for acting as though the object of education was to inculcate the teacher’s own opinions in order to produce disciples rather than thinkers or inquirers. Mill wrote: ‘The very corner-stone of an education intended to form great minds, must be the recognition of the principle, that the object is to call forth the greatest possible quantity of intellectual power, and to inspire the intensest love of truth: and this without a particle of regard to the results to which the exercise of that power may lead, even though it should conduct the pupil to opinions diametrically opposite to those of his teachers’.
Massive changes have occurred in university education over the last 174 years, some of which correspond to Mill’s suggestions. Does this mean that Mill’s views on university education are now of only historical relevance? Do our universities now inspire the intensest love of truth? Are these standards of truth-seeking now reflected in the mass media and politics?
Unfortunately, there seem to be many people in universities these days who would regard Mill’s aim of inspiring the intensest love of truth as a philosophically suspect idea that is inconsistent with the modern purpose of universities in training technicians and inculcating them with politically correct views.
I will focus here on the views on progress and, in particular, concerns about public opinion that Mill put forward in ‘Civilisation’, published in 1836, when he was about 30 years old.
Mill identified three characteristics of civilisation:
• the development of commerce, manufactures and agriculture;
• people acting together for common purposes in large organisations; and
• peace being maintained within society through arrangements for protecting the person and property of members.
He suggests: ‘Wherever there has arisen sufficient knowledge of the arts of life, and sufficient security of property and person, to render the progressive increase of wealth and population possible, the community becomes and continues progressive in all the elements which we have just enumerated’.
Mill goes on to argue that the most remarkable consequence of advancing civilization is ‘that power passes more and more from individuals, and small knots of individuals, to masses: that the importance of the masses becomes constantly greater, that of individuals less’. He gives several reasons: economic growth results in the growth of a middle class and the dispersion of knowledge; the development of habits of cooperation and discipline in large organizations enable development of associations of different kinds, including benefit societies and trades unions; and improved communications through newspapers that enable people to learn that others feel as they feel.
Mill argued that political reform would follow inevitably: ‘The triumph of democracy, or, in other words, of the government of public opinion, does not depend upon the opinion of any individual or set of individuals that it ought to triumph, but upon the natural laws of the progress of wealth, upon the diffusion of reading, and the increase of the facilities of human intercourse’.
Mill’s concern about the growth in power of public opinion was that the individual would become lost in the crowd; although the individual depends more and more on opinion (reputation) he is apt to depend less and less upon the well-grounded opinions of those who know him. Mill suggested that with the growth in power of public opinion ‘arts for attracting public attention formed a necessary part of the qualifications even of the deserving’. His main concern was that ‘growing insignificance of the individual in the mass’ ... ‘corrupts the very foundation on the improvement of public opinion itself; it corrupts public teaching; it weakens the influence of the more cultivated few over the many’.
One for the remedies that Mill proposed was ‘national institutions of education, and forms of polity, calculated to invigorate the individual character. Mill then proceeded to castigate the English universities for acting as though the object of education was to inculcate the teacher’s own opinions in order to produce disciples rather than thinkers or inquirers. Mill wrote: ‘The very corner-stone of an education intended to form great minds, must be the recognition of the principle, that the object is to call forth the greatest possible quantity of intellectual power, and to inspire the intensest love of truth: and this without a particle of regard to the results to which the exercise of that power may lead, even though it should conduct the pupil to opinions diametrically opposite to those of his teachers’.
Massive changes have occurred in university education over the last 174 years, some of which correspond to Mill’s suggestions. Does this mean that Mill’s views on university education are now of only historical relevance? Do our universities now inspire the intensest love of truth? Are these standards of truth-seeking now reflected in the mass media and politics?
Unfortunately, there seem to be many people in universities these days who would regard Mill’s aim of inspiring the intensest love of truth as a philosophically suspect idea that is inconsistent with the modern purpose of universities in training technicians and inculcating them with politically correct views.
Tuesday, January 19, 2010
Does brain plasticity have implications for the idea of progress?
I have not long finished reading Norman Doidge’s book, ‘The Brain that Changes Itself’ (2007). Doidge is a research psychiatrist and has written a highly readable and informative book based on interviews of scientific pioneers and people who have benefited personally from the new science of neuroplasticity.
The main message that I get from the book is that the computer analogy of brain function – the contribution of nature corresponds to hardware and the contribution of nurture corresponds to software – is somewhat misleading. The machine metaphor of the brain as an organ with specialised parts cannot fully account for the capacity of the brain to perfect its circuits to make itself better suited to the task at hand. More information about the book is available here.
Norman Doidge has relegated his discussion of plasticity and the idea of progress to an appendix. This may be because he does not want his comments on this controversial subject to detract from the main themes of his book. Nevertheless, Doidge’s conclusions about the implications of neuroplasticity for progress are cautious. He writes: ‘while it is true that the history of Western political thought turns in large part upon the attitudes that various ages and thinkers have held toward the question of human plasticity broadly understood, the elucidation of human neuroplasticity in our time, if carefully thought through, shows that plasticity is far too subtle a phenomenon to unambiguously support a more constrained or unconstrained view of human nature, because in fact it contributes to both human rigidity and flexibility, depending upon how it is cultivated’ (p 318).
Doidge suggests that while neuroplasticity teaches that the brain is more malleable than some have thought, ‘calling it perfectible raises expectations to a dangerous level’. The history of Western political thought referred to by Doidge includes the contribution of Condorcet, the French philosopher and mathematician, who was a major participant in the French revolution. Condorcet argued that human history was the story of progress and that human nature was continually improvable in intellectual and moral terms. The idea that the imperfections of human nature are a consequence of social arrangements leads to the belief that revolutionary changes in social arrangements will lead to a transformation in human nature. When this doesn’t happen revolutionaries tend to resort to additional coercion to change human behaviour to fit in with the new social arrangements that they have created.
Steven Pinker has questioned whether the idea of a malleable human nature deserves ‘its reputation for optimism and uplift’. He suggests that if it did, B F Skinner would have been lauded as a great humanitarian when he argued that society should apply conditioning to humans in the pursuit of utopian ideals. Skinner’s critics pointed out that no-one doubts that behaviour can be controlled; putting a gun to someone’s head or threatening him with torture are time-honoured techniques. Pinker comments: “The issue is not whether we can change human behavior, but at what cost” (‘The Blank Slate’: 169).
It seems to me that the idea of a malleable human nature may have become associated with socialistic utopianism merely because of an accident of history. The views of John Locke, who originated the concept of the human mind as a ‘blank slate’ written on by experience, certainly cannot be described in those terms. Locke viewed liberty as freedom from the violation of natural rights (including rights to possessions as well as to life and health) and indispensable to the proper pursuit of happiness.
Norman Doidge suggests that Rousseau, one of the originators of the view that humans are perfectible, used the term perfectibility in an ironic sense. According to Doidge, Rousseau understood that if the human mental and emotional life are malleable there can be many different kinds of development and we cannot be certain what a normal or perfect mental development would look like. To my mind this view highlights the arrogance of Rousseau’s revolutionary followers in attempting to impose their peculiar views of utopia on other people.
What kind of society is most likely to promote the development of human brains in ways that will relax the constraints of human nature that limit our virtue and our wisdom? Is it a welfare state that aims to minimize the economic challenges that we have to face? Is it a rent-seeking society in which the extent to which individuals and groups prosper depend on their skills in playing a political game of obtaining preferment at the expense of others? Or is it a free society in which people prosper by engaging in mutually beneficial exchanges?
At one point in his book, Norman Doidge writes: ‘To keep the mind alive requires learning something truly new with intense focus’ (p 88). When I read that I was reminded of what Israel Kirzner has written about the benefits of freedom to society. Kirzner points out that losses from denial of freedom extend beyond those associated with preventing people from attaining known goals. He writes: ‘A free society is fertile and creative in the sense that its freedom generates alertness to possibilities that may be of use to society’ (“Perception, Opportunity and Profit”, 1979: 239). Perhaps we should be open to the possibility that the exercise of entrepreneurial alertness improves human nature.
The main message that I get from the book is that the computer analogy of brain function – the contribution of nature corresponds to hardware and the contribution of nurture corresponds to software – is somewhat misleading. The machine metaphor of the brain as an organ with specialised parts cannot fully account for the capacity of the brain to perfect its circuits to make itself better suited to the task at hand. More information about the book is available here.
Norman Doidge has relegated his discussion of plasticity and the idea of progress to an appendix. This may be because he does not want his comments on this controversial subject to detract from the main themes of his book. Nevertheless, Doidge’s conclusions about the implications of neuroplasticity for progress are cautious. He writes: ‘while it is true that the history of Western political thought turns in large part upon the attitudes that various ages and thinkers have held toward the question of human plasticity broadly understood, the elucidation of human neuroplasticity in our time, if carefully thought through, shows that plasticity is far too subtle a phenomenon to unambiguously support a more constrained or unconstrained view of human nature, because in fact it contributes to both human rigidity and flexibility, depending upon how it is cultivated’ (p 318).
Doidge suggests that while neuroplasticity teaches that the brain is more malleable than some have thought, ‘calling it perfectible raises expectations to a dangerous level’. The history of Western political thought referred to by Doidge includes the contribution of Condorcet, the French philosopher and mathematician, who was a major participant in the French revolution. Condorcet argued that human history was the story of progress and that human nature was continually improvable in intellectual and moral terms. The idea that the imperfections of human nature are a consequence of social arrangements leads to the belief that revolutionary changes in social arrangements will lead to a transformation in human nature. When this doesn’t happen revolutionaries tend to resort to additional coercion to change human behaviour to fit in with the new social arrangements that they have created.
Steven Pinker has questioned whether the idea of a malleable human nature deserves ‘its reputation for optimism and uplift’. He suggests that if it did, B F Skinner would have been lauded as a great humanitarian when he argued that society should apply conditioning to humans in the pursuit of utopian ideals. Skinner’s critics pointed out that no-one doubts that behaviour can be controlled; putting a gun to someone’s head or threatening him with torture are time-honoured techniques. Pinker comments: “The issue is not whether we can change human behavior, but at what cost” (‘The Blank Slate’: 169).
It seems to me that the idea of a malleable human nature may have become associated with socialistic utopianism merely because of an accident of history. The views of John Locke, who originated the concept of the human mind as a ‘blank slate’ written on by experience, certainly cannot be described in those terms. Locke viewed liberty as freedom from the violation of natural rights (including rights to possessions as well as to life and health) and indispensable to the proper pursuit of happiness.
Norman Doidge suggests that Rousseau, one of the originators of the view that humans are perfectible, used the term perfectibility in an ironic sense. According to Doidge, Rousseau understood that if the human mental and emotional life are malleable there can be many different kinds of development and we cannot be certain what a normal or perfect mental development would look like. To my mind this view highlights the arrogance of Rousseau’s revolutionary followers in attempting to impose their peculiar views of utopia on other people.
What kind of society is most likely to promote the development of human brains in ways that will relax the constraints of human nature that limit our virtue and our wisdom? Is it a welfare state that aims to minimize the economic challenges that we have to face? Is it a rent-seeking society in which the extent to which individuals and groups prosper depend on their skills in playing a political game of obtaining preferment at the expense of others? Or is it a free society in which people prosper by engaging in mutually beneficial exchanges?
At one point in his book, Norman Doidge writes: ‘To keep the mind alive requires learning something truly new with intense focus’ (p 88). When I read that I was reminded of what Israel Kirzner has written about the benefits of freedom to society. Kirzner points out that losses from denial of freedom extend beyond those associated with preventing people from attaining known goals. He writes: ‘A free society is fertile and creative in the sense that its freedom generates alertness to possibilities that may be of use to society’ (“Perception, Opportunity and Profit”, 1979: 239). Perhaps we should be open to the possibility that the exercise of entrepreneurial alertness improves human nature.
Sunday, January 17, 2010
Is the rule of law under challenge in Australia?
I expect that some readers will think that this is an absurd question. Australia has a well-deserved reputation for the quality of its legal institutions. Our ranking on the World Bank’s rule of law index is higher than that of the U.S. and U.K. So why ask the question?
First, I don’t think we can derive much comfort about rule of law from the World Bank’s rule of law index. It measures perceptions of the extent to which people have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. As I have noted in an earlier post it is a broad measure of the quality of legal institutions rather than a measure relating specifically to rule of law.
Second, there is evidence that Australia has problems with rule of law. An example has recently come to notice close to home. In order to avoid violence in public parks, as occurred in Huskisson on Australia day last year, the Shoalhaven council has introduced bans on alcohol in certain specified parks on certain specified public holidays. I don’t have a view on whether these bans are the best way to prevent anti-social behaviour. The problem regarding rule of law arises because the police have been reported as saying that people wanting to drink responsibly as part of family gatherings can ignore the bans without risk of prosecution. It is comforting to know that the police do not like interfering with family gatherings, but it is difficult to feel comfortable with a situation where laws are to be enforced selectively. What has happened to the idea that the law should be enforced without fear or favour?
Robin Speed has referred to the similar example of an agreement by two doctors who operated independent practices in a country town and who agreed that one would work on Saturday and the other on Sunday. A Senate committee recognised that this was caught by the definition of a criminal cartel, but swept aside that concern on the grounds that the ACCC and DPP would not be expected to prosecute in such a case. As Speed says, “that is the antithesis of the rule of law”.
In his article in “The Australian” yesterday, ‘The rise and rise of the regulators’, Robin Speed argues that there has been a fundamental shift in the relationship between the individual and the law: “Increasingly, the relationship is not of the individual knowing and complying with what the law states, but of knowing and complying with what the regulators state the law states, and then knowing the extent to which the regulators will apply the law as stated by them”.
Even when parliament passes laws with the intention of restraining regulators, this does not necessarily prevent them from seeking to avoid those laws. For example, I have been reliably informed that in the 1970s the government’s most senior legal advisor provided a legal opinion that legislation that had recently been passed with the support of both of the major parties in parliament did not restrain regulators in the way that those framing and supporting the legislation had intended. The circumstances of this example are quite distinct from those where a court finds that the wording of legislation does not have the meaning that parliament intended. In the circumstances to which I am referring the opinion of the government’s legal advisor had the effect of denying the intention of parliament to restrict the regulatory activities of a particular arm of government. It elevated the intentions of regulators above those of the parliament.
How can the regulators be constrained? The obvious answer is legislation that gives regulators less discretion. In my view one area of high priority should be reform of the tax system to introduce greater certainty and reduce role of the tax office in deciding what tax law means. It will be interesting to see whether the Henry tax review has anything useful to say on this question.
Postscript:
Greg Cutbush, a farmer near Yass, has told me that he thinks the rule of law problem Mr Speed identifies is very common. For example, he’s noticed the ACCC applies one rule to farm products and another to household appliances. Any farmer who is found to have conspired with his neighbours to insist that the local grain merchant pay them the same price for their canola will be prosecuted under the Trade Practices Act because collective bargaining is prohibited. And yet when his brother and three of his neighbours get together and all buy new lawnmowers from an agent they have bullied in Bathurst one Saturday morning, nobody gives a stuff. It seems like the ACCC’s watchdog role is all window-dressing.
First, I don’t think we can derive much comfort about rule of law from the World Bank’s rule of law index. It measures perceptions of the extent to which people have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. As I have noted in an earlier post it is a broad measure of the quality of legal institutions rather than a measure relating specifically to rule of law.
Second, there is evidence that Australia has problems with rule of law. An example has recently come to notice close to home. In order to avoid violence in public parks, as occurred in Huskisson on Australia day last year, the Shoalhaven council has introduced bans on alcohol in certain specified parks on certain specified public holidays. I don’t have a view on whether these bans are the best way to prevent anti-social behaviour. The problem regarding rule of law arises because the police have been reported as saying that people wanting to drink responsibly as part of family gatherings can ignore the bans without risk of prosecution. It is comforting to know that the police do not like interfering with family gatherings, but it is difficult to feel comfortable with a situation where laws are to be enforced selectively. What has happened to the idea that the law should be enforced without fear or favour?
Robin Speed has referred to the similar example of an agreement by two doctors who operated independent practices in a country town and who agreed that one would work on Saturday and the other on Sunday. A Senate committee recognised that this was caught by the definition of a criminal cartel, but swept aside that concern on the grounds that the ACCC and DPP would not be expected to prosecute in such a case. As Speed says, “that is the antithesis of the rule of law”.
In his article in “The Australian” yesterday, ‘The rise and rise of the regulators’, Robin Speed argues that there has been a fundamental shift in the relationship between the individual and the law: “Increasingly, the relationship is not of the individual knowing and complying with what the law states, but of knowing and complying with what the regulators state the law states, and then knowing the extent to which the regulators will apply the law as stated by them”.
Even when parliament passes laws with the intention of restraining regulators, this does not necessarily prevent them from seeking to avoid those laws. For example, I have been reliably informed that in the 1970s the government’s most senior legal advisor provided a legal opinion that legislation that had recently been passed with the support of both of the major parties in parliament did not restrain regulators in the way that those framing and supporting the legislation had intended. The circumstances of this example are quite distinct from those where a court finds that the wording of legislation does not have the meaning that parliament intended. In the circumstances to which I am referring the opinion of the government’s legal advisor had the effect of denying the intention of parliament to restrict the regulatory activities of a particular arm of government. It elevated the intentions of regulators above those of the parliament.
How can the regulators be constrained? The obvious answer is legislation that gives regulators less discretion. In my view one area of high priority should be reform of the tax system to introduce greater certainty and reduce role of the tax office in deciding what tax law means. It will be interesting to see whether the Henry tax review has anything useful to say on this question.
Postscript:
Greg Cutbush, a farmer near Yass, has told me that he thinks the rule of law problem Mr Speed identifies is very common. For example, he’s noticed the ACCC applies one rule to farm products and another to household appliances. Any farmer who is found to have conspired with his neighbours to insist that the local grain merchant pay them the same price for their canola will be prosecuted under the Trade Practices Act because collective bargaining is prohibited. And yet when his brother and three of his neighbours get together and all buy new lawnmowers from an agent they have bullied in Bathurst one Saturday morning, nobody gives a stuff. It seems like the ACCC’s watchdog role is all window-dressing.
Wednesday, January 13, 2010
How painful is economic reform?
In my last post I presented evidence that people in countries with relatively high growth rates tend to perceive that their lives are improving. This is one of the reasons why I reject the view that economic growth makes people unhappy and that so called ‘unhappy growth’ can explain the reluctance of some governments to undertake economic reforms.
This raises questions about the effects of economic reforms on perceived changes in the quality of life. Do people in countries undergoing economic reforms tend to perceive that their lives were better prior to the reforms? My initial thought was that this would depend on the success of the reforms in raising economic growth rates.
I have now attempted to test this view empirically. In the analysis the perceived improvement in quality of life over the last five years is calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. Regression analysis has been used to explain variation in perceived improvement in life for 104 countries in terms of economic growth rate over the five years to 2007, improvement in governance over the same period (the average change in the 6 World Bank governance indicators), change in regulatory quality (the World Bank governance indicator most closely related to reforms that increase economic freedom) and a variable reflecting the extent to which assessments that people in different countries make of their lives tend to differ from the ratings that would be expected on the basis of income levels.
The regression explains about 40 per cent of the variation in perceived improvement in life among the 104 countries. The results show:
• Economic growth has a positive effect on perceived change in quality of life.
• Improvements in governance have a positive effect
• Improvement in regulatory quality have a negative effect on perceived change in quality of life.
(These results pass the standard statistical test relating to standard errors of estimates. Anyone who wants to see the results is welcome to contact me by email.)
It is important for the negative impact of change in regulatory quality to be seen in context. Economic reforms are generally undertaken in the hope that they will result in improvements in quality of life through higher economic growth. The chart below shows that countries which undertook regulatory reforms generally had relatively high economic growth rates. There was only one country undertaking regulatory reforms which had a negative economic growth rate.
The green diamonds in the chart denote the 10 countries in which people had the greatest perceived improvement in their quality of life. The red diamonds denote the countries with the greatest perceived decline in quality of life. The green diamonds are generally associated with higher economic growth rates than the red diamonds.
The evidence seems to support my intuitions – which are probably similar to the intuitions of most other economists interested in public policy - about the painfulness of economic reforms. Reforms often involve removal of regulatory barriers that protect the incomes of some groups at the expense of the broader community. The people who experience these income losses tend to resist reforms and to perceive that their lives were better before they were undertaken. When reforms are successful in promoting economic growth, however, these perceived losses tend to be outweighed by the benefits to those who gain from the reforms. Ad hoc attempts to promote reform of particular regulations are likely to be less successful than reform programs that are sufficiently broad and persistent to enable a high proportion of the population to perceive that their lives have improved.
This raises questions about the effects of economic reforms on perceived changes in the quality of life. Do people in countries undergoing economic reforms tend to perceive that their lives were better prior to the reforms? My initial thought was that this would depend on the success of the reforms in raising economic growth rates.
I have now attempted to test this view empirically. In the analysis the perceived improvement in quality of life over the last five years is calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. Regression analysis has been used to explain variation in perceived improvement in life for 104 countries in terms of economic growth rate over the five years to 2007, improvement in governance over the same period (the average change in the 6 World Bank governance indicators), change in regulatory quality (the World Bank governance indicator most closely related to reforms that increase economic freedom) and a variable reflecting the extent to which assessments that people in different countries make of their lives tend to differ from the ratings that would be expected on the basis of income levels.
The regression explains about 40 per cent of the variation in perceived improvement in life among the 104 countries. The results show:
• Economic growth has a positive effect on perceived change in quality of life.
• Improvements in governance have a positive effect
• Improvement in regulatory quality have a negative effect on perceived change in quality of life.
(These results pass the standard statistical test relating to standard errors of estimates. Anyone who wants to see the results is welcome to contact me by email.)
It is important for the negative impact of change in regulatory quality to be seen in context. Economic reforms are generally undertaken in the hope that they will result in improvements in quality of life through higher economic growth. The chart below shows that countries which undertook regulatory reforms generally had relatively high economic growth rates. There was only one country undertaking regulatory reforms which had a negative economic growth rate.
The green diamonds in the chart denote the 10 countries in which people had the greatest perceived improvement in their quality of life. The red diamonds denote the countries with the greatest perceived decline in quality of life. The green diamonds are generally associated with higher economic growth rates than the red diamonds.
The evidence seems to support my intuitions – which are probably similar to the intuitions of most other economists interested in public policy - about the painfulness of economic reforms. Reforms often involve removal of regulatory barriers that protect the incomes of some groups at the expense of the broader community. The people who experience these income losses tend to resist reforms and to perceive that their lives were better before they were undertaken. When reforms are successful in promoting economic growth, however, these perceived losses tend to be outweighed by the benefits to those who gain from the reforms. Ad hoc attempts to promote reform of particular regulations are likely to be less successful than reform programs that are sufficiently broad and persistent to enable a high proportion of the population to perceive that their lives have improved.
Thursday, January 7, 2010
Does 'unhappy growth' explain failure to adopt economic reforms?
Several researchers have noted that there is a tendency for average life satisfaction to be lower in the countries with high economic growth rates even though there is strong evidence that average life satisfaction is higher in countries with higher incomes. Carol Graham and Eduardo Lora have referred to this as the ‘paradox of unhappy growth’. In one recent paper Eduardo Lora (with Juan Camilo Chaparro) suggests that ‘unhappy growth’ may help to explain why some countries have been reluctant to adopt economic reforms that would lift economic growth rates (‘The conflictive relationship between satisfaction and income’, Nov. 2008).
This is an interesting view, but I doubt its validity. It seems to me that ‘unhappy growth’ could be a misnomer. Before explaining why I should try to summarise the authors’ explanations for ‘unhappy growth’. One explanation is in terms of an aspirational treadmill. Economic growth raises aspirations, so people experiencing high income growth may come to expect higher incomes and hence feel less satisfied with their current incomes than people experiencing low growth. The other explanation is that economic growth is often associated with structural changes that result in income losses to some groups as well as gains to others. As a result of loss aversion the average life satisfaction may decline while average income rises.
Both of these explanations seem plausible, but they leave us with a paradox. How can high incomes - which must have resulted from economic growth in the past - be associated with high average life satisfaction if economic growth reduces average life satisfaction?
There is a simple explanation that dissolves this paradox. The observation of lower average life satisfaction in the countries with higher growth rates might just reflect the shorter time that the people in the countries with higher growth have had to accumulate the capital necessary to enjoy the fruits of their current income levels. Consider two countries which currently have similar per capita incomes, one of which has experienced rapid growth over the last couple of decades and one which has experienced low growth. It would be reasonable to expect that per capita net wealth would be lower in the high-growth country than in the low-growth country because people in the former country have had less opportunity to accumulate wealth from their current incomes. People with lower per capita net wealth could be expected to have poorer standards of housing and to feel less financially secure, so it is only to be expected that they would feel less satisfied with their lives. (This is similar to the explanation offered by Angus Deaton, namely that life satisfaction responds to the long-term average income, as in a permanent income model of life satisfaction. See: ‘Income, health and well-being around the world’).
There is some evidence that average life satisfaction is strongly influenced by net wealth. A study by Bruce Headey and Mark Wooden has shown, using Australian data, that wealth is at least as important to subjective well-being as is income (IZA Discussion Paper 1032, Feb. 2004).
There is also some evidence of a similar phenomenon with respect to education levels. Regression analysis suggests that there is a tendency for average education levels to be lower in countries with high growth rates, after controlling for income levels. This can be explained in terms of the time taken for accumulation of human capital. It would make no sense to attempt to explain it in terms of economic growth resulting in less education.
Finally, there is evidence in the following chart that people tend to perceive that their quality of life has improved in countries that have experienced relatively high growth rates. The perceived improvement in quality of life over the last five years can be calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. The chart plots perceived improvement in quality of life against per capita GDP growth rate for the period 2002-07 (based on rgdpl data from Penn World Tables) for 103 countries. The pink dots in the chart lie on a line fitted by regression.
The evidence of perceived improvements in quality of life in countries experiencing high economic growth rates is not consistent with the idea that economic growth makes people unhappy. I don’t accept that the failure of governments to adopt economic reforms can be explained by ‘unhappy growth’.
This is an interesting view, but I doubt its validity. It seems to me that ‘unhappy growth’ could be a misnomer. Before explaining why I should try to summarise the authors’ explanations for ‘unhappy growth’. One explanation is in terms of an aspirational treadmill. Economic growth raises aspirations, so people experiencing high income growth may come to expect higher incomes and hence feel less satisfied with their current incomes than people experiencing low growth. The other explanation is that economic growth is often associated with structural changes that result in income losses to some groups as well as gains to others. As a result of loss aversion the average life satisfaction may decline while average income rises.
Both of these explanations seem plausible, but they leave us with a paradox. How can high incomes - which must have resulted from economic growth in the past - be associated with high average life satisfaction if economic growth reduces average life satisfaction?
There is a simple explanation that dissolves this paradox. The observation of lower average life satisfaction in the countries with higher growth rates might just reflect the shorter time that the people in the countries with higher growth have had to accumulate the capital necessary to enjoy the fruits of their current income levels. Consider two countries which currently have similar per capita incomes, one of which has experienced rapid growth over the last couple of decades and one which has experienced low growth. It would be reasonable to expect that per capita net wealth would be lower in the high-growth country than in the low-growth country because people in the former country have had less opportunity to accumulate wealth from their current incomes. People with lower per capita net wealth could be expected to have poorer standards of housing and to feel less financially secure, so it is only to be expected that they would feel less satisfied with their lives. (This is similar to the explanation offered by Angus Deaton, namely that life satisfaction responds to the long-term average income, as in a permanent income model of life satisfaction. See: ‘Income, health and well-being around the world’).
There is some evidence that average life satisfaction is strongly influenced by net wealth. A study by Bruce Headey and Mark Wooden has shown, using Australian data, that wealth is at least as important to subjective well-being as is income (IZA Discussion Paper 1032, Feb. 2004).
There is also some evidence of a similar phenomenon with respect to education levels. Regression analysis suggests that there is a tendency for average education levels to be lower in countries with high growth rates, after controlling for income levels. This can be explained in terms of the time taken for accumulation of human capital. It would make no sense to attempt to explain it in terms of economic growth resulting in less education.
Finally, there is evidence in the following chart that people tend to perceive that their quality of life has improved in countries that have experienced relatively high growth rates. The perceived improvement in quality of life over the last five years can be calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. The chart plots perceived improvement in quality of life against per capita GDP growth rate for the period 2002-07 (based on rgdpl data from Penn World Tables) for 103 countries. The pink dots in the chart lie on a line fitted by regression.
The evidence of perceived improvements in quality of life in countries experiencing high economic growth rates is not consistent with the idea that economic growth makes people unhappy. I don’t accept that the failure of governments to adopt economic reforms can be explained by ‘unhappy growth’.
Saturday, January 2, 2010
Can communitarians and libertarians agree about the good society?
Since Michael Walzer is often identified as a leading communitarian thinker I did not expect to agree with his views about the good society. I thought it might be interesting to read his short article, ‘What is “The Good Society”? (Dissent, Winter 2009) just to see how much his views differed from my own (See, for example, ‘Is the good society a useful concept?). I was surprised to find that there wasn’t much difference.
Walzer begins his article by asking how there could be one good society, given the immense variety of human cultures. He then proceeds to talk himself around to the position that the good society ‘is constituted by the peaceful co-existence of all the societies that aim at goodness’.
Walzer argues that this view of the good society involves focusing our hopes for goodness on ‘more local, more particularized “societies” rather that a single society in which all members share a single goal. What he has in mind is the possibility that a single individual could take part in many different good societies (movements, associations and communities uniting for a common purpose) organized at different levels of social life and over different geographic areas (p78).
This reminds me of similar views expressed by Friedrich Hayek: ‘It would be a sad misunderstanding of the basic principles of a free society if it were to be concluded that, because they must deprive the small group of all coercive powers, they do not attach great value to the voluntary action of small groups. ... The true liberal must on the contrary desire as many as possible of those “particular societies within the state” ... Liberalism is not individualistic in the “everybody for himself sense”. A few paragraphs further on he wrote: “It is the great merit of the spontaneous order concerned only with means that it makes possible the existence of a large number of distinct and voluntary value communities serving such values as science, the arts, sports and the like. And it is a highly desirable development that in the modern world these groups tend to extend beyond national boundaries ...’ (LLL, vII: 151).
The communitarian libertarianism that Michael Walzer is advocating in this article makes a refreshing change from the vision of the good society favoured by social democrats and paternalistic conservatives who view governments as having the central role of defining and achieving ‘societal objectives’. Our chances of continuing progress toward good or better societies in coming decades will be enhanced if there is more widespread recognition of the importance of the spontaneous activities of numerous small groups comprised of individuals who share common goals.
Walzer begins his article by asking how there could be one good society, given the immense variety of human cultures. He then proceeds to talk himself around to the position that the good society ‘is constituted by the peaceful co-existence of all the societies that aim at goodness’.
Walzer argues that this view of the good society involves focusing our hopes for goodness on ‘more local, more particularized “societies” rather that a single society in which all members share a single goal. What he has in mind is the possibility that a single individual could take part in many different good societies (movements, associations and communities uniting for a common purpose) organized at different levels of social life and over different geographic areas (p78).
This reminds me of similar views expressed by Friedrich Hayek: ‘It would be a sad misunderstanding of the basic principles of a free society if it were to be concluded that, because they must deprive the small group of all coercive powers, they do not attach great value to the voluntary action of small groups. ... The true liberal must on the contrary desire as many as possible of those “particular societies within the state” ... Liberalism is not individualistic in the “everybody for himself sense”. A few paragraphs further on he wrote: “It is the great merit of the spontaneous order concerned only with means that it makes possible the existence of a large number of distinct and voluntary value communities serving such values as science, the arts, sports and the like. And it is a highly desirable development that in the modern world these groups tend to extend beyond national boundaries ...’ (LLL, vII: 151).
The communitarian libertarianism that Michael Walzer is advocating in this article makes a refreshing change from the vision of the good society favoured by social democrats and paternalistic conservatives who view governments as having the central role of defining and achieving ‘societal objectives’. Our chances of continuing progress toward good or better societies in coming decades will be enhanced if there is more widespread recognition of the importance of the spontaneous activities of numerous small groups comprised of individuals who share common goals.
Monday, December 28, 2009
What is progress?
In my last post I gave several reasons why I think the ‘good society’ is a useful concept. There is another reason. The concept of a ‘good society’ may help us to think more clearly about progress.
What is the problem with progress? I am just about old enough to remember the 1950s when the most persuasive point used in favour of any change in Australia seemed to be: “You can’t stand in the way of progress”. A lot of good things were done in the name of progress but other things, particularly uneconomic public investment in dam building etc. gave progress a bad name. More recently the concept of progress has been confused by well-meaning people who have combined national accounting concepts with idiosyncratic values to produce meaningless indicators of “genuine progress”. Further confusion results from the tendency for people who still cling to long-discredited collectivist political views to be described as progressives.
The article in “The Economist” this week (19 Dec ’09 to 1 Jan ‘10) about progress and its perils discusses the popular view that while technology and GDP advance, morals and society are either treading water or sinking back into decadence and barbarism. The general message is that despite a general tendency to shy away from judgementalism many people yearn for a sense of moral purpose. The article ends by quoting Susan Neiman, a philosopher, who asks people to reject the false choice between Utopia and degeneracy: “Moral progress, she writes, is neither guaranteed nor is it hopeless. Instead it is up to us”.
I agree that people need a sense of moral purpose. A large part of the apparent decline in sense of moral purpose, however, can be attributed to a lack of moral clarity. In particular, there seems to be a great deal of confusion about the morality of modern consumer society. It is common to hear even avid users of new technology suggesting that the production of this stuff uses scarce resources but does little to add to their happiness in the long run. So why do they buy it and use it? Could it be because such stuff provides them with improvements in communications etc that are of enduring benefit, even though it has little effect on their emotional states in the longer term? The moral issue, whether it is good for us to have such stuff, does not depend on its transitory impact on our emotional states.
In terms of public policy, if progress means anything it must mean movement toward a good society, or movement from a good society to a better society. Changes can be counted as progress if they improve our capacity to live together in peace, provide us with greater opportunities to flourish or provide us with greater security.
However, the idea of progress also embodies optimism about the future of humanity – the idea that there has been a tendency for material, political, social, intellectual and moral conditions to improve throughout human history and that such improvement will continue in the foreseeable future. Roger Kerr has recently reminded us how inspiring the idea of progress was in the 18th Century. He argues that the idea that life tends to get better over the longer term still has potential to be inspiring today.
It seems to me that despite all the existing and potential problems faced by humanity there is a basis for optimism that advance of knowledge will continue to enable people to enjoy progressively better lives in coming decades.
What is the problem with progress? I am just about old enough to remember the 1950s when the most persuasive point used in favour of any change in Australia seemed to be: “You can’t stand in the way of progress”. A lot of good things were done in the name of progress but other things, particularly uneconomic public investment in dam building etc. gave progress a bad name. More recently the concept of progress has been confused by well-meaning people who have combined national accounting concepts with idiosyncratic values to produce meaningless indicators of “genuine progress”. Further confusion results from the tendency for people who still cling to long-discredited collectivist political views to be described as progressives.
The article in “The Economist” this week (19 Dec ’09 to 1 Jan ‘10) about progress and its perils discusses the popular view that while technology and GDP advance, morals and society are either treading water or sinking back into decadence and barbarism. The general message is that despite a general tendency to shy away from judgementalism many people yearn for a sense of moral purpose. The article ends by quoting Susan Neiman, a philosopher, who asks people to reject the false choice between Utopia and degeneracy: “Moral progress, she writes, is neither guaranteed nor is it hopeless. Instead it is up to us”.
I agree that people need a sense of moral purpose. A large part of the apparent decline in sense of moral purpose, however, can be attributed to a lack of moral clarity. In particular, there seems to be a great deal of confusion about the morality of modern consumer society. It is common to hear even avid users of new technology suggesting that the production of this stuff uses scarce resources but does little to add to their happiness in the long run. So why do they buy it and use it? Could it be because such stuff provides them with improvements in communications etc that are of enduring benefit, even though it has little effect on their emotional states in the longer term? The moral issue, whether it is good for us to have such stuff, does not depend on its transitory impact on our emotional states.
In terms of public policy, if progress means anything it must mean movement toward a good society, or movement from a good society to a better society. Changes can be counted as progress if they improve our capacity to live together in peace, provide us with greater opportunities to flourish or provide us with greater security.
However, the idea of progress also embodies optimism about the future of humanity – the idea that there has been a tendency for material, political, social, intellectual and moral conditions to improve throughout human history and that such improvement will continue in the foreseeable future. Roger Kerr has recently reminded us how inspiring the idea of progress was in the 18th Century. He argues that the idea that life tends to get better over the longer term still has potential to be inspiring today.
It seems to me that despite all the existing and potential problems faced by humanity there is a basis for optimism that advance of knowledge will continue to enable people to enjoy progressively better lives in coming decades.
Saturday, December 19, 2009
Is the 'good society' a useful concept?
Readers of this blog will know that over the last couple of months I have been thinking about the concept of the ‘good society’. The time has come to try to summarise why I think the ‘good society’ is a useful concept.
First, I think it would possible for nearly everyone to agree that a good society is one that is good for its individual members and that such a society would have certain objective characteristics. The institutions of a good society would:
• enable its members to live together in peace;
• provide its members with opportunities to flourish – to have more of the things that are good for humans to have; and
• provide its members with a degree of security against threats to individual flourishing, including security against misfortunes such as accidents, ill-health and unemployment.
Some people would want to go further in specifying characteristics that may make a society good for the people living in it, but attempts to do this may place at risk the ability of people to live together in peace. (See: Is there such a thing as a good society? and What are the characteristics of a good society?)
Second, the ‘good society’ concept is distinguishable from other similar concepts such as the ‘great society’ or ‘open society’. When a society agrees to provide individual members with a degree of security against threats to individual flourishing, for example through provision of a welfare safety net, it departs to some degree from the liberal principles of an open society. But it may still be a good society. (See: Are the institutions of a good society the same as those of the great society?)
Third, the characteristics of a good society are measurable.
• It is possible to measure the peacefulness of different societies using the safety and security sub-index of the Legatum prosperity index. A large part of the variation in peacefulness of different societies can be explained by World Bank governance indicators relating to political stability and the quality of legal institutions. (See: What institutions explain the peacefulness of societies?)
• It is possible to measure opportunities relating to a range of aspects of human flourishing in different societies such as: economic opportunity; the extent that people feel happy or satisfied with life; safety and security; health and longevity; educational opportunity; freedom to choose how to live; the opportunity to participate in political processes; social capital; satisfaction with efforts to preserve the natural environment. Many of these indicators tell similar stories about human flourishing. Economic freedom and governance indicators also tend to tell similar stories about the potential for human flourishing in different societies. (See: Do all well-being indicators tell similar stories about human flourishing? and Do economic freedom and governance indicators tell similar stories about human flourishing?)
• Economic security in different societies can be measured by indicators such as the average income of people at the lower end of the income distribution. This measure is closely related to average income levels and measures of economic freedom and good governance. (See: Does economic security depend on average income levels?)
Fourth, it possible to identify fairly clearly how good various societies are for the people who live in them without making the subjective judgements that would be necessary to combine various indicators into a ‘good society’ index. The indicators generally tend to tell a similar story – but a combination of indicators tells a more reliable story than any single indicator considered in isolation.
Fifth, it seems to me that the concept of a good society is an aid to clear thinking about the kinds of societies we want to live in. When people suggest, for example, that policies in particular societies should be changed to place more emphasis on life satisfaction and less emphasis on raising incomes it may be useful to remind them that high average life satisfaction and high incomes are both common characteristics of good societies.
First, I think it would possible for nearly everyone to agree that a good society is one that is good for its individual members and that such a society would have certain objective characteristics. The institutions of a good society would:
• enable its members to live together in peace;
• provide its members with opportunities to flourish – to have more of the things that are good for humans to have; and
• provide its members with a degree of security against threats to individual flourishing, including security against misfortunes such as accidents, ill-health and unemployment.
Some people would want to go further in specifying characteristics that may make a society good for the people living in it, but attempts to do this may place at risk the ability of people to live together in peace. (See: Is there such a thing as a good society? and What are the characteristics of a good society?)
Second, the ‘good society’ concept is distinguishable from other similar concepts such as the ‘great society’ or ‘open society’. When a society agrees to provide individual members with a degree of security against threats to individual flourishing, for example through provision of a welfare safety net, it departs to some degree from the liberal principles of an open society. But it may still be a good society. (See: Are the institutions of a good society the same as those of the great society?)
Third, the characteristics of a good society are measurable.
• It is possible to measure the peacefulness of different societies using the safety and security sub-index of the Legatum prosperity index. A large part of the variation in peacefulness of different societies can be explained by World Bank governance indicators relating to political stability and the quality of legal institutions. (See: What institutions explain the peacefulness of societies?)
• It is possible to measure opportunities relating to a range of aspects of human flourishing in different societies such as: economic opportunity; the extent that people feel happy or satisfied with life; safety and security; health and longevity; educational opportunity; freedom to choose how to live; the opportunity to participate in political processes; social capital; satisfaction with efforts to preserve the natural environment. Many of these indicators tell similar stories about human flourishing. Economic freedom and governance indicators also tend to tell similar stories about the potential for human flourishing in different societies. (See: Do all well-being indicators tell similar stories about human flourishing? and Do economic freedom and governance indicators tell similar stories about human flourishing?)
• Economic security in different societies can be measured by indicators such as the average income of people at the lower end of the income distribution. This measure is closely related to average income levels and measures of economic freedom and good governance. (See: Does economic security depend on average income levels?)
Fourth, it possible to identify fairly clearly how good various societies are for the people who live in them without making the subjective judgements that would be necessary to combine various indicators into a ‘good society’ index. The indicators generally tend to tell a similar story – but a combination of indicators tells a more reliable story than any single indicator considered in isolation.
Fifth, it seems to me that the concept of a good society is an aid to clear thinking about the kinds of societies we want to live in. When people suggest, for example, that policies in particular societies should be changed to place more emphasis on life satisfaction and less emphasis on raising incomes it may be useful to remind them that high average life satisfaction and high incomes are both common characteristics of good societies.
Thursday, December 17, 2009
Does economic security depend on average income levels?
In an earlier post I suggested that there would be widespread agreement that a good society would provide members with a degree of personal economic security against potential threats to individual flourishing, including misfortunes such as accidents, ill-health and unemployment. (See: What are the characteristics of a good society?)
In suggesting that there would be widespread agreement about this I had in mind that nearly everyone would tend to be somewhat risk averse if they had to choose what kind of society to live in without any knowledge of their own personal circumstances. Rather than focusing exclusively on the median (or most likely) outcome of their choice I think nearly everyone would have some regard to what their quality of life might be like in various societies if they were to draw the short straw in terms of parentage, health, intelligence, good looks and good luck. (How people would actually respond to such a thought experiment is an empirical question. I recall reading somewhere that John Rawls’ difference principle has not been supported by empirical research, but this principle seems to assume extreme risk aversion applies to choices made behind a veil of ignorance. If any readers are aware of useful empirical research on this question I would be grateful to be made aware of it.)
It seems to me that the average income of people at the lower end of the income distribution is an appropriate measure of economic security because it relates directly to the quality of life that people are able to lead. This can be estimated for a wide range of countries using survey data on the percentage of national income or consumption of people in the lowest 10 percent of the income distribution. Another relevant indicator is survey data on the proportion of the population that have at times not had enough money to buy food that their family needed in the preceding 12 months.
The following table shows countries ranked by the average income level of people in the lowest 10 percent of the income distribution. Percentages with not enough food are also shown along with a range of other indicators of average well-being and institutional quality. As in similar tables in recent posts, the ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red. Indicators are defined below the table.
As would be expected, countries which rank highly in terms of average incomes of the bottom 10% tend to have the lowest percentage of people who claim that at times they did not have enough money to buy food. There are some interesting anomalies, however, at both ends of the spectrum. For example, the percentage claiming that they did not always have enough money for food were higher than would be expected in several high-income countries including the UK, Italy, Australia and New Zealand. Low-income countries in which the percentage claiming inadequate money for food was lower than expected included Nepal, Vietnam and India.
The table shows that average incomes of the bottom 10% of the population depend strongly on the goose that lays the golden eggs – i.e. on the institutional factors that determine average income levels of the whole population. I do not intend to imply, however, that democratic institutions and income redistribution policies of governments play no role in supporting incomes of the bottom 10%. A regression analysis suggests that democratic institutions do tend to support average income levels of the bottom 10% of the population. Examples are evident in the table. Countries in which relatively low ratings on ‘Voice and accountability’ may help explain lower than expected incomes of the bottom 10% include Iran, Tunisia and Argentina. Countries in which relatively high ratings on ‘Voice and accountability’ may help explain higher than expected incomes of the bottom 10% include India and Mongolia.
Hint: Click on the table for a clearer picture.
Notes:
Income index for the poorest 10%: Index expressed as a fraction of estimated average income of the poorest 10% of families in Norway, the country in which the poorest 10% have the highest average income. Estimates based on share of income/expenditure of the poorest 10% of the population from Table M, HDR 2009 Statistical Tables, UNDP.
Not enough food %: The proportion of the population claiming that at times in the preceding 12 months they have not had enough money to buy food that their family needed. Survey data from the Gallup World Poll.
Average income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. Quality of life index: Gallup World Poll data on “life today” (latest available) country averages, expressed as a fraction of the rating for Denmark, the country with the highest rating.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.
In suggesting that there would be widespread agreement about this I had in mind that nearly everyone would tend to be somewhat risk averse if they had to choose what kind of society to live in without any knowledge of their own personal circumstances. Rather than focusing exclusively on the median (or most likely) outcome of their choice I think nearly everyone would have some regard to what their quality of life might be like in various societies if they were to draw the short straw in terms of parentage, health, intelligence, good looks and good luck. (How people would actually respond to such a thought experiment is an empirical question. I recall reading somewhere that John Rawls’ difference principle has not been supported by empirical research, but this principle seems to assume extreme risk aversion applies to choices made behind a veil of ignorance. If any readers are aware of useful empirical research on this question I would be grateful to be made aware of it.)
It seems to me that the average income of people at the lower end of the income distribution is an appropriate measure of economic security because it relates directly to the quality of life that people are able to lead. This can be estimated for a wide range of countries using survey data on the percentage of national income or consumption of people in the lowest 10 percent of the income distribution. Another relevant indicator is survey data on the proportion of the population that have at times not had enough money to buy food that their family needed in the preceding 12 months.
The following table shows countries ranked by the average income level of people in the lowest 10 percent of the income distribution. Percentages with not enough food are also shown along with a range of other indicators of average well-being and institutional quality. As in similar tables in recent posts, the ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red. Indicators are defined below the table.
As would be expected, countries which rank highly in terms of average incomes of the bottom 10% tend to have the lowest percentage of people who claim that at times they did not have enough money to buy food. There are some interesting anomalies, however, at both ends of the spectrum. For example, the percentage claiming that they did not always have enough money for food were higher than would be expected in several high-income countries including the UK, Italy, Australia and New Zealand. Low-income countries in which the percentage claiming inadequate money for food was lower than expected included Nepal, Vietnam and India.
The table shows that average incomes of the bottom 10% of the population depend strongly on the goose that lays the golden eggs – i.e. on the institutional factors that determine average income levels of the whole population. I do not intend to imply, however, that democratic institutions and income redistribution policies of governments play no role in supporting incomes of the bottom 10%. A regression analysis suggests that democratic institutions do tend to support average income levels of the bottom 10% of the population. Examples are evident in the table. Countries in which relatively low ratings on ‘Voice and accountability’ may help explain lower than expected incomes of the bottom 10% include Iran, Tunisia and Argentina. Countries in which relatively high ratings on ‘Voice and accountability’ may help explain higher than expected incomes of the bottom 10% include India and Mongolia.
Hint: Click on the table for a clearer picture.
Notes:
Income index for the poorest 10%: Index expressed as a fraction of estimated average income of the poorest 10% of families in Norway, the country in which the poorest 10% have the highest average income. Estimates based on share of income/expenditure of the poorest 10% of the population from Table M, HDR 2009 Statistical Tables, UNDP.
Not enough food %: The proportion of the population claiming that at times in the preceding 12 months they have not had enough money to buy food that their family needed. Survey data from the Gallup World Poll.
Average income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests. Quality of life index: Gallup World Poll data on “life today” (latest available) country averages, expressed as a fraction of the rating for Denmark, the country with the highest rating.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.
Sunday, December 13, 2009
Do economic freedom and governance indicators tell similar stories about human flourishing?
This follows on from my last post: Do all well-being indicators tell similar stories about human flourishing? The indicators that I looked at did tend to tell similar stories – countries that have high average income levels also tend to have high rankings on other well-being indicators.
The purpose of this post is to extend the analysis to consider the institutions that are associated with human flourishing. There is a great deal of evidence that economic freedom is associated with high income levels and other aspects of human flourishing such as health and education. Evidence on the effects of democratic institutions is less clear, although the opportunity for citizens to participate in political processes may itself be viewed as an aspect of human flourishing.
A recent study by Michael Stroup (‘Economic freedom, democracy and the quality of life’ World Development, 35(1) 2007) has examined interactions between economic freedom and democracy on measures of health, education and disease prevention. The study found that while greater economic freedom consistently enhances a range of well-being measures, democracy has a smaller positive influence.
I accept that leaders (and potential leaders) of non-democratic countries with low levels of economic freedom may need to consider whether they should give higher priority to democracy or economic freedom when devising strategies to improve the well-being of citizens. There are good reasons, however, why democracy and economic freedom should be viewed as complementary rather than competing objectives. For example, rule of law is less problematic if there is a mechanism for political leaders who are suspected of considering themselves to be above the law to be voted out of office. Similarly, control of corruption is easier in a democracy where the public has power to dismiss corrupt leaders. It is possible for democratic rights to result in greater rent-seeking and less economic freedom, but non-democratic rulers do not necessarily promote economic freedom and widespread prosperity – some seek to benefit themselves and their cronies by impoverishing the general public.
The following table presents indicators of the performance of various societies in relation to two indexes of economic freedom and the World Bank’s governance indicators. As in the table in the preceding post, countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.
The table shows that all the institutional indicators tend to tell a similar story about performance of various countries. There are, however, a few exceptions for ‘Voice and accountability’, reflecting particularly an absence of democratic institutions in some high-income and upper-middle income countries. In the case of United Arab Emirates and Kuwait this is associated with relatively poor performance in a range of well-being indicators, but that is less evident the case in Singapore and Hong Kong (as can be seen by comparing information in this table with the one in the preceding post).
All the indicators are strongly correlated with per capita income levels. A few countries manage to have high per capita incomes without a high level of economic freedom and good governance – but only by producing a huge amount of oil.
Indicators are defined and information sources are presented below the table. Hint: Click on the table for a clearer picture.
Notes:
Income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Economic Freedom (Heritage): The Heritage Foundation defines economic freedom as the right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. Data from the 2009 report.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Government effectiveness: Index compiled by the World Bank capturing perceptions of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies.
Regulatory quality: Index compiled by the World Bank capturing perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests.
The purpose of this post is to extend the analysis to consider the institutions that are associated with human flourishing. There is a great deal of evidence that economic freedom is associated with high income levels and other aspects of human flourishing such as health and education. Evidence on the effects of democratic institutions is less clear, although the opportunity for citizens to participate in political processes may itself be viewed as an aspect of human flourishing.
A recent study by Michael Stroup (‘Economic freedom, democracy and the quality of life’ World Development, 35(1) 2007) has examined interactions between economic freedom and democracy on measures of health, education and disease prevention. The study found that while greater economic freedom consistently enhances a range of well-being measures, democracy has a smaller positive influence.
I accept that leaders (and potential leaders) of non-democratic countries with low levels of economic freedom may need to consider whether they should give higher priority to democracy or economic freedom when devising strategies to improve the well-being of citizens. There are good reasons, however, why democracy and economic freedom should be viewed as complementary rather than competing objectives. For example, rule of law is less problematic if there is a mechanism for political leaders who are suspected of considering themselves to be above the law to be voted out of office. Similarly, control of corruption is easier in a democracy where the public has power to dismiss corrupt leaders. It is possible for democratic rights to result in greater rent-seeking and less economic freedom, but non-democratic rulers do not necessarily promote economic freedom and widespread prosperity – some seek to benefit themselves and their cronies by impoverishing the general public.
The following table presents indicators of the performance of various societies in relation to two indexes of economic freedom and the World Bank’s governance indicators. As in the table in the preceding post, countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.
The table shows that all the institutional indicators tend to tell a similar story about performance of various countries. There are, however, a few exceptions for ‘Voice and accountability’, reflecting particularly an absence of democratic institutions in some high-income and upper-middle income countries. In the case of United Arab Emirates and Kuwait this is associated with relatively poor performance in a range of well-being indicators, but that is less evident the case in Singapore and Hong Kong (as can be seen by comparing information in this table with the one in the preceding post).
All the indicators are strongly correlated with per capita income levels. A few countries manage to have high per capita incomes without a high level of economic freedom and good governance – but only by producing a huge amount of oil.
Indicators are defined and information sources are presented below the table. Hint: Click on the table for a clearer picture.
Notes:
Income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Economic Freedom (Fraser): According to the Fraser Institute’s definition, individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. Data from the 2009 report (for 2007).
Economic Freedom (Heritage): The Heritage Foundation defines economic freedom as the right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. Data from the 2009 report.
Voice and accountability: Index compiled by the World Bank capturing perceptions of the extent to which a country’s citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association and a free media.
Government effectiveness: Index compiled by the World Bank capturing perceptions of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies.
Regulatory quality: Index compiled by the World Bank capturing perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.
Control of corruption: Index compiled by the World Bank capturing perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests.
Sunday, December 6, 2009
Do all well-being indicators tell similar stories about human flourishing?
Human flourishing is about enjoying the things that it is good for humans to have. It is more than economic opportunity; it is more than feeling happy or satisfied with life; it is more than safety and security; it is more than good health and longevity; it is more than educational opportunity; it is more than being free to choose how you live your life; it is more than the opportunity to participate in political processes; it is more than social capital; it is more than the opportunity to enjoy the natural environment. These things may all be relevant to human flourishing but no single aspect incorporates everything that contributes to individual flourishing. Any list of aspects of human flourishing is likely to be incomplete and include items that are more important to some individuals than to others.
Hopefully everyone who reads the above paragraph will consider it to be a statement of the obvious. However, the idea that there is more to life than feeling happy or satisfied actually seems to be quite controversial. Some happiness researchers, including some economists, seem to think that everything that is good for humans to have can be reduced to a single number reflecting feelings of happiness or satisfaction with life.
In an earlier post (What are the characteristics of a good society?) I suggested that nearly everyone would agree that a good society would provide its members with opportunities to flourish – to have more of the things that are good for humans to have. In another post (Is a good society index a good idea?) I foreshadowed that I would attempt to identify the suite of indicators that are most relevant to assessing to what extent particular societies might qualify as good societies. This post goes some way toward that objective. It presents indicators of the performance of various societies in relation to a range of aspects of human flourishing.
In the following table countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.
The table shows that many well-being indicators tell a similar story about human flourishing. It also shows, however, that both per capita GDP and subjective indicators of the quality of life have limitations as well-being indicators. This is particularly evident in regard to societies such as United Arab Emirates, Singapore and Kuwait. (Many of the indicators used in the table are sub-indexes of the Legatum Prosperity Index. Indicators are defined and information sources are presented below the table.)
Notes:
Safety and Security: A sub-index of the Legatum prosperity index. High ratings reflect the existence of a safe environment and peaceful society.
Health: A sub-index of the Legatum prosperity index measuring how well citizens are capable of living long and healthy lives.
Education: A sub-index of the Legatum prosperity index reflecting mainly the years of schooling that a nation’s citizens complete.
Freedom: A sub-index of the Legatum prosperity index which measures how well citizens are able to freely choose the course of their lives and their perceptions of societal tolerance.
Democratic Institutions: A sub-index of the Legatum prosperity index which reflects civil liberties, political rights, the independence of the judiciary etc.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.
Environmental satisfaction: Gallup World Poll data on the satisfaction of citizens with efforts to preserve the environment in their country, presented in index form such that the highest rating country has a rating of 1.0 and the lowest rating country has a rating of zero.
Hopefully everyone who reads the above paragraph will consider it to be a statement of the obvious. However, the idea that there is more to life than feeling happy or satisfied actually seems to be quite controversial. Some happiness researchers, including some economists, seem to think that everything that is good for humans to have can be reduced to a single number reflecting feelings of happiness or satisfaction with life.
In an earlier post (What are the characteristics of a good society?) I suggested that nearly everyone would agree that a good society would provide its members with opportunities to flourish – to have more of the things that are good for humans to have. In another post (Is a good society index a good idea?) I foreshadowed that I would attempt to identify the suite of indicators that are most relevant to assessing to what extent particular societies might qualify as good societies. This post goes some way toward that objective. It presents indicators of the performance of various societies in relation to a range of aspects of human flourishing.
In the following table countries have been ranked by per capita income levels. The ratings of countries with performance in the top quartile for each indicator are shown against a green background, those for the second quartile are shown in yellow, the third quartile in orange and the fourth quartile in red.
The table shows that many well-being indicators tell a similar story about human flourishing. It also shows, however, that both per capita GDP and subjective indicators of the quality of life have limitations as well-being indicators. This is particularly evident in regard to societies such as United Arab Emirates, Singapore and Kuwait. (Many of the indicators used in the table are sub-indexes of the Legatum Prosperity Index. Indicators are defined and information sources are presented below the table.)
Notes:
Income index: Real GDP per capita (rgdpl) for 2007 from the Penn World Table, expressed as a fraction of per capita GDP in the United Arab Emirates, the country with highest per capita GDP. Source: Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, August 2009.
Quality of life index: Gallup World Poll data on “life today” (latest available) country averages, expressed as a fraction of the rating for Denmark, the country with the highest rating.Safety and Security: A sub-index of the Legatum prosperity index. High ratings reflect the existence of a safe environment and peaceful society.
Health: A sub-index of the Legatum prosperity index measuring how well citizens are capable of living long and healthy lives.
Education: A sub-index of the Legatum prosperity index reflecting mainly the years of schooling that a nation’s citizens complete.
Freedom: A sub-index of the Legatum prosperity index which measures how well citizens are able to freely choose the course of their lives and their perceptions of societal tolerance.
Democratic Institutions: A sub-index of the Legatum prosperity index which reflects civil liberties, political rights, the independence of the judiciary etc.
Social capital: A sub-index of the Legatum prosperity index which reflects how well people are engaged in social networks and relationships that are trustworthy and supportive.
Environmental satisfaction: Gallup World Poll data on the satisfaction of citizens with efforts to preserve the environment in their country, presented in index form such that the highest rating country has a rating of 1.0 and the lowest rating country has a rating of zero.
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