Author Archives: Arnold Kling

My views on consequentialism

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A reader asks how seriously I take my consequentialism,

As I listen to the democratic senators questioning Amy Coney Barrett, I hear them engaging in speculative consequentialism. They ask to what extent the judge should consider what the questioners regard as catastrophic consequences of a decision that is otherwise reached through sound legal reasoning and constitutional validity. In particular they are claiming that millions of people will lose their health care if the court strikes down the Affordable Care Act, even if the justices rightly believe the act to be unconstitutional. Therefore, they argue, the right thing to do is to uphold the act.

1. I don’t consider myself a devotee of any well-known moral philosophy. There is a reason that the field is still contested.

2. I make a case for consequentialism against the intention heuristic in cases of high causal density. In such cases, it is very hard to know the consequences of one’s actions. Will raising the minimum wage by $1 do more good than harm for low-wage workers? We don’t know. You have to take whatever information is at hand and make your best guess. But using as a shorthand the intention that you have of helping low-wage workers is a terrible way to form your judgment. In my view, the intention heuristic used in that way does not qualify as moral philosophy. It is bad thinking.

3. So don’t ask me to make a full-on stand in favor of consequentialism. But whatever virtues and defects consequentialism has in the abstract, in practice I think that paying at least some attention to consequences is better than relying on the intention heuristic.

4. In the question at hand, there is a question of whether consequences should be judged on a case-by-case basis or on the basis of general rules (“act” utilitarian vs. “rule” utilitarian). That is a can of worms I do not want to open. But suffice to say that allowing an unconstitutional law to stand might be ok in an “act” utilitarian sense but really bad in a “rule” utilitarian sense.

In short: Consequences are hard to predict. That is why we need to worry about consequences!

Thoughts on the state of things

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Two essays by eminent observers.

1. David Brooks writes,

the values of the Millennial and Gen Z generations that will dominate in the years ahead are the opposite of Boomer values: not liberation, but security; not freedom, but equality; not individualism, but the safety of the collective; not sink-or-swim meritocracy, but promotion on the basis of social justice.

. . .The stench of national decline is in the air. A political, social, and moral order is dissolving. America will only remain whole if we can build a new order in its place.

Brooks argues that a decline in social trust does not just happen all by itself.

High national distrust is a sign that people have earned the right to be suspicious. Trust isn’t a virtue—it’s a measure of other people’s virtue.

Like Yuval Levin, the Brooks sees our only hope as building formal institutions.

Over the past 60 years, we have given up on the Rotary Club and the American Legion and other civic organizations and replaced them with Twitter and Instagram. Ultimately, our ability to rebuild trust depends on our ability to join and stick to organizations.

2. Francis Fukuyama writes,

The issue here is thus not whether progressive illiberalism exists, but rather how great a long-term danger it represents. In countries from India and Hungary to the United States, nationalist conservatives have actually taken power and have sought to use the power of the state to dismantle liberal institutions and impose their own views on society as a whole. That danger is a clear and present one.

Progressive anti-liberals, by contrast, have not succeeded in seizing the commanding heights of political power in any developed country. Religious conservatives are still free to worship in any way they see fit, and indeed are organized in the United States as a powerful political bloc that can sway elections. Progressives exercise power in different and more nuanced ways, primarily through their dominance of cultural institutions like the mainstream media, the arts, and large parts of academia. The power of the state has been enlisted behind their agenda on such matters as striking down via the courts conservative restrictions on abortion and gay marriage and in the shaping of public school curricula. An open question for the future is whether cultural dominance today will ultimately lead to political dominance in the future, and thus a more thoroughgoing rollback of liberal rights by progressives.

This is part of a new project of Fukuyama’s, called American Purpose. Pointer from Tyler Cowen.

I have quoted the paragraphs with which I most disagree. Fukuyama’s entire essay is excellent, and almost every paragraph was tempting to excerpt. But I put a greater weight on cultural breakdown–see the David Brooks essay–than political breakdown, and so I am more concerned with the threat from the left.

Asymmetric news bubbles?

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PJmedia reports,

On the day Yelp introduced a new “racist behavior” wokeness rating, antifa and Black Lives Matter activists in Portland were seen on Twitter soliciting names of “non-friendly” businesses that support police, singling them out as targets. By Sunday’s pre-planned “Day of Rage,” rioters had trashed one of the explicit targets, a black-owned downtown Portland cafe.

Read the whole story. My point here is that I am pretty sure that people on the left never see stories like this. Perhaps it is true that people on the right never see some stories of outrages committed by the right, although I am skeptical about that.

I could be wrong, and I hope I am, but I think that in this sense the news bubbles are asymmetric.

Welcome to the Occupation

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I recently read Live not by Lies, by Rod Dreher. Takeaways:

1. Social Justice ideology is antithetical to liberalism. You can get that from Pluckrose and Lindsay (Dreher cites Lindsay).

2. The Social Justice movement manipulates language and pressures people to accept lies. You can get that from Jordan Peterson, who first came to prominence because he was not willing to let government dictate his use of gender pronouns. Dreher does not cite Peterson, but he does cite Orwell, who wrote the classic warning about coerced lying.

3. The tyranny that is coming to this country will be a “soft” tyranny. Mass surveillance will come from technology firms, not from a secret police. Enforcement will come from social pressure, restrictions on employment, and de-platforming, not from imprisonment, torture, or assassinations.

4. Dreher’s main claim is that in order to resist this tyranny, one must learn from the Christian resistance to the Soviet Union. Above all, we must not allow Social Justice propaganda to obliterate history and destroy freedom of conscience. We should live with the hope that truth will defeat tyranny.

Unbundling or rebundling?

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Allison Schrager writes,

Up until fairly recently, we consumed many goods and services bundled together. Your airline ticket price included a meal and checked luggage. Your cable bill included hundreds of channels. A newspaper subscription offered content from many journalists. But changing economics and technology have made bundling less necessary and attractive—at least in the short run. A bundled service offers lots of variety for a fixed price, but you end up paying for things you don’t want. Now, when we book flights online, we can see other airlines’ prices for identical routes; an airline can appear more competitive by breaking out different services. Streaming platforms mean that we no longer must pay for cable channels we don’t watch. And now, members of the media whom colleagues deem “problematic” don’t have to tolerate a hostile newsroom; they can send out an email newsletter or broadcast a podcast to their audience and collect money directly.

I don’t think that unbundling is the endgame in music, journalism, or punditry. Yes, we have pretty much seen the end of bundling music from physical forms, such as a vinyl record or a CD. And we are pretty near the end of the unbundling of the written word from physical forms, such as magazines and newspapers. But as Allison points out, only a few high-profile writers can expect viable subscription revenue in a totally unbundled world. If nothing else, what Clay Shirky called the mental transactions costs make people unwilling to pay for all the content they might like on a case-by-case basis.

Instead, I return to a prediction I made twenty years ago.

For an economic model, I continue to recommend the idea of “clubs.” A club would provide content aggregation, recommendation, and annotation services. Journalists would be paid by clubs, rather than by individual publications. For a consumer, joining a club will provide access to value-added services relative to online content.

Where we something that most closely resembles the club model I had in mind is in the video streaming world. Netflix, Amazon, etc.

If my prediction eventually holds, most writers, will not be able to make it on their own. Instead, they will be bundled together, just not in the traditional magazine or newspaper format. I think that once the club model gets going, the superstars will be recruited by the clubs for competitive purposes.

Income, wealth, and redistribution

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1. Russ Roberts writes,

Is $100 billion all that stands between ending homelessness and giving everyone in America clean water? If that’s true, what a brutal indictment of our government’s ability to solve problems. In 2019, according to the Congressional Budget Office, the federal government spent $4.4 trillion. If only taxes had been set high enough to raise $4.5 trillion! Then we could have cured homelessness and provided everyone with clean water.

He is reacting to a tweet from Bernie Sanders saying that if we taxed $100 billion from Bill Gates we could do all these wonderful things. Roberts is saying that it is not the lack of $100 billion that keeps the government from ending homelessness and giving everyone in America safe drinking water. Apparently, government is unable to assign a high priority to solving those problems and/or the problems are too complex to be solved by throwing money at them.

The Roberts essay deals with a whole list of economic and philosophical concerns related to the issue of wealth taxation. But I think that the challenge is to change the frame of the debate from the intention heuristic to consequentialism.

The intention heuristic says that the intention of wealth taxation is to increase the fairness of society, and that settles the matter. Lately, I have come to think that arguing against the intention heuristic is like arguing against a brick wall.

2. In a debate with Donald Boudreaux, Branko Milanovic writes,

The figure below shows the share of the middle four deciles in total market income. (Market income includes all labor and property incomes, plus income from own businesses.) . . . it is 3 percentage points lower than in 1990.

The figure shows the share dropping from 32 percent in 1990 to 29 percent in 2020. Milanovic cleverly plots it on an axis where the minimum is 28 and the maximum is 36, which makes it look like a dramatic decline. If the range went from 0 to 100, the drop would barely show up.

Robert Litan on Milgrom and Wilson

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In Trillion Dollar Economists, Robert Litan wrote (p. 254),

Various economists had ideas for how the commission could best achieve these apparently conflicting objectives, but none were as influential as Paul Milgrom, his colleague Robert Wilson, and longtime senior economic advisor at the FCC Evan Kwerel. . .

The key mechanism these economists designed was the simultaneous auction that required bidders to remain active in every round of bidding in order to be eligible to receive any licenses

Litan’s 2014 book about economists whose work proved valuable in practice is remarkable in that it included several subsequent Nobel laureates: Richard Thaler (2017), William Nordhaus (2018), Banerjee/Duflo/Kremer (2019) and now Milgrom and Wilson.

Books on the future of labor

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I made a list, including

Neal Stephenson, The Diamond Age, 1995. In this science fiction novel, Stephenson depicts a world in which nanotechnology, as described in Eric Drexler’s monograph “Engines of Creation,” has matured. As a result, no one lives in hardship. Any standard product can be made cheaply by a “matter compiler,” what we would now think of as a 3D printer with superlative capabilities. Machines have substituted for labor to the point where a lower class, called “thetes,” enjoys a coarse consumer lifestyle without having to work. An upper class, called “Vickies,” has skills that complement the machines, and this elite indulges in a taste for old-fashioned hand-crafted goods.

21st-century classic books?

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EconJournalWatch asked contributors to name works published so far in this century that will still be valuable to read in 2050. I don’t think I could possibly agree with most of the selections. I contributed my own, including this one:

Ray Kurzweil, 2005, The Singularity Is Near. If Kurzweil’s extrapolations are correct, then the reader in 2050 will be a transhuman cyborg, who probably will find the rest of this list trivial. If instead the human race remains much as it is in 2020, then the reader should be curious to figure out “what went wrong.”

Resilience and efficiency

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Lorenzon M. Warby writes,

Efficiency tends to encourage specialisation. Stable environments tend to select for efficiency.
Resilience is about being able to continue to operate in changing circumstances.

Resilience tends to encourage generalised adaptability. Unstable environments tend to select for resilience.

It is a long essay, and I have not necessarily picked out the main point. But in terms of this scheme, I think that complex supply chains and high debt are suited to efficiency but not to resiliency. The result is that the housing bust of 2006-2007 and the current pandemic imposed much higher economic costs than might have been the case otherwise.