Monday, October 31, 2011

Free Markets and Free Medical Care

In my last post, I argued that health care (with some exceptions) is a private good. The benefits of these sources are obtained primarily by those who consume them, with little public benefit leaking out. As such, there is no "free rider" argument to be made for government funded health care. This makes health care different from education, which does have a large public good component.

Against this, there were some objections to the idea of leaving medical care to the free market.

In answering these objections, I wish to begin by pointing out that the current system in the United States is not a free market system. Consequently, you cannot raise objections to a free market health care system by criticizing the current system in the United States.

The medical industry is probably second only to the banking industry in its success in using government to transfer money from the poor and middle class to the rich. Lobbyists and campaign contributions from companies and special interest groups in the medical industry are responsible for countless regulations, programs, and mandates. Each one of these rules takes a little money out of each of our pockets and concentrates that wealth in the pockets of the business owners and special interest groups who sought those regulations.

The huge medical costs we experience in the United States are because thousands of these little wealth transfers add up. They add up to the point that the government is now transferring thousands of dollars from each middle-class pocket (who can afford to pay) to the rich, and the poor are priced out of the market entirely.

Nobody should be surprised to discover that one of the primary uses people have for our system of government is as a tool for transferring wealth and power from those who cannot afford political manipulations to those who can. We should not expect anything else.

But this is not a free market system. A free market system condemns using the government to force wealth transfers. The only type of wealth transfers that the free market allows are those that people agree to voluntarily.

Another set of objection to free market health care that fails assumes that a free-market economy is an unregulated economy. What is called a "free market" is not “unregulated”. It is actually a massive body of regulations.

All you need to do to see this is to consider the question, "What counts as informed consent?"

Even if we look only at free-market principles, it is easy to get bogged down in a swamp of ill-defined rules and exceptions that define “informed consent”. Can an 18 year old give informed consent? What about somebody who is 17.99 years old? How much information is necessary for informed consent? What types of force count as duress? If you are starving and want a cracker, if I ask for your home as payment, is that coerced? The complexities to free-market informed consent can compete with any government regulation for complexity.

So, then, here are two ways NOT to criticize a free market in medicine. One is by criticizing the current system in the United States – which involves thousands of forced transfers from the middle class to the rich. The other is by criticizing the concept of an unregulated market – since free markets are actually governed by a very complex set of rules.

However, if you want to make a valid criticism of free-market health care that actually sticks, try this one:

The free market is a system of "one dollar, one vote". Rich people have the power to bid resources away from poor people - even where the poor people have a more highly valued use for those resources.

I have described this in the past using a story about a poor mother who wants a bottle of water for her sick child and a rich woman who wants it to give her poodle a shampoo. The rich person can simply bid the price outside of the poor person's grasp. But the ability to pay $20 for a bottle of water without batting an eyelid does not prove that her use for that water has more value. It simply means she has more money to put into the bidding process.

We see this where rich people buy meat - thus increasing the demand for grain, bidding the price out of reach and off of the table of those who cannot otherwise afford it. Currently, we see the same thing is happening with rich people using food grains to produce ethanol - again bidding food grains off of the table of poor people around the world in the form of higher food prices. The same thing happens with gasoline - rich people bid the price up to force poor people to conserve.

Rich people, some of whom have a demand for medicine at any price (or almost any price) can get medical resources allocated to them simply by bidding it away from those who could not afford to otherwise pay for it. The fact that a poor person cannot outbid the rich person does not mean that the poor person has a lower-valued use for those resources. It simply means he doesn’t have the money.

We are told that, in the free market, those who value a particular good or service more use price to bid it away from those who value it less. Thus, resources always go to their most valued use. However, this is true only if we add the assumption that all people have the same access to money. The instant we change that assumption and allow different consumers to have different income levels, then some consumers have the power to bid resources away from those who value it more but can't pay as much.

This creates a real problem for free market medical care in societies with widely different income levels. What we will find is a situation in which poor people simply cannot afford medical care even for basic needs because rich people have bid the resources out of their ability to pay. As the wealth gap widens, the situation gets worse. And the wealth gap is widening, so the situation is getting very much worse.

Friday, October 28, 2011

Free Education and Health Care

Brian Sapient at Atheism wants to know if atheists agree with the claim that education and health care should be free.

Of course, nothing is ever free. Somebody has to pay for it. So the real question is whether education and health care are things for which people have a right to force other people to pay for, threatening violence up to death on those who refuse.

As it turns out, these are two different types of goods and, as such, they require two different answers.

Education is a public good. It provides benefits to people - not just the person being educated. We are all better off in a community of well-educated, reasonable people. Whereas those who are stupid and irrational create all sorts if problems, not only for themselves, but for others.

We find this in climate change denial, where people who cannot reason their way out of a wet paper sack provide a significant barrier to policy options that could prevent a great deal of global harm and suffering. I am not saying that I know what the best options are. I am saying that it would be nice to have this discussion with people who can at least put aside the poor arguments that currently dominate global warming denial.

A public good is something that other people have a reason to pay for (there is some sum of money less valuable to a person than the benefits they obtain). However, they can not be blocked from these benefits when others pay for them. Free riders who seek to obtain the good without paying cause the good to be under funded.

National defense, a police and court system to fight crime, pollution control, and flood control, all produce public goods. They also are things that it is reasonable to ask the public to fund.

Health care, on the other hand, is a mostly private good. It's benefits are almost exclusively to be had by the person whose health is being cared for.

There are exceptions. Immunization against communicable diseases provide a public good by creating firewalls against the spread of those diseases, for example. This provides an argument for government subsidies for immunizations.

It is also true that we would all be better off surrounded by people who are generally healthy and fit. However, a government health and fitness program is a different sort of thing compared to free health care.

In fact, in one important way, free health care might work against overall public health and fitness. Free health care means, "We are going to cover the costs of personal decisions detrimental to health and fitness."

Smoking. Obesity. Lack of exercise. Drug and alcohol abuse. Unprotected sex. Use of alternative medicines (e.g., prayer). These all decrease health and fitness, and increase health care costs.

For all practical purposes, free health care is actually a subsidy for these types of activities. A subsidy invites people to take up an activity by saying that the government will pick up part of the tab - cover some of the expenses - associated with smoking, obesity, sexual promiscuity, and the like. It is a subsidy for unfit and unhealthy living.

It is also important to recognize that many of the activities useful for maintaining health and fitness are free. It costs no money to get exercise, not smoke, not over eat, not abuse alcohol and drugs, and not have unprotected sex. People can also save a lot of money by avoiding quack medicines and other nonsense - another potential benefit of a quality education.

Where people are choosing to risk their health, I do not see any particularly strong reason to want to compel others to bail them out when they suffer the results of their own choices.

Having said this, there is a certain amount of medical care that qualifies as a welfare good. It goes in the same category as having food to eat, water to drink, air to breathe, and a basic freedom of movement. You are not going to survive without it. Even a fit and healthy person will have health care costs necessary to maintain a minimum quality of life. Others lose health and fitness through no fault of their own. To state the obvious, we all lose health and fitness eventually, no matter what we do.

If a civilization has a lot of resources being spent fulfilling few and weak desires, there are many and strong reasons to direct some of those resources to fulfilling more and stronger desires. Methods would naturally include praise and condomnation - to promote an aversion to wasting resources on trivial things and a desire to help those in need. Other tools available to obtain these ends include rewards (for those who make these kinds of contributions) and punishment (for those who do not).

However, this is a far more limited option than would fit in the category of "free health care".

So, to answer the question.

The state should heavily subsidize education - real education; the acquisition of reasoning skills and true beliefs. The subsidy should respect the degree to which education is a public good.

If a society has people spending resources on fulfilling few, weak, and trivial desires, then it should redirect some of those resources to fulfilling more and stronger desires of basic health care. It should also work to promote health and fitness. However, subsidizing poor lifestyle choices is not a useful way to spend government funds.

Tuesday, October 25, 2011

The Flat Tax and the Loophole Manufacturing Industry

Republican Presidential candidate Rick Perry is releasing his economic plan today, which includes the option of a 20% voluntary flat tax.

Perry is another Texas idiot who is simply not qualified to be President. He is one of the worst of the contenders.

However, this does not mean that a flat tax would be a bad idea.

Personally, I would like this option. At tax time, I choose the simplest option available. My goal is to minimize the time I spend filling out taxes. A 20% flat tax would make it easy. I may pay more, but the higher amount will be more than made up for in time saved and reduced stress.

This points to way in which our current hyper-complex tax code is actually built by the rich for the rich.

These deductions that they write into the code are substantially available only to somebody with the resources to hunt them down and take advantage of them, and for whom it would be profitable to do so. Those of us who do not have a tax consultant staff are likely missing opportunities every year to take deductions we qualify for. We are also losing out on opportunities to do things in such a way that we can qualify for those deductions. The vast majority of us simply do not know all of the tax implications of the options we have each year.

A second way in which the hyper-complex tax code serves the rich can be found by asking, "How did those deductions get written into the tax code anyway?"

They were put there by people who had the resources to lobby politicians for the deductions - special interest groups. These are the activities that go on behind the scenes and beneath the radar of regular voters like you and me. We don't notice them - but the special interest group with the campaign contributions and other resources the candidate might draw on sure know about them.

From the point of view of the special interest group, loophole purchasing is just another business investment. For example, they invest, say, $5 million in lobbyists, public relations, and campaign contributions to manufacture a new tax loophole that, according to the accountants, has a $50 million payoff. That is an excellent investment opportunity – a company or organization would be foolish to pass it up.

However, you and I do not have the resources to invest in loophole manufacturing. So, the loopholes tend, by and large, to serve the interests of those who can afford to have them built.

A third expense comes from the opportunities lost when companies invest in the manufacture of legal loopholes rather than productive goods and services. The $5 million that my hypothetical special interest group invested in loophole manufacturing above could have invested that money someplace else – product development, updating infrastructure, employee education.

We waste untold billions of potential research and development dollars every year in the loophole manufacturing industry. If we closed that industry down, we would free all of that economic potential to pursue other, more productive options.

Furthermore, the loophole manufacturing industry corrupts our political system. A lot of loophole manufacturing involves simply buying and selling political favors. The loophole manufacturer (politician, regulator) sells his product to the highest bidder, who pays for it by providing the manufacturer with something of value in return. Our political system would be a lot cleaner if the loophole manufacturing industry did not exist.

A fourth cost is found in all of the costs associated with filling our taxes and trying to figure out in advance what it is that we owe - and what options exist for minimizing those costs. These resources, like the resources spent in loophole manufacturing itself, could have gone into something a lot more productive or enjoyable - something that actually had value to the agent rather than handing around (or trying to prevent the handing around) the wealth already created.

One problem is that, a simple flat tax would benefit the rich at the expense of the middle class and working poor. However, this problem is easily fixed. Let households deduct the first $40,000 or so. This would take us toward the principle that the first dollars for public welfare be the dollars that fulfill the fewest and weakest desires. Include interest income and capital gains as income.

That would be it.

(1) How much money did you make last year?

(2) Subtract $40,000 from line (1).

(3) Multiply (2) by 0.2.

(4) How much was withheld from your paycheck last year?

(5) Subtract (4) from (3)

(6) If (5) is a positive number, send in that amount. If (5) is a negative number, you qualify for a refund of that amount.

Sign and date here:


End of story.

Monday, October 24, 2011

The Possibility of Evil

In my last post, I mentioned a hypothetical corporate leader who "really does not care about the fact that the methods for creating his product kill, maim, or sicken others or destroys their property."

My purpose was to illustrate that the current system is one in which the person who is willing to do harm has a number of economic advantages over any who would be reluctant to do harm. He gets to pocket profits that others would avoid and use governments in ways that others would shun. In doing this, he gets extra income that he can then use to drive more virtuous (and less vicious) competitors out of business.

This brought up some comments about the possibility of evil.

A member of the studio audience asked, "Do you really believe this person exists in the real world?"

My answer: We are clearly surrounded by people who have a lower regard for the interests and well-being of others than people generally have a reason to promote. Some not only disregard the well-being of others, they actively seek to cause harm. For some, causing harm is an acceptable means (collateral damage). For others, it is an end in itself.

Villainy, in this sense, is a matter of degree. There are probably a few with absolutely no regard for the well-being of others. At the same time, everybody has this fault to some degree. Each of us has encountered a situation where we did not do as much for others as a person with good desires would have done.

According to desirism, a villain is a person who lacks malleable desires that people generally have reason to promote, or has malleable desires that people generally have reason to inhibit. Praise, condemnation, reward, and punishment are the social tools for promoting moral virtue and inhibiting vice.

The drunk driver provides one of the best examples of moral failing for my purposes. The drunk driver does not seek to do harm. Instead, he adopts a belief - contrary to all evidence - that he does not pose a threat to others. The main difference between the drunk driver and the corporate executive is that the drunk driver is a threat to only a small number of people – one vehicle full, in most cases. The corporate executive has the power to do far more harm.

This is not to say that all corporate executives are evil. They clearly are not.

Yet, even here we must use some care in using the claim "good" or "evil". Desirism suggests that it is possible for a person to be both - to be good in one area of life, and a villain elsewhere. This happens as a result of a specific mix of the malleable desires an agent acquires.

A brutal Nazi SS officer can be a gentile and loving father. A drunk driver can be somebody who volunteers a great deal of time to help the poor. A slave owner in a slave society can be, in every other respect, indistinguishable from any gentleman in the world today in terms of concern for his family, willingness to sacrifice for his country, and the efforts he makes on behalf of the suffering of others – those who do not belong in the slave class.

A corporate executive can be brutal in the board room while still be the nicest person one would meet if you happen to bump into him on a fishing trip with his kid.

The drunk driver also illustrates the fact that few people actually see themselves as evil. Take almost any person who has committed a moral crime, and he will give you a story that paints him as the virtuous person trying to do good - or, at least, as somebody doing that which was fully within his rights - being victimized by oppressive 'others' filled with malicious plans or a callous indifference.

I have no doubt that Hitler thought himself a great man. Slave owners had any number of rationalizations in defense of slavery. It was a great institution – a win-win situation – in which the plantation owner benefits from the labor of the slave, and the slave benefits by a warm roof, food, and somebody to watch out over their welfare.

A rapist will commonly tell you either that the woman wanted to be raped or that she deserved it as punishment for some prior crime. Child molesters will explain why sex with children is not harmful and that all harm comes, not from them, but from an oppressive society.

However, the fact that one is a successful rationalizer does not mean that one is not guilty of a moral crime. Rationalization itself is a vice, worthy of condemnation. It is not to be made into an escape from moral judgment.

The main impact that Ayn Rand has had is to give business leaders a rationalization for disregarding the life, health, and well-being of others. They are told to see themselves as the sole source of all things of value and deserving a rich reward for their contributions. Those who do not become wealthy are too lazy to make money themselves and, instead, wants to live like a parasite on the profits of those who actually contribute.

Though, to be honest, some members of the 99% fit this description.

Do these people exist?

Well, yes, they do.

My standard example of this type of people are corporate leaders who contributed to senseless propaganda against climate science. I mentioned some of them in an earlier post, many of the objections we hear against climate change. Regardless of whether the climate change science is accurate, the arguments being used against it are absolutely pathetic. We have reason to inquire as to the moral character of those who would grab onto those rather foolish arguments.

A person genuinely concerned about the well-being of others would condemn the use of these flawed arguments as cluttering the debate. I cannot think of any conclusion to draw of those who grasp these flawed arguments other than that they lack concern over the potential harm that climate change might cause. They do not have enough concern to keep the debate focused on objections that actually make sense.

Do people who grasp foolish arguments against climate science exist?

Well, yes they do – and many are on the seats of major corporations.

Quite a substantial number of candidates for the Republican nomination for President of the United States also fit this description – and they are well funded.

Friday, October 21, 2011

Moral Failure and Taxing the Rich

On the subject of a sales tax, a member of the studio audience brought up the fact that the US government tried a small luxury tax in the early 1990s.

Three years later, it was judged to be a failure and repealed.

I should note that it was considered a failure by a Republican congress. However, the reasons offered for considering it a failure deserve some consideration. At the start, I need to remind the reader that this is a blog on ethics. I focus on how things ought to be. I have argued that the dollars that pay for government-provided public goods and basic welfare ought to be the dollars that fulfill the least and weakest desires. Given the law of diminishing returns, these are the last dollars of the richest people.

But, in the real world, we routinely run into people who are immoral.

We can conclude that torturing innocent people is evil. But, what does this proof do for the person who has been kidnapped by some sadist who has strapped him to a table and is starting to pull out his instruments of torture?

A sales tax that excludes basic welfare goods (food, medicine, basic shelter, basic clothing) has a lot to recommend it morally. However, some people are immoral, and their immoral behavior may create problems.

Well, immoral behavior, by its very nature, does create problems. There is no reason to call behavior that creates no problems immoral.

The luxury tax of the early 1990s is said to have failed because the very rich - the people whose dollars were fulfilling the fewest and weakest desires, were too selfish to allow that money go to providing government public goods and basic welfare (turning them into dollars that fulfill more and stronger dollars).

They quit purchasing goods in the land that has the sales tax and made their purchases in lands that did not have that tax. This left the middle class (those whose dollars fulfill more and stronger desires) to pay for the public goods and basic welfare that the wealthy refuse to provide.

Furthermore, when the wealthy took their money to other countries to make purchases, this cost jobs in local businesses that cater to the rich.

I want the reader to note that this problem is not unique to the sales tax. It is true of all forms of taxation. The very wealthy have a way to avoid those taxes - because they have a freedom the rest of us do not have to move their economic activity to other regions.

If there is a property tax, they buy property elsewhere. If it is an income tax, they arrange to get their income elsewhere. If it is a capital gains tax, they will buy and sell their assets in foreign markets.

Note that this is not a tax loophole. Closing tax loopholes alone will not bring this business back into the country. In fact, closing tax loopholes will do harm. These business leaders are simply going to move their activity from the country that closes the loopholes to a country that maintains them. In short, it will drive business away.

Actually, this is a lot easier to see with respect to regulation - though all of the basic underlying principles are the same.

Take a corporate leader who really does not care about the fact that the methods for creating his product kill, maim, or sicken others or destroys their property. He wants the liberty to conduct these activities anyway and he does not want to pay any compensation for harms done. Instead, he wants to pocket all of the profits including the money that would have gone to compensation.

Assuming that he is wealthy enough, he simply farms out his operation to whatever government will refuse to regulate those activities. If the harms are global rather than local, this becomes much easier to pull off.

We can take greenhouse gas emissions for an example. These are activities that kill, maim, and sicken others and harm their property. If one country decides to restrict or tax these emissions, the international business leader instead moves his business to a country that offers no restrictions. The country that gets the jobs will still suffer the harms of global warming - but they at least have jobs available while they are being harmed. Countries that refuse this deal also still get the harms, but do not get the benefits of jobs.

In many industries, the wealthy have the opportunity to bid out their activities in this way. They will build their business in those areas where the people ask for the least contribution of their dollars to public goods and basic welfare, and give them the greatest freedom to harm others without demanding that compensation be given. The country that puts in the winning bid gets the company with its jobs. All other countries get the global harm done and nothing else.

In fact, a business can add another element to this bidding process. "How willing are you to tax your middle class to provide me with an economic incentive - a payoff - to build my factory in your country? To get my business, you have to show a willingness to cut your college education funds and social security to make sure that my business is bailed out if I should make a lot of foolish business decisions."

This bidding puts more wealth into the pockets of the wealthy - often transferring it directly from the pockets of the poor and middle class. And the more wealth these people accumulate, the more freedom they have to engage in this type of bargaining. And the more freedom they have to engage in this type of bargaining, the wealthier they become.

To make matters worse, we can well expect that the people who have the profits from harming others without compensation, obtaining government "economic incentives", and refusing to contribute to public goods and basic welfare, will economically dominate competitors that accept these costs. Good companies finish last.

So . . . regulation, sales tax, income tax, property tax, capital gains tax, business incentives, environmental regulations, worker safety . . . all of these are subject to this phenomenon. It is not a problem unique to the sales/luxury tax, and it is not a reason to preferring some other option over and above the sales or luxury tax.

So, there you are, strapped to the table by the sadistic killer who is starting to gather his instruments of torture. The person strapped to the next table has given you an argument that demonstrates that sadistic desires are immoral - they are desires that people generally have many and strong reasons to inhibit through condemnation and punishment. You know this to be true.

But it is not going to help.

It is just a fact of the world around us that, where morality fails, people suffer the consequences. We have all been victims, of one degree to another, of moral failure. The more moral failure we allow, the more suffering results. The moral failure of allowing evil people to make economic bargains across nations of the type mentioned above threatens a great deal of widespread suffering. It is a situation that people generally have many and strong reasons to prevent.

Thursday, October 20, 2011

Romney's Philosophy of Regulation

One of Republican candidate Mitt Romney's first acts as President, according to his plan for jobs and economic growth, will be to sign over to corporate America significant rights to your life, your health, and your property.

His Day-One plan includes an executive order that

Directs all agencies to immediately initiate the elimination of Obama-era regulations that unduly burden the economy or job creation, and then caps annual increases in regulatory costs at zero dollars

The first part of this is meaningless political gibberish - as if there is somebody out there who is a passionate defender of unduly burdening the economy. For the sake of the really stupid, I will explicitly state that the dispute is not over whether we should or should not unduly burden the economy, but what counts as an undue burden.

For this, we turn to the "zero dollars" clause.

I am a business owner. I am engaged in an activity that, it is discovered, kills, maims, or sickens others or damages their property, I get to continue that activity unless and until somebody is willing to pay me enough so that not doing harm costs me zero dollars.

Your right to life, health, and property are irrelevant. Your costs are irrelevant. The only thing that matters – the only standard on which regulations will be judged – is whether or not the regulation costs me, the Corporate American, zero dollars. If that rule is violated, the regulation will not take place.

This is functionally the same as saying, "I, a member of Corporate America, own certain rights to your life, health, and property. If you wish to prevent me from doing certain harms to your life, health, and property, you must pay me not to do so. Otherwise, I shall be considered at liberty to inflict those harms by any activity that I judge to be profitable. If you wish to buy me off so that I will not inflict those harms, you owe me at least as much as I would have made in profits by the activity that would have caused those harms – and not even one dollar less."

These are not the values I was raised to believe in. Those values state that all people have equal rights to life, liberty, and property, and it is the purpose of government to secure these rights. It is not the purpose of government to transfer those rights to Corporate America.

Though I do not believe in a creator (or, at least one that has beliefs and desires) or in intrinsic values, I hold that an honest examination of the moral facts reveals that people have many and strong reasons to promote a moral harming the life, health, and property of others. In other words, in declaring that such actions are immoral and those who would do so are . . . shall we say . . . lacking in certain virtues.

Okay . . . they’re selfish and evil.

In effect, Romney’s executive order is a massive government wealth transfer scheme from poor and middle class Americans to Corporate America.

I, the Corporate American, will either get the profits from the activity that harms others, or I will get at least an equal profit from being paid nit to cause harm. You, the muddle or lower class American, will either suffer the harms that I find profitable to inflict on others, or you will suffer the costs of paying me not to do harm."

In other words, I am richer and you are poorer.

Of course, it is not the case that all regulations prevent harming the life, health, and property of others. However, do not complain to me about the failure to make that distinction.

It is Romney in his Plan for Jobs and Economic Growth that fails to make any distinctions on this matter. If he had made distinctions and recognized other values, the rights people have not to suffer harm to their life, health, and property - then this objection would not have been made.

Instead, what we get from Romney, is a statement his regulatory philosophy holds that the purpose of government is not to secure the equal rights that all people have to their life, health, and property. Instead, governments exist for the purpose of securing the number of dollars in the pockets of Corporate America by ensuring that regulations remove not one dollar from those pockets.

Wednesday, October 19, 2011

Considerations Regarding School Vouchers

While I am on the subject of things that conservatives get right and liberals get wrong, I want to bring up the subject of school vouchers.

This is a system where the government takes tax money and pays a parent or guardian to get their child educated. The state does not manage the school or pick the teachers or pick the coursework – but it does require that the student meet certain standards. It is, after all, paying for a service – the quality education of a child. It does have a need to adopt some measure of making sure that it gets what it pays for.

One of the common objections to this system that I hear is that it is a tax subsidy for religion. There are a lot of parents who would use these vouchers to send their children to some form of religious school, where they will get religious indoctrination at state expense. This violates the separation of church and state – which does not permit the government funded religious indoctrination.

I think that this is a flawed argument. The government is not paying for religious indoctrination. It is paying to educate a child to acquire a certain set of knowledge and skills. It just so happens that, at the same time as the child is being given these skills, in some setting, it is also getting religious indoctrination. However, this is not something that the state is paying for.

It is also the case that, while a child is being educated, it is breathing – consuming oxygen and exhaling carbon dioxide. The fact that this happens while a child is getting an education paid for by the government does not imply that the government is paying the child to consume oxygen and exhale carbon dioxide.

To determine what the government is paying for, we do not need to look at what happens while the child is learning. We need to look at what the state considers to be a successful completion of the contract on the part of those who get the money. That contract cannot include any type of religious indoctrination, but this does not permit religious indoctrination going on at the same time as the terms of the contract are being met.

On this matter, we still have many and good reason to set high standards. We benefit from a well educated population, and we have reason to condemn the uneducation and miseducation (myth-education) of children.

However, the fact of the matter is that the political compromise necessary for public schools is to teach ignorance on all controversial matters. By 'controversial', I am no talking about scientific disagreements about (for example) whether t-Rex was a carnivore or scavenger. I mean any fiction that a segment of the population absolutely refuses to let go of.

The option that I would propose is not to oppose school vouchers, but to use them.

Lets create our own schools.

I would love to see an Academy of Reason for K-12 education.

This would not be an atheist school – I would oppose that. An atheist school would mean picking winners and losers on matters of fact. Though I think I know what the facts are concerning the existence of a god, I reject the arrogance of presuming infallibility.

However, it would be a school where a philosophy course covering the arguments for and against the existence of a god ( along with free will, epistemology, logic, and value theory) may well be a required course.

It would be a school that discusses creationism in its biology class – specifically for the purpose of educating children to understand exactly why creationism is not science. One could devote whole lectures in biology class to, "Here is what the creationists say. These things are false, and those things over there are not science"

It would be a school that could offer honest and informative classes on the history of religion - and even of history, for that matter. The question of what counts as evidence and whether there is evidence that Jesus actually existed could be discussed.

It would be a school where those students who are interested could take in a class that looked into the biology and psychology of homosexuality, and where students would get accurate information about sex, pregnancy, and venereal diseases and how to prevent them.

There are other potential concerns about school vouchers. For example, some worry that taking the best students out of the public schools and putting them into private schools will lower the quality of public education. Also, public schools are concerned about having less money to spend on education. Consolidating schools to cut costs will mean longer commutes for school-age children and their parents. This is not the end of the discussion.

However, there would be a lot that could be gained from having schools where teachers are free to teach and students are free to learn. And a school voucher system would help parents of modest means to get the it children into those schools.

Tuesday, October 18, 2011

Considerations on a National Sales Tax

I could support a national sales tax.

A national sales tax is a part of Republican Herman Cain's "9-9-9" tax plan – a 9 percent national sales tax, 9 percent corporate income tax, and 9 percent individual flat tax.

This is not to say that I support Cain's 999 plan. I do not. It seems well designed to tax the middle class for the purpose of supporting the wealthy.

Furthermore, I am not a supporter of a "flat tax". As I have argued in the past, I think that the first dollars for government public goods should come from the dollars that fulfill the least and weakest desires. Because of the diminishing marginal return of dollars, these are the last dollars of the very rich.

However, there is some merit to the idea of replacing taxes on labor, savings, and investment with a tax on consumption - merit grounded on real-world reasons for action and not imaginary "intrinsic values".

A tax makes the activity being taxed more expensive. You take an option that fulfills just a few more and a little stronger desires than an alternative and tax it, and you create a situation in which the alternative wins out. This suggests that taxes should be placed on activities that one wants to discourage, and not be placed on taxes one wants to encourage.

Working, saving, and investing are not good candidates for "activities we have reason to discourage".

In fact, we have more and stronger reasons to encourage these activities than discourage them.

Is "consumption" something we want to discourage?

A sales tax is really a tax on consumption - on spending.

Whether this is something to be discouraged, I would argue, depends entirely on what is being consumed.

One of the objections to national sales tax is that it is a regressive tax. It puts a greater burden on the poor and middle class - who have to spend a higher percentage of their money to survive - than on the wealthy who have spare cash to save and invest.

However, as I said above, I am no fan of the flat tax. I think we can engineer a sales tax in such a way that it avoids these objections.

First, we do not have a sales tax on what is needed to survive. Food...good food...need not be taxed at all. The portion of the poor person's income that goes to food need not be taxed. Medical care, prescription drugs, and primary shelter (rent and mortgage on a first home) can also be included in the list of things not taxed.

The more things excluded from the sales tax, the higher the rate needs to be on the things included in order to make up the lost revenue. However, that is not an objection to the system. This is, instead, an application of the principle that the first dollars to go to pay for government services should be the dollars that fulfill the least and fewest desires.

On the issue of rent and mortgage, we can rationally conclude that a $10,000 monthly rent or mortgage payment represents the purchase of a form of shelter not needed to maintain basic human welfare. So, perhaps, allowing the first $1000 in rent or mortgage per month to be free of a sales tax would be sufficient.

I am throwing these numbers out for illustrative purposes only. A proper understanding of the subject matter may argue for a different number, but the principle remains the same.

Another economic good that we can argue should be tax free is education. Indeed, education - because of its free-rider problem (an educated population is a benefit to everybody, even those who do not contribute to the cost of education) - is something that the government should subsidize, not something it should tax.

On the other side, we can have a higher sales tax rate on things that are clearly luxury items - pure consumption. Jewelry, designer clothes, everything above $2,500 in monthly rent or mortgage, luxury cars, expensive hotel suites, cruises and first-class plane tickets are examples that can fit into this category.

The fact that a sales tax is supported by Republicans - and can be designed as a system that taxes the middle class to benefit the rich - does not prove that it is a bad idea. It has its merits - and can be designed in such a way that it is just as progressive as an income tax, with the tax focused on collecting those dollars that fulfill the fewest and weakest desires.

Monday, October 17, 2011

Against Government Energy Goals

A while back, I briefly stated that I object to a climate policy in which the government set quotas and goals - for example, that by 2025 a quarter of our energy will be low carbon, or that we are going to reduce greenhouse gas emissions by 40% from its levels in 1990.

Today, I will defend that position.

Recall that my proposed climate policy would involve nothing more than a tax on man-made greenhouse gas emissions that would be used to compensate those harmed through climate change for the harms done (as best as we can). The goal is to build the cost of greenhouse gas emissions into the price, so that those who engage in greenhouse gas emitting activity are not permitted to profit from killing, maiming, and sickening others and destroying their property.

I would also add some amount to the tax to provide energy assistance to the poor, but that is a separate issue. That issue should not clutter this discussion.

Once those costs are internalized, I have no idea what course people generally will take. I do not know the full value that the different options have for people - and neither does anybody else. People may decide to go ahead and produce just as much greenhouse gas regardless of the costs - but at least those harmed will be compensated. They may go for conservation, cutting back on energy-using activities. They could go for some form of alternative energy. I simply do not know, and I would not try to predict.

The best way for this information to come out is through market transactions where the individual preferences of billions of people can be aggregated far more efficiently than any bureaucratic plan can hope to provide.

Not only are politicians substantially ignorant of current aggregate demand, they are even more ignorant both of future demand and future supply. Perhaps future breakthroughs will come mostly in conservation technology - making all forms of energy production uneconomical. Maybe carbon sequestering will allow us to open the coal fields. Maybe cold fusion is just around the corner. Maybe solar power satellites will become the least expensive way to build massive pollution-free orbiting power stations. I do not know the best direction to go, and neither does anybody else in government.

Compounding this problem of bureaucratic ignorance - where governments dictate winners and losers, every potential competitor needs to invest in lobbying, "public relations" (which often involve massive public disinformation campaigns), and the buying and selling of legislatures and regulators becomes an essential part of business.

If any company should decide to take the high road and not play these political games - focusing instead on giving their customers the best product at the lowest price - then it is on that company's carcass that the politically involved companies will feed.

We are talking here not only of lost billions of dollars in politicking that produce no viable economic goods, but of policy distortions that spring from these activities that generally make people worse off than they would have been. Not only are these programs built on a platform of massive ignorance distorted by the misinformation of political lobbying and "public relations", bureaucratic solutions lock ignorance and politics firmly in place.

Markets, on the other hand, are extremely flexible. They not only respond almost instantly to new information, and provides incentives that cause people to have the right sorts of reactions to that news.

If a massive freeze damages some food crop, the market instantly responds. The price goes up, telling people to immediately get to work to find ways to conserve whatever will soon be in short supply. It drives them to give up the least valuable uses of that resource, or to switch to substitutes where the most economical substitutes are available. It also gives people an incentive to find more of the good that is now in short supply.

Where markets respond quickly and accurately to new information, it takes the government months or years to respond to change direction - and its incentives are corrupted by the political process.

For these reasons, I would argue for a carbon tax to internalize the externalities of greenhouse gas emissions - and that is it.

I would end all government subsidies – oil subsidies and “green energy” subsidies alike.

I would end all subsidies being paid for alternative energy - ethanol, solar, wind, tide, carbon sequestering, nuclear, and the like. Let alternative energy industries - ethanol, solar, wind, tide, carbon sequestering, nuclear, and the like - compete against the new (higher) price of traditional fuels as best they can, and let the better industry win.

I would use these savings to help balance the budget.

(The carbon tax revenue is not general revenue and can’t be used to balance the budget. It is supposed to go to compensate those harmed by climate change. Adding it to the general revenue means balancing the budget on the backs of those harmed by climate change and not compensated.)

This is a plan that not only gives us a sound energy policy and helps to balance the budget, it deals with the issue of greenhouse gas emissions in a rational way, and it is one that no ideologically sound conservative could reject.

Friday, October 14, 2011

A Conservative Argument for Limited Government

I established my liberal credentials yesterday defending taxation of the wealthy to pay for government provided public goods and basic welfare.

I also criticized the practice of arguing from imaginary reasons for action to conclusions that effectively direct resources away from where they would fulfill many and strong desires and towards where they fulfill fewer and weaker desires.

However, conservatives have some valid objections to government spending. These valid objections depend on real, existing reasons for action - not the imaginary reasons for action referenced above.

These are arguments about the threat of reducing the total value of goods and services available by reducing incentives to produce goods and services.

There are arguments about the utility of freedom given that each individual is the best informed and least corruptible agent when it comes to fulfilling his own desires.

There is the political economy if laws and regulations that fly through a government bureaucracy under the public radar that take $5.00 in a year out of the picket of each citizen and deposits $1.5 billion in the accounts of the special interest groups that lobbied for the change.

There is the unproductive waste generated by making it the case that economic success goes, not to the company with the best product at the lowest cost, but the company with the best lobbyists and lawyers. Making it the case where corporate investment funds are best spent researching candidates and influencing elections, rather than hiring scientists and technicians and designing new products.

There are problems of perverse incentives, whereby those who manage their money and health well are punished with additional costs so the money can go to bail out those who manage their money poorly, or to provide health care for those who do not take care of their health.

These are not arguments grounded on imaginary reasons for action. The reasons for action behind these arguments are very real.

One particular set of facts I want to draw attention to in this post arise from having too much confidence in the government's ability to redistribute wealth from the rich to the poor.

In fact, governments are far more efficient at redistributing wealth from the poor to the rich.

Look at the events of the past 12 years.

The rich obtained trillions of dollars in benefits from the Bush tax cuts.

Then they harvested over a trillion dollars in benefits from no-bid contracts handed out by the Bush administration for the Iraq war - much of which went to benefit campaign contributors.

The deregulation of the financial industry allowed them to harvest additional trillions from financial transactions that not only failed to produce any benefit for the society, it gummed up the economy so badly that it was nearly brought to a standstill.

After this, they got trillions of dollars in bailout funds and stimulus funds that kept them in their million dollar jobs and million dollar houses, while middle class people lost their jobs and houses at near record numbers.

Given these considerations, at this point taxing the rich is far from asking them to give up money they earned through free trade for the benefit of the poor and middle class. It is more like wanting them to give some of the trillions of federal dollars they have been given over the past 12 years back to the government.

The message we hear is, "You have no right to this money. It is our hard earned income that we earned through our brilliant entrepreneurship providing goods and services for the people on the private market."

However, the fact of the matter is, a substantial portion of this wealth was government hand outs, some in payment for government services needed only through their lobbying, and some simply handed to "too big to fail" companies to keep them in business.

Now, these same people who took these trillions of dollars in government money are seeking yet another benefit - that of being free of the burdens of government programs that benefit the poor and middle class. The real message is, “Now that we have robbed the government vaults of all of its wealth, we can’t afford to continue to provide you with the benefits you have become accustomed to.”

The remedy for these ills, according to the conservative argument, is to simply deny the government the power to redistribute wealth from the poor and middle class to the rich. A lot of the problems of the last 12 years could have been avoided if not for the power that the rich have to manipulate the government into providing these multi-trillion dollar benefits.

Thursday, October 13, 2011

The Case for Taxing the Rich

Today, I am going to answer a question from the studio audience:

It's a fact to say that the rich currently do pay a larger proportion of the income tax bill. So how much more do you want? Where would you cap it?

In one sense, the question is a red herring. In terms of the current political debate, I am not demanding that the government conform to my own ideas on how much to tax. Instead, I have been arguing for compromise. I might come up with a value of X%. However, some other intelligent and concerned person may come up with Y%. In this case, even though I disagree with them, I am not going to have the arrogance we see in a substantial number of Republicans these days and say "X% or nothing". I would say, "Let's assume that I am not an infallible super genius and you might be right and meet somewhere in the middle."

My utter contempt for so many Republicans does not rest on thinking that they are wrong - they may well be right. It rests in the absolute arrogance they display in refusing to go even 10% of the way towards compromise.

But, let us look at the issue of how much to tax the rich.

I want to begin by taking a quick look at the question, "Tax them for what?"

I don't have space to go into a discussion of each type of government expenditure. I will look at one, and in doing so present the types of arguments relevant in determining when such an expense is justified.

Recall, desires are the only reasons for action that exist - the only reasons for or against adopting or rejecting a particular policy.

There are some goods and services that fulfill many and strong desires - but do so regardless of whether the beneficiary pays for those goods or services. These are called "public goods".

The paradigm example of a public good is national defense. It is not possible for the military to be selective in which property it defends. It can't say, "Apartment 529 paid is current on its defense payments, but Apartment 530 has not, so we will defend the first apartment but not the second." There is no way to defend Apartment 529 that will not benefit the owner of Apartment 530, even though the owner of 530 never paid a dime for defense.

A system of police and courts also provides for the common good - produces extensive positive externalities. The rapist captured and imprisoned is a benefit to everybody.

Quality education is a public good. You and I obtain a great many benefits merely from the fact that we are surrounded by well-educated people, even if we contribute nothing for that education.

The problem with public goods is that, since people can obtain the benefits without paying, they tend to get underfunded. Too many people wait for other people to cover the costs.

The solution, in the case of public goods, is to have the government pay for the public good (military, police and courts, education) and make sure that people pay the cost through taxation.

So, here we have determined a government expense based solely by an examination of reasons for action that exist - where desires are the only reasons for action that exist.

How much should we spend?

Here, we apply the law of diminishing returns. With the first million dollars, we do the things that provide the greatest social benefit. That is, they fulfill the most and strongest desires. With the next million, pay for items that fulfill fewer and weaker desires - not quite as many or as strong to fit in the category of the first million. Each million will produce diminishing returns. We keep adding millions until we reach the point at which, for the next million, we have some alternative that fulfills more and stronger desires than we would get by another increment in the public good.

And now the big question: who should pay for it?

Remember, we are looking only at reasons for action that exist, and desires are the only reason for action that exist.

This suggests that the first dollars to be spent on a public good should be those private dollars that fulfill the fewest and weakest desires.

Dollars are subject to the same law of diminishing returns that I mentioned above. The first dollars a person has go to fulfilling the most and strongest of his desires. The next set of dollars go to fulfilling fewer and weaker desires. Dollars continue to go to fulfilling fewer and weaker desires until, for a person with hundreds of millions of dollars, the next set of dollars fulfill very few and weak desires. So, the dollars that fulfill the fewest and weakest desires are those last few dollars of the very rich.

We also need to add a qualifier that applies to everything said about desires in this article, but is best mentioned here.

Some desires are better than others.

That is to say, there are desires that people generally have many and strong reasons to promote, and desires that people generally have many and strong reasons to inhibit.

We may imagine a hoarder who has a very strong desire to accumulate as much money as possible. For this person, their three billionth dollar may fulfill a particularly strong desire. However, this is not a desire that people generally have many and strong reasons to promote. As such, it would not have nearly the weight as a desire to provide money for malaria prevention, for example. That desire is a desire that tends to fulfill other desires. Therefore, it is a desire that others have reason to promote.

Consequently, the person contributing money to malaria prevention may get a tax break that the person wanting to hoard as much cash as possible would not get. We may raise the percentage collected in taxes a bit to collect enough from the hoarders to cover the losses from the tax breaks given to those contributing to malaria prevention.

Ultimately, this is a case for covering government expenses out if the pockets of this who have the most money. The dollars that are fulfilling the fewest and weakest desires should be the first to go to public goods and, I would argue, essential welfare goods, that fulfill the most and strongest desires.

There are other proposals out there, but the most common alternatives are founded on myth. They postulate reasons for action that do not exist, most of which have the effect of putting the few, weak, and low-value desires of some above the more, stronger, and better desires of others. As imaginary entities, they have no relevance in a discussion of real world policies. They provide no real world reason to reject the form of taxation defended above.

Wednesday, October 12, 2011

Desirism and the Concept of Fairness

A couple of my recent posts and comments have brought forth an invitation to discuss the concept of fairness. Are we being fair to wealthy people to ask that they make some contribution to closing the deficit?

Let me begin with a few basic claims about fairness.

(1) 'Fairness' is a moral concept. A moral person is fair. A person who is unfair is doing something that a moral person would not do.

(2) Since it is a moral concept, 'fairness' must relate to reasons for action that exist. There must be reasons for action that exist for creating a state in which people are fair, and reasons for action that exist for avoiding a state of unfairness. Reasons for action that do not exist have no relevance to the question of what is fair or unfair.

(3) Desires are the only reasons that exist.

I am not going to use this post to defend desirism - I have written quite a bit on that subject throughout this blog. Here, I will only seek to apply the principles of desirism to the concept of fairness. In short, this is the idea that moral evaluations ultimately aim at evaluating malleable desires as those that people generally have reason to promote through praise or inhibit through condemnation.

(4) Since 'fairness' relates states of affairs to reasons for action that exist, and desires are the only reasons for action that exist, we must assess 'fairness' by examining its relationship to desires.

(5) As a moral concept, we are relating 'fairness' to malleable desires that people generally have many and strong reasons to promote using social tools such as praise and reward, and seeking no relation to malleable desires that people generally have many and strong reasons to inhibit. Again, this is all defended in a general discussion of desirism.

(6) 'Fair' not only identifies a state as one that a person with good desires would seek to realize, but also serves as to praise for those who would act to realize that state. In this way, it acts to promote the desires responsible for creating such a state.

(7) 'Unfair' not only identifies a state as one that a person with good desires would seek to avoid realizing, but also serves to condemn those who would act to realize that state. In this way, it acts to inhibit the desires responsible for creating such a state.

So, ultimately, I get to the conclusion that to treat somebody fairly is to treat him as a person with good malleable desires (desires that people generally have many and strong reasons to promote) and lacking bad malleable desires (desires that people generally have many and strong reasons to inhibit) would treat that person.

What would a fair trial look like? It is a trial that a person with good desires, and lacking bad desires, would design.

Now, let's apply this to the case of dividing a cake among a group of six-year-olds who are all pretty much equal. The person with desires we have the most and strongest reason to promote would likely give each an equal share. But we also have reason to give people a desire to consider those who would benefit more from a slice of cake - and this who would not benefit much at all (because they already have 154,598 cakes to eat).

In comments I mentioned a case in which a boat sinks and one person ends up with 10 life jackets, one person has 1 life jacket, and 9 people have no life jackets. The concern for others that people generally have reason to promote would seek a state of redistributing the life jackets so that each person has at least one.

We use the terms 'unfair' and 'selfish' to condemn those individuals that would hoard life jackets and inhibit the desires that would lead to this behavior. Actually, our moral condemnation would be stronger than that. And if he were to take 8 life jackets and auction them off to the highest bidders, we would have utter contempt for such a person - for good reason.

We call the state of affairs in which each agent gets at least one life jacket 'fair' to promote desires that would motivate agents to realize this state.

Does fairness require an equal distribution of all assets?

No. After people have been raised up to a particular state where they have no particular need for a resource, it is unfair to take from somebody any surplus that the person may have acquired for themselves. We want to condemn this interest in taking more than what is needed because we do not want to destroy the incentive to create a (desire-fulfilling) surplus.

Yet, this does not imply that we have no reason to condemn the person who decides to do nothing when his well-being is secure and his small efforts will provide major benefits for others.

Similarly, even in a state in which there just is not enough to go around, we have reason to promote an aversion to taking so much from another that we take away their means of obtaining some basic level of food, shelter, and health.

I would like to contrast this to the libertarian concept of fairness. This concept is built upon a myth that intrinsic values exist and that it is unfair to take property from others when that act violates these imaginary intrinsic moral properties.

Libertarianism shares the idea that "fair" is what there are reasons for action to bring about, and "unfair" is what there are reasons for action to avoid. Its problem rests with the make-believe reasons for action that it relies on in determining what states to bring about or avoid.

Desires exist. We see them operating around us constantly, providing a whole host of reasons for intentional action that both explain and allow us to predict a great many every-day events - the behavior of intentional agents.

But the libertarian conclusions about fairness are false, because the libertarian reasons for action are not limited to reasons for action that exist.

Do you want to prove that the wealthy are being treated unfairly? Then prove that a person with good desires will not prefer that the money that pays for government services come from the rich. And prove that those desires are good, not because they are in agreement with some imaginary supernatural oughts, but because they are desires that people generally have many and strong reasons to promote using tools like praise and condemnation. Prove that people generally have many and strong desire-based reasons to condemn the motivation behind such an act. Then, you have proved that taxing the rich is unfair.

Tomorrow, I will look specifically at the issue of taxing the rich and answer the question of how much I would have taken, and for what.

Tuesday, October 11, 2011

Obama and the Issue of Civil Rights

A member if the studio audience made the following comment:

Noam Chomsky made a salient point in an interview with RT: "Bush tortured people, but Obama just kills them." Moreover, Obama has changed virtually none of the Big Government, anti-civil liberty policies that Bush put in place. Killing Awlaki, an American citizen, rightly ought to raise many eyebrows.

I am no fan of Noam Chomsky - but it is an ad hominem fallacy to reject a proposition simply because of the name attached to it.

However, this comment brought to mind the fact that, though I have written a great deal about the wrongness of torture and the moral requirement of trials by an impartial jury to prevent abuses of power, I also claimed even before the 2008 Presidential election that Obama would not be able to reverse these policies.

Any attempt to do so would result in his being removed from office and replaced by somebody more like Bush/Chaney - willing, even eager, to torture not only for information, but for vengeance.

The reason rests in the fact that America itself has morally degenerated. The moral aversion to torture, to denying the right to a fair trial, to ignoring the principle that people have a right to be secure in their persons, papers, homes, and effects from unreasonable searches and seizures, and to cruel and unusual punishment that used to be a part of the social morality that defined America had greatly diminished.

Those who still hold these values can complain all we want about how the government is responsible and blame the President. However, the fact is that of a President were to try to secure these rights and live by these standards, the American people will see that he is properly punished for his actions and removed from office at the earliest possibility. We will then replace him with somebody who shares and enforces our immoral inclinations in these respects.

Clearly, not all Americans have suffered from this moral degeneration - but a sufficient number has to make it impossible for the government to respect these rights for long.

It is particularly ironic that we still have people saying, "Gasp! We can't elect an Atheist! An atheist does not recognize that our rights come from God and will destroy those rights at the first convenience."

Yet, look at who has become the enthusiastic supporters of torture, of taking people off the streets and holding them indefinitely without a trial, of cruel and unusual punishments, of corporate nobility destroying the life, health, liberty, and property of others through pollution with impunity and without compensation?

No doubt, future generations will say, "Look at the rise of atheism in the first part of the 20th century - the same time that America reverted back to a nation of torture, unjust imprisonments, and cruel and unusual punishments. Obviously, atheism is to blame." This will be in spite of the fact that the people in the past century who were the strongest supporters of these policies also happened to be the most religious.

Obama tried to give the Guantanamo Bay detainees fair trials in a civilian court. Congress passed legislation prohibiting that any federal money be spent on this - forcing him to keep Guantanamo Bay open and its people imprisoned without trials.

If Obama were to give even a hint that he is soft on terrorism, his opposition will immediately employ fear tactics to tell the American people that "they" will come and inflict untold harms if we do not get somebody into office more sympathetic to torture, killing, and cruel and unusual punishments. I am pretty sure that Obama has taken these reforms - restoring America to its previous standards of decency - about as far as he can get away with.

It calls to mind an element in the Star Wars movie Revenge of the Sith that has always struck me as particularly noteworthy. As the Emperor gains his emergency powers to the cheers of the Senate, Padmé (one of the Senators opposing the Emperor) says, "So this is how liberty dies: With thunderous applause."

Do not look to Obama to change things. These changes have to come from us. More to the point, the change has to be within us.

Friday, October 07, 2011

An Ethical Look at Occupy Wall Street

As this "Occupy Wall Street" protest continues, I would like to write about whether, and to what degree, there is legitimate cause for complaint.

There are two issues that I have seen worthy of protest for quite some time.

Issue #1: A number of corporate executives participated in financial transactions that effectively gummed up the financial system, requiring massive government intervention to clean up the mess. We still have not cleaned up all of the dirty debt. But even doing as much as we have done has created massive government debts.

I would like to know how many of those responsible for the mess are unemployed, without health insurance, with their homes in foreclosure and bill collectors around every corner.

A massive amount of government assistance not only went to save these companies (and the investment accounts of the people who caused these problems) but the jobs of those responsible for this mess as well.

The free enterprise system is supposed to function by holding people responsible for their actions. It is supposed to be a system where entrepreneurs make their bets and take their chances. If they win, they pocket the winnings. If they lose, the losses come out of their pockets - not ours.

The possibility of loss is supposed to provide these investors with an incentive to make sure that their investments are worthwhile.

What do you think would happen at the gambling table with Uncle Sam standing over the shoulder of a gambler saying, "If you win, you get the winnings. If you lose, I will cover your losses."

Well, the expected reaction would be for the gambler to take risks he would not otherwise take. And we get to pay for losses that otherwise never would have been lost.

Which is exactly the behavior that killed the economy.

We have set up a system where millionaires are allowed to place massive economic bets, keep the winnings if they win, and take the money out of our pockets if they lose.

That is a system that warrants protest and demands for change.

Issue #2: There is reason to protest the political ideology that says that the whole burden of salvaging the American economy on the shoulders if the poor and middle class.

Everybody has an incentive to pay less and force others to pay more. However, in this case, we have a group claiming that those with money make no contribution while the other 99 percent accepts all the burden, where those who caused the problem are among the group spared any cost.

That is wholly unfair and worthy of protest.

There are some very worthy reasons for complaint, and I am pleased to see objections being raised.

Thursday, October 06, 2011

Harm: Physical versus Property

Here is an interesting principle that comes from a member of the studio audience.

To equate property violence to physical violence is laughable, Alonso. The implicit threats of the tea party were against persons, not property. The actions are not the same. Well, it may be morally questionable to commit acts of property violence--although this is debatable even under desirism in political debates. Framing the question in terms of equivocalness is misleading..


Let's say I give you a choice. Your options are, (1) I make a small, clean cut on the side if your hand, or (2) destroy your home and everything in it.

Or (1) I yank out three of your hairs, or (2) I take the whole of your savings.

Which do you choose?

Recall, equating violence against property and physical violence is laughable.

Yet, in both cases, I would wager that the bulk of the population will take the first option (physical violence) over the second (property violence) in both case.

Now, increase the magnitude of the physical violence and/or decrease the magnitude of the property violence, and you will eventually come to a point where the agent will, in fact, be indifferent to between the two options.that is to say, the property harm and physical harm are equivalent.

Pay attention to the implication here. For every act of property violence, there is an alternative act of physical violence with which the agent will be indifferent between the two. There us some form of physical violence that us subjectively equivalent to that property violence for the victim.

This point will be different for different people defecting their different subjective preferences. Many people will prefer the loss if a dollar to a cut on their hand. Fewer would be willing to suffer the loss of $100. Many would accept the cut over the loss of thousands if dollars.

Actually, all harms that we inflict against people are harms of the same type. We harm people by thwarting their strong and stable desires. The degree to which an agent may prefer a physical violence to property violence is determined by his aversion to the physical harm and it's consequences, compared to his aversion to the loss of the property or it's consequences. The fact that people routinely make these comparisons is proof enough that they can do so.

This pretense that there is a difference between the two is simply a rationalization that some people use to give themselves permission to cause harms of a particular type.  It is a technique called "minimization - the pretense that one us not doing harm to avoid the psychological costs if doing home.

The position does not have any legitimacy. Yet, some people find the belief in certain fictions to be useful or comfortable.

Assassinating Americans by Executive Order

On September 30, the US Government intentionally killed an American citizen, Anwar al-Awlaki, in a missile attack in Yemen. Was this murder?

Whether an act was committed against an American or whether he was on American soil may be relevant to whether it was illegal, but not to the question of whether it was immoral. It violates the very essence of morality to say that, simply in virtue if being an American, or in virtue of being at one set of coordinates rather than another, one's basic moral rights change.

This invites the question of whether the rights such as the right to a trial, against arbitrary imprisonment, or cruel and unusual punishment, is a moral right respected by governments (or not), or if they are legal rights that exist only at the whim of the government. If it is a moral right, it is a right held by all people regardless if nationality. If it is a mere political right, then we have no basis for a moral objection if the government began doing the something to us in our win country.

America's founding fathers viewed these rights to be moral rights, respected by just governments and violated by unjust governments. The Declaration of Independence is nothing if not an assertion that we have moral rights, that governments are established to protect these rights, and whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it.

We see the same philosophy in the Bill of Rights, where rights to freedom of assembly, to keep and bear arms, to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures, and so forth are pre-existing moral rights that governments must not abridge.

As a moral realist, I share this view. There are pre-existing moral rights that define whether a government is being just or unjust. These rights do not depend on the whim of the government to decide whether it will grant those rights. Instead, whether governments respect or abridge those rights determine the government's legitimacy.

It is quite remarkable, if you think about it, how strongly political conservatives demand that these rights be treated as mere political rights, applicable only to Americans merely by the accident that the government has been created to respect these rights, and not held by any other people. There are few things so clearly at odds with the philosophy under which this country was founded.

In discussing the moral case, it does not matter whether Anwar al-Awlaki was an American, or whether the act took place on Ametican soil. That is simply not a part of the debate.

However, we can still approach the moral question by asking, "Would it be a violation of a fundamental moral right for the U.S. Government to kill an American citizen in the same manner in . . .say . . . Arizona?"

If the government were to adopt the practice of launching drone attacks against Americans on American soil at the discretion of some unspecified committee appointed by the President, would this be merely a political issue? Or would it be an immoral injustice that would justify the view that the government has become destructive of, rather than securing, our pre-existing moral rights?

I am not suggesting that we settle the moral question by asking how we feel about these various options. I am suggesting that, in deciding the moral case, killing Anwar al-Awlaki is morally equivalent to killing him the same way on a road in Kansas - all else being equal.

Wednesday, October 05, 2011

Occupy Wall Street and Willingness to Violence

Do you remember, in the early days of the Tea Party movement, members showed up with guns declaring their right as an expression of their anger towards the government?

Their implicit threats of violence were met with strong condemnation. Many people I read offered this as strong evidence that the Tea Party itself was morally bankrupt - or at least morally deficient.

Now, it appears that the political left's answer to the Tea Party, with its movement to Occupy Wall Street, now has an opportunity to address the issue of violence on its own side of the political spectrum.

Oct. 5 (Bloomberg) -- Anonymous, a group of self-styled hacker-activists behind attacks on corporate and government websites, vowed to support the Occupy Wall Street protests by erasing the New York Stock Exchange “from the Internet” on Oct. 10.

(See: Businessweek Anonymous Vows NYSE Attack to Support Wall Street Protests)

This is violence - plain and simple. Instead of using guns and bombs, these people are threatening to use keyboards, but the effect of damaging or destroying the property of another person is the same. And, of course, the offenders on both sides will declare, "We are in the right. They deserve what we do to them."

We can expect to hear all of the same rationalizations and excuses that those on the right who threatened or implied violence would have used - about how their personal genious and infallible sense of right and wrong gives them unquestioned liberty to threaten or use violence to back up their righteous indignation.

As far as I can tell, the Tea Party and the political right talked mean and made their implicit threats, but I did not catch much news of actual violence. Yet, the mere expression of a willingness to consider violence was enough to earn them the condemnation of the left. Regardless of the nature of their grievances, they were not to think that resorting to violence was a legitimate response.

Apparently, some people on the left think that they are not bound by the same standards. They are not only permitted to express a willingness to consider violence, they can go so far as to plan and execute acts of violence against those they disapprove of.

This is a good opportunity to discover if the political left actually have some sense of right and wrong, or if they are instead a bunch of opportunistic hypocrites who think that they stand above and beyond the moral principles they assert should apply to others.

These proposed attacks against should not take place, and where they are being offered in support of Occupy Wall Street it is up to the participants on that occupation to condemn them and to express clearly that they object to that type of behavior.

Update 5:00 pm

It seems that some members if Anonymous are questioning whether this is a legitimate threat - suggesting that it may have been a move to discredit Occupy Wall Street by linking it to behavior that would be subject to criticisms like mine. I would hope that this is the case. Occupy Wall Street does need to show that it's movement has a morally more responsible attitude towards violence and implicit or explicit threats of violence than we have seen elsewhere.

Liberal vs. Conservative on Climate Change

A member if the studio audience has asked:

I am interested, in these posts, to see this developed from the perspective of what you think is a realistic "conservative" perspective. However you seem to be describing the "liberal" perspective, could you please explain why you call it "conservative"?

Well, I call it conservative because it is grounded on the principles of free and open markets and an inalienable human right to property. There is nothing in this argument about a right to health care or a job, no safety net for the poor, and no micromanaging of the economy.

It is really interesting that what I have been arguing - based on free trade and individual rights - is seen as 'liberal' and condemned as 'socialists' by a large portion of the population. Those people, in turn, are defending a set of attitudes that I think can more accurately be called "corporate feudalism".

Corporate feudalism is a doctrine that replaces the principle of property rights with one that gives the corporate lords and ladies widespread political permission to violate these rights - to perform actions harmful to the lives, health, and property of others with impunity - when there are profits to be made.

Let me illustrate the difference by adding some liberal components to the issue of climate change that can't be defended using the principles of free markets and individual responsibility.

Recall that, using principles of a free market and individual responsibility, the goal is to internalize the actual costs of greenhouse gas emissions by raising the price (through an emissions tax) by an amount that - as close as we can get - matches the value of those costs. That revenue is then to be used strictly to compensate those harmed for the harms suffered.

Let us assume that this is $1.00 per ton of carbon.

The liberal then steps up and offers the following.

First, this increase in energy costs will harm the poor. Energy costs are a higher portion of their costs of living. A liberal position that I would defend would say something like, "We should increase the tax to $1.20 per ton of carbon and use the extra revenue to provide energy assistance to the poor."

Second, while we are at it, let us add another $0.10 to the tax and use it to pay for climate change research, so that we know what we are doing.

Third, we can't just internalize the costs of harm done and compensate those harmed and leave the free market to work out the details. We are going to mess around with the details as well. For example, we will establish a goal that, by 2025, 25% of our energy will come from renewable resources. The conservative would condemn these types of government fine tuning. The percentage of energy that comes from renewable resources will be whatever percentage the free market settles on after costs have been internalized.

Fourth, some liberals have argued for using the government to pick and choose energy companies for direct government support in terms of loan guarantees or actual grants. Here, too, the conservative argument would be that, once costs are internalized, the free market should be let alone to decide which companies succeed or fail, and the government ought not to be interfering in those decisions.

Fifth, some liberals will bring into the debate values that simply do not exist - values that are as imaginary as any religious values. For example, there are some who think that any form of human change introduced into the environment represents an intrinsic evil. Rather than treating environmental values as an economic good to be traded like all others, they assert that it has a special value that justifies all sorts of special burdens be placed on others. The conservative would object to these arguments.

Personally, I the liberal is right with respect to the first two points, and the conservative is right on the last three.

However, in saying this, remember that I am talking about the property rights, free market conservative. I am not talking about the corporate feudalist that dominates today's political scene. The corporate feudalist - the typical Republican conservative we see today - sidesteps much of this debate with their objection to any attempt to limit the corporate masters' political liberty to inflict harms when it is profitable to do so is wrong.

Tuesday, October 04, 2011

Greenhouse Gas Emissions and Transactions Costs

In this series of posts, I have been looking at the climate change issue from the point of view of an intelligent and consistent political conservative – one that believes in individual responsibility and free markets.

Morally, a conservative believes that individuals have inalienable rights to life, liberty, and property. These rights represent a moral prohibition on others against acting in ways harmful to one's life, health, liberty or property, and a duty to provide compensation to victims for harms done.

Economically, it means that individuals must cover the costs of their actions and not force those costs on others without their consent. This provides an incentive to avoid actions where the social costs exceed the social benefits, allowing Adam Smith's invisible and to operate for the good of the community.

Applying these to climate change, the conservative challenge is to come up with a system where the harm-doers with respect to greenhouse gas emissions cover the cost of the harms inflicted on others.

One option is to have each and every greenhouse gas emitter negotiate with each and every person potentially harmed and purchase the risks associated with those potential harms.

Unfortunately, the transaction costs for this type of system are prohibitively high.

In free market economics, transaction costs represent a type of economic inefficiency. It gets in the way of mutually beneficial market transactions.

Person 1 has A but would prefer B. Person 2 has B but would prefer A. Both have reason to exchange A for B. Unfortunately, this beneficial trade has to overcome the barrier of transaction costs. They have to negotiate a trade. And they need to engage in the physical activities that make the trade possible. All of these costs are examples of transactions costs.

Lowering the height of the transaction cost barrier means that more mutually beneficial market transactions can take place.

So, we need a system that accomplishes three objectives.

(1) Internalizes the cost of harms done into the incentives faced by the harm doers.

(2) Compensates those harmed for the harms done (respecting their rights to life, liberty, and property).

(3) Lowers transaction costs.

All of these help the free market's invisible hand work its magic.

There are two policy options that meet these criteria. In cases of perfect knowledge, and application, these options are functionally identical and there is no reason to choose one or the other.

One option is to have the harm doers pay a fee equal the best estimate of harms done - thus internalizing those costs. The revenue is then used to provide compensation to those harmed. This will render some actions too costly - but only those that produce harms that those who benefit are unwilling to cover. The prohibitive transaction costs of having to negotiate trillions of individual contracts is replaced by the lower costs of negotiating the tax.

The other option is "cap and trade". This option fixes the quantity of harmful activity permitted and then auctions off permits to engage in that activity. If the correct level of activity is selected, the revenue that the government receives from auctioning these permits is equal to the value of the harm done. Furthermore, the receipts go to those harmed as compensation for the harms suffered.

Certainly, there will be disputes as to the magnitude of these harms. Harm-doers will have an incentive to deny or minimize harms, while others will have an incentive to magnify the harms suffered or to claim harms that do not exist.

This is a practical problem. However, it is not a problem that is unique to this particular set of circumstances. All of criminal and civil law has to deal with these types of issues - plaintiffs who make exaggerated claims of harm and defendants seeking to minimize or deny those claims. If this were a lethal objection, then it would be a lethal objection to the whole of civil and criminal law.

However, these incentives do not provide a moral excuse for making false claims in order to try to milk the system. It does not justify trying to manipulate the system so as to profit from inflicting harms on others. Nor does it justify trying to manipulate the system by using it to get others to compensate for harms that do not exist. The moral objection to these types of activities still stands. Those people deserve our contempt and condemnation.

None of this counts as socialism. None of this represents anything an intelligent and morally consistent conservative must reject. There is a point at which I would break off of this line of argument and go places an intelligent and consistent conservative would not go, but we have not reached that point yet.

Monday, October 03, 2011

Denial of Harm on Climate Change

For the last couple of posts I provided a proper conservative response to the issue of climate change that an intellectually honest and responsible conservative should provide.

My first post covered the moral argument. Conservative moral principles say that it is wrong for a person to act in ways harmful to others without, at the very least, compensating others for the harms they suffer. This justifies moral prohibitions on things such as murder, rape, theft, vandalism, and fraud. It also provides a moral prohibition on throwing a chemical into a person’s eyes that blinds him, or into the air that summons a wave that destroys his property. Throwing greenhouse gasses into the air obligates those who do so to compensate others for the harms done. Conservative principles of individual rights and responsibility require this. Yet, no conservative politician seems interested in defending these principles.

My second post covered the economic argument. Free market principles prohibit non-free (coerced) economic transactions. In order to prevent economic transactions that produce a net economic cost, people are obligated to provide those harmed with compensation for harms done. This means that economic transactions either need to create enough of a surplus to cover those costs, or the person who performed the transaction (rather than those harmed) suffers the costs of their mistake. This gives people an incentive to discover and avoid those mistakes. On the other hand, if people are permitted to pass costs onto others against their will, the lack of an incentive to avoid those costs means that people will inflict a lot of costs that would otherwise have been avoided.

Both of these arguments rest on the assumption that greenhouse gas emissions cause harm. This is an assumption that some people might want to question.

Child molesters do this. In order to give themselves permission to have sex with children, they deny the strong scientific consensus that says that these types of activities are harmful. How can they be harmful? Sex is fun. It is pleasurable – or it can be.

They also engage in the habit of dreaming up other possible causes of the harm. If there is any harm being done it is caused by those who have a totally irrational reaction to these relationships. It is always somebody else's fault.

A lot of people are going to be jarred by this comparison, but it still stands. Denying harm as a way of giving oneself permission to do things harmful to others that one wants to do is a very common human quality. But that does not make it a good quality. It is a quality that we quite sensibly condemn and detest - because of the harms that people who display this quality commonly do to others.

Drunk drivers provide us with another example. "I'm okay. I can make it home." A great many harms are caused, in fact, by people who simply refuse to admit that the behavior they engage risk the well-being of others - until those others end up maimed or killed or their property is destroyed. And still the morally irresponsible person will insist, "It wasn't my fault" in the face of strong evidence to the contrary.

Even if it were to turn out that climate scientists had made some huge mistake - which is extremely unlikely - we can see massive evidence of clutching at straws in denying home among many who question the consensus on climate change. The quality of the arguments is truly pathetic.

Like the claim that the little ice age provides evidence against global warming (global warming is not inconsistent with regional cooling).

Like using news articles from news magazines in the 1970s talking about "the coming ice age" to discredit climate change science. (News magazines are not peer-reviewed science publications, there were no predictions of a coming ice age in the peer-reviewed literature, and even if there were, scientists change their minds with new data.)

Like using the fact that there has been little atmospheric temperature change in the past few years to discredit the science. (Energy also gets stored in a system by means of a phase change - the melting of large quantities of ice - and warming of non-atmospheric heat sinks such as the deep ocean - which brings in a whole new set of risks).

Like the claim that humans contribute a small amount to the overall carbon emissions. (All natural emissions are balanced by natural absorption as shown by 10,000 years with little fluctuation in greenhouse gas emissions. The only change in missions in the last few years that exists to account for the change of concentrations is the increase in human greenhouse gas emissions).

Like the argument that there us a lot if complexity in climate science and we really do not know what the results will be. (This is consistent with the possibility that human actions could trigger a natural response that will make things far worse than we currently expect - such as the massive thawing of frozen deep-sea methane caused by deep-sea warming.)

These are all foolish arguments, easily seen as flawed by anybody truly concerned not to cause harm, but greedily clutch by those who want to deny responsibility for the harms and risks they impose on others.

The latter argument in particular is a lot like the drunk driver claiming, "You don't know for certain that I will kill somebody on the way home, so give my the keys."

I do not have to know for certain. It is enough to know that you are risking lives, health, and property that are not yours to play with. Recklessness is still a moral crime - one defined by the reckless disregard its agents show for the harms and risks they impose on others.

Whenever I see any of these arguments show up in a debate, I know that I am dealing with an individual with a recklessly irresponsible disregard for the potential harms and risks he creates for others.

If somebody dislikes being put in the same moral category as others who deny harms in order to give themselves permission to perform actions harmful to others - if they hate being in that category - my advice is to quit clutching at clearly irrational straws in denying the potential harms and risks of their actions. As long as they continue to clutch at these straws, they fit in the same moral category as others who clutch at quite similar straws.