A persistent meme about the proposed Voluntary Student Membership Bill currently before the NZ parliament is that the current situation allows for quantitatively more choice than the proposed bill. Basically, it goes like this.
At the moment, students can have binding referenda on VSM. The bill would force VSM upon them, abrogating them of that choice. Therefore, if you support choice, you should oppose the bill. Often thrown in are some corollaries along the lines that ACT or National are 'forcing' VSM on a probably unwilling student populace.
This brings out an important difference in how people see politics generally. To me this argument is absurd, but to many it rings so clearly true that it needs no more justification. The difference (I think) lies in your conception of the relationship between the individual and society. If (like me) you think that individual rights are the only true rights, then VSM provides more choice - because it devolves it to the level of the individual. On the other hand, if you think collectives and groups can make meaningful decisions that are broadly representative of their constituents, then of course you should let the group 'choose' whether or not they want VSM.
Ultimately this distinction is unlikely to be resolved with respect to VSM, because (as with many political issues), both sides are steadfastly unwilling to acknowledge that the other might have a point, or to admit that their basic principles are even up for debate. But here are a few brief specific reasons which will hopefully be persuasive.
1) The group of university students is wildly heterogeneous, that is, individual students are huge different from each other. There are jocks, nerds, goths, anarchists, conservatives, apathetics, and all sorts of people that don't fit into silly stereotypes and definitions. How can you really say that this group 'chooses' something by simply aggregating their votes? Even calling them a group is stretching it.
2) VSM allows people to 'decide' on universal membership every year. It's like having a (nearly) free referendum! How? Well if everyone supports student unions, then everyone will join. So VSM allows people to make the same choice a referendum would, but every year! If we are interested in 'choice arithmetic' - it seems like VSM is the way to go.
3) Compulsory student membership, properly understood, is the anthesis of choice - and even voting on it is. This is because what you are voting on is whether or not you should stop your fellow students from choosing to leave. So you are choosing whether or not you should be allowed to choose. This isn't like voting in an election, it's like voting as to whether you should have elections at all, or whether everyone's vote should just be the same as yours.
The obvious response is to say that choice isn't that important, and that there are considerations at play. Obviously there are, and you can expect some posts on them in the future. But if you say that, you've conceded to me more or less the point of this blog post, which I am happy with for now.
Update: BK Drinkwater does a much more comprehensive post.
Meritocracy - Neither Descriptive nor Desirable
A guest poster at Kiwiblog informs us that full equality of opportunity exists - the only reason why you might be unsuccessful in life is because you're lazy.
This is of course silly, not even the most ardent meritocrat would argue that there is a 0% correlation between your parents' wealth and your own (for example), even correcting for other factors like IQ. Hard work just isn't all the story. But underlying it is the common concept that wealth in society is and ought to be distributed according to merit.
Morally, this is the wrong way of looking at things. As Robert Nozick showed a while back, if you want a society where wealth is strictly patterned according to a particular variable you like (hard work, intelligence, number of posts read on Defective Equilibrium), you are going to have to continually interfere in voluntary (and often mutually beneficial) transactions to maintain this distribution. To take the merit-based argument, if you really want wealth to be distributed according to merit, once you had a meritocracy, you would have to forbid people giving gifts to people less meritorious than themselves, lazy people from accidentally making new discoveries and getting rich off them, etc. To actually maintain the pattern would require a state that intrudes in things most people think it probably shouldn't.
Equally important is that 'merit' is such a nebulous concept, it's more or less impossible to draw any moral conclusions from it. What attributes I think are good are likely to be highly different to the attributes you admire. Maybe I think that a lazy but brilliant person is of greater merit than a hard-working average person, or maybe vice versa. There's not an obvious set of independent standards by which we can judge this. Most people implicitly judge it by imagining what they want to be like, and assuming that everyone should also aspire to that, or something very similar. But that is not a very good way of doing it. It's easy to accept that different people can gain equal enjoyment from living vastly different lives, that is, theories of the good should be thin (at best). But people are for some reason reluctant to generalise this when thinking about desirable personal attributes.
There's also the important question of which of your attributes you deserve and which you do not (further reading: Rawls' Original Position). Surely I don't 'deserve' in any merit-based way the money my parents worked to earn (note that this is a different thing from saying I am entitled to it in a Nozickian sense). But then why should I deserve their work ethic, intelligence, or anything else I might (or might not) inherit from them? Surely I can't claim to be a better person for things I'm not responsible for in any meaningful way?
Conclusion: The meta-readers among you will notice that I've presented a kind of right-wing and a kind of left-wing argument here. My hope is that no matter where on the political spectrum you fall, you will reject meritocracy. There are just simply way better alternatives out there.
This is of course silly, not even the most ardent meritocrat would argue that there is a 0% correlation between your parents' wealth and your own (for example), even correcting for other factors like IQ. Hard work just isn't all the story. But underlying it is the common concept that wealth in society is and ought to be distributed according to merit.
Morally, this is the wrong way of looking at things. As Robert Nozick showed a while back, if you want a society where wealth is strictly patterned according to a particular variable you like (hard work, intelligence, number of posts read on Defective Equilibrium), you are going to have to continually interfere in voluntary (and often mutually beneficial) transactions to maintain this distribution. To take the merit-based argument, if you really want wealth to be distributed according to merit, once you had a meritocracy, you would have to forbid people giving gifts to people less meritorious than themselves, lazy people from accidentally making new discoveries and getting rich off them, etc. To actually maintain the pattern would require a state that intrudes in things most people think it probably shouldn't.
Equally important is that 'merit' is such a nebulous concept, it's more or less impossible to draw any moral conclusions from it. What attributes I think are good are likely to be highly different to the attributes you admire. Maybe I think that a lazy but brilliant person is of greater merit than a hard-working average person, or maybe vice versa. There's not an obvious set of independent standards by which we can judge this. Most people implicitly judge it by imagining what they want to be like, and assuming that everyone should also aspire to that, or something very similar. But that is not a very good way of doing it. It's easy to accept that different people can gain equal enjoyment from living vastly different lives, that is, theories of the good should be thin (at best). But people are for some reason reluctant to generalise this when thinking about desirable personal attributes.
There's also the important question of which of your attributes you deserve and which you do not (further reading: Rawls' Original Position). Surely I don't 'deserve' in any merit-based way the money my parents worked to earn (note that this is a different thing from saying I am entitled to it in a Nozickian sense). But then why should I deserve their work ethic, intelligence, or anything else I might (or might not) inherit from them? Surely I can't claim to be a better person for things I'm not responsible for in any meaningful way?
Conclusion: The meta-readers among you will notice that I've presented a kind of right-wing and a kind of left-wing argument here. My hope is that no matter where on the political spectrum you fall, you will reject meritocracy. There are just simply way better alternatives out there.
Economic History Question
Who was the first person to discuss externalities and how they affect markets? The sources I've read seem to strongly imply Pigou but I am not sure if that is just because of the tax.
Does anyone know?
Does anyone know?
Theological Paranoia
Say you're God and you want to kill of all of humanity, but in such a way that no-one will know that it's you (as is your want). How would you do it? You might consider what humans' weaknesses are, in order to exploit them.
Addictive behaviour? Doesn't seem to be universal enough, even if you try to compensate with substantial negative externalities. Eg. Smoking.
Risk Management and Natural Disasters? It seems like people aren't very good at anticipating rare, catastrophic events. But humans would be on to you with this one, they've already labelled these 'acts of God'.
There are plenty of others, but I think your best bet would be a lethal collective action problem dispersed across the entire world. Humans are broadly self-interested, and at the very best can only consistently be altruistic in quite a limited way. So if you set things up in such a way that heaps of their actions have costs which they themselves don't have to bear, they will by and large do little about it, while collectively making themselves slowly worse off, to the point of self-extermination, if you set it up right. It would be more effective if it was dispersed across the whole world, because that makes it harder for people to bargain with each other and come to better outcomes that way.
That sounds pretty effective, but here's how you could make it even more deadly. You would make the costs so dispersed and hard to see that it would take the smartest people in the world to notice that they actually existed. Secondly, you would notice that academics aren't very good at collaborating across genres, so you make it a massive cross-disciplinary project to determine the costs precisely.
Finally, you set up a lot of the industries that produce the most cost with high fixed costs, and economies of scale. This makes them naturally fairly uncompetitive, that is, you have a small number of big companies producing in those areas. So there will be strong incentives on very powerful interests to resist pricing in the costs appropriately.
So far, so hypothetical. It's lucky for us that God loves us and... wait. Uh oh.
We are screwed.
Addictive behaviour? Doesn't seem to be universal enough, even if you try to compensate with substantial negative externalities. Eg. Smoking.
Risk Management and Natural Disasters? It seems like people aren't very good at anticipating rare, catastrophic events. But humans would be on to you with this one, they've already labelled these 'acts of God'.
There are plenty of others, but I think your best bet would be a lethal collective action problem dispersed across the entire world. Humans are broadly self-interested, and at the very best can only consistently be altruistic in quite a limited way. So if you set things up in such a way that heaps of their actions have costs which they themselves don't have to bear, they will by and large do little about it, while collectively making themselves slowly worse off, to the point of self-extermination, if you set it up right. It would be more effective if it was dispersed across the whole world, because that makes it harder for people to bargain with each other and come to better outcomes that way.
That sounds pretty effective, but here's how you could make it even more deadly. You would make the costs so dispersed and hard to see that it would take the smartest people in the world to notice that they actually existed. Secondly, you would notice that academics aren't very good at collaborating across genres, so you make it a massive cross-disciplinary project to determine the costs precisely.
Finally, you set up a lot of the industries that produce the most cost with high fixed costs, and economies of scale. This makes them naturally fairly uncompetitive, that is, you have a small number of big companies producing in those areas. So there will be strong incentives on very powerful interests to resist pricing in the costs appropriately.
So far, so hypothetical. It's lucky for us that God loves us and... wait. Uh oh.
We are screwed.
Thought Experiment: Printing Money
Here's another thought experiment - still public policy stuff but as I have just received the latest Philosophical Review hopefully I will have some more eclectic ones shortly. This one is decidedly less abstract, I'm not even sure if it classifies as a thought experiment, but there you go.
Say the Government decides to manage the money supply itself and take over the task of printing money from the central bank. Say then that there is an enterprising politician (call him William) that now thinks he can game the system to his own advantage. William has a sure-fire investment that is going to make him a millionaire, but he needs $10,000 to get in on it.
He figures that he can use the Government printing press to print the money. Sure, that devalues everyone's money, but what would be the inflationary effect of $10,000 more across the whole economy? Far less than would be even noticeable or measurable. How can you say your rights have been violated if you can't even notice the extent to which they have been? Is there even a rights violation at all? Or if you're not into rights, surely you would accept that this investment is going to make William much happier, without noticeable effect to the rest of us. By a utilitarian standard, wouldn't he be morally obligated to print himself money?
Question: Is what William does immoral? On what grounds? Assume that he doesn't get caught, and puts mechanisms in place so it can never be done again.
Say the Government decides to manage the money supply itself and take over the task of printing money from the central bank. Say then that there is an enterprising politician (call him William) that now thinks he can game the system to his own advantage. William has a sure-fire investment that is going to make him a millionaire, but he needs $10,000 to get in on it.
He figures that he can use the Government printing press to print the money. Sure, that devalues everyone's money, but what would be the inflationary effect of $10,000 more across the whole economy? Far less than would be even noticeable or measurable. How can you say your rights have been violated if you can't even notice the extent to which they have been? Is there even a rights violation at all? Or if you're not into rights, surely you would accept that this investment is going to make William much happier, without noticeable effect to the rest of us. By a utilitarian standard, wouldn't he be morally obligated to print himself money?
Question: Is what William does immoral? On what grounds? Assume that he doesn't get caught, and puts mechanisms in place so it can never be done again.
Brief Thought
If I support local action on climate change, but would defect in a Prisoner's Dilemma, am I being inconsistent?
It seems like I am.
It seems like I am.
Supply, Meet Demand
Jeanette Fitzsimons probably needs to become more acquainted with them both, unfortunately, as well as a bit more textbook micro.
Here she is on electricity:
Hold up. What do diseconomies of scale mean for market structure? It means that the efficient number of firms is lots of small ones - which just so happens to be one of the conditions for a competitive market. This is because one big firm will produce stuff more expensively (per unit produced) than lots of little ones. It's when we see economies of scale that we start to see natural monopolies, or at least oligopolies. So by Fitzsimons' own reasoning, we should probably deregulate the electricity industry and let the market get to work. On the other hand, we should probably have state-run shoes and toothpaste factories.
To be fair on Fitzsimons, she does make other arguments that are somewhat more valid. However their proposal of staggered electricity rates (ie, increasing marginal cost) seems like a great way for the power companies to capture more surplus.
Related question: Should having taken first year Econ (at least) be a prerequisite for political service? Unfortunately then the New Zealand Green Party could cease to exist.
Note: I do think that the Green Party are great and a valuable addition to NZ politics - but they do have a habit of getting themselves confused about economic issues.
Update: Paul Walker does it a little more rigorously.
Here she is on electricity:
With shoes or toothpaste, increased demand gives economies of scale and tends to bring prices down. With electricity ... increased demand raises prices. (my emphasis)To be fair, I suspect she's just guilty of poor phrasing. What is interesting though is how she justifies the low level of competition in the electricity sector. Apparently there are diseconomies of scale there, according to Fitzsimons.
Hold up. What do diseconomies of scale mean for market structure? It means that the efficient number of firms is lots of small ones - which just so happens to be one of the conditions for a competitive market. This is because one big firm will produce stuff more expensively (per unit produced) than lots of little ones. It's when we see economies of scale that we start to see natural monopolies, or at least oligopolies. So by Fitzsimons' own reasoning, we should probably deregulate the electricity industry and let the market get to work. On the other hand, we should probably have state-run shoes and toothpaste factories.
To be fair on Fitzsimons, she does make other arguments that are somewhat more valid. However their proposal of staggered electricity rates (ie, increasing marginal cost) seems like a great way for the power companies to capture more surplus.
Related question: Should having taken first year Econ (at least) be a prerequisite for political service? Unfortunately then the New Zealand Green Party could cease to exist.
Note: I do think that the Green Party are great and a valuable addition to NZ politics - but they do have a habit of getting themselves confused about economic issues.
Update: Paul Walker does it a little more rigorously.
Upcoming Debating Goodness
If you live in Wellington and like argument, this Monday could be a good day for you.
At 10AM is the grand final of the New Zealand Schools' Debating Championships (the schoolkids are debating over this weekend to determine who makes it). It will be held in the legislative chamber of Parliament, on the topic "That citizens initiated referenda should be binding on government". All are welcome but if you want to go you have to RVSP for security reasons - check out the facebook event here for more info. New Zealand is currently the world champion for schools debating, and I've seen quite a few of the debaters debate before, they are all excellent.
Of more interest perhaps to those of us who's schedule doesn't let them take Monday morning off to watch a debate is the Victoria Uni DebSoc hosted Public Debate, on the 'smacking debate' currently very popular in New Zealand. Defective Equilibrium co-blogger Udayan Mukherjee will be debating, as well as Sue Bradford MP and a whole lot more interesting people. It is at 6:30PM at Rutherford House LT1, again check out the facebook event here. Again all are welcome, there might be a gold coin donation.
At 10AM is the grand final of the New Zealand Schools' Debating Championships (the schoolkids are debating over this weekend to determine who makes it). It will be held in the legislative chamber of Parliament, on the topic "That citizens initiated referenda should be binding on government". All are welcome but if you want to go you have to RVSP for security reasons - check out the facebook event here for more info. New Zealand is currently the world champion for schools debating, and I've seen quite a few of the debaters debate before, they are all excellent.
Of more interest perhaps to those of us who's schedule doesn't let them take Monday morning off to watch a debate is the Victoria Uni DebSoc hosted Public Debate, on the 'smacking debate' currently very popular in New Zealand. Defective Equilibrium co-blogger Udayan Mukherjee will be debating, as well as Sue Bradford MP and a whole lot more interesting people. It is at 6:30PM at Rutherford House LT1, again check out the facebook event here. Again all are welcome, there might be a gold coin donation.
My Favourite Blog
My favourite blog at the moment (apart from yours of course, if you have one!) is My First Dictionary. If you like black humour, I recommend it.
Thought experiment of the day - Rights/Welfare Tradeoff
I know I don't do these every day or even every month, but perhaps if I say so it will make me do it - it could be a cool feature perhaps.
Say everyone earns the same wage, $100. The Government taxes income (and income only) at 20%, and has a choice of two policies - A and B.
Policy A lowers the income tax to zero with no other effects (I suppose the Government isn't doing much to start with). So people now earn $100 after tax (up from $80).
Policy B raises the national income level by 25%, meaning an after-tax wage of $100, however it violates people's rights slightly by doing so, perhaps by forcing them to work as slaves for 10 minutes every day.
Which policy would you prefer? In this case it's easy, as they both give the same income level but one has us working as slaves. So you would choose policy A.
But what if I change the numbers? What if policy B doubles the national income, at the cost of 20 minutes a day of slave labour?
The reason I ask this is that I think the majority of deontological theories of political justice (like that of Rawls) take into account consequences at some level (Nozick and Kant being the two obvious exceptions, and even Nozick allowed some ad hoc consequentialism). What is often less clear is how they determine the tradeoff - at what point do we bite the Kantian bullet and just say that rights are too important? At 3 hours of slavery per day? At 8? Or vice versa, at what point does welfare override basic freedoms? What if you could abolish scarcity by putting cameras in everyone's house (don't ask me how) without telling them?
This seems like an obvious question but it is one I think that is rarely spoken to. In particular, most people tend to believe in the fortunate coincidence that their favoured policy is both welfare-maximising and non-rights violating, at least to a certain degree. But if that is not the case, how much welfare is worth one rights-violation?
Notice that I am defining considerations of redistributive justice out of my thought experiment, I think that would overly complicate things.
Update: BK Drinkwater shares his thoughts. He promises he will talk less in the abstract in the future - I make no such promise.
Say everyone earns the same wage, $100. The Government taxes income (and income only) at 20%, and has a choice of two policies - A and B.
Policy A lowers the income tax to zero with no other effects (I suppose the Government isn't doing much to start with). So people now earn $100 after tax (up from $80).
Policy B raises the national income level by 25%, meaning an after-tax wage of $100, however it violates people's rights slightly by doing so, perhaps by forcing them to work as slaves for 10 minutes every day.
Which policy would you prefer? In this case it's easy, as they both give the same income level but one has us working as slaves. So you would choose policy A.
But what if I change the numbers? What if policy B doubles the national income, at the cost of 20 minutes a day of slave labour?
The reason I ask this is that I think the majority of deontological theories of political justice (like that of Rawls) take into account consequences at some level (Nozick and Kant being the two obvious exceptions, and even Nozick allowed some ad hoc consequentialism). What is often less clear is how they determine the tradeoff - at what point do we bite the Kantian bullet and just say that rights are too important? At 3 hours of slavery per day? At 8? Or vice versa, at what point does welfare override basic freedoms? What if you could abolish scarcity by putting cameras in everyone's house (don't ask me how) without telling them?
This seems like an obvious question but it is one I think that is rarely spoken to. In particular, most people tend to believe in the fortunate coincidence that their favoured policy is both welfare-maximising and non-rights violating, at least to a certain degree. But if that is not the case, how much welfare is worth one rights-violation?
Notice that I am defining considerations of redistributive justice out of my thought experiment, I think that would overly complicate things.
Update: BK Drinkwater shares his thoughts. He promises he will talk less in the abstract in the future - I make no such promise.
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