Tuesday, April 19, 2011

Truth or Consequences?

The Association for Private Enterprise Education annual meetings had a refreshing number of discussions about the variety of voluntary activities. To use one of my favorite overly simplistic lines, the opposite of government coercion is not the market; the opposite of government coercion includes all voluntary activity, of which market processes are only one example. Speakers such as Elinor Ostrom, Deirdre McCloskey, and George Ayittey spoke on variations on this point in plenary talks, and those discussion continued into several individual paper sessions.

On the other hamd, after returning from the conference, I picked up an article in First Things entitled "The Emancipation of Avarice" by Edward Skidelsky. Anyone who reads this blog would understand why I was attracted to such a title. The topic of the paper is one that I find exciting for Christian economists to debate. Unfortunately, I found the argument of the paper jumbled. About midway in his article, he critiques Mandeville and the Parable of the Bees. If you recall one of my earlier posts criticizing Mandeville, you can imagine I found common cause with his criticisms. But then he seems to draw a direct, if not actually straight, line from Mandeville through Adam Smith and into all of modern economics for what he calls its emphasis on consequentialism. I'm not sure I buy this. (Smith's recent biographer, Phillipson, puts much more distance between Mandeville and Smith, and Skidelsky goes right to the Wealth of Nations, without visiting The Theory of Moral Sentiments. ). But let's stick with the issue of morality, economics, and consequentialism here. Suppose the civic leaders of a nation take Skidelsky to heart to study the writings of Aristotle, Aquinas and Agustine...to "express an aspiration to mold people's characters, to make them less greedy, more generous, and so forth." Further suppose that, steeped in such high philosophical idealism, they enact rent controls, minimum wages, and raise the tax on capital gains to 80%. Is it morally deficient of the consequentialist economist to pound home the empirical reality that these efforts very likely help well-to-do teenagers at the expense of inner city minority workers (minimum wage), create an appropriable property right that benefits mobile jet setters who can sublet their apartments at market rates, all the while degrading the quality of housing serving the poor (rent controls) and end up with the wealthy paying fewer taxes (very high capital gains tax rates)? Doug and I have discussed at length the reverse question: what is the moral position of someone who looks only at their own intrinsic motivations and refuses to discuss the consequences of their actions?

If someone argues that Aristotle believes that enacting rent control creates a virtuous citizen in a virtuous society, then I would argue that either a ) Aristotle is wrong b ) the person who interpreted Aristotle is wrong, or c ) I have a very different concept of virtue. Does that mean that I must necessarily be a consequentialist? I don't know. I do know that Skidelsky seems to support government intervention "to erect safeguards against the powerful human tendency to rapacity." But he has no model of public choice, except where, earlier in the essay, he admits that "In complex, fractured societies, any attempt to rule through direct moral exhortation can lead only to tyranny."

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