Pursuit of Truthiness

my gut tells me I know economics

Archive for the ‘utilitarianism’ Category

Is Paying Taxes Immoral?

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The US Government is a huge organization that performs many many actions. I think almost anyone could come up with something the government does that they don’t like. I think many people could come with something the government does that is downright evil: bomb Afghan farmers, imprison innocents, pass on money to even worse governments or groups.

Given this, I am surprised that I can’t recall a single person arguing that it is immoral to pay taxes. Sure, people will grumble about losing their money or about how the government will just waste it. But no one argues that you have a moral obligation to make sure that less of your money goes to evil purposes- whether by working so little (or giving away so much) you incur no tax obligation, finding every possible loophole, or simply illegally evading paying taxes. Why not? Do you not have blood on your hands for financing the government’s murders and other evil deeds?

I avoid the force of this argument by being (or aspiring to be) utilitarian. You have to average out all the effects of paying taxes to determine the morality of it. The government does many good things and very many morally neutral things to balance out the bad. Plus avoiding all taxes would be quite costly to me, and my utility counts too.

But many people don’t think this way. They refuse to flip the switch in the trolley problem. They boycott corporations for running sweatshops, or giving money to causes they don’t like, or various other perceived evils. Shouldn’t they think paying taxes is immoral, and do what they can to avoid it?

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Written by James Bailey

September 17, 2012 at 3:13 pm

How to care about Equality

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Like many utilitarians and economists, I have a hard time caring about inequality for its own sake, even though many people seem to think it is very important.  Making poor people richer is good on standard utilitarian grounds, but it is hard to imagine wanting to make rich people poorer just to make everyone feel more equal.  How can utilitarians support wealth equality, and redistribution, without putting any value on equality itself?

One reason is as old as utilitarianism itself- the diminishing marginal utility of money.  If rich people don’t value $1000 as much as poor people, in theory we can increase total utility by taking from the rich and giving to the poor.  Wolfers’ finding that happiness rises with the natural log of income supports this.  Of course in practice this leads to incentive problems and an efficiency/equality tradeoff; this lowers the optimal amount of redistribution but gives us no reason to think it is zero.

Second is the fully general trump card against utilitarians (I hope a philosopher can tell me how to get out of this): other people say equality will increase their utility, and you say you want to increase utility, so you should support their desire for equality.

I think one version of this is influential in practice.  An economist like Greg Mankiw might not care about inequality himself, but everyone around him talks about it, so he thinks of more constructive things to say than “your values are silly”.

Another version is the “realpolitik” concern.  Bismark invented the welfare state not because he cared about equality or happiness but to stave off revolution.  Similarly, we might care only about happiness, but realize that voters may be more supportive of happiness-enhancing pro-market policies when inequality is small.  Look at the Economic Freedom of the World Index– Northern European countries like Denmark have high levels of redistribution but are otherwise very free markets.  Denmark is often rated the happiest country in the world.  I would like to see a poli-sci paper on this, or write one if none exists.  If you count the Republicans as the pro-market party (iffy), I have written a paper finding this for the US.  But one should look internationally, as well as looking at survey data on opinion in addition to actual outcomes.

There is one more utilitarian argument for redistribution that I don’t recall hearing, though I am sure it has been made.  Economists like to emphasize that the price system is an amazingly efficient mechanism for allocating resources to their highest valued use.  A common response to this point is that the system is inefficient and unfair, because a poor person who will get 10 utils from a good can be outbid by a rich person who makes 4 times as much money and gets 5 utils from the good.  Somewhere, a rich kid is ignoring or complaining about a toy that a poor kid would love to have but can’t afford.  What I have yet to hear is the obvious corollary of this criticism: the more equal incomes get, the more efficient, fair and utility-enhancing the price system becomes.  The price system more efficiently allocates resources in Denmark than in Mexico.  Perhaps Danish voters are more willing to let prices work because they actually work better in the more equal country of Denmark.

Written by James Bailey

September 19, 2011 at 2:34 pm

Placebos, Utilitarianism and Truth

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I finally got around to reading Predictably Irrational, and the chapter on placebos got me thinking.  The chapter describes how some surgeries were found to be no more effective than “placebo surgery”, when doctors told patients they would do the surgery, gave them anesthetics and made incisions but didn’t actually perform the part of the surgery that was supposed to be effective.  The usual response when a treatment is proven to be no more effective than a placebo is to stop doing it, or to claim the study was flawed.

But if a placebo is effective (and they are often quite effective), perhaps we should continue giving them.  If placebos require false belief on the part of the recipient, to what extent is it ok for the scientific and medical establishment to deceive people, or at least not expend effort discrediting placebos?

I know this isn’t exactly a novel question, but I haven’t put much thought into it and the answer is not obvious to me.  Like many other who think of themselves as “rationalists”, I am mostly a utilitarian but I put a value on truth that is likely out of proportion to that which can be justified on purely utilitarian grounds.  My modus operandi is to be truthful without even making utilitarian calculations, and even if I made them and they pointed to deception I would likely decide to be a single-issue deontologist.

This tension goes back to the beginning of both utilitarianism and classical liberal truthiness, since JS Mill helped come up with both ideas.  He tried to square the circle and argue that there was no conflict.  Today people acknowledge the conflict but I have not read a good solution to it.  I believe Robin Hanson and Eliezer Yudkowsky have said something like “the conflict exists, I take the side of holding truthfulness as a value in itself but I cannot fully defend this position.” (except for mundane dishonesty)

I guess that’s where I am now too.  However, I do wonder if rationalists should spend so much effort trying to convince people that, say, homeopathy is quackery.  If people turn to homeopathic remedies in lieu of modern medicine when there is a real treatment available, that is certainly bad.  However, in the areas where modern medicine does little better than a placebo, homeopathy is likely to provide a much cheaper placebo.

This issue comes up in economics as well.  Some macroeconomic remedies may return the economy to prosperity by fooling people.  Rational expectations argues against this by saying that the government is incapable of fooling markets.  However, provided that they could, economists face a dilemma where telling people the truth about what government policy is doing could make the country poorer.

This conflict comes up in politics all the time.  Is it ok to use dishonest tactics to get better policies adopted?  Like end-justify-the-means problems generally, much of the problem is due to the fact that everyone considers their own ends to be worthy, but for many reasons their ends would not in fact increase total utility.

This is part of why I say err on the side of truth, but I cannot really defend this position.

Written by James Bailey

August 31, 2010 at 5:03 pm