On Ethics and Economics

Rating:
Summary: Can a thermometer cure the illness?
Review: Amartya Sen makes a number of specific criticisms of utilitarianism which are his own. The most significant of these is the criticism of “utility” as a measure of well-being. He rightly points out that “functioning” is a more rational measure of well-being than opulence â€" command over a mass of commodities, or utility â€" the value of desired objects. People can use things they command, whether purchased or enjoyed by nature, in order to achieve a level of functionality in life, but the level of functionality achieved is dependent on numerous factors over and above the things used. A landless peasant may be very “happy” at getting a pile of straw to sleep on for the night, and may have no “desire” for crepes suzette, but neither fact contributes anything to a measure of their well-being. Functionality, however, is amenable to perfectly objective measurement: life expectancy, freedom from illness, level of education, freedom, access to love ones, etc.. Measurement of expenditure on food, medicines, educational services, transport etc., indicates only the effort taken under given conditions to achieve a level of functionality, but this may be as much inversely related to the degree of functionality achieved as directly related. The more a person is subject to crime, the more they spend on crime prevention, the more unhealthy a person is, the more they spend on medicine. Public policy can therefore only measure its own success by the summation of functionality or capability.

On top of this, Sen points out that even the level of functionality achieved is not a proper measure; in the first place, someone may not want to achieve a certain functionality, and in the second place, such a capability (such as the ability to do violence to other people) may not be morally valued by the community as a whole. Therefore, the more ephemeral capability is the true measure of well-being, rather than achieved functionality.

Utilitarianism is a justification for free-market capitalism. The phenomena described in the dot points above are all too familiar phenomena of the action of the free market. They are not just “anomalies” for utilitarianism, they are its unambiguous expression. The point of utilitatarianism is simply to prove that all these abominations are “the best of all possible worlds” ridiculed three hundred years ago by Voltaire.

It is clear enough that utilitarian ethics is simply a justification for free-market economics which has the superficial appearance of intuitive validity. So there is value in criticising utilitarianism, in exposing its fraudulent character, and in trying to produce an alternative measure of the goodness of a state of affairs. Such a measure could be used to legitimise public policy which is not aimed just at maximising the accumulation of capital.

“Green economics” has had a similar aim, to encourage governments to keep statistics on values which are external to the economy (such as forests and rivers, clean air and so on) so that the government has available a measure of its success or failure, alternative to the calculation of GDP.

The great advantage of utilitarianism in its most naïve and primitive form, is that it fairly well captures the real ethic of capitalism. That is, it is very poor ethics, but reasonably good economics. (I say “reasonably good” because of course no real person ever acts as the narrowly self-interested infinitely well-informed computer which utilitarian economic assumes them to be.) The definition of the free economic agent which constitutes the definition of the person for utilitarianism is the basis for the exchange of commodities at their value, and constitutes the ideal condition for the accumulation of capital.

Sen raises the deeper question raised by the critique of utilitarianism as public policy, as to what, if any, justification is there for presuming that in a community there is any agent having the legitimacy to choose one state of affairs over another and determine public policy accordingly, at all. Or, more specifically, where such legitimacy may lie. To construct a theory of capability-utilitarianism still supposes that the agency which collects the data on capability and enforces laws aimed at maximising it has the legitimacy to do so.

And incidentally, the project also raises the question of the capability to do so.

Utilitarianism in its naïve form was nothing but an apology for the naked rule of capital, whose function is to advise governments to let the market do its work without interference, to justify self-seeking by “proving” that the greatest good for the greatest number is achieved by unfettered individualistic self-seeking. As a guide to public policy therefore it was simply an advice to do as little as possible, within the limits imposed by avoiding or suppressing riot, revolution and war.

Once we say that, actually, the market does not produce the greatest well-being for the greatest number, or any version of social justice at all, then the provision of a measuring scale is a fairly marginal contribution to doing something about the problem.

On the one hand we have an economic system, capitalism, based on the free exchange of commodities at their value, whose outcome is the concentration of economic and therefore political power in the hands of a few, and on the other hand a state and governmental machine which aims to measure and regulate this economy. Perhaps being in possession of a sound critique of utilitarian ethics makes it easy to interfere in the market with a good conscience, but we are still a long way short of an ethic which can implement a general improvement of living capabilities.

The thermometer can tell the doctor when you have a fever, can cannot cure the illness. Most people don’t need a thermometer to know when they have a fever.

Rating:
Summary: Can a thermometer cure the illness?
Review: Amartya Sen makes a number of specific criticisms of utilitarianism which are his own. The most significant of these is the criticism of “utility” as a measure of well-being. He rightly points out that “functioning” is a more rational measure of well-being than opulence â€" command over a mass of commodities, or utility â€" the value of desired objects. People can use things they command, whether purchased or enjoyed by nature, in order to achieve a level of functionality in life, but the level of functionality achieved is dependent on numerous factors over and above the things used. A landless peasant may be very “happy” at getting a pile of straw to sleep on for the night, and may have no “desire” for crepes suzette, but neither fact contributes anything to a measure of their well-being. Functionality, however, is amenable to perfectly objective measurement: life expectancy, freedom from illness, level of education, freedom, access to love ones, etc.. Measurement of expenditure on food, medicines, educational services, transport etc., indicates only the effort taken under given conditions to achieve a level of functionality, but this may be as much inversely related to the degree of functionality achieved as directly related. The more a person is subject to crime, the more they spend on crime prevention, the more unhealthy a person is, the more they spend on medicine. Public policy can therefore only measure its own success by the summation of functionality or capability.

On top of this, Sen points out that even the level of functionality achieved is not a proper measure; in the first place, someone may not want to achieve a certain functionality, and in the second place, such a capability (such as the ability to do violence to other people) may not be morally valued by the community as a whole. Therefore, the more ephemeral capability is the true measure of well-being, rather than achieved functionality.

Utilitarianism is a justification for free-market capitalism. The phenomena described in the dot points above are all too familiar phenomena of the action of the free market. They are not just “anomalies” for utilitarianism, they are its unambiguous expression. The point of utilitatarianism is simply to prove that all these abominations are “the best of all possible worlds” ridiculed three hundred years ago by Voltaire.

It is clear enough that utilitarian ethics is simply a justification for free-market economics which has the superficial appearance of intuitive validity. So there is value in criticising utilitarianism, in exposing its fraudulent character, and in trying to produce an alternative measure of the goodness of a state of affairs. Such a measure could be used to legitimise public policy which is not aimed just at maximising the accumulation of capital.

“Green economics” has had a similar aim, to encourage governments to keep statistics on values which are external to the economy (such as forests and rivers, clean air and so on) so that the government has available a measure of its success or failure, alternative to the calculation of GDP.

The great advantage of utilitarianism in its most naïve and primitive form, is that it fairly well captures the real ethic of capitalism. That is, it is very poor ethics, but reasonably good economics. (I say “reasonably good” because of course no real person ever acts as the narrowly self-interested infinitely well-informed computer which utilitarian economic assumes them to be.) The definition of the free economic agent which constitutes the definition of the person for utilitarianism is the basis for the exchange of commodities at their value, and constitutes the ideal condition for the accumulation of capital.

Sen raises the deeper question raised by the critique of utilitarianism as public policy, as to what, if any, justification is there for presuming that in a community there is any agent having the legitimacy to choose one state of affairs over another and determine public policy accordingly, at all. Or, more specifically, where such legitimacy may lie. To construct a theory of capability-utilitarianism still supposes that the agency which collects the data on capability and enforces laws aimed at maximising it has the legitimacy to do so.

And incidentally, the project also raises the question of the capability to do so.

Utilitarianism in its naïve form was nothing but an apology for the naked rule of capital, whose function is to advise governments to let the market do its work without interference, to justify self-seeking by “proving” that the greatest good for the greatest number is achieved by unfettered individualistic self-seeking. As a guide to public policy therefore it was simply an advice to do as little as possible, within the limits imposed by avoiding or suppressing riot, revolution and war.

Once we say that, actually, the market does not produce the greatest well-being for the greatest number, or any version of social justice at all, then the provision of a measuring scale is a fairly marginal contribution to doing something about the problem.

On the one hand we have an economic system, capitalism, based on the free exchange of commodities at their value, whose outcome is the concentration of economic and therefore political power in the hands of a few, and on the other hand a state and governmental machine which aims to measure and regulate this economy. Perhaps being in possession of a sound critique of utilitarian ethics makes it easy to interfere in the market with a good conscience, but we are still a long way short of an ethic which can implement a general improvement of living capabilities.

The thermometer can tell the doctor when you have a fever, can cannot cure the illness. Most people don’t need a thermometer to know when they have a fever.

Rating:
Summary: ethic
Review: ethi

Rating:
Summary: Ethics of Choice and No Choice
Review: It's interesting how ethics and their practice seem to fall along the lines of events that tend to produce profits, and are therefore, more easily justified than not, to the point of being made a part of the law that governs ethics as well as processes. This aspect of human tendencies to favor profits as ethical under any circumstances may well have given rise to the Enron's, Worldcom's, etc., that often also produce the exonerations of bankruptcies where privileges of "restarts" are common, under different names, or through acuisition/mergers where social responsibilities are thrown by the wayside and efforts to salvage the more profitable opportunities are typical of commercial justice. The inconsistency that these ethics represents is often difficult to rationalize in rational minds.

Rating:
Summary: Sen - But not at it's best
Review: This short book consists of three lectures.

In the first lecture Sen mainly argues that economic agents shouldn't be modelled as completely self centered. He argues that real individuals don't behave that way. I think that's fairly obvious and the reason people have often be modelled as egoistic is technical convenience. Other than that, he argues that rationality should mean more than consistent actions. Point taken. Since more work is done today that isn't based on selfcentered individuals, the lecture is of somewhat minor importance. But if you think all people act in an egoistic fashion (at least in an economic environment), read that part.

The second lecture is IMO the best one. Sen looks on the impact utilitarianism had on economics at identifies the parts utilitarianism is made of. He the goes on to argue that these parts are independent and that their merit should be judged independently. He shows several roads one can take without accepting utilitarianism in its totality.

In the third lecture Sen takes a look at the proper scope of social choice theory and things that should be incorporated but aren't yet. It's fairly good but nothing spectacular.

Apart from the rough outline given, the worth of the book lies in little remarks Sen makes on a number of topics. These remarks make one think and reconsider ones position.