Frankfurt on the Equality Fetish

“To the extent that people are preoccupied with equality for its own sake, their readiness to be satisfied with any particular level of income or wealth is guided not by their own interests and needs but just by the magnitude of the economic benefits at the disposal of others. In this way egalitarianism distracts people from measuring the requirements to which their individual natures and their personal circumstances give rise. It encourages them instead to insist upon a level of economic support that is determined by a calculation in which the particular features of their own lives are irrelevant. How sizable the economic assets of others are has nothing much to do, after all, with what kind of person someone is. A concern for economic equality, construed as desirable in itself, tends to divert a person's attention away from endeavoring to discover–within his experience of himself and his life–what he himself really cares about and what will actually satisfy him, although this is the most basic and the most decisive task upon which an intelligent selection of economic goals depends. Exaggerating the moral importance of economic equality is harmful, in other words, because it is alienating.”

Harry Frankfurt, “Equality as a Moral Ideal,” Ethics, Oct. 1987.

More Lucky Thoughts

As Jencks and Tach note, (hat tip: Reihan) your economic status is robustly correlated with your parent's economic status. Is it “luck” that members of the middle-class, for example, pass on middle-class virtues of hard work, the importance of investment in human capital, delayed gratification, punctuality, thrift, etc., to their children. No. Not at all.

Am I “lucky” to have been born to a stolidly bourgeouis, civic-minded, church-going police chief and nurse who filled my head with the “protestant ethic”? Simply put: no.

I don't mean to be thornily metaphysical here, but if I was not the son of James K. and Dorothy A. Wilkinson, then I would not be me. Even more to the point, if the particular germ cells that were party to my conception had been different, that being would not have been “me” with different attributes, it would have been someone else altogether. In this sense we are all “lucky” to exist at all (if existence is a perfection.) But I am not “lucky” to have the genotype that I have. I have it necessarily. That is, my genotype is not a contingent attribute of me. That a being with my genotype exists is contingent. That I exist with this genotype is necessary. The statement “I could have had a different constellation of genes” is ill-formed, not entirely different from “Gold could have had a different atomic weight.” So, insofar as any of us have “good genes,” it is not a matter of “good luck.”

Now, my manifest attributes are not simply a matter of my genes. My developmental environment will have determined how my genetic potential is expressed. So, what Dorothy Wilkinson ate, drank, and so forth while she was carrying me shaped the way I am. Am I “lucky” that mom didn't smoke? Well, Mom considered it against her religion. Am I “lucky” that Mom was a quasi-Mormon? Um. I don't know quite what to say here. But the point I'm trying to get at is that Mom did a lot of things vis a vis little me with the EXPRESS INTENTION that it have a particular effect on my welfare and character. That I have a tendency to feel guilty when I'm late for something is in part a INTENDED consequence of my mother's actions. So, from her perspective, it's not a matter of luck that I usually show up on time. It's the way she trained me.

If I meet a guy in a restaurant, and he likes the way I look, and gives me a million a year salary to work for his firm, that's luck. If I'm damn good speller, that's because I've got a good mind for words, and good training that was intended to make me a good speller, neither of which is is “luck” in any clear sense. (Please enjoy the irony of spelling mistakes herein.) We don't think it's good luck that the bridge didn't fall down when it was designed to stand up. Right?

Questions for Krugman

Krugman says:

There's a very good reason voters, when given a chance to make a clear choice, increasingly support a stronger, not a weaker, social safety net: they need that net more than ever. Over the past 25 years the lives of working Americans have become ever less secure. Jobs come without health insurance; 401(k)'s vanish; corporations default on their pension obligations; workers lose their jobs more often, and unemployment lasts much longer than it used to.

Questions: (1) Would a rational person behind a veil of ignorance who knows all the relevant economic statistics for 2005 and 1980 choose to be a randomly selected worker in 1980 or in 2005? (2) Do labor market and income volatility have anything important to do with “economic security?” (3) If all there is to economic security is a state “guarantee,” why haven't people in socialist economies been more economically secure?

Literary Lacunae

Julian sends me this meme: “What 5 books are you vaguely embarassed to admit you haven't read?” Here goes:

(1) Max Weber, The Protestant Ethic and the Spirit of Capitalism. I keep suspecting that my intuitions about markets and culture are closer to a Weberian sociologist than to those of an economist, which makes me feel like I should really read this book and find out.

(2)Derek Parfit, Reasons and Persons. Some of the smartest people I know, such as Tyler and Julian, think this is a great work of philosophy. My former grad advisor Chris Morris gave me this helpful category: “Books I've read, but not by myself.” I've read so much secondary literature about Reasons and Persons that it seems like I've read it. I consider it among the books I've read, but just not by myself. But I suppose I should actually work my way through it.

(3)Carson McCullers, The Heart is a Lonely Hunter. This is my beloved housemate's favorite book (and number 17 on the Random House 100 best novels list) and I keep meaning to read it, but am ashamed to say, I cannot generate the motivation to do it.

(4) Thomas Hobbes, Leviathan. I sincerely believe that this is the most important work of political philosophy in the English language. So I should probably get around to reading the whole thing one of these days. I'm pretty sure I've read the good parts, but who knows!?

(5) Robert Nozick, Anarchy, State, and Utopia. This is truly shameful, but I've never actually gotten to Utopia. Again, I know what it says, but not because I've read what it says.

I pass the meme to Joanna Robinson, Tyler Cowen, and Alina Stefanescu.

A Rare Triumph for Liberals

Here's E.J. Dionne:

Indeed, the Social Security debate so far has been a rare triumph for liberals: For the first time in a long while, core liberal principles are actually winning in a public debate. The idea that Social Security is an insurance program and not an investment plan is gaining traction.

Why E.J. Dionne thinks deception is a “core liberal principle” totally eludes me. Here are two options about Social Security as insurance.

(1) It is not insurance.
(2) It is “insurance,” in some loose sense. But then so is (a) means-tested welfare or (b) mandatory personal retirement accounts plus a safety net.

If (1) is true, then Dionne's claim is a lie. If (2) is true, then saying that Social Security is insurance does nothing to tell us why we ought to prefer the status quo over (a) or (b). As it happens, there is NO “core liberal principle” that I can think of that supports the fevered defense of America's badly structured historic welfare programs.

Check this:

* The Social Security tax is regressive.
* The overall benefit structure accomplishes, on net, either no downward income redistribution, or a small amount of upward redistribution. (I.e., it is either close to a wash, or regressive, redistribution-wise.)
*The system is structured to disadvantage current workers over current retirees, and is thus invalid as a “compact” between generations, if we take the contract metaphor seriously.
* Because the Social Security tax hits least wealthy workers hardest, Social Security prevents many from accumulating wealth, and reinforces the divide between investing an non-investing classes.
*Social Security makes it impossible for many of the least wealthy to accumulate wealth that they can pass on to their children or grandchildren, thereby helping to perpetuate generational inequality.

It is crucial to note that whatever else it might be, Social Security is not PRIMARILY insurance, if it is insurance at all. The redistribution to the elderly poor it does manage to effect is incidental to the huge volume of transfers back and forth from within the same income bracket. (Net income-related redistribution come to less than 10% of total transfers) There's a huge amount of deadweight loss in all this pointless churn.

A system of personal accounts plus a means-tested safety net would:

* Be more progressive in every way.
* Eliminate most of the unjust intergenerational transfers that are at the heart of the current system.
* Almost entirely close the gap between the investing and non-investing classes.
* Help the least wealthy workers accumulate inheritable wealth.
* Protect the elderly against poverty AT LEAST as well.

All this is independent of the fact that the “insurance” language amounts to a “noble lie” that ought to be anathema to liberals.

Consider James Buchanan's analysis of Social Security as a “fiscal illusion,” which is an idea he credits to the obscure Italian public finance theorist Amilcare Puviani. According to Buchanan, following Puviani, those with political power will often erect a structure of public finance that is meant to cause “tax payers to think that the taxes to which they are subjected are less burdensome than they actually are” and “make beneficiaries consider the values of public goods and services to them to be larger than may actually be the case.”

Here is what Buchanan says about Social Security in particular:

Social Security Taxes. The modern American system of old-age and survivors “insurance” seems ready made for the Puviani criticism. It is apparent to almost everyone, without detailed analysis or knowledge of the system, that the effects of promoting the institutions under the “insurance” rubric, which implies actuarial independence and integrity, tends to conceal from participants the real flows of costs and benefits. Whether or not such was the deliberate intent of the founders of the system need not concern us here. The facts are that the system, as an independent trust-fund account outside of the regular budgetary procedures of the federal government, is not actuarially sound by private financial standards, and that the plan will depend for its continued existence on the Treasury's willingness to finance currently claims made against the system. Contributors to the system finance only a relatively small share of the benefits that they receive, especially to this date (1966), and the remaining funds must be secured from current taxes collected from prospective beneficiaries. To the extent that the current contributor accepts the regular increases in his own taxes, as well as those nominally levied on his employer, under the assumption that, on balance, these are to be accumulated for support of his own retirement benefits, he will be less resistant to such increases than if he knew that such tax increases were simply required to meet current outpayments to beneficiaries. He operates under an illusion of the Puviani sort. If future claims against the system should be properly discounted, along with future taxes that are required to meet these claims, the entrant into the system would recognize that, in the net, the costs significantly exceed the benefits, both computed in present-value terms. The fact that there is no widespread resentment or resistance against entering the system supports the hypothesis that illusion is present, and is effective. Even for the employee who may recognize the actuarial bankruptcy of the present system, who is able to dispel the fiscal illusion, it may not, however, be rational to reject the scheme when he predicts that, during his own period of retirement, other prospective entrants can still be attracted by illusory claims of “insurance.” The system in this manner provides a continuing means through which income transfers can be made to the aged from the currently productive elements of the population, which can be “explained” or “rationalized” to many taxpayers on the basis of contributory schemes of retirement protection. There seems little question but that, if the same fiscal transfers were proposed openly and without attempts at illusion, there would be significantly greater political resistance. This conclusion can be attained, regardless of one's own value position on the quite separate question as to whether such transfers should be decreased, kept the same, or increased.

Compare Buchanan's analysis with a key idea from another of the 20th Century's great contractarian political theorists, John Rawls:

if the basic structure relies on coercive sanctions, however rarely and scrupulously applied, the grounds of its institutions should stand up to public scrutiny. When . . . basic social arrangements and individual actions are fully justifiable, citizens can give reasons for their beliefs and conduct before one another confident that this avowed reckoning itself will strengthen and not weaken public understanding. The political order does not, it seems, depend on historically accidental or established delusions, or other mistaken beliefs resting on the deceptive appearances of institutions that mislead us as to how they work.

That's Rawls in Political Liberalism talking about the publicity requirement for just institutions. Just rules for a free people in a liberal society must be open to them and MUST NOT be sustained by illusions that cause people to misunderstand the terms of our association, cripple our ability to govern ourselves through effective public deliberation, and ensure that we remain ignorant of the institutions that shape our expectations for our lives, and condition our preferences and characters.

By pushing the “Social Security status-quo is insurance line” Dionne is directly contributing to the violation of “core liberal principles” that ought to be even more important to welfare-liberals than the fiscally anti-egalitarian aspects of the status quo that Dionne, for some inexplicable reason, thinks are just great.

This is a “triumph for liberals”?!

Welfare iberals keep wondering aloud about what's the matter with welfare liberalism. Dionne unwittingly points us toward a plausible hypothesis. Welfare liberals have become fetishists of the crumbling institutions of the New Deal/Great Society welfare state, which they mistake for actually existing expressions of liberal ideals. But welfare liberals don't even understand what liberalism, as an idea, is, and so can't recognize that their beloved programs fail according to what ought to be their own standards. All they can do to answer the what is liberalism question is to point at an amber-edged policy and say “that!”