Monday 4 March 2013

Microeconomist Club has rules

First rule of Microeconomist Club: commit yourself to methodological individualism and respect the world's rich diversity of utility functions. Consider that others' actions may be inspired by the optimisation of a utility function the likes of which is beyond your ken.

Second rule of Microeconomist Club: cast into the outer darkness those doing violence to the first rule.

Swarthmore historian Timothy Burke would perhaps have fewer complaints about 'neoliberal' economics if there were greater adherence to the rules of Microeconomist Club. Burke despairs that public health discourse has put such focus on social cost arguments:
Or maybe the math works out and yes, I should try to live a little longer and be injured somewhat less…in order to avoid costing society some slightly higher amount for my careor some fraction of lost productivity. And here we have arrived deep in the belly of the neoliberal whale, just in time to watch the experts and technocrats hand out machetes to we, the swallowed. If you want an explanation of the meanness of 21st Century American public discourse, for the fractures in the body politic, this will do as a starting place. “Get that guy to wear his helmet, because otherwise he’s going to cost you money.” “Get that woman to lose weight, because otherwise she’s going to cost you money.” “Hassle that couple because their kid plays too many video games and might slightly underperform in school and not make the contribution to net productivity that we are expecting of him.”
We are offered a thousand reasons to complain of other people’s behavior (and to excoriate and loath our own) on the grounds that it will cost us too much. That we should talk about what is good and bad, right and wrong, mostly in terms of the selfish consequences, or at best, in terms of the kind of closeted idea of a collective interest that neoliberalism dare not directly speak of–sort of the nation, sort of the economy, sort of the community, but really none of those directly or clearly.
The large majority of purported social costs tallied in health measures are really the costs individuals impose upon themselves. It has never been 'neoliberal' economics to force people to internalise costs that are already internal. It's just bad economics that ought be cast into the outer darkness.

Burke continues:
For another reason, because it’s harder to just keep hammering at some change in an inflexible and unreflective way. When I was in seventh grade, I once screwed up my courage to tell my intelligent, sensitive, very queer, 50-something chainsmoking English teacher that he should stop smoking. He winced, teared up a bit, thanked me for caring, and said, “But darling boy, I think it would hurt me worse at my age to try and stop”. Which at seventh grade I was not prepared to understand, but now I can. When we care about others, we also know that there are reasons why they ride motorcycles without helmets or serve chicken nuggets three times a week, reasons that are profoundly built into their specific humanity or are at the least not really worth the harm and cost of the persistent harassment that might push a change in habit.
Which is another reason the technocrat avoids this mode of argument. Because to see people in this way is to be seen. If it’s about the empirical evidence and the abstract costs of acting or not acting, the expert can stay invisible and outside. But when we sit down to persuade through love or affection, we are naked and vulnerable ourselves. Our bodies and habits are as seen as those we are looking upon. The worst of all worlds is the person who borrows the grandiose certainty and intensity of public health and imports its rhetoric into more intimate kinds of observing and commenting upon others. [emphasis added]
I'd go further than this. I have some insight into the utility functions of the people I love, but even there my simulations often err. I have a partial and limited understanding of the utility functions of other acquaintances and friends. I can imagine being able to persuade a close friend that some chosen course of action is not the best way of achieving his ends as he sees them - being able to imagine the ends, understanding the constraints, and weighing appropriately the chances that I just had simply misspecified the utility function. I couldn't imagine doing the same for a stranger unless he asked me for advice while specifying the desired ends.

But the State cannot see our diverse ends. I can imagine a particularly good social worker perhaps having some useful advice for beneficiaries in that worker's case file. But it's not the place of the State to persuade with love and affection. We rightly laugh at corporate ad campaigns purporting that some logo loves us. Pity the fool who believes those ones, right? But how is it more plausible that the State can love us or that we can love each other through the State?

Burke gets the bolded bit above entirely right. As individuals, we have some limited insight into the utility functions of our friends and loved ones, and into the constraints they face. We can tailor our advice or admonitions accordingly, and refrain where we can see the costs of change as being in excess of the benefits while trying to account for the costs and benefits as they are viewed by the target of our affections. The state cannot do that. It simply cannot tell what comprises the good life for each of us given the diverse set of "good things" and the myriad ways of trading them off against each other at the margin.

And while voluntary organisations can harness altruistic love for charitable purpose, it's awfully hard to channel that impulse through State bureaus: bureaus predicated on love fail where you can't be sure that you've hired staff that are always motivated by it and will continue to be so after extended contact with clients; the tick-box process rules that act as substitute make it hard for those actually motivated by love to achieve much.

1 comment:

  1. Mar 04, 09:04:00 pm GMT+13

    what an exclusive club you fellows inhabit , and how
    we would wish to contribute to New Zealand, but you will not allow us at all ,
    into your delicate little conversations,you will not even give us the language,
    you will not write in words we understand and we are getting angry now, we are
    getting sick of professors and we want NZ to do well, so wake up here and now
    ,and say words well Pablo, Eric