by Tyler Cowen
This approach to the aggregation problem coincides with common sense morality. Not everyone can be happy about everything all of the time, but we should nonetheless choose the option that makes a strong preponderance of people much better off. Most important plural values will come along for the ride.
Choosing the pro-growth policy addresses some outstanding problems in ethics. For instance, in traditional economics—at least prior to the behavioral revolution and the integration with psychology—it was commonly assumed that what an individual chooses, or would choose, is a good indicator of his or her welfare. But individual preferences do not always reflect individual interests very well. Preferences as expressed in the marketplace often appear irrational, intransitive, spiteful, or otherwise morally dubious, as evidenced by a wide range of vices, from cravings for refined sugar to pornography to grossly actuarially unfair lottery tickets. Given these human imperfections, why should the concept of satisfying preferences be so important? Even if you are willing to rationalize or otherwise defend some of these choices, in many cases it seems obvious that satisfying preferences does not make people happier and does not make the world a better place.
Focusing on the long-term benefits of growth sidesteps such dilemmas. A fast-food cheeseburger is not actually worth $4.89, considering its potential impact on my future health. The cheeseburger offer is manipulating my evolutionarily programmed desire for more fat, to the detriment of my life expectancy. Yet at the same time, living in a much wealthier society—even one rife with fast food—is still good for most people, including good for their health. For all the talk about America’s obesity problem, which is indeed real, life expectancy is still rising with wealth. Indeed, it is wealthy and well-educated people who are most likely to be thin or to succeed in their diets.
When a higher rate of economic growth is at stake, the relevant comparisons become quite obvious after the passage of enough time. A given individual is likely better off living an extra five years, receiving anesthesia at the dentist, enjoying plentiful foodstuffs, having more years of education, and not losing any children to premature illness. Similarly, people one hundred years from now will be much better off if economic growth continues. At some point these cumulative benefits will be sufficiently robust to outweigh particular instances of irrational or misguided preferences. In other words, this approach also resolves some problems of preference aggregation within the individual self. If part of you wants a cheeseburger and another part of you wants broccoli, it might be hard to come to a good all-things-considered judgment of what is best. Is deliciousness more important, or is your health more important? Yet when we have the opportunity to opt for a Crusonia plant—higher rates of economic growth—we can get by with a fairly blunt set of judgments. The wealthier society will, over time, make just about everyone much better off.
To sum this all up, if we make a broad enough and long enough comparison, we will find that for a lot of choices the aggregation problems are not all that serious, at least not cripplingly so. Given that somewhat cheering reality, I would like to define two principles for practical reasoning. First:
The Principle of Growth: We should maximize the rate of sustainable economic growth, defined in terms of a concept such as Wealth Plus.
The Principle of Growth would return economics to its roots in Adam Smith. Smith held a straightforward, common sense approach to political economy. He understood that the benefits of cumulative growth were significant, especially with the passage of time. It is no accident that his economics treatise was entitled An Inquiry Into the Nature and Causes of the Wealth of Nations.
By the way, I see only one episode in human history in which the Principle of Growth was clearly and unambiguously applied, and that is in the East Asian economic miracles, which includes Japan, South Korea, Taiwan, Hong Kong, Singapore, and China (with a caveat for sustainability in the case of China). These histories are normally thought of as big economic successes, and of course they are, but there’s more to it than that: they also represent the highest manifestation of the ethical good in human history to date. Whereas Hegel saw the nineteenth-century Prussian state as a manifestation of God’s will in history, I am assigning a comparable (but secular) place of importance to the East Asian economic miracles. The word “miracle” truly does apply.
I call the second principle the Principle of Growth Plus Rights:
The Principle of Growth Plus Rights: Inviolable human rights, where applicable, should constrain the quest for higher economic growth.
Bear in mind that I am working with a pluralistic rather than a narrowly utilitarian approach. I will return to the status and nature of such rights later, but for now just think of such rights as binding and absolute. That means: just don’t violate human rights. If we were willing to trade these rights against a bundle of other plural values, at some sufficiently long time horizon the benefits from higher economic growth would trump the rights in importance, and in essence the rights would cease to be relevant. In other words, the presence of Crusonia plants means that rights—if we are going to believe in them at all—have to be tough and pretty close to absolute in importance if they are to survive as relevant to our comparisons.
Philosopher Robert Nozick wrote of rights as “side constraints.” The particular specification of these side constraints need not coincide with Nozick’s libertarian vision, and need not coincide with his absolute attachment to all forms of private property or his prohibition of most forms of taxation. Still, these rights will satisfy Nozick’s notion of rights as restrictions on the choice set of an individual or an institution. Again, there are some things we just shouldn’t do. As I see it, virtually everyone believes in rights of some sort, and thinking in terms of Crusonia plants and aggregation problems helps us identify how those rights fit into moral theory, namely that they have to be pretty strong and nearly absolute.
Note that the traditional notions of “positive rights” or “positive liberties”—both of which refer to people’s opportunities—do not fit into this conception of rights. The concept of positive liberties is important, but it is already covered by the imperative to maximize sustainable growth. There is no need to double-count positive liberties, and in fact doing so would be a mistake.The result is that these negative rights, restrictive though they may be, represent a stripped-down set of bare-bones constraints, a series of injunctions about the impermissibility of various forms of murder, torture, and abuse.
That said, I will later argue that we should violate rights to prevent extremely negative outcomes which involve the extinction of value altogether, such as the end of the world, as is sometimes postulated in philosophical thought experiments. If we strip away all of the basic preconditions of moral reasoning and all of the broad empirics behind our judgments and behind our construction of Crusonia plants, sensible notions of rights probably don’t apply, or at least their status becomes slippery. In that sense, these postulated rights are not quite absolute, which is why I used the phrase “nearly absolute” earlier. Still, to make this concrete, I have been reading newspapers for over forty years, and I have yet to see an example of a real-world choice that is so far outside the box that I do not wish to apply basic reasoning about rights to it.
Aren’t there other exceptions to the rules?
How far does this principle of growth maximization extend? For instance, what if small individual policies affect growth only when considered as a larger collective bundle of growth-enhancing policies? Must we then be agnostic toward the individual policy in that instance? Or can we group those individual policies together in some manner and think in terms of a tighter and more comprehensive set of commitments? And how will this issue relate to rights?
To think through these questions with a transparent example, let’s consider one of Derek Parfit’s “Mistakes in Moral Mathematics.” It goes something like this: if a firing squad of six shooters kills an innocent person, all of them fi
ring accurately at his heart, can we say that any one of the shooters is a murderer? After all, the “marginal product” of any single shooter was zero. Should we punish or invest resources into preventing the actions of any one of the shooters? Does it matter whose bullet arrived first? Should we refuse to prosecute group murders of this kind?
Virtually everyone would agree that participating in such a shooting is wrong. Even though a single additional bullet doesn’t change the tragic outcome, if we view that bullet as part of a generalizable rule about how to treat other people—“don’t shoot the innocent”—the sum total of rule-following behavior would save the life of the victim. In this case both human rights deontology and a rule consequentialist approach point us in the right direction, namely not firing the additional bullet. Furthermore, the “marginal product alone matters” approach to questions of this nature would induce dire practical consequences. For instance, more and more murders would be carried out by large groups so that no single individual would be liable. Governments obviously don’t want to allow this moral or legal loophole, and that is one reason why a rules-based approach to morality is, to some degree, inevitable.3
The marksman example is stylized, but it fits many real-world situations. Maybe a single act of corruption has no harmful effects, but corruption in general is harmful, and many corrupt acts will destroy a polity. Would we be justified in condemning a single act of corruption with a fair degree of strictness and severity, without worrying too much about whether the single act of corruption is really going to matter in the long run? A single act of weakness may not damage a person’s credibility much, but many weak acts will. A single improvement in procedures may not boost the overall veracity of science very much, but a broader collection of such improvements might make a big difference. Numerous violations of the rule or law may seem harmless enough, but enough of them can be dire once we consider the longer-run expectation and incentive effects. In many of these cases we judge the apparently indifferent individual act in terms of the broader pattern of behavior to which it belongs, and so we can imagine a moral imperative to try to bring about the larger set of grouped actions.4
Some of us might recoil in horror at the notion of a life, or a society, in which everything is governed by strict rules without exceptions. But fear not—rules will not acquire such extreme powers, because most rules are not as important as the growth maximization rule. What makes a growth maximization rule compelling is its attachment to a Crusonia plant, namely very large, ongoing, and indeed compounding gains in human welfare. Some rules, such as “never lie,” face embarrassing counterexamples if lying can bring about significant practical benefits in particular instances. But a rule of “maximize the rate of sustainable economic growth” does not face a comparable problem. By definition, the rule is telling us to follow outcomes with a preponderance of benefits over costs. So practical costs may overturn or modify some rules, but they will not limit the Principle of Growth, which will be limited only by absolute or near-absolute human rights.
In other words, maximizing sustainable growth as an imperative rule doesn’t allow a rule such as “always alphabetize by author rather than by book title” to have comparable moral force, if indeed it has any force at all. Once we move beyond absolute human rights and work toward a Crusonia plant (in this case, sustainable economic growth), most of the remaining morality will be practical in nature, prone to exception, dependent on context, and not exercising much of a tyranny over our lives. It won’t necessarily have much to do with rules at all, unless some other perspective, outside of the scope of the arguments at hand, establishes that rules are indeed the proper way to go.5
At the end of these arguments, we are led to a surprising conclusion. If the time horizon is sufficiently long, the only non-growth–related values that will bind practical decisions are the absolute side constraints, or the inviolable human rights. In other words, the dual ideals of prosperity and liberty will be central to ethics. I’ll be returning to some arguments for inviolable human rights later, but in the meantime we have a relatively straightforward, exclusive (“worship no other gods”), and practicable formula of “Growth and Human Rights.”
I’ll now look at the issue of time horizon in more detail. If the proper time horizon for our decisions is quite short, none of these arguments will succeed. I’m going to show why the time horizon matters so much and why we—in most, but not all, cases—should think in terms of very long time horizons.
1. See for instance Sen (1984). As an aside, consider how traditional cost-benefit analysis invokes a “potential compensation” principle to assess the relative importance of policy winners and policy losers. In this traditional economic approach, the key question is whether the gainers’ gains exceed the losers’ losses, or, in other words, whether the winners could in principle compensate the losers, as measured in material wealth. If so, then cost-benefit analysis recommends the policy, because in principle it could be transformed into a situation where everyone benefits. This is not commonly considered an interpersonal utility comparison, but in practice it functions as one. In most real-world cases, the compensation is never paid from the winners to the losers or even seriously contemplated. So we are judging one set of gains as socially “worth more” than a set of losses on the other side of the scale, and very often the margins of net gain are relatively slender. Note, by the way, that the grossness of the real income comparisons will limit the scope for outcome intransitivity and Scitovsky double-switching problems, as outlined by Chipman and Moore (1978).
2. Ronald Dworkin (1980) presents a philosophical critique of the potential compensation principle. He argues that wealth cannot be an end in itself and that we should pay more direct attention to whatever it is we think wealth is proxying for.
3. See Parfit (1987, 67) for a related and more complex example. For more recent takes on this dilemma and related problems, see Kagan (2011) and Nefsky (2012), and see Temkin (1996) on a possible role for the Sorites problem.
4. On the case for rules, see Brennan and Buchanan (2000), Epstein (1997), and Kydland and Prescott (1977), among many others. Cowen (2011) presents my earlier thoughts. Glazer and Rothenberg (2005) outline how many policy issues involve time consistency issues. See also the literature on rule vs. act utilitarianism, for instance Brandt (1963), Lyons (1965), Regan (1980), Slote (1992), Hooker (2000), Mackie (1985), Scarre (1996), and Feldman (1997). This problem has been present in rule utilitarianism since William Paley in the eighteenth century; see Schneewind (1977, 125–127).
5. An interesting piece on related issues is Väyrynen (2006).
4—Is time a moral illusion?
When I schedule my appointment with the dentist, I wonder whether it should be for this week or the next. Is there anything to be gained or lost from shifting the discomfort from one point in time to another? Is there a justifiable reason for putting off the appointment simply to postpone the discomfort?
So often we are tempted to put pleasure first and postpone our chores and our pains. The present is so real and vivid, and the future seems so distant and abstract. Many people cannot fully grasp that when the future comes, it will be as real as the present is right now.
I am struck by how people respond when they are given a choice between the immediate present, the future, and the more distant future. Very often they are biased toward the immediate present. For instance, a person might realize that a benefit in two years’ time is about the same in value as that same benefit in three years’ time. That’s a rational posture. That same person, however, may prefer a dollar today to three dollars three weeks from now.1 But when the comparison is between ten years from now and twenty years from now, people exhibit much more patience, and many people would even say that a benefit ten years from now is about as valuable as the same benefit twenty years from now.
In other words, individual time preference usually focuses on the immediate vs. the only somewha
t distant. If we can get over our initial impatience for receiving a reward now, our intellect is very often capable of seeing that we should care about the more distant future as much as we should care about the less distant future. For the most part, we’re actually fairly rational about time, except for this fixation on the “now” moment and the “very soon/right away” horizon.
We are programmed for the now moment for reasons which are inapplicable to most of our public policy choices and obsolete as a fundamental tool of moral reasoning. Human beings evolved under brutal hunter-gatherer conditions; they had good reason to pay special attention to the now moment. If you didn’t get the “now” right, there might not be a tomorrow. If you let a piece of meat sit, it would spoil or be seized by your neighbor or consumed by marauding animals overnight. It wasn’t like sitting on T-Bills in your Fidelity account. So we may have an innate biological preference for the “now,” but we will do better if we can get past it, if we can tap into the part of ourselves that recognizes that a benefit in twenty years’ time is about as valuable as that same benefit in thirty years’ time.
If you are the kind of person who is inclined to seize the current benefit, you will do best if you can find a way to link these immediate rewards to a superior payoff in the future. Young people, uneducated people, and those with lower IQs and problems with cognition or self-control find it hardest to make this connection. Those same people are also more likely to have problems with obesity, gambling, impulse control, and even violence. These correlations don’t philosophically prove that their impatient choices are incorrect (maybe the gamblers are the wise ones and the rest of us are fools for missing out on their risky delights), but they do lend support to the idea that these individuals are making a mistake. They are failing to imagine the future and its import. Further evidence suggests that children who are more impatient have more trouble in school and are more likely to encounter disciplinary action.2