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Prior Knowledge

Wednesday, August 24, 2005

a principle relevant to our organisation of economies

How ought we to organise economic institutions? As part of the answer, I suggest that the libertarian right to produce, market and consume anything at all so long as it has no evident harmful effects should be balanced against a principle of producing and consuming only that which we need (or rather, not too much more than we need).

A prudential reason for the latter principle is that we are not likely to be able to predict all the harmful effects of some product or some pattern of consumption and that concerns of harm minimisation would suggest that we forego various products and patterns of consumption that are not 'relatively' necessary. An obvious example of unforseen ill-effects of a product is the automobile and its reliance on oil. An example of the ill effects of an unnecessary pattern of consumption would be the huge amount of international trade. With the growth of international trade many nations are moving away from a state of self-subsistence where localities or nations can provide for their own basic needs. Concerns of comparative advantage are often presented to argue that it is more efficient overall if some country produces, say, rice, while another produces microchips. This leads to a dependency on large amounts of petroleum to transport goods from country to country or even continent to continent. This dependence is a consequence that looks increasingly unwanted in light of the environmental impact of the consumption of large amounts of oil. The suggested principle might require us to try to return part of the way towards localised, self-subsistent economies.

Another reason for the principle is to do with justice. In the past few centuries, the desire for relatively unnecessary products (or their consumption beyond relatively necessary amounts) has often been satisfied by the military conquest of a resource-rich area of the globe or by the subjugation and exploitation of some group of persons. Consider, for example, the injustices attached to the growth of industries heavily dependent upon gold, spices, cotton, coal, diamonds and oil. The scope of the 'unless the product has harmful effects' proviso in the free-market view is usually limited to a concern for the health of consumers insofar as it is directly affected by the consumption of the relevant product and a rather narrow circumscription of the production process that does not include, say, facts about whether the necessary inputs were obtained justly.

While current state regulatory agencies generally want new products to reach the market unless they are harmful, the suggested principle might recommend that we allow new products to reach the market only if they are 'relatively necessary', cannot be supplemented by other products which can be produced and consumed with less impact on the environment and less injustice and whose effect on the environment and on issues of justice is acceptable.

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  • I think you need to provide a fuller account of the word need. Specifically, how much more than the bare necessities is too much?

    I think that are computers needed by modern day society. By whos standards is need to be assessed? They seem to be completely extravagant to subsistence farmers. Why are automobiles unnecessary? They are a requirement to maintain the lifestyle that hundreds of millions of people.

    Your argument seems to see environmental harm as the most important harm. But, I think that producing wind turbines would be considered unnecessary under your scheme. If we only need what we eat, then we shouldn't utilize electricity.

    If only we are only allowed to produce and consume subsistence-level products, you need to explain our (overwhelming) desire for more than subsistence level produce. Fruit is not needed, does that entail that we are not allowed to produce it?

    Also, I'm not sure I understand by evident harm in your libertarian criteron. "...the libertarian right to produce, market and consume anything at all so long as it has no evident harmful effects"
    By evident harm do you mean direct harm? Because I don't know that the libertarian is going to care about very indirect forms of harm, which is evident. If we take potential into account, every form of production seems to harm someone else indirectly. As soon as we take away their possibility of farming the same land, for example, we harm them indirectly.

    When you brought up the example of international justice, it seemed to me that you were only opposing imperialism because it conquered due to demand for unnecessay goods and riches. Is it just to allow poor nations, who do not have the land requirements to fee their people to invade sparse countries?

    Generalising, how do you justify national boarders? Surely what is required to reduce the environmental impact is to move people to where land is more productive. And, being more specific, can the poor steal from the rich?

    Another problem, is that by restricting produce to only which is relatively necessay does not explain people's desire to continually produce other things and push the boundaries.

    The most major problem, however, is how can everyone be self-sufficent. I don't think there is enough landmass to feed the world's population using inefficent susbsistence farming techniques.

    8/24/2005 05:03:00 PM  

  • I'm worried about how you would enforce the proposed principle. Do you think it could be done without falling into totalitarianism?

    8/24/2005 05:40:00 PM  

  • The proposal is left intentionally vague as I have little idea how to answer various practical questions like the ones brought up in the above comments. How much more than bare neccessities is too much? How do we judge the leel of bare needs given that the only plausible way to do this would be to treat need as relative to the level of development of a society rather than as absolute? I cannot propose any general rule to decide the issue and can only suggest that we can, in principle, decide these issues on a case by case basis.

    T brings up a point about our desire for more than subsistence level produce. First, it is unnecessary to speak of 'subsistence' levels, as it seems intuitively plausible that we can have greater than subsistence consumption and still show some restraint. Second, I'm not sure I understand the point about our 'desire' for more products - surely some of our desires can legitimately be curbed.

    On whether the concerns of international justice would allow the poor to steal from the rich, note that other moral considerations - like unfulfilled needs - are relevant here that are not relevant to a case of the rich exploiting the poor. I expect that these other moral considerations would urge redistribution and no-strings-attached investment from the rich to the poor, leaving the question of the poor 'stealing' from the rich as a potentially permissible last resort.
    A related point is that recommending a partial return to an ideal of self-subsistent communities does not mean an end to inter-national duties and moral concern. There may be duties to help those countries that cannot produce enough to sustain themselves. Also, I must clarify that I need not urge an exclusive reliance on subsistence farming techniques. Being a little more concerned about the unneccessarily high use of fuel in international transport of foodstuffs need not mean that we have to do without other helpful tachnology like tractors and various methods of mass production.

    The vexing question of totalitarianism: I guess I can only point to the ways that are already used to control the influence of democratic states on citizens. For example, we can make vague pronouncements about checks and balances, making the relevant advisory bodies transparent to public sructiny and as impervious to state and lobbying pressures as possible.

    Further, I had in mind that perhaps we can try to put the control of these regulatory boards in the hands of citizens' groups or consumers' groups that are relatively free from central oversight. I am optimistic enough to suppose that such citizen groups could make more conservative decisions than would the business interests which are best seen as ultimately governed by profit maximising motives. The decisions would be based on assessment of long term efects and judgments about whether the product is really necessary (in a context-sensitive and pragmatic sense of 'necessary' rather than a 'bare needs' sense) or is too trivial a luxury to be worth producing. For instance, I wonder whether consumer groups would approve the production of trivia (for which the demand is often created by effective marketing campaigns) like those 'tamagochi' pets a few years ago; or whether they would always approve new products that only add negligible gains in usefulness at the cost of unnecessary packaging like wrapping individual slices of cheese in plastic rather than selling blocks of cheese.

    Given that my proposal of using consumers' groups rather than the state to exert some control on market activity is pretty vague, let me refer the interested reader to the work of political economists Michael Albert and Robin Hahnel, who expound a detalied account of 'Participatory Economics' where consumer and producer groups plan their consumption needs and production capabilities. Though I only have a passing acquaintance with the economic model they propose, it seems prima facie plausible as a way of allowing some democratic, rather than totalitarian, control over the economy.

    8/25/2005 02:52:00 PM  

  • I think the goal here is laudable, and that there are better means of reaching it.

    The problem you're trying to solve is enviromental damage and risk of same. So how to we solve that using market forces? We factor those costs into the resource costs.

    Presently, resources are mainly priced based on how much they cost to extract from the ground/sea/etc. To make the pricing correct, they need to include the cost of cleaning up enviromental damage from spending the resource. This pricing can also be handled by the market - just force the purchase of a "cleanup policy" (in an combined future/insurance market) alongside the resource.

    This is a much less invasive change than trying to identify what goods are "needed", and use the traditional efficiency of markets to optimize resource usage.

    8/26/2005 02:56:00 AM  

  • Yeah, that sounds like a better idea.

    Even in 'democratic' versions of Sagar's proposal, I worry about groups of people having arbitrary power to tell others what they may or may not do. It isn't difficult to imagine conservative groups abusing such power to impose their moral agenda on the rest of society -- without regard for whether the products they want to ban do any real damage. And even for mere rubbishy toys... if my neighbour wants a tamagochi, who am I (or even the whole rest of the neighbourhood) to stop him? Incorporate the environmental costs into the production costs, then let people produce as they will -- and pay accordingly.

    8/26/2005 12:01:00 PM  

  • It has been suggested that the relevant 'hidden' social costs could be handled through market means, simply by artificially pushing up the prices of relevant resources to ensure that it takes into account the negative externalities. One reason to favour such adjustment of prices to my proposed alternative of requiring consumers to consider the social costs is that the price system potentially conveys the same information to the consumer in a more succinct form - if a product is more expensive, it signals that it has great social cost. However, note the kind of information that is signalled by the price in our case: the information consists of facts about the world that have ethical importance. What reason have we to believe that the supposed success of the price system at signalling the material costs of production will translate to similar success at signalling the ethical costs of production and consumption? I expect that we are simply to trust a central authority to accurately capture the social costs in price terms. But, why should we trust a central authority to accurately weigh the ethical importance of these costs (and to ignore lobbying and bribes from producers who want the social costs of their product to be forgotten) when we can instead leave the decision to consumers who are, in the ideal scenario, well-informed and educated?

    10/11/2005 06:57:00 PM  

  • I think these sort of questions often result in arguments when actually it is a difference in understanding of the question.
    for example I could say "how should humans operate" and the answer could be "we should all sit around in orgasmic happyness" or "we should all fufill our favourite goals" and surely I would get little disagreement (on at least one of them). If we had the power to do that - but hte question generally implies we dont but d we have the power to control a governemnt (required by any strong law baised policies) do we have the pwoer to control peopels culture (I believe required by many anarchist policies). And how are we willign to apply the power and how are we intending to accumulate it (obviously we dont have it this instant, and which questions do we imply we dont need to answer because they are entirely hypothetical and are not supposed to have any real world implications?
    Slightly different ways of looking at it should produce radicaly diferent answers - and the only reason we dont se that first up is because we have a philosophical or political hammer and we are preconditioned to see appropriate sized nails. ok maybe I should use a drill bits and raw material analogy!)

    10/20/2005 09:34:00 PM  

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