Our upcoming episode #174 will be on Adam Smith’s Wealth of Nations, and we’ve scheduled a follow-up (#176) with Russ Roberts of EconTalk, so I again have economics on the brain, and am trying to figure out exactly what rubs me the wrong way about pro-capitalist cheerleading apart from its obvious association with some pretty despicable elements in politics, given that I agree with the overall narrative that capitalism grows wealth and is hence responsible for our high standard of living, including the ability to podcast and enjoy many if not most of the things that we enjoy. (Note that Smith’s picture does not by itself indicate lack of government involvement in this growth. Smith does not think capitalists “built that” by themselves, though there are plenty of government interventions in the economy that he objects to.) So as with my post on Penn Jillette, here’s another stab at trying to figure out what I think using the stimulus of a reasonable-sounding pro-capitalist video, this time by Walter Williams, economist at George Mason University:
The moral sentiment drawn on here is a basic and widely held one: “You don’t work, you don’t eat.” Now, using the example of mowing a lawn is a misleading way to present that because the unfairness objection to capitalism is based on the idea that capitalists qua investors actually aren’t working. If I already have a lump of money, maybe I need only ask around or use the Internet to find an investment advisor with a good track record, and rely on that person’s expertise to pick a project with a good management team, who in term pick qualified workers, and the workers and the managers (and the investment advisor) do the work to get me my profit, which I then, according to this picture, turn over to a vendor as a certificate of the value that I’ve provided to the community.
But of course, capitalism needs capital, so regardless of the fact that I didn’t get sweaty mowing a lawn for my profit, I chose to invest that money and enable all this good to happen (in Smith’s words, I supported productive labor) rather than burning my money or using it for direct consumer behavior like hiring someone to mow my lawn (which Smith calls supporting unproductive behavior; even though the person mowing my lawn is providing value to me, and my paying him in turn enables him to engage in economic activity that supports others, that has much less overall economic value than investing capital. Paying to mow is essentially creating something—short grass—that promptly disappears, instead of creating a good that can then be further recirculated to the overall increase of society’s wealth).
So if we accept that greater overall wealth is a species of utilitarianism, i.e., that monetary wealth is a species of the good, even if not the only or best species, then the investing capitalist is earning what Williams in the video is calling a certificate of performance. Unlike many presentations of capitalism, this video is in particular concerned with desert: because of a moral act (helping others), we can see money qua certificate of performance as deserved.
Does it follow that someone who doesn’t produce such a certificate does not deserve the fruits of others’ labor? That those who haven’t earned money don’t deserve a share of society’s resources? In light of consideration of the capitalist, the moral principle should no longer be formulated as “you don’t work, you don’t eat,” but “if you don’t provide value to others, you don’t eat.” The capitalist has provided value to others not in virtue of his work, but in some other way.
What is the value of culture? Of art and scholarship? If we’re not simply defining value in terms of money, if we’re open, as this video is, to making a moral argument to the effect that providing a value to the community creates a condition whereby the producer of this value deserves something, then there are many activities that create such desert, even if the market doesn’t itself reward these activities.
There is plenty of precedent for trying to reward such behavior outside of the market. Adam Smith is pretty uniformly critical of these. In Book V of Wealth of Nations (Part III, Article II), Smith criticizes the educational system of his day as not providing enough direct value to people. University professors were teaching things like Latin and Aristotelian biology that were of no obvious use to most students, yet various social conventions forced any student who wanted to get into certain professions to suffer through this, and so subsidize the teachers who taught these subjects. Smith contrasted this with trade schools, which have to effectively convey the trade in question lest they go out of business. This sounds like the kind of argument Williams would approve of: It’s moral that people get to vote voluntarily with their dollars.
But what kind of world would we live in if every bit of scholarship and art required a sufficient commercial demand to permit its production? How many artists have only been recognized after their deaths? How much basic research doesn’t produce immediate economic payback, yet slowly raises our overall knowledge in ways that do eventually provide economic gains? Does every endeavor to, for example, preserve history need to be justified in economic terms, i.e., does there need to be some consumer willing to pay for that particular history to be supported?
Let’s suppose I want to live in a world where the arts and sciences are supported. Maybe I should work to convince others that this is a good idea too, and we can voluntarily put some portion of our incomes into funding a university or other organization that will fund such endeavors in bulk. This much should be fine with Smith and Williams.
Maybe I’m very successful at convincing those in power that this is a worthwhile idea (and if this is truly a representative democracy, that means the majority of people, or if it’s merely a republic like ours, then I convince the people’s representatives or the experts that the people’s representatives in their wisdom rely on). I convince them that these long-term gains are worth everyone’s money, and so I get tax support for support for culture, or maybe I and my supporters successfully establish a custom exactly like the one Smith is objecting to where anyone who is to get a decent job must jump through some hoops that involve supporting some sort of educational/cultural-support entity, even though the scholarly work and art supported by this institution is decided by the professors and not directly by the paying students, or even the politicians involved.
Williams and Smith would say that this process in effect robs consumers of their voting power. For a “certificate of performance” (money) to be legitimately earned, it needs to produce something that individual consumers find valuable. A university selling degrees to accountants and lawyers and other respectable trades that bundles in a bunch of Latin and Aristotelian physics and modern poetry and studies into the diets of ancient Australians is like a shitty cable company that gives you the Home Shopping Network and the religious stations and the Golf channel along with the networks you actually want. Yes, there are some weirdos that want those selections, but not enough that they could possibly survive based on market forces alone.
So a humanities practitioner, as someone probably not able to make a living selling his services directly to people, is through his university/government subsidy effectively stealing from unwilling customers through both taxes and the tuition associated with socially required education. This sounds pretty morally dubious, but that depends on what moral calculation you subscribe to. A proto-utilitarian like Adam Smith (see our episode 45) would look at whether the benefits outweigh the inconvenience. He doesn’t think that money is the only good. Though in the Wealth of Nations, he’s concerned only with how various social measures might increase overall financial wealth, that doesn’t mean that there might not be some good outside of such wealth worth also pursuing. If we could determine that some cultural activities were good in some other way than by what price they fetch in the market, then that might morally justify actions to promote their existence.
But, the pro-capitalist might respond, how can we determine if such activities are good? Who decides? Are there objective goods? One of the central ideas of Rawlsian liberalism is that people’s ideas of the good differ, so society as a whole should remain neutral with regard to alleged objective goods.
The loophole here is the harm principle. Society is justified in outlawing actions that cause physical harm to others, and if one could unproblematically establish other types of harm, such as psychological harm, then one can act to prevent those too. The alleged harm in allowing all art, science, and other humanities sink to the level of pay-to-play would be that doing this allows society to sink into barbarism.
Who decides what barbarism consists in? Well, the experts in those fields: Humanities professors peer review each other, they have debates about whether that kind of philosophy is real philosophy and that kind of art is real art, etc. They’re not perfect, and perhaps won’t recognize a budding Van Gogh, and most likely the fact that they’re already invested in certain traditions means that a lot of bullshit will continue to be supported. But I think one could make a case for a general, mandatory fund to support a wide range of activity of this kind.
Ultimately, it’s not necessary that consensus be reached on what types of cultural activity are valuable. Critical theorists may think that evolutionary psychologists are full of crap and vice versa, but both may deserve our support. The important thing for me is that I want to live in a world where the life of the mind is alive and well, where the tedium of commerce does not eclipse much of what makes life worth living. So even if I don’t “get” your intellectual or artistic pursuit, I support (not just in the abstract, but through monetary provision) your right to pursue it. You’re pursuing what you find stimulating, but the invisible hand thus lifts up the overall level of the culture.
An objection Williams would make to what I’ve described is the “mandatory” element involved in supporting a cultural fund. Whether actually paid for by taxes or by de facto social requirements like the need for a certain kind of education to get a well-paying job, there’s something coercive going on, and does the good that the cultural fund provides outweigh the oppression involved in coercion?
To a hardcore Libertarian à la Nozick (and this was the attitude I was reacting to in my past post about Penn Jillette), the coercion involved in taxation is a deal-breaker, but the fact that I’m grouping together with-a-gun government coercion with de facto coercion by social convention should indicate that I’m not looking to have that argument again. Any extreme rule-based morality (“All taxation is theft and hence evil!”), to be intuitively plausible, needs to be tempered with utilitarian sentiments (and vice versa!). My concern is with how much hardship people actually experience in being “coerced” in these different ways. A very low tax on a rich person, even though technically coercive (if you don’t pay, you eventually go to jail), is just a bother. A very high level of inconvenience forced merely by social custom (to get a high-paying job you must have an expensive education, which you can’t afford because your parents had low-paying jobs) can feel much more burdensome, and result in much more tangible suffering.
In considering taxation in Book V of Wealth of Nations, Adam Smith doesn’t give a blanket denunciation of taxation as coercive, but considers what kinds and amounts of taxes actually dampen economic activity. An overall utilitarian calculus should tell us that if a certain level of coercive funding (by whatever means) produces more good than inconvenience it causes, then we should do it. Considering only the national bottom line in thinking about “more good” here is morally astigmatic. A utilitarian calculus must include all of the alleged goods involved, which of course includes not just economic and cultural ones, but environmental ones and probably spiritual ones; each type of good involves its own epistemic difficulties. (No one said social policy was easy!)
In an economy that’s just getting off the ground, when the overall level of wealth is low, then perhaps a cultural fund is a luxury that society can’t afford. But we now live in a wildly affluent society. We can afford to have a very liberal view of what might constitute value, of what activities deserve a certificate of performance. Just as a government can be oppressive, market forces themselves can be (metaphorically) oppressive. Instead of just asking “how small a government can we get away with?” so that as many of our resources as possible are used as capital to support “productive labor,” we should also ask “given that we want to continue improving our standard of living, what burden can the economy bear to support goods that are not amenable to direct support by the market?”
I think that political theorists, economists, and philosophers should be exploring both of these problems, and then a rational political process should help us as a society reach a (temporary, to be renewed periodically) consensus on what percentage of our efforts should be given over to supporting a growing economy vs. supporting a cultural heritage, and exactly what means (taxation vs. de facto social duties) would be best brought to bear to support the latter. As is consistent with a naturalist moral theory like Hume’s (and probably Smith’s), it’s up to us as a society, drawing on our moral sentiments and our experience over the centuries, to decide the most moral path: How many eggs should we put into the grow-the-economy basket vs. the grow-the-culture basket? Or can we figure out how to make the two interact in a non-zero-sum manner with respect to each other without simply making culture entirely subservient to market forces?