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I notice that a lot of people on this site seem to be both utilitarian and right wing. This makes me confused, as the utilitarian case for a strong welfare state seems extremely strong on its face. By "strong welfare state" I mean something akin to the Scandinavian countries (Denmark, Norway, Sweden) in which the necessities of life (healthcare, housing, minimum subsistence) are essentially guaranteed, while maintaining a market economy.
Premise #1: We want to maximize pleasure (utility) and minimize pain (disutility).
Premise #2: Within the unit of people we care about, we care about everyone equally.
Premise #3: Central planning doesn't work very well, so we want to maintain a market economy.
Premise #4: We already have a fairly industrialized, advanced capitalist economy.
ARGUMENT:
Being in poverty is extremely bad for people's wellbeing, both in terms of physical and psychological health. It is extremely unpleasant for people to be homeless or hungry, or having to make decisions like choosing between heat in the winter, medicine, or food. Poverty sucks -- it is painful not being able to afford the essentials of life.
Being afraid of falling into poverty is also bad for people's wellbeing -- it is a major source of worry and concern because everyone knows that being impoverished sucks and is painful. So the existence of poverty is a cause of pain for a much larger group than those actually impoverished. Fear of poverty also leads people to refuse to take risks to avoid the pain of poverty, which leads to less pleasure.
Diminishing marginal utility. At a certain point, another yacht for the ultrawealthy rich guy is not going to make him significantly happier. Money can't buy love, you can't take it with you, etc. etc. However, charging that guy more in taxes and using those resources to eliminate poverty will make the groups mentioned in #1 and #2 significantly more happy.
We should be OK with high taxes in exchange for eliminating poverty by directly providing the necessities of life for those who cannot afford them. The pain avoided by eliminating poverty outweighs the pain imposed by the taxes (or the pleasure that is lost for the wealthy) because of the principle of diminishing marginal utility. Poverty causes more unhappiness than luxuries cause happiness.
Responses to obvious objections:
a. "Eliminating poverty will cause more pain in the long run because the economy will collapse or at the very least growth will slow, leading to a decline in living standards for everyone." Response: This doesn't seem to have happened in Scandinavia. The Scandinavian countries have been strong welfare states for a long time and are still very wealthy countries, among the wealthiest in the world. They haven't had their economies collapse from having too many layabouts and such.
b. "Charging me high taxes on wealth I created infringes on my liberties/freedom". Response: This may be a coherent objection, but it's not a utilitarian objection, it's a rights-based objection.
c. "The Scandinavian countries only could do this because they are ethnically homogenous, tightly knit societies. Look at Sweden right now, it's falling apart as they let in more immigrants." Response: This goes more to the political problem with instituting this system rather than the desirability of the system itself. The fact that present-day social democrats are pro immigration does not make immigration a necessary part of a social democracy. One can easily imagine a social democracy with Japan-style immigration restrictions.
d. "I only care about those who are deserving to not be in poverty; I don't care about everyone, I'm fine with people being in poverty if they do nothing to better themselves, or if they are in the outgroup." Response: This is also not really a utilitarian objection. Who "deserves" what is a question of justice, of deontology. But here, we are trying to maximize pleasure and minimize pain. This is difficult enough, boiling down all of human experience into two buckets, "pleasure" and "pain". If you add a whole 'nother set of buckets, "good people", "medium people", "bad people"... then you've really abandoned the exercise and are just doing deontology with extra steps. The pain someone experiences from not having housing or food or heat during the winter is plainly real and sincerely felt, even if you believe that that person should have done something different to avoid being in that state.
I don't really believe in diminishing marginal utility in its strong form. I also don't think the modern welfare state does much to eliminate the real sufferings of poverty, its more akin to a heroine drip for addicts. And on top of that, the taxation for a welfare state reduces economic dynamism (as does the welfare state itself, by disincentivizing work for some populations).
Overall, I find the welfare state an overwhelmingly unredeemable invention that only justifies itself with morally monstrous arguments along the lines of "think of the children."
Why not? It seems like common sense to me -- a dollar means a lot more to the guy begging outside McDonalds than it does to Elon Musk.
What are the "real sufferings of poverty", then?
"Diminishing marginal utility" is a misonomer. Economists tend to assume that the marginal utility of everything is diminishing, relative to previous units. (Heroin and the like may be exceptions.) The issue is the marginal utility of money vs. other things. In modern utility theory, money has no marginal utility as such; it only has marginal utility relative to an alternative. And utility is typically defined by modern theorists in terms of relative preference, rather than a psychological state of pleasure etc.
If there is a diminishing marginal utility of money, then why do so many poor people buy lottery tickets and otherwise gamble in games with negative expected value?
Assume that people gamble for the pleasure of taking risks. If there is diminishing marginal utility of money, why would the marginal value of money relative to this pleasure be low for poorer people?
Also, don't middle class and richer people save a higher proportion of their incomes than poorer people? Do they value maintaining their period-to-period monetary assets, relative to their incomes, more than poorer people?
Also, diminishing marginal utility on average is also very different from it being universal. Otherwise, why would many very rich people still work similar hours to poorer people? You can postulate that the former enjoy work, but that's ad hoc, as it doesn't explain why they would prefer paid labour.
I'm not saying that there is increasing marginal utility of money. I'm saying that it is really isn't obvious that money has diminishing marginal utility, even on average.
Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4034138/
I also forgot how to spell "misnomer".
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Of course middle class and richer people save more than poor people. Having barely sufficient income to cover needs, and hence having little left to save, is the definition of being poor.
As for why rich people who work a lot prefer paid labour, the answer is obvious: They get more utility out of paid labor (enjoyment + whatever they buy with their income) than unpaid (enjoyment alone).
Anyhow, talking about rich people not working does not address OP's point about relative utility of X extra dollars for a poor vs more affluent person. I can guarantee you that the local homeless guy would get more out of the $165 I recently earned than I will.
(1) I talked about proportions. There's nothing by definition that says that rich people have to save a greater proportion of their incomes than the poor.
(2) Your reasoning about rich people assumes that paid labour is equally preferable to unpaid labour, e.g. working as a bank director is as enjoyable as volunteering for a charity. This seems implausible for me. Do you have evidence for this "obvious" answer?
(3) What do you mean "get more out of"? If you mean "more utility", then you are begging the question. The point of my examples was to muddy the waters: one can cite evidence both for and against a higher interpersonal marginal utility of wealth for the poor vs. the rich. I think the honest answer for utilitarians is to say that they don't know, and that intuitions to the contrary are based on a hedonistic analysis of utility that ran aground in about 1850-1950, when it proved impossible to find a non-arbitrary interpersonal scale for utility. That's why economists and many ethicists ditched the hedonistic analysis of utility in favour of a preference-ranking analysis, but a preference-ranking analysis doesn't give you an interpersonal scale.
Yes, there in fact something about the definition that says that poor people save a smaller proportion. Again, "poor" by definition means that your income is barely enough to cover basic costs, so, by definition, a poor person will have very little surplus income and hence will be able to save a very small proportion of their income. In contrast, if your income is large enough that you can save a large proportion after paying your costs, then by definition you are not poor.
No, my reasoning does NOT imply that working as a bank director is as enjoyable as volunteering for a charity. I said merely that, given the same job, getting paid yields more utility than not getting paid.
Yes, I meant more utility. And, if you think that economists think that my example is wrong, then I think you are misunderstanding them. There is a $150 check on my desk right now, waiting to be deposited. I can literally throw it away, and will not miss it. That is how little marginal utility I get out of that $150. In contrast, $150 for a homeless person can make the difference between sleeping on the subway and sleeping indoors, for more than one night.
(1) But the issue is marginal income - that's where there's an additional dollar. If a poor person has an increase in marginal income and their income is enough to cover basic costs, then there is nothing in the definition of "rich" and "poor" that implies that they save a higher proporiton of that additional dollar than someone with greater wealth.
(2) If the job is different, then you've not explained why many rich people prefer paid labour like being a bank director to unpaid labour like volunteering for a charity.
(3) But what's the common scale for the comparison? Assume you prefer throwing the $150 away and the homeless person does not. That tells us about the internal structure of your respective utility scales, but doesn't tell us that their utility is higher on a scale that incorporates the preferences of both of you.
No, the specific issue is not marginal income; you referred to pct of** total **income: "Also, don't middle class and richer people save a higher proportion of their incomes than poorer people?"
Because they get paid for the paid work. You seem to think that the argument is that a rich person gets zero marginal utility from money. That is not the claim. If I am a lawyer or doctor making $300,000, then obviously I by quitting I am giving up quite a bit of utility. But that says nothing about the issue at hand: It tells us noting about whether I would get as much utility from an extra $1000 as would a poor person. And, btw, people who are rich enough not have to work quit work all the time -- it's called retirement -- and often they spend some of their time volunteering. So, your assumption that rich people don't never quit work and go volunteer is empirically false.
Then let's ignore money. Suppose 100,000 people own three cars each (call them "Group X"), and 100,000 other people ("Group Y") have no cars. I give each of them a 2003 Honda Civic. Which Group members are most likely to use their new cars" It is Group Y, right? Why, if that obviously true, if it is so impossible to make a comparison between the utility each gets out of the car? It isn't.
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It's not ... directly obvious that this is true. Consider the stereotype of him spending it all on crack or booze. It may also depend on the region. There's probably studies on this; could you link them?
Well, presumably he gets a lot of utility out of crack or booze. Besides, that $165 means that he can now get both crack AND booze. Or crack AND several meals at McDonald's. In contrast, I am able to buy crack and food and booze even if I throw the money away; it has very little marginal utility for me.
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Gambling seems like a poor example for your point. Poor people are buying the opportunity to imagine themselves getting rich (and every once in a while it happens). People who already are rich can buy real investments and the psychic thrill isn’t the same for them.
The higher savings rate for the wealthy also seems like evidence of diminishing marginal utility of money. Wealthy people put more money away because spending is a lot less urgent than someone struggling to make ends meet.
Poor people don't need to gamble to imagine themselves as rich. It does happen sometimes, but the expected value of lotteries etc. is negative.
What's the evidence that the psychic thrill of gambling is less for the rich? Note that, to substantiate this claim, you can't assume a diminishing marginal utility of wealth.
If it's less urgent, then that means that their preference for saving a marginal unit of money vs. spending it is greater. As I said, in modern utility theory, something only has utility relative to something else; mathematically, utility is defined as an ordinal variable corresponding to a ranking of alternatives.
There's a further issue, of course, of defining a common unit of utility across people. I'm assuming that's somehow not a problem, because otherwise the "diminishing marginal utility" position is REALLY stuffed.
I also forgot another reason why "diminishing marginal utility of money" is a misnomer: it should really be called "diminishing interpersonal marginal utility of money", because the marginal utility can be decreasing for each individual and yet the value of one more unit of wealth can be greater for rich people rather than poor people. Diminishing marginal utility of money for each individaul does not imply that an additional dollar gives greater utility to a poor person than a rich person. In fact, it's logically possible that money can have diminishing marginal utility for each person and yet one still maximises utility by taxing the poor to give to the rich.
For example, consider a society with two people, A and B. We define MUn(a) as the marginal utility of money for the nth unit of money for A and MUn(b) for B mutatis mutandis.
Suppose that MUn(a) = 1^(-n). So the marginal utility of the 100th unit of wealth for A is 1 / 100. The marginal utility of the 10,000th unit is 1 / 10,000. Thus, the marginal utility of money for A is diminishing: it decreases with each unit. In fact, it's monotonically diminishing: the marginal value of the nth unit is less than each previous unit.
Suppose that MUn(a) = 1^(-√n). So the marginal utility of the 100th unit of wealth for A is 1 / 10. The marginal utility of the 10,000th unit is 1 / 100. Again, the marginal utility of money for B is (monotonically) diminishing.
If A has $499 and B has $159,999, then the value of an additional dollar for A is 1 / 500 and the value of an additional dollar for B is 1 / 400. Utility is maximised by B having the additional dollar, even though we are assuming utility is (montonically!) diminishing.
And again, this is all assuming away the problem of interpersonal utility comparisons, because otherwise I don't begin to have a functioning version of your position with which to play. You could say "Obviously, utility doesn't work the way you specify in your example," but then you ARE obliged to explain how you find a common unit of utility for people in the real world, because all I am granting in this example is diminishing marginal utility of money (relative to something else that is common between A and B, e.g. assuming a common valuation of a Big Mac).
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Does it? Begging is one of the least effective ways to get dollars possible. If dollars are so valuable to him, why not sustain effort to acquire them in quantity?
I think most of the people begging outside McDonalds value their time and short-term amusement more than they value dollars, straight up. Elon Musk is the exact opposite, valuing dollars and the things dollars buy more than idle hours and idle pleasures. Begging gets beggers what they actually want: continued freedom from all responsibility and, frequently, sobriety. That's why they keep begging, because it's what they want. Give them a million dollars, and they'll blow it all in short order, possibly killing themselves in the process, and certainly leaving themselves little better than when they started.
But that first single dollar means a lot more to that guy than it does to Elon Musk, since for him it’s the difference between eating and not eating right then and there whereas for Elon it’s not even a rounding error. You can be right about how Elon and the homeless guy value their time relative to earning money, but $1 still means a lot more to the destitute hungry guy than Elon.
I don't believe this is true. In a nation of ~350 million, my estimate of the number of people who've died of classic Dickensian starvation in the last decade is 0. Kids get neglected by unfit parents, elderly people get sick enough to stop eating, maybe a shut-in breaks a hip and no one notices, but near as I can tell, we have literally conquered bread. Food pantries and giveaways are ubiquitous, as are programs to hand out meals to the homeless. Some of the people panhandling on the side of the street might have missed a meal recently; I also miss meals when I'm on a gaming binge and am too lazy to actually feed myself. When they get hungry enough, food will be available for them. When they go hungry, that is a choice they have made.
This idea that a dollar is the difference between eating or not for the homeless guy is, near as I can tell, entirely fictional. Homeless people mostly live the way they live by choice, at least until the drugs burn out enough neurons that choices aren't really a thing they can do any more. Most of them appear to be stuck in a spiral of self-destruction; we should be taking them off the streets and putting them in a secure, structured environment where they can get their shit back together. Giving them free money often seems to only help them kill themselves faster.
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But it doesn't follow that the marginal utility is higher for the beggar than Elon Musk.
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Assuming that begging in front of a fast food restaurant isn't just a novel form of slumming, IMO this doesn't quite illustrate to what a degree those people are no longer even capable of choosing or valueing anything. That far down, it may seem psychologically unfeasible to climb up towards anything, no matter how modest. The body is degraded, the mind along with it, and they're probably all out of social contacts as well. With no resources to invest, no energy to spend, no faculties intact, nothing to offer to the market and nobody to rely on, what can you actually hope to accomplish? I think it's valid to observe that those people are no longer capable of pulling themselves up by their bootstraps. But there's a bit of a leap required to come to the conclusion that you must throw money at them.
And here I see utilitarians taking the easy way out. Has a utilitarian ever said "this person is beyond help, any resources invested here are wasted"? In my cyncical view, most utilitarians are simply humanitarians with a coat of rational paint, with many of their premises and conclusions going unexamined and only the the details getting the lightest touch of utilitarian calculus. Who questions the metrics of pain and pleasure as proxies for disutility and utility? Who quantifies them? Utilitarianism may as well just be a ritual of rationality, an act put on in order to feel better about indulging one's altruistic impulses. I'm sure I'm wrong about this and effective altruism is actually fully reasoned-out and I just don't get it, after all the people who do it are smarter than me, but I'm getting the same vibes from the so-called utilitarians that I get from those who want to help the starving poor the world over without having ever heard of utilons.
I wouldn't be surprised: that sounds like it could easily be a summary of the condition of a person who has been sentenced to be sacrificed to a bloodthirsty trolley. There are all sorts of repugnancies that utilitarianism can fall into; that's why I see it as, at the very least, something very slippery to deal with.
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In America, and most industrialized nations, its the fact that the person remains nonfunctional.
Might this be the cause rather than the effect.
Well it is the cause, but the knowing is also the effect.
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