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PaperclipPerfector  1yr ago (text post)   29657 thread views

Culture War Roundup for the week of July 31, 2023

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The Virtue Theory of Money

Recently, Freddie deBoer published an essay called "What Would a Functioning System of Equal Opportunity Look Like for the Losers" complaining about how unfair "equality of opportunity" is. The main point is that since talent is partially heritable, if we reward people based on their abilities then people who have been unlucky in the genetic lottery will be left worse off. It's a little hard to tell exactly what way of distributing resources Freddie would prefer instead, but he seems to have the opinion that it is unjust for luck to play a significant role. In Freddie's words: "it’s hard to see how rewarding talent falls under a rubric of distributing resources to people based on that which they can control."

I think Freddie's essay is a good example of a misunderstanding about the benefits of equality of opportunity—a misunderstanding I've come to think of as the Virtue Theory of Money. Basically, this is my name for the belief that the main purpose of money is to reward people for being good.

In my experience, many people seem to have some sort of implicit belief that people should be rewarded by society according to how virtuous they are. This takes different forms: some people emphasize hard-work, conscientiousness and so on. Others emphasize the difficulty or social value of the job that someone is doing. For example, some people argue that affirmitive action is bad because it prevents talented, hardworking people from getting the jobs/university spots that they deserve. As another example, some people argue that teachers should be paid more because of how important their jobs are. The labor theory of value also seems to be partially motivated by this idea.

Read in this light, Freddie is basically complaining that talent is not a virtue and so we should not reward people for being talented. (He also seems to believe that the reason talent is not a virtue is because it is influenced by genetics, which is outside our control. I find that idea somewhat incoherent—all sorts of other apparent virtues like generosity or open-mindedness are also influenced by genetics, but that's irrelevant to my main point.)

However, I think this idea is almost totally wrong. In my view, the main reason to reward some people more than others is if doing so leads to better social outcomes. The point is not to provide personal benefit to the people rewarded but to incentivize behavior that benefits the entire society.

As an example, I believe that the best argument against affirmitive action is not that it personally hurts the individual people denied positions because of it (though I do feel sympathy for them) but because it deprives society of having the most capable people in the most important jobs. The reason that we want to select the most talented people to become doctors is because it's good to have good doctors not because being a doctor is a nice reward for being a top student. Likewise, the best argument for paying teachers more is if doing so would lead to better educational outcomes of enough magnitude to be worth the extra cost. I agree that plenty of teachers (though far from all) are nice, hard-working people who do a demanding job. But again, a job is not supposed to be a reward for being a good person, it's supposed to be a way to get something useful done.

I also think this is a serious issue. Basing hiring decisions and salaries on how virtuous people seem can cause resources to be poorly allocated in a way that hurts everybody. If we followed the Virtue Theory of Money then too many people would want to be teachers (it's already a popular job even without a major salary boost) and not enough would want to be middle managers or accountants. We would have worse doctors, engineers and scientists.

So my main response to Freddie complaining about "equality of opportunity" leading to talented people being rewarded more is: that's exactly the point! We want talented people to be incentivized to apply their talents instead of doing some routine job that almost anyone else can do. Stop trying to use the virtue theory of money and think about the long-term conseuqences of policy decisions.

Now, I do want to add a couple caveats to this. First, I think it's bad to let people suffer a lot when society has sufficient resources to help them. So I think it's reasonable for the government to give some help to people who don't have the ability to get high quality jobs. But I think we should be aware that the government is only able to do this because of how rich our society is and that this wealth depends on incentivizing talented people to use their talents. Second, I do think that there is some value in rewarding people purely for their virtue. I want to live in a society of virtuous people and so I would like virtue to be incentivized even if the economic benefits are not always easy to measure. However, I think this should usually be a secondary concern.

DeBoer, in this essay, does not claim that we should use money to reward people for being good. He claims that we should ensure that even stupid and untalented people still have some minimal level of material comfort. He does not seem to mention anything about them being good or not.

His main point, I think, is that equality of opportunity is not sufficient to bring about a world in which everyone has that minimal level of material comfort. Which, really, is pretty obvious. Maybe there are a few people who have never thought about the matter before or who are extremely ideologically blinkered and so do not realize it but for the rest, DeBoer's essay just states something obviously true. I am not sure why he felt like spelling it out.

Your idea of focusing on better social outcomes is an interesting one, however. It provides some form of justification for allowing practices such as inheritance that are anti-meritocratic. In defense of inheritance, one could argue that letting parents pass on their wealth to their children encourages the parents to work harder and thus leads to better social outcomes overall.

Except stupid, untalented people in developed countries do have a minimum standard of living, unless they just make cartoonishly terrible decisions. And the latter category is mostly the mentally ill, criminals, drug addicts, etc. Now it’s true that welfare and charity are the mechanism for this minimum standard of living, and that this is no doubt humiliating for many people who have done nothing wrong except for being below average in every respect. And it’s equally true that there are people who slip through the cracks, mostly through fault of their own. But at a certain level we have to stop pretending there is any good solution to those two problems- you can’t make psychotic people act rationally, that’s what ‘psychotic’ means. And of course people who can’t provide for themselves will often find it humiliating to be provided for, but you can’t fix that either.

Honestly I'm not even against the whole idea of just handing the hopeless poor a small warm apartment, three healthy meals a day, a Netflix subscription, a decent sized gaming computer and some pocket money every week to spend on whatever takes their fancy as long as they acknowledge that they are beneath the people who actually toil to produce the stuff they are getting given and swear to just STAY OUT OF THE WAY! while the rest of society is out there propelling mankind to greater and greater heights. Literally all someone would have to do to avail themselves of this would be to sign a declaration saying they are irrevocably checking in for X period (where X ranges from 6 months to the rest of their lives, as they see fit) to be treated as a ward of the state.

Providing all this for free would probably be cheaper than the untold billions being wasted today trying to maintain the illusion that low quality humans are just as good and useful in modern society as high quality humans if only they are given the right push.

Are you also going to give them medical care? "Yes" is unaffordable, and "no" makes it into a horrible deathtrap.

If we instead just ask, "How much medical care are you going to give them?" then there are plausible answers. After all, bandaids are medical care that you could give them. So is, like, free MRIs for anyone with a slightly sore wrist. Of course, the American polity is allergic to the very concept of this question most of the time.

This is a special case of the general problem people have when being pinned down into agreeing to how much is "enough" to give someone a "basic existence", but it's special in that people have been overly conditioned to view healthcare as a binary, either you "have it" or you "don't have it" thing. Compare e.g. food, where most people make their own choices on a regular basis about how much food they buy, what quality, etc. There, people are at least likely to have the capacity to engage in a discussion about how much food (quantity and quality) is "enough", even if there is sufficient heterogeneity to prevent meaningful political solutions.

Let me rephrase: Any level of medical care that would be affordable would make it into a horrible deathtrap.

Bear in mind that we can't afford to give everyone food, housing, clothes, and pocket money with or without medical care, unless we're living in Star Trek. The only reason this is even slightly plausibly affordable is that there are a limited number of poor people. I'm skeptical that there are so few that we could afford to do this. Medical care just makes it orders of magnitude worse.

And that doesn't even consider problems like "what if everyone, as soon as they retire, signs up for the poverty program so they get their medical care paid for".

If we instead just ask, "How much medical care are you going to give them?" then there are plausible answers.

They're utility monsters. They will essentially hold themselves hostage for whatever you have, and more. Unless you're willing to, at some early point, say "fine, die then" (and the US is demonstrably not so willing), they will consume ever-increasing amounts of resources.

Of course, the American polity is allergic to the very concept of this question most of the time.

I actually like this plan, my only worry is that way too many people would do this! Perhaps we can pull it off in another 10-20 years.

Oh, go chase yourself. A Netflix subscription is consumption, which your economy is founded on. Take that away, let Netflix and the other companies crash, and see how much "propelling to greater and greater heights" goes on.

If you want to argue that people doing pure research with no immediate 'how do we monetise this?' results should be 100% funded, I'm happy to go along there - but the funding will dry up if there is no money being made. And who makes the money? The engines of consumption.

And who are the majority of consumers? Those you call "low quality humans":

Here those strange entities, the Thrifty Housewife, the Man of Discrimination, the Keen Buyer and the Good Judge, for ever young, for ever handsome, for ever virtuous, economical and inquisitive, moved to and fro upon their complicated orbits, comparing prices and values, making tests of purity, asking indiscreet questions about each other's ailments, household expenses, bed-springs, shaving cream, diet, laundry work and boots, perpetually spending to save and saving to spend, cutting out coupons and collecting cartons, surprising husbands with margarine and wives with patent washers and vacuum cleaners, occupied from morning to night in washing, cooking, dusting, filing, saving their children from germs, their complexions from wind and weather, their teeth from decay and their stomachs from indigestion, and yet adding so many hours to the day by labour-saving appliances that they had always leisure for visiting the talkies, sprawling on the beach to picnic upon Potted Meats and Tinned Fruit, and (when adorned by So-and-so's Silks, Blank's Gloves, Dash's Footwear, Whatnot's Weatherproof Complexion Cream and Thingummy's Beautifying Shampoos), even attending Ranelagh, Cowes, the Grand Stand at Ascot, Monte Carlo and the Queen's Drawing-Rooms. Where, Bredon asked himself, did the money come from that was to be spent so variously and so lavishly? If this hell's-dance of spending and saving were to stop for a moment, what would happen? If all the advertising in the world were to shut down tomorrow, would people still go on buying more soap, eating more apples, giving their children more vitamins, roughage, milk, olive oil, scooters and laxatives, learning more languages by gramophone, hearing more virtuosos by radio, re-decorating their houses, refreshing themselves with more non-alcoholic thirst-quenchers, cooking more new, appetizing dishes, affording themselves that little extra touch which means so much? Or would the whole desperate whirligig slow down, and the exhausted public relapse upon plain grub and elbow-grease? He did not know. Like all rich men, he had never before paid any attention to advertisements. He had never realized the enormous commercial importance of the comparatively poor. Not on the wealthy, who buy only what they want when they want it, was the vast superstructure of industry founded and built up, but on those who, aching for a luxury beyond their reach and for a leisure for ever denied them, could be bullied or wheedled into spending their few hardly won shillings on whatever might give them, if only for a moment, a leisured and luxurious illusion. Phantasmagoria—a city of dreadful day, of crude shapes and colours piled Babel-like in a heaven of harsh cobalt and rocking over a void of bankruptcy—a Cloud Cuckooland, peopled by pitiful ghosts, from the Thrifty Housewife providing a Grand Family Meal for Fourpence with the aid of Dairyfields Butter Beans in Margarine, to the Typist capturing the affections of Prince Charming by a liberal use of Muggins's Magnolia Face Cream.

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