Monsters, Markets, and Running Over Children (Efficiently!)
Posner begins in Chapter 3 (Utilitarianism, Economics and Social Theory) by distinguishing between wealth maximization and utilitarianism. Where utilitarianism judges actions by their effect on aggregate happiness, normative economics judges them by their effect on social welfare. He believes that he addresses many of the issues that plague utilitarians, such as the animal problem (sheeps), the boundary issue, the foreigner issue, and that “the perils of instrumentalism are also less acute in a system of wealth maximization” (80).
I think, however, that the way in which Posner defines “value” brings up serious questions about whether his alternative is actually any less “monstrous” than that of the utilitarian.
My main issue is Posner’s reliance on willingness to pay as the measure of value. As he writes, “the most important thing to bear in mind about the concept of value is that it is based on what people are willing to pay for something rather than on the happiness they would derive from having it” (60) The individual who deeply wants some good but cannot pay for it “does not value the good in the sense in which I am using the term ‘value’” (61). This then means that in a system of wealth-maximization, only preferences backed by money carry ethical weight (61). The poor person who values her children’s education just as much as the wealthy parent thus values it less, simply because she lacks the ability to pay.
This definition of value produces an outcome that to me seems no less troubling than the utilitarian monstrousness Posner criticizes.
Consider his treatment of the sheep vs. child problem. Posner argues that the utilitarian is monstrous because, given enough sheep, the utilitarian must conclude that a driver who killed a child to save 2 sheep “could not be considered a bad man, because his action may have increased the amount of happiness in the world” (53). Posner thinks he resolves this problem by saying that animals aren’t included because of any speculation about whether they feel content or suffer, but that they matter only insofar as they generate economic value / “enhance wealth” (76). On the very same page, he argues that people who lack sufficient earning power to support a minimum standard of living “are entitled to no say in the allocation of resources”. The logic that reduces sheep to their economic output also reduces impoverished people to their earning potential. In a society with widespread starvation, a sheep that produces meat, milk, and wool could easily register as more “valuable” than an indigent child whose family cannot back their preferences with money. Wouldn’t Posner then, under the wealth-maximization framework, also demand that the child be run over as opposed to the two sheep?
Posner is no less monstrous than the utilitarian. He’s just made monstrousness efficient, ensuring that it falls on those least able to pay their way out of it.
This post is a sharp critique of Posner. I'm not sure, however if I'd characterize it as a more efficient monstrosity and rather a more depraved one. Classic utilitarianism still considers all human voices while Posner completely disenfranchises the impoverished. While utilitarianism may be flawed in its calculations, at the very least it allows all sentient brings capable of suffering to participate. Some utilitarians are in favor of things like welfare, since $100 dollars to a starving person has massive util compared to a rich family, but Posner would reject this because the rich family has greater value "based on what people are willing to pay." If Posner had a more efficient system is would account for more variables instead of cutting people off.
ReplyDeletePosner: Your argument relies on the happiness of the child, or the suffering of the poor, yet both of these subjective internal states are incoherent metrics for governance. Wealth maximization is, by contrast, morally honest, replacing sentimental guesswork with the measurable reality of human capitol. Furthermore, your claim that wealth maximization demands running over a child in the face of scarce resources ignores the actual economic value of that child and the profound loss to society.
ReplyDeleteWhile wealth maximization does not protect children due to their right to live, nor their happiness, every child is both costly to produce and represents potential future productivity, and therefore is an investment that should be protected. Additionally, the death of a child includes the loss to parents and society, and even if the parents are poor, their “willingness to pay” to avoid the death of their child is typically infinite (every dollar of their future earnings and labor).
Finally, your account regarding the poor’s WTP fails to account for ONE reality of how wealth is created. By rewarding the inventor, who creates a surplus for all, over the idler, wealth maximization provides a principled, non-arbitrary basis for a social hierarchy rooted in productivity rather than mere existence.
Tonalli: Your post serves as a very nuanced critique of Posner. I agree with the classification of his argument as “efficient monstrousness”; when coupled with his argument that women should be entitled to (initially) choosing their sexual partners in the name of efficiency, it makes his claims all the more monstrous. The “cost” of rectifying a poor decision in sexual partner by the male counterpart (eg. greater social costs, infidelity, unsupported children) is inefficient, and given that the woman is the “user who values it the most” (71), they are more likely to maintain the efficiency of the transaction.
ReplyDeleteDylan: While I think your critique of Tonalli’s classification of Posner’s argument as “efficient monstrousness” is intriguing, I can’t say I completely agree. Posner defines efficiency as “exploiting economic resources in such a way that “value” – human satisfaction as measured by aggregate consumer willingness to pay for goods and services – is maximized” (10). And isn’t that what the decision to kill the child versus the sheep is doing? Of course, the idea of assessing the “values” of the sheep and the child within a society of widespread starvation is, in Posner’s words, efficient. By choosing to kill the child, he is being monstrous. Therefore, isn’t his account one of monstrous efficiency? Or efficient monstrousness?
Sophie: Your objection to Tonalli’s argument is interesting, though I think Posner would disagree with you. While he might understand that a family’s willingness to pay or “value” their own child might be very high, I do not think that he would value their willingness to pay over that of the costs to society, given that in this widespread starvation, there would be one less mouth to feed. Just because this one family’s willingness to pay is “typically infinite”, I do not believe that Posner would value their WTP more than the WTP of the society who would largely benefit from the removal of a person from their society (especially a child who would be depleting & consuming resources more rapidly than adults in the same society).
Of course, I disagree with this account. I believe that Posner lacks a moral framework that is brought to us by others like Rawls. The act of killing is wrong. But by his wealth-maximizing framework, Posner fails to tell us why killing is a morally wrong action. In fact, it seems that Posner believes that it is morally permissible when it is wealth maximizing. But is that truly the case? How do morals truly weigh into Posner’s account of wealth-maximization?
I thoroughly enjoyed this critique of Posner, and after reading other comments on this post, I wanted to put this commentary in conversation with our most recent Tutorial. It is striking to me that Sen’s argument differentiating “engineering” and “ethical” based origins to economics remains pertinent to a conversation about Posner and the “Economic Approach to Law.” Sen claims that “ethical considerations are not given much role in the analysis of human behavior” (Sen, 6). What Posner appears to be doing is taking the engineering approach to the extreme, and it is interesting to me that even Sophie’s comment on this post focuses on the possible “return on investment” of children, rather than children’s right to exist by virtue of their humanity and ethical necessity.
ReplyDeletePosner says that “Value and happiness are of course related: a person would not buy something unless having it would give him more happiness… than the alternative goods or services that he must give up to have it... value necessarily implies utility.” In order to make this statement, however, Posner seems to use “willingness to pay” while completely ignoring the “inability to pay” of so many individuals who would be completely disenfranchised by his system of efficiency.
I agree that the sheep/child example shows that wealth maximization doesn't really escape Posner's monstrousness problem that utilitarianism is subject to. However, I'm not certain about the point on insufficient earning power. You claim Posner position on the poor is that they are "entitled to no say in the allocation of resources," but isn't Posner's willingness to pay idea inclusive of future earnings and the preferences of others? He considers others who do have market standing and whose WTP for a child's survival is extremely high. As Sophie points out, the indigent child WTP isn't measured alone in a vacuum, but is measured together with everyone who would pay to protect her. Therefore, the sheep vs. child example artificially removes all the third-party WTP that would attach to the child's survival, what isn't what Posner is saying. However, I do agree that Posner's account is still quite flawed. For example, a slightly amended critique might be that the third-party WTP is itself distributed unequally, meaning the poor child witha poor family and poor community would still lose compared to the wealthy child.
ReplyDelete