Ritchie on utility in economics

Dear Lord this is a stupid one from the Lord High Tax Denouncer:

Third, that utility is a useful economic concept. It isn’t. Distribution matters.

Utility is how we fucking discuss the important of distribution!

Take, for example, how we justify the extraction of money from the rich to give it to the poor. This is, BTW, something that just about everyone other than the most rigid of Randian Objectivists agrees with. The discussions revolve only around how much, not whether.

So, the marginal utility of an extra £ to a rich man is less than the marginal utility of an extra £ to a poor one. Thus we can increase the total utility experienced by all by taking a £ from a rich man to give it to a poor one. We might want to keep doing this until we come to a Pareto Efficient distribution. One in which we cannot increase the utility experienced by any one member of the society without reducing that of another one. Or, we\’ve maximised total utility.

So to say that utility isn\’t a useful economic concept is entirely nonsense: if you\’re in the business of reordering society through taxation and benefits that is. Because utility is the intellectual foundation of your entire structure of distribution!

The whole damn point of reducing inequality depends upon the usefulness of utility as an economic concept.

At which point we might open a little competition. Is there actually any economic concept at all that Murphy has managed to get right?

97 thoughts on “Ritchie on utility in economics”

  1. Utility is not the foundation of leftist redistributionism. Getting at the rich and ensuring absolute equality at a very low level of wealth is the foundation of leftist redistributionism. In other words, the very antithesis of utility.

  2. It is not just Randian free marketeers (that’s those influenced by the late Ayn Rand, for those who don’t know) who don’t look for utilitarian justifications for property rights. The “Austrian” school also tends to take a dim view of seizing property from A to give to B by reference to utility, marginal or otherwise. Hayek famously criticised the mis-use of marginal utility ideas when they are used to justify progressive income taxes.

  3. Tim, did you just say that you can take tax money off a rich person without decreasing their utility?

    Tim adds: No, don’t think so. And if I did, didn’t mean to. The idea is that the reduction in utility of the rich bloke is less than the gain in utils to the poor one. Total utility can rise as a result of redistribution therefore.

    And do note the caveat I put in: that it’s the extent of this that is at issue, not the basic point. Feeding the starving for example: it doesn’t reduce the utility of some at least rich people as they do it voluntarily.

  4. It’s a paradigmatic thing.

    The Other Side define the economy as a system which “distributes resources” whereas a market capiltaist sees the economy as a system in which producers trade that which they have produced. These two paradigms are entirely incompatible.

    The first paradigm is, basically, pre-industrial. For most of human history, people didn’t really recognisably “produce”; they harvested resources. Thus, to a large extent your wealth was predicated on how many resources you had access to. The Chinese could trade tea because tea grows in China. So “capiutalism” was more about arbitrage which leads to a mercantilist perception of markets.

    The industrial revolution changed that; it became more important economially to produce something from the resources. The economic value was thus in the factory, not the mine and field. It’s the guy who makes the chairs and tables who generates more value than the guy who grows the trees.

    As I’ve often noted, the Left, particularly the puritan-romantic-arty-crafty Left of whom Ritchie is a prime example are not radical progressives, they are in fact radical reactionaries; their economics and general worldview is that of the pre-industrial era. As such, they simply cannot comprehend how an industrial economy actually functions.

  5. PaulB-

    Tim, did you just say that you can take tax money off a rich person without decreasing their utility?

    Not quite. He said you could increase the aggregate utility by transferring money via taxes from the rich to the poor. The rich man loses less utility than the poor man gains.

  6. I did come across some university lecture notes (for a second year economics course) that ignored the idea of utility. They pointed out that the model of homo economicus was fatally flawed since in reality people (by which they meant flesh and blood people, not firms) are not always rational profit-maximisers. In reality people make their decisions based not only on what gives them the most dollars, but also concerns for their personal happiness, sense of responsibility to family, their ethics, culture, etc. Therefore the only way to understand how the world really works is to abandon the maxims of economics and study geography instead.

    The course was taught by a geography department.

    Where does the concept of “utility” get taught these days? A-level? First year undergrad?

  7. Must admit I’m not completely sold on the idea of utility myself. Can something really be the cornerstone of your policy-justification if it’s measured in arbitrary units?

    If we were to say “under policy X, the utility of the winners increases more than the utility of the losers decreases, and this net utility gain is the greatest available in the policy-space, ergo let’s implement X” that is a whole sequence of seriously strong claims, and I’m not convinced we have seriously effective ways of measuring them. (And that’s leaving aside the issue of the accuracy of predictions about the consequences of the policy – intended and unintended . Tricky job, that.)

    Colour me skeptical but I’m not even sold on the fundamental assumptions that bundle-preferences are complete, transitive and non-satiable.

  8. Tim did say:

    we can increase the total utility experienced by all by taking a pound from a rich man to give it to a poor one. We might want to keep doing this until we come to a Pareto Efficient distribution. One in which we cannot increase the utility experienced by any one member of the society without reducing that of another one

    Which surely implies that some taxation is possible without decreasing the utility of the person being taxed.

    However, I’m happy to accept that that’s not what he meant to imply.

    Tim adds: “Which surely implies that some taxation is possible without decreasing the utility of the person being taxed.”

    Certainly willing to agree that certain taxation/spending bundles are not utility decreasing. £200 a year each to be ready to kill the French should the need arise again seems utility enhancing for all.

  9. You definitely used the term Pareto efficiency incorrectly. Pareto efficiency requires all individuals to increase utility (e.g. trade where both are better off after exchange).
    In order to justify distribution, you need something more complicated, a way to price one individual utility versus the another.
    Charity is not a good example, since it is actually pareto efficient (since it happens without coercion), so it would happen anyway.
    Taxation requires the equilibrium after charity to be still inefficient based on whatever valuation metric you use for collective utility (additive, min, etc…).

  10. PaulB-

    We might take the fact that very rich people start giving their money away as indications that above some point additional wealth may have negative utility.

  11. MyBurningEars-

    Bear in mind that you can’t measure utility in units at all; it’s ordinal, not cardinal. Doesn’tmean it doesn’t exist. There is no unit of “happiness”, but we know that some person at some moment in time is happier than some other person.

  12. I’m probably missing something obvious here, but taxation is obviously possible without decreasing the utility of the person being taxed.

    At the most basic, a 10 stone 60-year-old millionaire buys some safety by giving some of his income to the 18 stone 20-year-old loitering outside his gate.

    In effect, it’s no different to the rich guy spending

  13. …no different to the rich guy spending 20k a year to have a private security guard patrolling his grounds.

  14. >utility is a useful economic concept. It isnt. Distribution matters.

    Astonishing. Whatever you think of utility as a concept, saying it is discredited because distribution matters shows you haven’t the first clue about what utility is. This is an incredibly ignorant and embarrassing thing for a supposed leading economic commentator to say, but I dont suppose Murphy will realize.

    Perhaps he could ask Krugman if he would like to support him on this one, and see what he says.

  15. >Which surely implies that some taxation is possible without decreasing the utility of the person being taxed.

    Of course this is possible in theory in some situations. But that doesnt mean that in general, in most situations in the actual world, tax doesn’t lead to decreases in utility.

    It is also possible that there are circumstances where I could put arsenic in some of your meals without it harming you, but this doesnt mean that its something I should do.

  16. Offshore Observer

    John Stuart Mill would be proud. The greatest happiness for the greatest number. Of course taken to its extreme, if killing 30% of the population made the remaining 70% ecstatically happy then that is a perfectly rational course of action as it maximises utility.

    Of course utility is a useful part of economic theory, but the fact it can’t be properly measured or quantified, and the fact that some people behave in ways which seems not to maximise thier personaly utlity, it suggests to me that economics is more “Social” than “Science”.

    And these people run the country.

    Hey did anyone else pick up in the story in the Telegraph the other day which showed that the spreadsheet that Rienhart and Rogoff used to justify thier theory that once government debt reached 90% of GDP then a collapse in economic growth was inevitbale.

    As it turns out the spreasheet has an error in it and the growth rate would fall to 2.2% (which most of Europe would kill for now).

    3 years of global policy on austerity following the advise of two leading economists whose spreadsheet had a basic error in it.

    Oh well, at least we aren’t being governed by a bunch of classics or politics graduates …. oh wait….

  17. “I did come across some university lecture notes (for a second year economics course) that ignored the idea of utility. They pointed out that the model of homo economicus was fatally flawed since in reality people (by which they meant flesh and blood people, not firms) are not always rational profit-maximisers. In reality people make their decisions based not only on what gives them the most dollars, but also concerns for their personal happiness, sense of responsibility to family, their ethics, culture, etc. ”

    Was having this argument with two work colleagues who parrotted the same line. Was painful trying to explain to them that they had fundamentally misunderstood the idea of “utility” and that it has never been a synonym for “profit-maximisation”.

    What was especially depressing is that they are both part of the “great and the good” and deeply involved in ResPublica (one is a particular crony Phillip Blond).

    We are surrounded by fuckwits.

  18. On Homo economicus, happiness is utility too, just difficult to measure in dollar terms. And sure people aren’t always economically rational but so what? To me the very definition of wealth is the ability to do economically irrational things.

    And sure you can get a decrease in utility with wealth, but it tends to go along with increases in utility in other areas. Now I am no longer a student (renting one room and the limited clobber I could keep in it) I find the amount of time (and money) I spend maintaining the house and clobber is dramatically higher. You could construe that as a loss of utility arising from increased wealth.

  19. >John Stuart Mill would be proud. The greatest happiness for the greatest number. Of course taken to its extreme, if killing 30% of the population made the remaining 70% ecstatically happy then that is a perfectly rational course of action as it maximises utility.

    Sorry buddy, but you don’t understand utility either. There is nothing in the concept of utility that makes any claim that maximising overall utility is the rational course of action. This is a moral or political theory (actually it is something of a straw man, but anyway) that happens to make use of the concept of utility, but this theory is entirely distinct from the concept.

  20. @Tank, I am not sure you are correct.

    From a utilitarian perspective, taxing the rich to give to the poor to the extent it maximises (or at least increases) total utility is fine. But you have to acknowledge that you are indeed reducing the utility of the rich. You have to go beyond the utilitarian argument in the event that killing people (reducing their utility to 0) increases the utility of those left alive by more than the reduction of the dead people.

    Even killing invading soldiers might not be fine under utilitarian calculus. If the invaders bring development, technology, and the democratic rule of law the utilitarian approach might be to let the invasion take place, whereas we would generally support lethal resistance to an armed invasion.

    And killing people in vegetative states who would otherwise eat €100,000s of healthcare resources annually allows that money to be deployed with greater utility and with the vegetable going from almost to zero utility. From a purely utilitarian perspective that’s fine, but we generally regard such courses of action as morally repugnant.

    So the utilitarian approach to tax and redistribute is fine, but the degree of tax and redistribution is inevitably going to get pushed in one or other direction (away from maximum total utility) by moral arguments – either the “leftist” argument to sacrifice production for more equality (euphemistically known as fairness), or the “rightist” argument to let people alone to enjoy the fruits pf their labour and investments. So an “optimal” utilitarian outcome is not necessarily what we are aiming for.

  21. offshore observer

    Tank,

    of course I was conflating utilitarianism, the philosophy developed by Jeremy Bentham and John Stuart Mill in the 18th Century with the economic concept of utlitity in a poor attempt at Satire. Perhaps I don’t understand comedy either.

  22. The point abotu utilitiarianism, the doctrine, is that you have to do something which is both impossible and undesirable, which is to maximise aggregate utility at the expense of individual utility, the flaw in which approach is best summarised by Jimmy Carr’s off-colour joke:

    “What do nine out of ten people prefer? Gang rape.”

  23. JamesV, all of what you say is irrelevant. Utilitarianism has nothing to do with the concept of utility, other than the fact that the former theory makes use of the latter concept. And obviously Murphys objection to the concept of utility is not an objection to utilitarianism (not even he is that dumb).

    Offshore observer:
    >of course I was conflating utilitarianism, the philosophy developed by Jeremy Bentham and John Stuart Mill in the 18th Century with the economic concept of utlitity in a poor attempt at Satire. Perhaps I dont understand comedy either.

    Looks like it! But Im glad you didnt really conflate the two.

  24. Ian B: “Bear in mind that you cant measure utility in units at all; its ordinal, not cardinal. Doesnt mean it doesnt exist. There is no unit of “happiness”, but we know that some person at some moment in time is happier than some other person.”

    If something is measured on a purely ordinal scale then actually you can’t measure “sums” or “differences”. (Which is why in statistics you use the median, not mean, of an ordinal variable.) If you believe utility is purely ordinal then it rather hamstrings the ability to measure and compare “changes in utility” (A’s gain is incommensurable with B’s loss), or to calculate “total utility” for JS Mill fans.

    This is why cardinal utility gets used e.g. to consider welfare implications of policy. Ordinal utility works fine if you are just trying to explain why a consumer prefers one bundle of goods to another. (See e.g. http://en.wikipedia.org/wiki/Cardinal_utility )

    The happiness point is interesting. Certainly common sense tells us “person A is happier than person B”. But there are certainly different conceptions of what happiness means, and so it is not impossible for person A to count as happier on one scale, and person B on another.

  25. Even killing invading soldiers might not be fine under utilitarian calculus.

    I’ve always been interested in the extent to which you are better off losing wars. Clearly Germany has done the best out of WWII within Europe (compare and contrast with Greece, technically on the winning side). Japan did much better out of losing than it would have done out of winning. I’ve also come across the theiry that the roots of the european enlightenment lie in being on the losing side in the crusades. But then the counter-factuals don’t seem to work. Germany *not* losing WWII means Hitler winning, which doesn’t seem to translate into Britain doing well. Etc.

  26. MBE-

    You are entirely correct, which is why wise Austrian School economists reject arithmetical economics; such concepts as Utility (and, supply and demand curves etc) are fictions meant to demonstrate principles and aid reasoning, but they are imaginary concepts with which you cannot do arithmetic.

  27. The Austrian School wisely rejects all empirical tests of its theories: otherwise it would have to admit to being completely wrong.

    For the rest of us, attempting any precise quantification of utility would be futile, but that doesn’t make the concept useless. For example, who could deny that there are many people for whom the first hundred square metres of garden vastly exceeds in utility the same area of land added to the acres of private garden already enjoyed by a billionaire?

  28. Well there’s your problem Paul, which is the same problem most people have. They grade utility by their own subjective values, and then presume it applies to everyone else.

    It is interesting to note how successful the current economic situation is under the wise guiding hands of the arithmeticians. One would think this a pretty good test of their paradigm, would one not?

    The Austrians merely recognise the limits of knowledge. This has been hugely sucessful in Physics; in both Relativity and QM we learn of limits. Sadly, the ideal of being able to manage the unmanageable by knowing the unknowable is so appealing that most economists simply refuse to recognise what those limts are; the glory of econometrics being that the economy is sufficiently complex that any narrative can by judicious jiggery-pokery be used to explain some effect due to some cause. It is a classic example of what Popper observed; that a theory that can explain anything (his examples being Marxism and Freudianism, amongst others) actually explains nothing.

  29. And, as I said above, utility is ordinal. It’s the lack of cardinality that denies you the ability to do math with your gardens.

  30. Ian B>

    “you have to do something which is both impossible and undesirable, which is to maximise aggregate utility at the expense of individual utility, the flaw in which approach is best summarised by Jimmy Carr”

    Only if you believe that the reason we’re not all gang rapists is solely the chance of punishment. In fact, we all (barring psychopaths and so-on) lose more utility by unfairly and violently reducing the utility of another than we gain from whatever action was carried out as a result.

  31. Ian>

    “It is a classic example of what Popper observed; that a theory that can explain anything (his examples being Marxism and Freudianism, amongst others) actually explains nothing.”

    Ah, good point. That explains everything…

  32. My BurningEars:

    In reality people make their decisions based not only on what gives them the most dollars

    This is true of homo economicus as well. The leisure-labour trade-off is covered in every Econ 101 course and Econ 101 textbook I’ve heard of. This comes to the grand result that if hourly wages rise, economic theory cannot predict if people would prefer to work fewer hours (as they’re richer – income effect) or more hours (as they can earn more and thus presumably buy more flash toys to use in what leisure time they take – substitution effect).
    If you assume that people aim to maximise money, rather than utility, this Econ 101 result will make no sense to you.

    If you assume that the geography lecturer aimed to be honest, rather than maximise their ego, their claim in your lecture notes will make no sense to you.

  33. Only if you believe that the reason we’re not all gang rapists is solely the chance of punishment.

    Is that the point, though? I thought that the point of that joke was about measurement and sampling. Namely that in a specific environment nine of of ten people are enjoying gang rape. Ergo using that measurement and sample, it becomes desirable / utilitarian / acceptable / whatever.

    (What it isn’t, of course, is a ‘rape joke’; far from it. Not only does it not claim that rape is funny, it also references it (presumably) as a terrible thing that nevertheless under certain circumstances becomes the choice of nine of of ten people. The joke relies on the inherent badness of rape to make a point about sampling. But don’t trust the fuckwits at the grauniad to get that, as they didn’t when they referenced it in a “why oh why do horrid people make jokes about rape?” article…)

  34. Dave, that’s besides the point. You’re making the mistake of dragging morals in. You have to start with the assumption that the gang rapists are rationally maximising their own happiness.

  35. @ PaulB #8 and #29
    All Timmy did was miss out one word of the definition *after* stating
    “So, the marginal utility of an extra £ to a rich man is less than the marginal utility of an extra £ to a poor one. Thus we can increase the total utility experienced by all by taking a £ from a rich man to give it to a poor one. ” – which clearly implies that the marginal utility is non-zero.
    The existence of National Lotteries that voluntarily transfer wealth from the poor to the rich are compelling evidence that not many (let alone all) individuals make decisions on a logical profit-maximising basis all the time but the dramatic decrease in abject poverty in ex-communist countries that are no longer controlled by former members of Komsomol (or local equivalent) is equally compelling evidence that Austrian economics is better than Marxist. Moldova, still run by communists, has replaced Albania as the poorest country in Europe.

  36. Ian, Sam>

    I get the joke. I was generalising a bit more, though.

    When we’re talking about people rather than in the abstract, we almost all don’t feel that our utility is maximised by things like raping, murdering, and so-on. Ian calls it a moral point, but behaving morally makes us happy; it provides utility.

    To take the joke example from above, in actual fact killing 30% of the population wouldn’t make the other 70% ecstatically happy – rather, they’d feel guilty, angry, or whatnot. As such, utility is actually maximised by not killing 30% of the population.

    Not-doing stuff we find unacceptable provides utility.

  37. We might want to keep doing this until we come to a Pareto Efficient distribution. One in which we cannot increase the utility experienced by any one member of the society without reducing that of another one.

    You’re already at a Pareto optimum when you start!

    You can only increase the poor man’s utility by taking utility off the rich man. That utility might be miniscule, if they’re as rich as Croesus, but it’s still going to be strictly positive. Diminishing returns don’t diminish to zero.

    (Fill in your own bit about appalling ignorance, economic illiteracy, blah, bah.)

  38. John77>

    Again, that’s a classic example of failing to appreciate the utility people actually gain from something. Lottery players don’t play because they expect to win, so the expected return clearly isn’t the sole, or even primary, utility they gain.

    For what it’s worth, I’ve been known to buy a Euromillions ticket from time to time – and I feel the couple of quid gives excellent value for money because it’s so fascinating to watch the way my mind ties itself in knots trying to believe, in the face of all the evidence, that I have a better-than-random chance of winning. I suggest giving it a try some time when there’s a mega-jackpot of £100m or something. It’s quite extraordinary how you can walk up to the counter a completely rational skeptic, and yet walk away half-believing you’ll win, simply because you’d rather like to, and despite consciously and constantly reminding yourself that it’s bollocks. I find the psychology absolutely intriguing.

  39. Dave, you still don’t seem to be quite getting the point, which is that utilitarianism can justify any outrage if that outrage will maximise the aggregate happiness, or good, or utility.

    To use a real example, Nazism was a utilitarian programme, which maximised the common good by eradicating the Jews.

  40. Larry>

    In that case you’ll have no trouble proving the hypothesis you put forwards: that taking money from a rich person can only ever decrease their utility.

    (Of course, you can’t prove that. It’s nonsensical unless you pretend he’s getting nothing in return.)

  41. IanB: the argument that “our knowledge is limited, therefore [Theory X] ” is certainly popular (and it’s usual to mention quantum mechanics). But there’s no agreement on X – how could there be, it works equally well or poorly for anything.

    Are you saying that there are not many people for whom the first hundred square metres of garden vastly exceeds in utility the same area of land added to the acres of private garden already enjoyed by a billionaire?

  42. Ian>

    Of course utilitarianism can justify anything. The point is that in practice it doesn’t. What humans actually do want – how the most utility is gained – is to not commit outrageous acts.

    And unless you claim that a deliberate part of Nazi policy was to start and lose a World War, it’s hard to see how Nazism maximised utility for the Germans. It was an ideology which brought the world’s wrath down upon Germany, which seems distinctly lacking in utility to me. It also very evidently saddens many modern-day Germans, which is also the opposite of providing utility.

    By definition, unless you’re a sociopath or some such, that which is undesirable to you as an atrocity is also undesirable to everyone else (again, barring sociopaths etc.) and so will not provide the greatest utility. ‘The greatest utility’ is an abstract concept, but ‘the greatest utility for the human species’ deals with reality – I hesitate to call it concrete – and must take account of how people do actually react to things.

  43. IanB @42

    Could we wind it down a little and say something like “The “Nazis BELIEVED they were maximising the aggregate common good by eradicating the Jews” or “The Nazis mistakenly thought they were…” Or perhaps just find another reference, one that doesn’t even hint at given credence to maniacs who tried to wipe out an entire people. I know what you were trying say, but it doesn’t read right.

  44. Ironman,

    No. As discussed above, utility is is a personal thing. If the Germans would have been happier with a Jewless Germany, then the Holocaust was maximising their utility, and “how it sounds” be damned. We can’t impose our own values on other people in this discussion.

    Dave still doesn’t get this, and it’s really important.

  45. Paul B>

    Are we supposed to approach that as an actual question, or an example? It depends on your definition of ‘many people’ for a start. How many people in the world don’t have a patch of land, although in most cases it’s more subsistence-farm than garden. Also depends on just how much the billionaire appreciates his extra patch.

  46. Ian>

    I get it. What you don’t seem to get is that the Holocaust was a disaster for Germany, in actual fact, from the utilitarian point of view. Which is the whole damn point. In the abstract, you can make arguments to justify it from a utilitarian perspective. In reality, though, those arguments are demonstrated to be false by the fact that it totally fucking failed to achieve what was intended: Germans have very obviously not gained in utility as a result.

  47. Dave, we know that the Nazi period was a disaster for Germany after the fact, but they didn’t know it would be at the time. Nobody has a crystal ball. If they’d succeeded in a Jewless Greater Germany extending from the Channel to the Pacific’s West Coast, it would’ve been a major win. From their perspective.

    People can only guess at what the future holds.

  48. If you think Hitler was approaching it from a strictly utilitarian perspective, you’re mad. He wanted to kill the Jews because he was a raving anti-Semite; his spurious justifications were just him rationalising.

    From a utilitarian perspective, it’s clear that the demise of the Nazis was an entirely predictable direct consequence of their anti-Semitic policies.

  49. Utility is not maximized by slightly increasing the utility of nine people while massively decreasing the utility of one. However anxious Ian B may be to repeat that rape joke, it really doesn’t contribute to this discussion. His holocaust argument fails similarly.

    Of course he’s right that if utility considerations seemed to support committing some outrage, we still shouldn’t do it. But using taxation to adjust a largely arbitrary income distribution is not an outrage.

  50. Offshore Observer

    Ian B

    You are spot on about utilitariansim. It is one of the classic criticisms of that economic philosophy that the majority can often enjoy something quite abhorent. Which is why you have alternative economic philosophies like feminism, marxism, natural law etc etc. Some political systems choose the philosophy of individualism based on John Locke etc.

    all of which makes for interesting debate and I often wonder where the next major philosophy is going to come from. Since Feminism we really only have post modernism which is faintly depressing really.

    But then again as has been pointed out to me earlier. This is a thread about utility rather than utilitarianism. They are different (and mixing them up isn’t as funny as it seems (apparently)).

  51. @Ian B: not much sign of the definition of marginal utility you were using on April 17th on this blog and getting very upset about viz.”Marginal Utility is the theory of subjective value.”

  52. Ian B

    Believe me I really do get this circular debate you’re having here and I’m not imposing anything on anyone, just pointing out how it read and ASKING you if you’d like to find another example. Now, I’m going to increase my personal utility by going somewhere else.

  53. Yes there is, DBC. We’re discussing subective values right now.

    PaulB-

    Utility is not maximized by slightly increasing the utility of nine people while massively decreasing the utility of one.

    Who said anything about “slightly” and “massively”? Look, you and Dave really have the same problem, and it’s a very common one in our moralist society. It’s this thing where you take your values, and make the assumption that those values are universal, and then derail a discussion about something practical into a round of moral condemnation.

    So, let us generalise.

    “There exists some condition in which the optimal maximisation of utlility of some group of persons will be achieved to the unacceptable detriment of one or more members of the group.”

    Or are you asserting that no such situation can arise?

  54. Who said anything about slightly and massively?

    I did. My judgment is that being gang-raped is a massively unpleasant experience. And so is being murdered by the Nazis. I’m not ashamed to apply that as a universal value.

    … the optimal maximisation of utlility of some group of persons…

    No one is arguing for the maximization of utility of some group.

    Your problem here is that your argument boils down to “Jimmy Carr made a sort-of joke about rape being enjoyable for rapists, and therefore redistributive taxation is bad”.

  55. “But then the counter-factuals don t seem to work. Germany *not* losing WWII means Hitler winning, which doesn t seem to translate into Britain doing well. Etc.”

    When creating counterfactuals, you do actually have to create a counterfactual. The Germany that lost WWII could not have been the Germany that won it. Or it would have won it. Or conversely, the UK that lost would not be the UK that won. Either way, history runs a different course. Maybe to one that produces an entirely viable, prosperous & pleasant to live in Greater EU from the late 40s without the mass slaughter of the intervening years. Remember, the Final Solution dates to early 1942, long after Operation Seelöwe was abandoned & Barbarossa stalled. There’s no guarantee a successful Hitler would have retained power, any more than Churchill did.

  56. Oh boy, going by the logic of “lots of posts = bad”, another comment thread I don’t dare to read because of my economics degree! It’s bad enough that Ian B’s first comment was particularly lucid. For the record Tim’s original post was poorly-worded; he left out the part that redistribution is only Pareto-optimal if the poor man compensates the rich man in some other way. Maybe this was raised already, I’ll never know.

  57. Also why are we talking about the German Socialist Workers’ Party? Was someone determined to provide yet more evidence for Godwin’s Law? I hope people aren’t trying to claim that the British State was necessary to defeat the Nazis, because that would be very very bad. Without the British State there would have been no Munich agreement, Hitler would have been immediately removed by military coup, and there would have been no Holocaust. Score one for the anarchists.

  58. Ian>

    #52

    How does what work? It’s obvious to anyone bar the wilfully obtuse that mass-murdering bastards end up being brought down by the fact that everyone ends up hating them. Commonly, perhaps even always, that’s the case.

    #57

    “It’s this thing where you take your values, and make the assumption that those values are universal”

    Absolutely not. No assumption involved. It’s a clear historical fact that evil bastards fail because they can’t get enough people to go along with evil-bastard plans for them to succeed. As the old joke had it, Hitler’s biggest mistake was in not telling the US that the Jews were just practice for the blacks. (And yes, I know the implicit assumption in that joke – that the US would have given Hitler free-reign if it wasn’t for the anti-Semitism – isn’t strictly accurate. It’s just a joke to illustrate the point.)

    Paul B>

    “utility considerations seemed to support committing some outrage”

    I’ve been trying to point out that that statement is basically an oxymoron. Utility includes not being outraged. It’s logically possible for the statement to be true in the case of a subset of humanity, but not of the whole, but only if you assume unlikely things, such as a psychopath who can be happier having killed the entire planet than the total happiness experienced by those otherwise not killed.

  59. Dave,

    No, you’re confusing how you want things to be with how things are.

    Besides all else; if Hitler had separated his Jew policy from his war policy, and not triggered a war, and just killed all the Jews, then none of the negative consequences we saw would have arisen. As with the Turks and Armenians, for instance.

    Mass murdering bastards often do quite well. Genghis Khan not only did well in his life but, by adding in a policy of raping every hot chick he encountered, ensured the widespread dissemination of his own personal genes.

    So anyway, what actual point are you arguing? Are you trying to say that the Common Good (as defined by a utilitarian calculus based on asking Dave what the Common Good is, and then doing that) can never conflict with the individual good? Something like that?

  60. Ian>

    “you`re confusing how you want things to be with how things are.”

    That would be more persuasive if your counter-examples held any weight.

    “if Hitler had separated his Jew policy from his war policy, and not triggered a war, and just killed all the Jews, then none of the negative consequences we saw would have arisen”

    But the two are directly linked, in that he did both because he was an evil megalomaniac. And in any case you’re merely speculating: I can just as well speculate that he’d have been deposed by an enraged populace when the nature of his treatment of the Jews became clear.

    “Mass murdering bastards often do quite well. Genghis Khan not only did well in his life but, by adding in a policy of raping every hot chick he encountered, ensured the widespread dissemination of his own personal genes.”

    You’re implying that raping-and-pillaging his way across Eurasia was the best possible use of his and his people’s time from their own perspective. Do you really think that’s true? Did the invasion of Europe help the majority of the Mongol hordes in any way?

    You’ll note, of course, that Ghengis went too far in his warmongering, just like Hitler, and in fact had done enough to unite Europe against him without doing enough to defeat them. If communications had been better, he’d have driven China into an alliance with Europe as well.

    There’s also the story, perhaps apocryphal, that Ghengis himself was killed by a captured princess he was raping.

    “Are you trying to say that the Common Good (as defined by a utilitarian calculus based on asking Dave what the Common Good is, and then doing that) can never conflict with the individual good? Something like that?”

    No. Obviously not. I’m trying to explain to you why your statement:

    “There exists some condition in which the optimal maximisation of utlility of some group of persons will be achieved to the unacceptable detriment of one or more members of the group.”

    Is by definition an oxymoron. What the hell do you think ‘unacceptable’ means? If something is unacceptable, that detracts from its utility. You’re still trying to use the ‘profit-maximisation’ definition of utility, even after it’s been pointed out that such a definition is completely incorrect.

    Once again: acceptability is a form of utility.

  61. Dave, I am saying that an optimal utilitarian calculus in someone else’s subjective value system will produce an unacceptable result in your value system.

    One man’s evil megalomaniac is another man’s saviour of the Reich. You can’t get around this by blithely declaring that everyone you disapprove of will come to a sticky end.

    This is the whole problem with a collective utilitarianism. Who gets to decide what is a “best” outcome? Do we all ask Dave?

  62. Ian>

    You seem oblivious to the fact that both you and I, and everyone else to boot, are included in any calculation of the total utility. As I said, it’s not theoretical but practical and real to observe that these things are known as ‘outrages’ and so-on because pretty near everyone in the world agrees that they’re wrong.

    “One man

  63. Ian>

    You seem oblivious to the fact that both you and I, and everyone else to boot, are included in any calculation of the total utility. As I said, it’s not theoretical but practical and real to observe that these things are known as ‘outrages’ and so-on because pretty near everyone in the world agrees that they’re wrong.

    “One man’s evil megalomaniac is another man’s saviour of the Reich. ”

    It’s very obviously not a one-for-one correspondence, even if you’d like to pretend it is.

    You’re presenting the world’s most reviled historical figure as an example of how people don’t all think alike on certain matters. I’m not sure you’ve quite thought that one through.

  64. Dave, “From a utilitarian perspective, it’s clear that the demise of the Nazis was an entirely predictable direct consequence of their anti-Semitic policies.”

    WW2 didn’t kick off as a result of Kristallnacht and the Final Solution, despite being hinted at by Huttler before 3.9.39 as a likely response to war on Germany, was not organised till early 1942.

    In other news, Hjalmar Schacht said, after the war that, absent the war, the Reich would have been bankrupt by 1945 anyway.

  65. You’re presenting the world’s most reviled historical figure as an example of how people don’t all think alike on certain matters. I’m not sure you’ve quite thought that one through.

    Oh, but I have. Reviled by you. Not by Nazis. Which is the fucking point. To a Nazi, a world without Jews is itself a public good.

    I’m trying to avoid accusing you of this, because it’s so stupid, but I do have to ask; you seem to have a naive belief that morals are objective. You don’t actually believe that do you? I mean, we’ve known that isn’t the case since David Hume.

    So I don’t want to believe you’re well over two centuries behind the times on the issue, but everything you write suggests that you are.

  66. Edward>

    I think I overstated that somewhat. I should have said that the anti-Semitic policies were part-and-parcel of their other policies of similar nature, such as treatment of occupied territories.

    The war didn’t start because of the Nazi’s anti-Semitic policies – but it was lost because of them. All other factors aside, the loss of Jewish scientists, managers, engineers, and so-on was enough by itself to lose the war. But then, the thing about ideologies like Nazism is that they contain the seeds of their own downfall in many ways.

    Tim adds: “All other factors aside, the loss of Jewish scientists, managers, engineers, and so-on was enough by itself to lose the war.”

    Would be nice to believe so. But there’s absolutely no evidence at all that it is true.

    The Nazis lost because they simply did not understand, in any manner at all, the economic production of the USA. And that’s it really. It wasn’t even US manpower. The moment the US decided to start making tanks and trucks and oil and rubber and ships and planes and all the rest for the Allies then the Nazis were going to lose. Maybe not in 1945, but soon enough.

    Strangely, in 1917/18 the Germans did understand this. They had to win before the Yanks turned up in numbers. 1940 or so, not so much.

  67. Ian>

    I can’t understand what your point is, if it’s not that you think the whole world’s full of Nazis. It’s not, so Nazism cannot be generally acceptable, so cannot be a general good. That’s all. It’s not theory, it’s just how things are. Once again: it really doesn’t matter what a tiny minority thinks when we’re calculating the general good.

    You seem to have confused a statement of what the subjective morality of humankind generally is in regard to Nazism with a statement that it is objective. It’s not objective, it’s just universal. Everyone, bar a handful of Nazis, hates Nazis.

    Maybe you’re still struggling with the basic concept of utility. Increasing someone’s utility means giving them more of what they want. If people hate Nazis, then they don’t want Nazism, so you can’t increase their utility by giving it to them.

  68. Dave, there are a great many swishes of the executive fountain pen in your summary disposal of what people do and don’t want.

    What I want to know is, how did you get to be the chap with the fountain pen?

  69. Edward>

    Seriously, are you two suffering the effects of tertiary syphilis? Carbon monoxide poisoning? Ergot in your bread? What is it precisely that is making you challenge an observation as blindingly obvious as that it is lighter at daytime than at night?

    It is not, in any way, even slightly, so much as a little bit, contentious to point out that Hitler is hated by almost every single person on the planet who knows who he was.

    I’ll make it simple for you: do you dispute that Hitler is near-universally reviled?

  70. Tim>

    “The Nazis lost because they simply did not understand, in any manner at all, the economic production of the USA. And that’s it really. It wasn’t even US manpower. The moment the US decided to start making tanks and trucks and oil and rubber and ships and planes and all the rest for the Allies then the Nazis were going to lose. Maybe not in 1945, but soon enough.”

    Well, it’s all speculation, but there are estimates that with willing co-operation from the Jewish atomic scientists and so-on, Germany could have had atomic weapons well before the US actually got them, let alone before the US would have got them without the Jewish refugees. That’s ignoring the lost production improvements and other weapons that might have been developed, as well as things like the Jewish soldiers and so-on.

    Germany couldn’t have beaten the US, but they could have won in Europe and negotiated a peace.

  71. Dave, for my part, no.

    As it happens, I’m reviled by anyone who knows me well.

    All of which is besides the point. Unless, that is, you’re proposing to dispose of me, too.

    Because personally I’m a big fan of me.

  72. @ Dave #66
    Oh great all-seeing one
    How do you account for Joseph Stalin, Mao Tse Tung etc dying peacefully?
    # 41
    I was illustrating the point that utility is subjective and you accuse me of failing to understand what utility is.
    # 79 The Germans lost WWII because Hitler attacked Russia: by the time the USA entered either War, Germany could, at best, draw.

  73. “We might want to keep doing this until we come to a Pareto Efficient distribution. One in which we cannot increase the utility experienced by any one member of the society without reducing that of another one.”

    That doesn’t work, as should be obvious. Redistribution from low MU people to high MU people may increase total utility, but it isn’t a Pareto improvement, since the low MU people are worse off. It isn’t even a potential Pareto improvement, since any side payment that kept them from being worse off would eliminate the transfer and thus the benefit to the high MU people. To get your result you would need some mechanism for transferring utiles instead of money, and there isn’t one.

    “Take, for example, how we justify the extraction of money from the rich to give it to the poor. This is, BTW, something that just about everyone other than the most rigid of Randian Objectivists agrees with. The discussions revolve only around how much, not whether.”

    That’s wrong for two reasons. To begin with, it implicitly assumes that everyone is a utilitarian. People who reject utilitarianism, or consequentialism more generally, in favor of some version of natural rights could oppose redistribution without being Randians.

    But it isn’t even clear for a utilitarian, because you are assuming that there exists a mechanism that achieves the objective without utility costs that more than cancel the utility gain. Consider the general problem of rent seeking. Once you establish institutions for income redistribution, you have to think about what the cost will be of people fighting over who gives and who gains–and balance that cost not against the utility gains from an optimal redistribution but from the redistribution that the institutions can be expected to produce.

    As you may have noticed, it isn’t all that uncommon for government redistribution to go up the income ladder instead of down–subsidizing opera, for instance, or universities whose students are mostly from the top half of the income distribution.

  74. So Much for Subtlety

    Dave – “It is not, in any way, even slightly, so much as a little bit, contentious to point out that Hitler is hated by almost every single person on the planet who knows who he was.”

    I disagree with that. The love of the Nazis is the love that dare not speak it-s name, but it is clearly a wide and deep love. If you google bars and restaurants named after Hitler, you find them all over the world from India, where he is, of course, big, to Thailand to Korea. If you put a programme on Hitler on Channel Four huge numbers of people will watch it. Just as they will buy books about Hitler. And they will pay real sums of money to collect Nazi memorabilia.

    The Great and the Good insist that no one should publicly revere Hitler or express an interest. That would be creepy. But it is clear that vast numbers of people do.

    A couple of years ago at one of Taiwan-s leading universities, students set up a National Socialist Student Society. They said they were not big on the killing of Jews, but Hitler made Germany strong and so offered lessons to young Taiwanese. I would think that is pretty much the universal approach to Hitler. You just cannot say so in public.

    Which goes to prove what I have occasionally said – human beings are vile to each other. All the time.

  75. So Much for Subtlety

    Dave- “Did the invasion of Europe help the majority of the Mongol hordes in any way?”

    We are talking about them 700 years later. We are not talking about the Tanguts. I would say that this raping and mass murder policy has worked out quite well for the Mongols. How many other countries of Mongolia-s size have a history you are so familiar with?

    “You-ll note, of course, that Ghengis went too far in his warmongering, just like Hitler, and in fact had done enough to unite Europe against him without doing enough to defeat them.”

    Which bothered him and the other Mongols not one little bit.

    “If communications had been better, he-d have driven China into an alliance with Europe as well.”

    But they weren-t. And perhaps you under estimate him – he conquered half of China with the support of the other half.

    “There-s also the story, perhaps apocryphal, that Ghengis himself was killed by a captured princess he was raping.”

    Which did the princess no good, nor her people which immediately afterwards ceased to exist as a meaningful entity. Which suggests it might not have been the best choice of policy for her.

  76. Ian B declares we’re discussing subjective values right now. That’s the problem: if you decide at the outset that all value are totally subjective, you end up defending the indefensible like Nazi race policy in a haze of moral relativism. Tim started off discussing marginal utlity in the more normal sense where subjective values are balanced and checked by tax rates and measurable quantities. I was saying that subjective values would soon bang up against the price system which contains many” objective correlatives”.

  77. So Much For Subtlety

    DBC Reed – “That-s the problem: if you decide at the outset that all value are totally subjective, you end up defending the indefensible like Nazi race policy in a haze of moral relativism.”

    But that does not solve the problem. Because if you decide that values are not subjective, then on what basis do you decide what is moral and what is not? On what firm ground do you stand?

    You cannot logically argue backwards and say that the Holocaust is wrong and therefore your values are objective. Especially if you do not think so in other cases.

    And we have plenty of evidence that most people do not think values are objective and are perfectly happy defending the indefenisble. For instance, within two decades of the end of WW2, European intellectuals, lead by Sartre, were calling the people who made Algeria Judenrein the only moral choice. They would go on to assert that opposing Pol Pot was immoral.

    Now I do not care to defend mass murderers on the Right or the Left. As a general rule. But I fail to see why someone like Zygmunt Bauman or Eric Hobsbawm is morally acceptable (or even someone like Nelson Mandela if it comes down to it) and someone like, say, Albert Speer or Heidegger is not.

    So it seems we are in a morally relative world. It is just a question of what everyone else is doing. If everyone was saying the Nazis were good people, I am sure everyone else would agree.

  78. Surreptitious Evil

    Sighs …

    Ed @ #84

    As it happens, I’m reviled by anyone who knows me well.

    Perils of the profession, I suppose. 🙂

  79. Offshore O, yes, I believe G’s law has been invoked on this thread, although on this occasion I don’t think anyone is calling anyone else a Nazi.

    Surreptitious E, oddly, no! I’m reviled by professional colleagues, too.

    Off to smoke a bit of crack now, got a lot of gang raping to do later. Must dash.

  80. @SMFS
    This is why I said @#55there was not much sign of Ian B’s definition of marginal utility being the same as subjective values : Tim had started out on the presumption that most people, except followers of the lady novelist, agreed with redistributive taxation( possibly on moral grounds /Tim does n’t say explicitly.) Ever since people have been attacking this starting-point as failing to take into account different subjective values.As such they are latching onto an argument that cannot, by its basic moral? premise, bear this subjective interpretation.

  81. Counter factual history is a very subjective field. I for one would claim that the Nazis could have conquered the Soviet Union without excessive difficulty if they had properly established and supported independent states in the territories they initially conquered. They would have received considerable support throughout the Ukraine and European Russia generally, as well as from the Baltics, the Caucasus, etc. Indeed Stalin was not particularly popular anywhere outside of places where the coercive power of the state was available. Germans were all but welcomed in many areas, which led to a good deal of revenge once they were driven out of those areas.

    But that does beg the question, were the Nazis actually capable of treating Eastern Europeans in a way that would enable such a structure to be created. One could assume a sufficiently rational Hitler might see that as a possibility, or alternatively that the general outlook and modes operandum of Hitler was such that complete subjugation of captured areas was the only possible policy. Counter factually one can assume almost anything, but as to whether such things COULD occur, well, who really knows.

    On the balance I’d posit that neutralising the Soviets was possible, but defeating a determined USA was not unless by defeating the UK Germany could deny the USA a foothold to exploit. The other would be to politically turn the USA back to isolationism.

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