Sunday, August 23, 2009

Amartya Sens and "The Idea of Justice"

What is "the good"?

Economic Nobel Laureate Sen has a new book, "The Idea of Justice", which, according to the Economist, ties in all his thought into a comprehensible whole in language that we all can understand. Sen states that the most referenced (and thus respected?) philosopher of the 20th Century John Rawls has lead us astray with his concept of the veil of ignorance: we cannot pretend that we do not know the role we play in society, nor the way society is actually, therefore we cannot act "as if" we don't know and therefore using the veil as an ideal construct to develop a constitution order is nonsence. This has lead politcal economy down the wrong path, a path, or course, Sen means to improve upon.

The Economist review (August 8th, 2009 print edition) states that Sen uses Adam Snith's idea that we are social beings who act with social constraints and with 'others' in our mind while we make decisions on how to act. We are not uber-rational 'utility maximizers' who act in a bubble. This rational actor axiom is of course one of the most hotly disputed concepts in economic theory and is fact a red-herring. Hume before Smith said we act rationally except when human sentiment is involved. Because everytime we negotiate a contract or make even a simple market exchange we work with others. To say that most economists don't understand this just sets-up a straw-man by which then Sen can then justify his use of a collective good or common good edifice.

Sen's idea of justice is that humans have rights to certain things. Who will decide this "postive right"? This right to eat? The only guarantor of a right is government coercion. Yes, per Sen then, we all have a right to 2,000 calories a day. My calories aren't your calories. I may enjoy Brooklyn Pizza where you might like sushi or MacDonalds. The central planner may like prime-cut steak. It's all 2,000 calories, but these calories are not made equal. The right to something always means coercion. By definiton not everyone can eat the central-planners steak, it requires coercion to get this sreak.

Does not Sen believe this coercion is wrong, despite his oft-quoted need to combine economics with moral philosophy? Coercion perhaps is the biggest evil of all.

Beside the right to be free from starvation (however defined and by whom) Sen misses the main point that human flourishing isn't ends-orientation, but process-orientation. We need to be free to choose our paths, not have some endgame predetermined for us. Human beings learn and grow from choosing their paths, their investments if you will, and having the right to fail, or to earn big money, from their subjective risk. We are not the same, to pretend that we all want the same thing, "equality", is, really, insulting to a person, not to say logically unsound.

Equality of outcome, per Sen, is justice, not, it should be noted, equality of opportunity. It is freedom of choice, of movement, the freedom to fail, which is the biggest right of all. We grow from making mistakes, not from having a guaranteed 2,000 calories of pig's feet at our table, day-in, day-out. Well that is unless we game the central decision-maker to move up on the 'food' rights' scale. I'll split my salmon with the central planner if he gives me 2,000 calories of salmon instead of 2,00 calories of beans.

Justice, like the market, is process-oriented, not a results-oriented, predictable, controlable, system. If policy is something more than equality of opportunity, it immediatly begets coercion and visions of the annoited. This destroys justice and does not create nor enhance it. Economics is just one subset of a moral society, the guaranteeing of some type of economic 'equality' destroys the very fabric of a free-society. We become dependent on the state not upon ourselves and those we care about.

This edifice boils down to what philosopher Isaiah Berlin calles "positive rights" versus "negative rights". Sen says we have right to be free from hunger. This is of course the slippery slope. The Economist in its review of the book calls those that are against Sen's "social choice" construct, especially fellow Nobels James Buchanan and Friedrich Hayek as 'right wing". This too is a straw man. Because someone believes that people taking their own risks with their own money, money they have a right to, either be it through Rawlsian luck or hard work and entrepreneurial action and ideas through bringing to market things that people want (the ultimate "social choice" - free choice in the market to negotiate for what we want) they are right wing? This is absurd. Right wing implies a strong, interventionalist, state, Hayek and Buchanan spent their lives battling a strong coercive state.

Hayek and Buchanan were (and are) methodological individualists who know that only an individual acts. No "system" or sets of guaranteed rights describe an action at all. Just a "collective" decision process where those at the top live in penthouses with ocean views, while those at the bottom share a cold-water flat with three other families. We all have the right to an apartment. Its just that under collective choice, some apartments are more equal than others.

Sen, like Martha Nussbaum, Aristotle, and John Rawls, is a "capabilities" theorist. Equality of opportunity means little if you don't have the capabilities (money) to act as you see fit for your best interest. Equality of rights does not enhance your capabiltites, it is a sympton not a cause. The ability to trade your ideas, ingenuinty and work with others freely in a voluntary and cooperative society, not one in which collective decisions are made by the few, might be the best way to achieve Aristotle's flourishing. Aristotle lived in a time when the world had known nothing but slavery (with a select few as polis to decide what is right), we are lucky that we have evolved since then in our recognition of the rights of others.

The "right" to collective action as determining a common good is an unhealthy de-emphasis on the rights of individuals to determine their own value and to determine what is best for them and those they love and interact with on a daily basis and for their own aspirations in the longterm.

Ted Burczak wrote a book Socialism after Hayek which tried to address the collective good emphasis on capabilties, stating that perhaps what society owes each other is a lump-sum payment at coming-of-age so that an individual has the material means to exercise her or his capabilties.

This is perhaps a "second best" solution (e.g. remove all market distortions like special interest regulation, taxes and trade barriers and just tax enough for the wealth transfer, an idea which is, by the way, completely consistent with the second theorem of welfare economics). This idea is certainly better than the continual erosion of human liberty, and an increasingly inefficient and distorted distribution of society's resources, under an ever increasing notion of the public good under the welfare state. The best solution of course is to allow human beings to take care of each other, through free choice in the market and through volunteerism, without statist coercion.

Lastly, and these are conservative estimates, let's say that a politician wins with an average of 51% of the vote in the USA and that 50% of the eligible population votes (these numbers are of course less elsewhere, except in totalitarian states). This means that those who decide on collective action have a mandate of 26%. That is not a viable social contract. Thus limited government is called for to correct for this failure of democracy to provide for a common good under collective action, and shows that, economic inefficiency aside, individual opportunity, Isaiah Berlin's negative rights, the right to be free from harm and not the right to 2,000 calories per day, is the best path towards human self-actualization.