The wheels of capitalism…

…have come to a grinding halt, and central banks around the world are greasing them to get them running again – this (or essentially this, for I don’t recollect the exact phrase) is what I heard a news anchor on BBC World say a few days back in relation to the financial disaster that has shaken the very foundation of the US economy, and thereby that of the world economy. I switched off the television set in disgust; but newspapers are not exactly saying anything different. So there is no way one can follow the news without hearing someone or the other cursing the “free market” for having engineered the current mess.

First things first, the present crisis was not created by the “free market” because a free market, the main requirement of laissez-faire capitalism does not exist anywhere in the world – not even in the US. Anyone who thinks otherwise understands neither markets nor capitalism, and could just as well think of Osama Bin Laden as a benevolent old uncle who’s blowing people up just because he’s a bit senile and who doesn’t really want to harm anybody. The US is a socialist country – the United Socialist States of America – it has been that way since the late 19th century – and so is every other country in the world; the only difference is in the degree. (Some right thinking) economists, businessman and politicians have pleaded over the centuries that the government should keep its dirty hands to itself and not interfere with the economy, but such pleadings have always fallen on deaf ears and intellectual barbarians like JM Keynes (“In the long run, we are all dead” – unfortunately, while he is, his ideas aren’t) helped make government the big and nosy monster that everybody is familiar with.

Capitalism is an economic system where there is minimal (zero) government interference – it is purely the buyers and sellers who make up the economy. And since the US decided to become a “welfare state”, a country where the government decides to get into the unending business of social welfare – an exercise as futile as fighting Hydra, it cannot claim to be one. Over the years, the US has-

  • Passed antitrust legislation to “protect” the public from monopolies forgetting the fact that the only monopolies realistically possible in a society of rational and intelligent men is one granted and enforced by the government, thereby robbing some firm’s freedom to merge into another or increase in size and benefit from resultant economies of scale. Apparently bureaucrats understand business more than businessmen do.
  • Created the Federal Reserve as the “lender of last resort”, placed the entire US banking industry under regulation and abolished the gold standard that tied the hands of the government by preventing it from printing money in excess of the stock backed by gold, an act that is the root cause of all inflation. In Rothbard’s words, and he is so right, it legalized counterfeiting [for itself]. Read his essay The Case Against The Fed (pdf), and then go hold Bernanke’s feet to the fire. And the world smirks at Zimbabwe’s attempts at curtailing hyperinflation by printing 100 billion dollar notes that can only buy a couple of loaves of bread. So ironic.
  • Created financial behemoths (Mae and Mac) to facilitate the provision of “affordable housing” to people who would have otherwise not qualified for the same, and then “leaned” on “private” banks to go ahead and do the dirty work. And then they blame the “free market” for it.
  • Imposed a variety of taxes and introduced so many complicated laws that it created a new profession of bloodsucking bureaucrats whose only job is to see that people give up a part of their income to feed an army of bums or to build bridges to nowhere and so on and if they don’t pay up, send them to jail, and tax consultants and lawyers. While some accountants and lawyers would still be necessary in a laissez faire society to negotiate contracts between willing parties and to manage and audit the books of accounts of firms, those who profit from Bastiat’s Broken Window Fallacy would have to look for another job. Non-voluntary taxation is essentially a protection racket being run by government – pay up or suffer the consequences.

While banks share a major part of the blame for the current crisis, not looking into the quality of loan applicants for example, the fact remains that bad loans are a part of the business – if I borrow money from someone, invest the same in a business, and suffer huge losses, I won’t be able to pay him back. The thing that went wrong here was that the people who were left holding the baby had no clue of the risk they were taking and the contagion spread without a corresponding spread in accountability. And the government – its attitude towards regulation which results in people assuming that they no longer need to pay attention to the quality of their investments since the government is “looking out for them”, the way the banking system works, and government spending money that appears like magic from thin air – cannot escape its share of the blame.

To prevent future crises similar in scale, a few things need to be done. We have to end the anarchy of “fiat currency” and return to a 100% gold reserve banking system. All government regulation of the banking industry has to go and people have to take up the responsibility of managing their own risks. Social welfare programs – the dole, education, health care – should be left to temples, churches and charities and not to the government. And production and pricing of goods and services should be left to the market. The Fed has to go, and so should the government’s nasty habit of spending money it does not have – by printing it. Basically, the US government has to undergo a financial neutering. It is difficult and it will take time, but any step in this direction will be a welcome one. Unfortunately, that is hardly going to happen any time soon. What will happen instead is more regulation and more restrictions. Crooks will always find ways to make money on every opportunity, and it is always the honest businessmen and honest taxpayer who will suffer – because of the government, and because of the financially, philosophically and politically illiterate people who vote it into power.

People who advocate a return to a 100% gold reserve banking and putting a stop to government spending money it does not have are routinely ridiculed and referred to as “gold bugs”. Well, the gold bugs have bitten hard this time, and the bite is going to cost the US government upwards of 700 billion dollars in treatment costs. “The free market for all intents and purposes is dead in America,” a Senator Bunnings is supposed to have noted. Unfortunately he is unaware that he is referring to incidents that happened before World War I.

The world has never seen capitalism in action. When it does, it will be something that would have no parallel in human history when it comes to productivity and freedom. So stop blaming a non-existent capitalism and free market for problems created by the government and those who came up with methods that enabled them to game the system. To know what capitalism really is, read George Reisman’s Capitalism – A Treatise on Economics (pdf). More importantly, get a copy of Ayn Rand’s Capitalism – The Unknown Ideal to read a philosophical defense of capitalism. “Capitalism is not the system of the past; it is the system of the future —if mankind is to have a future,” she said.

Note: K.M. has written a similar post on the mistaken notion that capitalism is to blame for the current mess.

Advertisements
Trackbacks are closed, but you can post a comment.

Comments

  • Pramod Biligiri  On September 22, 2008 at 12:23 am

    I hear you well and truly :|

    I’ve felt compelled to write on this in the last 1 week: Listen to those voices in the wilderness, Why Oh Why?, and Propping up a house of cards.

  • Joshua  On September 24, 2008 at 5:09 am

    The US is a socialist country – the United Socialist States of America – it has been that way since the late 19th century – and so is every other country in the world; the only difference is in the degree.

    And the Union of Soviet Socialist Republics was really the Union of Soviet Capitalist Republics.

    The world has indeed never seen pure capitalism in action, but it has also never seen pure socialism either. These extremes on the scale remain untested and untried.

  • Aristotle The Geek  On September 24, 2008 at 10:23 am

    Well, I am defending capitalism, not socialism. And capitalism is the only system that doesn’t follow the perverse philosophy of “from each according to his ability, to each according to his need.”

    Pure capitalism will mean the elimination of force from human relationships and elimination of perverse government intervention. But pure socialism will necessarily mean more government intervention and more thumb screws. Unless every human being suddenly grows a heart of gold, socialism equals loss of freedom. And if humans really manage to do that, we won’t need socialism anyway since capitalism doesn’t demand that men stop indulging in charity. But socialism does demand that humans prostrate before a higher authority called government.

  • Aristotle The Geek  On September 24, 2008 at 10:31 am

    Another thing, you cannot have a bigger experiment in socialism than the USSR – an unimaginably powerful communist government that controlled the country with an iron hand. If socialism failed there, and killed millions in the process, we can be sure that its not going to work anywhere else.

  • Joshua  On September 24, 2008 at 11:55 am

    Pure capitalism may eliminate force, but it will almost certainly increase coercion. And will certainly result in many people becoming too poor to sustain their own lives, or the lives of their loved ones. It is for that reason that a small amount of socialism was added to the capitalist mix – because there are some things that are more important than freedom.

    And the USSR was no more as socialist than the US is capitalist. Because of the politics of communist states, problems weren’t properly reported (and were covered up), so the central authorities couldn’t (or didn’t) manage the economy properly. And they didn’t produce the goods their populace required/demanded. As a result, barter systems developed from the very beginning.

    Just thought I’d point out that I don’t necessarily agree with either socialism nor capitalism. They both have downsides and benefits, and as such I don’t think any mix of the two (nor any extreme) will be a perfect economy.

  • Aristotle The Geek  On September 24, 2008 at 2:24 pm

    “And will certainly result in many people becoming too poor to sustain their own lives, or the lives of their loved ones. It is for that reason that a small amount of socialism was added to the capitalist mix – because there are some things that are more important than freedom.”

    There is nothing more important than freedom. And when you say something is – what you are essentially advocating is slavery. When you say that the government, and society, has the right to decide what I am allowed and not allowed to do with the money that I earn out of the work that I do, it is precisely that. Socialism is a system where the productive are enslaved by the non-productive. If a group of people cannot sustain themselves under capitalism, it means that have no abilities to offer – they can’t cook, or sweep, or read, or write, or drive, or dance, or sing, or talk, or provide any service that someone else will be freely willing to pay for, and therefore these people can only exist by eating other people alive – not physically, but by making the government rob from them and hand over the spoils to the “unsustainables”.

    I quote Ayn Rand, one of the strongest philosophical defenders of capitalism-

    There are only two fundamental questions (or two aspects of the same question) that determine the nature of any social system: Does a social system recognize individual rights? – and: Does a social system ban physical force from human relationships? The answer to the second question is the practical implementation of the answer to the first.

    Is man a sovereign individual who owns his person, his mind, his life, his work and its products – or is he the property of the tribe (the state, the society, the collective) that may dispose of him in any way it pleases, that may dictate his convictions, prescribe the course of his life, control his work and expropriate his products? Does man have the right to exist for his own sake – or is he born in bondage, as an indentured servant who must keep buying his life by serving the tribe but can never acquire it free and clear?
    This is the first question to answer. The rest is consequences and practical implementations. The basic issue is only: Is man free?
    In mankind’s history, capitalism is the only system that answers: Yes.
    Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

    “And the USSR was no more as socialist than the US is capitalist…And they didn’t produce the goods their populace required/demanded.”

    The USSR was one of the best experiments in socialism. And it did not suffer from any “problems”. The “problems” were a natural consequence of socialism. A market where billions of transactions take place every day cannot be managed by central planning by a group of people – even if they happen to be of the highest intellectual caliber. That is a disaster waiting to happen, And it did. Socialism guarantees that the market will fail. And the more socialism tends towards communism, the higher the rate of failure. The government doesn’t produce anything. Individuals produce it based on the demand for a particular good in the market. And they will only produce it if they can profit from it. There is only one moral way to indulge in non-profit activities – one based on voluntary charity. Capitalism does not prohibit charity. Socialism forces it on the unwilling.

    “Pure capitalism may eliminate force, but it will almost certainly increase coercion.”

    Any transaction between two willing parties cannot be termed as one being done under coercion. In a capitalist society, the government would protect its citizens against coercion – initiation of force, that is.

    If a vegetable farmer who happens to be the only major source of potatoes in a particular region charges extremely high prices for his product, people are free to choose whether they want to deal with him, or buy potatoes from the next town. If they choose to buy from the farmer, this won’t be coercion. Coercion is when a man makes another sign an agreement surrendering his rights to his vegetable farm under threat of grievous bodily harm. And the government in a capitalist society is duty bound – in theory – to protect the victim of coercion.

    In a socialist society on the other hand, the government is duty bound – in theory (and the theory is practiced extremely well, as we have seen) – to initiate force against – coerce – every one who does not follow the socialist policies of the government – pay arbitrary taxes, follow arbitrary regulations, and pay a ransom – protection money – to the government in order to be allowed to survive and do business on the other hand.

    There is nothing more important than freedom. And capitalism is the only system that can guarantee individual freedom. Any system that says that one group of people can enslave another group just because the second group is more productive than they can ever be is a perverse one.

  • Joshua  On September 25, 2008 at 4:59 am

    There is nothing more important than freedom.

    Maybe not, but even so, the fact remains that there are things more important than your freedom – namely, the freedom of many others.

    It is for that reason that you are not free to kill whoever you wish – because murder would compromise the freedom of another far more than forbidding murder compromises your freedom. Likewise, taking away your freedom to control part of your property is justifiable because it prevents somebody else from losing a greater freedom (the freedom to control their body and life).

    Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

    This is a good definition, because socialism would consequently be defined as the polar opposite – a social system where no property is privately owned. And, as I have already said, no such system has ever existed.

    If a vegetable farmer who happens to be the only major source of potatoes in a particular region charges extremely high prices for his product, people are free to choose whether they want to deal with him, or buy potatoes from the next town.

    And what if this vegetable farmer has a monopoly on all potatoes, everywhere? The buyer no longer has any choice – he has been coerced, through economic force rather than physical force, into paying that price for potatoes.

  • Aristotle The Geek  On September 25, 2008 at 2:40 pm

    There is no such thing as “freedom to commit murder”. If you think there is, you don’t understand the meaning of freedom. Freedom refers to the right to life and all related rights. It does not refer to the right to rape, right to steal, right to kill, right to enslave, right to demand that others provide for your every “need”, the right to demand that others lick your feet.

    A person committing murder is infringing on another person’s right to life. But a person buying a house of his own is not infringing on another person’s right to buy a house of his own and neither is the potato farmer forcing others not to grow their own potatoes. If the potato farmer is so intelligent and productive that he can corner the world market for potatoes while every other human being alive can do nothing but watch on, then he deserves every cent he charges and the others deserve to pay the price because they are so unintelligent that neither do they have the skills to grow potatoes, nor do they have the skills to start tomato farming and exchange potatoes for tomatoes, or pumpkin farming, or rice farming, or start a shoe manufacturing facility, or become an accountant.

    “Likewise, taking away your freedom to control part of your property is justifiable because it prevents somebody else from losing a greater freedom (the freedom to control their body and life).”

    How is it that people can come and kick me out of my house, eat the food that I have cooked out of provisions that I have purchased out of money that I earned by slogging my ass off, and it is termed as their freedom to control their body and life when what they are doing is enslaving me by forcing me to work not for myself but for them? This is what is communism – sacrifice of the individual for the society.

    Maybe when there is a major famine, while I won’t have the “right to commit murder”, these people will be “justified” in controlling part of my property – raiding my store of grains for example, or even cutting me into a thousand pieces, cooking my body parts and eating me so that they don’t lose a “greater freedom” – “the freedom to control their body and life” As per your world view, people are unproductive, lazy sloths who don’t care to think or work but want to exercise their “freedom” by murdering that of another.

    I repeat, there is nothing more important than freedom, mine and that of every other individual. The freedom and rights of rational men never come into conflict. In a society of cannibals however, there is nothing but conflict – every man’s right to life means every other man loses the “right to eat that man alive”.

  • Joshua  On September 25, 2008 at 2:53 pm

    A person committing murder is infringing on another person’s right to life.

    You say you support the right to life, but you still insist that you are free to take actions that will result in the death of others. If you don’t support things like social health care programs, people will die. Therefore, to not do so is morally equivalent to murder.

    I think that accurately summarises my position on this issue. Nobody deserves to die (that said, I do agree that the death of one can be justified if it prevents the death of many).

  • Aristotle The Geek  On September 25, 2008 at 3:12 pm

    The fact that America did not attack the USSR and China in the 1940s and 1950s meant that tens of millions of people died there at the hands of communists. You mean to say every American is a murderer? Non-action resulting in death cannot be subject to moral condemnation, action is.

    The right to my life refer to is something that “prevents someone else from using me as his property or killing me”. It does not mean the right to demand that others provide for my life. My right to my life does not mean that when I find myself drowning in a swimming pool, I have the right to demand that you put your life at risk to come and save mine. And that is what social health care programs are all about – when you steal a family man’s money to provide dentures (under a social health care program) to an eighty year old man, you are preventing the man from spending the money on buying books for his daughter. In a free non-cannibalistic society – all charity will be private – it will not be based on theft. The old man will probably get his dentures because well off people would probably donate some money to charities to help the not-so-well-off people in their locality.

    “the death of one can be justified if it prevents the death of many”
    Never! In that case the murder of a hundred million can be justified if it saves a billion – the plunder and destruction of America and Americans would be justifiable so that the Chinese and Africans and Latin Americans can enjoy a better standard of living.

  • Joshua  On September 25, 2008 at 4:18 pm

    Non-action resulting in death cannot be subject to moral condemnation, action is.

    A pseudo-distinction, though a commonly made one. There is no such thing as non-action. You can either do something, or do nothing. In your example, I can either act to save you, or act not to save you. They are both choices, they are both actions.

    Not feeding your children and allowing them to die, when you could have easily saved them, is still murder. Not taking seeking medical care for your child when they clearly require still leaves you responsible for their death.

    I see no difference.

    In that case the murder of a hundred million can be justified if it saves a billion

    That’s right – basic utilitarianism. But I doubt killing 300 million Americans would prevent the death of >300 million others.

  • Aristotle The Geek  On September 25, 2008 at 4:31 pm

    Its not a pseudo-distinction. Action is doing something. Doing nothing is not called action. A stone lying on the ground is not acting when it “lies on the ground”.

    There is a difference between taking up a moral responsibility for those who cannot take care of themselves (like giving birth to children or adopting them) and having a millstone forcibly tied around your neck. Parents have the moral responsibility to take care of their children. I do not have the moral responsibility to provide food and clothing to every beggar sleeping on the street. And if he dies due to cold, I do not become a murderer.

    Utilitarianism is nonsense. And using it to justify murder is perverse. Under utilitarian thinking, killing 300 million Americans and plundering trillions of dollars will pay for itself within a generation – millions of African children will no longer die – they will give birth to millions more and within 30 odd years there will be more lives on earth in this way than there would have been if America would exist by itself.

    Earth will then be a communist-socialist-cannibalistic-utilitarian paradise.

  • Joshua  On September 25, 2008 at 6:32 pm

    Its not a pseudo-distinction. Action is doing something. Doing nothing is not called action. A stone lying on the ground is not acting when it “lies on the ground”.

    But what most people mean by inaction is not inaction. True, a person can’t be held accountable for not saving another when they too were incapacitated. What you have described as inaction is really acting in a way that doesn’t not result in harm to another (e.g. walking past a drowning person), which is obviously the same as acting in a way that results in harm to another (e.g. forcibly drowning a person).

    Parents have the moral responsibility to take care of their children. I do not have the moral responsibility to provide food and clothing to every beggar sleeping on the street. And if he dies due to cold, I do not become a murderer.

    I disagree. People are equals. Just as you are not more morally valuable than any other person, your family are not more morally valuable than any other.

    Utilitarianism is nonsense. And using it to justify murder is perverse.

    No, libertarianism is nonsense. And using it to justify murder is perverse.

    I doubt we can ever come to agreement. Your premises are so different to mine, how can we ever agree?

  • Aristotle The Geek  On September 26, 2008 at 12:16 am

    I have never argued with a utilitarian or consequentialist before. The theists, socialists and communists all have their points of weakness – they would scream if you accuse them of cannibalism or slavery, and would be full of moral indignation. So trying to convince you about my point of view might be difficult, but I can try.

    Agreement is possible when the mind is open to ideas – not pliable, but open. Each of us will try to stick to positions we have adopted over I don’t know how many years. But behind every position there is a philosophy. I last changed my views a decade ago. And there is no turning back now because individualism – or whatever else you call it – appeals to my sense of justice.

    The problem with utilitarianism or consequentialism – I only understand it as “the end-justifies-the-means principle” – is that it removes man and his mind from the equation. It does not consider the origin and nature of man or existence or the means of survival, but treats man instead as a commodity discovered lying on the ground and to be used as such, or worse – an animal.

    Every man has a natural right to life – Objectivism derives it from “natural rights” and the Austrian School of Economics (Murray Rothbard) derives it from the concept of self-ownership. Essentially both are the same. And the only way man can survive if he is able to acquire and keep property. That is how property rights come into existence. And his is true for every man – no man owns any one else, and every man is as free as the next one to go about his life in a manner of his choosing, as long as he does not harm another man.

    Under your utilitarian view however, freedom and rights seem to have no meaning. Aristotle says of democracy (and this is true of your view of moral-value-equality) – “Democracy arises out of the notion that those who are equal in any respect are equal in all respects; because men are equally free, they claim to be absolutely equal.” Just because all people are free, it does not mean that all automatically have 20-20 vision, or can compose a soundtrack or write a bestseller. So constructing an entire theory based on such assumptions does not make any sense. As far as I am concerned my family is definitely more valuable to me than my neighbors, and I definitely consider myself to be morally superior to any murderer on some death row in some part of the world.

    Further, the question of sacrificing X or X’s property to a particular end – who decides it and on what basis? If no one is morally superior to me, no one has the right to decide to sacrifice me. How do you justify that?

  • Joshua  On September 26, 2008 at 4:15 am

    Agreement is possible when the mind is open to ideas – not pliable, but open. Each of us will try to stick to positions we have adopted over I don’t know how many years. But behind every position there is a philosophy. I last changed my views a decade ago.

    Fair enough. I wasn’t always a utilitarian, so perhaps you are right.

    It does not consider the origin and nature of man or existence or the means of survival, but treats man instead as a commodity discovered lying on the ground and to be used as such, or worse – an animal.

    I don’t think it does. Utilitarianism may not consider the nature and origin of man, but it does consider means to survival (in the sense that survival is, usually, considered a better outcome than death) and the value of man (though utilitarians differ on how they derive this value and how valuable they consider man to be).

    Every man has a natural right to life – Objectivism derives it from “natural rights” and the Austrian School of Economics (Murray Rothbard) derives it from the concept of self-ownership.

    Utilitarianism is compatible with such views, and in fact such things are often considered when deciding which act causes the best consequences.

    And the only way man can survive if he is able to acquire and keep property.

    It’s entirely possible, though not feasible in our society, for man to survive without owning any property.

    Further, the question of sacrificing X or X’s property to a particular end – who decides it and on what basis? If no one is morally superior to me, no one has the right to decide to sacrifice me. How do you justify that?

    In a situation where your death would prevent the death of many others, or where taking your property would prevent harm occurring to many others, then you can see that the situation doesn’t just involve your rights, but also the rights of others. Utilitarianism (specifically, act utilitarianism) states that the right course of action is the one that has the best consequences – i.e. fewer people’s rights being violated, or the most autonomy/life/happiness (or whatever is under consideration) for all.

    All moral agents have, by definition, the responsibility to make moral decisions, and under utilitarian views the right decision will always result in the least amount of sacrifice for people in general (yet may still involve sacrifice for or of some).

  • Aristotle The Geek  On September 27, 2008 at 5:11 am

    “Utilitarianism is compatible with such views, and in fact such things are often considered when deciding which act causes the best consequences.”
    Natural rights and self-ownership means no one has the moral right to harm me and my property for his own benefit. How, then can your version of utilitarianism be compatible with this?

    “It’s entirely possible, though not feasible in our society, for man to survive without owning any property.”
    Property does not only refer to physical property but also to everything man creates out of his own labor. Under your version of utilitarianism, a cobbler in a particular society could be condemned to a life of making shoes without anyone paying for it because while he is the only one suffering, the whole society will gain by not having to pay for the labor of manufacturing shoes. Basically, how do you measure what is good and what is bad. What is the standard? And how arbitrary is it?

    “In a situation where your death would prevent the death of many others, or where taking your property would prevent harm occurring to many others, then you can see that the situation doesn’t just involve your rights, but also the rights of others.”
    How would you define “right”? If I become a murderer because I don’t attempt to save a drowning man, how is it that this bunch of people won’t become murderers if they kill me for their own self-interest? Simply because they are more in number? In effect, it is majoritarianism at work. Why complicate things so much and not instead, follow Nietzsche – “might is right”?

    “Utilitarianism (specifically, act utilitarianism) states that the right course of action is the one that has the best consequences – i.e. fewer people’s rights being violated, or the most autonomy/life/happiness (or whatever is under consideration) for all.”
    Does utilitarianism bother to find out what the source of happiness is, or how property comes into existence, and why a “right” is called a “right”? As I said, it does not bother with things like that but is only concerned with the end. Life is not abstact mathematics where you assign the same weight to Einstein and Hitler and go about moralizing on that basis.

    The main question is why is the “happiness of the greatest number” moral and more important than the right of an individual to his own life and the fruits of his own efforts?

  • Joshua  On September 27, 2008 at 4:01 pm

    Natural rights and self-ownership means no one has the moral right to harm me and my property for his own benefit. How, then can your version of utilitarianism be compatible with this?

    It’s a simple cost-benefit analysis. If your harm is less than the harm that would result to me if I didn’t do the act, then the act is justified (e.g. stealing your phone to call an ambulance to save my life).

    You can say that ‘harming another is always wrong’, but that isn’t very helpful when all your choices would result in harm to others.

    Property does not only refer to physical property but also to everything man creates out of his own labor. […] Basically, how do you measure what is good and what is bad. What is the standard? And how arbitrary is it?

    This is the greatest source of disagreement among utilitarians, but usually the standard involves something like happiness, autonomy and/or harm.

    As for your example, it is for that reason (and all your other examples) that ‘rule utilitarianism’ developed (in contrast to ‘act utilitarianism’). Under ‘rule utilitarianism’, it is not the act of enslaving a certain cobbler but rules like ‘one must never enslave another’ or ‘one must never enslave another unless lives are at stake’ that are analysed in terms of consequences.

    How would you define “right”? If I become a murderer because I don’t attempt to save a drowning man, how is it that this bunch of people won’t become murderers if they kill me for their own self-interest? Simply because they are more in number? In effect, it is majoritarianism at work. Why complicate things so much and not instead, follow Nietzsche – “might is right”?

    What is right is what results in the greatest good for the greatest number.

    Does utilitarianism bother to find out what the source of happiness is, or how property comes into existence, and why a “right” is called a “right”? As I said, it does not bother with things like that but is only concerned with the end. Life is not abstact mathematics where you assign the same weight to Einstein and Hitler and go about moralizing on that basis.

    Why isn’t it?

    The main question is why is the “happiness of the greatest number” moral and more important than the right of an individual to his own life and the fruits of his own efforts?

    Turn the question on its head – why are the rights of one individual more important than the rights of a greater number of individuals?

  • Aristotle The Geek  On September 29, 2008 at 1:25 am

    A society or any other group is only a collection of individuals – nothing more (more about the importance of the individual, “rights”, the mind, necessity of considering the process of survival etc. later). So, when you (or your version of utilitarianism – act utilitarianism) say that “what is right is what results in the greatest good for the greatest number,” you say it by allocating an arbitrary number of happiness points to individuals, and seeing which group of individuals (group being one or more individuals sharing the same end) has the most points when it comes to the “rightness” or “wrongness” of a particular action.

    But there is a problem with the “greatest good for the greatest number” idea. Stefan Sencerz says

    Here is another mistaken (even if popular) formulation of utilitarian principle:

    An action is morally right if and only if it brings about the greatest happiness for the greatest number.

    The problem with this formulation is that, in some situations, it is impossible to use it. This is the case because [it] requires us to maximize two independent variables; namely, (a) the number of affected people and (b) the amount of happiness brought about by a certain act. These leads to immediate difficulties illustrated by the following example. Imagine that an agent can do one of two actions having the following consequences:

    The action #1 gives each of 10 people exactly 100 units of happiness (and no pain or unhappiness) for the grand total of 1000 units of utility.
    The action #2 gives each of 100 people exactly 5 units of happiness (and no pain) for the grand total of 500 units of utility.

    What should be done in accordance with this formulation of the utilitarian principle? The act #1 affects only 10 people. It brings about, however, more happiness than the alternative. (that is, it brings about the greatest happiness.) The act #2 affects in a positive way 100 (the greatest number of people). But each of them receives a smaller amount of happiness (and the total happiness brought about is also smaller). So, what should we do? Should we benefit the greatest number of people? Or should we bring about the greatest amount of happiness? It is totally unclear what we ought to do in accordance with this mistaken formulation of the principle of utility.

    So, you could either talk about the “total happiness” or the “total people benefiting”, or the “average happiness” at the end of the action, and that’s assuming A’s happiness and B’s happiness are fungible – that the pleasure derived by Einstein enjoying his night working on theories in physics and Hitler torturing Jews in a gas chamber are interchangeable. In Sencerz’s example – maximization of total happiness will mean #1 is right, maximization of the “total people benefiting” means #2 is right, and maximization of the average happiness of the population at the end of the action will mean #1 is right, because an addition of 1000 to an existing stock of happiness will produce a better average on an unchanged denominator than the addition of 500.

    Now lets deal with the three cases one by one-

    Total utilitarianism (happiness)- If all we wish to do is maximize the total happiness of a particular society, then every action that has a non-negative marginal utility is right. So, redistribution of wealth would be right because while the rich would become unhappy, the poor would become happy and chances are the net effect would be positive. Every time a new member is added to society, another round of egalitarianism should follow. And soon we would end up with the Parfitian problem of “The Repugnant Conclusion” (Stanford Encyclopedia of Philosophy). There is another challenge to TU – Nozick’s utility monster – an entity that is so efficient at generating utility that the sacrifice of the whole society to it would be the best way to increase TU of the group (again group being one or more individuals). You could challenge this saying this is not possible, but why not? So, effectively, TU will end up in one kind of dystopia or the other.
    Total utilitarianism (people)- If you don’t want to maximize the happiness, but the number of people who are happy – one man, one happiness point – you are in for another dystopia. While the utility monster is defeated, the Repugnant Conclusion is not.
    Average utilitarianism – In this case, it would be best if we start liquidating those in society whose happiness is below average. For every such liquidation, the average would increase. So a group of one or more individuals with the highest capacity of happiness should be the ones that remain standing.

    Also read Average and Total utilitarianism (Wikipedia)

    The thing is the very basis on utilitarianism, as I see it depends on the assumption that happiness of individuals is both measurable and fungible – which is not the case. I can grant that I can measure my own happiness as a matter of degree – I could rank it for example – but the fact remains that the happiness I receive from listening to music is different from the one I receive from having a good meal or reading the good book. What I don’t grant is that my happiness is in someway interchangeable with that of someone else – that the happiness X derives from drinking wine can be interchanged with the one I derive from watching a film. In the face of this, the morality of utilitarianism is suspect, as I see it.

    Consider these paragraphs from the Stanford Encyclopedia of Philosophy entry on Consequentialism

    Another problem for utilitarianism is that it seems to overlook justice and rights. One common illustration is called Transplant. Imagine that each of five patients in a hospital will die without an organ transplant. The patient in Room 1 needs a heart, the patient in Room 2 needs a liver, the patient in Room 3 needs a kidney, and so on. The person in Room 6 is in the hospital for routine tests. Luckily (for them, not for him!), his tissue is compatible with the other five patients, and a specialist is available to transplant his organs into the other five. This operation would save their lives, while killing the “donor”. There is no other way to save any of the other five patients (Foot 1966, Thomson 1976; compare related cases in Carritt 1947 and McCloskey 1965).

    We need to add that the organ recipients will emerge healthy, the source of the organs will remain secret, the doctor won’t be caught or punished for cutting up the “donor”, and the doctor knows all of this to a high degree of probability (despite the fact that many others will help in the operation). Still, with the right details filled in, it looks as if cutting up the “donor” will maximize utility, since five lives have more utility than one life. If so, then classical utilitarianism implies that it would not be morally wrong for the doctor to perform the transplant and even that it would be morally wrong for the doctor not to perform the transplant. Most people find this result abominable. They take this example to show how bad it can be when utilitarians overlook individual rights, such as the unwilling donor’s right to life.

    It is similar to most examples I have offered, but it shows that utilitarianism has no concept of “crime” or “fairness” or “rights”.

    Right and Wrong
    Now lets come to the question of determination of right and wrong. So, “the greatest good of the greatest number” or however else you define it determines what is right or wrong. The question is when is the decision to be made – before or after the action? In the former case, what happens if the intended consequences do not materialize but people are left worse off than before? In the latter case, its a question of hindsight – the conclusion is there for all to see. So, we might have a situation where the decision to do right which then turns out to be wrong will itself be termed wrong.

    Now the question is, what is the point of assigning ratings to actions if you are not going to use them? Will these “rights and wrongs” be used to punish people? If so, how is it fair to punish people after seeing the effect of the action – something that the actor could probably not have foreseen? Or is it that only motives matter, and consequences are irrelevant?

    Now consider another example (think I have read a similar example in one of Rand’s works, don’t know which one). There are two opposing groups in a society – one small, the other large; one with property, the other without. Egalitarianism demands that the property be redistributed. Now what if one night the “haves” go and butcher all the “have-nots”, leaving just one of them alive. The balance of power has changed. Now what is right and what is wrong, and “who is doing the deciding”?

    The Individual, his rights and his values
    When utilitarians say “the greatest good of the greatest number”, what does that mean? The answer is maximization of happiness. But the answer does not tell me why is the maximization of happiness the primary goal, except for referring to the pleasure-pain mechanism. But the mechanism is one that relates to the individual, not society. Further, it still does not justify the morality of following it.

    Ayn Rand too refers to the mechanism, but as something that alerts the individual to the concepts of “good and evil” and “life and death”. But happiness is a higher concept than pleasure and cannot be the standard of measurement of ends. And this is what she has to say in “The Objectivist Ethics” (The Virtue of Selfishness)-

    “Happiness” can properly be the purpose of ethics, but not the standard. The task of ethics is to define man’s proper code of values and thus to give him the means of achieving happiness. To declare, as the ethical hedonists do, that “the proper value is whatever gives you pleasure” is to declare that “the proper value is whatever you happen to value”–which is an act of intellectual and philosophical abdication, an act which merely proclaims the futility of ethics and invites all men to play it deuces wild.

    The philosophers who attempted to devise an allegedly rational code of ethics gave mankind nothing but a choice of whims: the “selfish” pursuit of one’s own whims (such as the ethics of Nietzsche)—or the “selfless” service to the whims of others (such as the ethics of Bentham, Mill, Comte and of all social hedonists, whether they allowed man to include his own whims among the millions of others or advised him to turn himself into a totally selfless “shmoo” that seeks to be eaten by others).

    When a “desire” regardless of its nature or cause, is taken as an ethical primary, and the gratification of any and all desires is taken as an ethical goal (such as “the greatest happiness of the greatest number”)—men have no choice but to hate, fear and to fight one another, because their desires and their interests will necessarily clash. If “desire” is the ethical standard, then one man’s desire to produce and another man’s desire to rob him have equal ethical validity; one man’s desire to be free and another man’s desire to enslave him have equal ethical validity; one man’s desire to be loved and admired for his virtues and another man’s desire for undeserved love and unearned admiration have equal ethical validity. And if the frustration of any desire constitutes a sacrifice, then a man who owns an automobile and is robbed of it, is being sacrificed, but so is the man who wants or “aspires to” an automobile which the owner refuses to give him—and these two “sacrifices” have equal ethical status. If so, then man’s only choice is to rob or be robbed, to sacrifice others to any desire of his own or to sacrifice himself to any desire of others; then man’s only ethical alternative is to be a sadist or a masochist.

    The moral cannibalism of all hedonist or altruist doctrines lies in the premise that the happiness of one man necessitates the injury of another.

    Utilitarianism fails to consider that man is a rational animal who needs the “right” to his own body and efforts in order to survive. Theoretically he could survive in prison – being commanded to sit, stand, eat, drink or do whatever the warden demands of him – but that is not what survival refers to. As Rand points out, the only thing utilitarianism will lead to is a dystopia because no rational man will allow himself to be enslaved for the “common good”. It is man who invents and produces. Food, factories, cars and knowledge of medicine do not grow on trees. And any “philosophical system” that forgets ethics, or divorces it from reality can never be the right one.

    Morality does not exist in a vacuum. It depends on a system of values. Ends do not determine values. The values determine the ends. And this is what Rand said about values in “What is Capitalism?” (Capitalism: The Unknown Ideal)-

    There are, in essence, three schools of thought on the nature of the good: the intrinsic, the subjective, and the objective. The intrinsic theory holds that the good is inherent in certain things or actions as such, regardless of their context and consequences, regardless of any benefit or injury they may cause to the actors and subjects involved. It is a theory that divorces the concept of “good” from beneficiaries, and the concept of “value” from valuer and purpose—claiming that the good is good in, by, and of itself.

    The subjectivist theory holds that the good bears no relation to the facts of reality, that it is the product of a man’s consciousness, created by his feelings, desires, “intuitions,” or whims, and that it is merely an “arbitrary postulate” or an “emotional commitment.”

    The intrinsic theory holds that the good resides in some sort of reality, independent of man’s consciousness; the subjectivist theory holds that the good resides in man’s consciousness, independent of reality.

    The objective theory holds that the good is neither an attribute of “things in themselves” nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value. (Rational, in this context, means: derived from the facts of reality and validated by a process of reason.) The objective theory holds that the good is an aspect of reality in relation to man—and that it must be discovered, not invented, by man. Fundamental to an objective theory of values is the question: Of value to whom and for what? An objective theory does not permit context-dropping or “concept-stealing”; it does not permit the separation of “value” from “purpose,” of the good from beneficiaries, and of man’s actions from reason.

    So under an altruistic “philosophical system”, man, “individual rights” (there are no other rights), freedom, justice, right and wrong become putty – something that any group that is in the majority can mold according to their wishes.

    So by not considering the reality of man’s existence and the process of sustenance of life, and only considering man and his efforts as a means to some undefinable ends, although utilitarianism ends up advocating happiness – it will only produce dystopia.

    Finally-
    “Turn the question on its head – why are the rights of one individual more important than the rights of a greater number of individuals?”
    The answer is – assume individuals don’t exist. Now think of society. The question is a “stolen concept.” The concept “society” cannot be conceived without referring to the concept “individual”. And as I said, rights are an attribute of an individual – someone who physically exists. Society is just a collection of individuals – its an idea – a universal.

  • K. M.  On October 1, 2008 at 3:20 am

    Joshua and Aristotle,
    Sorry for interrupting this incredible debate but I couldn’t resist. This is the best example I have seen of the strengths of this medium – if utilized properly, it allows one to put ones thoughts as clearly as possible into words, something that is not possible in conversation.

    Joshua,
    Since you have shown yourself to be capable of thinking in terms of ideas and holding on to the logical consequences of your positions, I hope you continue this debate to its conclusion. I would suggest you start by explaining why one needs a code of ethics (whether utilitarianism or egoism) at all. For the record, I am with Aristotle in this debate.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s