Are Markets Repugnant?

Ronald Bailey | January 31, 2008

How about this remarkable quotation:

“The problem is not that economists are unreasonable people, it’s that they’re evil people,” [Yale University psychologist Paul Bloom] said. “They work in a different moral universe. The burden of proof is on someone who wants to include” a transaction in the marketplace.

According to the New York Times, Bloom made this assertion during a recent fascinating conference, "Repugnance as a Constraint on Markets," at the American Enterprise Institute (which I unfortunately missed, damn it!).

The idea is that some things or services are just so offensive to the moral sense (repugnant) that no one should ever be able to buy them in the marketplace. Of course, we now find some market transactions repugnant that earlier generations would not have. Slavery and bear-baiting come to mind. On the other hand, biomedicine is an area especially rife with activities that past generations found repugnant, including smallpox vaccines, anesthesia for child-birth, selling condoms, organ transplants, and artifical reproductive techniques.

It is true that markets are great at facilitating all kinds of transactions, including those that some people find immoral, e.g., sexual services, recreational drugs, and burning fossil fuels. But markets are not just arenas of "anything goes" amorality. For example, a study of 15 small scale societies by University of Massachusetts economist Herbert Gintis and his colleagues found that the more integrated those societies were into outside markets, the more generous and cooperative their members are. In my column, "Do Markets Make People More Generous?," I reported Gintis' findings:

"I would say societies that use markets extensively develop a culture of cooperation, fairness, and respect for the individual," says Herbert Gintis....

Gintis speculates that markets bring strangers into contact on a regular basis, encouraging people to develop more concern for others beyond their family and immediate neighbors. Instead of parochialism, being integrated into markets encourages a spirit of ecumenism. "Extensive market interactions may accustom individuals to the idea that interactions with strangers may be mutually beneficial," the researchers theorize. "By contrast, those who do not customarily deal with strangers in mutually advantageous ways may be more likely to treat anonymous interactions as hostile, threatening, or occasions for opportunistic pursuit of self-interest."...

Based on his research, Gintis believes that history traces humanity's rise from tribal selfishness to more cosmopolitan liberality. "Market societies give rise to more egalitarianism and movements toward democracy, civil liberties, and civil rights," Gintis points out. "Market societies and democratic societies are practically co-extensive."

Repugnance is not the end of an ethical analysis, it's the beginning. As theologian and AEI fellow Michael Novak told the AEI conferees, "Repugnance is not enough." Markets are superb at enabling people with differing moral visions to live together peacably. Consequently, the burden of proof should be on those who want to ban an activity from the marketplace rather than on those who favor it. By advocating markets economists are not only reasonable, they are also moral.

Whole Times article here.

Clarification Addendum from Prof. Bloom: Just as I suspected, Bloom was not arguing that he thinks that economists are evil. He sent me the following clarification:

"Just to clarify, my remark about evil economists was a joke. This was obvious at the conference itself, though unfortunately not from the NYTimes article. After I said it, people laughed, and then I said, "To put it more fairly ...". and went on to argue that economists tend to reason consequentially, and are less sensitive than lay people to considerations such as taboo, disgust, status quo bias, and so on. And I tend to agree with them on this. In particular, as I argued in the discussion period, disgust is very unreliable as a guide to moral behavior."

Those sending him "strange" emails, please lay off.

Declaration of competing interests: As an undergraduate I was a double major in economics and philosophy.

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|1.31.08 @ 11:28AM|#

I think Gintis gets the causality backwards: more generous, friendly groups end up with more extra-group market transactions.

|1.31.08 @ 11:32AM|#

joe: Of course you think that. But why not read the study anyway?

|1.31.08 @ 11:33AM|#

I find psychologists repugnant.

|1.31.08 @ 11:36AM|#

It's not a one way relationship; it's a feedback loop.

Markets encourage cooperative behavior, which in turn enncourages people to respect strangers.

This habit then encourages the inclusion of new technologies or products into markets.

|1.31.08 @ 11:39AM|#

"The problem is not that economists are unreasonable people, it's that they're evil people,"

I assume this scholar (almost upchucked typing that) expects to be take seriously. Obviously a formal education doesn't necessarily impart intelligence.

Nick: In fairness to Bloom, he may only have been arguing that "regular folks" regard economists that way, not that he himself does.

kinnath|1.31.08 @ 11:39AM|#

Declaration of competing interests: As an undergraduate I was a double major in economics and philosophy.

We won't hold that against you.

|1.31.08 @ 11:41AM|#

I read it, Ron. His ideas about causality are entirely speculative.

|1.31.08 @ 11:42AM|#

He establishes the correlation with evidence, then offers hypotheses to explain it.

Calidore|1.31.08 @ 11:46AM|#

joe,

Sounds like a chicken and egg problem.

|1.31.08 @ 11:48AM|#

OK, Ron, then I find this particular psychologist to be an idiot. I've never heard anyone say economists are evil people. Who thinks that? Capitalist are evil, that I've heard. "Regular folks" think economists are the pocket protector guys in school that know about money. No one hates them.

|1.31.08 @ 11:51AM|#

Which came first the chicken or the egg?

Evolutionist: The egg, because two animals closely resembling chickens without actually being chickens mated and created the egg which hatched into the first chicken.

Creationist: The chicken. God created the animals, Adam named them, and then the chickens mated and laid eggs.

kinnath|1.31.08 @ 11:53AM|#

Here is short description of my version of the Nolan chart:

On one axis are human activities that are either good or bad for society. On the other axis are activities that are commercially viable or not.

The good news is that activities that are bad for society and not commercially viable, tend to take care of themselves naturally.

Social conservatives work themselves into a lather to ban commercially viable activities that they view are bad for society.

Social progressives get wrapped around the axle pushing to have government sponsor all activities that are good for society regardles of whether or not the market could support the activity.

Libertarians have a heart attack whenever it is proposed that government is necessary to support a socially "good" activity that the market fails to support.

|1.31.08 @ 11:56AM|#

I agree, Calidore. The feedback loop tarran mentioned certainly sounds plausible.

tarran, markets also encourage competitive behavior, which the author identifies as reducing generosity. Thinking about how trans-cultural trade happens, it's probable that the earliest step inovolves societies that use a cooperative, socialist method of distributing resources within the group engage in trade with other such societies.

Calidore|1.31.08 @ 12:00PM|#

Anyway, using Ockham's razor it seems to me that the more "economic" explanation may be that which posits that interactions with outsiders leads to generally friendlier people. Of course I could be in error.

Rimfax|1.31.08 @ 12:00PM|#

I find it repugnant that Yale compensates Paul Bloom for his services. (Is that enough to get him to quit, or is he a stinking hypocrite?)

Taktix®|1.31.08 @ 12:01PM|#

The egg, because two animals closely resembling chickens without actually being chickens mated and created the egg which hatched into the first chicken.

What's more free market than hot chicken-on-chicken action?

Rimfax|1.31.08 @ 12:03PM|#

"They work in a different moral universe. The burden of proof is on someone who wants to include"

And the arbiter of when that burden is met would be...who? If the answer is the market itself, well, then I couldn't agree more.

|1.31.08 @ 12:06PM|#

joe: Markets do encourage competitive behavior, but most often they encourage voluntary transactions which most reasonable people would identify as cooperative behavior, also known as reciprocity.

|1.31.08 @ 12:08PM|#

The idea is that some things or services are just so offensive to the moral sense (repugnant) that no one should ever be able to buy them in the marketplace.

Or, you could just mind your own fucking business.

Markets are superb at enabling people with differing moral visions to live together peacably. Consequently, the burden of proof should be on those who want to ban an activity from the marketplace rather than on those who favor it. By advocating markets economists are not only reasonable, they are also moral.

QFMFT

Sam Grove|1.31.08 @ 12:09PM|#

markets also encourage competitive behavior, which the author identifies as reducing generosity

I suspect humans are both cooperative and competitive. Each strategy adopted as appropriate.

The discovery of trade is likely a hallmark of the beginning of civilization.

|1.31.08 @ 12:09PM|#

"tarran, markets also encourage competitive behavior, which the author identifies as reducing generosity. Thinking about how trans-cultural trade happens, it's probable that the earliest step inovolves societies that use a cooperative, socialist method of distributing resources within the group engage in trade with other such societies."

Yeah it is called the hill people and valley people allegory they teach in every basic economics class. Trade by necessarily makes the two people involved better off. If didn't people wouldn't do it. Take even the most repugnant trade you can imagine; say a woman selling her body to prostitution. While a life of prostitution is pretty lousy, there are worse options. Even welfare can be a worse option since there is no we could ever pay people enough money to make prostitution not pay for some people.

What nitwits like Bloom refuse to understand is that sometimes there are no good options. People engage in what he considers to be "repugnant trade" because the alternative is worse. Yeah it sucks to work in a sweat shop in Indonesia, but it sucks worse to live in a slum with no source of income beyond stealing and begging. The Blooms of the world refuse to understand that.

|1.31.08 @ 12:13PM|#

Markets do encourage competitive behavior, but most often they encourage voluntary transactions which most reasonable people would identify as cooperative behavior, also known as reciprocity.

The "cooperative behavior" of two parties in a transaction amounts to each pursuing his own interest, not both interests at the same time, and those interests happening to align. Neither is actively working to achieve the other's purposes.

This is different from what most people would define as "cooperative behavior," which is for more than one person to work towards a goal they have in common. Putting the two together under the heading "cooperative" obscures more than it explains.

It is the latter that is associated with altruism and genorosity, not the former. As the man says, we get our bread because of the baker's selfishness, not his generosity.

|1.31.08 @ 12:15PM|#

Actually, John, I think the Blooms of the world think that it would be a good idea to give the unfortunate options beyond "starve" or "whore yourself."

Joe,

Other than some moral idea that doing good must in some way hurt, what is the difference? If a baker works hard and is smart and is able to sell me a loaf of bread for ten cents less than his competitor, how is that any different practically or morally than someone giving me a dime?

|1.31.08 @ 12:19PM|#

While I was certain that free-marketeers would shudder at Bloom's analysis, he is absolutely right that economists are very different from the average person. I wouldn't use the word evil, but they often have a starkly amoral way of looking at the world, and I would contend that that is fundamentally inhuman. I think humans are social creatures and markets tend to atomize society.

Chuck|1.31.08 @ 12:20PM|#

"I would say societies that use markets extensively develop a culture of cooperation, fairness, and respect for the individual," says Herbert Gintis....

You're not going to believe that guy, are you? He's an economist for heaven's sake! They are well-known to be evil. He's probably just making it up so he can, uh, sell...stuff. Or something.

On a less snarky note:

If B has something A wants, there are basically three ways to get it:
1) ask B to simply give it to you,
2) kick B's ass and take it, or
3) arrange a trade: give B something they value in exchange.

(1) has a low success rate (from my observations), and (2) can be pretty risky. Compared to the other options, (3) looks pretty good. It seems to me that governments are much more likely to choose (2) than individuals are.

|1.31.08 @ 12:20PM|#

The difference, John, is that one is cooperative and one is not, and the author of the study (and Ron Bailey) have hypothesized that market-based behavior encourages cooperation and thus increases generosity.

It's really not a comment about the morality of transacting business with bakers. The guy who said that we get our bread from the baker's selfishness was Adam Smith, and he wasn't arguing that the baker was therefore bad. Psst: you don't need to lecture me about things you hear on the first day of Econ class. Got it thanks.

|1.31.08 @ 12:21PM|#

"Actually, John, I think the Blooms of the world think that it would be a good idea to give the unfortunate options beyond "starve" or "whore yourself.""

Exactly, but what they don't understand is that sometimes there is no way to give a better option or that the collateral effects of doing so are worse. The solution inevitably ends up being a reduction of options and people being worse off. The old saying that the road to hell is paved with good intentions is old for a reason; it is true. People like Bloom think they are doing good by restricting trade when in fact they are doing quite the opposite. From a theological perspective, the devil never arrives with horns and cloven hooves, he arrives dressed in a suit talking about fairness and the need to save everyone

|1.31.08 @ 12:24PM|#

James,

Economists, on the whole, don't actually think that they wholly-amoral observations and conclusions drawn from economic studies are actually adequate to create a theory of ethics, morality, or politics. They generally realize that Economics describes only a part of the human experience.

The people you're talking about are market-fetishist ideologues, most of whom are not economists, and many of whom don't actually understand economics very well.

Demand Kurv!

"The difference, John, is that one is cooperative and one is not, and the author of the study (and Ron Bailey) have hypothesized that market-based behavior encourages cooperation and thus increases generosity."

That is true only if you define cooperative as necessity being altruistic. I would say that farmers and seed companies like Cargill are highly cooperative. Farmers tell Cargill what they need and Cargill produces it or produces new products and educates farmers (i.e. sales) about their use. It is a very synergistic relationship. The fact that both sides get rich doesn't make it any less cooperative. If you don't understand that, I am afraid Joe you do need some lecturing in basic economics.

|1.31.08 @ 12:25PM|#

Joe,

I think that you are hinting at something that is often missed in modern society: the difference between voting and participating, the difference between being a consumer or being a citizen, me wanting to get off and someone willing to be paid for it and actual love. So not all 'cooperation' is equal.

|1.31.08 @ 12:30PM|#

John,

That is true only if you define cooperative as necessity being altruistic.

That's not true. There is also the situation of two different people or groups sharing the same objective and working together for it.

I would say that farmers and seed companies like Cargill are highly cooperative. They could be described that way, but it would be using the term to mean something different than when two groups actually share an objective.

If you don't understand that, I am afraid Joe you do need some lecturing in basic economics.

Here's what I wrote, you condescending prick:

As the man says, we get our bread because of the baker's selfishness, not his generosity...It's really not a comment about the morality of transacting business with bakers. The guy who said that we get our bread from the baker's selfishness was Adam Smith, and he wasn't arguing that the baker was therefore bad. Do you THINK I'm having trouble with the point that both parties to a transaction get something out of it?

|1.31.08 @ 12:31PM|#

I think both sides of the argument are based on a billion tiny assumptions that don't line up with each other. Therefore, nobody's going to understand the premise of anyone else's argument and it's going to go on forever with people shouting "You don't get it, I do!"(I have to admit, I'm thinking the same thing right now).

Steven Horwitz|1.31.08 @ 12:31PM|#

Actual evil economist here (who like Ron, was an econ and philosophy double major).

In the passages leading up to Smith's famous quote about the butcher and the baker, he argues that the reason we rely on self-interest to generate social cooperation (and cooperation it is - the keyboard I'm typing on and the shirt I'm wearing were made through the cooperation, if unintentional, of millions) is that we don't know enough others well enough to engage in truly altruistic cooperation with them.

In other words, if we want to extend social cooperation with anonymous others, which is necessary for any decent level of human subsistence, we need to rely on self-interest to generate that cooperation because we simply do not know what enough other people want/need to provide it for them directly and altruistically.

Side note one: Mises almost titled *Human Action* as *Social Cooperation*. That phrase is one he uses a fair amount in that book and the ways in which markets generate it is an underlying theme.

Side note two: Hayek notes that the Greek word for exchange also meant "to admit into the community" and "to change from an enemy to a friend." Exchange leads to cooperation.

The interdependencies exchange creates are most certainly a form of social cooperation. The intentions behind such cooperation do not change the fact that cooperation is happening. All the people who contributed to the making of my shirt can legitimately be called "cooperators."

The "cooperative behavior" of two parties in a transaction amounts to each pursuing his own interest, not both interests at the same time, and those interests happening to align. Neither is actively working to achieve the other's purposes.

I believe this is inaccurate on a couple of counts.

First, any number of market transaction are predicated on one party actively working to achieve the other's purpose. Most if not all service transactions are that way, for example.

Second, I think you're confusing cooperative and altruistic behavior, whic are not the same thing. Altruistic behavior is when I work in your interest even though it is not also in my interest to do so that the behavior. If you and I have aligned interests, then my behavior isn't altruistic, but we are still cooperating.

Marketplaces are a mix of cooperative and competitive behaviors. To overgeneralize, you cooperate with the people you do transactions with, and you compete with other people trying to do transactions that you could also do. Some people you will never cooperate with, some you will never compete with, and some you will alternately compete with and cooperate with.

|1.31.08 @ 12:38PM|#

RC,

See above, about the difference between having objectives that align and sharing an objective.

Second, I think you're confusing cooperative and altruistic behavior No, I'M not. Bailey and Gintis are, but postulating that market-transactional behavior increases "gererosity." I'm saying that this isn't so. Yes, it can increase "cooperation," in the sense of working together to make a transaction happen, but no, that is not "generosity."

If you and I have aligned interests, then my behavior isn't altruistic, but we are still cooperating. That is exactly the point I've been making. I agree completely. I'm just pointing out that this is a different type of cooperation.

you cooperate with the people you do transactions with You also cooperate with the other people in your company, coop, or family to bring your goods to the transaction in the first place. Those are two different types of cooperation.

"In other words, if we want to extend social cooperation with anonymous others, which is necessary for any decent level of human subsistence, we need to rely on self-interest to generate that cooperation because we simply do not know what enough other people want/need to provide it for them directly and altruistically."

That is why central planning never works as well as the market. Beyond the corruption that goes with central planning, even if we could produce a race of incorruptable philosopher kings to do the planning, they still couldn't do as well as the market because they would never have the information to do so.

|1.31.08 @ 12:40PM|#

"If you and I have aligned interests, then my behavior isn't altruistic, but we are still cooperating. That is exactly the point I've been making. I agree completely. I'm just pointing out that this is a different type of cooperation."

That is true Joe, but unless you add some moral dimension to it that says that cooperating for reasons outside of material gain is morally superior to cooperating for profit, what difference does it make?

"The problem is not that economists are unreasonable people, it's that they're evil people

This is what you say when you cannot disprove the other guy's theory using facts.

And- markets encourage efficient allocation of resources.

|1.31.08 @ 12:43PM|#

That is true Joe, but unless you add some moral dimension to it that says that cooperating for reasons outside of material gain is morally superior to cooperating for profit, what difference does it make?

Once again John, it falsifies Gintis's hypothesis about market behavior increasing generosity.

|1.31.08 @ 12:49PM|#

Oh, and cooperating for reasons outside of material gain isn't necessarily morally superior to cooperating for profit.

It's just that tacking on some non-self-interested cooperation on top of the market-based cooperation you engage in is morally superior to only engaging in market-based cooperation.

Bill Gates did nothing bad by running Microsoft and making billions. In fact, what he did brought a great deal of good into the world. Then, when he donated all of that money, he brought even more good into the world.

|1.31.08 @ 12:55PM|#

Wait, did someone argue that only engaging in market behavior was in-itself generous?
I thought the argument was that people who engage in market-based transactions are more likely to be generous because of the types of relationships they have with others, not that the market transactions are in-and-of themselves altruistic.

Steve Verdon|1.31.08 @ 12:56PM|#

Because that would make too much sense. Everytime somebody reads about the results of a study, they run off all the variables that could confund the results...and upon reading the paper it is almost always the case that such variables are included in the analysis, hence their impact can be marginalized out.

|1.31.08 @ 12:59PM|#

Bill Gates did nothing bad by running Microsoft and making billions. In fact, what he did brought a great deal of good into the world. Then, when he donated all of that money, he brought even more good into the world.

I agree it was more altruistic, but I'm not convinced that his philanthropy will ever do as much to increase human happiness than Microsoft Inc. has done.

His personal wealth is a minor portion of the wealth generated by Microsoft directly which is only a minor portion of the increased wealth generated by his customers.

Reinmoose: Thanks.

|1.31.08 @ 1:00PM|#

I did read the study. And commented on it. You know, unlike yourself.

|1.31.08 @ 1:01PM|#

I believe that all transactions should be governed by a wise individual. That individual would be me. To satisfy joe's craving for social justice, I will send money to poor people when the whim strikes me. Largess!

There is the question of what, precisely, falls outside of the marketplace. The government is really just another market actor, albeit one with extraordinary powers. Just thinking about things from an economics perspective is limiting, and I think it's one of the grave weaknesses of economics as a science when inexpertly wielded by nonexperts (or by experts, for that matter). If I give money to a bum on the street, that's a type of market transaction, even if some people would like to suggest that it wasn't.

|1.31.08 @ 1:02PM|#

J sub D,

I agree it was more altruistic, but I'm not convinced that his philanthropy will ever do as much to increase human happiness than Microsoft Inc. has done.

That's not what I wrote. I wrote about what he did IN ADDITION TO running the business.

A + B > A

|1.31.08 @ 1:03PM|#

Reinmoose,

I thought the argument was that people who engage in market-based transactions are more likely to be generous because of the types of relationships they have with others, not that the market transactions are in-and-of themselves altruistic.

Gintis argued that the "types of relationships they have with others" increases altruistic generosity. Not just mutually-beneficial cooperation, but generosity.

"Altruistic behavior is when I work in your interest even though it is not also in my interest to do so that the behavior."

Also known as "co-dependence"

And is generosity always good? Ask the wife of a man who spent his paycheck on rounds of drinks for his friends after work.

|1.31.08 @ 1:05PM|#

More specifically, he identifies greater altruistic generosity among market-traders, and hypothesizes that it was caused by the non-altruistic market-based transactions.

|1.31.08 @ 1:06PM|#

Gintis argued that the "types of relationships they have with others" increases altruistic generosity. Not just mutually-beneficial cooperation, but generosity.

Umm.. isn't that what I said?

|1.31.08 @ 1:08PM|#

Yes. Why do you ask?

|1.31.08 @ 1:09PM|#

well, I wondered why you felt the need to repeat back to me what I said. That's all

|1.31.08 @ 1:11PM|#

Because I thought it would be uncivil to write "Umm...isn't that what I just said?" in response to your question. That's all.

Except you are not arguing for a more voluntarily generous society joe, you are argueing for an authoritarian state structure designed to extract tribute at gunpoint.

The flaw in your thinking joe is that:

1. You see violenence (i.e. the state) as the only method available to help the poor. In reality, there are any number of methods of ensuring social welfare that don't involve violent monopolies of power.

2. You assume that the state has the ability or incentive to help the poor. In reality, the state is likely to use the tribute it extracts for graft and warfare. Politicians elected to "help the poor" have every incentive to keep the poor desperate and miserable and totally dependent for survival.

3. You assume that the massive taxation, control, and domination by a tiny elite nessicary to implement your "welfare state" has no negative effects on the poor. In reality, the means designed to help that one poor person may in fact create several additional poor people. Inefficient means of addressing poverty creates additional poverty.

You are trying to present a false alternative, that if we aren't willing to be subservient slaves to the political machine, we must be "against the poor". But in reality, we can support social welfare and oppose the state (and its co-opting of the social welfare issue to promote its own power).

|1.31.08 @ 1:12PM|#

It's called "active listening" - it's in all the Conflict Resolution - Psych 101 books.

|1.31.08 @ 1:15PM|#

Oh I see, you took offense to my comment. Gottcha.

|1.31.08 @ 1:17PM|#

joe, I misinterprtetd what you meant. You were using more = additional. I read it as more = greater. We'll fight about somethig else. OK?

Sam Grove|1.31.08 @ 1:20PM|#

Then, when he donated all of that money, he brought even more good into the world.

Actually, we don't know that. What is the evidence?

Do we assume because he 'donated' the money, good was done?

How can we tell if good was the result?

And if some good was actually done, how can we compare relative value to the case if he had used the money to start another business?

In the case of 'altruistic' giving, we only have for evidence of good done the intention of doing good. Good is assumed from the act of giving, not from the results.

In the case of market transaction, we have the evidence of the participants having engaged in the transaction.

Sam Grove|1.31.08 @ 1:26PM|#

A + B > A

Unless 'B' is negative in which case A + B < A

|1.31.08 @ 1:35PM|#

Rex,

Just one, do you think it might be possible for you to take a stab at discussing what I actually write?

Where, anywhere on this thread, have I argued for anything like what you are assigning to me?

I'm not interested in going over that ground with you YET AGAIN. We have a subject to discuss, thanks.

|1.31.08 @ 1:36PM|#

J Sub,

We'll fight about somethig else. OK?

The *&%# we will!

;-)

|1.31.08 @ 1:38PM|#

Sam,

In the cast of Bill Gates' altruistic giving, and pretty much every other work of altruistic giving, we are just as able to observe the on-the-ground results as we are with market transactions.

We know that some six- or seven-digit number of Africans have been innoculated from various nasty diseases who wouldn't have otherwise been, for example.

|1.31.08 @ 1:44PM|#

What if Bill Gates had started a chain of hot-dog carts instead of Microsoft? What if he'd invested all profits after 2002 into index funds?

We could do this all day, Sam Grove. I'm willing to postulate that his businesses decisions brought good into the world, if you are willing to posulate that his highly-regarded philanthropic donations brought good into the world, too.

Deal?

|1.31.08 @ 1:47PM|#

Do we really need to be dicussing whether or not the altruistic behavior is beneficial (or as beneficial as additional market behavior) in order to have a discussion about whether or not market participation increases the likelihood that people will behave altruistically?

|1.31.08 @ 1:49PM|#

I vote no.

|1.31.08 @ 1:51PM|#

And Ron:
exactly how are economics and philosophy competing interests?

Sam Grove|1.31.08 @ 1:51PM|#

We know that some six- or seven-digit number of Africans have been innoculated from various nasty diseases who wouldn't have otherwise been, for example.

That definitely sounds good.

But what is 'C' were, start a number of business opportunities in the same area so that, in addition to being immunized, those same people are able climb out of poverty, afford to eat well, and no longer have to rely on the charity of Bill Gates.

In that case, might not A + C > A + B?

|1.31.08 @ 1:54PM|#

As I said, Sam, we could just as easily replace A with C, too.

Why would we do that?

|1.31.08 @ 1:57PM|#

Also, Sam, a couple points about your hypothetical:

1. Not dying in childhood from preventable disease is even more necessary to being able to start a business than having Bill Gates' investment capital, and

2. The Gates Foundation does fund the type of programs you mention, and

3. Would not a grant or subsidized loan, or even just business investment that Gates knows won't be as profitable as other business investments, provided to allow local start-ups to get off the ground be just as charitable as funding immunizations?

Sam Grove|1.31.08 @ 2:01PM|#

Excuse me, should read: "What if 'C' were:"

|1.31.08 @ 2:01PM|#

Just arguing semantics now, but I was a philosophy major, too. :)

The "cooperative behavior" of two parties in a transaction amounts to each pursuing his own interest, not both interests at the same time, and those interests happening to align. Neither is actively working to achieve the other's purposes.

This is different from what most people would define as "cooperative behavior," which is for more than one person to work towards a goal they have in common.

As noted above, in "service" transactions the seller of services is indeed working to achieve the buyer's purposes - that's what he's hired for.

Even in transactions for goods, both parties are working toward the common goal of consummating the transaction.

Is the difference that you're trying to articulate the difference between "pure" cooperation where there is absolute unity of purpose, and those in which there is only partial unity of purpose, with each party also having their own individual goals?

If so, I would say that there is no such thing as absolute unity of purpose, and thus no pure cooperation in any realm, market or otherwise.

You also cooperate with the other people in your company, coop, or family to bring your goods to the transaction in the first place. Those are two different types of cooperation.

Not really. A "firm" (as economists call a company, coop, or other economic unit) is just a shortcut for a bundle of individual transactions that are expected to be highly persistent day to day. Members of a firm exhibit the same mix of shared and individual purposes as participants in an individual transaction.

Sam Grove|1.31.08 @ 2:06PM|#

"3"

No, pure charity doesn't expand the market so much as help people for a while.

And I'm not opposed to charity, nor suggesting that it never does good, just saying that we can't assume that it does good from the mere act of it being charity.

In market transactions, we can usually assume that the voluntary exchange has left participants better off...because they participated.

In the case of charity, we must pay close attention to the results.

Case in point: foreign aid.

|1.31.08 @ 2:07PM|#

I don't know if the free market brings more generosity into the world, but it brings a greater sense of fairness to cultures. As people interact more and more with people they don't know, they have to establish rules of interaction to get what they want from the strangers. That, in turn, establishes a culture of fair play and leads to smoother and greater number of interactions. You will have examples of people that think they can beat the system through either knowledge or personal power, but they are anomilies to the overall result of increased free trade interactions and most of them encounter a situation in which they lose anyway (encounter someone with greater power and knowledge than they). Their example then reverberates down through the cultures to reinforce the belief in the simple rules of engagement and influence even more people to play by established norms. Whether or not they become more altruistic in their interactions is irrelevant, as societal peace is encouraged through people coming together to agree on terms of interaction rather than equilibrium of wealth.

Bernd|1.31.08 @ 2:09PM|#

joe,

A + B > A B > 0

I, for my part, have lost a lot of faith in Bill Gates' philantropy.

I think we can both agree that foreign aid in the standard model is not just ineffective, but a net evil in that it mostly pays despots, thereby not only strengthening them but creating an incentive to become ruler - in much of Africa, i.e., waging civil war.

Gates uses his credibility as a major philantropist to call for more of it.

Not that I think that I'll ever convince you about most things; as the resident thoughtful liberal, to me you're mostly a great example for the fact that reasonable people can disagree.

There should be a <=> between A + B > A and B > 0. But of course, to a HTML parser, that's a tag.

|1.31.08 @ 2:14PM|#

RC,

The purpose of the seller of services is to get paid. Making the buyer happy is just a means to an end. Once again, their objectives are not the same, just aligned.

Even in transactions for goods, both parties are working toward the common goal of consummating the transaction. Consumating the transaction is neither party's goal, most of the time. The buyer wants to get stuff, and the seller wants to get paid. Consumating the transaction is just a means to an end.

If so, I would say that there is no such thing as absolute unity of purpose, and thus no pure cooperation in any realm, market or otherwise. I guess one can make the point that there is no pure anything in our universe. Did you know that your desk isn't solid, because most of the volume of its atoms is empty space? I don't think this gets us anywhere.

I guess you could say that two guys building a wall together don't have "absolute unity of purpose," because they are each looking to get paid themselves. All that this observation does is weaken the author's theory that people engaging in voluntary transactions become more altruistically generous.

|1.31.08 @ 2:17PM|#

Sam Grove,

In market transactions, we can usually assume that the voluntary exchange has left participants better off...because they participated.

No, we can assume that they THINK they've been made better off, because they chose to take part.

We can just as credibly assume that charity recipients THINK they're better off, because they accept the charity.

|1.31.08 @ 2:21PM|#

joe,

in the long term, trades are only repeatedly carried out if both parties benefit and I'm not arrogant enough to believe that someone who repeatedly makes bad decisions (and suffers the consequences therein) needs to be kept safe from himself.

All,

I don't deny that there are problems associated with charity. There are also benefits associated with it that market transactions can't provide, such as filling needs where the poverty of the needy prevents or restrains their real demand from translating into market demand.

We could have an anecdote war all day about paces where the market model produces bad results, and where the charitable model produces bad results. I don't see the point, though. Let's not.

|1.31.08 @ 2:22PM|#

Not interested, LiT.

|1.31.08 @ 2:23PM|#

Not interested in arguing about policy. Not interested in stacking up charity vs. market transactions as if the two are mutually exclusive.

Nothing to be gained there except a perverse verion of GO TEAM RED!

Lost_In_Translation|1.31.08 @ 2:24PM|#

As charity is voluntary, I don't see why we'd be arguing against it. When wealth redistribution is mandatory, that's not charity.

I must have missed the cherring of team red....

|1.31.08 @ 2:25PM|#

And there's your problem, LiT: you think this is a conversation about "what should we do?"

It's not.

|1.31.08 @ 2:26PM|#

Although some systems are better than others, it's we humans that make them as flawed as they are. Even libertopia to me is just a less flawed system than, say, our current one. Nothing is going to make everyone happy and equally wealthy--not unless we aim for universal misery and poverty, anyway.

When wealth redistribution is mandatory, that's not charity.

Yet another off-topic discussion I'm not interested in having.

I know, how about if we hash out the question of whether, and if so how, engaging in market behavior makes people more generous?

|1.31.08 @ 2:27PM|#

I guess you could say that two guys building a wall together don't have "absolute unity of purpose," because they are each looking to get paid themselves. All that this observation does is weaken the author's theory that people engaging in voluntary transactions become more altruistically generous.

I don't see how. Just because a person engages in activity to satisfy a self-interest does not mean that they do not also engage in more altruistic behavior. While I'm waiting to read the paper on my flight this afternoon, I would wager that greater wealth and standard of living (gained through the efficiency of markets and pursuit of money/goods in one's own interest) increases the ability of someone to perform generous acts (over having less wealth in a non-market-oriented economy). Therefore, unless participation in markets decreases the tendency of someone to perform these generous acts, the potential to perform them certainly increases, and I would guess the instance of it increases as well.

Lost_In_Translation|1.31.08 @ 2:32PM|#

joe,

Ok, to stay on topic, I would say that free market is or loosely correlated to an increase in generosity in that people who have achieved a certain wealth and have a certain psychological reward profile will be generous. Free markets affect the former, but not necessarily the latter.

|1.31.08 @ 2:33PM|#

Reinmoose,

I'm not saying that there is a negative causal relationship.

I am taking exception to the author's hypothesis that there is a positive causal relationship.

I would wager that greater wealth and standard of living (gained through the efficiency of markets and pursuit of money/goods in one's own interest) increases the ability of someone to perform generous acts (over having less wealth in a non-market-oriented economy). That's not his thesis. He claims that engaging in trade changes the way human beings view other human beings, and the proper way to interact with them, and that their greater propensity to engage in altruistic behavior measures this, and is caused by it.

Lost_In_Translation|1.31.08 @ 2:34PM|#

Lost_In_Translation|1.31.08 @ 2:36PM|#

Joe,

I think there is some interpretation on how strong the causal relationship is that the author is proposing. I wouldn't say its necessairly a direct trend upwards, but historical data would probably show that the slope tends to be in the same direction and not flat.

|1.31.08 @ 2:39PM|#

This is a great discussion, but I have to concentrate on work for a little while.

John, Ron, you see how interesting things can get when you don't simply assume that I don't know what I'm talking about and know nothing about economics?

Has anybody ever seen the scene in Shrek 2 when Shrek and Donkey first meet, and coo at, the poor, helpless, harmless little pussy cat?

I keep getting that whenever there's a thread about economic behavior. It's past time to start realizing that being a liberal does not render one an illiterate.

|1.31.08 @ 2:40PM|#

LIT,

I find your "greater wealth" theory a lot stronger than the author's "more generous attitudes" theory.

|1.31.08 @ 2:41PM|#

Oh, I wasn't commenting on what I thought the study said. I was just making an observation about how engaging in markets might lead to a greater liklihood for generosity.

But you're right, that is the angle the study is taking, and I'll better be able to evaluate it when I read it on the plane later.

Lost_In_Translation|1.31.08 @ 2:41PM|#

It's past time to start realizing that being a liberal does not render one an illiterate.

I thought liberals were just bad at math?

I keed, I keed.

|1.31.08 @ 2:46PM|#

Reinmoose,

I wouldn't say I'm more generous because I've learned how to successfully transact freely in the market, but my success in those transactions allow me to redistribute wealth as I might like because I don't worry anymore about meeting my wants.

Those were pretty much my feeling as well. Of course, in order to accept this, you have to also accept that markets lead to greater creation of wealth (which I believe they do, not everyone does, of course).

|1.31.08 @ 2:52PM|#

Of course, in order to accept this, you have to also accept that markets lead to greater creation of wealth (which I believe they do, not everyone does, of course).

Another half century of anecdotal data should help (of course we could always be relegated to a Radley Balko type string of "isolated incidents")

|1.31.08 @ 2:54PM|#

"Just because a person engages in activity to satisfy a self-interest does not mean that they do not also engage in more altruistic behavior"

The opposite is also true: A person engages in altruistic behavior to satisfy some self interest (i.e. the need to feel better about oneself, to make the world a bettr place, to feel morally superior to others, to get laid, etc...)
Self-interest and altruism are not mutually exclusive. Therefore, neither is morally superior to the other.

Lost_In_Translation|1.31.08 @ 2:56PM|#

A person engages in altruistic behavior to satisfy some self interest...(to get laid)...

ain't that the truth

|1.31.08 @ 3:20PM|#

Then, when he donated all of that money, he brought even more good into the world.

Prove that, joe. I think he wasted a lot of it, when it could have been reinvested into productive enterprises. And I think he did it for his own *selfish* idea of his own legacy.

|1.31.08 @ 3:33PM|#

As I noted above, Bloom does NOT think that economists are evil. I have now added his clarification to the post above. I include it here now:

"Just to clarify, my remark about evil economists was a joke. This was obvious at the conference itself, though unfortunately not from the NYTimes article. After I said it, people laughed, and then I said, "To put it more fairly ...". and went on to argue that economists tend to reason consequentially, and are less sensitive than lay people to considerations such as taboo, disgust, status quo bias, and so on. And I tend to agree with them on this. In particular, as I argued in the discussion period, disgust is very unreliable as a guide to moral behavior."

Dave T|1.31.08 @ 3:36PM|#

Al Roth did an excellent talk a google where he talked about market failures, market design, and the topic of repugnance is brought up (with respect to organ markets)

Link Here

adrian|1.31.08 @ 3:45PM|#

rana: altruism is selfless. Giving to satisfy a self interest is not altruism. And one is morally superior to the other when you realize altruism is immoral.

Neu Mejican|1.31.08 @ 3:47PM|#

Ron Bailey,

It is nice that have posted Bloom's clarification.

I wonder why you didn't include the context from the Times article that made it clear that there was more to the quote than was going on...

Why just post the "gotcha" section without context? You could have gotten context from the video of the talk which is available on one of the links that you provided...

"It's just a blog post" shouldn't be an excuse for lazy journalism, imho.

The video is here
http://www.aei.org/events/eventID.1623,filter.all,type.past/event_detail.asp#

Bloom starts talking at around minute 25...

Mike Laursen|1.31.08 @ 3:49PM|#

"Just to clarify, my remark about evil economists was a joke. This was obvious at the conference itself, though unfortunately not from the NYTimes article."

I don't suppose we could get the New York Times to start printing smilies in their stories.

|1.31.08 @ 3:57PM|#

rana: altruism is selfless. Giving to satisfy a self interest is not altruism. And one is morally superior to the other when you realize altruism is immoral.

for all practical purposes then, nothing is altruistic.

|1.31.08 @ 4:00PM|#

Lost in translation, thanks. That is precisely the point.

|1.31.08 @ 4:06PM|#

Adrian,
name any act of altruism that does not involve some element of self-interest. (note: "self-interest" does not equal "self-gain").
Even Mother Teresa's actions were driven by her own interests, one of them being to propagate the word of God as it may be.

Neu Mejican|1.31.08 @ 4:22PM|#

rana,

Sorry, but that is just empty sophistry.

An act of altruism is one that has more cost to the actor than gain, but is done anyway.

|1.31.08 @ 4:27PM|#

Neu Mejican,

Depends on your value scale. You could in theory value the joy you feel at making someone else happy than the utility of using that money to buy a car.

Neu Mejican|1.31.08 @ 4:30PM|#

Lost in Translation,

To do the calculation you have to standardize the scales...if your benefit outweighs your cost, it wasn't altruistic...if cost outweighs benefit, it was.

|1.31.08 @ 4:36PM|#

NM,

to standardize the scales, you've got to define "cost" and "benefit"

adrian|1.31.08 @ 4:51PM|#

i would say whenever you are driven by guilt or force to give.

|1.31.08 @ 4:54PM|#

Neu Mejican,
Although what you say might be true, you miss the point.
The point is what motivates people to do altruistic acts. You can judge an act to be altruistic or not with some information, but its difficult to judge or understand what motivated that altruistic act.

To use the example of Bill Gates donating money to charity; many would consider this an altruistic act. But we dont know what motivated Bill to give his money away. Maybe he wanted to change his image of the greedy/capitalist businessman, maybe it made him feel good, maybe he was pissed at his family and didnt want to leave them any money, maybe he lost a bet, we dont know.

|1.31.08 @ 5:01PM|#

"An act of altruism is one that has more cost to the actor than gain, but is done anyway."

We can go round and round debating what would be the cost or the benefit. In the end, that is for every individual to decide for himself. As Lost in Translation said by "your value scale".
Im not saying altruism and self-interest are the same (how could they be?) but one does not exclude the other.

Neu Mejican|1.31.08 @ 5:02PM|#

rana,

What motivates people to do altruistic acts is a very different issue than what constitutes an altruistic act.

If the moral value of the act is dependent upon the motivation behind that act, then you need to know the motivation. Otherwise it is not important.

So, we could redefine altruistic as an act that benefits another even though I perceive it to be against my own benefit.

What motivation would I have for such an act?

Kindness.

adrian|1.31.08 @ 5:06PM|#

so is the ultimate act of kindness giving everything you possess away? including your mind? is there anything left of you at this point?

so ultimate kindness = suicide?

might help global warming...

Neu Mejican|1.31.08 @ 5:07PM|#

It is important to deconflate the concepts of altruism and reciprocal altruism.

In the first, there is no time function.
In the second, my current costs are weighed against the potential gains from reciprocal altruism in the future...in this case, even though I may not get anything back from the person I am helping...promoting the value of altruistic behavior in the group is of value to me because it may lead to a future benefit for me...yadda yadda...

There is some nice research on this type of stuff in primates...

Neu Mejican|1.31.08 @ 5:08PM|#

rana,

When you commit suicide you take away from me the positive contributions that your existence has on the world.

NM|1.31.08 @ 5:09PM|#

oops,

I mean Adrian

|1.31.08 @ 5:12PM|#

"If the moral value of the act is dependent upon the motivation behind that act, then you need to know the motivation. Otherwise it is not important."

Im not arguing the moral value of an altruistic or self-interested act.
The only reason I mention motivation is because that is where self-interest lies. Meaning, that altruistic acts, as you define them, "benefits another even though I perceive it to be against my own benefit", can be motivated by the any type of self-interest.

|1.31.08 @ 5:15PM|#

"When you commit suicide you take away from me the positive contributions that your existence has on the world."

Would you say this to be true for suicide bombers? Maybe so. I dont know. But Im pretty sure that these suicide bombers are killing themselves for a perceived benefit (70 virgins in heaven, family pride, etc).

SIV|1.31.08 @ 5:33PM|#

Of course, we now find some market transactions repugnant that earlier generations would not have. Slavery and bear-baiting come to mind.

How are these things alike? How are they different?

Humans have rights
Bears and dogs do not

Should we prohibit ALL market transactions that "we" find repugnant?

|1.31.08 @ 5:39PM|#

adrian,

See if this helps:

"the ultimate act of kindness":unenlightened self-interest::non-absurd acts of altruism:enlightened self-interest

|1.31.08 @ 5:40PM|#

No virgins, only raisins.

http://www.dailygalaxy.com/my_weblog/2008/01/the-great-koran.html

Jamie Kelly,

Prove the opposite.

SIV|1.31.08 @ 5:41PM|#

Unless I missed it Pinker is talking about "cat burning".I don't see how that is a market transaction, much less a sport. Was there some wealthy village idiot in 16th Century France who kept betting the cat wouldn't burn to death?

|1.31.08 @ 5:53PM|#

"What motivation would I have for such an act?"
Neu mejican

You are co-dependent? You have no self esteem?
You believe yourself inferior?

Sometimes the motivation may be kindness, other times it may be mixed with not-so-noble reasons.

|1.31.08 @ 6:00PM|#

People can engage in market transactions for not-so-noble motives, too.

So?

Salvius|1.31.08 @ 6:09PM|#

"Give a man a fire and he's warm for a day, but set fire to him and he's warm for the rest of his life."
-- Terry Pratchett, Jingo

Neu Mejican|1.31.08 @ 6:18PM|#

rana,

Meaning, that altruistic acts, as you define them, "benefits another even though I perceive it to be against my own benefit", can be motivated by the any type of self-interest.

If my subjective judgment is that the act is against my own benefit, but I do it anyway because it benefits you, I have worked against self-interest, by defintion.

As such, it can't be motivated by self-interest.

Neu Mejican|1.31.08 @ 6:20PM|#

rana,

Neu Mejican|1.31.08 @ 6:21PM|#

And one is morally superior to the other when you realize altruism is immoral.

Seemed to be about morality to me...sorry I misunderstood.

|1.31.08 @ 7:15PM|#

If my subjective judgment is that the act is against my own benefit, but I do it anyway because it benefits you, I have worked against self-interest, by defintion.

or you're masochistic....

I think the only self sacrifice I could prove is giving my life to save another...because at that point there's really no upside for you...especially if you don't believe in afterlife...

Sam Grove|1.31.08 @ 8:18PM|#

I suggest that participating in market transactions allows people to be more generous because they tend to be wealthier than people who do not engage in market transactions.

Also, many of them can remember being lower on the economic ladder thus inducing a bit of sympathy in many cases.

Neu Mejican|1.31.08 @ 8:57PM|#

Lost In Translation,

Masochistic...that would mean that I subjectively experienced a benefit from my act...not altruistic.

Mike Laursen|2.1.08 @ 12:23AM|#

We had a fish market up the street that was pretty repugnant. Especially in the afternoons.

|2.1.08 @ 8:50AM|#

"And one is morally superior to the other when you realize altruism is immoral."

"Seemed to be about morality to me...sorry I misunderstood"

Neu Mx, The first quote is not mine.

|2.1.08 @ 10:55AM|#

altruism is immoral

war is peace

freedom is slavery

hate is love

Neu Mejican|2.1.08 @ 11:07AM|#

rana,

mia culpa...Adrian's quote.

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