Here’s why recycling poses a policy dilemma: To keep people from dumping their trash on their neighbor’s lawns (or, when they burn it, in their neighbor’s lungs), we have to keep the price of landfill space artificially low. But once you’ve made landfill space cheap, you weaken the incentive to recycle, so arguably we get too little recycling. One solution is to pump up that incentive by casting recycling as a moral imperative. Unfortunately, once people believe recycling is a moral obligation, we’re liable to get too much of it.
This month’s issue of Cato Unbound is titled “The Political Economy of Recycling”, with a lead essay by Michael Munger of Duke University expanding on these and related points, with responses by Edward Humes, Melissa Walsh Innes and myself.
Over the course of the next month or so, we’ll be posting responses and re-responses to each others’ essays, as the mood strikes us. The best of your comments here might well find their way into some of my posted responses there.
Below the fold, a brief teaser from my essay:
When you cast policy issues in moral terms, you degrade the character of public discourse. You lead people to see conflicting priorities as an occasion for battle, rather than an occasion for compromise. You send the message that policy is best decided by appeals to one’s inner conscience (or, more likely, to the polemics of demagogues), rather than by appeals to impersonal cost-benefit analysis. And this is a very bad thing. If overusing landfills is a bad habit, then branding everything you don’t like as evil is a far worse one.
If we’re determined to instill blind moral instincts that make people behave better most of the time, I’d like to nominate a blind moral instinct to respect price signals and the individual choices that underlie them—an instinct, for example, to recoil from judging and undercutting other people’s voluntary arrangements. I like it when my neighbors dispose of their beer cans properly. I’d like it even more if they’d stop trying to dictate other people’s wages, working conditions, housing contracts, and drug habits.
By concentrating our moral resources on recycling, we not only crowd out that nobler mission; we actually undercut it, by sending the message that price signals are unreliable. Of course, some price signals are unreliable, but the whole point of the moral suasion agenda is to get things right most of the time, not all of the time. Every time a misguided locavore makes the world a poorer place by choosing expensive local food, it’s because she’s absorbed the false lesson that prices are generally a poor measure of social cost – a lesson first absorbed, I suspect, at the feet of the recycling propagandists she first met in elementary school.
Since garbage collection is typically a governmental service, the people with garbage don’t directly pay for their garbage collection; this again reduces the usefulness of price signals. (If recycling items reduces the amount of remaining trash, and this reduced the price you’d have to pay to get rid of it. that would encourage recycling).
Artificially reducing the price of landfills would make this worse if you directly pay, but it doesn’t even get that far since you don’t pay directly.
In Steve Landsburg’s contribution to the Cato discussion is;
‘I think we should generally be cautious about labeling people as sinners.’
With which I wholeheartedly agree, so I’m requesting that he remove the picture of Joe McCarthy from the top of his previous post, ‘The Story Darkens’, which is a follow up to his, ‘Lies and Lying Liars’.
Unless that is, he can produce even one example of Joe McCarthy being a ‘lying liar’–at least regarding his anti-communist efforts, as presumably, McCarthy, being a politician, did bend the truth occasionally when campaigning.
I’ll even give him a head start; don’t suggest ‘I have here in my hand a list of 57 names…’. He did have at least that many names, and all of them were at the very least sympathetic to Communism.
Don’t choose Annie Lee Moss, John Stewart Stewart Service, Owen Latimore, Gustavo Duran, nor George C. Marshall. He was correct in what he said about all of them.
“When you cast policy issues in moral terms, you degrade the character of public discourse. ”
The verb for this is to bearce.
What don’t we adjust the prices of both Recycling and Trash, so that the appropriate amount of each get’s used. Or is there a simultaneity thing that makes that more difficult?
@ Ken B,
You’ve italicized the conversation again. What the Heck?
See if this helps
Did it?
@Daniel #4
“Wh[y] don’t we adjust the prices of both Recycling and Trash, so that the appropriate amount of each get’s used.”
Appropriate for what? Or for whom?
In many places of Europe, including where I live, the tax on garbage collection is a function of quantity. Sorted garbage (recycleable) is collected at zero marginal cost. Over 70% of garbage is recycled.
Most trash cans have a lock (to avoid freeriders).
@Todd,
I’m not really sure in this case. I guess you would want to pick the subsidy that properly adjusts for the cost of not recycling but obviously I see how difficult this would be given that in the mind of the consumer trash and recycling are almost perfect substitutes in terms of quality and so the indifference curve is definitely not smooth and thus whatever is cheaper from the consumer’s standpoint would be what they use. Why couldn’t we decide on the appropriate amount of use for each in a given time period and just make recycling cheap for that amount and make trash cheaper after that level is reached. Again, I’m just speculating here, I’m not really sure how difficult it is to decide what the appropriate amount would be?
Okay didn’t read stefano’s statement before I posted. That system maoes sense to me.
If the goal is to promote consideration of public policy outside the constraints of moral terms, I can think of better language for talking about the issue than “degrade the character of public discourse.” How ‘bout this language instead?
1. Both price signals and moral suasion influence people’s behavior; in this sense, we can regard price signals and moral suasion as substitutes for each other.
2. Generally price signals provide the more reliable guide to socially optimal behavior. Among the advantages of price signals:
A. They adjust to reflect current data.
B. In contemporary capitalist societies, people regularly confront the frustration of not being about to consume things they cannot afford, and tend to respond to this frustration peacefully. People are not always so reconciled to the frustration of seeing their morals flouted; they may be more prone to respond to this frustration violently.
3. Sometimes price signals fail to promote socially optimal behavior. Under these circumstances, moral suasion sometimes provides a second-best remedy for promoting socially optimal behavior.
4. Sometimes moral suasion also fails to promote socially optimal behavior.
I don’t expect anything I’ve said above would come as a big surprise to readers of Cato Unbound — except, perhaps, the idea of treating moral suasion as a tool for dealing with market failure. In contrast:
I can’t wait to see Landsburg persuade the readers of Cato Unbound that violations of their views of autonomy rights – taxation, land use regulation, etc. — should be regarded not as occasions for battle, but occasions for compromise. Libertarians are not known for their ideological flexibility.
Ok. And every time a misguided corporate executive or banker makes the world a poorer place by choosing to engage in short-term strategies that will maximize his bonus at the expense of the welfare of his firm and society, it’s because he’s absorbed the false lesson that morals are a poor measure of social cost – a lesson first absorbed, I suspect, at the feet of free market fundamentalists such as Ayn Rand and Milton Friedman.
So – in round figures, what percentage of the world’s wealth has been destroyed by locovores?
nobody.really: I suspect Cato might have done better to invite you to write this instead of me.
Steve, have you considered the possibility that some people, including some environmentalists and locovores, don’t share your belief in the social welfare criterion, so that even if they thought that prices accurately reflected social costs, that may not be good enough in their view? Like they might believe that we have a responsibility to take care of the environment and the planet, even if it doesn’t increase economic efficiency.
Also, how can you disagree with casting policy questions in moral terms? Isn’t the very use of “impersonal cost-benefit analysis” to make policy decisions premised on a certain system of consequentialist ethics, one in which, as you said, you “respect price signals and the individual choices that underlie them”?
In response to nobody.really:
First, your swipe at Friedman sneaks in an assumption that is at odds not only with what Friedman said in his 1970 NY Times Magazine article (to which you implicitly refer), but also with fairly standard economic theory. Specifically, you assume that corporate executives’s self-interest in running their firms is generally, or at least often, at odds with the long-run interests of their shareholders and of the general public. While such an assumption is unquestioned in the economically uninformed media space, it is a highly questionable one – save when government gives corporations the ability, through subsidies for example, to off-load their costs onto the general public. This is no place to rehash the economic argument or even to give any long list of citations, but the literature on the market for corporate control – in its modern form dating back to Henry Manne’s Feb. 1965 JPE article – is available for you to read.
Second, how much wealth has been CREATED by locovorism (or other environmental fads)? Or, asked only somewhat differently: how much wealth for society at large has been CREATED by environmentalists compared to the amount of net wealth for society at large that has been created by entrepreneurs and corporate executives who are guided chiefly by price signals?
My father ran a machine shop. The anithesis of a “green business” but, way back in 1960 they recycled. A machine shop starts with a chunk of metal and uses lathes and milling machines to cut away all the metal that doesn’t look like the finished part. If they made a part that weighed 1 lb. they probably produced 1 lb of metal chips doing it. Steel chips were worth very little. You needed to pay someone to haul them away. Copper chips were a different story. You could get real money for those. Usually you cut a deal with the scrap man. He’d buy the copper chips, maybe at a tad below market price and he’d take the steel chips away for free. All this happened in a commercial market – a rather small specialty market at that. It all happened because both my father and the scrap man benefited from the transaction. The idea of morality entering the conversation of steel and copper chips would have been beyond absurd. Why is it so different with household waste? And isn’t the way we deal with the issue of household waste today beyond absurd?
nobody.really: To follow up on Don Boudreaux’s comment —-
I do like your points 1-4 very much. But I think the analogy at the end of your comment fails badly. The locavore does something socially bad because s/he has been misled into thinking it’s socially useful. The corporate executive in your example does something socially bad not because he’s been misled, but because he elevates his own interests over others’. Those are very different problems, so I think your analogy is a poor one.
I also am inclined to reiterate Don’s point that the locavore is unlikely to be doing much collateral good along the way, whereas the corporate exec is likely to be doing a lot of offsetting good. But unlike Don, I think that’s tangential to the main point, which is that your analogy fails completely in the first place.
Steve, this might be a nick-picky, because I think you’re probably right, but could your last comment not be rephrased as
“The locavore does something socially bad because he elevated his own interests (feeling socially conscious) over the interests of others (who might not feel inclined to buy locally). The corporate executive does something socially bad because he has been misled to into thinking no one else in the world matters.”
Is there any some amount of symmetry in the analogy? How exactly are they different?
Steve,
“You send the message that policy is best decided by appeals to one’s inner conscience (or, more likely, to the polemics of demagogues), rather than by appeals to impersonal cost-benefit analysis”
I’d like to ask what you mean by “impersonal cost-benefit analysis.” I often here this as justification for ignoring very large costs just because they’re difficult to put an exact value on. I hate to inject hyperbole here but I think the value of human life is often ignored just because it’s difficult to ascertain. For example, after the Oklahoma tornadoes hit I heard a news report interviewing the city manager where people died. He was talking about why he was opposed to adding safe shelters for schools in the often hit town. His reasoning was essentially that it’s impossible to put a value on human life whereas the cost of construction is readily apparent.
This line of reasoning disturbed me, mainly because I’ve often heard this repeated by other politicians and sometimes even economists. This is why I believe sometimes cost-benefit analysis (when it involves large incalculable costs) can not be impersonal but must involve some intuition. Economists have tried to, for example, put a value on individual lives with QALY and some constant value based on average present valued future wages, but it’s easy to see why this is not a perfect calculation. Is someone’s life worth more just because they have a higher wage? This I think would be the very lower bound estimate as there is value to life outside of your explicit marginal benefit given to society in exchange for wages (and sometimes wages don’t properly reflect this either).
I’m not saying that we shouldn’t conduct cost-benefit analysis, I’m just saying we can’t always conduct a completely impersonal one when certain costs and benefits are extremely difficult to calculate.
Also feel free to delete this if you think it’s too off topic, it’s just been rattling around in my brain for a while now and I wanted to get everyone’s input on it and I couldn’t find a better place to do it than this post.
Daniel:
I often here this as justification for ignoring very large costs just because they’re difficult to put an exact value on. I hate to inject hyperbole here but I think the value of human life is often ignored just because it’s difficult to ascertain.
This is like criticizing architecture because architects routinely forget that buildings need foundations, or criticizing medicine because doctors so often ignore the circulatory system. In other words, it hasn’t the slightest resemblance to actual practice.
Steve,
In what way? I know that there’s set values at federal agencies for valuing human life, but it requires a fair bit of value judgement and so it can not really said to be impersonal can it? In lew of someone explicitly placing a value on human, in what way is it accounted for in markets? I’ve also been chastised on this blog for bringing up the value of human life in health care discussions because I’m injecting “emotion” into the debate when we talk about health prices and subsidies. My question is then, how is it injecting emotion into a debate to talk about the foundation of a building when talking about architecture or the circulatory system when talking about medicine?
Even if we get the costs, benefits and incentives all fine and dandy at the garbage disposal end, there would be, I suspect, huge distortions still.
This is because, I suspect, resources and raw materials are not valued as highly as they ought to be.
When bauxite is discovered on government land, is there an auction to sell off the mining permits? Or are mining leases just “granted”? If the latter, then surely the price of unrecycled aluminum is artificially low?
Or am I just being ignorant here?
Keshav,
“have you considered the possibility that some people, including some environmentalists and locovores, don’t share your belief in the social welfare criterion”
No. The basis of locavores is that is socially more beneficial. It is exactly the “social welfare criterion” that locavores used to justify their actions.
“even if they thought that prices accurately reflected social costs, that may not be good enough in their view”
This is a contradictory statement. If they thought the price wasn’t good enough, then by definition they do not think the price accurately reflects social cost.
“how can you disagree with casting policy questions in moral terms?”
He gave a pretty solid answer on this. The entire point of doing this is the cast your political opponents as evil, shutting down debate and critical thinking. The point is that environmentalists assume their conclusions, i.e., assume that recycling actually is good for the environment, but it may not be. In fact, some efforts to recycle are actually worse for the environment than simply throwing everything into a landfill. And this is simply dismissed out of hand by most so called environmentalists because of the moral imperative that they attached to recycling in and of itself as being “good”.
Daniel: You appear to be unfamiliar with how cost-benefit analysis is actually done. There’s a great deal of literature on how to value a life. Look for papers by Kip Viscusi or old work of Dick Thaler; this is just the tip of the iceberg.
Steve,
Does this work rely on vsl, in which the value of life is determined by the trade-off of an economic good against an increased risk of death. I first read about this in Getzen’s health economics BA level health econ book. As I remember it, it relies on the assumption that a person knows their increased risk of death, which I do not believe to be the case in most situations. Also by my understanding of the current literature it would value a worker at a manufacturer in the US at a much higher rate than a worker at a manufacturer in China because of the much higher risks that someone in China has versus the risks that someone in the US has in addition to the much lower wages they are willing to accept. I can’t accept a life value measure as value free that varies with respect to opportunity. This might be the best that we can do right now but there’s still value in it’s construction. I’m also not sure which sentence would give you the idea that I don’t understand how cost-benefit analysis works. Anyway if I’m missing a critical point from the literature or if either of the people you mentioned does work not based on vsl I’d be thrilled for you to point it out to me so I could learn more.
I’m wondering if different countries place different costs on the trashing of landscape. If we compare Germany, a exceptionally tidy country, with India, the opposite, it indicates the germans place a higher value on a tidy environment. Follow that through and its no surprise Germans have a higher recycling rate than India.
#3. The italic thing happened to me a while ago – the whole post became italicised after I italicised something. It never went back to normal no matter how many italic closes people put in. I have avoided italics since.
1) We have discussed the issue of price signals before. I raised the issue of battery farmed eggs and gestation crates for pigs. The price of these goods is lower than free range, but the welfare of the animals is considerably lower. The price signals that battery eggs and crated pigs add more to social welfare than free range, and any concern for animal welfare appears to be a red herring. other example were eggs that twere subsidised 90% from the proceeds of crime. In this case price would fail to sigmnal the greatest social welfare. We agreed that price is not the only consideration, but we did not get any closer to defining when non-price considerations should be significant.
2) Society can benefit from non-price based exchanges. Lawyers asked to work for $35 and hour to assist veterans with their legal difficulties refused, but they were prepared to do it for nothing. The non-price exchange added to total utility. People offered small amounts of money to help others are more reluctant to do so than if offered nothing. There is often much reduced cooperation when price is the only basis for exchange. How do we know when it is appropriate to step outside the price mechanism?
3) The well known Isreali nursery case may be illuminating. For anyone unfamiliar, a nursery closed at (say) 6pm, and wanted to stop late collections of the children. They introduced a fine, which should have been a disincentive for late collections. They found that late collections went up, since the parents now considerd they were paying for the care, so were entitled to be late. On withdrawing the fines, late collections did not then reduce back to their original level. Introducing price changed the way the parents thought about the exchange. We have two mecahnisms going on – the price and the social. In the first instance parents were socially obliged to get there on time and made an effort to do so. After the fine they made less effort because they prefered to pay the fine. My reponse was that the fine was too small, and should have been high enough so that the staff were genuinely indifferent to whether they stayed for the higher price or left. This mixing of the social and financial would probably have caused the parents to move elesewhere, and somewhat misses th epoint that introducing pricing to all our exchanges would add significantly to the cost of things.
Not sure how these ramblings can be best applied to current post yet.
#25 – Are you sure about the recycling rate? In India there are people that make a living recycling material from rubbish dumps. Vendors will sell you “mineral water” in re-used plastic bottles re-sealed with a dab of superglue. Old tyres are turned into sandals and buckets. I think the recycling (and re-use) rate may be very high.
off topic attempt to see the effect of formatting tags
It seems crazy to me (and, I imagine, people who disagree with your premise) to say people shouldn’t use moral principles to set policy, and then immediately proceed to use moral principles (the assumptions behind cost-benefit analysis) to set policy. It’s not the dispassionate amoralness of cost-benefit analysis that makes it such a good and reliable tool to use, it’s that more people agree with its assumptions (knowingly or unknowingly) than almost any other normative evaluation.
I have long been distressed by the sometimes dangerous illogic and smug satisfaction of locavores and uninformed recyclers/environmentalists. But recently I wonder if we discount the benefit of self-satisfaction too much?
I have a questionable habit of buying Doctor Who and other memorabilia from the UK and having it shipped to the US, where it sits on my desk seen only by me and only for the purpose of occasionally making me feel good. I have caused significant resources to be expended for this very selfish act but I think most at Cato would see the results as a net good for society (increased trade + my getting something out of it).
Is it any different that the locavores/recyclers cause extra resources to be expended in the service of making themselves feel good? (I think it’s fair to characterize it this way, as I’ve found most people who believe in these things believe they should be done even when they know the activity is proven to be net harmful, as the moral benefit is more important than the practical harm.)
Landsburg:
nobody.really:
Landsburg:
1. Let me concede some of the points raised by Landsburg (and Dan Boudreaux): I also don’t see the value of locovorism, so from my (our) perspective this looks like deadweight social loss. And I *do* see the value of commerce, even acknowledging that commerce can generate negative externalities.
2. But are me making appropriately analogous assumptions about the executive and the locovore? That is, how does free-market fundamentalism influence the bonus-hungry executive’s behavior, how does “locovorism” influence the locovore’s behavior, and how do these situations compare? Let me address that below.
2A. How does free market fundamentalism influence the behavior of the bonus-hungry executive?
Admittedly, I have difficulty blaming an executive’s externality-generating behavior on Ayn Rand et al., because the strategy of promoting your own interest at the expense of others long predates them.
But shame (you know, that whole moral suasion thang) is the honor that vice pays to virtue. Free market fundamentalism may have reduced the power of social norms to cause an executive to ask how his behavior affects others, and to act on the information. Free market fundamentalism may persuade the executive that markets are so efficient that negative externalities are impossible. It may persuade him that market forces have caused the wisest people to ascend to the top ranks of his firm, and that these people must surely be setting aside funds to pay for all the damage he knows that he is creating. It may persuade him that the ability to “get away with things” is among the skills that a meritocratic universe rewards. Natural selection favors those who can accrue maximum social benefits to themselves while shifting maximum social cost to others; thus, nature is manifesting a morality. To coin a phrase: “Greed is good.”
(A discussion at Distributed Republicaddressed the extent to which Wal-Mart’s success could be traced to its arguably illegal practice of suppressing unions. Self-described libertarians argued that unionization laws offended their world view, and thus they saw nothing wrong with evading them. Yes, Wal-Mart’s peculiar success in evading these laws might well give them an advantage over unionized firms in the marketplace, but that did not represent an exogenous factor triggering a market distortion. To the contrary, it was an endogenous factor, because it is entirely appropriate for the market to reward firms for their ability to evade costly regulations. To these commentors, objections that Wal-Mart — but not rival firms — had been able to evade labor laws were akin to objecting that some slaves — but not all – had been able to escape the antebellum South.)
Moreover, even if an executive were never exposed to free market fundamentalism, it may still influence his behavior – by influencing his environment. In particular, free market fundamentalism influences the regulatory environment. Deregulation in various industries (savings & loans/banking, energy markets, telecommunications) precede bubbles, scandals, and collapse. The NYT reported on Alan Greenspan’s testimony following the housing crisis:
In the absence of free market fundamentalism, I suspect we might have avoided a lot of harm – regardless of what executives thought about it.
2B. How does “locovorism” influence the behavior of the locovore?
Here I confront a familiar problem: I don’t know what I’m talking about. Landsburg hypothesizes that locovores restrict their dining habits in the mistaken belief that their sacrifice is socially useful; in the absence of this mistaken belief, they would behave differently. This is unclear to me.
Locovores may be laboring under a delusion. Alternatively, locovores may be laboring under the CORRECT assumption that their PEERS hold delusional views, and that the locavore can successfully achieve social status by playing into those views. (This is the old “prejudice vs. discrimination” distinction transposed to a new setting.)
A more serious critique comes from Nietzsche:
Looking past Nietzsche’s gratuitously (and characteristically) provocative phrasing, his insight remains: Many people CRAVE the opportunity to sacrifice for a large cause. Similarly, Machiavelli observed that people will grow more loyal to the Prince the more they must sacrifice for him.
(The fact that people’s tendencies are irrational does not make them unforeseeable. Hate to say it, but Lennon was simply mistaken: A world without religion or nationalism is not a world of people living for today and living life in peace. Rather, it’s a world of people seeking out NEW arbitrary ways of uniting and dividing. If you remove people’s role models, they’ll just make new ones – and perhaps worse ones; if you remove their graven images, they’ll just make more – and perhaps worse ones. If you free kids from having to wear a school uniform, don’t be surprised if they start wearing gang uniforms. Michael J. Fox argues that people are so thirsty for leadership, they’ll cross the desert to an oasis and, if they can’t find water, they’ll drink the sand; Michael Douglas says they drink the sand because they can’t tell the difference.
The remedy, such as it is, does not lie in eliminating the basis for people to unit and divide, and eliminating leadership; it lies in providing people with the LEAST PERNICIOUS GROUNDS for uniting and dividing, and the LEAST PERNICIOUS leaders. I used to think this meant sports team affiliations – until some football/soccer hooligans taught me otherwise. So I’m back to embracing nationalism. Because nations are geographic areas, the people you gain an arbitrary affinity for are the people in your proximity that you might actually be able to help, whereas the people you gain an arbitrary hatred for are people who are generally too far away to harm.)
Similarly, if you take away a person’s tendency to embrace locovorism, that doesn’t mean they’ll embrace whatever lifestyle you find rational. I suspect people who feel the need to sacrifice for a cause will find an outlet for their predilections, as part of The People’s Romance. Maybe that outlet is locovoism and recycling. Maybe it’s helping a soup kitchen. Maybe it’s making political donations to Jerry Falwell. Maybe it’s supporting the invasion of Syria. Maybe it’s supporting a Great Leap Forward, land redistribution, collectivist farming, and a government-enforced one child policy. Locovorism may seem suboptimal — but there is no shortage of worse ways people can channel their inclinations.
2C. How do the situations of the executive and the locovore compare?
At least by some conception, the locovore engages in socially harmful behavior in the mistaken impression that it is socially useful. That doesn’t seem so different than the executive who acts to maximize his bonus while 1) ignorant of the negative externalities he is generating, or 2) under a worldview that he shouldn’t be concerned about the negative externalities he is generating.
I harbor the hope that the locovore might be persuaded to change his views if only he received additional information; that is, the locovore seems to be laboring under a mistake of FACT. Yet the same dynamic might also apply to the executive who does not know of the negative externalities he is creating. And who knows? If you provide the executive with a recording of Greenspan’s testimony before Congress, perhaps the executive will reconsider his embrace of free-market fundamentalism.
Arguably, the executive’s strategy of doing what is personally profitable is tied to simple self-interest, an inclination that seems to be innate. And with good cause, if you embrace Evolutionary Psych: price signals often suggest socially optimal behavior. But the inclination to sacrifice for the greater good may also be innate – and people may also have acquired this tendency because it is, broadly speaking, adaptive.
Notwithstanding the shortcomings of the price mechanism, I don’t anticipate that many people here would advocate that we abandon it. Analogously, given what we understand about the shortcomings of people’s tendencies to form groups, to seek leadership, and to sacrifice for a larger cause, should we advocate that people abandon those tendencies? Or should we conclude that, on balance, the social benefit outweighs the harm? Or is there some middle strategy, between embrace and rejection, to guide people’s behavior optimally?
While I think that emotion should not be used to determine the exact extent to which we should do something, if we’re pretty sure that we should be doing *more* of something then it can be benefitial to use appeals to emotion to get people to do more of it. So it’s not useful for getting us to the optimal point on some cost-benefit curve, but if we know what slope of the curve we’re on, we can use emotion to get closer to the top. I don’t mind appeals to emotion to get people to recycle more or donate blood. If we reached the point where blood donations were out of control (so that surplus blood donations were expiring in storage — something I think was happening in the weeks after 9/11) and people’s charitable instincts could be more productively channeled elsewhere, that would be different.
This may be assumed in everything above, but isn’t the other issue with employing moral suasion to promote policy that morality is subjective? I believe recycling is good, Steve does not. I can think of few moral topics where the majority perspective has not changed over time, or is not consistent around the globe. Slavery, child labor, polyandry all were quite acceptable at one time, and are still acceptable in some places. If our only justification for promoting a policy is that it is morally correct, don’t we risk the tyranny of the majority? Not that I am an anarchist, where anything goes, but I am unclear where one draws the line.
It often seems as if moral suasion is just the option of the person who can’t get their way through other means, “I can’t get people to recycle using market incentives, so I’ll get my way by making them feel bad.” If people are morally opposed to abortion, why don’t they pay women to carry the baby to term?
Sorry for rambling…
An interesting point made by the great Julian Simon was that a landfill is a good place to have all that garbage waiting for the day when we can economically use it.
I am not convinced that prices are perfect signals. Not only do markets need to operate efficiently but government policy needs to be sound because all prices are affected by government policy.
To counter steve’s example as a hypothetical locavore: food from afar may have been air freighted. Aeroplane fuel is not subject to tax and therefore the price for goods which have been air freighted is artificially low. This is not because of the market but because of distorting government policy. By choosing to buy local food I am correcting bad government policy and improving welfare.
Did this unitalicise things?
#40 No. Last time it stayed italicised for the rest of the comments. Any ideas why this happens?
#41 Yes. I think that the original comment did not close the italicisation correctly. If you try to just correct it by only closing an italicisation then it doesn’t work because the thing that is accepting and parsing the comments stips out the unmatched close italicisation instruction. What needs to happen (assuming someone can’t just go and edit the original comment) is to construct a comment that closes the italicisation in such a way that the comment parser thinks it is a legitimate open and close.
This. is tricky given we don’t know what it lets through and what it doesn’t.
That still ultimately depends on someone holding a wrong view. If you can correct that the whole thing collapses. (Barring the existence of a self-sustaining loop where everyone thinks it brings higher status because everyone else does. Which is possible, but most people don’t think explicitly in terms of status and if locavorism was proven to their satisfaction to be bad they wouldn’t do it anyway just for status while no longer being able to rationalize the status grab.)
Insomuch as price signals are moral signals I don’t understand any of these posts.
nobody.really:
Scott H.:
Case in point.
“Every time a misguided locavore makes the world a poorer place by choosing expensive local food, it’s because she’s absorbed the false lesson that prices are generally a poor measure of social cost”
Quick! Everyone buy Model-T’s and not Cadillac! I don’t see a reason to blast people who choose to eat only local foods if they are willing to pay full price for these types of food. Clearly their absurd reasons for eating local is important to them and should be apart of their utility function. I would think it would be a bit hypocritical to judge and shame their preferences on one hand, and triumph free choice on the other. Maybe this was a bit of satire that flew over my head, though.
This is solid quotable material though:
“You lead people to see conflicting priorities as an occasion for battle, rather than an occasion for compromise.”
On par with:
“As soon as men decide that all means are permitted to fight an evil, then their good becomes indistinguishable from the evil they set out to destroy.” -Christopher Dawson
Above should read part, not apart. My bad.
#46. If you choose local food because you think it tastes better, then that is a legitimate part of your utility function. If you buy it because you think it is doing a particular good, when it is actually doing harm to that particular, then that is a mistake, and is not a legitimate part of your utility function.
I firmly believe that we must look beyond simple preferences to extract anything meaningful from utility, and this is a case in point. If we define utility as simply what people prefer, then utility is maximised by locavores’ choices, even if they do significant environmental or social damage. The economist should have no quibble with such behaviour. However, we do look beyond the simple preference for local food to the deeper preference for environmental protection, and we judge that this deeper preference is not fulfilled by their choices.
Some free market promoters are quite happy to acknowledge this when these choices are a rejection of price signals, as above. They are less accepting when the preferences clash with more fundamental “real” preferences, such as when racism, sexism or ignorance prevent the choice that would maximise the underying desire for efficiency.
My dad once told me, “Why don’t you do something productive with your life, and not just sit around all day doing crossword puzzles? Why don’t you contribute to the economy?” Well he actually never told me this, but I’m sure that Steve would say that it would be absolute bonkers to think that a person choosing to sit on their butt doing a crossword puzzle, instead of working, is doing something harmful to the economy.
If they are willing to pay full price (i.e. all costs are being accounted for) for the food they eat, then it is not doing any harm to the economy – period. No offense, but I really don’t care about your personal interpretation of Utility. And I would like to correct you on one part. On the side, you are far to quick to say “everyone” has a strong preference for your kind of environmental protection. I am almost certain they fear the looming threat of global warming, so are willing to pay a higher price. If they ask for subsidies/taxes on the food that they purchase,or the food that they’re refusing to eat (i.e. force others to accept their lifestyle), then they are harming the economy. I don’t care about why they have the preferences that they have – that does not matter.
Most of Texas is so desolate that a landfill might actually improve the landscape–at least it would attract small mammals and birds. Has anyone calculated that if West Texas were made into a landfill, how long we could continue to dump all world’s garbage in it?
Here in the People’s Republic of Austin, we not only pay for wasteful recycling, but also, now that free plastic bags have been eliminated in the interests of wildlife, we spread our germs through unwashed cloth bags and, in addition, have to buy plastic bags for trash baskets. Ironically, Texas has made the killing of bird-exterminating cats a state felony.
Price signals? Austin has eliminated important price signals for both electricity and water. You are forbidden to use water to wash your car or for a backyard recycling fountain. You can water your dead lawn and dying trees only once a week. But you can use as much as you want to hose off your roof or your driveway or to water your foundation!
Guess where the socialist planners went when they were thrown out of Russia.
Ah — that would explain the accent….
To my surprise (and perhaps against my better judgment), the idea of getting producers (so ultimately consumers) to internalize disposal costs actually seems fairly logical and promising, at least conceptually. Probably not making them directly responsible for collection, & not sure what Ms. Innes means by having them “manage” the recycling, but possible the govt could assess upfront surcharges that approximate these back-end ‘social costs’ sensibly and fairly?? She seems safe in assuming this could motivate producers to “find more efficiencies than government ever could”.
@49 I don’t recall saying everyone has a strong preference for my kind of environmental protection.
I am very happy to discuss where my interpretation of utility differs from yours – and especially the “correct” definition if there is such a thing. I have never really had a good understanding. The locavore case is good example. The locavore wants environmental protection. This cause him to by local, which (possibly) results in less environmental protection. If the choice leads to less environmental protection then it is erroneous, or irrational, because it fails to deliver what they person thinks they are choosing. Is utility maximised?
If I pay money to a charity run by a crook, I get the same fuzzy good feeling as if I give to a genuine charity, but only because I have been deceived. Is that as efficient as giving to a genuine charity? I am interested in your view.
If I want to buy the most fuel efficient car, and the salesman lies to me so I buy a gas guzzler, is that efficient (assuming I never find out) – even if I pay full price for it?
correction: this causes him to buy local
Here: http://levine.sscnet.ucla.edu/texts/verview.php3?indent=1&pwrd=guest&stt=0&obd=1&doc=654210000000000780&docname=behavioral-decision-theory.doc&ver=654210000000000790
To sum up, don’t be so quick to deem things irrational.
@53
This is all irregardless to the post. If a person is willing to pay the full price (i.e. all costs are being accounted for) for a good or service, then it is not harming the economy – period.
If you do not accept this, then you ARE putting your own preferences of environmental protection on others.
If you go to the store and someone convinces you that a specific brand of orange has come from God so you buy it, then I don’t really care about if you got bamboozled as long as you pay full price for the orange that you just purchased. That way I know you’re not harming the economy.
Chicago Methods: If I am absolutely convinced that I am giving my money to a noble charity that does a lot of good, but in fact my money is being spent entirely on administrative costs that do no good whatsoever, then the person who misled me has done some actual harm, even though my contribution is voluntary.
Namely: If I give to a good charity, I feel good and people are helped. If I give to a bad charity, I still feel good (because I’ve been fooled) and nobody is helped. THe latter is a worse outcome.
Spending an extra dollar for a local orange because you believe it benefits someone is an act of charity. If it’s an ineffective act of charity, which you’ve been fooled into believing is effective, then the person who misled you has done actual harm.
iceman 52:
“To my surprise (and perhaps against my better judgment), the idea of getting producers (so ultimately consumers) to internalize disposal costs actually seems fairly logical and promising, at least conceptually”
Your first instincts were better. Say we have a product which I can dispose of the waste at negative cost. Perhaps I compost banana skins. But you live at the South Pole and cannot compost but must ship your skins back. I think it’s clearly more efficient if we each pay the varying cost of disposal. If we get producers to “internalize” the cost then ex hypothesi you and I pay the same for the disposal.
#59 – I was pondering it relative to a base case where no one is effectively internalizing much b/c govt provision has difficulty getting the price signals for dumping / recycling very close to right at the consumer level (see Ken A #1). In that case it doesn’t seem unreasonable to view disposal as part of the ‘true cost’ of the product. Perhaps also possible for producers sometimes to adjust to local market conditions? At a minimum as SL said it seems “worth thinking about”, and we’re looking for a system that gets things right more often, not all the time.
#53, 58 – I would say fraud is fraud regardless of any ‘illusory’ effects on utility (“The Road to Steubenville”?), and each dollar fraudulently obtained costs a dollar to a real charity or more productive endeavor.
P.S. Harold – on the futility of utility, does this passage by David Friedman help?:
“In order to get very far with economics, one must assume not only that people have objectives but that their objectives are reasonably simple. Without that assumption, economics becomes an empty theory; any behavior, however peculiar, can be explained by assuming that the behavior itself was the objective. (Why did I stand on my head on the table while holding a burning $1,000 bill between my toes? I *wanted* to stand on my head on the table while holding a burning $1,000 bill between my toes.)” (A fascinating discussion about ‘why assume rationality’ follows.)
nobody.really – have you read much Ayn Rand? “The Virtue of Selfishness” is a good primer on her *moral* system.
@60. unfortunately, it only underlines the difficulty of utility!
@59. An example of how internalising *may* be beneficial. I understand that in Japan items like televisions are sent back to the manufacturer for recycling. It is therefore valuable for manufacturers to build in easy dis-assembly into their products. In the west, recycling is nothing to do with the manufacturer, so they have no reason to make dis-assembly easy. Try dismantling a LCD screen to get at the component parts – it takes quite a long time, andit is this that makes attempts to recycle components uncommercial. The actual cost of the easy dis-assembly is very small, and I would argue is less than the cost of dismantling or throwing away the screens. Without the internalising mechanism it doesn’t happen.
The italics are making my head spin.
61 –1) sending things back to the manufacturer does not sound particularly efficient.
2) you had said “if we define utility as simply what people prefer, then utility is maximised by locavores’ choices, even if they do significant environmental or social damage. The economist should have no quibble with such behavior.”
Good issue, has come up before, my take – of course if we define whatever people do as utility-maximizing then the concept is not just “difficult” but pretty well useless. Friedman’s response is the best I’ve seen — economics is based on the *“false but useful” assumptions* that people have reasonably simple objectives and choose the correct means to achieve them. He adds several compelling reasons for why this is the best predictive guide to the behavior of others (he knows enough about himself to allow for the consequences of his own irrationality). As with price signals, we’re looking for guides that get things right most often, and from there we are quite free to “quibble” with things that appear anomalous. Of course in the process we may often find (hopefully with pleasure) that, rather than people being “wrong”, we need to refine our understanding of what constitute rational goals and means. Applies both ways to ‘free-market’ outcomes too.
@61
But that has introduced a constraint: that ONLY the manufacturer can dispose of it. Imagine I had a rival TV eating facility. Then it would make more sense for the manufacturer to sell 2 options: we take it back or you get a discount and have to deal with Ken B.
My pont is that your example explicitly raises the cost of disposal to all consumers. That’s almost always going to be less efficient.
Steven,
It’s surprising to see that the same person wrote both this:
“When you cast policy issues in moral terms, you degrade the character of public discourse. You lead people to see conflicting priorities as an occasion for battle, rather than an occasion for compromise. You send the message that policy is best decided by appeals to one’s inner conscience (or, more likely, to the polemics of demagogues), rather than by appeals to impersonal cost-benefit analysis. And this is a very bad thing.”
and this:
“Nearly every economist in America is appalled by Pat Buchanan’s revival of protectionism. So is my daughter Cayley. The difference is that, unlike the economists, Cayley is appalled for the right reasons.
Unlike my students, Cayley relies on me for moral guidance. Sure, I could explain to her how trade makes our family richer. But nine-year-olds are quite self-centered enough; it’s their concern for others that needs gentle encouragement. So instead of telling Cayley how great it is for our family to save money at the car dealer’s, I talk to her about the difference between right and wrong.”
While others might fault you for being inconsistent or rejecting moral appeals only when they fail to support your preferred policy, I’d argue that your error is in failing to see that cost benefit analysis is the application of a different moral principle, namely “Minimize the totality of the costs that you impose upon others against their will.” I think it’s a pretty easy sell so show that this beats the environmentalist ethic of minimizing a very narrow set of costs while disregarding another very broad set of costs.
Making that argument really isn’t going to degrade public discourse. Refusing to address arguments just because they appeal to morality (or just because they appeal to cost benefit analysis) seems like a surer way to degrade the discussion.
@James 64:
You seem to be identifying “appeals to one’s inner conscience ” with understanding “difference between right and wrong.” I think Steve’s point is that this difference is best decided by “appeals to impersonal cost-benefit analysis.” Steve is not rejecting moral arguments; he is rejecting moral hand-waving.
That’s the whole point of consequentialism: a demand that you justify your moral claims in terms of such an analysis rather than *just* your own tender conscience.
The way I would put it is that to the extent cost-benefit analysis is a moral principle, it seems like a pretty simple one: don’t do things that do more harm than good. I suppose this can raise issues of different parties who are harmed vs. benefited and how to weight their competing interests, but that seems more like providing a warning that if you really want to go down that road, you will need to bring a personal moral principle with you. This may be the comparison to the trade example — supporting free trade clearly passes a “neutral” cost-benefit test, and restricting it clearly fails, *unless* you choose to elevate certain group’s interests more than others.
I think the main point of this post is that when applied to a specific issue like recycling, the cost-benefit advocate might say “if you want to serve the environment there are better ways to do it” (or even “your preferred policy is actually counter-productive”); the moral argument then is introduced as a way to paper over these realities by saying “yes but you should do it anyway because it’s the “right thing to do”.”
But perhaps SL has his own (better) response.
Ken,
How can your read me quoting Steve’s words: “When you cast policy issues in moral terms, you degrade the character of public discourse.” and then say “Steve is not rejecting moral arguments; he is rejecting moral hand-waving.” He didn’t say “When you make bad moral arguments…”
You write “That’s the whole point of consequentialism: a demand that you justify your moral claims in terms of such an analysis…”
But the moral claims are logically prior to consequentialism. You might base your appeal to cost benefit analysis on a belief that preference fulfillment should be the organizing principle in policy analysis but you need a moral argument say *why* preference fulfillment *should* be the organizing principle.
Steve just goofed on this one. If morality matters outside of policy analysis then it matters in policy analysis as well. It’s far better for his (our) side to just address the moral position head on. Surely you’d see a problem if an environmentalist refused to address Steve’s position because “casting issues in cost/benefit analysis degrades the argument.” What Steve did is no different and entirely unnecessary.
@James
I assume you mean me, but we have a Ken here who lacks an initial, and confusion often arises. I am Ken B.
I think you are confusing two quite different arguments.
Argument 1: Your emotions, including your conscience, are insufficent basis for policy decisions. You need a working theory of the likley consequences.
Argument 2. Attempting to stigmatize an attempt to discuss consequences as ipso facto moral failure is a bad thing, an attempt to circumvent debate an analysis.
Imagine Steve is a straight up utilitarian. He says he is not but this is the simplest form of consequentialism to discuss. He can consistently say 1) we should ban cheese eating because my sums show it’s better banned and 2) your portrayal of cheese eaters as moral monsters is a bad thing anyway, because next year things may cahnge and my sums may come out differently.
James in 67: “But the moral claims are logically prior to consequentialism.”
No, that’s not really right. You can certainly argue that the moral value of the ends is logically prior, but that doesn’t make the moral case for the means — an *action* or *policy* — logically prior. Imagine again you are a utilitarian. You have a prior value for everyone’s final state: health, happiness, etc. Any state of the world you can evaluate. I suggest a policy of banning cheese eating. You cannot know if this is a good or bad policy until you look at the way it changes things.
Even on more normal moral models prior values do not dictate the morality of actions. Why is it wrong for me to hit old ladies? I think it’s because hitting them hurts them. That’s a prior value inducing a judgement on the action. Is there then a simple rule about impacting old ladies? No of course not. If I have to tackle an old lady to stop her getting run over by a bus or stop her shooting a child then my action is good despite hurting her.
This, which I just stumbled across by accident, is right on point in this discussion. http://blogs.discovermagazine.com/science-sushi/2013/06/19/the-very-thick-line-between-raising-concerns-and-denialism#.UcMAa-uhUeO
I think James has a point. What can be meant by “When you cast policy issues in moral terms, you degrade the character of public discourse.”?
If we do not cast in terms of morality, we are simply assuming some morality.
Lets follow the arguments back.
SL says (very broadly) that if we ignore the morality of individual choices then everyone will end up with more of what they value most. By ignoring morality in the detail, we obtain greater benefit overall. We have no need to find out which of the good things is more or less good, because it all sorts itself out via the price mechanism. This is a moral casting, because we have to agree that this result is a good thing.
The locavore, or subsidising recycler, may be coming at it from one of two directions. They may essentially accept the above utilitarian morality, and be attempting to maximise outcomes by manipulating behaviours. They are saying in effect not only that recycling is a moral good but also by subsidising (or spending extra) they are making a choice about how much better this is than some other moral good. SL may justifiably say here that the introduction of morality into the discussion is a distraction, because we have no better way to calculate the moral good done by different actions than by using prices.
But – some approach it with a different, non-utilitarian morality: perhaps that “damaging” the Earth is a moral wrong greater than the moral harm done by failing to maximising human preferences. If we are to discuss this, we have no option but to cast it in moral terms.
The original quote thus assumes that all parties accept the basic morality of (essentially) utilitarianism. It assumes that to discuss the morality of preserving environments for their own sake is degrading public discourse, which again assumes that his view of morality is the right one. Steve tacitly accepts this when he says “rather than by appeals to impersonal cost-benefit analysis. And this is a very bad thing”.
The essential point is that some people want both – they want the goals that SL wants, but they want to achieve those goals through moral appeals. It is a good thing to point out the problems with this approach. Some other people want a completely different outcome, and for these it is a moral issue.
Harold: ‘ What can be meant by “When you cast policy issues in moral terms, you degrade the character of public discourse.”? ‘
It means prejudging the question by the use of morally loaded terms to silence debate is a bad idea. It’s not remotely the same as saying “there are moral issues to be debated here.” “Casting in moral terms” means describing other people’s positions as inherently immoral or moral.
Steve is referring to things like “it’s immoral to pollute” without considering the actual costs and benefits of the pollution, and in a way that preculeds discussion of the idea that some ways to pollute are less harmful than others. Say I want to sell sulphur pollution credits. That’s an attempt to minimize the harm done by any set amount of sulphur emission. Maybe it will help, maybe not. But if you use terms like “death mercant”, “hell fire licenses” or similarly loaded descriptions you preclude debate and better ideas.
You can recognize this when it comes from the other side Harold. “God said it, I believe it, that settles it.”
Ken B. That link illustrates the point quite well. The person who says “I would not like GM whatever the scientists say” and “I don’t need scientists to tell me GMO’s are not a good idea” seems to be making a moral claim: even though GMO’s may benefit people, they are still not a good idea for some moral reason. This is useful because we can then ignore such claims if we do not share their morality. There is an alternative explanation – that scientists are unable to assess whether GMO’s will be good for us. There is a point here, scientists can assess, for example, the impact of GMO’s on the immediate environment and on health. They cannot easily assess the impact of GMO’s on promoting monopoly power of agribusiness for example, or possible effects in 100 years time. The big problem is that campaigners worried about the latter will use arguments based on the former. This is also particularly true about anti-nuclear and global warming.
Harold 73: “The big problem is that campaigners worried about the latter will use arguments based on the former. ”
Right. Even unknowingly. That’s part of the insidious effect.
Marginal Revolution had an interesting story this week. Canada banned paying for human sperm. This was a decision made based by “casting [the issue] in moral terms” rahter than considering how this would effect infertile couples or sperm banks.
A random act of music. We live in the golden age of the accordion! http://www.youtube.com/watch?v=cvaDEM5WSuQ