The Moorish Wanderer

The Good, The Bad and the Greedy

Posted in Dismal Economics, Read & Heard, The Wanderer, Tiny bit of Politics by Zouhair ABH on August 7, 2010

I spot in my little fellow nihilists lot, the Doctor One. The last piece I read on his Blog falls right within my purview, so to speak. I have been studying economics for a long time, I’m still at it, but with his own piece on a seemingly unrelated matter, I realized I have been spending little time on philosophical economics.

This provides me therefore with an opportunity to expand my own thoughts on the matter, plus, it is always a pleasure to write back to a fellow blogger and a personal friend.

I will deal with the immediate material I claim I can master, i.e. the relationship between “good” and economics. I put advisedly the word “good” between brackets because in the world of economics, this cornerstone of philosophy (alongside Beauty and Truth) is defined in such broad and smudged manner that many economists didn’t bother discussing it and ended up with different definitions, and ultimately, with different theories about it. In a nutshell, the dominant paradigm economic science moves on is of utilitarian nature.

The philosophical foundations were laid in late 19th century, mainly through the works of Karl Menger, and Stanley Jevons. These thinkers provided the set of axioms fit for mathematical economics.

The second video Hisham uploaded is very interesting, because M. Friedmann explains, in quite simple terms, the essential axioms of Economic theory, the very ones the Founding Fathers provided economics with, so that it would run like a core science. Greed, in Milton’s scientific world, is defined as the systematic maximization of one’s utility by choosing or not to “enjoy” an additional unit of a definite good, regardless of what others might suffer as a consequence of one’s own acts.

In mathematical terms, it goes like this:

 

 

 

I fancy this mathematical formulation (upon which I warn those with advanced skills in economics, it merely expressing in simple mathematical terms the consumer maximization program) because it leaves a great deal of interpretation on how the utility function U(.) changes from one individual to the other.

However, it gives no precise information on how an individual is supposed to quantify as it were, the utility each merchandise delivers. Incidentally, the utility in question is the economic translation of the philosophical concept of good. That’s why merchandise is dubbed as good, and that’s why economists, and more specifically Walras, thought of ordinal utility. Because no scientific measure can be provided for measuring good, Pareto had the clever idea to derive it from the preference one has for one good (or bundle of goods) over the other. Trade-off is therefore the ultimate criterion.

We do now have a closer definition of what Friedmann defined as Greed: The systematic preference of the best bundle of goods, regardless of other individuals. The fact this takes place in a capitalist economic system is irrelevant; Indeed, the founding axioms for neo-classical economics are oddly similar to those that shaped centralized/plan economies.

That, of course, is merely the description of economic science. Much has been done on that issue since Friedmann stood in front of the camera. The standardized economic idea -upon which Gekko in “Wall Street” coined the famous quote “Greed Is Good“- considers this maximization program to be Pareto-efficient.

Meaning, Good and Happiness are achieved when each individual cares solely about themselves and only so.Truth and the constraints of real world are of course, quite complex to fit in this model. That’s why economists use concepts such as “Externalities“, and later on, “Cooperative Game Theory” to explain how a higher commonwealth (and therefore the ability to achieve a larger amount of Goods, and presumably, reach a higher scale of “Goodness”) could be reached without a systematic Laissez-Faire policy. (I know I am at odds with my fellow neo-liberal enthusiasts economic students, but the academia as well as the data confirms it, under a set of conditions that remain very controversial, but that is the essence of economic policy) If I may, I would like to summarize my statement: Good in economics is a matter of individual materialistic preferences.

On a society scale, this does not necessarily hold through a systematic maximization trade-off. In these cases, good is achieved collectively, as Nash famously considered, one’s utility is defined through their own direct personal utility, as well as their collective action contribution return. Let me now turn to the full-philosophical discussion of Good.

I don’t think Good/Evil-Bad are solely a matter of religious beliefs. I still think one can have an ethical compass independent of any religious or moral beliefs. In a society, people, individuals or communities, are expected to behave following a pre-defined pattern of behaviour, what sociologists call “norms”. These norms are the one that shape the scale of values, these define what is good and what is not. The fact some of them integrate the idea of tolerance towards deviance (I borrow here the Durkheimian definition of the word) makes them more democratic than others.

In any case, Good is defined through these norms, and how these come to be dominant is a matter of historical course and the very object of human action. The problem with societies like Morocco is that the norms are still dominant, and are expected to be followed scrupulously. Deviants are socially punished, when labelled as “outcasts”, and, in extreme cases, physically liquidated. Therefore, when my friend asks the question “What is Good?”, and in the Moroccan context, it means yielding the perfect behaviour the myriad of norms requires from each one of us to be so. In a western context, good is of a somewhat blurred definition, and is left for individuals to define their own set of references.

How to achieve it is even trickier. In Morocco, the mere façade of Good behaviour is enough to buy the respect of “society“. I restrain myself to the Moroccan case because I have to confess my lack of knowledge of other MENA countries, but I expect it should be similar in Egypt for instance, or even Saudi Arabia.

In any case, my own Good-Evil analysis is heavily influenced by Popper’s epistemology; i.e. I don’t believe there is a paramount good, and any action that seeks to achieve it has at least one self-contradiction (which eliminates religions from that lot, oh, my agnostic creed came out so unexpectedly…)

I posted something quite beside the point put forward by my fellow blogger. It may go back to the fact I don’t take my own principles as “Good”. I have to confess my ammorality when it comes to social contact, for it boils down to a matter of politeness. When it comes to politics, I am a partisan of policy-relativism.

I don’t think socialism -which I support- is the best set of policy to achieve good, I merely wich to put it to practise and see if it works. I hold all policies in equal skepticism until one or all of them acheive their objectives. Does good exist? Perhaps. Can we achieve it? I don’t think so, but some actions could embody the idea of it.

8 Responses

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  1. […] This post was mentioned on Twitter by Hisham, Maroc Blogs. Maroc Blogs said: The Good, The Bad and the Greedy: I spot in my little fellow nihilists lot, the Doctor One. The last piece I read … http://bit.ly/coKEgn […]

  2. […] NB2: La volonté de l’écrire m’est venue d’ici. […]

  3. Hisham said, on August 9, 2010 at 15:24

    Even in my wildest dreams I wouldn’t have hoped for a response as kick-ass as that one. It’s an education. I’m really humbled and quite happy to have helped rekindle your interest for a subject you obviously are so comfortable juggling with.

    As far as I’m concerned, philosophical economics are kind of uncharted territory but given my inclination for suicidal argumentation (I mean, I’m pretty sure you’re gonna come up with the first-class, well informed answers) I would love to see if you can help me clear up some of the gray areas still inaccessible to my understanding. So allow me to play the devil for a moment in here, and forgive me if I use pretty plain language.

    I wonder how you can reconcile your support for socialism and socialist ideals (although you also admit you’re a universal skeptic) with the basic common sense of utility and the natural inclination of each individual to seek happiness through personal gain. Aren’t you betting on the bad guys? Hasn’t socialism proved itself wrong aready?

    Externalities are an important notion indeed, seldom recognized. Would you support theories like Participatory Economics which (to my understanding) were basically elaborated as an attempt to reduce additional costs for third parties affected by market transactions into which they have little say. Apart from its obviously benevolent aim, I personally find parecon’s language and envisioned project quite outlandish.

    …founding axioms for neo-classical economics are oddly similar to those that shaped centralized/plan economies.
    How could that be? I’m surely an ignorant on these matters but that’s quite a statement. You might argue (like Friedman up there is) that in planned/centralized economies the greed is merely shifting from the individual level to that of the state. But greed isn’t the only component of capitalism and to pursue happiness, you would still need to be able to maximize you own utility to borrow your words, which in a tightly controlled, socialist environment you wouldn’t dream of achieving would you?

    I don’t think Good/Evil-Bad are solely a matter of religious beliefs. I still think one can have an ethical compass independent of any religious or moral beliefs.
    I couldn’t agree more, but then(I like to argue with good friends) I can’t fathom neither your self acclaimed Amoralism nor your agnosticism. Everything is relative for sure but in matters of good and bad you must have chosen your good and your bad already haven’t you? In matters of belief, how can a rational mind as yours equate the probability of the existence of a superior being with that of its non existence. Unless you’re the kind of teapot agnostic much closer to my heart.

    To expand on this discussion I would recommand ready Bill Sonday’s very interesting pieces here and here.

    • The Moorish Wanderer said, on August 9, 2010 at 23:04

      that prompts me into wrting a post explaining the theoritical background of the said statement. That would be my answer.

      On the matter of socialism, I have to clarify one thing. A socialist can stand by a certain form of market economy. I think the marxist criticism comes from the way the output value is divided between capital and labour. As far as I am concerned, market-based economics is the working form of economic activity to-day, save for contingency situations where planned economy is beneficial. In any case, I will provide thoughts on how I would see the economy working under my own conception of socialism. However, it has little, if nothing to do with social-democratic or stalinist schemes…

      On the matter of ethical/moral beliefs, I am afraid it is not so straightforward. Indeed I have chosen my own good as well as my own bad compass. That I can explain only partially by the sort of upbringing I had, otherwise I can’t explain it much more than the initial set of principles I was provided with. Because I defined myself as agnostic, my rationale does not ask the core question of (non)existence of God. As a matter of fact, there are, in my view, more important things to think about: how to improve humankind, how to achieve higher and higher states of civilizations… More down-to-earth kind of thing, but that God question is not the central issue here. I am familiar with Richard Dawkins outspoken campaigns. I like the guy, but he is just too extreme for me ;-D

      • habib said, on August 11, 2010 at 10:22

        “I am familiar with Richard Dawkins outspoken campaigns. I like the guy, but he is just too extreme for me ;-D”

        Which part of his beliefs do you deem extreme? It’s not like he proclaims himself Commander of the Unfaithful or something of the sort? I say that he is far less judgmental and more tolerant than any (officially) outspoken religious person. His campaign is benign when compared with the things done in the name of god(s).

        If you call Dawkins “too extreme”, what would you call Ibn Saud (to avoid naming a character closer and more relevant to us)? I wonder…

  4. habib said, on August 11, 2010 at 10:46

    “I am familiar with Richard Dawkins outspoken campaigns. I like the guy, but he is just too extreme for me ;-D”

    Which part of his beliefs do you deem extreme? It’s not like he proclaims himself Commander of the Unfaithful or something of the sort? I say that he is far less judgmental and more tolerant than any (officially) outspoken religious person. His campaign is benign when compared with the things done in the name of god(s).

    If you dare call Dawkins “too extreme”, what exactly do you call the Saudis or Hashemites (to avoid naming characters closer and more relevant to us)? Can you still find words to describe them in your lexicon? Your relativism seems to extend way beyond mere policy.

    • The Moorish Wanderer said, on August 11, 2010 at 13:34

      I thought the emoticone placed after the sentence was clear enough that it was just a joke.
      Obviously I am much closer to his thinking than that of “Ibn Saud” (as you put it).

      I am sorry it was not as clear as I thought it would be.

      • habib said, on August 11, 2010 at 16:13

        Don’t be. It’s my fault for not being hip enough to properly parse “;-D”. My age is showing.

        This one I get because I have the facial expressions and body language to read from.

        Yours was trickier because a lot of politically-correct bright people that haven’t given the issue much thought, view Dawkins as “extreme”.

        Anyway, I highly encourage you to refrain from equivocating on these matters. It’s been our curse all along.

        Socialism has been another of our many curses. Policy should be based on rational arguments not fuzzy emotions. And quite frankly, competent people tend to ditch tax-burdened places that restrict their freedoms and move to liberal places. As Friedman himself puts it, there are no exceptions to this rule.


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