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Meaning and connotation

Summary:
In response to my previous post, commenter BC asked: When you say that you don’t expect Bezos to give away almost all his wealth and that you’re “fine” with that, do you mean that you don’t expect Bezos to act morally and that you’re fine with some immorality? I responded: This is almost a textbook example of the connotation of words getting in the way of clear thinking.  “Immorality” has a literal meaning, and also a (quite different) connotation. Suppose I park somewhere and put a quarter in the parking meter.  Then I overstay the hour I’ve purchased.  I’ve broken the law, and should be punished by the meter maid if I’m caught.  Is my action “wrong”?  Yes, obviously.  Am I behaving in an “immoral” way?  It depends whether you use ‘immorality’ in a literal sense

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In response to my previous post, commenter BC asked:

When you say that you don’t expect Bezos to give away almost all his wealth and that you’re “fine” with that, do you mean that you don’t expect Bezos to act morally and that you’re fine with some immorality?

I responded:

This is almost a textbook example of the connotation of words getting in the way of clear thinking.  “Immorality” has a literal meaning, and also a (quite different) connotation.

Suppose I park somewhere and put a quarter in the parking meter.  Then I overstay the hour I’ve purchased.  I’ve broken the law, and should be punished by the meter maid if I’m caught.  Is my action “wrong”?  Yes, obviously.  Am I behaving in an “immoral” way?  It depends whether you use ‘immorality’ in a literal sense of doing something wrong, or with the everyday connotation of “a great evil”.  Parking violations are not great evils.

I’m fine with people being guilty of a few parking violations, but I also think people who are caught should be fined.  I’m fine with people being somewhat selfish with their vast wealth, but also think there should be a progressive consumption tax, a sort of “fine” or sanction on selfish wealthy people.

Economists tend to be cold-blooded rational utilitarians, whereas most people are more “moralistic” in their thinking.  For an example, consider these two policies:

A. Keep marijuana illegal and have a fine that averages out to $5 per use.  (Maybe a $50 fine imposed on one of each ten uses.)

B.  Legalize marijuana and impose a $5 tax.

To most people, those are very different policies.  Policy A is seen as treating marijuana use as being immoral, whereas in policy B society is “saying” it’s OK to use pot.

To an economist, the two policies are almost identical, and would be completely identical if people were risk neutral.  Economists are all about costs and benefits, sanctions, incentives, externalities, etc. They don’t tend to use terms like evil, immoral, etc.  Littering and murder lie along the same continuum, with murder imposing much more harm on others than littering.  But fundamentally the questions are always the same; what public policies shape incentives in such a way as to minimize the harm done by externalities?

I cannot emphasize strongly enough that this approach does not provide any hard and fast policy answers.  In my view, the optimal public policy regime is pretty close to complete laissez faire, partly for “rules utilitarian” reasons, but also because the distortionary impact of interventionist government policies is greater than most progressives suspect.  But I also see very intelligent progressives using the same sort of reasoning that I use, and reaching much more interventionist policy conclusions because they perceive the world in a different way.  To take a simple example, how a person reacts to the Great Recession will depend on whether they see it being caused by Fed policy or by a reckless unregulated financial system.  I think you know where I stand.

I say this because I worry that deontological libertarians might respond to progressives advocating big government for utilitarian reasons by rejecting utilitarianism, whereas they should in fact be questioning whether progressives actually have a good grasp on economic theory, i.e. whether progressives are correctly interpreting the utilitarian consequences of their proposed policies.

I actually think that Bryan Caplan conceded too much to the socialists when citing Huemer with approval:

I say utilitarianism is utterly crazy.  After all, as Huemer previously told us:

It’s worth taking a moment to appreciate how extreme the demands of utilitarianism really are. If you have a reasonably comfortable life, the utilitarian would say that you’re obligated to give away most of your money. Not so much that you would starve, of course (because if you literally starve, that’ll prevent you from giving away any more!). But you should give up any non-necessary goods that you’re buying, so you can donate the money to help people whose basic needs are not met. There are always plenty of such people. To a first approximation, you have to give until there is no one who needs your money more than you do.

If that’s not crazy, what is?

It’s the socialists who believe we could establish this moral norm without discouraging wealth creation.  I don’t believe that, because I don’t believe that people are robots.  I certainly don’t have that sort of self-control.  If I could be convinced that I had a moral obligation to give away almost all of my wealth, it would badly damage my morale.  Why get up in the morning to work hard to create a better Amazon?  You might say that utilitarianism “demands” that Jeff Bezos work hard for others, even if he doesn’t benefit.  But people aren’t robots!  I take people as they are and form judgments about behavior based on actual people with actual brains that are wired in specific ways.  Most people need motivation in the form of money to go out and create wealth.

A person is not a single “identity”; they are a hive of competing emotions and desires.  One part of the brain says I want to lose weight, another says I want to eat ice cream.  Most people find it hard to lose weight, even if “they” want to.  But what does “they” mean?  The “want to lose weight” component of the brain?  Or the “want pistachio gelato” component?

My views may seem weird, but in some respects they are perfectly normal.  Normal people don’t expect others to give away 95% of their fortune.  But normal people do tend to have high opinions of selfless people who devote most of their wealth to helping the unfortunate.  Both statements can be true!

Words like ‘immoral’ have connotations that get in the way of clear thinking.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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