Choices

Which do you favour?

A. An indisputably good outcome which appears to confound your pet theory or

B. An indisputably bad outcome which appears to validate it.

The optimal choice is surely A - it demonstrates that your theory either needs refining or junking and there is also the benefit of that "good outcome". Yet is is striking to consider how many people take greater comfort in B and either dread the day that A comes to pass or somehow manage to explain it away. The theory ought to be only of instrumental value - that is, its utility rests on its ability to produce good outcomes. It doesn't have any intrinsic value which must be defended against the bad outcomes which question it.

The "pet theory" of the organisation mentioned below is anti-capitalism. This requires them to spurn any poverty-reducing policies which resemble globalised capitalism and embrace several proven bad ideas - autarky, mercantilism, dirigiste planning - all the better that the theory remain validated. This is highly irresponsible and I suggest immoral. Rich countries can afford the inefficiencies associated with bloated public services and protectionism - it is a misnomer to say that rich countries "benefit" from protectionist trade policies, free trade is good for producers in poor countries and consumers in rich countries - but poor countries need dynamic economies to generate wealth and growth. While others see might see such campaigners as altruistic idealists, I see this as a form of neo-colonialism, attempting to install in the developing world a western-derived collectivist socialism which has been spurned across the developed world

Comments

[Abiola Lapite]

"The theory ought to be only of instrumental value - that is, its utility rests on its ability to produce good outcomes. It doesn't have any intrinsic value which must be defended against the bad outcomes which question it."

Ah, but here is where you go wrong! You ignore the hedonic value that bad theories have for those who adhere to them: they give meaning to lives which might otherwise be devoid of purpose, make people feel good about their special place in the world, and "explain" away any failures or shortcomings from which they've suffered. Why would those who obtain so much emotional succor from theories wish to abandon them in face of contradictory empirical evidence? "So much the worse for the facts", as Hegel is supposed to have said.

[Brian]

I guess it depends on one's determination of 'indisputably.'

Some would argue that untrammeled capitalism would result in a situation little different the times of de jure European colonialism.

Of course, I fall somewhere in the middle. I do not think complete laissez-faire would benefit African countries. An African marketplace is the closest thing to pure laissez-faire capitalism I've ever witnessed. 12 year old kids in rags selling bubble gum and matches (instead of going to school) don't look like they're benefiting fantastically.

But I also think that Europe and America need to open up their markets and drop subsidies. I think free trade can work provided it's actually a two way street.

[Brian]

I think one of main reasons why socialism in theory works a lot better than socialism in practice is because it doesn't really take into account human nature.

[Frank McGahon]

I guess it depends on one's determination of 'indisputably.'

The reason I said "indisputably" is precisely to forestall these sorts of evasions - "indisputably" means a good outcome which is not disputed by either opponents or proponents of theory X, such as, say, a decrease in infant mortality, or an increasing gdp (absolutely or per capita ppp).

Some would argue that untrammeled capitalism would result in a situation little different the times of de jure European colonialism.

Well then it behoves them to make that argument rather than just assume it to be true. The problem I have is that this is simply taken as an a priori axiom and little effort is expended to explain why it should be taken as given.

Please note that my main point here is not just to say "socialism bad, laissez-faire good" (although I do believe that to be generally true) but rather to say, "these specific socialist policies have had bad outcomes in the past and are likely to have similarly bad outcomes in the future".

[Frank McGahon]

You ignore the hedonic value that bad theories have for those who adhere to them: they give meaning to lives which might otherwise be devoid of purpose, make people feel good about their special place in the world, and "explain" away any failures or shortcomings from which they've suffered

Or alternatively, the "good outcome" of boosting the individual's vanity trumps every other possible outcome.

[Frank McGahon]

I think one of main reasons why socialism in theory works a lot better than socialism in practice is because it doesn't really take into account human nature.

This is an oft-repeated sentiment, but does it really mean anything? How can something "work in theory"? This is a bit of an oxymoron. I mean, if I imagine a perpetual motion machine whirring away, can I say that this machine "works in theory"?

[Ciarán]

Frank, I don't think GDP growth in itself is indisputably a good thing, at least in the light of your defining indisputably as something that everyone can agree on. It is perfectly possible for an economy to grow in a manner that not only benefits a small section of the population, but actively impoverishes the remainder: oil-based states often experience this.

I'm not arguing that growth is bad, just that it's not necessarily an effective marker for what is good (lower infant mortality rates etc.). This counts especially for poorer countries that already tend to suffer from large internal inequalities.

[Abiola Lapite]

"How can something "work in theory"? This is a bit of an oxymoron. I mean, if I imagine a perpetual motion machine whirring away, can I say that this machine "works in theory"?"

This reminds me of an old joke, according to which French policymakers, schooled as they are in Cartesian thinking, are liable to ask "It works in practice, but does it work in theory?"

[Frank McGahon]

Frank, I don't think GDP growth in itself is indisputably a good thing, at least in the light of your defining indisputably as something that everyone can agree on

Ciaran, surely we can all agree that it is generally better for your GDP to grow than to wither? This is not at all to say that every single thing in a country with growing gdp is all sweetness and light. I'm aware of the "curse of oil" problem, but to use this as a counter-example to the notion that growing gdp is "indisputably" good would be equivalent to arguing from the case of a lottery winner who couldn't handle his newfound wealth and ended up with huge problems, that getting richer was not an "indisputably" good thing.

[Ciarán]

Well, Frank, I'm a terrible pedant, but yes: your lottery winner would suggest that getting rich is not indisputably good in that it is quite possible to come up with examples where getting rich was not good. On development, reforms that lead to economic growth may not be good things if one's aim is, say, lower infant mortality. I'm not entirely sure, that in the context of African countries, say, economic growth has been proven indisputably to deliver benefits to large numbers of people.

Economic growth is not an indisputable good in that, in the very possible circumstances that it wasn't delivering, people might be better off moderating in the name of other valuable things.

[Frank McGahon]

Economic growth is not an indisputable good in that, in the very possible circumstances that it wasn't delivering, people might be better off moderating in the name of other valuable things.

This is a mistaken conclusion. Look, examine two propositions:

1. Growth (barring sudden unsustainable windfalls) is a good thing.

2. All policies which lead to growth are therefore good, even if they have negative consequences.

Now, 2. doesn't logically follow from 1. - You could probably achieve great growth if you enslaved everyone from age 15-60 and put them to work 18 hours a day. The growth achievable from this mass enslavement wouldn't justify it.

The fact that some policies which might lead to good growth have negative outcomes might make those policies or those negative outcomes bad, not the growth itself. You are arguing against proposition 2. not proposition 1.

Further, you are quite wrong to downplay the importance of growth and suggest that places might do better to "moderate" growth (in the hope that what: collectivist socialism miraculously turns out to work this time?). Remember that growth compounds. If my salary "grows" every year while yours "moderates", it won't be long before I'm vastly richer than you. Poor countries need to get richer for a whole load of reasons - they won't be able to provide those valuable things like lower infant mortality, clean drinking water, better life expectancy, greater literacy levels otherwise - and the only way that's going to happen is through "growth".

[Ciarán]

I was arguing against your conflating propositions 1 and 2. After all, you said that it was indisputably good, and defined 'indisputably' in a way that made it sound very much like 'necessarily.' Something is not indisputably good if it has some bad consequences: some people could dispute how good it was.

As for your equating moderate growth with collectivist socialism, well that doesn't follow. All economies in fact do moderate growth. As you said, they don't allow slavery. They also impose regulations on what sorts of contracts people may enter into and the manner in which people provide information (in the financial markets, for example) or produce externalities. This isn't collectivist socialism, no more than arguments against big government are necessarily anarchist. It's just a statement that growth is one of a number of values that states must account for.

[Frank McGahon]

I was arguing against your conflating propositions 1 and 2.

Where? I simply made the point that growth itself, or increasing gdp was an indisputably good thing, this isn't the same thing at all as retrospectively coronating all policies which lead to growth.

All economies in fact do moderate growth. As you said, they don't allow slavery. They also impose regulations....

No. No. No. this is not "moderating growth". This is enacting policies which may have the consequence of a slightly less growth than full slavery. This is not the same thing.

The full slavery was just a reductio ab absurdum to demonstrate one point, it is not the case that growth is involved in some zero sum game against "valuable things" and the only way to achieve growth is by reducing the "valuable things". In fact the opposite is closer to the truth. Without growth, poor countries cannot provide the valuable things.

[eoin]

"If my salary "grows" every year while yours "moderates", it won't be long before I'm vastly richer than you. "

True, but you are conflating GDP growth with GDP per capita growth. GDP growth which is merely a function of a country having a growing population is not necessarily a good thing*. If for instance the Irish economy is to grow by 6% because it's population it to grow by 6%, but the per capita GDP were to remain the same, then the average person ( worker) will not be better off.

He would be worse off in terms of what economists slyly call externalities - time to get to work in the more crowded streets, an so on.

[Ciarán]

I don't think we agree on anything more than language. First, I wasn't being quite clear, but to run with it, you conflate growth and its consequences if you say that it is impossible to dispute growth being a good thing (i.e., it is indisputable). After all, if it is impossible to dispute it's being a good thing, then it is impossible to point to any consequences as suggesting that a particular instance of growth may not be wholly good.

On moderating, well "enacting policies which may have the consequence of a slightly less growth" is moderation. It's the act of being moderate.

And as for picking me up on the slavery point, I was well aware that you were engaged in a reductio ad absurdam, which is why I followed with a few other points. Why must accountants produce reports in certain ways? Why must I bear the costs of health and safety when I employ people? Why can I not pollute at will? All of these things might lead to higher growth (as they did in the 19th century), but we regulate the people's activities because we value other things apart from growth: in these cases, information, health and environment.

But I think we more or less agree. So let me state my case to see if I'm right.

Growth is certainly required for poor countries to provide all sorts of 'valuable things' (God: now I'm doing it!), but it is not a stand-alone value. It is an instrument to achieving other ends. If the wholesale pursuit of growth did not achieve those ends or produced some bad consequences (China during the Great Leap Forward, for example) and the sacrificing of some growth might be more effective in bringing those ends about or avoiding bad consequences, then less growth than is possible would be preferable.

Once we admit other values, it is possible to dispute the idea that growth is good. Which means that saying it is an indisputable good is incorrect.

[Brian]

"This is an oft-repeated sentiment, but does it really mean anything? How can something "work in theory"? "

It doesn't "mean" anything. I was merely trying to explain why certain ideas still hold much romantic value despite the obvious negative consequences of them being put in action. Such negative consequences are usually explained by apologias for the specifics of that situation. For example, East Germany or the USSR wasn't SUFFICIENTLY pure in their application of communism and that's why it failed. This is argued rather than offering an admission that communism itself was fundamentally flawed.

[Frank McGahon]

Ciaran,

I fear you misunderstand what I meant by "indisputable" and it occurs to me that we have strayed way off track. Of course growth is of instrumental value only. My very first point was a throwaway reference to what might constitute an indisputable good outcome, for a particular case. Thus, in the case of poor country X which badly needs economic development, it is possible that opponents and proponents of policy Y might agree that, in this particular case the growth was a "good outcome".

Oh, and I disagree with you on the relationship between regulation, growth and externalities - regulations will reliably hamper growth but are considerably less reliable in achieving their purported positive externalities - but we'll save that for another day!

[Frank McGahon]

Such negative consequences are usually explained by apologias for the specifics of that situation. For example, East Germany or the USSR wasn't SUFFICIENTLY pure in their application of communism

Of course, communism hasn't been tried yet! as Tony Benn was wont to proclaim.

[Peter Nolan]

"hile others see might see such campaigners as altruistic idealists, I see this as a form of neo-colonialism, attempting to install in the developing world a western-derived collectivist socialism which has been spurned across the developed world"

That's just because you're evil, McGahon!

[Ciarán]

Fair enough! I was becoming just a little aware writing my last rambling comment that the relationship between what I was typing and the topic and hand was becoming, er, obscure...

[Jon Ihle]

Frank,
You know, of course, about those people who think

1) growth = consumption

and

2) consumption is indisputably bad

therefore....