> You're characterizing our disagreement as hinging on whether public
> policy should optimize economics subject to moral constraints or
> optimize morality subject to economic constraints.  I'm unclear on what
> either of those really mean for public policy.


There's a difference in the intent of your policy and the methods that you 
will use to evaluate it. For example, suppose that you've devised a new 
tax code for an underdeveloped country. When you evaluate its success, 
will you look at how much additional wealth it generated, or some actual 
measure of utility such as the percentage of citizens who have access to 
electricity or clean water? I use the term "actual measure of utility" 
because I think that just examining, say, the increase in GDP is a bad way 
to measure net social welfare. The net wealth of a society is, at best, an 
indirect measure of its net welfare because aggregate wealth trends tell 
us nothing about the *distribution* of wealth or whether that wealth is 
being used to satisfy some particular goal. The classic example is health 
care. Despite rising levels of aggregate wealth in America, many 
*individual* Americans have poor health and inadequate access to proper 
medical care. Is the solution to this problem the creation of even more 
wealth in the hope that the health care industry will spontaneously 
reorganize? Or is the solution a targeted policy, whether it be 
nationalized health care, better health education in schools, and/or 
something else? I argue that the latter approach would be better, 
particularly since the market has thus far been ineffective in addressing 
this issue.

The failure of wealth-driven policies is even more obvious in the 
international pharmaceutical market, where drug companies develop 
medicines for diseases that affluent people care about (e.g., restless leg 
syndrome, diabetes) and ignore a huge number of illnesses (e.g., diarrheal 
diseases) that affect a much larger number of people who have much less 
money. People who care about net welfare should find this problematic. So, 
in the international drug market, should we pursue wealth-driven or 
morality-driven policies? In other words, should we allow drug companies 
to maximize their profits and hope that they'll turn a charitable eye 
towards the developing world, or should we force them through regulation, 
subsidies, tax credits, etc., to address the needs of poorer countries? 
History suggests that the former strategy will fail if you're trying to 
optimize for health and not profit.

I understand that it is extremely expensive to develop new drugs and that 
pharmaceutical companies must be given a way to recoup these costs. 
However, it's obvious that a market system which focuses on maximizing 
their profits will not lead to a net increase in global health (an 
important utility metric).



> Let me first defend Graham's point.  He concedes whole classes of 
> exceptions and I think social injustices are included, if not 
> explicitly. His argument -- that income inequality is not, inherently, 
> unjust -- remains intact.

Once again, I'm claiming that economic justness does not equal moral 
justness. When you say that income inequality is "not inherently unjust," 
you should specify whether you refer to the economic definition, the moral 
definition, or both.

If Graham includes social injustice in his exceptions list, then I suppose 
that he and I are in agreement. But if Graham believes in the entrenched, 
pervasive nature of social injustice, why does he spend so much time 
waxing poetic about the inherent fairness of economic inequality? This 
fairness only exists in an idealized model of the economy which bears 
little resemblance to the real one. The fact that Graham spends most of 
his time talking about this idealized world suggests that either a) he is 
a hopeless utopian, or b) he does not, in fact, believe that social 
injustice is entrenched and pervasive ;-).

~j


p.s.

> And just to nip a potential subthread: the non-mathematically inclined 
> are not allowed to blithely declare human motivation to be irreducible 
> to mathematics.

Ah, but I claim that the mathematically inclined are not allowed to 
blithely declare that human motivation *is* reducible to mathematics ;-). 
The reason that I do not use yootles to determine who will pick me up from 
the airport is that, in the common case, this decision is not subject to 
rigorous mathematical or economic constraints, nor should it be. In many 
scenarios, I only care about approximate notions of fairness. I suppose 
that if gasoline were $27,000 a gallon, it might be reasonable to employ a 
strong mathematical framework to prevent tragedy (e.g., "Oh no, Todd has 
taken me to the airport fifteen times but I haven't taken him at all. Todd 
has now spent $405,000 on gas while I have escaped scot-free."). Absent 
such extreme conditions, the introduction of mathematics into simple human 
transactions will often just add overhead and produce little tangible 
benefit.

It is frequently possible and fruitful to analyze people's behavior using 
mathematical models. However, that doesn't mean that the underlying 
psychology of the individual is actually driven by these models, or that 
giving the math to people will make it easier for them to manage their 
lives.