Series: Part 1 | Part 2 | Part 3
When Cost-Benefit Matters …
If there is a part of The Darwin Economy that made me smile is the reasoning Frank uses regarding his discussion on morality and cost-benefit analysis. The reason for the smile is that the argument is so remarkably beautiful, simple, and sound (Frank, 2011, pp. 35-39). If Frank wanted to be a philosopher, I think he would be a great one. Contrary to appearances, philosophers search for the best possible clearest line of reasoning. Of course, philosophy is not easy, and its level of rigor of thought leads, sometimes, to difficult discussions, not easily understood by non-specialists. However, there are others who discuss many issues unnecessarily. I know that Frank is not exactly impressed with many of the so-called “philosophers” today, who try their best to make their writings as confusing and obscure as possible (e.g. Judith Butler). He thinks that in these cases, there is a positional tendency of some “philosophers” to appear scholarly by showing off their excessive use and abuse of words, when, beneath, there is next-to-no-content to offer anyone. I agree.
Of course, I underscore the fact that I adopt a deontological point of view, Frank’s is a consequentialist view. But, in my view, none of this diminishes at all his argument.
Following his sound line of reasoning, he confronts people who object on several cost-benefit analyses on ethical grounds. For example, should a business owner place a blade guard for his woodworkers’ safety? Frank argues convincingly, that the answer depends necessarily on cost-benefit analysis, since buying a blade guard and paying its maintenance costs money (Frank, 2011, p. 38). An employee working in a risky job receives higher salary for this reason, since the owner does not have to spend money on blade guards, and there are employees willing to place their lives in risky jobs if there is more pay in salary. An employee’s safety is an ethical concern. Yet, he or she could also trade his or her safety for higher salary. From an ethical standpoint, many people suppose that we should respect a person’s free choice of trading salary with safety. Then the problem ceases to be ethical, and it becomes a cost-benefit issue. How much is safety worth? Answer: what employees are willing to pay for it (Frank, 2011, p. 37-38).
The problem comes when many people need their children to go to the best school, which requires them to live in the best school districts, hence they need to buy more expensive houses. Under such circumstances, this becomes a positional problem. There are only so many houses in the best school districts, which leads to an exponential increase in the number of people trading safety for higher wages. This happens while this dynamic increases the market cost of the houses in the best school districts. As time goes by, this competitive scenario leads to people spending in houses that are too expensive and adopting jobs that are too dangerous. In other words, this is not the case of just people “freely” choosing to place their lives at risk for higher wages, but they are also people who are engaging in a competition that places the lives of other people at risk. Negative externalities abound in such cases. Defending such freedoms blindly, leads to a worse society … and nobody would end up better than before. Let’s remember Mill’s harm principle, we should avoid acting in ways that lead to undue harm to others (Frank, 2011, pp. 37-38).
This is what Darwin noted, that frequently competition among individuals can lead to results that are worse-off from a group standpoint. Hence, as Ronald Coase suggested, the state must mimic the situation where employees as a collective would choose freely to establish a deduction in salary (willingness to pay) for greater safety … hence states’ rules for safety. What if salaries are too low to buy safety?… Then the state could impose higher wages. In any case … the state should intervene to avoid the sort of competition where everyone is worse off (Frank, 2011, pp. 38-39).
Notice that Frank’s reasoning is completely compatible with the deontological view we assumed in an earlier blog post in this series. A comprehensive view of the complexities of society that takes into account all orders of society (technoscientific, juridical-political, ethical, etc.) will let us see clearly the nature of the problem before us, and apply the corresponding solution to the problem. We can lead to effective results if we know which areas of the technoscientific realm (where the economy is) should be restricted by the juridical-political order for the benefit of us, the moral beings in the story. The rest of the analyses made throughout the book regarding this reasoning (willingness to pay, income transfers in private and public spheres, steep progressive consumption taxes, taxing harmful activities, and so on) would be completely validated under this deontological framework.
Again, I strongly advise my readers to buy the book. I guarantee you, despite any philosophical objections I might raise in my blog, it is a gem. If I participated in U.S. elections, I would actually start an enthusiastic campaign to reform tax policies in the way suggested by Frank … plus the implementation of the majority of the policies suggested by Richard Thaler and Cass Sunstein in their book Nudge. Hey, both books are libertarian! So, I don’t expect libertarians in Congress to oppose their suggestions. If you, my dear reader, live in the U.S. … what the heck are you waiting for?!
Yet, there is a little thing I wish to address to end the series.
The Trolley Problem or its Equivalents
Frank says in his book a little comment regarding deontologists:
[Deontologists] often manage to score telling debate points by constructing examples in which the action with the best overall consequences seems clearly impermissible to most observers.
A perennial favorite describes a botanist who wanders into a jungle village where ten innocent people are about to be shot. He is told that nine of them will be spared if he himself will shoot the tenth. What should the botanist do? The consequentialist framework seems to suggest that shooting the innocent man would be the right choice, because doing so would result in the net saving of nine lives. Yet most normal sentient beings are loath to endorse that conclusion. Deontologists insist that such examples demonstrate the bankruptcy of consequentialist moral reasoning (Frank, 2011, p. 94).
Well … not quite. If you are a hardcore deontologist, perhaps you are blinded to the fact that under such circumstances, we (deontologists) still have to choose! Yet, as the philosopher Judith Jarvis Thompson and others have pointed out, neither the consequentialist nor the deontological frameworks help us systematize situations like this, and similar (although qualitatively different) situations such as different versions of the trolley problem.
Trolley Problem: There is a trolley going to hit five people stuck in the tracks. You, the driver, may make a switch to another track to save the five, but there is one person stuck in that other track. What do you do?
There are many versions of this problem, showing different situations to let us see the problem of systematicity of the criteria we use in each case: What happens if instead of switching, you can throw a fat man to the tracks to stop the trolley? What if the one man in the other track is a friend? What if the person doing the switch is not the driver or a bystander? … and so on.
Note: Frank’s opinion on what should be done if the man in the other track is a friend appears in his book What Price the Moral High Ground? How to Succeed without Selling your Soul, pp. 55-56. I highly recommend this book also. Although I don’t agree with Frank’s conclusion regarding consequentialism in this case, the book is another very big gem. Again, everyone should read it.
I will not solve the whole variety of trolley problems here, because, honestly, it is a philosophical headache for me. However, I just wanted to say that the botanist example brought by deontologists, according to Frank, may be an “easy” way to dismiss consequentialism, but in the end it is a simplistic reasoning for any deontologist to hold.
References
Foot, P. (1978). The problem of abortion and the doctrine of double effect. Virtues and vices. Oxford: Blackwell.
Frank, R. H. (2004). What price the moral high ground? How to succeed without selling your soul. Princeton: Princeton University Press.
Frank, R. H. (2011). The Darwin economy: liberty, competition, and the common good. Princeton: Princeton University Press.
Thomson, J. J. (1985). The trolley problem. Yale Law Journal, 94, 1395-1415.
Thomson, J. J. (2008). Turning the trolley. Philosophy & Public Affairs, 36, 2, 359-374.
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Of course, in the academy and in an increasing secularized society, agnostics and atheists are increasing in numbers. I have no problem with most of them, and actually love to sit down and talk to them for hours. Many of my friends are atheists, agnostics and unbelievers, and I am proud of them.
Yet, as time goes by, there is an emerging pattern from people who meet me at first, who are either atheists, agnostics, or even indifferent to religion. When they learn that I am Catholic, one of the first questions they ask me is: “Do you think I am going to hell?”
Sometimes, I find it so amusing, other times annoying. People seem to think that hell is the first thing in my mind when I meet them. Sometimes I am tempted to respond:
-”Do I look like God to you?”
-”Thank you for thinking that I have enough divine powers to decide that.”
-”Are you an asshole?”
-”Did you do your good deed for the day?”
-”You will! But don’t worry … go to confession first, I’ll take care of the rest in a few minutes.”
-”Yes, you are going to hell … Which of the circles do you prefer?”
-”Well … your face sure looks like hell right now!”
-”Let me read your hand and see your future afterlife … in fact, let me read the ‘index’”
-”Well, now that you’ve chosen me as your afterlife judge, you better treat me well … or else!”
-”Have you been a good boy/girl this year? Have you been naughty or nice?”
-”Yes! So prepare to have dinner with Ann Coulter!!!!” ~ Evil Laugh ~
-”Yes … that is … if you end up with an HMO”
-”Nope… because you studied Biochemistry and paid for all your sins” (very few understand this joke)
-”Do you watch porn?”
Robert Frank’s brilliant book, The Darwin Economy, a very well-argued long statement against the inanity of political and economic discussions in the United States, should be taken seriously by the political right, left, center and none of the above. Although I differ from his consequentialist framework, I want to emphasize two things:
- Even though it may appear that he is not interested in issues regarding social justice, I don’t think it is the case that he is indifferent towards those issues (pp. 131, 169). There is a feel in the book for the opposite. He is motivated by those issues, but he is not being ideological about it. This can be seen very clearly about his interest about labor-managed firms and their failure to proliferate in the market (Frank, 2011, pp. 30-35).
- It is good not to lose sight of his line of argument: even if you become the most recalcitrant libertarian in the universe … a John Galt, a Prime Mover a la Ayn Rand, and being totally selfish about the whole thing … you will eventually end up choosing a society very similar to a welfare state, very, very close to one that is built on principles of social justice (pp. 131, 202-207). In other words, the most selfish of libertarians living all the Randian virtues, if he or she is intelligent, will end up in no less than a libertarian welfare-state (pp. 211-215)
Of course, for those who haven’t read the book, talking about a “libertarian welfare-state” sounds nonsensical. Yet, everything becomes transparent when we realize that Frank’s whole argument is not solely founded on Darwin’s observation regarding individual and group interests, but also on the views of one Nobel Prize laureate, Ronald Coase. Frank’s reasoning regarding Coase holds perfectly for the creation of a welfare-state. Yet, there are some aspects regarding his use of Coase which, I argue, can be better understood within a deontological framework, as presented in my previous post.
Meet Ronald Coase … and the Reason He Won the Nobel Prize …
Ladies and gentlemen … meet Ronald Coase!
This picture pretty much presents Ronald Coase as he looks today. Did you know he was born in December, 1910? Yep! That makes him …. ummm… 101 years old. Yes, he is alive … not kidding!
Anyway, Coase is famous for two great works in economics. The first one has to do with his research on why corporations exist. In his article “The Nature of the Firm” (1937), he discovered the obvious … at least it is obvious to us now, but not then! Why do corporations exist? For one simple reason, because if production consisted solely of independent businesses specialized each in one sole activity (one for extracting metal, another business for making them into pieces for assembly, another for building the product, and so on), each one of them would have to sign contracts with the others in order to create a chain of production between them. Even supposing that these contracts are negotiated at negligible cost and very easily, it wouldn’t be practical to negotiate all of them, and would drive product prices sky-high. Imagine a car that is built this way, nobody will be able to buy it. Yet, Coase realized that corporations exist because it is far easier, cheaper, and more efficient that a hierarchy of command is established, and then create a whole division of labor with a chain of workers doing different jobs … just like Adam Smith envisioned (Frank, 2011, pp. 90-91).
But the work that deserved him the Nobel Prize in 1991 was his 1960′s article, “The Problem of Social Cost“. The statement of this article has made us understand better the relationship between the law and the economy. Before this very important article, the law usually saw disputes within an ethical framework: perpetrators vs. victims. This framework does seem to hold in some cases, but in other cases, it is clearly inadequate. For instance, the paper (and an earlier one) makes one reference to the Sturges vs. Bridgman case (1879) as an example. In The Darwin Economy, Frank modifies it a bit, but the situation is exactly the same.
Before I go into details, I wish to talk about externalities. The term “externality” has to do with what all of us “internalize” and “externalize”, when we invest in something. Sometimes that investment has a positive or negative effect that a third party did not consent. For example, if I paint my house, and modify it to look good, clean, and so on, not only do I have internalized a gain from that investment, but I also externalize value to my neighbors’ houses, in this case, this is a positive externality: my investment in my house has the side effect of increasing my neighbors’ house value. I never sat down with my neighbors to ask their permission to increase their houses’ value, yet, in 99.99% of the time, they won’t protest because of it, they will welcome such intrusion without their consent. However, most of the time when economists talk about “externalities”, they mean negative externalities, i.e. externalities that cost to others.
In “The Problem of Social Cost”, Coase argues that externalities are reciprocal in nature. How so? He uses some cases illustrate his argument perfectly. I am going to use Frank’s version of the Sturges vs. Bridgman case. Frank quotes Coase:
A confectioner had used certain premises for his business or great many years. When a doctor came and occupied a neighboring property, the working of the confectioner’s machinery caused the doctor no harm until, some eight years later, he built a consulting room at the end o the garden, right against the confectioner’s premises. Then it was found that noise and vibrations caused by the machinery disturbed the doctor in his work. The doctor then brought an action and succeeded in securing an injunction preventing the confectioner from using his machinery. What the courts had, in fact, to decide was whether the doctor had the right to impose additional costs on the confectioner through compelling him to install new machinery, or move to a new location, or whether the confectioner had the right to impose additional costs on the doctor through compelling him to do his consulting somewhere else on his premises or at another location (Coase, 1959, p. 26).
If we use the perpetrator vs. victim ethical framework, we have a problem. As Frank argues very well in The Darwin Economy, it is not clear, from an ethical standpoint, who is the perpetrator or the victim (Frank, 2011, pp. 85-95). The situation for the doctor is the following: the noise costs him $20,000 in damage. The doctor could move at a cost of $10,000, or he could install soundproofing machinery at $5,000. In light of this scenario, there are two possibilities:
- The state could make the confectioner liable, in which case, he would have to install soundproofing machinery at $5,000 as the most efficient solution. After that, the confectioner would not have to compensate the doctor for the damage.
- If the state did not make the confectioner liable, the doctor’s best option is that he himself would have to install the soundproofing machinery at $5,000.
Most people find (2) troubling. Why should the doctor have to pay to the confectioner? Yet, as noted, no one is perpetrator or victim in this scenario. In case the state did not hold the confectioner liable, the confectioner would not have to pay, making the doctor adopt the most efficient solution to the problem (Frank, 2011, pp. 88-89). This is the problem of reciprocal externalities, where a simple and at low-cost negotiation would have been enough to solve without state intervention.
Of course, libertarians took Coase’s solution as if he had said that the state were not necessary, and that the state were actually hindering the market. Yet, as Frank notes, this could have not been Coase’s message at all. Actually the moral of the story is not that the state is not necessary in such situations. As we have stated above, Coase has studied the need for corporations to solve the problem that arises when negotiations among parties are impractical. In such cases a corporation establishes an authority which facilitates the whole process of production very efficiently. What happens regarding the confectioner and the doctor when negotiations become impractical? Very simple! It becomes the role of the state to mimic the situation where free parties would have negotiated if it were practical. That would be the best possible solution (Frank, 2011, pp. 89-91). If we generalize this situation, then we will end up in a libertarian welfare state.
Frank states that such a view would be classified as consequentialist (Frank, 2011, pp. 93-94). Yet, I see no reason why this should be the case. Referring to my earlier post, the problems considered here belong to the techno-scientific stratum of society, not to the ethical stratum. Why? Because this is not an ethical problem: again, none of the parties can be classified as perpetrator or victim. So, from a deontological point of view, there is no ethical principle to defend here. This is a market problem, to be solved in the most efficient way possible: there are reciprocal externalities, so the best possible way to solve this problem is the Coase’s approach.
Misapplications of Coase’s Approach
Before I make my core-criticism, I want to point out that Frank is being careful with many of his statements. Although he suggests Coase’s approach, he also says:
It isn’t my claim that the Coase framework is the uniquely correct way of thinking about such decisions. But to the extent that we can agree that the costs and benefits of the alternatives we face matter to at least some extent, I hope we can agree that the Coase framework might often facilitate clearer thinking about the relevant trade-offs (Frank, 2011, p. 98, my emphasis).
Despite this, I have a disagreement with Frank regarding a misapplication of the Coase framework. For example, should it be applied to interracial hand-holding? Let’s imagine that in the south, in the 1960s, each interracial couple would be willing to pay $100 a week for the right to hold hands in public. If there are 100 interracial couples, then that would be a total of $10,000 a week for the city or the state. Yet, there are a million whites willing to pay $1.00 a week to avoid the sight. If negotiations may have been practical, each white may have paid or $0.10 a week for a total of $100,000 which would finance a payment of $1,000 a week to avoid holding interracial hand-holding. That would mean that each interracial couple would be $900 better than before ($1,000 a week they receive minus the $100 they suffer from not holding hands). Each offended white would be $0.90 better than before. Therefore, this is a good deal for both parties … or is it? (Frank, 2011, pp. 95-96)
Of course, Frank makes it clear that such an arrangement is completely unacceptable (Frank, 2011, p. 96). Yet, what would prevent such thing from happening? Why wouldn’t it be ethically right for interracial couples or whites to carry out this transaction? What is the ethical reasoning that would make us regard this as unacceptable? Again, Frank uses a particular consequentialist framework. He explains his position to be against this arrangement in the following way:
… the analysis completely ignores the fact that people adapt over time in dramatically different ways to different forms of real or imagined injuries. The cumulative amount that white residents o Atlanta in the 1960s would have been willing to pay to avoid the sight of interracial hand-holding probably did outweigh the cumulative amount that the small number of interracial couples would have been willing to pay for the right to hold hands. But as interracial relationships have become more common during the intervening years, attitudes have changed dramatically, and in ways that were completely predictable at the time (Frank, 2011, p. 96).
As a deontologist, I cannot avoid thinking that Frank’s heart is in the right place, but this reasoning is not. I think that he implicitly carries out another misapplication of the Coase framework. Does Frank mean that if people are not able to adapt over time to interracial hand-holding, then the Coase framework would be ethically acceptable? Even if we were to argue that in such circumstances whites and interracial couples were to end up economically “better” under the Coase framework, it really strikes our moral sense to actually consider interracial hand-holding as being subject to negotiations.
As Frank does recognize, the Coase framework works very well when allocating scarce resources, which is what the market is all about. Yet, the example of interracial hand-holding is an ethical and not a market problem. From a deontological standpoint, we are treating a couple’s legitimate loving expression as being subject to commercial exchange, as if it had a price (in the Kantian sense). Yet it is not subject to price, because it involves dignity (see my previous post regarding the difference between price and dignity).
We have seen that in most of the cases, consequentialism and deontology usually end up in almost the same place, to account for what, phenomenologically, strikes our moral sense. Yet, here deontology has a very clear-cut criterion to establish why the Coase framework should not be applied in the case of interracial hand-holding, and why the consequentialist criteria don’t seem to work very well … at least the way Robert Frank applies them.
References
Coase, R. H. 1937. The nature of the firm. Economica, 4, 386-405.
Coase, R. H. 1959. The Federal Communications Commission. Journal of Law and Economics, 2, 1-40.
Coase, R. H. 1960, October. The problem of social cost. Journal of Law and Economics, 3, 1-44.
Frank, R. H. 2011. The Darwin economy: liberty, competition, and the common good. Princeton: Princeton University Press.
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Introduction
Many people who have heard about the terms “deontological theory” and “teleological or consequentialist theory” in the field of Ethics, usually have a very particular way of understanding the debates engaged by ethicists on both sides of the field. Sometimes the image people have about it is a caricature of the more nuanced views in both sides. Let me give you an example of what I mean, in the movie Robin Hood: Men in Tights, there is a scene where Robin Hood, Achoo and Blinken want to cross a bridge. Robin assumes what we could call a deontological approach to the problem, while Achoo chooses a more consequentialist and more efficient approach.
At least in the Anglo-Saxon environment, there is a lot of favor for consequentialist approaches to problems. At the same time, there is an image of deontological approaches as being noble in spirit, but inherently stupid in practical terms … much like the way suggested by Robin Hood: Men in Tights.
A similar perspective is shared by Esperanza Guisán with her highly critical exposition of Immanuel Kant’s philosophy and his pure deontological views. In fact, she alleges that Kant was moved by his pietist prejudices against inclinations and emotions in general as being inherently “evil”. These are the grounds with which she practically insults Kant’s philosophy to the ground in a very aggressive criticism. Since Kant’s proposal is, for all practical purposes, religion in disguise, and she is absolutely unable to stand any religious view in any way throughout her book, then she gives the impression that no one should pay any more thought on the subject, and apparently the discussion ends there (Guisán, 1995, pp. 170-189).
Other authors who actually admire Kant’s contributions, and assume a deontological view (like myself), are more moderate. In fact, as the eminent bioethicists Jorge José Ferrer and Juan Carlos Álvarez point out, rarely can you find today a “purist” deontological philosopher, all of them incorporate consequentialist aspects to their philosophy in one way or another (Ferrer & Álvarez, 2003, pp. 113-114). In this case, I wish to talk about a deontological approach that I think is adequate to understand many of the proposals of The Darwin Economy from a deontological framework.
The Ethical Points that Kant wanted to Make
Kant has been damnable in the minds of many consequentialists. Some of their complaints are well founded, especially regarding the inflexibility of what should be done under specific circumstances. Others, like Guisán’s attacks, are unwarranted. It may be that Kant was playing a closet pietist while writing his ethics, yet that should be irrelevant when we are evaluating the validity of his contributions.
The question we should ask is what did Kant want to do with his philosophy. I have written about this before, and I invite the reader to read that article on deontological ethics, but I will repeat the main idea. In Kant’s Groundwork for the Metaphysics of Morals, Kant points out that we all have the equivalent of what David Hume called “moral sense”, a very basic instinctual knowledge of what is good or bad, right or wrong. Yet, the major problem everyone has is that we, humans, are the masters of deception and self-deception. Sometimes, demagogues, religions, politicians, or even our own friends, can deceive us to make us do what is wrong or evil. It may well be that even though we believe that we are doing something inherently good, in another level we know it is wrong. What Kant said was that his proposal should be taken like a sort of compass to point to a secure ethical north (AK:404-405). He may have gone too far dismissing inclinations altogether, but this dismissal is not an issue of piety, but an issue of the subjectivity of inclinations. Today we know that we are unable to make rational decisions without emotions, nor with too much emotions. Still, Kant’s point is still valid, in the sense that too many times our inclinations can lead us astray. Instead by operating by inclinations, Kant is saying that we should use the rational compass of his proposal.
Also, it is worth noting that Kant “was not born yesterday”. He did say that good actions carried out contrary to inclinations are more ethically praiseworthy than those when we act in full agreement with inclinations. Yet he did not really pretend that every single human being can act from duty all the time. Sometimes we will act in conformity with duty, sometimes from duty, sometimes none. Yet, if we are confronted with a situation when we need to act the best way possible, Kant says that we should keep in mind the formulae of the categorical imperative to discover which maxims are the actual ethical laws to follow.
A More Contemporary Deontological Model
After G. E. Moore’s Principia Ethica, metaethics has become important, and its distinction from normative and the applied levels of ethics is far more significant in this process. So, the framework I am proposing for the discussion is the following:
- We can assume the formulae of the categorical imperative as Kant proposed or certain revised versions other people have made on them as our metaethical criteria to establish which are the objective ethical norms.
- At the normative ethical level, we can adopt all of the maxims that are consistent with our metaethical criteria as being objective ethical norms. These are the sort of norms which we should follow from duty, as Kant would say.
- In the practical or applied level, we deal with black and white situations and all of the grayish area in between. It is the juice of ethical discussions in philosophy.
In the normative levels, the ethical norms have their own rational foundation and can be assented and recognized as valid by all rational moral beings. I add here the term “moral”, because as Robert Frank says in another work of his, the term “rational” is often used in equivocal ways, which is one of the reasons he points out that “rational” choice models used by economists can be wrong very often. Some define rational as “intelligent selfishness”, yet humans do not always behave in such ways. The way I use the term “moral” in “moral being” is a person you can consider responsible for his or her actions, who is able to choose in terms of right and wrong according to a set of values, and is aware of the consequences of his or her actions.
Every rational being is moral, but do not always act ethically. I contrast moral with ethical. An act is moral if it follows the norms and values of a given society. On the other hand an act is ethical if the actions are made from objective norms and values which may or may not coincide with moral norms and values. Acting ethically is objectively good, acting morally is not always good. The ethical norms and values are themselves prescribed metaethically, set in the normative ethics arena, while applied ethics seeks the best objective criteria to act the best possible way given certain circumstances.
Given that by extension moral beings can be also ethical beings, and given that there is a distinction between acting in conformity with duty and acting from duty, the question is: which of the norms should prevail given certain circumstances? In this case, the Formula of Humanity can be our guide.
Act so that you use humanity, whether in your own person or in the person of any other, always at the same time as an end, never merely as a means. (AK 4:429)
We can polish Kant’s Formula of Humanity in such a way as to replace “humanity” with “moral rational beings”, which would save us from specism. I wrote about a way we can phenomenologically provide the adequate foundations to determine who is a rational moral being and who is not, while not falling into specism. Other eminent bioethicist, like Diego Gracia, have also made similar approaches from the phenomenology of Xavier Zubiri, but the discussions on these matters are beyond the scope of this blog post.
For now, we should remind ourselves that rational moral beings can claim slight (but only slight) superiority from non-rational non-moral beings. We have the capacity to make rational and intelligent decisions that have great impact on non-rational non-moral beings as a whole. Yet, this superiority is not an argument in favor for “raping the Earth” as Ann Coulter so colorfully described it, or doing with it “whatever the heck we please”. And even if we were to have that sort of gross position, it is a poor approach, since we cannot claim absolute superiority above everything else. As environmentalists, religious naturalists, process theologians and many others have pointed out, we are all connected to the Earth in some way. If we do “whatever the heck we please”, the joke will be on us in the end, especially if we don’t decide to establish unsustainable policies. The religious naturalist, Michael Dowd, reminds us that we can’t live without bacteria, yet they can live fine without us.
Finally, the formulas of Humanity and Autonomy imply the Kantian distinction between price and dignity. For Kant, price is a property of that which can be replaced by something else as its equivalent. He makes a distinction between two sorts of prices: market price is the price that is related to general human inclinations and needs; and fancy price, is the property of something which conforms with a certain taste, with a delight in the mere purposelessness play of our mind. Yet, for Kant, dignity is the property of those beings whose value cannot be replaced by something else, and which can only be ends-in-themselves. In other words, dignity is the property of those who have no price, which means necessarily that every other being does (AK 4:434-435). For Kant, moral rational beings have dignity, nothing else does.
Part of respecting the dignity of moral rational beings is the respect on people’s own freedom, and the people’s ability too choose among some options. In this sense, Mill’s harm principle is perfectly compatible with this notion of dignity, and we can state with perfect consistency that we can create a society whose economy and jurisprudence is based on people’s freedoms, but we should exclude from them all of those unwarranted liberties which create undue harm to others. As Robert Frank has explained extensively in his book The Darwin Economy, this principle of harm does not say that nobody should do any harm to others:
As John Stuart Mill argued in On Liberty, it’s permissible to constrain an individual’s freedom on action only when there’s no less intrusive way to prevent undue harm to others (Frank, 2011, p. 9).
Also, as Frank argues very persuasively, we as social animals, cannot establish the harm principle only to direct harm (e.g. hitting a person with a stick, robbing a bank). For the harm principle to have coherent meaning, we should also include indirect harm. For instance, if an athelete, say a runner, has worked hard for so many years to reach a certain level in a championship, and there is another player who decided to use steroids, there is no direct harm on the former, but there is indirect harm. If the runner has to choose to use steroids too to win, it will lead to serious health and social risks. If her or she decides not use steroids, then, in all likelihood, he or she will lose. No one can argue that there is no undue harm being done here. Frank says:
If Mill’s harm principle is to have any coherent meaning, indirect forms of harm must count. My conception of what constitutes harm to others strike some as expansive. But it’s one that even libertarians will find difficult to challenge in their own terms … Even if libertarians had complete freedom to join others in forming any sort of society they pleased, they’d find compelling reasons for joining one that gave indirect harm equal footing with direct harm. (Frank, 2011, p. 12)
No matter how much is an athlete willing to defend his freedoms to choose, he or she will ever join a competition where there are no rules and penalties against using steroids to win a championship. He or she would love to participate in a competition where such rule is enforced. Hence, from a deontological standpoint, this rule would be completely consistent with the dignity of the rational beings participating in it, because it takes away a freedom that prevents undue harm to all participants.
If this is the case, from a deontological standpoint, economic and political institutions built to guarantee people’s freedoms and help them make better choices without taking people’s freedoms away. In this sense, I wholeheartedly agree with Frank in recommending the book Nudge by the economists Richard H. Thaler and Cass R. Sunstein (follow their blog here).
How would We Organize Conceptually a Deontological Approach to Society
Unfortunately due to language and ideological leanings, some of the social philosophy being elaborated in Europe never reach the United States. For example, the thinking of philosopher André Comte-Sponville on this matter is pretty much unknown in North America. One of the best books he wrote is Le capitalisme est-il moral? (2004), which I have discussed extensively in other blog posts. He proposes four different conceptual strata in order to understand social complexities. Here, I will change the terminology of some of the strata to adjust it to the discussion, but the idea is more or less the same. Here is the illustration:
From bottom-up direction, we can distinguish the following four strata:
- The Techno-Scientific Stratum: It involves techniques which have their own logistics, i.e. their own intrinsic problems, and their own solutions to those problems. Among these we can find the different natural sciences, technology, and the economy. For Comte-Sponville, all of these mechanisms are amoral, hence none of their mechanisms can be considered themselves ethical in any way. Since amoral processes generate good and ill for society, it needs an external social force to diminish the ill (the negative externalities) and increase society’s welfare (the positive externalities).
- Juridical-Political Stratum: The juridical-political stratum consists of the law and the state. It is up to the juridical-political stratum to restrict externally the processes of the techno-scientific stratum. However, this stratum also needs several restrictions. According to Comte-Sponville, laws are not equivalent to ethical norms, which means that unethical people can indeed follow the law verbatim, and still be evil. Also, at the level of the state, which he understands within Rousseau’s conception of what the Republic should be, it is important to point out that the people or the state should not have all the powers. It should have the power to guarantee its citizens’ welfare, but it should never have power against minorities, nor should it have the power to establish concentration camps. Therefore, it also needs the external restrictions established by another social force.
- Ethical Stratum: Comte-Sponville calls it the “moral stratum”, but it is the same idea. This is the stratum of ethical norms as well as the rational beings (as ends-in-themselves), who can establish these external restrictions through their votes, the courts, or even on the street, creating political pressure. It is the stratum where responsible decisions are made regarding the law, and the techno-scientific stratum.
- Emotional Love: Comte-Sponville is based on some of the Christian philosophy regarding what should move us to act ethically. Yet, the “emotional love” in a very loose sense of the term as a way to promote ethical behavior is exactly what cognitive scientists and neurologists have been studying for years. Love for our neighbor, for a nation, for God, can be powerful means to move us to act ethically. He points out three sorts of love that should be at the very top of all emotions that lead us to act ethically: love towards truth, freedom, and humanity.
According to Comte-Sponville, we make a mistake if we want to moralize the economy (which Marx tried to do), i.e. to adjust the economy to be forcibly fair and just using internal, not external, mechanisms. It is equally a problem to eliminate the needs of the ethical stratum and let the dog of the techno-scientific stratum loose (which is the movement-libertarians’ mistake). The state must have a role in the interaction between the techno-scientific stratum and the ethical stratum.
Finally, Comte-Sponville tells us about the importance of taking into account all four strata when making a decision that is going to affect society. We should prioritize one or the other depending on the circumstances, and have the best welfare of humanity when making the decisions. To omit the importance of each one, would lead to irresponsible decisions. Therefore responsibiity, should take into consideration the ethical ideals for society as established metaethically and by normative ethics, but taking into account the consequences that lead society to the best welfare possible.
This is not incompatible with the “libertarian welfare-state”, which Frank advocates, or even the “libertarian paternalism” as Thaler and Sustein advocate.
Why Teleological-Based Models do not Work for Me
Of course, Robert Frank seems to favor a teleological model. His main objection to deontologists, at least as it appears in The Darwin Economy seems to be the following:
Deontologists face other hurdles, such as how to explain where the bedrock moral principles they invoke come from. (Frank, 2011, p. 94).
Of course, this is not the whole objection, which we will discuss in our next blog post on the subject. Yet, he knows that at a practical level, deontologists and consequentialists (teleologists) are almost in the same place:
Consequentialist and deontologists have been at each other’s throats for millenia. Nothing I say here could possibly settle the issues that divide them. But because I will advocate policy claims that follow from Coase’s consequentialist framework, it’s important to emphasize that the two frameworks are less squarely in conflict than may often appear (Frank, 2011, pp. 94-95).
Yet, although there is little difference in extension, there is a difference in intension. I think that the objection quoted above actually is better understood from a consequentialist framework. For example, at all times consequentialism posits the importance of happiness of most individuals possible as the guide for all ethical decisions. Yet, stating this begs the question as for why should we should use this as a criterion for any decision. There is a problem de jure, regarding why should our happiness or interests (in the language of Peter Singer) be considered superior to all other beings, or even if there were no other being, why is happiness and interests good? How do you establish this as an objective criterion when whatever especially when this is moved by subjective inclinations that do not necessarily have a tendency towards ethical behavior. G. E. Moore’s criticisms to the naturalistic fallacy in all modalities, does include pleasure and happiness as identical to being good. He advocated a form of utilitarianism, but a platonist utilitarianism, where happiness alone is not the sole value to be sought by our actions, but many objective abstract values as well.
Deontology, since Kant, has provided an adequate response. The preference of rational moral beings should be preferred because it is us who are the ones who have the ability to make the best decision for society and the world. Also, notice that in all of this there is a consequentialist component of deontology. All non-rational, non-moral beings serve as means, such as the economy as a whole, the jurisprudence and political body (the state), and all the sciences. In this sense, we have provided a more complete deontological model for ethical behavior, especially regarding the economy, in contrast with some other consequentialist models.
In my next blog post on this subject, I will examine other objections by Frank to deontologists, and the consequentialist approach of Ronald Coase.
References
Comte-Sponville, A. (2004). El capitalismo, ¿es moral?. España: Paidós.
Guisán, E. (1995). Introducción a la ética. Madrid: Ediciones Cátedra.
Ferrer, J. J. & Álvarez, J. C. (2003). Para fundamentar la bioética. España: Universidad Pontificia Comillas & Desclée de Brower.
Frank, R. H. (2011). The Darwin Economy: Liberty, Competition, and the Common Good. Princeton: Princeton University Press.
Kant, I. (1999). Groundwork of The metaphysics of morals. In M. J. Gregor & A. Wood (eds.), The Cambridge edition of the works of Immanuel Kant: practical philosophy. (pp. 37-108). US: Cambridge University Press.
Moore, G. E. (1903). Principia Ethica. http://fair-use.org/g-e-moore/principia-ethica.
Moore, G. E. (1912). Ethics. http://fair-use.org/g-e-moore/ethics/.
Paton, H. J. (1971). The categorical imperative: a study in Kant’s moral philosophy. US: University of Pennsylvania Press.
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Her Hair, her Eyes
This work is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
As the Sun walks away,
it scratches the sky,
making it mimic your hair
before the night does arrive …
… or maybe the yellow star just walks away
in its eternal trip to the other side
whenever we see the moon shine
on the brilliance of your emerald eyes …
… those eyes …
the ones I see in my visions
of a sweet morning,
as if you were resting
just by my side.
In my mind I breathe you,
filling my cells with the life of you,
flirting with them, waking them up
at the light of your sight.
Kissing our time together
my illusions become real
and surrounded by your embrace
touching my mind and my dreams
I can ascend to your heart
and be carried away by your streams.
Unlike the previous post where I cheered for Robert Frank’s book The Darwin Economy, I want to be a bit more critical about the book this time.
Before I begin, I want to say that I still cheer for this book, and it is one I ardently, enthusiastically, and wholeheartedly recommend. If I had the chance I would buy lots of them and give them as gifts to my friends, neighbors, legislators, governor … you name it. One of the greatest things about reading this book is that it becomes one of those events which invite you to revise your thinking on a rational basis. And I never cease to marvel at the depths of Frank’s views on the economy. It certainly has stimulated me to revise my own ideological views about how the economy works, and which solutions should be adopted to make this world a better place. As a matter of fact, there are many areas in the book I will use for my Ethics course this semester (most of the students in my course are from Business Management).
That does not mean that I agree with all of the examples he uses in the book, nor do I agree with the way he portrays many aspects of what is a deontological view of Ethics. Frank seems to promote a teleogical or consequentialist view of Ethics, while I use a deontological approach.
What is the Book About?
Before discussing what the book says, let me clarify what the book is not about. When I showed the book to several on my friends in Facebook and Google+, some raised concerns about the subject. They warned me of the possibility that I might fall into social darwinism. Of course, whoever has read my educational material about what Ethics is and is not, knows that I would never fall into it. Although I always begin the course explaining from a biological level how evolution made us have a moral sense, I strongly warn my students that Neodarwinism, as it is proposed today, only describes a whole process by which living beings reproduce, speciate, and change over time. It does not intend to prescribe ethically what we should and should not do as rational moral beings. As we shall see soon, Frank does not turn Darwinism’s description of biological processes into an ethical advice.
Originally, The Darwin Economy was going to be called The Libertarian Welfare State, which gives you an idea of what it is about. Given that Frank was told that such a title would never sell in Europe, he changed its name to The Darwin Economy. It was also written as a reaction to the almost inane (I would say “insane”) “dialogue” that seems to permeate all of political discourse in the United States. Of course, most of us know Adam Smith as being the father of the science of economics as we know it today, yet Frank predicts that in a hundred years from now, the majority of serious and learned economists would name Charles Darwin as the parent of their discipline. Contrary to some misconceptions, Smith showed that, sometimes, if you let selfish people act in the marketplace, the “invisible hand” of the market will lead to good outcomes for society. Frank points out that Smith would not recognize his own views if he ever read the proposals made by extreme libertarians today, who think that government should do nothing and that a free unregulated market will always lead to good outcomes.
Smith’s skepticism about a universal goodness out of selfish people stems from the fact that many business owners can join together and conspire to oppress the people, in which case, the government should intervene to prevent such conspiracies against the public. However, one question we could ask is: When does the invisible hand fail? Frank finds the answer in Charles Darwin’s own work. What drives biological descent with modification is precisely competition among individuals and groups. Both the cheetah and the gazelle compete for survival by trying to be faster than the other. The fastest member of each species tends to survive and reproduce, passing those genes along. When that happens, individual and group interests are in harmony, since the prevalence of fast gazelles and fast cheetahs do actually benefit their respective groups as a whole. In this case, we have “invisible hand”-like results.
However, Darwin also noticed that individual and group interests diverge. This is the case with the bull elk (as you can see in the cover of the book). Members of the species are polygenous, meaning that they take more than one mate if they can, to be able to reproduce. Their male antlers are not really meant to defend themselves against other predators, but to win some fights with other males; whoever wins, will end up with as much as 100 females maximum. So, whoever has the biggest antlers will end up with their mates and pass the genes along. Yet, in this case, there is a problem. If males with heavy antlers prevail, then such feature becomes a disadvantage from the group’s point of view, because they can end up being eaten by predators if chased in dense wooded areas. In this case, individual and group interests diverge. Such cases do happen in the economy, and when they do, the “invisible hand” of the market breaks down.
Bull elk are pretty much stuck with the situation, since their intelligence is not complex enough to make rational decisions about what to do with their antlers. They are pretty much stuck with natural selection. Yet, Frank does not suggest that we ought to be stuck with natural selection, not even market selection for that matter (which is what social Darwinism would suggest). Instead, he points out that we, humans, as intelligent beings who actually can make rational decisions, we should collectively establish a mandate which benefits the group.
He uses the example of hockey players. If you let players have the choice of not wearing helmets, all of them end up not wearing it. This is not because they ignore the fact that helmet protects them (there is no cognitive error in the process), quite the opposite, they know that playing without helmets could increase the chance of being hurt during the game. Yet, given the immediacy of seeing better, hearing better, and intimidating the opponents better …. they are not too worried about a more abstract concern of harm. Yet, if you ask them if they should be a mandate to wear helmets, they would all favor it. Why is there a discrepancy?
If there is no mandate, the individual interest to win prevails, leading other players to do the same, since they are also thriving for their individual interest to win. Yet, when they all do it, the result is that not one individual is in any advantageous position, yet everyone is worse off, since all of them are unprotected. Hence, individual and group interests diverge. A rule mandating helmets and prescribing a penalty for those who do not want to wear it, would make all players wear helmets, everyone would be in equal footing, and they end up better than if there were no mandate.
This is what happens with the construction of ever more expensive houses for the middle class, even when there is no increase in salary in real terms over the years, leading huge problems. Those at the top earned more throughout the years, buying far more mansions, and spending considerably in them, even when they are no happier than before for doing so. This consumerist behavior “trickles down” to those below. As a result, the middle class competed for more and more expensive houses even when they had no real income growth. This apparently benefited them individually, especially regarding status, but not as a group. This inevitably leaves the middle class worse off.
[Note: I highly recommend Robert Frank's analysis on this very interesting subject in his book Falling Behind: How Rising Inequality Harms the Middle Class.]
Frank suggests that a progressive consumption tax will discourage this sort of behavior, among others which create harmful activities such as carbon dioxide emissions which create global warming, while, at the same time, leading governments to have money to invest on roads, bridges, and other infrastructure and services people actually need.
Again, his whole argument makes a LOT of sense, and, in a way, I am completely surprised that this has not led to further policies for scrapping the income tax and payroll tax, and phasing in some of these progressive consumption taxes. In another sense, I am not surprised, since many people in the United States are actually misled regarding how taxes and economic prosperity are related. You need government to take care of bridges, dams, roads, and even the army. As Frank argues, if there were no taxes, there would not be an army, without an army you couldn’t defend yourself against other countries which have armies, and if conquered by another nation you will end up paying mandatory taxes to that country. Also, he shows in the book how lowering taxes has helped terrorist causes. Many people are not aware that because of irresponsible tax cut policies, a lot of funds were cut to keep nuclear missiles in Russia (the former Soviet Union) guarded. This means that terrorists may have far less barriers to reach them. I wouldn’t be surprised if the mushroom cloud metaphor that George W. Bush talked about when launching the failed Iraq War in 2003 will be realized in some way any time soon.
Again, I enthusiastically recommend Frank’s book as being one of those bright lights which challenge people of all along the political spectrum to re-evaluate our own positions on the economy and politics. None of what I will say in these series will ever change that. In fact, I thank him for changing my mind about a lot of things.
Frank’s Ethical Position of the Discussion
Yet, there is a little difference I have with him regarding his approach to the issue of ethics. I confess that I have still to read his book What Price the Moral High Ground?, which seems very interesting. I want to react to Frank’s notion of ethics as he is pondering about the issue presenting Ronald Coase’s contribution to the discussion on what should be the relationship between the economy and the state regarding cases where the traditional ethical framework of perpetrator and victim seems inappropriate. Surprise, surprise! As a deontologist, I fully agree with Coase!
Frank alludes to the famous debate between the consequentialists (teleological ethicists) and the deontologists (deontological ethicists). I happen to be the latter, Frank seems to hold a consequentialist approach. Yet, he recognizes the following:
Consequentialists and deontologists have been at each other’s throats for millenia. Nothing I say here could possibly settle the issues that divide them. But because I will advocate policy claims that follow from Coase’s consequentialist framework, it’s important to emphasize that the two frameworks are less squarely in conflict than may often appear (pp. 94-95).
In many areas of ethical discussions, there seems to be a “battle” between deontologists and consequentialists, but I don’t want to give that impression in this case. Ronald Coase’s views actually does make a lot of sense to me, but reasons very different from Frank’s views. The purpose of my next blog post is to ponder about a deontological solution to some of the problems raised by Coase’s framework.
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A Brief Exposition of the Evolution of the Cosmos
And Elohim said: “Let there be light”, and there was light.
~ Gen. 1:3
None of what science says about the universe is final, strictly speaking. It formulates a theoretical body which tries to account for the phenomena that scientists see in the universe. There are many cosmological proposals today, but the one which prevails in the minds of most cosmologists and astrophysicists is the Theory of the Great Explosion (aka the Big Bang Theory). This theory is not perfect, though, but most scientists think that it is the way the universe began to exist and the theory which best accounts for what we see in the universe.
There are many mysteries about the original grand explosion. For example, the explosion originated a high degree of order (almost contrary to common sense), and, since then, the average degree of disorder in the universe started increasing. Other mysteries involve some constants embedded in everything that exist. These constants did not have to exist the way they did … but they are there! For example, the specific degree of strong nuclear force in atoms, the value of the weak nuclear force, the ratio of the degree between the forces of gravity on the one hand and electromagnetism on the other, the number of space-time dimensions, and so on.
Some theists see this as a “pointer” (not proof) to God’s existence, that is, that God created the universe in such a way as to make it creative and viable for emergent order and carbon-based life. Others of a more naturalistic tendency suggest the hypothesis that there are multiple universe which originate with different constants, and different properties. Yet, apparently, by sheer chance, these had all the right constants for a creative universe such as ours, and we happen to live here. It is no different from the fact that most star systems out there do not seem to be suitable for life … but the more planets are in the universe, the more probable that there are the right conditions for life to come to be in some star system … and we happen to be in one of those planets. The theistic argument and the multiple-universe hypothesis are metaphysical at this stage, because none of them can be confirmed or refuted at this point.
But, according to the Theory of the Great Explosion, there were primordial universal structures that let energy become subatomic particles such as protons, neutrons and electrons. Lose individual protons are by definition hydrogen, and became atoms once electrons were formed and orbited around them. Perhaps there were small amounts of helium at the beginning too. This gave rise to the first hydrogen molecules, and these condensed into the first stars in the universe. For billions of years, these stars formed galaxies, these galaxies formed clusters, and these clusters form superclusters. We are in a hierarchical universe ever evolving into more complex structures. To give you an idea of what we are talking about, let me show you this picture.
Source: Peebles, P. G. E. (1980). The Large Scale Structure of the Universe. Princeton University Press.
This is a picture of one small segment of the universe as it appears in one of the Earth’s horizons. You might think that each dot here is a star. No … each dot is a galaxy. Which means, within each dot there are millions of stars and planets. We can see, though, that these galaxies are concentrated in some sectors than others, revealing a more complex structures. This is one dimension of the way the universe is creative.
As Rev. Michael Dowd has pointed out frequently, creativity is nothing more than creating something which has not existed before. The way the universe creates is in a nested way (much like Russian nesting dolls), where the parts become a whole new entity, and the whole is more than the sum of its parts. Ken Wilber, a philosopher, has coined a name for these whole entities: “holons“. Holons are made up in a nested way from other holons, and they themselves form part of a yet greater holon. The universe is organized in such a manner.
But, what do we mean when we say that the whole is more than the sum of its parts? If you look at a clock, or a TV, or a stove, you will notice that these are not creative units … they are the result of interacting pieces that in themselves play no other role or function. In this sense, clocks and TVs are nothing but the sum of their parts. On the other hand, the universe is not like a clock or a TV, a water molecule is made up of two hydrogen atoms and one oxygen atom. Yet, the result is a new molecule whose properties cannot be explained merely by adding up hydrogen and oxygen atoms. The way these atoms interact with each other make the water molecule a whole new unit. In a temperature between 0⁰C and 100⁰C, hydrogen and oxygen in their natural state are flammable gases (each in a different way), but water is liquid and helps us put out fires. In the same way, galaxies are more than a mere addition of stars, clusters are also more than mere addition of galaxies, and superclusters are more than a mere addition of superclusters.
Formation of our World
There is another important dimension of creativity which we have not addressed yet. The Great Explosion originated mostly hydrogen molecules. Yet, we know that there are many substances beside this: carbon, oxygen, nitrogen, and so on. How did they originate. George Gamow, one of the pioneers of the Big Bang view of the cosmos thought that they were created by the original explosion itself: the explosion was so great, that it forced nuclear fusion among hydrogen atoms to form other elements. Yet, this is not a viable option in light of what we have seen in the universe.
We now know, thanks to a Big Bang foe called Fred Hoyle, that these elements originated inside stars. The astrophysicists actually have shown that this is what happens, precisely because they are able to measure the amounts of elements they find in different sorts of stars, novas, supernovas, and other celestial phenomena.
(Click on Image to see Larger Version of this Image. License: CC-BY-SA-3.0)
This image summarizes well the process of creation of elements, which scientists call stellar nucleosynthesis, which, since then, has been incorporated to the Theory of the Great Explosion. Stars are in a plasma state, that is, they are made up of a gas of electrically charged particles. They usually begin as being an accumulation of hydrogen atoms, which are mostly loose protons because of the high degree of temperature. Also due to the heat, these protons, along with neutrons, form helium inside blue and yellow stars through a process called nuclear fusion. In this process, two atomic nuclei fuse together to form a yet more complex element, releasing energy in the process. Today, most of the sun is made up of hydrogen particles and they are fusing together to form helium. Within the next five billion years, these helium particles will fuse into carbon, oxygen and nitrogen, until there is a point where the sun will increase in size and its light will turn red. This will be the Red Giant stage of our sun.
On the other hand, other stars much bigger than our sun turn to a shade of blue. These are Blue-White stars, where hydrogen fuels run quickly, in which case one possibility is that they will become Super-Red Giants, or the other Blue Giants. In both cases they will produce not only carbon, nitrogen and oxygen, but also sodium, potassium, aluminum and others, thanks in part to the star’s huge force of gravity. Finally, in the fusion process, when enough iron (Fe) is produced, then the star eventually collapses to form a white dwarf, a black hole, or could explode into a supernova. It is in this explosion that the rest of the heavy elements come to be, among them copper, zinc, silver, mercury, and lead.
The Origins of Our Solar System and the Earth
As you might suspect, our Solar System did not arise from just one star formation, but instead from a series of star-formations and supernova explosions. This explains the size of the sun, as well as the prevalence of all sorts of elements and compounds that make the planets, dwarf planets, asteroids and comets be what they are.
Apparently our Solar System is the result of a cloud created by a supernova explosion which rotated in a sort of disk. Hydrogen would concentrate in the center creating a proto-star which would later become the Sun. The rest of the material, through collisions among various left-over matter from the previous star, and which persisted within the cloud itself, became the planets, comets, asteroids, satellites and dwarf planets. How do they look in terms of proportional size? The following NASA illustration gives you an idea.
Let me give you an additional perspective on the size of our Solar System. The following is a beautiful untouched image of Saturn creating a solar eclipse before Cassini Satellite. Earth appears in this picture… I’ll let you guess where it is (you can click on the image to see larger version).
If you can’t see it yet, let me help you. Earth is right here!
As we can see, our whole existence is the result of creative stardust. You, your family, your friends, all animals and plants, all organisms, all minerals that exist on the Earth … all of it is stardust. That is where we come from.
We are the local embodiment of a Cosmos grown to self awareness. We have begun to contemplate our origins star-stuff pondering the stars. ~ Carl Sagan
Mysticism and the Cosmos
This, for me, has been one of my doors to open and explore a mystical view of the universe, and why science is a key to true spirituality. Science does so in two ways:
- Contrary to what many people think, science is inherently humble. Scientific theories are never really final, they are all subject to change as more phenomena is discovered or need explanation. Yes, many scientists themselves could be arrogant and try to tell people how to make their theories a world-view, yet other scientists may not share the same opinion … which leads them to test theories and debate, until evidence provides the final say on these theories. In the beginning of the twentieth century we thought the whole of the universe was the Milky Way… thanks to Edwin Hubble we know that it is much bigger than that. Previously, scientists thought that the theory of spontaneous generation was correct, only to be overthrown experimentally by Francesco Redi and Louis Pasteur. … It is a humble discipline, and it gives us a story that keeps changing as time goes by. Inspired by Brian Swimme and Thomas Berry, the biologist, Connie Barlow, a religious naturalist, calls it the “Story of the Changing Story“, and she adds: “There cannot be any fundamentalism when it comes to the Story of the Changing Story”.
- It shows us that us, humans, are not really separated from the rest of creation. We are part of creation, we literally emerged from it. Science has revealed nothing less that our stars are our ancestors. All living beings are our brothers and sisters. We are all family.
From this perspective, we can actually connect spiritually with everything that exists, and we should develop a mystical union with the cosmos. From a theistic standpoint, this is a union with one manifestation of God’s own creation. For me, this is a very inspiring vision of the universe.
Some Thoughts
The prodigal son left home with an inheritance that he foolishly squandered on a profligate life. Destitute and ashamed, he returned to his father’s house asking only to be treated as a servant, since he clearly deserved no more. To his surprise and gratitude, he was received with love and forgiveness as one reborn to a new and more sustaining way of life. … Our conception of ourselves as set apart from the rest of nature is a bit like the prodigal son leaving home with an enormous inheritance. The repeated collapse of past civilizations and uncertain fate of our own is like squandering our inheritance on a profligate life. Before we become truly destitute and ashamed, perhaps it is time to return home to a conception of ourselves as thoroughly a part of nature. Perhaps this can lead to a more sustaining way of life in the future than in the past.
~ David Sloan Wilson, Evolution for Everyone.
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What is Evolutionary Christianity?
I am an evolutionary Christian, which means many things, among them the following:
- I consider both faith and science as paths to truth and God. There is a revelation of faith so far as it provides the existential meaning for the reality of the world, but I also consider science to be divine revelation. As Catholic, I do believe in St Thomas Aquinas’ statement that a misunderstanding of creation leads to a misunderstanding of the Creator. As it has always been held by Catholicism and many Christian denominations reason and faith are both paths to God. A faith which rejects science is not worth having. In this sense, I do agree with Carl Sagan who said “Science is, at least in part, informed worship”. I worship God in the Church, in nature, in science, in philosophy, and try to worship Him in everything I do and write (not always successfully). From this standpoint, the whole religion vs. science debate makes little sense to me.
- I do not see God and creation to be static, but always evolving in some way. In this sense, I reject much of the idea of “perfection” as it was understood by Hellenistic philosophers, and whose doctrine were integrated to the Judeo-Christian understanding of God. Not that all of Hellenistic philosophy should be rejected, many of them must be kept in Christianity, but the particular notion of “perfection” as conceived by Parmenides and Plato are no longer adequate to be understood in the realm of matters-of-fact (as David Hume understood the term).
- I do believe in a Trinitarian God, but Who is not divorced from its creation. I am a panentheist (notice that I didn’t say “pantheist”), which means that I believe that God is ontologically different from His creation, but is not separate from it, but He is integrated to creation (He is immanent to it), but is more than creation (He is transcendent). This is perfectly consistent with the Pauline statement that in the Lord we live, we move and have our being (Acts 17:28). in God we find our ultimate reason for being.
- I do not see divine revelation as dictation of divine words in tablets of stone (metaphorically speaking). Although many Christians believe that, such belief is actually contrary to Scripture itself. Truth is always the same, but the way God gradually reveals Himself, and the way we have understood such revelation, how ever imperfectly, has changed over time.
- I think of the Bible, Christianity, and all world religions as forming part of what Brian Swimme and Thomas Berry have called “The Great Story” of the cosmos, of the universe. In this sense, the Bible should be placed within an evolving story, and its texts should be placed in a historical context, but without dismissing all of its important contributions with which it reveals the life-giving reality of God.
This is a very short summary of where I come from, although my thoughts on these issues are pretty much more complex, but this is my position thus far. These are the premises of what I am going to discuss in these series on the Bible from an evolutionary standpoint. Today and always, I will thank God for evolution in the broadest sense of the word, because He made the cosmos in such a way that life emerged out of it gradually, to the point of evolving an ever emerging consciousness … until we, each one of us, became the universe being conscious of itself.
The evolutionary epic is probably the best myth we will ever have. ~ Edward O. Wilson
The religion that is afraid of science dishonors God. ~ Ralph Waldo Emerson
We are the local embodiment of a Cosmos grown to self awareness. We have begun to contemplate our origins–star-stuff pondering the stars. ~ Carl Sagan
I am the eye with which the Universe beholds itself and knows it is divine. ~ Percy Shelley
From Simplest Societies to More Complex Societies
Many people ask why did I add to this discussion a reference to Steven Pinker’s book, The Better Angels of our Nature, on the gradual decline of violence. Other people (the vast majority) responded with great disbelief. Here is a conference about the matter if you don’t have access to the book, but want far more detail than I offered in my earlier blog post.
Yet, the trend to non-violent societies worldwide (not just in Christian countries) is evident. This does not mean at all that violence, rape, slavery, and other evil aspects of humanity have disappeared, but it does mean that they have been reduced significantly throughout history. Part of the reason why this peace is taking place and increasing is the fact that our societies keep growing towards complexity.
Gradual complexity is not only a trait of societies, but of all of evolutionary process. Although we cannot say that blind-guided evolution is not progressive in the sense that it will always lead to something “better”, it does have an arrow in the sense that it is directed towards increased gradual complexity. I recommend you the book Evolution’s Arrow, by John Stewart, if you wish to investigate more on the matter. Again, this complexification of reality is not only a trait of living beings, but of all of the universe (the “nested reality” which Michael Dowd talked about in the video in the earlier section). A side effect of a complex and diverse society is precisely the process of peace which Pinker talks about.
No religion is exception to this rule of complexification. These blog series are all about how this happened, and how we can understand the Bible (a complex object) as the result of an evolutionary process.
Three Sorts of Stories which the Bible Tells
When people open their Bible, it is evidently telling us a story … from Genesis to Revelation. The story is not always consistent, some parts of it are beautiful, some sublime, some horrifying, some make you think, and some are contradictory. Yet, traditionally people read it from beginning to end as if it is a single logically-linear argument.
Yet, I want to distinguish three sorts of stories which Bible tells us in different ways:
- The Literal Story: It is as basic as to read the Bible and understand the events as they happen.
- The Different Meanings of Passages: Regardless of whether the Bible is taken literally or not, it must be interpreted. This is the sort of reading heavily interpreted by religions as such. I will not discuss that here.
- The Story Behind the Literal Stories
The last one is the focus of these series, especially regarding the way the Bible came to be over time.
In order to understand what this distinction is about, I want to use a specific biblical passage which has been both admired and rejected by believers and non-believers respectively. By the way, the underline you will see is an important emphasis, not accidental.
It happened some time later that Elohim put Abraham to the test. ‘Abraham, Abraham!’ he called. ‘Here I am,’ he replied. Elohim said, ‘Take your son, your only son, your beloved Isaac, and go to the land of Moriah, where you are to offer him as a burnt offering on one of the mountains which I shall point out to you.’
Early next morning, Abraham saddled his donkey and took with him two of his servants and his son Isaac. He chopped wood for the burnt offering and started on his journey to the place which Elohim had indicated to him. On the third day Abraham looked up and saw the place in the distance. Then Abraham said to his servants, ‘Stay here with the donkey. The boy and I are going over there; we shall worship and then come back to you.’
Abraham took the wood for the burnt offering, loaded it on Isaac, and carried in his own hands the fire and the knife. Then the two of them set out together. Isaac spoke to his father Abraham, ‘Father?’ he said. ‘Yes my son,’ he replied. ‘Look,’ he said, ‘here are the fire and the wood, but where is the lamb for the burnt offering?’ Abraham replied, ‘My son, Elohim Himself will provide the lamb for the burnt offering.’ And the two of them went on together.
When they arrived at the place which Elohim had indicated to him, Abraham built an altar there, and arranged the wood. Then he bound his son and put him on the altar on top of the wood. Abraham stretched out his hand and took the knife to kill his son.
But the messenger of Yahweh called to him from heaven. ‘Abraham, Abraham!’ he said. ‘Here I am,’ he replied. ‘Do not raise your hand against the boy,’ the messenger said. ‘Do not harm him, for now I know you fear Elohim You have not refused your own beloved son. Then looking up, Abraham saw a ram and offered it as a burnt offering in place for his son. Abraham called this place ‘Yahweh provides’ (Yahweh yir’eh), and hence the saying today: ‘On the mountain Yahweh provides.’
The messenger of Yahweh called Abraham a second time from the heaven. ‘I swear by my own self, Yahweh declares, that because you have done this, because you have not refused me your own son, I will shower blessings on you and make your descendants as numerous as the stars of heaven and the grains of sand on the seashore. Your descendants will gain possession of the gates of their enemies. All nations on Earth will bless themselves by your descendants, because you have obeyed my command.’ (Gen 22:1-18).
This is a story which has been inspired by believers, and upsetting to unbelievers. It reflects how far Abraham was able to go to obey God. The first sort of reading (I talked about earlier) is the literal story as it is told in the Bible. It is enough to read it to understand its literal meaning.
Many religions or religious denominations interpret this story in very different ways, and here we can see the second sort of reading I discussed above: the meaning interpretation. Some believers think that this passage means that we should follow God unconditionally, no matter if whatever He requests can be at first sight completely reprehensible. Other believers see in it Abraham’s faith that God, in the sense that he knew that in the end God was going to fulfill His promise of having descendants through Isaac, so He knew God would spare him in the end.
Another form of interpretation comes from a humanist-antireligious standpoint, like the one Richard Dawkins expressed in The God Delusion:
God ordered Abraham to make a burnt offering of his longed-for son. Abraham built an altar, put firewood upon it, and trussed Isaac up on top of the wood. His murdering knife was already in his hand when an angel dramatically intervened with the news of a last-minute change of plan: God was only joking after all, ‘tempting’ Abraham, and testing his faith. A modern moralist cannot help but wonder how a child could ever recover from such psychological trauma. By the standards of modern morality, this disgraceful story is an example simultaneously of child abuse, bullying in two asymmetrical power relationships, and the first recorded use of Nuremberg defence: ‘I was only obeying orders.’ Yet the legend is one of the great foundational myths of all three monotheistic religions. (p. 242).
Dawkins will be Dawkins, but, from an ethical standpoint, he is right if the text is taken verbatim at face value.
Yet, there is also a third aspect, the third sort of reading, which is the one I am focused on. The reader may have noticed that I purposely underlined a part of the story. For reasons I will explain in my later posts, the original story comes from what Bible scholars have called the Elohist tradition, a tradition which was developed apparently in the northern Kingdom of Israel, by a group of priests proceeding from Shilo, one of the most sacred places in Ancient Israel. If you haven’t heard of Shilo, then don’t worry, it is almost never mentioned in Bible school nor Catechism. However, it was important, because it was the place where the Ark of the Covenant resided long before Jerusalem was built by King David (Josh. 18:1; 1 Sam 4:3-5). We know that the story comes from the Elohist tradition because it uses extensively the word “Elohim” to refer to God.
Yet, look at the underlined section. One thing that strikes us is that instead of solely calling God “Elohim”, this section uses the name “Yahweh”. Also it talks about a messenger (an angel) of Yahweh appearing all of the sudden to substitute Isaac for a goat for the sacrifice. Yet, there is one characteristic of Elohist tradition which calls the attention of scholars. First, we must point out that where the underlined passage ends, it begins by God saying that Abraham has not refused his son. Another thing that happens is that in the rest of the Elohist tradition, Isaac never appears once again later. Finally, nowhere in the Elohist tradition does God say that his descendants will come from Isaac.
This led most Bible scholars to the following conclusion: the original Elohist story did actually involve a sacrifice of Isaac to God. In other words, apparently Abraham did kill Isaac. This should not surprise anyone who knows about the Middle East at the time, before 700 B.C. Human sacrifice, especially children, was a common practice if it was “required by the deity”.
But something happened to the story. It was edited by a later author. Who was he? We don’t know. Why was it edited? For one simple reason … because much later, especially after several religious reforms in Israel, forms of human sacrifice were increasingly rejected by Israelites. Contrary to what many detractors say, the story as we have it in the Hebrew Bible is not a story to legitimize human sacrifice. It is a story illustrating God as someone rejecting human sacrifice … all forms of human sacrifice.
The moral sense of the Ancient Israelites evolved in the process. THAT is God’s Word which many religious and non-religious are not able to find in the Bible if they do not place the origins of the Bible and its content in an evolutionary context.
In my next post, I will make a brief exposition of contemporary Neo-Darwinism and how it can help us understand this process of the edition of the Bible better.
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Forgotten Observations Made by Karl Marx
One of the names which arise the terror in the hearts of millions of conservatives is “Karl Marx”. Yep! The one and only! Marx is the greatest economist of the nineteenth century. Yet, the word “Marxism” is enough to stop any serious conversation about him … and I underscore the word “serious”. He was wrong in many things, especially his vocation for predicting the future of humanity, and his willingness to ignore some anthropological realities he actually acknowledged as being natural for all humans, except regarding humanity’s hypothetical life in his version of socialism and communism. Yet, that does not mean he was not a genius in making a very deep and thorough analysis on capitalism, including its virtues and difficulties. Many people who say have read his work, but actually never have, say that all of his work is just B.S. I can count Jim Cramer of Mad Money as being one of them Yet, this so-called “expert” has ruined many lives with his TV “advice”, especially when the stock market went downhill (Jon Stewart of the Daily Show is my hero for this reason: see Interview 1, 2, and 3.)
Marx’s opus magnum, Capital, is one of the most thorough and insightful works you will ever read on capitalism. In fact, if you compare Marx’s work to Smith’s, Marx was pretty much closer to what happens in capitalism. On the other hand, contrary to what some people believe, Marx’s analysis of capitalism rests heavily on the works of Smith and David Ricardo.
This is because Marx would observe everything under a holistic or integral standpoint. He inherited a great part of Hegel’s legacy, especially his dialectical view of things. Hegel said that you should see the world as it is shown to you, then begin your analysis from the simplest concept which all things share, then look for its negation, then look how these concepts are harmoniously included in a greater concept, then such concept would also imply its negation, which would lead to a greater concept which include them, and so on … until you reach the whole of reality. Marx used this sort of approach but with two basic differences:
- Hegel focused on the growth and evolution of collective thought (which he called “spirit”), and would make the economy the physical realization of the spirit. Marx saw that Hegel’s way of thinking was “upside down”, and that we need to straighten right side up: since humans are basically animals struggling for scarce resources, the primary focus of humanity will be the economy, and collective thinking is the result or reflection of this economic process.
- Hegel conceived oppositions within reality as being harmonious. Marx conceived the oppositions in the capitalist mode of production as essentially non-conciliatory. No matter how much you try to reconcile two opposing dynamics or class relations within capitalism, they will never be reconciled.
From this perspective, Capital will show capitalism as a logical chain organic relations and tense relations, and not a harmonious whole. He was in the complete disposition to grant every single supposition made by the great economists Smith and Ricardo. Yet, the intention of his work was to show that even in their own terms, capitalism, through these series of tensions, would eventually collapse.
As a result, Capital dedicates a lot of thought to analyzing these oppositions understood within a whole capitalist dynamic. I will not work on Capital in this blog, but I will just mention one of the particular oppositions he discusses, and see how this relates to today’s reality. You can have an introductory but very good analysis of Capital watching David Harvey’s videos on volume one, it is freely accessible on the net. For now, I will focus on one particular opposition: Money vs. Capital.
Throughout his work, Marx uncovers the reason behind the use of money. Money, in the end, is the way with which we exchange commodities, which he elaborates in Chapters 3 and 4 of the first volume. We don’t exchange oranges for TVs, nor chairs for tables. Usually the exchange of commodities is made through money. Capital is money, but it is a specific sort of money. For him, capital is that money which is aimed at producing more money, hence to more capital. If you store money in a safe and leave it there for 10 years, that money was not capital. Yet, if you take that money and invest it in the stock market, then it becomes capital. This leads to opposite and tense relations between two opposing forms of exchange of commodities:
- Commodity-Money-Commodity (C-M-C): This process leads to no increase in value, since commodity is exchanged for money, which is then exchanged another commodity. If I sell a small radio for $12.99, and then with that money I buy a book, there is no added value to the process. This is not capital reproducing itself, but just money exchange. The sole end of the whole process is another commodity.
- Money-Commodity-Money (M-C-M): This is a different process, because its aim is not another commodity, but money itself. Money is an end in itself. This is what capitalism is all about … money! So, a businessman has some money, with it buys some commodities, for the purpose of creating more money. Then money used this way is capital.
As we all know, the second process is better described as M-C-M’, which means that there was an increase in money (∆M), where ∆M = M’-M. How was this money reproduced? We discover, using Adam Smith’s own analysis with Marxian modifications, that one of the commodities bought by the capitalist is the labor force of the proletariat in exchange for the salary (nominal labor price). The proletariat itself, through the working process, will create more value, which means that the money will increase at the end of the process. Added value leads to increase in money as a result of the production process (aka ∆M) which is the surplus value, freely appropriated by the capitalist. This accounts for the phenomenon of hoarding, which defines capitalism as a system of accumulation of wealth.
Let’s look a bit thoroughly at this part of Capital, because, within it, there is a very important criticism to another economist called Jean-Baptiste Say (1767-1832), who was made famous by a formulation known as Say’s Law. Say correctly saw that every purchase is a sale, and every sale is a purchase. Say’s Law states that at the end of the day, the market should level out and there would be no increase of wealth: at the very end of the day supply and demand are equal. A bad businessman, he stated, does not hoard, since he or she needs to spend his or her profits in the marketplace. Many people in the nineteenth century held this to be true, but Marx explicitly refuted it (many people actually miss footnote #11 in Chapter 4 where he quotes Say).
Yet, the focus many people place to the M-C-M’ process in Capital makes them ignore Marx’s discussion of the C-M-C process in Chapter 3 of Capital. C-M-C is still an important part of the capitalist system. Although this process is not distinctive of capitalism (or a bourgeois category), it is an important component, since Say’s Law could be regarded as valid in this process, but Marx will refute this view as well:
- C-M: There must be an exchange between money and a commodity in order to be able to buy another commodity. In an amusing passage, Marx says that commodities love money, but “the course of true love never does run smooth”. The price of the commodity is partially dependent on prices in the marketplace. So, any independent seller will, in fact, be ultimately dependent in the market.
- M-C: Money will be exchanged by the commodity. Marx makes the observation that those who have money in their hands, and only those people, can buy commodities. To what extent? Well … to the extent that for whatever reason, if too many individuals do not want to exchange their money for a commodity, the circulation of commodities ceases to be.
It is here where Marx explicitly mentions Say’s Law as a dogma of faith held by many economists. Marx recognized that every sale is a purchase and every purchase is a sale … BUT no one needs to purchase just because he or she just sold. You can hold on to the money and not buy absolutely anything with it for a while. So, the C-M-C process is not one process, but two processes in tension with each other, forming a dialectical unity. When a lot of people decide, for whatever reason, to hold on to money and not exchange it for commodities, then there is a fatal crisis in the capitalist system, because the circulation of money stops. Say’s Law basically predicts that the market should level down, that crises are only apparent crises, that there cannot be any generalized crisis in the capitalist system. Many economists held on to this view for a long time. Yet, as Marx points out, there can be a crisis if money holders stop circulation.
Despite this strong an accurate criticism, Marx’s observation was largely ignored by other economists, maybe because they regarded Marx as an eccentric radical. Say’s Law was still believed by economists in general, until John Maynard Keynes came along in the 1930′s.
John Maynard Keynes
In the 1930′s, Keynes writings became generally important mostly due to the Great Depression. President Franklin Delano Roosevelt was an intuitive Keynesian, and later Keynes proved Roosevelt’s approach was the right path. Keynes proved Marx correct, even though he would never mention the “M-word” in his works to associate this criticism with Marx’s views. Instead he used his own term: “the liquidity trap“, which is the fact that in periods of perceived crises, many people decide to hold on to their money and purchase as little as they can in the marketplace. This would subsequently lead to a shrinking of the market, more layoffs, more people holding on to their money, and so on … leading to the market’s downfall.
Contrary to the Tea Party’s thinking about Keynes … he was not a Marxist. Actually Marx would reject Keynesian solutions, given that Marx wanted to end capitalism, while Keynes wanted to use a sort of socialism to save capitalism. Whether he read Marx or not is up to debate, although many people really suspect that he did. Yet, he was also part of those economists who refused to say the “M-word” explicitly for fear of being accused as communist, Marxist or anything of the sort. Today, of course, the Tea-partiers will accuse you of being a Marxist if you so much imply that government should spend some money in better toilets in the U.S. Capitol, but that is another story.
Yet, for Keynes the situation is clear. For economists, national income includes the variables of consumption, investment, and government spending. The question is: which of these three variables would lead a nation out of recession or depression? Keynes pointed out that consumers would never lead the way, precisely because of the “liquidity trap”. People will hold on to their money as much as they can in a time of crisis, where there is little opportunity for jobs and the risk of being victim of debt becomes a real problem.
For Keynes, private enterprise will not invest either. As we have seen with Adam Smith, you can only create jobs in relation to the size of the market, and Keynes knew that very well. If the market is in crisis and is shrinking, then the only choice of the private sector is to layoff many of its employees, which would worsen the situation since it contributes to the market’s downfall.
Hence, there is only one variable in this equation which can turn things around, and that is government spending. Government has the ability and the motive to do so. Some attribute the end of the Great Depression to the New Deal, others to the United States’ participation in World War II. In either case, it was government spending which saved the day in the end.
Yet, there is a reality regarding government spending in times of crisis: it needs to tax.
The (Mis)Use of Tax Holidays in the Midst of a Recession
Yet, apparently all of the “no-brainer” proposal made by Keynes in his works is rejected by many politicians today in the U.S. and Europe. Instead of giving government greater powers to spend on creating markets, provide for the poor, and so on, the suggestion which is prevalent in many industrialized countries is to cut back government “spending”, increase tax subsidies and extend tax holidays. Yet, as we saw in Part 1 of these series where we used Adam Smith as our main reference, that will not work. If I pay less taxes than last year, but my market size keeps shrinking, the only place the extra-money is going to go is my pocket. The problem with reducing taxes in the midst of a recession with no strings attached is that it makes the wealthy be more wealthy. This is the reason why “trickle-down economy” does not work.
Some Thoughts on Taxes and the Recession
However, I do grant the right-wing some criticism to tax policy. For example, one of the characteristics of taxing is that it diverts resources from whatever it taxed. The reason for this relies on the fact that people in general will avoid paying taxes on whatever it is taxed on. This will not always be this way. Taxing on profits won’t stop a capitalist from profiting if the tax rate is still competitive enough in relation to other cities, states, or countries. However, it can prevent job creation, if job creation itself is taxed. This is the problem of the great mistake of the payroll tax (especially PAYG), which actually prevents job creation by forcing employers to pay taxes directly related to employing a worker. That is the last thing we need during recession.
Income tax is another bad idea for the same reason, especially a component which is the savings tax. Why in the universe do we want prevent people and corporations from saving money in banks when we need to create incentives to save money and, thus, have capital to invest?
What about taxing stuff which is harmful? It has been shown that taxing cigarettes and alcohol actually does persuade many people not to do both, because it would increase their cost. What about progressive taxes on housing as a way to persuade people not to buy expensive houses? As it has been shown, part of the housing crisis is due to the fact that people in the middle class had a tendency to buy more expensive houses because other people were buying more expensive houses. This tendency actually does “trickle down”. The liberalization of the housing market is what got us into trouble in the first-place. In a time like this, ordinary poor and middle class people could actually benefit from having a non-expensive house which they can pay little or no taxes on, while those who do have money will pay more as they want bigger houses and mansions. If rich people want to spend on expensive housing, they will have to pay taxes, and those taxes can indeed help government achieve what it wants regarding recovering the economy.
However, as pointed out in an article, tax-exemptions on corporations and the wealthy has led to lack of government funds to actually invest in things we need to finance. Starving the government in order to pay debt is a wrong approach. Many highways in the U.S. need urgent repair. Some states have let them erode to gravel, while others are using gravel instead of asphalt to keep the road “in shape” (cheaper … right?!) Robert Frank, the economist, states that if a repair costs 6 million, it may well be that, if the problem is not solved, it may cost $30 million two years from now. If this is the case, then starving the government to pay debts will make government end up with more debt.
If you do not believe me, believe our Republican Puerto Rican government, whose policies on starving the government left about 20,000 people unemployed (“government is the problem”) in order to pay the public debt. Yet, such government measures had two very bad effects: it shrunk the market, which led to more layoffs in the private sector; and the public debt rose from about $50 billion in 2009 to more than $65 billion at the end of 2011.
The shrink-government-to-incentivize-private-sector approach to the economy failed miserably during these years. As many economists, like Francisco Catalá Oliveras, have pointed out, the problem of government size has little to do with the systemic problem of the economy in Puerto Rico. Yes, government size was great in relation to the private sector, but not necessarily to the size of the population. Ireland prospered immensely having relatively the same government size as Puerto Rico’s in proportion to its population, yet the size of the private sector was double of the size of Puerto Rico’s. The problem may not have been that the government is too big, but that the private sector is too small. Ironically, after the implementation of a Republican program in Puerto Rico to shrink the government “to create more private enterprises”, ended up by having the effect of making the private sector much smaller!
On the other hand, Latin America is becoming increasingly a prosperous continent, mostly because it is made up of countries which have had a more Keynesian approach to the problem. Of course, Venezuela is socialistic, but more Marxist in its approach to the economy. Although it is doubtful that the economy has “prospered” on this basis, it has made a lot of investment in infrastructure and government services which might come in handy in a future with or without Chávez. Similar countries such as Bolivia have taken these initiatives, which have led to an economic growth, the same in Ecuador. There is hot debate on whether these approaches will lead to further prosperity, given their aggressive approach towards capitalism itself. Yet, there can be no doubt at all that the Keynesian approach made by countries like Brazil and Argentina has paid off big time! Argentina fell into a very deep recession with the implementation of the same neoliberal policies which, right now, are going to be implemented in many European countries. The Kirschners, who hold on to Peronist ideals, approached the economy from a Keynesian philosophy, and its economy is now growing. Brazil’s philosophy is socialist, but more a democratic-socialism these days, business friendly, while simultaneously regulating its economy, especially in relation to its national resources. Today, it is becoming an economic super-power.
On the other hand, the United States is stalled thanks, in part, to a President who is not aggressive enough with the financial sector, and a Republican Congress which is not willing to compromise much because it wants the President to fail. Its systemic corrupt government is not making things better either. European countries are taking the bitter pill of starving the government in order to pay debts, but Greece, Italy, Portugal, Spain, are doing worse after taking such measures. Will the neoliberal measures work to save the European Union?
For what is worth, if any incentives are to be offered, it is recommended to look for those which do not depend on tax, and depend greatly on government investment. People underestimate how important it is to keep the infrastructure working: roads, electricity, water, investing in buildings, the environment, and so on … these are all factors which make opportunities to invest attractive, and would save corporations lots of money in relation with a scenario where these things are non-functional.
The high costs of health-care in the U.S. will need massive government investment, especially from the federal government, either through public option or government-run universal health care. In 2001 it was reported that about 50% of U.S. bankruptcies were related to health care costs, in 2007 it was 62%, making it the leading cause of bankruptcies (see this report, this one, and this one). A serious public option (not a watered down version that we have today) or universal health care would actually reduce government spending on health care (not increase it) as well as health-care costs. This can create incentives to private industry in two ways: making employers pay one third to half (perhaps even less) of what they spend today on health care for their employees, and stimulating a policy of preventive medicine which could increase their employees’ health making them more productive. Simultaneously, the relatively cheap cost of health care would make government spend less on it, and more on other things which need to be addressed.
Of course, for preventive health care approach, there needs to be government intervention in the food industry, which could lead to lower costs in health care for both government and private health care facilities. I will let Elizabeth Kucinich (a woman I consider a goddess, with whom I am totally in love with –platonically speaking–) explain this to you. (BTW … This video shows how tax subsidies keep killing us :-S)
One dollar taxed on harmful behavior is one less dollar taxed in useful activities.
So, let’s tax the right things. The tax policies must be rebuilt from the bottom up, since much of it is not helping the economy, but not-taxing is not an option. Yes, I am proposing “social engineering” … yet everything we do collectively is social engineering, if it is not government, it will be businesses and corporations who will do it … and, as I have said before, corporations do not think about your welfare … nor do they have the structural means to think about you. Government does! In democratic societies, we should assume the responsibility to tell government through various means (not just elections) to adopt the best tax policies to benefit all of us. Better let social engineering by democratic governments shape us, than entities and businesses which will socially engineer to exploit society without government restraint!
References
Catalá, F. (2007). Elogio de la imperfección. PR: Ediciones Callejón.
Frank, R. H. (2011). The Darwin economy: liberty, competition, and the common good. Princeton: Princeton University Press.
Keynes, J. M. (2010). Essays in biography. Palgrave Macmillan.
Marx, K. (2002). El capital. (8 vols.). P. Scaron (Trans.). México: Siglo Veintiuno Editores. [El capital. (8 vols.). V. Romano-García (Trans.). Madrid: Ediciones Akal].
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American Corporations are not Loyal to the United States
The United States is a very strange country. It is apparently one of the few countries (or perhaps the only country) in the world where people defends an economic system on the basis that it is the “national way of life”. If you don’t defend laizze-faire capitalism, then you are not a patriot. Usually, countries try to adopt the most efficient economic systems and adapt according to their reality of their internal and external markets. Not the United States! This even reaches the level of being detrimental to Americans in general. Individualism is one of those national myths which many Americans try to stick with, and one basis to reject taxes: ”It is my money! … Mine! Mine! Mine!” Yet, this clearly goes against the direct benefit of the people who subscribe this statement.
In June, Stutsman County residents rejected a measure that would have generated more money for roads by increasing property and sales taxes.
“I’d rather my kids drive on a gravel road than stick them with a big tax bill,” said Bob Baumann, as he sipped a bottle of Coors Light at the Sportsman’s Bar Café and Gas in Spiritwood (Etter, 2010).
On the other hand, the American right-wing has an irrational love for Adam Smith’s “invisible hand of the market”, a fetish which, as we have seen in our previous post, would make Smith pale. There is an unfounded belief that markets always lead to a better society as a whole, a bold belief which Adam Smith, as a good ethicist, never held in his lifetime.
Yet, as many of the patriotic Americans show a commitment to the laizze-faire capitalism, American corporations never ever show their loyalty to the United States, especially its people. Unnoticed by the news (especially corporate news in general) is the fact that corporations consistently betray the United States. For instance, during World War II, American companies invested heavely in Nazi Germany and Fascist Italy when these regimes were in power. One prominent business man is Prescott Bush, the grandfather of George W. Bush, had very profitable deals with Hitler at the time. Corporations like Coca-Cola, IBM, among others did so too. The situation is no different today. BP has made deals with Iran’s government (here is the TIME report). General Electric, Halliburton, Conoco-Phillips may have operations in Syria, Iran, and Lybia (see the 60 Minutes report here). In 2010, about 300 American corporations were approved by the U.S. government to make business deals with Iran (see New York Times report here).
While this is happening, many American corporations keep closing doors in the mainland to move overseas. Many people in the conservative spectrum of U.S. politics rightfully denounce these moves as being detrimental to the American people. Yet, they consistently keep electing the sort of government which is willing to grant all sorts of freedoms to the same U.S. corporations which keep trading with the enemy and are willing to go overseas leaving Americans out of work.
Capitalism may have the uncompromisiing loyalty of the American people, but capitalism has no such uncompromising loyalty to Americans in any way. Why is this the case? As Napoleon Bonaparte once said in 1815:
When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.
At the end of the day, corporations in general are about the bottom line, how much money can they deliver to their shareholders at the end of any given quarter …. that’s it. Their loyalty is to the shareholders, not the American people. Many on the right accuse Chomsky on being unpatriotic when he says that privatization does not mean that you give a public institution to some nice person, but means to give a public institution to an entity totally unaccountable to the people. Since he is an anarchist, such accusations hardly keep him awake at nights. Yes, usually private institutions can do things efficiently, but, people always miss the point about what is this efficiency about: corporations are efficient in order to create wealth for its shareholders, they are not efficient to create wealth for the people. I have to keep reminding people that corporations are legally bound to place their shareholders interests above everything else, even the public good. Unrestricted corporate activity will do no good to the American people.
So, if this is the case, then why the heck should Americans be uncompromisingly loyal to American corporations? If they lay off people, as we have said in our previous post, it is because of a shrinking market, or an enhanced technology, or the bottom line. If they move overseas, it only means one thing, they would profit more overseas than in the mainland. If they trade with the enemy, it is because they find such opportunities profitable. It is all about money … not about you!
Tax Exemption in Puerto Rico, our Experience
As a Puerto Rican, I have studied the economic experience of Puerto Rico under U.S.’s rule, especially after World War II. After the war, our governor Rexford Guy Tugwell (one of President Roosevelt’s great advisors) engaged in a program whose sponsor was Teodoro Moscoso, a businessman who looked for a way to use Puerto Rico’s position as territory in relation to the Internal Revenue Code in order to attract U.S. capital. The basic mechanism to carry out this ambitious program to industrialize Puerto Rico was using tax exemptions. Any U.S. subsidiary or corporation established in Puerto Rico would enjoy tax exempt profits under Section 931 of the U.S. Internal Revenue Code. This was the beginning of a radical move of the government to stir the Puerto Rican economy away from agriculture and more to an industrial and urban way of life. This kept progressing during successive administrations until 1976, when additional incentives were created, such as tax exemption on repatriation of profits to the U.S. mainland. This was Section 936 of the Internal Revenue Code.
For many years, Puerto Rico was placed at the very top of the list of countries which attracted U.S. capital overseas. Yet, that is no longer the case. As I pointed out elsewhere, Section 936 was eliminated due to global concerns. The world changed. Why was the U.S. so rich during all of these years. Very simple! Although I know this subject is controversial, the New Deal, Roosevelt’s Keynesian approach to the U.S. economy, paid off. Also, the U.S. involvement with World War II paid off enormously, and government injected a great deal of capital to the economy, which made it recover. U.S. investments world-wide were mostly involved with extracting natural resources from other countries. Europe in general was destroyed during World War II, so was Japan and China. India was still poor mostly because of all the years under Brittish subordination. For all practical purposes, in the democratic-capitalist block, the United States was the sole player in the world with its own prosperity.
For that same reason, Puerto Rico also prospered, it experienced exponential economic growth, but not economic development (the reason for this last statement will be explained in detail in a future blog post). For all practical purposes, corporations had all the reason in the world to establish themselves there, not elsewhere. Puerto Rican labor force was (and still is) of the highest quality, and it was also cheap. The infrastructure was one of the best, because, during World War II, the local and the federal governments invested heavily on roads, electricity, water supply, among others. The local government also provided buildings to fascilitate production in Puerto Rico, as well as a national bank (Banco Gubernamental de Fomento) which invested heavily on attracting capital and providing financial support for these companies.
Yet, in the 1980s there was an air of change. Already the U.S. Congress was making statements about the fact that tax-exempt corporations working under Section 936 were not producing the amount of jobs projected by its partisans. Quite the opposite, the economy of Puerto Rico seemed to stall, while U.S. corporations evaded billions of dollars in taxes using U.S. territories. This is the decade when the term “corporate welfare” was widely used in Congress for years to come. Again, the failure to create jobs did not stop these corporations from investing in Puerto Rico. Up to 1993, Puerto Rico still was at the very top of the list of countries which attracted U.S. capital. This began to fail in 1995, when President Clinton approved the elimination of Section 936′s tax benefits.
Why was it eliminated? In part, it was because after the collapse of the communist block, corporations wanted to invest heavily world-wide without any sort of restriction, and countries involved in free trade agreements would resent Puerto Rico having all the advantage in a new globalized market. Europe was no longer in ruins, but became an economic power enough to rival the U.S. dollar. Japan was another economic superpower, whose Yen also rivaled the U.S. dollar. Free trade agreements were being signed all over the place, in Asia, and America. This would make many industrialized countries participate in free trade agreements in order to let corporations freely invest in new countries, sometimes with tax exempt status. More markets were created around the world than ever before, as countries started to compete with each other as tax havens for corporations to evade tax payments to their respective governments.
As a result, U.S. corporations started leaving Puerto Rico to establish themselves on countries like Ireland, which became an economic super-power in Europe, and Singapore which became another big economic powerhouse in Asia. Under the current circumstances, corporate tax subsidies don’t work anymore. Puerto Rico kept choosing the strategy of corporate tax subsidies, with no beneficial results in any way, and major political parties keep adopting these non-sensical policies despite repeated statements made by reputed and serious economists that this is the wrong path to take (see Collins, et al., 2006, which is a study made by economists from the Brookings Institution and the Center for the New Economy). Even the renowned independentista economist, Francisco Catalá Oliveras, has repeatedly recommended to tax those foreign corporations which are going to leave anyway. This is a no-brainer! If, no matter which program of tax subsidies you give them, these corporations will leave soon anyway, why the heck not tax them?! There is no loss in this specific scenario, and Puerto Ricans would have everything to gain. Needless to say, the Puerto Rican government did not revoke their tax subsidies and refuse to tax them.
Unfortunately, in the early nineties, the amount of capital proceeding from 936 corporations added up to $13 billion, in 2001, it was reduced to $1 billion. In the new neo-liberal fever, Puerto Rico also sold its public phone company, which used to produce lots of revenue for the government. It privatized its own health care system and implemented an HMO-like model, which greatly increased health care costs. It partially privatized the water company, driving its costs higher. It is no surprise that under the tax subsidies model, and the sour pill that our governor, Luis Fortuño made us take (i.e. following his Republican conviction that government was the problem and that about 20,000 employees should be fired), Puerto Rico’s debt increased to a new record high of $65 billion. It is trying to keep up the system unsustainably using non-recurring funds (mostly coming from loans) to finance recurring operations. The financial services which grade credit are primarily concerned about the value of government bonds in the long run, especially those regarding the University of Puerto Rico and pension funds. In November 2011, Wasmer, Shroeder & Company, strongly advised its investors to watch out for Puerto Rican bonds in a report whose title speaks a thousand words: ”Puerto Rico: Greece of the West?” A lot of our loss of capital which Pueto Rico could tax without any sort of loss is diverted to the Cayman Islands … the joke is on us, Puerto Ricans!
Since the Puerto Rican government granted corporate tax exemptions, government is still unable to address many of the problems it had effectively, especially roads, electricity, water supply. The average tax contribution of foreign companies to the Puerto Rican government is about 4%. In Ireland it is 12.5%, while in Singapore the average is about 10%. Even with its meltdown, Ireland is still in a much better economic shape than Puerto Rico at the present moment. There was a contraction of Singaporean economy by a 0.8% in 2008, but it recovered, showing a 14.5% growth of its GDP (2010), even when we are still not out of world-wide recession. Isn’t it interesting that most of the time, countries which have mixed economies and tax the rich usually have much better services, goods and jobs, than those which do not? Some of these successful countries are: Singapore itself, Finland, Denmark, New Zealand, Switzerland, the Netherlands, Canada, and Norway. These also happen to be among the least corrupt governments in the world, and many of them happen to be social-democratic governments.
I ask … what the heck is the basis to say that taxing corporations would drive down the economy?
Singapore’s Use of Tax Subsidies
The signficant difference between Singapore and Puerto Rico becomes apparent when you realize that the latter has relied its economy almost completely on tax exemptions without creating a single job in recent years, except part-time jobs with lower wages. Yet Puerto Rico has an extremely low labor force rate (which, in 2011 fell below 40%, one of the lowest in the world). Again, does tax exemption create jobs?
Singapore is another sort of country. Yes, it is ruled by an authoritarian government which tries to control its ethnic diversity and the economy. Yet, its authoritarianism is not the main explanation for why it has been so successful over the years. The vast majority of authoritarian governments around the world are doing worse off than Singapore. What is its secret?
Simply speaking, they do not rely exclusively on tax exemption to foreign corporations. Yes, they do use tax subsidies to attract foreign capital, but they don’t give those tax subsidies forever, and not to whoever appears at its doorsteps. Many countries in the world which compete as tax havens, usualy make the mistake of extending tax holidays for big foreign corporations, a strategy which usually does not lead to better improvement of their populations. The competition among countries make them give more tax benefits and provide other incentives in detriment of their own people. Yet Singapore is another story. If you own a company which wants to take advantage of Singapore’s tax subsidies program, your plan better lead to job creation and the general economy’s improvement. No program which benefits you as business man is unconditional in Singapore. Yes, tax subsidies are increasing in Singapore as it is lowering its tax rate on foreign corporations, yet this is also being planned as a bigger progressive tax policy, where rich people actually have to pay more.
Contrast the Republican (especially Tea Party) way of thinking with President Lee Kwan Yew. President Lee tells the story of when representatives of a German company were concerned that after several calculations, they would find more profitable to leave Singapore to another country, that they would love for Singapore to lower further its tax requirements and extend them. President Lee talked to his advisors on the matter, and in the next meeting, he looked at the documents with the proper research and said: ”You are right. Singapore apparently is too expensive for you, and you would find it profitable to invest elsewhere. However, I will not lower taxes for your benefit. May I help you with your luggage?”
On the other hand, instead of relying on tax subsidies, what Singapore has done is to diversify every aspect of the economy. Even if it doesn’t have lots of natural resources, they have agriculture, producing good of all kinds, inviting young company matrices to be established in Singapore, it has an air line, a governmental universal health care system (one of the best in the world), high quality roads, electricity, and water utilities, it has not abolished assistance to the poor (even though poverty level in Singapore is significantly lower than other countries in Asia), with low unemployment rate (2.2%), low cost housing, and so on. It relies basically on exports, which is one of the highest in all of Asia. Needless to say that it is one of the most environmentally friendly countries in the world. They intensively train their labor force for new jobs available in the market place as the economy and world reality keep diversifying and changing. I may add that it has also a very aggressive savings program (sometimes to 40% of earnings), which continually nourishes the economy. This is the key to Singapore’s economic success …. not total reliability on tax subsidies which are, after all, only temporary and conditional.
We are in a Different World, Tax Exempt Status Should Not be the Norm
No longer is tax exemption one of the top criteria corporations use to establish themselves in any place in the world. Yes, it was a strong force for many years, but not not now. The opening of the global market has made multinational corporations to multitask production in key countries in the world, although this situation keeps changing over time. Tax subsidies are no longer the main path to attract corporations in the United States, except in some specific cases. Usually many of the companies asking to establish themselves anywhere in the U.S. are either companies providing goods and services which would provide them anyway without any tax-exempt status, or could be companies providing products to consume, which would also provide them anyway without tax-exempt status. WalMart has been one of those megastores which have lobbied extensively in state governments, and even municipal governments, for tax subsidies. Once a WalMart is established somewhere in a commercial strategic zone, it destroys the competition which is usually made up of tax-paying smaller or medium-sized stores. This inevitably leads to low wages, the prevalence of part-time jobs, no funds for fire departments, for police, for public education, and so on. In other words, those cities and states end up being worse than before. The same thing happens with other mega-stores which compete with others such as WalMart.
Usually, the norm is that if a corporation plans to move to another state or overseas, will do so regarless of whether it is given tax-exempt status or not. Usually tax subsidies are the result of lobbying by corporations, which basically means that a legalized bribery is in order to support or oppose certain government policies. Lawrence Lessig, in a very thorough and well-researched book about problem of corporate lobbying and how it is destroying democracy, makes the point very clear that the reason why many decent politicians are so easily corrupted within the system, it is because the system itself is corrupt. The book is called Republic, Lost, and I highly recommend its reading.
For all practical purposes, governors and Congressmembers are dedicating themselves almost fully to raising funds, much of which come from people associated with the corporate sector. Even when a candidate may know for sure that tax exemptions will not create jobs, he or she will favor it to pay back a corporate favor (often without being conscious of doing so).
The evidence has shown consistently that tax reduction as general policy leads to a worse state of affairs. There is no evidence at all that a general policy of lower taxes make states or the U.S. as a whole any better. As one of the millions of examples I can show in this blog, I want to use the one manifest evidence about how lowering taxes lowered quality of life, while many corporations and rich people were made richer. In 1978 a referendum was carried out, the people of the State of California approved Proposition 13, which basically limits taxes on “real property”, which led to lower tax rates for California. What was the inevitable outcome? The effects of Proposition 13 is described extensively in Peter Schrag’s Paradise Lost: California’s Experience, America’s Future.
This is a non-partisan thorough analysis on the degrading economy of California ever since Proposition 13 was passed. Shrag sums up his conclusions:
Californiaś schools, which, thirty years ago, has been among the most generously funded in the nation, are now in the bottom quarter among the states in virtually every major indicator–in their physical condition, in public funding, in test scores–closer in most of them to Mississipi than to New York or Connecticut or New Jersey. . . . Its once celebrated freeway system is now rated as among the most dilapidated road networks in the country. Many of its public libraries operate on reduced hours, and some have closed altogether. The state’s social beneefits, once among the nation’s most generous, have been cut, and cut again, and then cut again. And what had once been a tuition-free college and university system, while still among the world’s great public educational institutions, struggles for funds and charges as much as every other state university system, and in some cases more (Shrag, 1999, p. 8).
The right-wing is obsessed against taxes, because it leads to government waste. The lesson of the famous “Bridge to Nowhere” is an iconic and symbolic illustration that this indeed occurs. And much of the right-wing in 1978 advocated for Proposition 13 on the same basis. The lesson to be learned here, though, is that when you cut taxes to eliminate government waste, you also cut taxes which eliminate valuable government programs, especially those which help to create more jobs and better address the needs of the population. Yes, many people abuse government programs, but as the economist Robert H. Frank points out, the problem is not whether these programs are abused by the people or the government (sometimes they are), the real issue is that eliminating these programs would create far more costly problems for government in the long run. The starve-states-to-pay-debts policy is bad for this specific reason.
More evidence that cutting tax on corporations does not necessarily lead to more jobs is the evidence gathered by the non-profit organization GoodJobsFirst.org, which tracks the effect of government subsidies for U.S. corps (download the PDF version here). I also highly recommend Greg LeRoy’s The Great American JobsScam, an excellent book on how corporations in general manipulate the public into thinking that lowering taxes will create jobs, and shows ample evidence that they do not.
Why should anyone feel any patriotic duty to a system which, set completely free, is actively working against the American people? Why should market fundamentalism equate the “American way of life”?
If you didn’t understand anything I have argued here, I leave you again with Bill Maher to explain it to you in a way you will understand:
Some Thoughts on Ireland
We all know that during most of its history in the twentieth century, Ireland had a systemic economic problem. Yet, after a consensus made by the private sector, the public sector, and workers, everyone sacrificed a bit of their own interests to make Ireland work. The result was a booming economy. It even became a country with higher GDP per capita than the UK.
Yet, it made one crucial mistake, mostly due to the side effects of uncared boom economy: it deregulated the banking system, and assumed the neoliberal position that losses in the market should be adopted by the government, which non-surprisingly led to its current collapse in the market. Privatize profits, socialize losses.
This is an important observation to make, since the rise of Ireland’s economy is the product of intensive cooperation between different sectors of society. As Charles Darwin discovered in his life time, and as scientists who favor the idea of group selection point out, cooperative societies will usually survive better than non-cooperating societies. Unfortunately the formulae being applied to Ireland in this recent Irish economic recession has nothing to do with cooperation. Basically because of the right-wing leadership in the European Union, Ireland is now required to adopt neoliberal measures, including tax subsidies and government cut on social programs in order for it to pay its debt. The fact that Ireland is tied to the ever declining Euro makes matters worse.
I think that Ireland should ignore the European Union’s request, and create a new national consensus to deal with the problem without cutting taxes, nor by eliminating social benefits. I agree with Paul Krugman that the measures taken by Iceland are the way to go (see also his article “The Path not Taken” and “Eating the Irish“.
References
Collado Schwarz, A. (2009). Soberanías exitosas: seis modelos para el desarrollo económico de Puerto Rico. PR: La Voz del Centro.
Collins, S. M., Bosworth, B. P., Soto-Class, M. A. (2006). The economy of Puerto Rico: restoring growth. Washington, D.C. & PR: The Center for the New Economy and Brookings Institution Press.
Dietz, J. L. (2007). Historia económica de Puerto Rico. PR: Ediciones Huracán. (There is an English version available: Economic history of Puerto Rico: institutional change and capitalist development. US: Princeton University Press.
Etter, L. (2010, July 17). Economic crisis forces local governments to let asphalt roads return to gravel. WSJ.com. Accessed in: http://online.wsj.com/article/SB10001424052748704913304575370950363737746.html.
Irizarry Mora, E. (2011). Economía de Puerto Rico. México: McGraw-Hill.
LeRoy, G. (2005). The great American jobsscam: corporate tax dodging and the myth of job creation. San Francisco, CA: Berrett-Koehler Publishers.
Shrag, P. (1999). Paradise lost: California’s experience, America’s future. CA: University of California Press.
Lessig, L. (2011). Republic, lost: how money corrupts Congress – and a plan to stop it. NY: Twelve.
