How to Think About Social Issues: Tips 23-24

23. Ad Hominem attacks do not advance intellectual arguments:

            When you are considering a thinker’s argument, you should always focus your intellectual energy and critical thinking on the thinker’s ideas instead of on the life or personality traits of the thinker himself. Even if the thinker happens to be a serial killer, if he articulated an idea that, considered on its own, seems to be a very good one, the fact that the thinker is a serial killer should do nothing to discredit that idea. Of course, one might question how many brilliant ideas serial killers will come up with, given their day job, but that is another question entirely.

            

           The intellectuals most notorious for dedicating themselves to attempting to discredit ideas via Ad Hominem attacks are the Marxists. Indeed, this has become of the central tenets of their school of thought. Marxists claim that society is divided into antagonistic social classes and that for every period of history, one of these social classes is the dominant one. As the ruling class, they build up a ‘superstructure’ of ideas that legitimises their dominant position in society. Since economics developed as a separate and sophisticated area of scientific inquiry in the late 18th and 19^th centuries, the era of capitalism dominated by the ‘bourgeois’ or ‘capital-owning’ classes, the economic theories they developed were automatically considered to be apologies for the dominance of the ‘bourgeois’ classes. By discrediting economists as ‘sycophants of the bourgeoisie’, Marxists spared themselves the necessity of actually entering into a serious intellectual critique of these economists’ theories and ideas in order to make their point. Instead, all economic ideas up to that point, except those penned by Marx and his followers who of course wrote in the spirit of the ‘working’ classes, were deemed irrelevant by the Marxists because they were written by members of the bourgeois classes, in the interests of the bourgeois classes.

            

           Intellectually, this ploy does not have any merit. The social class backgrounds of all the great thinkers of history and the ‘interests’ they were supposedly representing could all be ‘unmasked’, but does that mean that all their ideas are worthless? The implications are absurd. However, it is true that non-intellectual motives such as who was patronizing their work, where they stood in their society, etc… could well have influenced the thinking of these writers. How then do we decide which of the ideas of these thinkers we should retain and which we should discard? The answer is: by subjecting them to the test of reason, the test of empirical confirmation, or both of these tests. In other words, by evaluating the ideas as ideas.

            

           Besides the Marxists, there are many others who use different variants of the ad hominem attack strategy. If a white male criticizes affirmative action policies, his ideas are sometimes disregarded because he is ‘privileged’ and ‘does not understand’ the plight of people whom affirmative action is supposed to help. It should be clear though that if his whiteness or maleness is impacting his proper reasoning on this issue, the supporter of affirmative action should be able to point out the flaws in his reasoning and thus discredit his ideas in that way. Attacking the thinker is of no avail because either his idea makes sense or it does not. If it does not, engage in a scientific debate with him. If it does, then pointing out that the originator of the idea is white or male does nothing to make it a worse idea. If the disagreement is a valuational one, then simply explain to him your own valuations of the ends that are pursued with affirmative action policies and try to bring him around to your way of thinking.

            

           Another example is trying to discredit the ideas of a thinker because the thinker is ‘inexperienced’. Perhaps the thinker is younger, or has not been in the business world for as long, or has not visited as many foreign countries as his intellectual opponent. Simply pointing out this fact does not constitute an argument though. In order to make it such, the ‘more experienced’ disputant should explain how his particular experience serves to refute the argument of his opponent or supports his own argument. In this way, the one disputant’s experience serves as just another intellectual weapon in his arsenal of empirical knowledge on the subject. It definitely does not, though, serve as an intellectual trump card that confirms that everything the ‘more experienced’ disputant says is true while everything the ‘less experienced’ disputant says is false.

           

           Ad hominem attacks are intellectually meaningless and do nothing to advance an argument. While investigating the biographical details of a thinker may be interesting for an intellectual historian, such details can never automatically discredit the ideas of that thinker. Ideas must be combated with other ideas, not with personal attacks.

24. Old ideas are not necessarily obsolete ideas:

            It is a common myth that new ideas are always better than old ideas. In the natural sciences, the myth is not as destructive because it is easier to see when a new idea is an ‘advance’ based on the material manifestations of the idea when the new theory is applied. Thus, either a new idea can lead to the creation of telephones or television sets or not, and any layman can see the material results of such an idea. In the social sciences though, the superiority of some ideas over others is not as evident to the layman. For one, in the social sciences, in order for someone to appreciate a new idea as an ‘advance’, they must understand the idea and the argumentation behind it. As mentioned earlier, knowledge of just the hard facts of history does not immediately translate into knowledge of which ideas on social questions were better than others. This is because history has so many complex, non-isolatable variables operating on it that it is almost impossible to isolate the social policies pursued by government as variables and assess these policies based on historical statistics alone. The layman observer does not need to understand the complexities of astrophysics in order to understand when an advance in that field led to the building of a better rocket ship. By contrast, in the social sciences, the observer must understand the theoretical framework of the science in question in order to decide for himself when a new idea is an advance or not.

Secondly, valuational disputes tend to play a bigger role in the social sciences. Most would agree that the ability to create safer cars or faster internet connections are good things, but whether an increase in general economic efficiency at the expense of some egalitarianism is considered a good thing or not depends on the valuator.

For these reasons, by and large, new innovations in the natural sciences do, on average at least, tend to represent advances over older ideas, and thus the myth that new ideas are necessarily better than old ones is not as destructive in these sciences. In the social sciences though, because familiarity with the science in question and a fair amount of critical thinking is necessary in order to determine when a new idea or policy recommendation is an ‘advance’ or a ‘retrogression’ in the science and because of more subjectivity in judging social policies and ideas, the myth is deadly and must be rejected.

For example, a common argument one hears against returning to a monetary system based on a gold standard goes like this: ‘The gold standard was the monetary system of the 19^th century. In the 20^th century though, every country in the world, aided by advances in monetary theory, realized that a fiat paper money system was much more satisfactory. Returning to these outdated, 19^th century monetary ideas in the 21^st century is out of the question, we must advance, not retrogress.’ This is really no argument at all though. A supporter of the gold standard could argue that while there were many advances in the 20^th century in terms of technology and standard of living, there was no advance and in fact a retrogression in monetary theory and monetary systems, accounting for persistent problems of inflation and business cycles in the 20^th and 21^st centuries. One does not have to advocate for a return 19^th century transportation techniques (horse-and-buggies) in order to advocate for a return to 19^th century monetary techniques (the gold standard). It is entirely possible that while there were advances in transportation technology, there were also retrogressions in monetary systems and ideas. Though historical periods can only be compared by taking ‘the whole package’ of economic, social, political, and technological and comparing that to the ‘whole package’ of another historical period, the social thinker is, thankfully, under no necessity of either advocating for one ‘whole package’ or the other. He can pick and choose based on deductive reasoning, perhaps aided by some empirical studies, and his own valuations, which policies or ideas represent ‘advances’ and which ‘retrogressions’.

Thus, don’t be afraid to support ‘old’ ideas if you think they are more correct than ‘new’ ideas. In the social sciences especially, ‘old’ does not necessarily mean ‘obsolete’.  

How to Think About Social Issues: Tips 21-22

21. Don’t just assume the existence of special interpersonal bonds between individuals:

This fallacy is prevalent, for example, in the ideology of nationalism. A nationalist is someone who proclaims that those belonging to a particular political entity or ethno-religious group share a deep bond. Because of this bond, they must put the interests of their countrymen, nation, or ethno-religious brothers ahead of those of the rest of humanity. The question is: why must they? And do they even necessarily have this bond with their compatriots in the first place?

For example, take a Canadian citizen that lives in Toronto. It is entirely possible that this person could sympathize with and have more in common with someone living in Hong Kong (a fellow cosmopolitan city-dweller that may speak English) than with someone living in rural Newfoundland, a part of the ‘Canadian nation’. The nationalist argument, however, blithely assumes that this cannot possibly be the case. Hence, we hear of the responsibilities that Canadians have for one another, how the success of ‘our’ industries is more important than worldwide prosperity, etc… The fact is though, the creation of these special interpersonal bonds of sympathy between individuals can only be done by the individual himself, not some outside observer telling him who he ‘really’ sympathizes with.

Racists, Marxists, and religious extremists commit a similar fallacy when they assert that all members of a race ‘really’ sympathize more with members of ‘their’ race than with members of ‘other races’, that all ‘social classes’ are bound together in solidarity by their ‘class interests’, or that members of a religion must do all they can do advance the interests of their co-religionists, even at the expense of people who subscribe to other religions. It is more likely that (though I do not want to commit the fallacy and make any absolutist statements on the subject) most individuals have a strong interpersonal bond with their family, a slightly less strong bond with their good friends, an even weaker bond with their acquaintances, and perhaps a bit of a bond with members of their locality that they may not know personally. Besides this, it is probably in the general interests of members of humanity as a whole that the world society operates in such a way as to optimize, as much as possible, every individual’s ability to pursue their own subjectively determined ends and desires. Though something resembling a racial, national, ethnic, or religious solidarity may exist for some people, it is by no means certain that this is the case for everyone. This being the case, beware of arguments that assume some kind of solidarity that may or may not exist as their starting point.   

22. Beware the tyranny of moderation:

“Everything in moderation” is a saying that is often expressed. I will endeavour to show when this phrase is applicable, and when it leads to absurdity.

            

           A common area where moderation is called for is eating habits. For example, take an ice cream lover that is also concerned about his health. On one hand, there is the extreme of eating no ice cream at all, thus improving his health, but not being able to delight in the taste of his beloved ice cream either. On the other hand, there is the extreme of eating a lot of ice cream, which would be delicious at the time, but would lead to health and weight problems. In this scenario, moderation would seem to be a good recommendation. This is because there is a balance to be struck between two desired, but mutually incompatible, goals: better health and eating delicious ice cream. Also, for most people, the enjoyment of ice cream tends to be the strongest in the first few bites, and gradually diminishes as more and more is eaten. Likewise, the negative health effects of eating a bit of ice cream are not very serious at all, but get exponentially more and more serious as more and more ice cream is eaten (diabetes, obesity, etc…). Thus, a compromise of eating a small, or moderate, amount of ice cream would seem to be in order for most people in this scenario.

            

           Take another example from the field of ingestible substances, and the call for moderation becomes absurd. The ingestible substance in question is cyanide, a poison that instantly kills the person who ingests it with only a small amount ingested. Let us consider the two ‘extremes’. One ‘extreme’ is not to eat any cyanide, and thus not die. The other ‘extreme’ is to eat as much cyanide as you can before dying. Unless you are suicidal, in this case the call for “everything in moderation” is absurd. A moderate amount of cyanide will still kill you, and even if you ingested such a small amount that it didn’t kill you, there would probably still be serious health repercussions and no positive benefits. In this case, the ‘extreme’ of not eating any cyanide is the best option.

           

           Now, the cyanide example may seem silly, but, as we will soon see, it is often in this sense that “everything in moderation” is applied to political questions. Take a dispute between those who would like garbage collection to be privately run by profit seeking business who makes individual garbage collection contracts with home owners, and those who would like garbage collection to be ‘socialized’ and run by the municipality, giving everyone a uniform amount of garbage collection done by government garbage employees and paying for it with tax money. Seeing this dispute, the political ‘moderationist’ comes in. He comes up with a compromise: garbage collection will be done by private companies, but the government, not individual home owners, will contract with them and pay them with taxpayer money. Since “everything in moderation” is good for ice cream eating, it must be good for this issue too right? Not necessarily. For supporters of the free-market, this case is closer to the cyanide example than to the ice cream example. For in this case, one ‘extreme’ is desirable, while another ‘extreme’ is undesirable. Between ‘garbage socialism’, something that has serious theoretical problems and has a poor empirical track record, and ‘free-enterprise garbage’, something that works better theoretically and has a good empirical track record, no compromise is necessary. Except for people with a very strong, fervent belief in the desirability of material egalitarianism in all fields, ‘free-enterprise garbage’ would seem to be the desirable solution from the perspective of those who appreciate the utilitarian benefits of the free-market.

            

           Take a real-life situation where the moderation principle has been applied in political affairs, producing disastrous results: the US healthcare system. Once upon a time, in the 19^th century, the US had a relatively free market in healthcare. Everyone was free to offer medical services to anyone else for an agreed upon price. Then, the first ‘moderate’ intervention came: licensing requirements for doctors. Now, doctors had to be a members of the American Medical Association in order to legally practice medicine, in effect, a doctor’s guild was created. Now, this guild did what every other guild does, it restricted entry into its field (in the name of consumer safety and high standards of course!) in order to jack up the price of the licensed doctors’ services. This made healthcare more expensive for the average medical consumer. After this, more ‘moderate’ interventions followed: employers were ‘encouraged’ through tax incentives and to evade wartime price controls, or forced through regulations or labour union pressure, to give their employees health insurance. Health insurers were eventually required by law to cover more and more uninsurable medical expenses (such as routine, discretionary visits to the doctor and expensive medical screening procedures) and were required to lump more and more medically risky people into the same insurance category as healthier people. These measures served to jack the price of healthcare even higher. Medicare and Medicaid came in the 1960s, the government was to help the elderly and the poor cover these higher and higher healthcare costs, levying large taxes to pay for it. Most recently, President Obama decided that he would force everyone to buy health insurance and force many employers to provide it for their employees, something that, if implemented, will result in higher unemployment due to the high cost of providing health insurance, at bloated medical prices, for employees.

But, are not all these interventions ‘moderate’? The US healthcare system is not a completely government-run system as in Canada or the UK, nor is it a completely free-enterprise system. Should not this bring the best of both worlds? No, because these ‘moderate’ interventions served to break the market mechanisms for conserving medical resources of requiring upfront payments and having open competition in the field of medical provision, the combination of which would have prevented medical costs from sky-rocketing as they did.

            

           This same logic applies to most government interventions in the free-market order: while allegedly infusing a degree of some perceived virtue of socialism such as egalitarianism, their most prominent characteristic is just to break the mechanisms that had allowed the free-market system to function in that area. The deteriorating situation then calls either for a repeal of the interventions or to march to the intervention’s logical conclusion: socialism. One again, we are faced with a consideration of the two ‘extremes’: free-market or socialism. Calls for moderation only make sense when, like in the ice cream example, the two extremes result in the sole pursuit of two desires which are to some extent mutually incompatible. In this case, the best course of action could be a compromise where both desires are pursued to a lesser extent. Some political interventions could qualify under this rubric if overall prosperity and egalitarianism, two mutually incompatible goals, are desired. But, the proposed intervention would still have to be scrutinized carefully in order to ascertain that the amount of prosperity given up is worth the amount of egalitarianism gained, and this not just in the short-run, but also in the long-run and keeping in mind general principles. If, like me, you find little desirable about socialism or egalitarianism, then not very many compromises are necessary.

            

           The preceding discussion should allow you to see the fallacy in something like the following statement: “The Austrian School of economics is too extreme. It constantly praises the free-market mechanism of resource allocation and constantly finds fault with government economic interventions. As such, it resembles a religion, rather than a science.” As we have seen, saying that something is ‘extreme’ does not necessarily make it incorrect or a religion. If someone thinks and can persuade others that the science of economics demonstrates that measure A leads to ends B and C, while measure B leads to ends D and E, and this person values ends B and C higher than he values ends D and E, then it does not matter how many times these judgements favour the free-market, while shunning government economic intervention. To simply proclaim that someone’s scientific and value judgements cannot be correct because taken together, they constitute an ‘extreme’ position on the free-market versus government economic control spectrum, is to abdicate all responsibility for actually analyzing these scientific and value judgements yourself. In fact, who is more ‘extreme’? Is it the person who makes a separate scientific and value judgement on each issue as they come up, or the person who dismisses the need for such judgements by proclaiming that the ‘moderate’ position must be right? The latter would seem to be the attitude closer to religious dogma, and the former closer to the attitudes of science. 

            

           Ultimately, there is no need for moderation between what you consider true and what you consider false, or between your own subjective happiness and misery. One should be pursued, the other discarded, and don’t let the invocation of ‘moderation’ convince you otherwise!     

How to Think About Social Issues: Tips 19-20

19. Do not try to settle arguments by appealing to ‘justice’ or ‘morality’:

To start, let me stress that I am by no means advocating moral relativism or accusing morality or justice of being useless concepts. The fallacy I have in mind is when a debater says something like: “You have persuaded me that the course you advocate has many advantages. However, it violates morality and justice and thus cannot be recommended”. As with the case of appealing to authority, the question is: what makes something just or moral? Principles of morality and justice are commonly contrasted with considerations of ‘mere’ expediency. Really though, rules of morality and justice are just deeper forms of expediency, concerned as they are with prescribing general rules of conduct which would prove expedient if everyone followed them for their long-run wellbeing as opposed to just considering the expediency of isolated measures for their short-run consequences.

Though this fallacy is committed by representatives of all strata of opinion, I will pick on members of an intellectual movement closest to my own opinions as an example. Anarcho-capitalist libertarians are those who believe that a stateless world where every good and service is bought and sold on the free-market, including defence services against criminals, is the political ideal for mankind. Their guiding principle of justice is known as the non-aggression axiom, which states that the use of coercive force is only permitted in retaliation for or in direct prevention of a violent assault against person or property. This stems from their principle of each human’s absolute ownership of their own person, the goods that they have produced, the un-owned land that they have ‘homesteaded’ (brought into production), and the goods that they have purchased or received as a gift. It follows that there is no room for a state, an organization characterized by its ability to fund itself through coercive levies (taxes). They reject the minarchist (supporters of a minimal state) claim that taxation is justifiable as long as the proceeds are used to defend the person and property of those taxed against the violent aggression of others, because no one has the right to coerce others into doing anything, including paying for defence services. Thus, they support anarchism based on principles of justice, and view any other political arrangement, including minarchism, as an unjust system.

But here, we must ask ourselves: why adopt this particular principle of justice as absolute, tolerating no exceptions, even if the exceptions can be formulated as rules such as the minarchist rule described above? The only satisfactory answer is that this absolutist construction of property rights is the principle of justice that is most expedient for the long-run, subjective interests of all members of society. To prove this though, one must prove that anarchism is a more satisfactory arrangement than any other system of political organization, such as minarchism. But then we are right back to the utilitarian, step-by-step evaluation process outlined in tip #16. Thus, saying that something is ‘just’ is simply another way of saying that its adoption as a general principle/rule of conduct is the most expedient course for the long-run, subjective interests of all members of society. In this case though, one must provide the full argumentation for why this is the case, and not just dismiss your opponents’ points by declaring that they ‘lead to injustice’.

To be fair to the anarcho-capitalists, a large chunk of their work is dedicated to convincing others that an anarchist social order could not only work in practice, but would be the most productive social arrangement imaginable. That is why their disparagement of utilitarianism and proclamations of the absolute justice of their cause puzzles me, for, implicitly at least, they do seem to believe that utilitarianism is indeed vitally important. Thus, never abdicate responsibility for rationally weighing the pros and cons of a social measure by simply proclaiming the justice or morality of one side of the argument, without providing further argumentation as to why justice or morality lies on that side and not the other.  

20. Do not try to settle arguments by appealing to the ‘general consensus’:

One argument that is often heard to justify a political measure in a democracy is that the measure is deemed to be a good one by ‘the general consensus’. It is often used in the context of implying that someone who disagrees with the measure is some fringe extremist, foolishly trying to argue against the conclusion reached by ‘the general consensus’ of reasonable people. However, on closer examination, it would seem that this does precisely nothing to settle an argument.

            

           The first problem is: what exactly is this ‘consensus’ on? For example, someone says that: “the general consensus today is that universal, compulsory, public education up to grade 12 is a good measure, therefore no one should oppose it”. But is this statement true? Is there really a consensus that the current system of public education is the best possible and that nothing should be done to change it? The answer is no, for many people complain about public education all the time, from the choice of curriculum, to the poor teachers, to the mediocre standard of educational achievement reached by such schools. However, it is true that if you suggest moving away from the public education model, you are met with looks of disbelief and cries of indignation by most people. What accounts for this? How can the same people be dissatisfied with the system and be virulently opposed to changing it in any fundamental way at the same time? The answer is that the ‘general consensus’ is not on the means (public education) but on the end (more egalitarianism in education). For whatever reason, most people feel that education should be artificially egalitarian somehow. However, that does not mean that this is the only thing they are looking for in an educational system. The content of the curriculum, the quality of the teachers, and the level of educational achievement of the students are other educational goods that are pursued alongside egalitarianism. Thus, if the opponent of public schooling can point out that these others goods will be diminished by public schooling (due to no competition, no responsiveness to supply and demand, and the substitution of bureaucracy for economic calculation), and even the egalitarianism of public schooling is exaggerated (due to great differences between public schools in different areas), a significant blow to the supposed ‘general consensus’ can be struck.

            

           The second problem is: even if there is a ‘consensus’ on both the ends and the means to achieve those ends, does this make it right for this ‘consensus’ to be imposed on others outside of it? For example, someone says that: “the general consensus today is that the only fair way for the government to raise revenue is to raise tax rates on the wealthy but not on anyone else, therefore no one should oppose such a tax increase”. But who exactly is making up this ‘general consensus’? Does it include all the wealthy people who are to pay more taxes? It probably does not, because otherwise, there would be no need for the money to be raised by a tax. All the wealthy people could agree, for instance, to set up a fund where they would put 10% of their income, to be donated to the government on the condition that all the other wealthy people contributed their share. This would be a free-rider-free way for wealthy people to self-tax themselves. That such a solution hasn’t been adopted would seem to suggest that there is not in fact a consensus among the rich people that the government should have even more of their money, whatever Warren Buffett might say to the contrary.  

            

           But, says the democrat, this would require unanimity among people in order to tax themselves, all we need in a democracy is a majority! And indeed, when one gets down to it, the ‘general consensus’ doctrine is nothing but a ‘majority rules’ doctrine. Made more explicit, the sentence: “the general consensus today is that the only fair way for the government to raise revenue is to raise taxes on the wealthy but not on anyone else, therefore no one should oppose such a tax increase” becomes: “a majority of the people in an arbitrarily defined political unit called a country, a majority which may or may not include the wealthy people to whom the proposed measure applies, says that the only fair way for the government to raise revenue is to raise taxes on the wealthy, whether or not they support this measure or even wish to be part of the arbitrarily defined political unit called a country in the first place, therefore no one should oppose such a tax increase, and if they do, it doesn’t particularly matter, because in a democracy, the majority can impose their will by force on the minority”. Phrased this way, it should become clear that the general principle behind the ‘general consensus’ doctrine is that every policy, no matter how ill-advised, can be justified if that policy is supported by the majority of the population of an arbitrarily defined political unit.

Even if there is a ‘general consensus’ on something, this does not automatically make it a good policy and thus should by no means be used to stop arguments over the desirability of social measures in their tracks. The majority of people think that Canada would be a better place without people of Hungarian descent and wishes to act on this impulse? Ok, then the ‘general consensus’ is that all Hungarians should be exterminated. The majority of people in the US think that the folks at Google have too much money and that they could use some of that loot for themselves? Ok, then the ‘general consensus’ is that all of Google’s assets should be expropriated and distributed among the majority. Affirming the soundness of such policies due solely to their popularity represents the ultimate abdication of the social scientist.

            

           Thus, next time someone drags out the ‘general consensus’ card in a political argument, make sure you point out that the people in this consensus tend to agree on ends, not means, and therefore may be misled by ignorance of the various means and their respective effects, and that even if the majority of people did reach a consensus on means and ends, this does not necessarily make it a good measure by any standard of justice that underpins a peaceful and productive human civilization. Democracy is a system of government that can be justified for a number of reasons, such as because an average democracy is probably better than an evil, idiotic, or crazy despot (which an authoritarian regime is always at risk of producing), or, most importantly I believe, because in a democracy, transitions of government (virtually inevitable in any system) can happen peacefully, without a destructive civil war as must occur for most major government changes in authoritarian regimes. One of these reasons is not, however, that 'the people' will always support the best policies, nor that democratic political power is never used to benefit one group at the expense of another, it clearly is all the time. To assert, therefore, that a democratic popularity contest determines what is or is not a good social policy is absurd, and to use this absurdity to stop social science arguments in their tracks is not at all helpful.      

How to Think About Social Issues: Tips 17-18

17. Process: Try to isolate and analyze only the ends most unique to the measure:

For this tip, an example right off the bat would be best to illustrate the point. Consider the system of socialized healthcare that currently exists in Canada. If we wish to analyze the desirability of socialized healthcare, we should try to isolate and analyze only the ends that are the most unique to socialized healthcare and that cannot be achieved with less extreme healthcare interventions. What are these ends? Full government control of the healthcare system and the ability to create a radically more egalitarian system of healthcare provision are fairly unique to the socialized model. If supporters of socialized healthcare present these as the main merits of their system (which they occasionally do), arguing that government can overcome the ‘inefficient anarchy’ of free-market healthcare provision with their more efficient central planning and that no one should be allowed to receive better healthcare than others on account of their ability to pay more for it, there is no problem. Opponents of socialized healthcare have two results, full government control of the healthcare system and their ability to pursue radically egalitarian policies in this industry, that they can then argue are unfavourable rather than favourable. Opponents could make similar arguments as they could have made for the case of socialization of the grocery industry as was presented in tip #15, arguing that government control of business is incredibly inefficient and that egalitarianism is either not a valid moral ideal or is not worth the productivity loss as a result of the killing of incentives to produce that its pursuit entails.

Unfortunately, the debate over socialized healthcare is not usually constrained to these points. All too often, supporters of socialized healthcare will confront opponents as follows: 'Government must provide healthcare to all to prevent people from dying in the streets if they can’t afford to pay the medical fees. You heartless libertarians don’t care for the plight of the poor, and their blood would be on your hands'. Of course, there are many good responses for the libertarian to this contention that in a free-market system, poor people will be dropping dead in the streets due to lack of proper healthcare. The likelihood that private charity, once it is no longer being crowded-out by taxation and welfare services, could help these people is actually quite large. Once government stops meddling with the healthcare industry and stops backing up the doctors’ restrictive associations, free-market forces are sure to significantly reduce the cost of healthcare from its current artificially high level. This will allow more people to access more healthcare services.

The main point is the following though: this argument, while interesting in its own right, has little to do with an argument over the desirability of socialized healthcare! While the principle of social safety net-ism, the principle that the government has the duty to provide a minimal standard of living to sustain those who cannot make enough money in the market economy, is a part of the idea of socialized healthcare, it could easily be pursued by less radical means than the full socialization of the healthcare industry. It is full government control of the healthcare industry and radical healthcare egalitarianism that are the ends fairly unique to socialized healthcare, a discussion of the merits or demerits of social safety net-ism has little to no place in a debate over socialized healthcare.

For instance, imagine that the government did not intervene in the healthcare industry, directly, at all. Rather, it just provided a general social safety net service for citizens who could not sustain themselves in the market economy, which would presumably include the provision of the healthcare services needed to sustain the life of their wards, provided that the cost was not truly prohibitive, such as for fancy, experimental treatments. The healthcare system would in no way be socialized, yet there would also be provisions to ensure that citizens would not drop dead in the streets due to lack of money to pay for healthcare. Thus, it would appear that the debate about social safety net-ism does not belong in the debate over the socialization of the healthcare industry, because less radical means could be adopted that would produce similar results in this area.

Another example of this would be a debate on how large the military budget should be. War hawks like to respond to any proposal to reduce the military budget by stating that such a cut would fatally undermine the security of the country, after all, surely these people don’t believe that the military is a useless institution! But when we analyze a military budget, we see that while each dollar can indeed buy more military capacity, each dollar is, in most countries, certainly not absolutely necessary to the security of its citizens. Perhaps the proponents of military budget cuts don’t particularly care if, for instance, the United States stopped operating military bases in the Philippines or if they reduced their fleet of air craft carriers from 100 to 50. Goods are evaluated based on the serviceability of their marginal units (the least valued unit of a stock of goods or a potential new unit to be added to a stock with its ability to satisfy a necessarily less valued desire than the desires satisfied by the current goods in a stock). It is the valuations of these units that play a role in human choice and human action, not valuations of entire classes of things such as ‘all the silk in the world’ versus “all the water in the world”. Thus, the question is not: which is better, having a military or not having a military? The question is: how much are we willing to give up for each unit of military service and what functions should the military be employed for? In this case, only the ends that an incredibly well-funded military could be used to achieve which an adequately funded military used mainly for the purposes of actual, physical defense of the country itself could not achieve should be the ones being debated, not the desirability of having a military taken as a whole.                              

18. Do not try to settle arguments by appealing to authority:

An easy, and highly unsatisfactory, way of avoiding the necessity of defending your point of view in an argument is to proclaim something like: 'Well, all respectable economists agree with me that the progressive income tax is a necessary and advantageous policy, your opposition to it is therefore quite silly'. This settles nothing though. For one, the other debater could just respond: 'Actually, all respectable economists believe that the progressive income tax is a foolish and destructive policy'. But this leads nowhere and the debate is not at all advanced in this manner. The question is: whose ‘authorities’ are right? The only way of answering this question is to restate the arguments that these authorities have made and then use these arguments to make your point. Really, then, the authorities don’t prove anything. Citing them may be useful in order to employ their arguments that have perhaps been more thoughtfully formulated than ones that you could come up with on the spot, but at the end of the day, it is the arguments, not the authorities, that are pitted against one another.    

How to Think About Social Issues: 15-16

15. Identify whether a disagreement is over means or ends:

When two people disagree over the desirability of a certain measure, there are two potential sources of this disagreement. The first, which I will call a scientific disagreement, is over what results can be expected from adopting a certain measure. It is a disagreement over whether this particular set of means will produce that particular end or ends, not over the desirability of the ends themselves. The second, which I will call a valuational disagreement, is over the desirability of the ends likely to be produced by the measure.

For example, imagine that someone proposes that the government should take over the grocery industry. What would a scientific disagreement on this measure look like? Well, an opponent of the measure might say that, because the government is presumably not driven by the profit motive once they have taken over the industry, they are not in a position to use capitalist economic calculation to its fullest, rendering it much more difficult for them to determine the relative value of their inputs and outputs in the eyes of the consumer. This, combined with the lack of competitors pushing the government grocers to serve the consumers better, will mean that, from the point of view of consumer satisfaction, the government take-over will be a disaster.

In response, a supporter of the measure might say (falsely I believe) that since without government control production is anarchic and not efficient socially, a government take-over of the vital grocery industry is a must, the industry is simply too important to be left to the arbitrary whims of individual businessmen. Notice that both debaters have the same end in mind, in this case, the most efficient system for producing and distributing groceries. Theirs is a scientific disagreement because one thinks that the measure is not in fact a means to that end and is in fact directly contrary to it, while the other thinks that the measure is the most suitable means for achieving that end. Note that in a scientific disagreement (yes, even in the social sciences), there is no room for relativism, agreeing to disagree because of different world-views or ideologies, or compromise, either the means under consideration are likely to produce the end sought or they are not. Perhaps one debater adheres to a better theory and/or has interpreted the relevant empirical more cogently than the other, and it is up to the observer to investigate this matter with his own intellect to decide who is ultimately more convincing.

Now, let us look at what a valuational disagreement on this measure would look like. In order to better isolate the two sources of disagreement, let us assume for the moment that both debaters agree that the government taking over the grocery industry will significantly reduce the productivity of the grocery industry in the eyes of the consumers but that it will allow the government to pursue egalitarian policies with regards to groceries and to assure that everyone will at least have enough to eat so as not to starve. The two debaters thus agree on the ends that the measure will produce, but now their disagreement is over which set of ends outweighs the other.

The opponent of the measure could argue that productivity in the eyes of the consumer is the most important measure of policy effectiveness, given that people’s happiness depends on them being able to fulfil their desires as much as possible, especially in an area as important as food. He could also argue how the individual’s freedom to pursue his own ends in the way he sees fit is vitally important as an end in and of itself. He may dismiss the so-called advantages of the government being able to pursue egalitarian policies in the grocery industry, because he may be a believer in meritocracy based on peoples’ ability to serve their fellow man as an end in and of itself and he may not place much importance, if any, on the pursuit of the egalitarian ideal.

The supporter of the measure could argue just the opposite. He could say that once a certain material threshold has been met, men should not pursue petty material advantages anymore, and that man’s voracious appetite for more and more material possessions as a consumer is wholly misguided and should be curbed. People should be satisfied with a simple, minimalist diet that the government will provide to them equally and should not indulge in luxurious gluttony. He may say that individual freedom is not important as an end, only the individual that conforms to some philosophical ideal can live with dignity. He may be a great believer in the ideal of egalitarianism, believing that no man should have more material possessions than any other and that it is a proper use of the government’s coercive power to enforce this.

The source of this disagreement is different evaluations of the desirability of the ends that the measure will likely produce. If the valuation is done thoroughly, remembering of course to consider the general principles behind the measure and what would happen if such principles were applied in other situations, then there is no true right or wrong in a valuational disagreement. The observer must consider carefully which set of ends he values more highly and make his decision accordingly. It is important to know what kind of disagreement you are having with another over a social issue so that you know how to convince them, either by educating them on the theory that you believe is correct for a scientific disagreement, or by trying to convince them to change their subjective valuations in the case of a valuational disagreement.

16. Process: Theory, Predicted Effects, Cost/Benefit List and Weighting, Position:

When analyzing a social measure, start with a scientific analysis (determining what ends the measure is likely to produce). This will require subscribing to a social or economic theory that is applicable to the measure in question based on the general reasonableness of that theory (keeping in mind, while doing so, the preceding tips in this compilation of course). Then, you must apply that theory to the particular measure to see what its predictions concerning the likely results of adopting that measure will be. If applicable, some historical or statistical knowledge relevant to the measure may be useful to back up the theory applied or in order to predict which, of the possible results that the theory predicts the measure could bring about, tends to be the most predominant given certain conditions.

Once this is done with a reasonable amount of thoroughness, draw up a list of all the main results that you think the measure will bring about. Remember, as per tip #13, that the general principle behind the measure could be applied in other situations by using the measure under analysis as a precedent, so this eventuality should be factored into your results list. Though tempting, do not draw up the results list as a cost/benefit list at the moment, remember that no one has evaluated these results subjectively yet.

Once the un-evaluated list has been drawn up, consult your own subjective valuations of the results and now organize the list, in a separate location, as a personal cost/benefit list. Remember, and I can’t stress this enough, that you must also evaluate the general principle and its other possible applications.

For example, let us take a measure to ban tobacco smoking completely. Some items on your results list might include: 1. Likely reduction of lung cancer rates. 2. Probable increased black market and criminal activity around this activity, resulting in more policing and jail resources being necessary and a partial crowding-out of above-ground, law-abiding businesses by underground, law-breaking businesses. 3. People would not waste as much time and money on addictive cigarettes which might allow them to be more productive and allow them to accumulate more capital. 4. Restriction of the freedom of individual consumers to fulfil their own subjectively determined desires in the way that they see fit, resulting in a reduction of their utility/happiness. 5. Reduction of the chances of aggression against others via second-hand smoke, which is an invasion of their right to self-ownership because it forces non-consenting people to inhale potentially dangerous substances. 6. General principle: the government has a right and a duty to prevent consumers from using goods that the government considers to be unhealthy. This measure could be used as a precedent for other measures, such as banning large soft drinks, banning fatty foods, banning television and video games, banning alcohol, etc…

The theories that I employed aspects of to come up with this results list includes: Austrian economic theory, Libertarian social theory, the medical theory that accepts the empirical correlation between smoking and lung cancer as causation. As for my cost/benefit list based on my subjective valuations of the results, I would place #2, #4, and #6 as costs, #1, #3, and #5 as benefits. I am not done yet though, as not all costs and benefits are created equal, thus I must compare the complex of costs versus the complex of benefits and see which course I prefer. In this case, I think that the costs far outweigh the benefits. The prohibition era illustrates how effective a spur to the formation of violent criminal organizations the criminalization of popular substances is, thus #2 is a serious problem for my own safety and the general moral fabric of society. Since all values are subjective, who am I to say that people are making the incorrect choice when they accept an increased risk of lung cancer in exchange for the satisfaction that they get from smoking? Thus, I think that #4 trumps #1. But it is #6, the general principle, which really troubles me, for the last thing I want is a busy body government telling me what I can and cannot do with my body and my time. Certain lifestyle choices, such as my enjoyment of sweet Chinese fast food, consumption of large quantities of red meat, and penchant for staring at screens for the greater part of my time, would perhaps not be considered optimal by a government commission, but they contribute to making me happy and thus I choose them even though I know there are certain health implications that come from these choices. As for #3, I don’t believe I have the right to force people to be more productive as I would not want them to force me to be so. And as for #5, while this is indeed a serious problem, there are several ways, such as the designation of certain areas as smoking areas and the treating of people smoking indoors in the presence of unwilling people or children as aggressors, prosecutable in the courts, to address this problem without the outright banning of smoking.

Thus, performing these steps should allow you to make a personal decision about whether you support a social measure or not. After this, you may want to try to convince others to come around to your way of thinking on this issue. For this, I recommend that you show your un-evaluated results list to the person you are trying to convince and ask them to make their own cost-benefit list. If they reach a different result than you, you can then bring up your own cost/benefit list and overall assessment and engage in a valuational debate to persuade them to see the issues your way.

How to Think About Social Issues: Tips 13-14

13. Always take into account the general principles behind policies:

When considering a social/economic policy, don’t just assess it in an intellectual vacuum, in isolation; rather, assess it also based on the general rule or principle underlying it. For example, imagine that there is a rich man who is very unpleasant, not a criminal, but very unpleasant: rude, selfish, obnoxious, narrow-minded. Living in the same city is a poor man who is very pleasant: polite, concerned for others, charming, and broad-minded. Seeing this, imagine a pundit proposes that the city’s government should take half of the rich man’s assets and give them to the poor man, as by doing so a pleasant person could be enriched at the expense of an unpleasant person, surely a social gain! A social thinker considering this in isolation might say: sure, why not? The pleasant person would probably make better use of his money and besides, he ‘deserves’ it more than the unpleasant person.

If we stop and consider the principle underlying this kind of policy though, we may have second thoughts. In this case, the principle is this: any time a democratically elected municipal government deems a rich man unpleasant and a poor man pleasant, it may step in and confiscate some of the rich man’s wealth to give to the poor man. But this is a terrible principle for a number of reasons. First, what criteria does the government have for distinguishing between unpleasant and pleasant people? What’s to prevent the government from abusing its power and just arbitrarily grabbing people’s money to reward its supporters? Second, how about the very foundation of prosperity and freedom in society: the right to hold property that cannot be confiscated unless its holder has invaded the personal or property rights of someone else? Who will bother accumulating wealth and property by serving the consumers if they can just lose it all at the arbitrary whim of a judgemental government? Thus, a policy that, taken alone may seem alright, when probed for the basic principle underlying it, turns out to be a terrible policy.

It is for this reason that Henry Hazlitt, in his book on ethics, recommends rule utilitarianism over ad hoc utilitarianism. First, we have a better chance of assessing the utilitarian effects of a general rule of conduct over ad hoc, single policy decisions. Second, principles are important for future action and, once a single policy is recommended by a social thinker, it can be used as a precedent for recommending other policies that the original social thinker may not sympathize with. You may protest all you want that it was not your intent to install a general principle but merely to recommend the one policy, but the fact is that ideas take on a life of their own and your precedent will be used to justify certain general principles that you may entirely disagree with.

Let us take another example, this time a tangible, contemporary one: Mayor Bloomberg of New York’s ban on large soft drinks for health reasons. Now, even as an isolated, principle-less policy there are some possible objections, namely, who is Mayor Bloomberg to say that everyone who willingly purchases a large soft drink, knowing full well the health consequences of their action, is making a poor decision? Values are subjective, and if some individuals value the present consumption of a greater quantity of soft drink over the cost of health risks in the future, who is Mayor Bloomberg to say that they are wrong, other than by arbitrarily substituting his own values for those of the individuals in question? Nevertheless, an argument could still be made for this policy in isolation, most convincingly along the lines that since the government must in many cases, under the present institutional arrangements, pay for the healthcare of its citizens, adopting a not very harmful ban of large soft drinks in order to help improve the health of its citizens and thus lower the government’s healthcare costs could be justified. Of course, one could argue that this just proves the cumulative nature of interventions and that if the government just got out of the healthcare market (which it should for other reasons anyway), this argument is of no effect. Let us not use this line of argument for the moment though and consider the question another way.

What is the principle underlying this ban of large soft drinks? Essentially, it is that the government has the right and/or the duty to make sure that citizens live a healthy lifestyle. In this case though, why stop at banning large soft drinks and narcotics? Why not prohibit fatty foods, sugary deserts, and salty snacks? In fact, why stop at prohibition at all? Why not compel people to eat a portion of spinach a day, take vitamin tablets, and drink cranberry juice? Why not force people to exercise for at least 30 minutes every day? The answer is because this is tyrannical and completely disregards the autonomy and subjective value judgements of individuals, treating them like dependent, childish wards. Ludwig von Mises, in chapter 15 of Human Action, made a similar argument when he opined that perhaps it would not be too bad if the state outlawed the advertisement of any product which could not be proven scientifically to do what it claimed to do, ie. cure acne, make ugly people pretty, etc… But in the end he did not recommend such a policy because he said that ‘freedom is indivisible’ and that once the government started getting into the business of being a truth-commission for the claims of private citizens, why not extend this function to the far more important statements of political, social, and religious doctrines? Why not outlaw all political statements that don’t fit into the models of registered government economists or the accounts of registered government historians, and outlaw all religious statements that haven’t been proven using the methods of the natural sciences? In this case, as in the other examples given, the answer is because while the initial policy considered may not be bad, the underlying principle is monstrous to most people.     

14. Don’t conflate state and society:

Beware when someone says something like: ‘You did not build your business alone, society helped you all the way and hence you owe a debt to society. Thus, you should be willing to pay more taxes’. What is wrong with this statement? The statement conflates the idea of society and the idea of state. Society is the network of cooperative relationships between human beings, including the division of labour and networks of exchange which are known as the market. This kind of society, the market society, transcends the boundaries of nation-states and encompasses all humans that engage in exchange transactions with one another, which now means the vast majority of the world’s population. The state, on the other hand, is organized coercion that is considered to be legitimate by its subjects. Currently, different states occupy different geographical areas, and most geographical areas only have one state that is considered legitimate by the majority of the region’s inhabitants. Thus, while the market society is characterized by contractual, voluntary relations and an international scale, regional states are characterized by hegemonic, coercive relations and a regional scale. It should be clear that these two conceptual entities are not the same thing.

It should also be clear what the fallacy of the statement is. Starting with the true assertion that people cannot build businesses, or do a lot of good things that they currently do, without society, it moves on to the false assertion that because of this, individuals should be willing to pay more taxes to the state. This clearly does not follow because the market society and the state are separate entities. Perhaps though, the author of the statement just left out or left implicit the reasoning linking society and the state and that they really mean that the market society would be impossible without a state. Leaving aside the anarcho-capitalist arguments that the market society does not need a state to function well, it is true that many eminent social thinkers, even very libertarian-leaning ones such as Mises and Hazlitt, do indeed argue that a state is necessary for the smooth functioning of the market society. After all, the market society is a voluntaristic society, but if individuals and organizations are free to organize private armies and use them to aggress against the person and property of other members of the market society, then what do we have left of that voluntaristic society? Thus, it is considered by many thinkers to be the state’s primary function to defend the persons and property of its citizens against the aggression of domestic and foreign criminals or rival states. In this limited sense, we may agree that the existence of a functioning state is a necessary pre-requisite for a prosperous market society. But in this case, unless all of the government’s resources are currently devoted to the protection of person and property and the voters still feel that more protection is needed, the call for a heavier tax burden on individuals does not follow.

Thus, the author of the statement must have something else in mind. And indeed, advocates of big government do hold that the government’s role extends beyond, far beyond, the protection of person and property. Transportation infrastructure, public utilities, schools, healthcare institutions, guardianship of natural resources and the water supply, welfare payments, aggressive military ventures, prevention of victimless crimes against someone’s sense of morality (drug laws for example), and many more are considered to be vital functions of the state, necessary to the functioning of society as a whole. There is a libertarian and free-market economics literature on why these things are either not necessary or could be done better and more economically by private enterprise which we recommend you consult before deeming any of these so-called state functions vital to the preservation of society as a whole. For now, suffice it to say that unless it can be demonstrated that the people in question who are supposed to be grateful to society for their accomplishments (businessmen in this case) could not possibly have succeeded without the state provisioning one of the ‘services’, besides defence, that it currently provisions, it is illegitimate to demand that these people be grateful to the state for something that society, taken broadly as the world-encompassing market society, really made possible.     

How to Think About Social Issues: Tips 11-12

11. Competition is not war:

Fuzzy thinkers have a tendency to confuse the commercial competition of the free-market with violent warfare. However, the two are completely different. Though sometimes businessmen will advocate for the use of coercion to advance their interests, this does not mean that free-market competition as such is the same as violent warfare. Consider a soccer game. The purpose of the soccer game is to determine which team is better at playing soccer. There are rules of the game to ensure, as much as possible, that factors other than the relative soccer-playing abilities of the two teams do not affect the outcome. Thus, if the players on one team decided to bring concealed pistols to the game, and went on to massacre the other team in order to ‘win’ the game, we cannot really talk about a soccer game anymore. The team with the pistols did not compete with the other team based on their soccer-playing abilities, but used violence to tilt the outcome in their favour.

Similar considerations apply to commercial competition. The purpose of commercial competition is to serve the consumers in the most economical, high-quality way. In contrast to soccer, this competition is not just to determine who is the ‘best’ at business, but to ensure that the people who are the best suited to serve the consumers in a particular way do so, and that others are spurred to surpass the established providers in consumer satisfaction, which is also a boon to the world’s consumers. There are rules of commerce to ensure, as much as possible, that factors other than the relative consumer-serving abilities of the competitors do not affect the outcome. Thus, if the operatives of one company decided to steal the products of another company or petitioned the government to prohibit the other company from competing with them, we cannot really talk about free-market competition anymore. The company employing coercion did not compete with other companies based on their ability to serve the consumers, and in doing so, both the world’s consumers and the potential competitors are injured.

Another spurious argument, which is related to the confusion described above, is to assert that rich companies and individuals can exert “economic power” over others, which is just as bad as coercive power. But, it is difficult to see why wealth equates to coercive power. Everyone in a market society has the right to either exchange or not exchange with anyone else. If a rich person decides that he would rather not pay $1000 to a cleaning lady for a day but would rather pay $200 to the cleaning lady for a day, the cleaning lady has the option of either accepting the $200 or not accepting it. To take away the “economic power” of the rich employer, the cleaning lady would have to have the right of forcing him to make any exchange that she saw fit, in this case perhaps $1000 or more. Also, the market ensures that the employer could not just pay $1 to the cleaning lady for a day, because presumably competing employers value her services more than $1 and would employ her instead, closer to the going market wage for cleaning ladies of her calibre.

Others say that free-market economists always go on about the consumers determining the production process, but not all consumers have an equal voice in determining this, hence the system is not fair and undemocratic. But the rich having greater relative consumption power is precisely what incentivizes them to serve the consumers effectively, as discussed in tip #4, otherwise why would they bother? Voluntary exchange and coercion are completely different things analytically, and to lump them together is to obfuscate one of the most important distinctions in the social sciences.

12. Define your terms:

When engaging in argument, about social issues in particular, it is very important that both participants agree on the definitions of the terms that they are using. Debates that revolve around two different definitions of a term are useless. Only when the term signifies the same thing in both participants’ minds can a proper discussion be held about the desirability of what that term signifies.

For example, there is a lot of disagreement over the meaning of the term ‘capitalism’. Marxists will say that capitalism is a stage of history, and that in this stage, there are various historical sub-stages of capitalism (early capitalism, late capitalism). Different economic policies are associated with these sub-stages, for example, early capitalism favours free-trade policies, while late capitalism favours protectionist policies. For the free-market economist though, capitalism is equated with the unhampered market and contrasted with government economic interventions and socialism, the ultimate government economic intervention. With this definition, it is absurd to say that protectionism is a late capitalist policy, by definition protectionism is a government intervention and hence a deviation from pure capitalism.

It is obvious how frustrating an argument between two disputants that held these two different definitions of capitalism would be. If both, for example, thought that protectionism was a bad thing, but one attributed it to late capitalism and another to government interventionism and thus not capitalism, then they would not really be disagreeing with one another, only wasting their time with definitional debating.

As another example, the word liberty is subject to an array of different definitions. Some think that liberty means the freedom to do whatever one wants, regardless of its effects on others. Thus, the freedom to rob, murder, and assault would be the most consistent realization of the call for liberty. Libertarians and free-market economists have a different definition though. For the libertarian Murray Rothbard, liberty is an outgrowth of the right to self-ownership and the corollary right to own property that one has created, homesteaded, or been given/sold. Thus, liberty for him means the respecting of people’s property rights in themselves and their justly-held material possessions. For free-market economist Ludwig von Mises, liberty can only exist in society, because it is defined as freedom from arbitrary interference with your person and property by other members of society. Thus, in the lawless jungle, there is no such thing as freedom, because there is no powerful authority to punish those who aggress against other people’s persons or property.

Whichever of the latter two definitions one adopts, it is clear that liberty definitely does not include the freedom to rob, murder, and assault. Again, a debate about the desirability of liberty between two disputants with these different definitions of liberty would be fruitless, because while both presumably agree that a world where everyone had the freedom to rob, murder, and assault would be bad, they are just arguing about definitional matters around the term liberty and not making any progress. A suggestion: if such definitional problems pop up in social controversies, come up with a new term to signify what you mean. For example, rather than speaking of capitalism to denote a free-market society, talk about an unhampered free-market society instead.     

How to Think About Social Issues: Tips 9-10

9. Who benefits:

When thinking about a government policy, always ask the question: who benefits? For example, take  licensing requirements for doctors. In the United States, all practising doctors are required, by law, to be members of the American Medical Association (AMA). The AMA does not let just anyone who says that they want to practice medicine into their ranks. To become a member, the candidate must go through AMA-approved medical schools (whose enrolment numbers are limited by the AMA) and must meet certain standards while a practising doctor. The AMA and its supporters claim that this policy is designed to protect consumers from sub-par doctors and quacks. But, let us inquire, who benefits from this policy?

Like any license-based restriction system, the AMA’s monopoly serves to reduce the supply of people who can do the work assigned to “doctors” and, as elementary economics will tell us, when the supply of something goes down (in this case the supply of medical practitioners), other things equal, the average price paid for the good in question will go up. In this case, the good in question is medical services, and when the average price of medical services goes up, the ones that benefit by receiving extra income are the doctors who are allowed to supply the good. The established doctors who already have their membership in the AMA enjoy these higher prices for their services, they are the ones that materially benefit from the policy.

But what of their claim that they are protecting consumers? This claim is disingenuous because, either the consumers do not want their protection and would prefer to take their chances, or they would only patronize AMA-approved doctors at a higher price if the choice between AMA and non-AMA doctors was available to them. Thus, as a voluntary association of medical professionals that certified doctors they deemed competent, the AMA could perform all their positive functions without the negative side-effects of their enjoying a coercive monopoly over medical consumers. The social scientist who asks: who benefits?, with regards to this policy will be in a position to evaluate the policy more realistically, as a monopoly scheme to reap the established doctors more monopoly gains and protect them from competition, at the expense of the consumers and potential doctors who are barred from the profession.

10. Seen versus Unseen:  

This tip I have taken from the works of the 19th century French classical economist Frederic Bastiat and the work, Economics in One Lesson by the American economist Henry Hazlitt. Inspired by Bastiat, Hazlitt recognized that the most important lesson in economics is to always think about the unseen costs of each economic policy. Bastiat and Hazlitt identified a major error known as the “Broken Window Fallacy”. Imagine that a juvenile delinquent throws a rock at a shopkeeper’s window, shattering it. Seeing it, most observers deem it a bad thing, but one observer says: “Don’t you see that this boy has done a service to the community by breaking this window? Now the glazier (the person who fixes windows) has work!”. This observer recognizes that the shopkeeper must give employment to the glazier and that this will make the glazier happy, this is the seen. What the observer does not recognize is that if the window had not been broken, the shopkeeper could have, say, bought a new suit with the money that now has to go towards repairing the window, and this would, besides making the tailors happy, have made the shopkeeper happy too because now rather than just replacing something that already existed, he can buy something new that will add to his well-being. This beneficial purchase that could have been made but has been forestalled by the act of destruction is the unseen, the ignoring of which constitutes the “Broken Window Fallacy”.

Keynesian economists in particular seem hooked to this fallacy. A major Keynesian argument is that, in a depression, the government should ‘stimulate the economy’ by spending money on public works projects, thus providing employment for the unemployed labourers. Keynes suggested that even spending money on digging useless holes or building useless pyramids would be better than doing nothing. What the Keynesians don’t seem to grasp is that the government does not just create resources out of thin air. It must either tax the citizenry to fund the project or (the method recommended by Keynesians), it must use its monopoly of money production to expand the money supply, thus giving itself more money and thus claims to resources, at the expense of other money holders’ purchasing power (and causing harmful economic distortions to boot). In either case, the government takes resources from the citizenry in order to fund their public works projects. While the employment provided by the public works projects is what is seen, the potential employment and consumer satisfaction that could have been provided had the money or claims over resources stayed in the hands of the citizenry is what is not seen. The government breaks the window with the tax, and ‘repairs’ it by providing employment to people with the public works project. If the tax had not been levied though, the resources would have been allocated in the way that the consumers wanted them to be allocated, not in the useless way in which the government allocated them.

An equally egregious Keynesian claim is that wars can help “stimulate the economy”. But wars only destroy, and though preparing for them and rebuilding afterwards provides a lot of ‘employment’, those resources could have been used in peaceful ways to improve the well-being of the world’s consumers. Thus, always remember to use your imagination and powers of abstraction and never forget about the unseen.