Saturday, November 10, 2007

Of child labour, property and worldviews

Blogger no. 1 writes about child labour - please go read. I have a small point to make. One of the reasons why people feel compelled to rescue children despite knowing that many of them start working by their own volition or that of their parents, is this - many children indeed start working due to poverty, but many of them are forced to stay on due to coercion. Even if one does not support the ban on child labour, one has to think about the conditions in which these children work and what can be done to improve them.

Second, and this is slightly more fundamental - poverty forces many parents to make their children work but many of these children do not want to work themselves. If we begin with the moral position that children below a certain age should not be working, does the parent have the right to send the child to work? Where does legitimate parental control end and coercion begin? And if we believe that the child's wish should be honoured, is this a strong argument in support of a welfare state and a safety net? There will definitely be inefficiencies and corruption in any such government initiative. Should the options then be evaluated by a cost-benefit analysis? Or is one of the two options significantly more correct from a first principles, moral point of view?

Apropos this, will any libertarian (or anyone, for that matter) explain to me what is the "moral position" on the distribution of property in the first place. I ask because any discussion on economic freedoms ultimately boils down to philosophical differences on property rights - what existing distribution of property can be accepted as correct and moral? Is there any moral basis for the heritability of property? Does it make sense to talk about economic freedom from a moral standpoint at all?

My worldview is this - the objectives of my ideal society are maximization of utility, liberty and equality of oportunity, in that order. I am right of centre, economically and politically, and a social liberal. I do not mind sitting on the fence on a lot of issues - it is a lot more honourable than it is usually made out to be. I try to work on certain first principles (which are close to the libertarian ideal), but I realize that given the constraints of a non-ideal reality, this is not always the best stand to take. I am wary of extreme positions. I admire balance - one of the biggest learnings from my short life has been that on either extreme of any world-view divide, one ends up contradicting oneself. I am a libertarian-centrist, so to speak. A consequentialist, a utilitarian.

8 comments:

Venu said...

"will any libertarian (or anyone, for that matter) explain to me what is the "moral position" on the distribution of property in the first place."
John Locke was one of the philosophers who popularised the concept of property rights. His reasoning was that a man obtains the right to own land by mixing his labour with the land (by, for example, cultivating it). This is, to some extent, a deontological defense of property rights. The other very reasonable explanation for property rights is that is evolved behaviour - many other animals have evolved territorial behaviour, and so it is no surprise that the concept of ownership comes so naturally to humans.

David Friedman gives an excellent consequentialist defense of property rights in this essay. I wish I could give a better explanation to the question of why property is heritable (when it is not explicitly willed to someone else), but my half-baked explanation is that it is simply because it is the most "natural" thing to do (it is a Schelling point).

Consequentialism is a fine stand to take, and for the most part I prefer consequentialist arguments. But it is vital to recognise that pure consequentialism cannot answer any questions at all. At some point the consequences have to be judged, and you will need some deontological standard to do that. Besides this, on some questions consequentialism contributes very little, for questions like e.g. whether it is right to fight against aging, or whether abortion is morally right. (I would have thought the answer was obvious to the former question at least, but surprisingly many prominent bioethicists actually think death is better for humans.) I take some stands on these issues, but I can't really justify those stands on consequentialist grounds. You have to use other arguments to convince people who don't agree with you on such issues- for example, point out inconsistencies, make analogies etc.

One common variant of consequentialism is consequentialism plus side deontic constraints - welfare maximisation is good here, but only if it is done without violating some constraints (e.g. under this variant, it would be wrong to kill a 100 people in order to save a 100,000). Again you see how this is not pure consequentialism.

For these reasons, I think you need to make qualifications when you say you are a consequentialist.

Also, I wonder why you think equality of opportunity is important. As others have pointed out, life is not a race with others where you all need to start on an equal footing. Robin Hanson gives an excellent explanation for why people care so much about equality of opportunity even though it is irrelevant to welfare maximisation.

zen babu said...

Venu,

Thanks for the detailed comment.

I am aware of John Locke's definition of property (though I always thought it was John Stuart Mill who said that). And to be sure, I support the concept of private property. However, this view is a little too simplistic. My question was more like this - is the current DISTRIBUTION of property morally justified? Do the Zamindars have a moral claim to the property they own? Do the ex-royal families? Mixing labour with land is a concept that fails to deal with those swathes of property that have historically been obtained through force and coercion. Remember, the idea that coercion (esp w.r.t property, for kings etc.) is necessarily morally wrong is not a very ancient one. To apply relatively recent moral first principles to what is essentially the result of thousands of years of histroy leads to massive cognitive dissonance. I am reminded of Mark Twain's quote - "No individual or nation occupies a piece of land that was not once stolen".

I understand that making property heritable is the natural thing to do. But, when one begins dealing with property rights and economic freedoms from a moral perspective, one renders the 'is it natural' question orthogonal to the point. Coercion, for example, is very natural. Yet, a libertarian society has no place for it because it is 'morally wrong'.

Deontological principles are necessitated for socio-political issues. For economic issues, welfare maximisation is often a mathematical target, and can itself qualify as a good enough first principle.

I do think that equality of opportunity is a necessary ideal, though I have placed it third in the order of priority. And as for the 'fairness gene', well what to say - a gene that determines thought processes is only a piece of biological code, something that gains meaning only when it finds expression through nurture and cultural influences. That article, for example, talks about how people may not care so much about equality of outcomes. I agree - I don't care myself. How does that change things at all?

That life is not a race to be won and competed on equal footing is a romantic notion that cannot (and should not) be forced down the throats of those who start at a lesser footing. Two kids want to get into IIM-A, both are equally intelligent, hardworking, etc. However, one grows up in a richer family, goes to schools that polish his english and make him play football, is able to avail coaching classes and intensive interview preparation sessions. The other cannot do any of these. Who has a better chance? Should he have the better chance? If you wish to insist on Hanson, does this situation not alter the kind of potential mates that will be available to the two of them at the end of their education? Society and policy is a little too comples to be explained away purely in terms of sexual fitness. What these two people want is a constrained, rival resource. Winning here does meaning beating the others. This aspect of life becomes a race, and my ideal society would have ensured that the two indeed start on an equal footing.

Venu said...

"is the current DISTRIBUTION of property morally justified?"

Just to make myself clear, I agree that a deontological justification such as that given by John Locke is insufficient as a moral reason for the current distribution of property. That is why I linked to the David Friedman piece, because it allows a much better way to reason about what is moral and what is not. (Also, Rajan & Zingales' book "Saving Capitalism from the Capitalists" has an excellent chapter on how property rights in their modern avatar evolved in Elizabethan England.) Basically, that distribution of property
is optimal under which each piece of property is owned by that person who can make the best use of it. This is optimal because, in the presence of trade, it maximises the output of a society. Besides, any allocation of property rights remains unstable as long as it is not optimal under this definition. To see why this is the case, look at it from a government's point of view. Why should any government which does not already respect property rights learn to respect property rights? If a piece of property is owned by that person who makes the best use of it, then it makes much more sense for the government to protect that person's right to own the property and steadily tax that person, instead of looting it from that person, because it cannot produce that much from that property itself. To put it in other words, you gain a right to a property only as long as you add more value to it than anyone else can. A son, for example, should rightfully own his father's land because he can put that land to much more productive use than some random thief from the neighbouring village. You see how this reasoning undermines a feudal lord's right to own a large tract of land. The feudal lord essentially adds nothing of value to a land. The Marxists make a similar argument saying the capitalist does not have any right to the profit as he does not add any value, but that was their crucial fallacy - the capitalist does add a lot of value.

Also consider the Coasian argument that even if the allocation started out random, in the presence of tradable property rights, we will (eventually) get to the optimal allocation of property rights.

The question of whether a paritcular distribution of property is "right" is ill-posed, and has no correct answer, for the reason Mark Twain pointed out. However, if you rephrase the question as which distribution of property is welfare-maximising, then there is an answer, and there are specific institutions that can help us get there - a government that enforces tradable property rights. You should not insist on having a deontological answer to every question - because it cannot answer every question.

"Deontological principles are necessitated for socio-political issues. For economic issues, welfare maximisation is often a mathematical target, and can itself qualify as a good enough first principle."
I don't completely understand. Are you saying that even though you are a consequentialist, voters reason by deontology (and hence "necessitated")? The biases of the public at large are a big problem, and I don't know if anyone has a good solution.

"What these two people want is a constrained, rival resource. Winning here does meaning beating the others. "
It is *natural* for humans to construe life as a race, for reasons Hanson pointed out - it is not *right* for humans to construe life as a race. Those who have a better opportunity must be allowed to make full use of their opportunities, because to not allow them to do so would reduce the welfare of the *entire* society.

"does this situation not alter the kind of potential mates that will be available to the two of them at the end of their education?"
Yes, and so do many other variables - the person's beauty, height, wit and so on. Why should I care if the the kind of potential mates available to people is not equal? It is irrelevant to welfare maximisation.

zen babu said...

Venu,

Did not read Friedman's piece, but will do so when I get the time. A couple of points, though.

1) The "distribution of property will eventually get to its optimal condition' argument is seductive, but falls flat on one count. I have always believed that even though the future and vision are ultra-important, the first duty of the government of the day is towards the people of the day. Accepting a given distribution of property as correct as of today, and allowing it to gradually reach its optimal distribution will be quite unfair to the current citizens if the current distribution of property is patently unfair and immoral (as was the case with Zamindars in India). It is tough for me accept a policy that simply ensures optimality a long time into the future - future optimality must be discounted by a discount factor to compare it with the present prevailing condition.

Again, just to make things clear - I fully support property rights and a givernment that protects them. I just don't get the 'moral position' on property rights and economic freedoms. And sure, I understand that I must not insist on deontological positions on everything - you must put my questions in context with the opinions expressed in Amit's post.

2) The Coasian argument assumes zero transaction costs. This is an assumption that is violated very frequently in the real world. I am not an expert so will not say anything further, but one must keep the actual transaction costs in mind when one posits Coasian negotiation as the solution to property distribution.

3) The choices you set up in the "add value to the land" argument are rather frivolous, alsmot Randian in nature. A son adds more value than a random thief in the village, agreed. But does he also add more value than the neighbouring farmer? If no, then by your argument, isn't the correct distribution of property one where the neighbouring farmer gets the property after the father's demise?

Secondly, feudal lords do add a certain very important kind of value to the land - the kind that the owners of a company add to the company by providing capital. A feudal lord ensures that the land, instead of being fragmented, is one huge stretch which can be cultivated together - this increases agricultural productivity. A feudal lord pays the farmers, extends credit to them. Does all this mean that the feudal lord has a moral claim to that property which was arbitrarily given to him?

4) I woder why you bring in welfare maximization only w.r.t to equality of opportuniy and not w.r.t liberty. Is liberty always welfare maximizing? Your argument assumes that those who have the opportnity are already better equipped to make use of that opportunity. My argument says that of all those who are best equipped to exploit a given opportunity (equally intelligent, hardworking, etc.) not all have the same opportunity. Equality of opportunity is neccesary to provide them the same opportunity.

Let's, however, assume that an insistence on equality of oportunity is not welfare-maximizing. In the farmer example above, let's say that the son inherits the father's property, and the neighbour wants to buy it from the son. Even though it makes rational sense for the trade to happen, the trade may not happen due to a thousand reasons - the son may be emotionally atached to the piece of property, the son may hate his neighbour, or the son may just be a dumb idiot. It is welfare maximizing for the trade to happen, and yet I will not insist on the trade to happen, because it will violate the son's liberty.

The three objectives of my ideal society are often in conflict, and the correct policy decision for the resolution of each of these conflicts has to be case by case. It is not just equality of opportunity, but also liberty, that is often irrelevant for even downright detrimental to welfare maximization, bt this does not maean that for evry such instance these two ideals should be ignored. I have seen that in a majority of these cases, I tend to go with the welfare-maximizing idea, and hence the priority order that I set up.

Venu said...

regards point 1: I was never supporting zamindari. All that explanation on the optimal allocation of property rights was meant to show that zamindari is suboptimal (and hence not "right", under consequentialism). I also fully recognise that a property rights mechanism can be suboptimal for a very long time. However, as David Friedman says, "utopia is not an option", i.e. the suboptimality of a policy does not disqualify it - a policy is disqualified only when it is worse in comparison with other realistic policies.

Anyways - yes, your remarks make sense given the context in which you made them. I often think Amit is smarter than he lets out and that he simplifies keeping his bigger audience in mind.

point 2: You are right, of course. Still, Coase gives us hope. And you do see Coase in action in real life - internet domain allocations, for example.

point 3: You are taking me for a complete deontologist at times, and a complete consequentialist at other times. I am neither but instead a bit of both, with each method imposing side constraints on the other. If something is deontologically correct but consequentially leads to severe suboptimality I will declare it immoral, and vice versa. Also, where the one fails, the other can help.

"isn't the correct distribution of property one where the neighbouring farmer gets the property after the father's demise?"
How do you decide who adds more value? Appeal to government or to God? You can only hope the son is rational, and sells his land to his neighbour, and goes and does something in which *he* has a comparative advantage. For this to happen, a system of tradable property rights has to be in place, which you and I support of course.

Also, I think empirically you are wrong about feudal lords, at least in India. They did _nothing_ but collect rent. I don't think a zamindar's land was cultivated together - it was farmed by peasants each their own, and the zamindar was content to let the peasant do whatever he wanted to do with his piece of land so long as he paid up. If the zamindars did add any significant value, then one should observe a drop in India's agricultural productivity following the abolition of zamindari. I don't know if this is the case, but I have never heard of any such drop. (India did have a food shortage in the 50's but that was more due to socialist controls, afaik.)

point 4: Again, I will just defend myself saying I never claimed to be a pure consequentialist. I believe in liberty both because it does in fact maximise welfare relative to others (that's what the free-marketers have been saying all along!), and also because I find it deontologically satisfying. You give (uncontestable) examples to show that liberty can be at odds with welfare maximisation. But I don't think liberty and equality of opportunity are comparable - liberty is *much less* at odds with welfare maximisation than is equality of opportunity. I care about *lack* of opportunity, but not equality of opportunity - I see nothing bad about poor kids not being able to get into IIM-A, but do see something bad about poor kids not being able to make it big (in general) in life. This is similar to why I don't care about income inequality - I care about poverty instead.

"My argument says that of all those who are best equipped to exploit a given opportunity (equally intelligent, hardworking, etc.) not all have the same opportunity. Equality of opportunity is neccesary to provide them the same opportunity."
That is a nice tautological argument :-). I understand you want to give the same opportunity to people of equal ability - I ask why? What deontological principle says that people of equal talent should end up in the same stations in life? (If our genes could speak up at this point, they would say - we care about equality of opportunity because it leads to station in life being nicely correlated with (talent)/(genetic fitness), thus making my job of assessing the genetic fitness of fellow humans much easier! Your earlier comment on genes interacting with nurture and culture is all fine, but please don't lead yourself down that path too much - nurture and culture only make quantitative differences, not qualititative differences - try saying "the characteristics of your digestive system are highly dependent on the environment in which you are brought up")

Venu said...

On second thoughts, the snark in the last parts of my previous comment was unnecessary - I apologise, and besides I was factually wrong. I have clearly overcome my genetically endowed intuitions on equality of opportunity, whereas I don't think I can ever overcome the genetically specified structure of my digestive system.

zen babu said...

Venu,

The debate has shifted now, but one last go.

1) As for drop of agricultural productivity, the green revolution took care of that. The drop in the 50s, though, can be attributed to an extent to the abolition of Zamindari. One of the various "socialist controls" exercised by the government was precisely this attempt to redistribute agricultural property that led to fragmentation.

2) I agree that deontology mixed with consequentialism is a stand that we share. You dismiss equality of opportunity (because it is not consequential enough, and hence not deontologically important!) but are ready to evaluate welfare maximisation vs liberty on a case by case basis (I assume you also believe that liberty is by and large itself good, deontologically, irrespective of its consequences). I am ready to do a utility vs liberty vs equality of opportunity trade off on every single point of conflict.

And as for the "what deontological principle ... " bit, can't I have one of mine? I hereby state that from a moral first principles perspective, people of equal ability should be given the opportunity to assume equal stations in life. That they may or may not do so is an outcome that I am not concerned with - the oportunity, however, must be equal. Of course, it is difficult to tangibly measure opportunity and so typically people measure outcomes, a very bad proxy. Yet, most violations of equality of opportunity are rather obvoius, especially in the Indian context, and policies can be definitely formulated towards eliminating them.

3) It is fine that you bother about poverty and not about income inequality. Most people, however, may just disagree with you. I disagree with you as well. I remember reading about a study that showed that given the same cost of living, far more people would live in a society where they earnt $50,000 and everyone else earnt $50,000 (an equal, but poorer society) as compared to a society where they earnt $100,000 but everyone else earnt $200,000 (a richer, more inequal society). Of course, these results may change if you change these numbers to 5000, 10000 and 20000. All that this indicates is the fact that in a representative measure of success as an economy and society, both income levels and income distribution must be factored in. Even libertarians don't ignore the Gini, do they?

4) Very off the point, but the geneticaly specified 'structure' is not what you will experience. What is relevant is how it behaves - and a digestive system brought up on bland food will behave very differently from the same digestive system brought up on spicy subcontinental food, when it is exposed to spicy food. I am amused that you pick up digestion as an example - it is almost a perfect way to show that nurture is often more dominant than nature in determining relevant behaviour.

Besides, it's a little strange that you are so bullish on Hanson's article when Hnason himself has made multiple "if this theory is correct" disclaimers in it. I have certainly not overcome my "genetically endowed intuition" on equality of opportunity and I don't plan to do so anytime soon either. :-)

Venu said...

Yep, my parting remarks too -

Highly recommend Raghuraman Rajan & Zingales book that I mentioned earlier, the chapter on evolution of property rights is quite relevant and the rest of the book is an excellent (empirical) defense of financial markets, which may interest you as well.

point 2: :-) Have your own deontological principle, by all means.

point 3: poverty vs inequality - this is a very broad topic and I don't think anyone's going to change their minds so I'll skip this. The specific study you mention has to be taken with a huge bag of salt - what humans say in response to a question like that is highly prone to cognitive biases, and a different framing of the same question may lead to different answers (Kahneman, Tversky?). Anyway, Will Wilkinson's paper on happiness dissects surveys on the effect of income inequality and happiness. The paper has its flaws, it feels ideologically motivated, but even conditioning on that, it has a lot of new things to say, I felt.

point 4: I like the Hanson article so much because it explained a range of intuitions I personally could not understand for a long time. Reading that article was an aha moment for me.

The difference between differently "brought up" digestive systems is quantitative - the distributions should overlap significantly. Why the heck is spicy Indian food so popular in infamous-for-its-bland-food Britain?