John Quiggin put up a post about John Rawls the other day and by the end of the thread I was taking some heat for something totally unrelated to moral and political philosophy. I think it was worth it, though, because I walk away with a couple of insights.
First, John Rawls famous work, "Two Theories of Justice" is, in my opinion, a masterpiece. It combines moral and political philosophy in a way that allows very clear thinking about how we should order our society. It is in the social contract tradition that goes back to include Hobbes, Locke, and Rousseau. For more about it, this from the Stanford Encyclopedia of Philosophy is a good entry.
One thing Rawls is absolutely not doing is putting forth a version of utilitarianism. And yet the economist Quiggin interprets the whole work as a mere example of that well worn theory. The first insight is this:
If economists read moral philosophy with a background assumption that utilitarianism is correct, it explains how we got here. There is some dismissiveness lately about “conspiracy theorists” who imagine a “neoliberal hegemony.” But if every economists just “knows” utilitarianism is the way to go, you get to a lot of (wrong) neoliberal conclusions without a conspiracy.
It also explains what struck me as strange from the start: economists think John Stuart Mill was really smart and still use his basic framework to explore the world. But coming from a philosophy background, I had long dismissed Mill because (as I remember it) his defenses of utilitarianism don’t just fail, they are juvenile.
This is ultimate hammers see every problem as a nail. If you’re good at math, utilitarianism is amenable to math. And if you’re good at math you might not pick up on the social cues that demonstrate utilitarianism fails as a model for real world morality.
More important is the second insight: the word "cost" has a deceptive double meaning. Rhetorically, "costs" are losses and if something is "costly" we don't want to do it. Economists use this meaning to persuade, but when challenged retreat to technical definition that amounts to a boring truism. The first meaning is what we care about, but the second is impossible to question.
In economics, "cost" is a term of art. Whenever an economic actor faces a choice there are always two "costs". First, there's whatever I have to offer in exchange for my preferred choice. Sometimes this cost is zero. Then there is the opportunity cost, which is the path not taken. I had the opportunity but went a different way. The first kind of cost is synonymous with price. Oppportunity cost is not defined in terms of money, but that's how economists understand the world so it also gets assigned a dollar value. By definition this dollar value is a hypothetical and frequently it's totally made up based on predictions about the future that are known to be false but made anyway because we must have a number, mustn't we?!
In ordinary language, "cost" usually means "price". And it absolutely always means a loss. Maybe I got value for money, maybe I didn't; maybe the movie was good or maybe that's two and a half hours I'll never get back: whether it's money or time or the road not taken, "cost" in ordinary language is always a loss.
This negative connotation is obviously extremely important when economists write for the popular press as Quiggin did in this other post here.
Switching to clean energy is "costly". Regulations to protect workers come at a "cost". Quiggin, despite his liberal policy preferences, is sticking with the negative connotation. But, he says, on their own terms, the cost is small.
But when you push and say, "Wait a second, it's not my money, why would I have a cost in this situation? Does the economy as a whole lose money? It's not a cost to the guy who gets to build the solar panels! What if the money has positive returns for society? That's not a cost, it's a gain."
At this point the economist retreats to the technical definition. Don't you understand? Every choice has costs. This money was going to go here, but instead it went there. We can add up the difference. How much money? That's the cost. Easy peasy.
This is technically true but totally misses the point. I couldn't care less if the money goes here or there. I want to know if I'm winning or losing. And when you tell me that the cost is big, that sounds like I'm losing.
