Richard Spady's account of economic growth reminds us of the tensions between domestic growth and development abroad, but the path forward isn't clear.
At the end of his essay, “Economics as an Ideology,” John Hopkins economist Richard Spady presents predictive extensions of sociologist Mark Regnerus’s data and application of the “sexual exchange model” from his book, Cheap Sex: The Transformation of Men, Marriage, and Monogamy. This move to “cheap sex,” Spady suggests, will impact poorer women first, but will gradually climb up the socioeconomic ladder, negatively affecting both men and women.
I confess I could not quite follow the (very brief) line of argument in that part of the article. But it did prompt me to consider whether the changing “sexual exchange” between men and women could be nested in Spady’s categories of “ideological economics” (which I would couch more broadly as Millian liberalism), versus a consistent application of microeconomic principles.
Recall Spady’s argument provides an extended meditation on the ideological application of one of economics “great principles,” which he formulates this way: “Being able to do something you couldn’t do before is always good, or at least not bad.” Or the way I’d summarize the principle, “more choice is always better.”
Spady focuses his analysis on economists. I think his argument applies more broadly, that the principle Spady identifies provides much of the power that drives what I term the Millian presumption, in popular culture, policy, and law. To wit, say there’s a proposal to increase freedom by one degree, that is, a proposal that would permit the choice of doing something in particular that was hitherto prohibited. If taking that action does not increase a person’s happiness, then folks in that category need not choose to take that action, and they will just as happy as they were before the choice was permitted. If, on the other hand, choosing to take advantage of the opportunity would increase a person’s pleasure or happiness, then folks in that category would choose to do it, and their happiness or satisfaction will be higher in the new state than in the old state. Overall happiness has been increased. Or, in economic jargon, the latter state Pareto dominates the earlier state.
The thing is, economics teaches us that, as an abstract matter, more choice does not necessarily Pareto dominate the condition of having less choice. The possibility is even more threatening to the Millian presumption than the cases Spady discusses in his article. He discusses cases in which, yes, the size of the economic pie gets larger (as a result of more trade, more capital and labor mobility, and technological advances), but the distributive effects leave some people worse off than before. Therefore these are not Pareto improvements over the earlier state.
But economics tells us that more choice does not necessarily result in bigger pies. The reason the prisoners’ dilemma receives the attention it does is because it presents in abstract form the exact opposite of the Millian presumption. To wit, when the incentive structure exists, more choice leaves everyone worse off.
By “everyone” I mean all the players in the game. While the outcomes are bad for the players, prisoners’ dilemmas can be used to generate social goods. Simply consider the canonical game in which two criminals rat each other out after the prosecutor sets them within the prisoners’ dilemma incentive structure. The creation of the prisoners’ dilemma secures the conviction of both criminals. So, too, economic competition between firms is a prisoners’ dilemma for the firms, but produces benefits for everyone else in the form of lower prices and higher quality. (That’s the nub of the difference between being pro-market and pro-business.)
There are of course prisoners’ dilemmas in which everyone is harmed. The voluntary provision of pollution control devices on cars is an example. If voluntary, many people would attempt to free ride on the efforts of others, resulting in higher pollution levels (and greater lung cancer) than anyone wants.
Critically, there is no necessary animus toward others on the part of the free riders. Everyone knows that the marginal addition to air pollution of their one automobile is miniscule. And almost everyone can think of something personally more satisfying, even more important, to do with several hundred dollars than spend it on a pollution control device that won’t demonstrably improve their lives, or others. So this is about as attenuated an application of the Millian harm principle as any. No intent to harm, no measurable harm from any one person’s free riding. But harm results as a result of the aggregation of individually rational decisions to free ride.
The application to marriage and sex is straight forward in principle, although contested in fact. What’s contested is the empirical nature of the harms.
The Millian presumption, I believe, provided the ideological power that drove the move to liberalize divorce laws. To wit, if staying married makes you happy, then you won’t avail yourself of the greater choice liberalized divorce laws allow, and you stay married. On the other hand, if not being married would make you happier, then liberalized divorce laws provide you the choice to do so, and thereby results in greater happiness for those folk. Easier access to divorce is a Pareto improvement.
Ah, but are their externalities, economically speaking? Well, maybe. First, there are the children. Does ending a bad marriage benefit or harm the children? Even if it does (moving out of the realm of Pareto considerations) how much harm does it cause children relative to parental unhappiness or harm from staying in an unhappy marriage? Irrespective of children, might the legal change alter the semiotic environment of marriage, thereby inducing divorce among couples who would have otherwise worked through their marital difficulties but for the possibility of easier exit? The point is whether we know these are correct are not with certainty, the point is that the mere possibility of the externalities would turn the theoretical power of the Millian presumption.
And so to return to the sexual exchange model from the start. As I understand the model, restricted access to sex for males depends essentially on a cartel among females. To be sure, a cartel strengthened by social sanction and an impressively high social and cultural, and even legal, investment. The investment needs to be high because, despite the investment, the terms of the cartel are fragile. Increase the ability to preserve the anonymity of the sexual encounter (a la birth control), and defection from the cartel is much easier. While defection of a few does not threaten the cartel, there is a tipping point in which externalities created by non-cooperating women can unravel the whole, and women in general feeling the pressure to meet the competition. The restricted access which motored the terms of the sexual exchange unravels. The cartel, as I understand Spady’s argument, was optimal for most women, particularly for lower-class women. Given the externalities, with the lower costs to defecting from the cartel, the increase in choice ultimately leaves almost everyone worse off, both women and men.
I don’t know how much of the argument above Spady would make. So he shouldn’t be held responsible for my thought experiment. Nonetheless, the last few paragraphs of his article prompted the thought of whether and how ideological economics, or at least analogous ideas, set up the dramatic revolution in relationships between the sexes over the last two generations, and whether traditional economic concepts might provide any grounds for circumspection about the cause and consequences of the social tidal wave.