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What Tradeoffs for National Solidarity?

What to do when an economic change — lower tariffs and trade barriers, easier mobility of capital and labor, technological innovations — increases the size of the pie, but the size of some people’s slices of the pie gets smaller, not only relatively, but also absolutely. This is the nub of the problem Richard Spady focuses on in “Economics as an Ideology.”

Spady has a formally narrow focus on economics, but the policy implications are much broader. His narrow focus is the way economists, at least “ideological economists,” glide too easily between two notions of efficiency. One notion focuses on the size of the overall pie. “Kaldor-Hicks” efficiency stands for the proposition that a move is efficiency enhancing if the gain in the size of the pie, relative to any losses, could (hypothetically) compensate the losers in the move, thereby making everyone better off. The other definition is Pareto efficiency, that there is no change that could be made such that some people would be better off without leaving even one other person worse off. Every Pareto-improving move will be Kaldor-Hicks improving, but not every Kaldor-Hicks improvement will be Pareto improving.

The thing is, while powerful when it can be satisfied, the Pareto criterion is a harsh taskmaster for economists and policy makers. The Kaldor-Hicks criterion is much easier to apply, and to satisfy. Because any transfers are hypothetical, a Kaldor-Hicks improvement really only means that a change is efficiency enhancing if it increases the size of the pie. A rising tide is Kaldor-Hicks improving whether all boats rise with it or not.

But gliding seamlessly from the Pareto criterion to the Kaldor-Hicks criterion, conflating them, means the people who lose in a transition become invisible. Here Spady’s argument intersects with common arguments today regarding the difficulties facing the American working class, particularly white working class men without college degrees. There is plenty of evidence for this: Death rates have been increasing for middle aged white men without college degrees in the U.S. since about 2000. Death rates for African American men without college degrees remain higher than for white men without college degrees. And while these death rates had been declining until 2013, they, too, took an uptick starting in 2013.

This group of whites left behind by the economy are also the core of the Trump constituency. Spady’s analysis is consistent with those who argue that Trump’s political success stemmed from this opening: He addressed a sizeable electoral group whose interests had been neglected by American political leaders of both parties over the last generation or so.

Spady focuses on Americans who have lost in the last generation because of shifts in trade, globalization, and technology, and whom, he argues, had been cut loose by American political and economic elites.

He posits three possible reasons why American elites have cut loose much of the American working class in the last generation. First, “[American elites] have all been direct economic beneficiaries” of the increase in international trade, not withstanding the losses among sections of the American working class. Secondly, the economic processes of the last generation have brought “large populations [throughout the world] from abject poverty,” nodding implicitly at reports that somewhere in the neighborhood of one billion people throughout the world have moved out of the ranks of “extreme poverty” in the last generation.

Thirdly, though, what about compensating Americans who lose in the global economic upheaval of the last generation? Spady writes:

Here we note a change in our public culture that is fairly recent, corresponding quite closely to accelerating globalization after 1989. These days, the losers are increasingly characterized as untalented, backward sorts. They are portrayed as morally less deserving than the foreign poor whose labor has displaced theirs. One can find religious leaders arguing, in effect, that American losers in globalization are less deserving in the eyes of Christ than the global poor uplifted by the changes of the last generation. Here is an example of a “comprehensive doctrine” welcomed by our technocratic, Rawlsian elites because it has a net positive effect on global utility by smoothing the way for its further beneficent development. It dampens populist resistance to globalization, or at least discredits it as morally reprehensible. In a global perspective, those American workers with depressed wages are rich. Why are the ingrates complaining?

I’m not entirely sure which religious leaders or other elites make this form of argument directly. To be sure, with Hillary Clinton’s language characterizing Trump supporters as composed of numerous “deplorables,” he doesn’t need to reach too far.

Yet at the end of it all, does Spady give us anything different in principle, or would he simply draw a slightly different line than the one drawn over the last generation?

Much of Spady’s argument implicitly concerns what I style as the break down in solidarity between the top third of American society (the elites, although I’m unsure being in the top third truly qualifies one as “elite”) and the middle third of American society in particular. The top third has generally gained, the middle third has borne losses, at least sectorally.

But just what would Spady do beyond counseling that elites “apologize” for the negative consequences of the last generation? Spady seems to reject Kaldor-Hicks compensation schemes as overly bureaucratic and intrusive. Is it all merely a matter of slowing down the transformation, à la Karl Polyani’s suggestion after all the crying in The Great Transformation?

Here’s the issue. Granting an appropriate solidarity between fellow nationals, what is the appropriate trade off, domestically, between solidarity and a bigger economic pie over all? Should policies that increase American wealth over all, but are not Pareto improvements, never be taken? If they can or should be taken, how would Spady have the nation respond to the losers in the process?

Secondly, with a nod, again, to all appropriate solidarity with one’s fellow nationals, Spady, too, would not ignore entirely the wellbeing of foreign nationals. As I’ve asked elsewhere, how many foreigners is an American worth? The question may sound factitious, but I don’t mean it that way. There’s an implicit tradeoff between improving the standard of living for middle class American whites, and growth from outsourcing in the developing world, and this is true no matter where one is on the spectrum (except at the outermost extremes).

I certainly don’t take Spady to suggest that no American job should be traded off no matter what domestic or international gains. But I don’t take the people Spady criticizes to suggest that domestic or international gains justify whatever American jobs are lost in the process. Perhaps it’s one of those “I-can-tell-it-when-I-see-it” things. The thing is, it seems one can concede any number of the powerful, careful arguments Spady advances in the article. But after reading it I am unsure what changes Spady would have made in the last generation of the economic and social experience of Americans over all, and working class Americans in particular.

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on April 04, 2018 at 06:30:06 am

[…] View Original: What Tradeoffs for National Solidarity? […]

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What Tradeoffs for National Solidarity? | MemePosts
on April 04, 2018 at 08:38:06 am

After reading Richard Spady's essay in First Things damning the ideological abuses of economics Professor Rogers states:
" I am unsure what changes Spady would have made in the last generation of the economic and social experience of Americans over all, and working class Americans in particular."

One might ask instead:
"How can anyone read Spady's essay and not grasp what could have been done differently?"
"Does that professed ignorance not, ironically, personify the very academic disease Spady laments?"

Neither an economist nor an ideologue, I prefer pragmatism to theory and prudence to ideology. Here is just a short list of things that I think Spady would say to our ruling elites in answer to Rogers alleged conundrum:

1)Those responsible in politics, academia and business for leading our country over the last 28 years (the elites) acted a) in their self-interest (showing at best, Spady says, only a "technocratic duty to manage well the larger machine of social utility") and b) without prudence and c) contrary to the public interest. And they did so, I would say, with unforgivable arrogance and a large dose of greed.

Spady might say: "Stop doing that! Stop acting with arrogance and in your self-interest and stop pretending that your self-seeking is public service. Show humility, instead; it's the beginning of wisdom. Contrition and an apology by the elite class now would be a good first step on the road to moral redemption."

2) In order to better serve their self-interest the ruling class weaponized economics by making it an ideology. This led the elites in politics, business and education a) to embrace the process of globalization as economically-warranted irrespective of its national political, financial and moral consequences; b) to turn a blind eye to globalization's economic and moral devastation of the American working class; c) to rationalize the fate of the political, economic and moral losers as economic "gains" or as morally-justified ("deplorables") or as the inevitable outcome of an Hegelian historical- economic process, and d) to adopt "a formal commitment to a modern redistributive welfare state in which politics is dominated by endless battles over which winners are going to pay for which losers, and how much. ...Tax rates, entitlements, and regulatory control (have) become the dominant issues for political elites."

Spady might say (I would say for sure): "Stop doing all of that! Do not continue to profess to lead America while ignoring the virtue of prudence. Do not deploy economic theory as ideological weapon. Do not behave (as Spady says) as if 'impoverished public debates and our end-of-history entanglement with the technocratic administrative state (are) normal, natural, even inevitable.' "

Those are just a few answers to Professor Rogers' professed befuddlement as to what we might do about what Spady calls the ideology of economics but which I would call the economics of acedia.

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timothy
on April 04, 2018 at 11:14:34 am

I read Rawls as defending classical liberal social contract theory. To my reading, there is a strong parallel between Rawls and Pareto--but not between Rawls and Kaldor-Hicks. (If a change in the economy is efficient by Kaldor-Hicks, behind the veil of ignorance most people very well might reject it.) So I don't understand the reference to Rawls' thought by Professor Rogers, above, where Rogers conflates the ideological values of our neo-Liberal elite (who presumably are guided by Kaldor-Hicks efficiency) with Rawls.

Can anyone explain?

Thanks!

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Kevin Hardwick
on April 04, 2018 at 11:19:07 am

I mistyped. It is Spady who seems to argue that Rawls would endorse a Kaldor-Hicks understanding of economic efficiency. Either way, though, it is a puzzling assertion. What am I missing?

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Kevin Hardwick
on April 04, 2018 at 16:58:09 pm

1. Rawls and social contract theory.

Hardwick reads Rawls as defending classical liberal social contract theory. I would qualify that statement.

What relationship should the individual have to the group? The theory of Divine Right stated that God ordained who had power and who did not, and people should submit to the status quo as an act of obedience to God. But this theory was patently arbitrary. Anyone who challenged the ruler was acting contrary to God’s will—until the challenger prevailed, in which case his victory became evidence of God’s new will. The theory of Divine Right = Might Makes Right.

Against this backdrop arose social contract theory: Individuals rightfully have autonomy, but lack the power to defend it. So they band together in the interest of forming a mutual alliance to defend themselves against coercion, and perhaps fraud. Of course, they must surrender some autonomy in the process of forming the alliance. People debate the precise amount and form of the autonomy each individual must surrender for purposes of defending their collective autonomy. But beyond that duty, people should have the freedom to use their resources and individual merits to pursue their self-interest in a meritocratic way. If some people are more virtuous or industrious than others, it’s only fair that they get to reap the rewards.

Whatever the merits of this theory, it limited a person’s duty to the collective to only that which is required for the self-interested purpose of defending autonomy. It provided no justification for using collective resources to aid the less fortunate.

Against this backdrop, Rawls proposed his Theory of Justice: Yes, individuals have autonomy, and should be free to form alliances to defend their autonomy or for any other purpose. But people’s circumstances are not merely a function of their choices and actions; they’re also a function of completely arbitrary circumstances of their birth—physical and mental qualities, wealth, social status, etc. These arbitrary circumstances make a mockery of meritocracy. If it was reasonable to imagine that the state was formed by people voluntarily banding together to advance a common interest in autonomy, why wouldn’t it be reasonable to imagine them banding together to advance a common interest in avoiding the risks related to circumstances of birth?

Well, it’s harder to imagine that because all human beings of our acquaintance have already been born, and thus the arbitrary circumstances of birth have already befallen them. It’s hard to get people to buy insurance against an event that has already occurred. So Rawls invites us to imagine people before they are born, pondering the kind of world they would want to be born into. Would they choose a world in which they had a small chance of being born with great wealth, and a large chance of being born into poverty (understood not just in financial terms)? Or would they choose a world in which there were more even distribution of resources?

Rawls speculated, based on MINIMAX game theory strategies (maximizing the welfare of the person in the worst circumstances, even if this means shaving down the circumstances of those in the best circumstances), that people would prefer the latter. And this formed the basis of his own social contract theory. Under this theory, people who oppose social safety nets are not merely expressing their autonomy; they are souls who previously entered into a mutual aid pact their fellow souls, and who are now seeking to welch on the deal.

Spady says, “Some think this [Rawls’s theory] a recipe for minimal government. But they have not consulted economists who have read John Rawls.” Much like Spady’s claims about what economists think, he neglects to cite even a single person who believes Rawls’s theory are a recipe for minimal government.

2. Rawls and efficiency.

It’s hard to associate Rawls with Pareto efficiency. Pareto efficiency asks whether any given change would cause someone to be harmed relative to the status quo. But before we are born, there IS no status quo. We are merely souls arguing about the kinds of social institutions we would create to govern the world into which we will be born, without knowing the circumstances of our future birth. So Pareto efficiency has no relevance to this analysis.

I read Rawls as providing a rationale for wealth transfers. And if you embrace wealth transfers, typically you’d want to design a world that maximizes wealth. That’s a Kaldor-Hicks world.

3. Spady on Rawls.

Here’s what Spady says about Rawls:

[L]iberal utilitarianism, roughly the line of thought running from Jeremy Bentham to John Stuart Mill to John Rawls, and neoclassical economics share a number of assumptions and dispositions. Both traditions of thought tend to presuppose the picture of an autonomous, utility-maximizing individual. This leads to a convenient and often useful calculus that has the alluring feature of objectivity.
* * *
One way of solving the political problem of living together is to narrow the assumptions we need to share in order to draw the binding conclusions that guide how we ought to order public life. The modern master of this approach is John Rawls. His approach, latent in “A Theory of Justice” and apparent in “Political Liberalism,” is to remove conflict over essential public questions by securing unanimous agreement to fundamental principles. Some of those fundamental principles turn out to be very similar to those that form the basis of mainstream economics today. This allows contested public questions to be translated into expressions of preferences that can be mediated by the mechanisms of markets and utility theory.
* * *
Some think this a recipe for minimal government. But they have not consulted economists who have read John Rawls. If they do, they will be told something like this:

“There are initial conditions to our present arrangements that are based in old cultural norms and patterns that were in many cases antithetical to classical liberalism. Therefore, if we truly believe in liberal ideals, we need to remediate these exogenous factors. If we do so, the happiness of unfortunates in our society can be greatly increased at little or perhaps no cost to the fortunate many. And even if the costs are high, it is in the rational self-interest of the fortunate to make the adjustments necessary to sustain the public trust in liberalism. Therefore, we must agree, through the proper use of public reason and in accord with the same collective processes that provide lawful security and the benefits of public goods such as roads, libraries, and civic celebrations, to pass laws and establish programs to effect the compensations that provide substantive equality to all.”
* * *
Rawls’s goal was to compel agreement to this picture as a condition of participation in the public square. He argued that to refer in public discourse to principles beyond the minimal assumptions of liberal utilitarianism was to offend and possibly denigrate the citizens who either hold only the minimal assumptions or harbor different beliefs about what he called “comprehensive doctrines.” What this means, in practice, is that a basic principle of economics must become public dogma: Rational-purposive agents always pursue what they regard as their best interests, and any account of “best interests” that exceeds this formal definition violates the canons of public reason.
* * *
These days, the losers are increasingly characterized as untalented, backward sorts. They are portrayed as morally less deserving than the foreign poor whose labor has displaced theirs. One can find religious leaders arguing, in effect, that American losers in globalization are less deserving in the eyes of Christ than the global poor uplifted by the changes of the last generation. Here is an example of a “comprehensive doctrine” welcomed by our technocratic, Rawlsian elites because it has a net positive effect on global utility by smoothing the way for its further beneficent development. It dampens populist resistance to globalization, or at least discredits it as morally reprehensible. In a global perspective, those American workers with depressed wages are rich. Why are the ingrates complaining?

4. Spady vs. Rawls

Rogers says that Spady seems to reject Kaldor-Hicks compensation schemes as overly bureaucratic and intrusive. This seems like a fair characterization of Spady’s remarks:

Over the long run, globalization will make us all better off [in the aggregate].

But given human nature and the natural desire for the winners to keep their winnings, you more or less need a dictatorship, or at least a stern and invasive administrative state, to ensure the income transfers that will make globalization actually Pareto-­improving. If you have that administrative state, as we do, and you grant that utility is transferable, which we do, and that “comprehensive doctrines” are impermissible in the public sphere, as we are regularly reminded, then you can (effectively) satisfy the remaining requirements of the theory. Which is to say, given human nature and a public culture defined by economics as an ideology, it is not hard to use economic theory to predict that we’ll have pretty much today’s state of affairs: a formal commitment to a modern redistributive welfare state in which politics is dominated by endless battles over which winners are going to pay for which losers, and how much. Put simplistically: Tax rates, entitlements, and regulatory control become the dominant issues for political elites.

This …. shows how deluded limited-government conservatives are. Once economics becomes the queen of the sciences, given initial conditions, we get the technocratic management of utilities that oversees free-market exchanges to ensure that they are Pareto-optimal, which they must be if what economic theory predicts as true is in fact true. And because “comprehensive doctrines” are proscribed, there’s no leverage in public life to point us toward a different outcome. This is not theoretical. It describes with relative accuracy some of the crucial features of American public life in 2018.

I don’t understand Spady’s claim that technocratic management would oversee free-market exchanges to ensure that they are Pareto-optimal. Rather, they’d want them to be Kaldor-Hicks optimal—that is, generating the greatest net wealth so that there’s more wealth to share.

Having read Spady’s entire essay, I believe his thesis is this:

A) He embraces a “comprehensive doctrine” (religion) that formerly dominated society more than it currently does. He had become accustomed to the prerogatives of that status, and is frustrated that the state no longer enforces his worldview in the same manner as in the past. Ergo he opposes modernity.

B) He observes that the working class are also frustrated with modernity. They may not embrace his comprehensive doctrine, but he argues that they should form an alliance with religious fundamentalists against modernity.

C) He notes that small-government people (libertarians, the managerial class) also do not necessarily embrace his comprehensive doctrine. But he argues that they have a common enemy: a Rawlsian world that will tax the rich to aid the poor. He argues that they, too, should form an alliance against modernity.

More or less, he’s trying to rationalize the alliances that currently form the Republican Party. These factions have little in common--indeed, the working class and the managers have diametrically opposed interests--but they may all have some basis for opposing aspects of modernity. And, as we've observed regarding Obamacare, it's much easier to unite people in tearing something down than it is to unite them in building a specific something in its place.

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nobody.really
on April 04, 2018 at 17:38:50 pm

I previously addressed these remarks here, here, and here. But to summarize:

People are prone to compare today’s economy to the “normal” economy of post-WWII America. But that economy was far from normal, and we could not recreate it without recreating the post-war circumstances.

What were those circumstances? First, the developed world experienced great pent-up demand during the Great Depression and WWII. Second, following WWII all of our economic rivals had their physical capital in ruins and their human capital in graveyards. Third, the labor supply was restricted: It heavily restricted participation by blacks, women, foreigners, and people with disabilities. Lack of technology limited the degree of competition from automation. And high shipping costs limited the degree of competition from abroad. Translated into econ-speak: The supply of labor was low while the demand was high. Just as economics predicts, this produced a booming labor market.

None of these circumstances remain. Yes, government policy may have influenced things around the edges--but most of these circumstances were going to change with or without government intervention. People who imagine that government somehow controls everything are mere conspiracy theorists--or Spady.

While people rail against immigrants, or even women in the workplace, few propose that we abandon technology. But technology is arguably the biggest job-killer. As a clear example, consider that in 1800, 83% of US workers worked in agriculture. Today 1.5% do, and we produce more than ever. How? Automation. What policy should we adopt to “fix” this “problem”?

Spady argues that “those responsible” should apologize. But apologize for what, specifically? For failing to create a new Great Depression and World War with which to dampen expectations and bottle up demand? For failing to force women, people of color, and people with disabilities out of the labor market? For failing to eliminate technology? For failing to block ever more people from pursuing education? Spady doesn’t say.

Spady offers no solutions (except the implicit fundamentalist promise of returning to an idealized past). Rather, he offers scapegoats.

“Stop doing that!” is not a policy; it’s a temper-tantrum.

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nobody.really
on April 04, 2018 at 19:14:33 pm

Well, first and foremost, thank you for such an extended and thoughtful reply to my query. I am very much grateful that you took the time to compose it.

I am, when it comes to philosophy, mostly an autodidact, and I am entirely aware that a) there are many people out there who have read more thoughtfully than I have; and b) that I may very well have missed something in my reading. It is in that spirit that I offer my comments below.

That said, I have two distinct quibbles with your account, above. First, I think you have mis-characterized Locke, whose thought I read differently than do you; and second--I am more hesitant here--I don't follow the logic of your charcterization of Rawls, and your rejection of what still strikes me as a pretty reasonable reading of Rawls as being consistent with Pareto.

Let me take these in turn. First, Locke is as much concerned with justice as he is with autonomy. Locke argues that most people most of the time possess sufficient "right reason" (a Church of England term--my inference, but not a direct quote of Locke) to know what natural law requires of them. So most people understand what they need to do to act justly towards others. Locke, then, disagrees with the more starkly Augustinian viewpoint of Hobbes, that the state of nature is a state of war. Nonetheless, the state of nature cannot secure justice, because men are biased towards themselves. In a state of nature, men are called to judge and execute the law for themselves, but cannot do so justly because they lack adequate detachment to judge fairly in their own cases. Understanding this, rational adults contract together to leave the state of nature and enter into a civil government, which among other things allows for independent judges of law.

It seems to me that if you leave out of your account Locke's (and Alfernon Sidney, and the other commonwealth theorists of late 17th century England) concern for justice, you are missing something important in Locke's account of the origins of government.

On to Rawls: I don't see the fact of birth to be central to Rawls' argument. The veil of ignorance is fundamentally about choice between alternatives. And given a choice between the status quo or a Pareto-optimal change to the status quo, rational adults will choose the Pareto-optimal option. Similarly, given a choice between a Pareto optimal option and a Kaldor-Hicks option, the Rawlsian rational adult, behind the veil of ignorance, will choose Pareto.

Your rejection of this logic does not make sense to me. Can you elaborate?

As I read Rawls, he should not be read as a priori and necessarily supporting a technocratic, neoprogressive state. At least, not at this early stage of the argument he advances. The logic of the veil of ignorance does not prefigure the modern bureaucratic and managerial state.

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Kevin Hardwick
on April 04, 2018 at 20:38:22 pm

I think you have mis-characterized Locke….

I won’t dispute your characterization of Locke. I was trying to describe social contract theory more generally, not Locke’s version in particular. And, well, I was focusing on the parts of each theory that make for the clearest contrast with the other theories. So I focus on autonomy rights of social contract theory as a clear contrast with the Divine Right theory.

But, in brief, I get that Locke said that the state of nature cannot secure justice because men are biased towards themselves. Yet it is unclear to me that Locke was concerned that people would be biased toward themselves at their own expense (e.g., consuming too much now, so that they’ll have to cut back later). Rather, I understood Locke to be concerned that people would be biased toward themselves wrongfully at the expense of others. That is, one man’s behavior might wrongfully intrude upon the cognizable interests (autonomy rights) of another.

I don’t see the fact of birth to be central to Rawls’ argument.

In his Theory of Justice (1971), Rawls proposes that people would decide on social rules when they live in an “original position” behind a “veil of ignorance” regarding their eventual social status: "[N]o one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. I shall even assume that the parties do not know their conceptions of the good or their special psychological propensities. The principles of justice are chosen behind a veil of ignorance."

I simplified this list as “circumstances of birth.”

And given a choice between the status quo or a Pareto-optimal change to the status quo, rational adults will choose the Pareto-optimal option. Similarly, given a choice between a Pareto optimal option and a Kaldor-Hicks option, the Rawlsian rational adult, behind the veil of ignorance, will choose Pareto.

We must be talking past each other.

As I said, Pareto efficiency asks whether any given change would cause someone to be harmed relative to the status quo. So let’s make this stark: Hitler really liked killing Jews, and achieved great success at doing so. Choosing a world in which Hitler was denied the opportunity to kill millions of Jews would mean violating Pareto optimality, because it would mean making Hitler less happy. Would rational adults, living behind a veil of ignorance, really choose the Pareto-optimal option and preserve Hitler’s discretion to kill millions of Jews?
In contrast, a Kaldor-Hicks solution might involve making Hitler less happy, but millions of Jews happier. Why would rational adults oppose this solution?

A world with only Pareto-optimal public policy is the law of the jungle. After all, even a vote to police property rights might make would-be thieves worse off, thus violating Pareto-optimality.

As I read Rawls, he should not be read as a priori and necessarily supporting a technocratic, neoprogressive state. At least, not at this early stage of the argument he advances. The logic of the veil of ignorance does not prefigure the modern bureaucratic and managerial state.

Perhaps not—but that’s the way it looks to me.

Rawls argued that people living behind a veil of ignorance would adopt a minimax strategy—that is, organizing society to maximize the welfare of the worst-off person. And this might entail transferring some wealth to that person from other people. Maybe you know of a way to achieve that outcome without bureaucracy, but I don’t.

In fairness, behavioral economics casts some doubt on the idea that people would adopt a minimax strategy. Consider lottery tickets. They are a reverse-Robin Hood institution: They result in taking a little from the (relatively) poor in order to give to the (relatively) rich. This suggests that people actually prefer a world with some amount of wealth disparities. (Admittedly, there are other ways to interpret this data....)

Or, even if people favor a minimax outcome, perhaps they so hate bureaucracy that they'd find the cure worse than the disease. This seems to be the point of view of libertarians. But curiously, I rarely find a libertarian who isn't white, male, able-bodied, etc. In short, if behind the veil of ignorance you knew that you had a substantial likelihood of being born female, black, disabled, sick, poor, etc., it's not clear you'd adopt a libertarian posture.

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nobody.really
on April 04, 2018 at 20:47:47 pm

Thank you again for taking the time to discuss these things. What I have concluded here is a) that I don't fully understand Pareto, and b) that I may very well not understand Rawls as well as I thought I did. Anytime someone reveals to you the extent of your own ignorance, they have done you a favor.

Lots of food for thought.

Well wishes,
Kevin

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Kevin Hardwick
on April 05, 2018 at 07:27:15 am

Comments on Spady led to an interesting discussion of John Rawls, the first of whose books, "A Theory of Justice," I took up when it was first published. That was near the end of my dying interest in the malign intellectual contributions of the faddish Sixties counter-culture, its mindless thought experiments and the pointless liberationist (political and psychological) writings of the likes of Herbert Marcuse, Norman Brown, Franz Fanon et al. For that reason I was predisposed to dislike Rawls, and, rather than tolle lege, I quickly put him down as an intellectually tedious salesman of distributive justice rationalism. Later in the Seventies I had a similar experience with Ron Dworkin's "Taking Rights Seriously." I spent enough time with Dworkin to appreciate what a waste of time he is, but did I miss something with Rawls?

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timothy
on April 05, 2018 at 08:31:29 am

If, as "nobody" says, “Stop doing that!” is not a policy; it’s a temper-tantrum" it is of no use for victims of abuse to complain. (Shut up and enjoy it all you rape victims lest you be accused of having a hissy fit!)

Yet, it would seem, logically, that the very FIRST step of redress is to STOP doing what is wrong.

The Hippocratic oath is premised on the very notion of first doing no harm, so surely to STOP what is harmful is medically important.
Say, for example, had George Washington's doctors stopped bleeding him he might have recovered rather than died.

Can politics and economics differ? It would seem not and that, for example, those who think the first step toward immigration reform is to close an open border or the first step to correcting the harm of Obamacare is to end Obamacare would argue that stopping what is wrong is, indeed, policy, not a temper tantrum.

And, of course, to voice aggravation or pain at what is aggravating or painful does not constitute a "temper tantrum."
You know that; why do you say the opposite?

So don't be ridiculous in an attempt to sound profound.

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timothy
on April 05, 2018 at 09:32:30 am

nobody:

I, too, would like to thank you for the fine exposition of the economic *ideology* of Rawls, Spady's interpretation of Rawls, and your own economically informed assessment. Similar to Kevin, I find your discussion of Locke is, perhaps, dismissive of Locke's understanding / recognition of the need for "moral sentiments."

My purpose here is not to question (other than regards Locke) your interpretation of certain economic theorists but rather to ask (assert, perhaps is more apt) if it is possible that what we are observing is not simply economics as an ideological phenomenon but rather economics as an epistemological phenomenon. By that i mean to say that whereas ideological economics may be said to color, and color distinctly and pervasively ones observations about human *exchange* and the distribution of wealth and riches, economics as an epistemology is somewhat more extensive both in its (attempted) grasp, its predilection for certain policy prescriptions AND its very mode of observation. That is to say, that economics as an *epistemology* so colors, so conditions ones basic perceptions of human *intercourse* that each and every instance of human behavior / dispute / conflict and / or aspiration may, indeed, MUST be cabined within the strictures and structures of some economic model, some grand interpretive explanation that reduces / forces all such human intercourse into the terms and categories of that particular model. Religious disposition, bias, preferences, even, as you argued recently, sexual behavior of women (i.e. prostitution and extra-marital sex) must be explained using the terms of economic advantage / disadvantage.

Curiously, it leads one to assert that under a veil of ignorance people would opt for a minmax strategy while at the same time implying a la Locke that humans will often act selfishly. I have no doubt that people will do so - act selfishly, that is - yet, it seems to me that such inherent selfishness a) would mitigate, or at least militate, against the minmax option and (or) b) that humans are far more complex, possessed of far greater emotional range than mere self-interest - EVEN when under a veil of ignorance, which may not be so extensive as to preclude any knowledge of economic outcomes, any empathy for their brethren, family, etc. Is this veil of knowledge the equivalent of a social lobotomy, leaving the afflicted without any intimation of outcomes?

The available options are, perhaps, more numerous than this epistemological economics approach would suggest. I find it somewhat disheartening to encounter a a system of thought, indeed a system of *observation* that denies the possibility of human intercourse predicated upon something other than mere exchange values.
Don't you?
And I ask that because, at times, it appears that in your rather learned and excellent summations of economics you appear to accept the trivialization of human behavior and are dismissive of some of humanity's more noble attributes.

Just a perception.
Then again, my *epistemology* may be simply that humanity is not "homo economicus."

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gabe
on April 05, 2018 at 09:49:27 am

The Hippocratic oath is premised on the very notion of first doing no harm, so surely to STOP what is harmful is medically important.

Excellent example. Every time a surgeon cuts into a patient, he causes the patient to lose blood, and opens the patient's body to infections. Both do harm. Ergo, we must conclude that the Hippocratic oath precludes all surgery.

Alternatively, we could conclude that whatever the Hippocratic Oath means, it can't be reduced to "Stop doing that!"

To design policy, we must understand the status quo, understand what change we hope to achieve, and devise a plan to do that. You (and Spady) have articulated pretty much none of theses steps. All you've done (as far as I can tell) is express some dissatisfaction: You imagined a world more to your liking, and find that the world does not conform to your expectations.

Well, here's a possibility: Maybe you have unrealistic expectations? That is, you expect the world to cater to you as it catered to uneducated white American men in the post-war era. As I previously outlined, I see no reason to expect such an outcome. Now, there's no harm in WANTING it. And heck, I'm in favor of taking many steps to promote the interests of uneducated white American men (among others). But shouting "STOP IT" won't help.

To take the obvious example, many jobs previously performed by uneducated American men are now performed by machines. Who, exactly, should we shout "STOP IT" at--the machines? 'Cuz I don't think the machines will care.

No, that would be silly. Instead, we should shout it at "those responsible"--the Illuminati? the Trilateral Commission? the Jews?--you know, the people who control everything, including economic development in the rest of the world and the advance of technology. If only we could find the wizard behind the curtain, THEN we'd be able to force him into giving us brains, a heart, courage, and a trip to Kansas.

Oh, spare us. The idea that government is some all-controlling entity is laughable. With the entire prestige of his presidency on the line, Obama could barely launch a friggin' website. And the Trump Administration can't manage to proofread its own press releases. You think they can control the economy?

If you're in the mood for irony: Trump won election by pandering to less educated people's frustrations--and his big accomplishment to date has been passing a tax bill that will make it ever more profitable for firms to buy more machines, and starting a trade war that will depress the farm sector. A real knee-slapper, yeah?

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nobody.really
on April 05, 2018 at 10:27:42 am

So don’t be ridiculous in an attempt to sound profound.

That said, I have been a going overboard a bit lately. I really care about this topic. And I want to sound entertaining so people might read my stuff--but when I'm on caffeine, it just comes off as mean. Very sorry to you, and to others.

If it's any consolation, it's not personal; it's the drug talking.

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nobody.really
on April 05, 2018 at 10:47:30 am

The philosophers I know consider Rawls to be the most important American philosopher--not just of the 20th century, but ever. Granted, academic philosophers, like academics more generally, are often rather narrowly focused on highly technical matters. But still, I would not be inclined to dismiss their judgment out of hand.

The Rawlsian project--to defend the idea of social contract as a starting point for understanding just government, strikes me as highly worthy. The Declaration of Independence is premised on social contract thought, and I think guys like Abraham Lincoln are correct to understand the Declaration as the moral foundation of the US constitution. So if Rawls permits me better to defend the ideals of the Declaration, then yes, I think he is important.

Appeals to authority are weak arguments, so take my observation here with a grain of salt. If nothing else, though, check out some of the rather extensive commentary on Rawls, before just dismissing him.

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Kevin Hardwick
on April 05, 2018 at 10:52:18 am

Nobody--

Allow me to add my voice to Gabe's in requesting your thoughts on these matters. I have benefitted much from this conversation already, but Gabe's questions above strike me as getting at something profound.

Thanks in advance!

Best wishes,
Kevin

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Kevin Hardwick
on April 05, 2018 at 15:04:15 pm

Kevin:

If I may be permitted:

1) thanks for the kind words, although I must admit that I am unsure whether my comments reflect profundity or fecundity. _Ha!
2) Re: The DOI and Social Contract - YES ---AND --- it is also a reflection of natural rights theory. to my mind there is an inextricable link between the Contract and Natural rights as understood by the Founders.
3) If I may suggest a book by Thomas West, :The Political Theory of the American Founding":

https://www.amazon.com/Political-Theory-American-Founding-Conditions/dp/1316506037/ref=sr_1_1?s=books&ie=UTF8&qid=1522954204&sr=1-1&keywords=the+political+theory+of+the+american+founding

in which West argues that Social contract of US founding is a predictable result of the lessons learned by humans from the defects found in a state of nature (my paraphrase / shorthand) and that the Founders were well versed and comfortable with natural rights.

I know you appreciate Pauline Maier. West asserts that she (and others) are incorrect when they fail to recognize that the founders believe that natural rights could serve as a justification for human equality *IN* civil society and not as Maier argues only in pre-society. "These two scholars [Maier and Barry Shain]incorrectly argue that the founders thought human beings are equal only outside of civil society, and that once they become members of a political community, their original equality has little significance for how government is instituted and what it does." (pg. 113)

I leave it to you to determine if West overstates the case of Maier and Shain.
I would suggest however that West's argument tends to support a somewhat more expansive view, a more complete view of the founders thinking and one that places an, at times, much needed corrective to the prevalent "Social Contract Only" theorizing of some scholars.

BTW: Might not be a bad text for young history / political science students.

take care
gabe

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gabe
on April 05, 2018 at 15:28:05 pm

Gabe:
Three thoughts from a short man standing in high surf:
1) I would call the phenomenon you've perspicaciously identified "ideological reductionism" and say that the phenomenon is pervasive in this anxious age of contested ideologies, in the throes of which (unfortunately) for most people in the ruling class virtually all serious matters (including economics) a) entail ideology (i.e., a foundational belief joined to a social/political plan for putting it into action) and b) are instrumentalised (weaponized) to achieve ideological objectives (i.e., to affect "necessary" change in society) and c) are rationalized to conform to (harmonize with) an ideological worldview which provides the ideologue (let's call him the "true believer'') and his group (see Freud's "Group Psychology") their vital psychological needs for perceiving social reality, understanding political purpose and finding existentai meaning.
2) The reductionism of subject matter to conform to the needs of ideology for instrumentalization/weaponization/ harmonization of knowledge/information occurs when the subject matter becomes of substantial political importance because of its capacity to sway the populace or to affect government decision-making and political outcomes. When that occurs the reductionism becomes epistemological, and affects the determination of a) what separates subjective opinion from objective fact or justified belief and b) what constitutes the ground of knowledge.
It is this demonstarbly clear effect of the ideologization of economics that has you concerned. It is also an effect on science (as if the malignant phenomenon of scientism were not bad enough) so that science has been ideologized in the form of "deep ecology" and climate change et al political movements masquerading behind the public's high regard for science.
3) Your concern for the narrow, constrained, reductionist economic view of life, reality and meaning that is embodied in what you would call economic epistemology is a worry shared by the religious community (myself included) who believe on faith that reason, nature, science and empiricism are the mere tip of what we can grasp and are to know. That religious concern over constrained materialistic visions is as applicable to science, socio-biology and neurology-as-destiny as it is to economics.

Homo-econimus is a sad, uninteresting creature, the source of fascination only for those doubly-damned to a life of materialism devoid of moral imagination .

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timothy
on April 05, 2018 at 16:06:12 pm

Been wondering whether to buy West's book.
Gonna buy it
thanks
Here's its review in last Fall's CRB:
https://www.claremont.org/crb/article/the-founders-in-full/

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timothy
on April 05, 2018 at 16:07:02 pm

Yikes. If GABE is thanking me, things have clearly gone off the rails.

Short version: The human mind lacks the capacity to comprehend and analyze the world in all its complexity. So we adopt simplified, stylized versions for purposes of analysis. Economics provides one method for creating such simplified, stylized model.

You can decline to adopt economic models. But you can’t decline to adopt SOME model—again, because your mind is simply too small to take in the world in all its complexity. Thus, it’s fair to say that economic models are simplified and stylized versions of reality. But it’s not fair to CRITICIZE economic models on this basis, unless you have some substitute which does not rely on simplification and stylization. And, unless you’re God, you don’t. So before you dismiss economic models for being simplistic, evaluate the foundations of your alternative model; you may find that they’re less justified than the economic principles are.

[M]y *epistemology* may be simply that humanity is not “homo economicus.”

Yes, some economic reasoning reflects a premise that people have consistent values that they pursue rationally, without regard to others. Many economists have challenged these assumptions. Obviously, people are influenced by culture as well as economics: I might be able to save money by not buying clothes, but I’m unlikely to pursue that method of economizing. And behavior economics reveals that people tend to have quite inconsistent (manipulable) values, care a great deal about what other people think of their choices, and are more altruistic, than homo economicus would predict.

But who cares? Well, I hear two objections.

Objection 1: I’m worried that false assumptions about human behavior will lead to false conclusions. And sometimes that happens, as we discover regarding the Ultimatum Game, for example. But most of the time—it doesn't. That is, traditional economic models seem to do a better job of predicting outcomes than most other models. And ultimately, the value of a model depends on its outputs, not its inputs.

Objection 2: I find economic assumptions unflattering; they hurt my ego. And to this, I answer: too bad. Again, the point is not that the assumptions are accurate; the point is that they do a better job of predicting outcomes than other assumptions. We can make assumptions about the behavior of prostitutes, drug users, rapist, women seeking abortion, gun owners, etc., based on our prejudices, moralistic teachings, lurid daydreams, or egotistical fantasies—or we can assume that people will respond to incentives. Predictions based on the latter assumption tend to out-perform predictions based on the former. The fact that we might prefer to have different assumptions is not relevant to the analysis.

[E]conomics as an *epistemology* so colors, so conditions ones basic perceptions of human *intercourse*….

Look, I already acknowledged that economists do it with models. Get your mind out of the gutter. :-)

[E]ach and every instance of human behavior / dispute / conflict and / or aspiration may, indeed, MUST be cabined within the strictures and structures of some economic model, some grand interpretive explanation that reduces / forces all such human intercourse into the terms and categories of that particular model. Religious disposition, bias, preferences, even, as you argued recently, sexual behavior of women (i.e. prostitution and extra-marital sex) must be explained using the terms of economic advantage / disadvantage.

Yes, the tools of economics MAY be applied to a variety of circumstances, not just money. That’s not a bug; that’s a feature.

I don’t know of anyone who is COMPELLED to use these tools. They often give me counter-intuitive insights. But if you choose not to use them, that’s up to you.

Yet here’s the bottom line: Economics (as applied to policy analysis) makes certain minimum assumptions—assumptions that are intended to create a level playing field for analyzing alternatives. Assumptions that go beyond these minimums are called “preferences.” But the mere fact of trying to create such a level playing field violates some people’s worldviews, and they complain that the tools of economics distort the very issue they’re trying to analyze.

And that’s almost certainly true. For example, I surmise that Spady embraces fundamentalist Christianity. Any analytical framework that doesn’t start from the premise that his religious tenets are uncontestable facts will violate his worldview. I concede the point. Indeed, I expect the First Amendment violates his worldview, because it defends people’s rights to propound alternative religions.

But, again, the point is not that economics is perfect; the point is that I don’t know of a more useful framework. A framework that starts from the premise that whatever Spady says must be true not only fails to lend itself to much analysis, but will create maximum conflict with all competing worldviews.

Economic analysis does not pander to Spady’s worldview. Indeed, it’s designed for facilitate critical analysis, not fawning reverence. Again, that’s not bug; that’s a feature. But it will never suit Spady. And, once we acknowledge that economics is inapplicable to addressing his concerns, we have no common framework from which to make judgments. I will often lack a basis for evaluating supernatural claims.

But this isn’t a crisis—for me. Harvard's Daniel Gilbert studies affective forecasting biases—that is, a cognitive bias that causes people to predict that the outcome of various decisions and events will be more consequential than they really are. That is, we systematically exaggerate our reason for concern about change. He knows about this bias. And yet, he acknowledged that he was head-over-heels in love with his fiancée, and is utterly persuaded that having her as his life partner is the best thing that could ever happen to him. He’s in the grip of his own cognitive bias, and he knows it. In other words, he's human; big surprise. That doesn’t impede his ability to do research.

[I]t leads one to assert that under a veil of ignorance people would opt for a minmax strategy while at the same time implying a la Locke that humans will often act selfishly. I have no doubt that people will do so – act selfishly, that is – yet, it seems to me that such inherent selfishness a) would mitigate, or at least militate, against the minmax option and (or) b) that humans are far more complex, possessed of far greater emotional range than mere self-interest – EVEN when under a veil of ignorance, which may not be so extensive as to preclude any knowledge of economic outcomes, any empathy for their brethren, family, etc. Is this veil of knowledge the equivalent of a social lobotomy, leaving the afflicted without any intimation of outcomes?

YES. THAT’S THE WHOLE POINT. As I understand it, anyway.

Consider: How do you fairly divide a cake between two people? You let Andy cut, and Beau choose first. Andy would be happy to cut the cake in his own favor—but because he is ignorant about which piece Beau will chose, Andy has no way to act on his self-interested inclinations. Thus, Andy’s best strategy is to maximize the amount that would go to the least-well-off person. And the way he does that is to divide the cake as evenly as he can, so that whichever slice he ends up with will be virtually as good as the other slice.

Likewise, Rawls acknowledged that people act selfishly. That doesn’t mean that they’re evil; it means that they’re human. And this was the problem with the traditional Social Contract Theory: It was created by members of the middle- and upper-classes to address the problems of these classes. Specifically, it was designed to address concerns about coercion and fraud. If you’re suffering due to mugger or an oppressive official, Social Contract Theory validates your grievance. If you’re suffering due to poverty or ignorance or earthquake or famine or disease, Social Contract Theory doesn’t care. Why? Because the people who wrote the theory had the resources to protect themselves (as much as possible) from those risks; they had no need of a mutual aid pact to manage those risks.

In order to transcend this problem of bias, Rawls hypothesizes a world where people are in the “original position” beyond a “veil of ignorance.” If you don’t know what roll you’ll play in the great game of life, you can’t pick rules that favor people in your role. It becomes like the cake-cutting exercise.

Society produces people in a great variety of circumstances. We can imagine them arrayed on a bell curve. Any of us might have ended up at any point on that curve. Why would we not want to buy insurance against the risk that we’d end up at the bottom of the curve rather than at the top? And the way we buy that insurance is to design the rules of society to ensure that each slice of the world’s wealth is roughly equal. That’s my understanding of Rawls’s thesis, anyway.

Let me conclude by saying that we’ve all been speaking in a high degree of abstraction here. The odds that we are talking past each other are high. It would be useful to discuss how economic analysis distorts some SPECIFIC topic, or how a Rawlsian perspective might apply to a SPECIFIC policy, to bring the conversation back to earth.

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nobody.really
on April 05, 2018 at 16:16:17 pm

Funny, I read the review and then forgot about it. It was only because a friend suggested it to me that I purchased it. A good read, a good read.

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gabe
on April 05, 2018 at 16:34:35 pm

Nobody:

I amke no specific claim or argument against any of the economist / ideologists herein discussed; nor for that matter against any of your economic assertions / assumptions / prognostications.

That is not my purpose. Nor am i advocating any religious epistemology as a substitute.

My true concern, and I believe that your latest post attests to this is:

That by restricting the analysis of human behavior to mere "market exchange" / economic principles, we are susceptible to a certain hubristic disposition / practice. That is to say, by *simplifying" experience and reducing it to manageable and presumably *observable* elements (paraphrasing you here, my friend) we are better able to predict specifc and / or general outcomes.
This may (or not) be true. However, what follows inexorably from this (see the history of the 20th century) is the presumption that a) we are able to then *nudge,* migrate, or otherwise modify human behavior and interaction AND B) that we are 1) entitled and 2) OUGHT to compel such behavioral change.
You clearly must be aware of this as you mention that "all wealth must be shared equally" As you know this CAN ONLY be accomplished by force.

if one is unwilling to recognize that much of human behavior is motivated by impulses other than sheer "gain", it becomes relatively easy to compel behavioral change as all change, at root, is nothing more than self-interest or pursuit of gain. There is then nothing to stop the changes envisioned by the economist ideologue; nor nothing to stop the further changes required as correctives to the initial changes, and so on because, after all, we are simply refining peoples *foolish* / selfish choices made under a veil of ignorance - something, of course, and by definition, those enlightened economists are not afflicted by. For surely, they have burst forth from "The Cave" and now see clearly what others cannot.

Tell that " gain only theory to a soldier. Hell, I just wish I was *smart* enough back in the day to have known that. Just think of all the gain that would have accrued to me and my comrades when we donned those Olive Drab Green outfits. Boy, what dopes we must have been.

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gabe
on April 05, 2018 at 18:33:28 pm

Not following you, gabe.

[B]y restricting the analysis of human behavior to mere “market exchange” / economic principles, we are susceptible to a certain hubristic disposition / practice. That is to say, by *simplifying” experience and reducing it to manageable and presumably *observable* elements (paraphrasing you here, my friend) we are better able to predict specifc and / or general outcomes.

This may (or not) be true. However, what follows inexorably from this….

Oy.

Let’s go over this again: I claim that the human mind lacks sufficient capacity to grasp the world in all its complexity. To take a simple example, can you name everyone in the world?

If you acknowledge that the human mind lacks the capacity to grasp the world in all its complexity, then it follows that the mind must work with something less complicated than reality. In other words, our minds work with a simplified model of reality.

For example, our minds develop heuristics for identifying three-dimensional objects based on shading. But this heuristic is so simple, we’ve learned how to exploit it to fool ourselves, creating a catalogue of familiar optical illusions.

This statement is not ominous, just candid. You are free to draw conclusions about what “follows inexorable from this….” But if it DOES follow inexorably from this, then presumably it’s something that is happening continually because human minds have ALWAYS had this limitation (to the best of my knowledge). I’m simply describing the human condition.

If you want to dispute this, please declare that either 1) you DO grasp the world in all its complexity (and can, for example, recite the names of everyone in the world), and 2) you are immune from reliance on simplifying heuristics (and thus do not experience optical illusions).

However, what follows inexorably from this (see the history of the 20th century) is the presumption that a) we are able to then *nudge,* migrate, or otherwise modify human behavior and interaction….

I don’t follow your chain of reasoning.

But regarding the idea that we are able to nudge, migrate, or otherwise modify human behavior, google “Milgram experiment.” As far as I can tell, this fact has been pretty firmly established since 1964, without regard to any other assumptions.

….we are 1) entitled and 2) OUGHT to compel such behavioral change.

I don’t see how this follows from any of the prior statements.

That said, evidence suggests that we are CONSTANTLY modifying each other’s behavior. Evidence shows that people in a cafeteria line are disproportionately likely to buy the first food they see. Cafeteria workers can choose to put healthy food there, or unhealthy food there—but whatever choice they make will influence the eating behavior of their customers. They only choice they do NOT have is to NOT influence people’s choices because, by definition of the cafeteria line, SOME food must come first.
You are welcome to feel paranoid about this, but I’m merely stating facts as I understand them.

[Y]ou mention that “all wealth must be shared equally”

Specifically, I said that a minimax strategy—the same strategy used in the cake-cutting exercise—would justify making an equal division of wealth. Do you disagree that the cake-cutting exercise demonstrates the merits of making an even division of the cake?

As you know this CAN ONLY be accomplished by force.

Yup. Indeed, tax collection in generally requires at least an implicit threat of force. Were you previously unaware of this?

if one is unwilling to recognize that much of human behavior is motivated by impulses other than sheer “gain”, it becomes relatively easy to compel behavioral change as all change, at root, is nothing more than self-interest or pursuit of gain. There is then nothing to stop the changes envisioned by the economist ideologue; nor nothing to stop the further changes required as correctives to the initial changes, and so on because, after all, we are simply refining peoples *foolish* / selfish choices made under a veil of ignorance – something, of course, and by definition, those enlightened economists are not afflicted by. For surely, they have burst forth from “The Cave” and now see clearly what others cannot.

Don’t follow this at all.

But ok, let’s consider the opposite. The Nazis regarded Jews as inherently inferior, insusceptible to change. And because the Nazis were not laboring under the crazy delusion that Jews could be motivated by gain to change, this explains why the Nazis treated the Jews so well, right?

Gabe, I fear that you haven’t really grasped what I was trying to say, and that individual words here and there have pushed your buttons. I’m sorry about that. Again, perhaps we could discuss how economic analysis distorts some SPECIFIC topic, or how a Rawlsian perspective might apply to a SPECIFIC policy, to reduce the chance of miscues.

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nobody.really
on April 05, 2018 at 21:39:40 pm

nobody:

You DO follow what I am saying BUT YOU REFUSE TO RECOGNIZE IT.
It clearly follows that those who presume to have the ability to predict behavior do tend to attempt to change that behavior.

But here is the rub:

Economists are no more apt to make accurate predictions of human behavior, even economic behavior than are (i believe the phrase was) astrologists. the records are comparable. Unless, of course, one confines oneself to only those tightly controlled laboratory experiments for which so much is claimed.

At least astrologists feign humility in their predictive engagements; not so the hubristic economists who would have us alter all manner of social interchange based upon some *ideal* allocation of resources / wealth and based upon studies which when adequately parsed expose nothing more than the "religiosity" usually attributed to some Baptist fundamentalist.

seeya

Hey BTW Sergio Garcia scored a *13* on the 13th hole today. No one could have predicted that based upon numerous studies, tendencies and past behavior. Must have been an economist doing the caddying for him. Ha, again!

"Economics has never been a science - and it is even less now than a few years ago." Paul Samuelson
Read more at: https://www.brainyquote.com/topics/economics

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. Friedrich August von Hayek"
Read more at: https://www.brainyquote.com/quotes/friedrich_august_von_haye_564181?src=t_economics

"Economics is extremely useful as a form of employment for economists. John Kenneth Galbraith
Read more at: https://www.brainyquote.com/topics/economics"

"Since the global financial crisis and recession of 2007-2009, criticism of the economics profession has intensified. The failure of all but a few professional economists to forecast the episode - the aftereffects of which still linger - has led many to question whether the economics profession contributes anything significant to society. Robert J. Shiller
Read more at: https://www.brainyquote.com/topics/economics"

I can go on and on.

so much for the predictive validity of the economics *business*.

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gabe
on April 05, 2018 at 23:38:30 pm

Nice quotes. But here's the one you neglect to quote: me, when I said

So before you dismiss economic models for being simplistic, evaluate the foundations of your alternative model; you may find that they’re less justified than the economic principles are.

So, gabe, what model do you have that's better?

Look, we all make fun of weather forecasts--and we continue to consult the weather forecasts. Which fact is more revealing?

if one is unwilling to recognize that much of human behavior is motivated by impulses other than sheer “gain”, it becomes relatively easy to compel behavioral change as all change, at root, is nothing more than self-interest or pursuit of gain….

Tell that “gain only” theory to a soldier. Hell, I just wish I was *smart* enough back in the day to have known that. Just think of all the gain that would have accrued to me and my comrades when we donned those Olive Drab Green outfits. Boy, what dopes we must have been.

I don’t know where you get this “gain only” theory. I said that people respond to incentives.

So let’s talk about boys in olive drag green outfits—or whichever color you prefer.

Scenario A: Imagine you’re a German soldier in WWII. You and all the collegues in your unit came from the same home town. You’re related to many of your colleagues, if distantly; your families have known each other for generations, and you all aspire to return to this town after the war. You’ve fought together since the war’s beginning, and you have no expectations that you will be relieved of duty before the war’s end. If you deserted, you’d have no home in the military—and everyone in your home town would know that you had betrayed all of their kin. But your unit can find occasions for recreation; heck, you’re in your home country.

Scenario B: Imagine you’re a US soldier in Vietnam. It has long become apparent that the war is a quagmire. You rotate into a unit of men you’ve never met before for finite tour of duty. Your commanders rotate out every six months. And each of your colleagues knows precisely when he will rotate home. Finally, there’s little opportunity to blow off steam: you live in a rural countryside, and cannot distinguish friendly locals from hostile ones. The primary source of recreation is drugs.

Now imagine that each unit finds itself under enemy fire, and one of the soldiers is shot an immobilized. In which scenario will soldiers be more willing to risk their lives to save a colleague?

Now, maybe there’s no way to answer that. Maybe you’d say, “Of course soldiers would risk their lives to rescue a comrade! To do otherwise would be unthinkable! No true soldier would ever be influenced by petty personal concerns. Do not dare to sully the noble profession of soldiering with such base, unworthy considerations!”

Or maybe you’d say, “Soldiers in each scenario face different incentive structures. And those incentive structures might have some tendency to influence their willingness to risk their lives for their colleagues.”

I leave it to you and your Olive Drab buddies to evaluate which analysis seems more credible to you. You know which analysis seems more credible to economists.

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nobody.really
on April 06, 2018 at 10:09:36 am

nobody:

So now it may be told:

All these thousands of words to assert that "humans respond to incentives."

OMG, I never would have known that, nor i suspect would any of the other readers / commenters here at LLB. An insight of staggering significance, no doubt! No, I know why I chose to not enter the academy. The preference for stating the obvious in near manuscript length is a predilection I do not share with the academy.

Were it simply that, one could resign oneself to the practice. YET, something deeper lurks within the final simple claim. It is not simply that humans respond to incentives, a fact which even my redneck, deplorable tailgating friends recognize, BUT that "We economists (social scientists, philosophers, etc etc) also know WHICH incentives people will respond to and why and when." The arrogation of such prescient capabilities to ourselves is the definition of hubris. And i may add, it is the principal reason why all of the "grand schemes" intended to improve the state of humanity have, and will continue to, fail(ed).

So no, the economic analysis has historically been no more successful at predicting human behavior than has astrology BUT it has been far more successful in reducing the perceived (and accepted) range of human possibility than has the science of the stars. Then again, there are many soi disant stars amongst the economic firmament, n'est ce pas?

with that I will go tend to my grandchildren and determine what manner and amount of economic gain I may garner from the encounter!!!!!

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gabe
on April 06, 2018 at 11:32:25 am

All these thousands of words to assert that “humans respond to incentives.”

OMG, I never would have known that, nor i suspect would any of the other readers / commenters here at LLB. An insight of staggering significance, no doubt!

Glad you feel that way. Now you can drop your paranoia.

And apparently it IS an insight of staggering significance, given the lengths to which people go to deny it. For example, I previously cited evidence showing that people’s willingness to serve as prostitutes varies with the degree of compensation. Yet prostitution is such an emotion-ladened topic that people resist acknowledging a dynamic that they would readily acknowledge under pretty much any other context. Often, the lessons of economics would be completely unsurprising—but for that fact that human minds are prone to cognitive biases and worldviews that keep us from acknowledging the obvious.

No, I know why I chose to not enter the academy. The preference for stating the obvious in near manuscript length is a predilection I do not share with the academy.

Alas, the propensity for stating the obvious is greatly exceeded by the propensity to blather on interminably, stating NOTHING, but using a lot of buzzwords. Sure you don’t wanna give it a try?

“We economists (social scientists, philosophers, etc etc) also know WHICH incentives people will respond to and why and when.” The arrogation of such prescient capabilities to ourselves is the definition of hubris. And i may add, it is the principal reason why all of the “grand schemes” intended to improve the state of humanity have, and will continue to, fail(ed).

Eh. Mostly social science identifies which factors tend to increase a given behavior, and which tend to decrease it. In conducting studies and experiments, sure, they quantify the results. But the specific strength of the correlations is generally less important than their relative strengths.

But hey—right now, someone at the Pentagon has developed plans for how troops will deploy in the next combat. Should they train troops as units and deploy them all together? Should they train soldiers to have individual skills that can be easily swapped in and out? Each method has its advantages. And, much to your disapproval, I expect that the military is conducting studies and analyses to evaluate which methods seem most useful for which kinds of combat. Doubtless, any results they come up with will reflect only a partial, proximate truth. Wouldn’t it be so much better if they made no systematic effort to study such things? Then they could be wholly ignorant, and proud of it—like certain people I’ve encountered.

with that I will go tend to my grandchildren and determine what manner and amount of economic gain I may garner from the encounter!!!!!

Great. But as you do so, ask yourself: Why are you going to tend to YOUR grandchildren, but not other people’s? Would this have something to do with the incentives you have for interacting with your grandkids vs. with kids in general?

Now, imagine you’re a detective looking for an alleged pedophile. Would you start your investigation looking at people playing with their own grandchildren, or with people who have a propensity to play with kids without any obvious incentives to do so?

My reply to you is the same as my reply to Spady: I don’t use economic analysis for the purpose of offending your religion—I truly intend no offense—but the fact that it offends your religion will not deter me.

Hi to the kids.

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nobody.really
on April 06, 2018 at 13:26:28 pm

I've never liked "state of nature" theorizing because I tend to think of a political state of nature as something like a mathematical singularity, which is the point or condition where the thing being observed, or the function being considered, is simply not defined and its behavior at that point is unknown and unknowable. State of nature theorists seem to assume that in such a state, isolated but sentient humans will use pure reason to concoct a rules for a society that is to their collective advantage.

Certainly, things never worked that way.

An imaginary state of nature where each individual is assumed to be completely autonomous is not useful for any further analysis because humans are born with a fundamental instinct to socialize. In a post-apocalyptic world where all pre-existing relationships have been obliterated, humans will immediately seek a primary pair bond for companionship and then the new pair will immediately seek out others to improve their collective chances of survival. If the inferences we may draw from Peterson's lobsters are useful, we may conclude that we instinctively know our approximately position, duties and rights in both the primary pair bond and in the hierarchy any larger grouping or society that will immediately follow.

Thereafter, everyone is born into an existing society and humans' great advantage and curse is that we have a memory of past experience, the ability to learn from experience and the ability to speculate on how our past might be the prelude to our experiences going forward.

If West actually said something like " US founding is a predictable result of the lessons learned by humans from the defects found in a state of nature" West is absurd. The only collective understanding we have of any primitive state of nature are the ubiquitous first human myths. Experience and history strongly suggest that when old societies are destroyed the first order of business for the survivors is survival, not speculation on political utopias.

BTW; I know Pauline Maier as a historian by way of "Ratification." In her other works I always thought her too attached to Whig history from her long association with Bernard Bailyn. But in "Ratification" she seemed to have moved beyond that.

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EK
on April 06, 2018 at 16:33:06 pm

The "thread" of this commentary has fallen away so that only the needle of sarcasm remains. Intending no mockery, insult and ridicule, I would add:

1) No one I know in the religious community believes economics "offends religion." Until today on this site I had never read or heard such a silly notion. Professional paranoia, perhaps? But they say "even paranoids have enemies" and surely there is a "tell me something I didn't know" grounds for questioning the value of economic analyses the results of which are mere statements of the obvious or that tell us that people respond to incentives and some incentives are more effective than others, or that confirm with data that people play more with their kids (or grandkids) than the kids (or grandkids) of others because the incentives are greater, or that in tracking down pedophiles detectives should pay attention to adults who play with children despite lacking obvious incentives to play with children.

2)Seems to me none of that is the intelligent point of defense to the arguments (none of which is a religiously-driven threat) that the profession of economics is sometimes (often?) guilty of a) an unjustified (obsessive?) reliance on models, b) the manipulation of statistics for ideological purposes, c) over-reliance on statistical correlations (even associations) to draw simplistic conclusions as to the causation of human actions, and d) the hubristic assertion that the public should have high confidence in a profession that is surely "dismal" but hardly "science."

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timothy
on April 06, 2018 at 17:28:12 pm

nobody:

This is what i find objectionable in your otherwise learned, insightful and humorous comments:

"...but the fact that it offends your religion will not deter me."

You assume THAT which needs to be proven. As I know that you go back and read old postings, please do so with a view to finding ANY commentary that I have made that is predicated upon a religious argument. Indeed, the only time that I have made reference to any religious writing or text was in response to the Mad Lawdog and that was to "spoof" the Lawdog.

Why MUST you folks always assume, what in your epsitemology, is the worst in other commenters, i.e., that any argument counter to your own must be propelled by a *religious* disposition / belief system.

You KNOW nothing of my religious disposition, or even if I possess any religious beliefs.

And again, you posit the great revelation that humans respond to incentives and that I have an incentive to play with my grandchildren. This has nothing to do with religion or *incentives* but something FAR MORE FUNDAMENTAL TO A GOOD AND SATISFYING LIFE: Do you want to know what it is:

I LOVE MY GRANDCHILDREN!!!!!! This, my friend, is what human beings are supposed to do - yep, I bet you will say "*Supposed* to do? According to who? according to what religious doctrine.
That is the game that you play.
Sadly, if you are unable to recognize that humans are innately wired to love.
Hey, and here is an observation that i have made over the years. Attribute it to my "alleged" religious bias, if you will:

To my mind, over many years of observation, what makes a Christian a GOOD Christian is the ability, no, the capacity to engender in others the ability to LOVE. Find whatever "incentives" you NEED to trivialize that basic human longing BUT the fact remains that humans respond to many many things and far more of those *things* are not reducible to some econometric analysis.

You also assume that religious folks are hostile to economics. My God, man, go and read economic history. Hey, who first developed the market theory of "pricing" - a French priest in the 16th century. Keep looking and you will find more.

Seems to me that the last recourse of the failed rhetorician is a recourse to accusations of "religious bias."

Give me an "effin" break.

Good day!

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gabe
on April 06, 2018 at 17:36:23 pm

You may be surprised to learn that West is closer to your position than you think. He deals not with the *mythical* state of nature but rather the state of nature which is defined by the lack of an organized government not that silly Rousseauian "paradise or Locke's / Hobbes notion of one against all. We are not discussing *primitive* states of nature - rather, we are dealing with a specific "pre-government " construct in which humans live only without the benefit of "state" protection NOT the informal social or cultural *protections / mores etc" that are everpresent and inevitable.

So NO - West is NOT absurd. Only those who deny that there is a specific and significant difference between a political society organized under a "government" and one organized (such as that is) on an informal, familial / tribal basis.

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gabe
on April 06, 2018 at 17:40:29 pm

Timothy:

Time to drop the mic; nothing more needs to be said after that; nor, I suspect would anything further said be *absorbed* by some. It appears that we have failed to provide the proper incentives.

See my comment above;

The last recourse of the failed rhetorician is recourse to accusations of religious bias.
Nobody. really believes that to be proper

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gabe
on April 06, 2018 at 17:59:36 pm

HaHa!

Love 1) the irony (or is it sarcasm) of:
"It appears that we have failed to provide the proper incentives." and 2) the word play of: "Nobody. really believes that to be proper."

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timothy
on April 07, 2018 at 01:11:43 am

gabe: I will go tend to my grandchildren and determine what manner and amount of economic gain I may garner from the encounter!!!!!

nobody.really: Great. But as you do so, ask yourself: Why are you going to tend to YOUR grandchildren, but not other people’s? Would this have something to do with the incentives you have for interacting with your grandkids vs. with kids in general?

gabe: [Y]ou posit the great revelation that humans respond to incentives and that I have an incentive to play with my grandchildren. This has nothing to do with religion or *incentives* but something FAR MORE FUNDAMENTAL TO A GOOD AND SATISFYING LIFE: Do you want to know what it is:

I LOVE MY GRANDCHILDREN!!!!!!

Exactly. And because you love your grandchildren, you receive an emotional reward (perhaps dopamine) from spending time with them in a manner that you don’t when you spend time with other kids. And, ok, sometimes the reward comes from knowing that you're providing a service to your children. Not everybody is so into their grandkids, but that doesn't mean that there aren't incentives for spending time with them.

In short, you are once again responding to incentives.

As you have repeatedly said, the fact that we respond to incentives is hardly remarkable. Yet you continue to resist the idea that this dynamic applies to you. Apparently the idea is quite banal in the abstract, and nearly blasphemous as applied.

I get it: Because I value the idea that I exercise free will, I resist theories that would seem to reduce the role of my free will. For some people, their ideological commitment to this idea of free will is so great, and the cognitive dissonance of social science so distasteful, that they reject social science entirely.

I have a word for ideological commitments: religion. Religions generate benefits and burdens. Perhaps the benefits outweigh the burdens, but religions can clearly impede critical thinking.

When I find myself rejecting the evidence because it conflicts with some cherished ideological commitment, I try to re-examine the commitment instead. I can't claim to have achieved perfect success--but I can say that this is my objective.

gabe: {W]hat makes a Christian a GOOD Christian is the ability, no, the capacity to engender in others the ability to LOVE. Find whatever “incentives” you NEED to trivialize that basic human longing BUT the fact remains that humans respond to many many things and far more of those *things* are not reducible to some econometric analysis.

Look, I like economic analysis in part because it helps me transcend sentimentality and ideological commitments in order to discover a more accurate understanding of the world. Far from trivializing or reducing, I can think of few more noble pursuits.

You say my remarks trivialize or reduce. I don’t know that that means. Again, I care about drawing accurate conclusions from the evidence. You fail to demonstrate how my remarks conflict with evidence. I surmise that when you say I trivialize or reduce, you mean that I have failed to genuflect before your religion. And perhaps I have. But as someone once said, "I don’t use economic analysis for the purpose of offending your religion—I truly intend no offense—but the fact that it offends your religion will not deter me."

Oh, wait--I'm sorry, nobody.really said that. Perhaps I made it up.

gabe: Give me an “effin” break.

I’d love to, but I don’t know how. It’s one of those in-”eff”-able mysteries. :-)

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nobody.really
on April 07, 2018 at 11:00:53 am

My Gawd, Edith!!! You are a bit pedantic, are you not?
Why belabor the obvious? Of course, humans respond to incentives (albeit probably somewhat different ones than you suppose).
So now, we see just how expansive is the predictive capacities of economic analysis; it is so broad, so incisive, so revelatory (Oops, there goes my *religion* again, Ha!) as to be able to dissect and comprehend familial love and paternal instincts.

Do you recognize no bounds to your peculiar form of megalomaniacal economics?

BUT most of all I DISPUTE the unwarranted claim that economics will provide a better, a more cogent, a more predictive analysis of human behavior and response. The record does not demonstrate this.

As you know, some things are "in-eff-able"

Let us try to be somewhat more modest in our claims. I try to be.

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gabe
on April 07, 2018 at 16:04:34 pm

As I previously said, the "thread" of this commentary fell away leaving the needle of sarcasm ( which I also am guilty of using, regrettably.) In the hope that we will not leave the matter a mere shredded fabric entangled in strands of intellectual fiber, I will clarify/expand parts of the substance of the "lost thread" which I think are most important:

1) My primary concern is with the increasingly supportive role that economists play in what I see as an undesirable, anti-humanist trend toward governance by an oligarchy, an elite bureaucratic class of experts. This technocracy is best characterized by the pejorative term "Administrative State," in which economists play a prominent role and which incentivizes (haha) self-interested, self-seeking economists (and other soi-disant "experts") to claim decision-making powers they do not posses. This warping effect is exacerbated by two other negative characteristics of the Administrative State: a) its desire to insulate bureaucrats from politicians while placing more and more decision-making under their often untouchable control and b) its proclivity to mask political/ideological objectives behind its screen of technical expertise, especially, but hardly limited to, economic expertise. In effect, the oligarchy is run by sheltered, protected and overvalued Wizards of Oz pretending to objectivity and public-interest omniscience in their capacity to produce optimal public policy outcomes, whereas in fact they are self-seeking ideologues who misuse, abuse and overvalue the (unquestionably valuable) laws of economics for reasons of personal gain and (unelected) political power. This produces dysfunctional economic superintendency, undermines the rule of law and degrades constitutional governance.

2) I believe that economists nowadays advance their self-seeking career interests by increasing their professional attractiveness to politicians. This is achieved, in part, by stressing the complexity of public policy decision-making and hawking the power of economists and economic models to simplify that complexity, simplification of the complex being a fundamental goal of politicians. This results in a) a corrupting collusion between two segments of the ruling governing class, technocrats and elected politicians, b) overlooking or minimizing the uncertainties of economics, the distant time horizons of economists, the limitations of economic scarcity and the necessity of economic efficiency, and c) deceiving the public into a false sense of comfort that complex problems of what should be done, who gets what and who pays are being solved by simplistic solutions offered up by magicians (economists) and their magic of economic modelling, when in fact d) the anticipated benefits never materialize as advertised (long time frames are acceptable in economics) and the underlying distributive issues are ignored and the causes of the problems are misdiagnosed.

3) The ideologization of their discipline is the price of economists' admission to the ruling class in America's technocracy. This corrupting process is most clearly seen in the haste of economists, professing objective expertise and scientific answers, to sign onto Leftist distributive justice political causes like ensuring economic equality and achieving racial justice defined as equality of outcomes. It is also reflected in the willingness of economists to enter the existential political/cultural fights over: a) immigration and trade policy between those who are enriched by the status quo and those whose lives and culture have been damaged if not destroyed by that enrichment and b) the dirigisme advanced by the "free stuff for the majority paid for by the rich" and the "rich" who would be forced to pay for that dirigisme.

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timothy
on April 08, 2018 at 10:01:09 am

Over at TAC Rod Dreher has a related post "Del Noce & The Left's Dead End" linking to an article by Carlo Lancellotti at "Commonweal" with additional interesting links in the post and in the comments.

Among other things, it observes that "homo econonimus" is a marxist term and it goes on to suggest that Puritan ethic capitalism divorced from religion must necessarily result in the sort of predatory economic exploitation by a bourgeois ruling class coupled with what some call cultural marxism that we see today.

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EK

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