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PART 8: Policy Commentary - Paul Heyne, “Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion 
“Are Economists Basically Immoral?” and Other Essays on Economics, Ethics, and Religion, edited and with an Introduction by Geoffrey Brennan and A.M.C. Waterman (Indianapolis: Liberty Fund, 2008).
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What Is the Responsibility of Business Under Democratic Capitalism?*
“What is the responsibility of business under democratic capitalism?” The topic assigned to me sounds so suspiciously like a sermon title that I’ve been emboldened to choose a text. Two texts, actually, but both from the scripture according to Adam Smith. The first is quite familiar. The second is less well known.
From Book IV of The Wealth of Nations, Chapter 2:
Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society.
And a few paragraphs later Smith writes:
He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. . . . [H]e intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
My second text is also from Book IV, the last chapter (Chapter IX), the second last paragraph:
All systems either of preference or restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.
I want to spend the first part of this lecture defending Smith’s outrageous claim that people in business promote the public interest most effectively by pursuing their own advantage, or, more precisely, the largest possible net revenue for their own enterprises. It’s the social responsibility of business, in short, to maximize profits. I want to defend that claim by showing why it isn’t outrageous at all. Some of my arguments have often been made before and won’t be strange to most of you. Other arguments may be less familiar and perhaps more controversial.
But the cogency of the entire argument depends ultimately on how we read eleven words in that second text: “. . . as long as he does not violate the laws of justice.” That is a very important qualification to every policy argument that Adam Smith ever makes in The Wealth of Nations. Smith has been seriously misinterpreted by those who have overlooked the role that justice plays in his system of political economy. I want to show you why the first argument, the case for profit maximization, makes no sense without this qualification. And I hope to persuade you that Adam Smith had a conception of what “the laws of justice” entail that is still deserving of attention today. Indeed, it may deserve especially close attention in an age such as ours, where unexamined and incoherent concepts of justice exercise so much control over public policy.
An economy or economic system is a social system through which people cooperate in using what they have to obtain what they want. This is the function of all economic systems: primitive, modern, socialist, capitalist, democratic, oligarchic, coordinated, or confused. Systems differ enormously with respect to whose wants they serve and how effectively they work. But all economies are systems of social interaction, through which people are induced to work, to consume, to save, to invest, to risk: all more or less; and all, of course, in specific, concrete ways.
The primary problem that modern, industrialized economic systems must solve is the problem posed by the scarcity of information. We are inclined to overlook these difficulties and to take their resolution for granted, because we take for granted the remarkable mechanism of social coordination through which we gather and disseminate the knowledge that is essential to the system’s functioning. In overlooking the knowledge or information problem, we focus undue attention on a different scarcity, the scarcity of goodwill. We erroneously suppose that goodwill can resolve problems that can in fact be resolved only through the accumulation of additional information. Moreover, many of our proposals for increasing the amount of goodwill in the economy fail completely to attain their objectives, but do manage to subvert the crucial information system.
Modern economies are incredibly complex. Indeed, they are unmanageably complex. But note carefully that something can be unmanageably complex and still work quite satisfactorily. Not everything that works is managed. Some systems can only work, in fact, if they are not managed, for the simple reason that no manager could possibly have command of all the information essential to the system’s effective functioning. Our economy is just such a system.
Have you ever pondered the unsettling truth that none of us knows how to produce goods upon which we are dependent for our very survival? In the case of many such goods, no one knows how to produce them. That is to say, no one knows. The required knowledge is scattered among millions of people. Moreover, it is necessarily scattered in this fashion, because no single mind could possibly grasp and comprehend all the information that must be known if, for example, an antibiotic is to be available for your use when you contract a life-threatening infection. Computers offer no real help in dealing with the kind of information problem to which I’m trying to direct your attention. The required knowledge isn’t the kind that can be stored in a computer, and it changes faster than computer programmers could ever hope to record it, because we simply have no timely way of gathering and keeping up-to-date all the detailed bits of information that must be precisely and correctly known if an economy like ours is not to break down in chaos.
This dispersed knowledge becomes available to decision makers, in an appropriately distilled form, primarily through the relative money prices that are generated by the ongoing processes of supply and demand. What people want encounters what people are willing and able to do, and the resulting possibilities are summarized in a vast menu with specific price tags attached to each option.
If that all sounds terribly abstract and even unrealistic, it’s because I’m trying to describe everyday occurrences with which we are all familiar, but whose nature and significance we rarely appreciate. We tend to think of prices as costs, which they are, of course, to potential users of a good. But prices are also potential income to suppliers of a good. And in both cases they are signals. Rising prices are signals to users that a good is becoming more scarce and ought therefore to be employed more sparingly. At the same time they indicate to suppliers that more ought to be produced, if possible. Falling prices emit the opposite signals. Moreover, information about changing scarcities is linked in this system with incentives to act appropriately, to alter one’s behavior so as to accommodate the new social situation. Rising prices not only tell users they ought to be more economical and suppliers that they ought to make more available; rising prices at the same time provide financial incentives to do what ought to be done.
That is why, as Adam Smith maintained, people in business who pursue their own advantage thereby promote the public interest. Business decision-makers—let me use the term executive, which captures the function in which I’m interested and is also non-sexist—business executives who aim at the maximization of profits are responding to their society’s instructions for the allocation of scarce resources. The information is not perfect, whatever “perfect” might mean in this context. But it is far and away the best information available to an executive who wants to be socially responsible. To ignore it or set it aside in the name of social responsibility almost always amounts to rejecting the most reliable information available on what social responsibility entails, in favor of a subjective and usually quite arbitrary conception of the public good.
Whatever the motives of business executives, the consequences of aiming at maximum profit are the maximization of output measured in terms of monetary value. I certainly do not want to claim that a larger dollar value of output is the highest good, or even that it is in all cases better than some particular alternative. But I do want to insist that alternative goals for business executives must bear the burden of proof. Critics of profit-maximization do not seem to realize what a heavy burden that is.
Most of the productive resources in the U.S. economy, apart from human resources, are owned by corporations, and are consequently managed by business executives on behalf of others. The officers of publicly-owned corporations have legal and moral obligations to shareholders that prohibit them from using these resources capriciously. It is the first obligation of corporation officers to do as well as possible for the owners they represent: to be good stewards, in short, of the resources entrusted to their care. It is much harder than we commonly suppose to find circumstances under which “social responsibility” would call for decisions aimed at any other objective than the maximization of profit.
A number of misunderstandings regularly confuse the discussion of this issue. To begin with, in arguing that business executives should aim at profit-maximization, I am actually saying that they should attempt to maximize the present discounted value of the expected stream of net earnings from ownership of the resources under their control. That wordy amplification underlines the point that we are not recommending any kind of shortsighted behavior.
Neither logic nor experience supports the commonly-heard charge that business executives sacrifice long-term results for short-run profits. Where shortsighted behavior is not to anyone’s advantage, we shouldn’t expect to observe it. The Wall Street Journal recently published an article on fire hazards in skyscrapers and laws designed to make such buildings safer. In the course of the article the claim was made that the savings on insurance premiums over a 30-year period would pay for the installation of sprinkler systems, but that such systems were nonetheless only rarely installed because most large office buildings are constructed by speculators who sell them within a few years. The argument is absurd. Developers construct buildings with an eye to their long-run value, regardless of how quickly they intend to sell, because the selling price they can obtain will be the present discounted value of all future net income expected from ownership of the building.
Contrary to a widespread belief, corporate managers do not aim at high quarterly profits, to keep shareholders satisfied, at the expense of long-run profitability. Management in this manner would depress current stock prices, which is not the way to please shareholders. Moreover, it would invite and facilitate a hostile takeover, which would clearly not be in management’s own best interest.
Whenever we see short-run benefits being pursued in disregard of long-run costs, we may assume with a high degree of confidence that the mis-managed resources cannot be sold. The right to sell a resource is the power to appropriate its long-run value. The right to sell consequently promotes conservation. If you want to examine a social system in which short-run benefits are persistently chosen despite the fact that their long-run costs will be excessive, look at the operation of democratic legislatures. “After me the deluge” is not the slogan of business executives in a market economy; it much more closely describes the behavior of legislators who must stand for re-election every two years. It is ironic that so many people believe government intervention in economic life is necessary to secure the interests of future generations, when the preponderance of the evidence suggests so strongly that the effective time horizons of government officials are shorter than the time horizons of private persons managing marketable resources.
We must also not be misled into supposing that profit-maximization is an alternative to such objectives as obeying the law or pursuing humane personnel policies. Business executives will usually find that profit-maximization requires law-abiding behavior and diligent attention to the interests of employees. Those who attack the profit-maximization criterion by assuming that its acceptance entails disregard for legality or for people are attacking a straw man.
This is not to say that business firms will always obey the law or that they will never treat their employees inconsiderately. I am in no way attempting to argue that business executives do all things wisely and well. My argument is a quite different one: Business executives ought to use maximum anticipated net revenue, properly discounted, as their decision criterion. When this produces unsatisfactory results, as it sometimes surely will, we should not ask or expect executives to use some other criterion in allocating resources, because we should neither ask nor expect them to behave like benevolent despots.
Isn’t that what it finally comes down to? We notice that the economic system turns out a lot of schlock, and so we urge business executives to pay more attention to good taste and high quality. We do not notice that business responds to a wide range of differing tastes and to a market that calls for goods of highly variant quality, and that in asking business executives to ignore the market we are in effect urging them to substitute their own preferences for the preferences of consumers. Is that social responsibility or elitism?
Or we notice that particular corporations are doing business in South Africa, and we urge them to pull out of that racist country even if this entails the loss of some profits. We too seldom ask about the probable consequences of such a pullout. (Who will subsequently take over the abandoned capital resources, for example, and how will this affect the evolving balance of power in South Africa?) But we almost never notice that by pushing such demands we are asking business executives to make foreign policy and to interfere in the domestic affairs of another country. It is true, of course, that doing business in South Africa has effects in that country just as much as not doing business has effects. But doing or not doing business for the sake of profits is a very different matter from doing or not doing business with the primary intention of affecting another nation’s domestic policies. Against those who would call this an exercise of corporate responsibility I maintain that it is a dangerous and even arrogant assumption of powers that do not belong to business executives and cannot safely be entrusted to them.
We are frequently misled in our consideration of such issues by the erroneous assumption that the choice for business executives is a simple choice between good and evil. This will almost never be the case, however. The choices that confront business executives are most appropriately seen as choices between alternative benefits and alternative costs accruing to or falling upon different people. When we pay attention to the costs as well as to the benefits of the policies commonly advocated in the name of social responsibility, those policies tend quickly to lose the moral sheen that makes them so attractive to critics of profit-maximization. Consider, for example, a U.S. corporation that operates a factory in Malaysia and subjects employees to workplace hazards that would be illegal in this country. Is that an irresponsible pursuit of profit? Is it an exploitation of Malaysian workers? Or is it the provision of valuable income-earning opportunities to people who would be much worse off if the corporation had to adhere to U.S. safety standards in Malaysia and consequently chose not to operate a factory there? The truth is that people whose life expectancy is low because of desperate poverty do not assign as high a value to occupational safety as do people in the United States, and that employers who adopt the standards of an affluent society in a poor society could easily end up reducing the well-being of people to whom they think they are being “socially responsible.”
The good intentions of business executives who would substitute their own notions of social responsibility for the criterion of profitability do not necessarily produce good results. Would it be churlish of me to suggest that the intentions themselves might not always be as good and pure as we are inclined to suppose? Corporate executives who adopt policies being urged upon them by church groups or other self-proclaimed advocates of the public interest, despite the fact that these policies will reduce net revenue for the corporation, will often be applauded for their business statesmanship. What is the value to them of such acclaim? And is it benevolence when people take actions that bring gratifying public approval to themselves at other people’s cost? I will applaud the generosity of corporate executives who contribute a portion of their personal incomes and their own time to charitable endeavors; I see no reason to applaud when they contribute the time and money of the shareholders whose resources they’re managing.
I would in fact be alarmed by this pseudo-benevolence, this “unbenevolent despotism,” if I did not see evidence that it is much more rare in practice than it is in rhetoric. Corporate executives are flattered by the request that they serve as philosopher-kings, and they are eager to proclaim their willingness to serve. I believe we can take comfort from the overwhelming evidence that, in practice, these executives equate socially responsible business decisions with decisions that maximize the market value of their corporation’s stock. Departures from this rule are by and large insignificant; corporate charity, which seems to be a contradiction of the profit-maximization criterion, is generally of such modest proportions that it can be justified in terms of public relations.
I want to make one more point before shifting to my second text from Adam Smith. The widespread but confused belief that profit-maximization is a wholly inadequate criterion for socially-responsible business behavior gains much of its appeal from the mistaken assumption that profit-maximizing behavior is selfish behavior.
We are much too quick to impugn people’s motives, including even our own motives under certain circumstances. Business executives are human beings, with all the variety of motivation and intention that this entails. People don’t do very many things for simple reasons, and they do even less for reasons that are simply selfish. Business executives who focus their attention on the relative costs and benefits of available options are paying attention to the task at hand, not acting selfishly. Their motives at any moment will be infinitely varied, complex, and I dare say unfathomable; but they are no more likely to be selfish or otherwise morally objectionable than are the motives of college professors preparing a lecture, United Way officials planning their campaign, or an architect designing a building. Economy in the use of means for the achievement of worthwhile goals is an important criterion for all the people just mentioned, and it is economy of just this sort that is being practiced by business executives who continuously consult the criterion of profitability. It is a serious mistake to equate concentrated and focused attention on the task at hand with selfishness. That would lead us to call surgeons “selfish” because they totally neglect the personality or family situation of patients while removing their gall bladders.
This confusion is compounded in the case of business executives by the fact that their success is monitored primarily through the comparison of values expressed in monetary terms. We apparently have enormous difficulty in breaking free from the notion that there is something inherently immoral, or at least morally inferior, about making decisions on the basis of relative monetary magnitudes. And we are not deterred by the absurd conclusions to which this prejudice sometimes leads us. If the members of a downtown church in a large city, for example, decide to sell their old building to someone who wants to erect an office tower on the land, they are not necessarily being selfish or greedy or putting monetary values ahead of religious values. Everything depends on what they do with the profit that they make from converting an old building they can no longer afford to maintain into the money that represents its value in alternative uses. A Manhattan pastor who obviously doesn’t want to see old church buildings torn down was recently quoted by the Wall Street Journal in just such a case: “I don’t give a damn what others think,” he said. “It’s a perversion that property is more important than beauty.”
That’s an extraordinary statement. Property cannot be more important than beauty for the same reason that beauty can’t be more important than property: the categories aren’t comparable. What the indignant pastor presumably meant was that the aesthetic values to be realized from preserving old churches are more important than whatever alternative values are promoted through the sale of such property. Whether that’s true in any given case surely depends on what must be sacrificed to preserve the old building. The monetary profit to be realized from the sale is not itself that sacrifice. The monetary profit represents command over other resources, resources that could be used in dozens of different ways: to build new churches, support missionaries, feed the hungry, or endow scholarships for promising young church architects.
Profit maximizing, whether by church officers or business executives, is a procedure for behaving economically, for being a good steward. The Greek word for steward, used in the New Testament, is in fact oikonomos. If social responsibility entails good stewardship, it calls for economy in the use of available resources. Decisions on the basis of relative money magnitudes are basically good stewardship.
The title of this lecture includes a word that I have barely mentioned: democratic. What is the social responsibility of business under democratic capitalism? As soon as we begin to take that word into account, a serious gap appears in the argument I’ve been constructing. The gap was already present in The Wealth of Nations.
Adam Smith claimed that the pursuit of private interest by business executives promotes the public interest. But throughout The Wealth of Nations he also complains bitterly about the power that merchants and manufacturers exercise in Parliament. He says that they have often obtained “a wretched monopoly against their countrymen” by bamboozling, pressuring, and even intimidating the legislature. Isn’t this inconsistent with the claim that the pursuit of private interest will promote the public interest?
What are merchants and manufacturers doing, after all, when they lobby the legislature, except pursuing their own advantage? If a dollar invested in lobbying promises a higher return than a dollar invested in machinery or product development, then profit-maximization calls for investment in lobbying efforts. That’s exactly what the merchants and manufacturers of Smith’s day were doing, and what business executives still do today. They carry competition into the arena of government, in an attempt to secure laws and regulations that will make their business activities more profitable. In our own time as in the time of Adam Smith, the lobbying efforts of business executives are directed primarily toward the enactment of laws that would restrict their competitors and create preferences for themselves.
Smith obviously disapproved of such efforts and found them subversive of the public good. But how then can he maintain that the pursuit of private interest promotes the public interest? The answer is that the pursuit of private interest for Smith had to be within the bounds of justice. That eleven-word qualification—“as long as he does not violate the laws of justice”—clears Smith of inconsistency, but opens a whole new dimension for our discussion.
Every claim that profit-maximization is socially responsible contains the implicit premise that the actions taken are legal. In a democracy, however, citizens participate in the making of the laws; and business executives are citizens along with everyone else. As a matter of fact, business executives have considerably more influence on legislation than do ordinary citizens. That’s not because “corporations have all the money,” as populist rhetoric would have it. It’s because of the free-rider problem that afflicts the democratic process. And it calls into question the adequacy of the contention that business executives are being socially responsible when they maximize profits within the limits of law. For they have a great deal of power to determine what those limits are going to be.
The Achilles’ heel of democratic capitalism is the tendency of the democratic part to destroy the capitalism part. In order to make clear what I mean, I must carefully define my terms. I shall call a political system “democratic” if its laws result from a competition between legislators for citizen votes. That definition isn’t as strange as it sounds. Definitions of democratic that refer to “the will of the people” or “the preferences of the majority” are misleading in that they assume what must be proved, namely, that a political system such as the one we have in the United States does in fact produce legislation consistent with what a majority of the voters prefer. The definition I am using has the advantage that it calls attention to the process that actually shapes legislation: the competition among legislators for voter approval.
The basic problem with democracy is that special interests have an enormous advantage in this competition. People know and care about their own interests. But they usually don’t pursue them successfully through the political process, because the cost to any one person of exerting influence will typically exceed by a large amount the expected benefit from acting. Each of us is just one voice and one vote. So why bother? Why bear the cost? Since my action will have an insignificant impact, while imposing considerable costs on me in time and money, it is in my interest to behave like a free rider in the political arena: to do nothing and hope that someone else will defend my interests.
The people for whom the expected benefits exceed the costs are people who form part of a relatively small group with a relatively substantial interest. The laws that emerge from operation of democratic processes are consequently laws that cater to an endless succession of narrow, special interests. We are not governed by the will of the majority but by the wills of innumerable minorities. Special preferences and restrictions multiply, and collectively make all of us ultimately worse off. Competition in the political arena subverts competition in the economic arena, and thereby subverts the invisible hand that extracts the public advantage from the pursuit of private advantages.
And what is “capitalism”? Capitalism is a social system within which individuals are free to exchange with one another on the basis of clear and stable “rules of the game.” That definition may strike you as even more idiosyncratic than my definition of “democracy.” But it directs attention to the essential features of what we actually mean when we talk about capitalist economic systems.
Capitalism is a social system, because its defining characteristics are social relationships, relationships among people, not relationships between people and things. (The term “capitalism” was invented by the enemies of the system and is thoroughly misleading.)
Secondly, the definition I have given points up the two conditions that make the system work: voluntary exchange and stable rights, more commonly described as free markets and private property. The trouble with these latter terms—frees markets and private property—is that they divert our attention from the social nature of the system. Property rights are rights with respect to other people, and are therefore inescapably social, not private. If I have a so-called “private property right,” what I have is the socially acknowledged right to exclude other members of society from making certain uses of my property. And I would rather speak of voluntary exchange than of free markets in order to point out that the freedom people possess under capitalism is again a social phenomenon, dependent upon their ability to persuade other people to cooperate with them.
I don’t want to legislate definitions or to get hung up in a purely verbal argument. What is important is that we see how thoroughly dependent a capitalist system is upon clear and stable rules. If it helps you see what I’m driving at and how important these rules are, think of them as clear and stable property rights.
The freedom that capitalism provides is created by the ability of individuals to manage and dispose of particular resources on the basis of their personal knowledge and interests. That is impossible without clearly defined and stable rights over particular resources. When such a system of rights exists, then social interaction—what the economist calls supply and demand—will establish scarcity-reflecting prices, and the vast, dispersed knowledge that the members of society possess will be effectively coordinated. The productive achievements of capitalism and the freedom that it allows individuals are both the result of clearly-defined and stable property rights, or rules of the game.
The big question is: Who decides what the rules will be? The usual answer is: The laws settle the rules. But this only pushes the question one step further back: Who decides what the laws are to be? If the best answer we can give to that question is majority rule, then capitalism is doomed. Majority rule must itself be subject to rules if capitalism is to survive. For majority rule that is not itself subject to a higher rule will inevitably produce special preferences and restraints that will prove incompatible with effective market coordination and individual freedom.
Capitalism requires clear and stable property rights. But clear and stable property rights will not exist except within a political system that is constrained by a constitution. It doesn’t have to be the constitution that was ratified in this nation two hundred years ago, although that particular constitution in its original form was a remarkably successful attempt to establish the kind of constitutional rule for which I’m now contending. The necessary condition is that the constitution constrain the pursuit of self-interest within the political arena: that it set rules for changing the rules under which voluntary exchange is going to occur.
But even a constitution isn’t enough. Formal constitutions must be interpreted, not only in order to apply them to changing circumstances, but also because no constitution interprets itself. Every formal statement presupposes background statements that fill out its meaning and intent. So every political constitution presupposes antecedent notions of justice out of which it arose and which put flesh on its skeleton. The rules of justice are the ultimate rules that shape the constitutional rules that constrain the legislated rules that finally control the rules of the game within which “capitalist activities” (and all other activities) occur.
In other words, there is finally no substitute for morality. But what morality? Don’t moralities differ? Who is to decide when moral judgments conflict? I can’t answer those questions in a single lecture. But do we have to answer them before we can agree on the issues before us? Personal moralities certainly differ. But what about impersonal moralities, or the morality appropriate to impersonal social systems? Can I induce you to give sympathetic consideration to the proposition that the morality appropriate to large, many-person societies is extraordinarily simple and rarely disputed once we agree what it is that we’re talking about?
We’re talking about justice in large, impersonal societies. And the only conception of justice that makes any sense in societies larger than a handful of people is the negative conception of justice: Avoid injustice. Injustice occurs when people are treated unfairly. Unfair treatment in large societies is treatment that is not in accord with the rules: the clear rules that everyone knows in advance and that apply equally to all.
A large society, such as the economic system of the United States, cannot be a just society unless its duties and benefits are allocated in accord with clear and stable rules. Perhaps the force of this claim will be clearer if I apply it not to the economic system but to a large college class. A college professor teaching a class of 500 students (a large society) must, if she wants to be fair, clarify the rules in advance and then apply them impartially. If a student confronts her with circumstances that the rules had not contemplated and so do not cover, she must search for a response that can be generalized. She must not allow some students to take advantage of other students by securing unique advantages. Each of the 500 students, if pressed, could probably find an explanation (unrelated to what the student actually knew) for missing one or more items on the last test. But it is fundamentally unfair to give extra credit to those students whose obsession with grades or personal belligerence prompts them to ask for it. If the same privilege were extended to every student in the class through a general announcement, it might seem at first that justice would be salvaged. But in fact it would not. The problem is that no teacher could adequately hear and evaluate the explanations of 500 students. Justice in large societies requires not only that general rules binding on all be promulgated, but also that they be applied in a non-arbitrary manner. The consequence of any attempt to apply personal criteria in a large-society situation will be capricious and arbitrary decisions. In short, injustice. Justice demands that we use impersonal criteria to allocate burdens and benefits in a large society, where inescapable limitations on our knowledge make it impossible to take personal considerations into account in any consistent way. And fairness requires consistency. That is why justice is pictured as blindfolded.
It is therefore the social responsibility of business executives under democratic capitalism to play by the rules, and to participate in the making of those rules in accord with the basic underlying rule of justice: Ask for no special preferences for yourself, and impose no special restraints on others. Legislate for others as you would have them legislate for you. Adam Smith tells us what justice requires when he says that all systems either of preference or restraint are to be completely taken away.
Let me remind you at this point how I defined capitalism. It is a social system in which individuals are free to choose what they will supply and demand, offer and bid, subject only to general rules known in advance. These rules will be both legal rules, externally enforced, and moral rules that are internally enforced. Capitalism, in short, is a system of individual freedom under law, where law does not mean just “legislation” but rather the whole body of established rules, agreements, and conventions by which the members of a society acknowledge themselves to be bound.
Capitalism is thus by definition an impersonal system. It is not altogether an impersonal system, because the individuals within it do participate in families and small, face-to-face associations, where they can know other persons well enough to be concerned with and to care for their unique qualities. But the distinguishing characteristic of capitalism is the impersonal nature of the social interactions that make it up. It can be described paradoxically as a social system in which people do not care about most of those for whom they care. The farmer who feeds me does not even know I exist, and while he wishes me no ill, he does not and cannot care about me in any subjective sense. Nonetheless, he cares for me, and very effectively, in an objective sense.
We are all dependent, throughout our lives, for our actual survival as well as our many comforts, upon the assistance and cooperation of millions of people whom we will never know and who do not know us. They help us to fulfill our aims in life not because they know or care what happens to us, but because this enables them to fulfill their own aims most effectively. They are motivated by their own interests, whatever these may be. They are guided by the rules of the society and their perception of the expected net advantages from alternative decisions. These net advantages, or structures of expected costs and benefits, are created by the similarly motivated and guided efforts of everyone else in the society.
Marx was thus correct. He saw more clearly than most of his pro-capitalist contemporaries that capitalism was a system based on commodity production. It had replaced (by supplementing more than by displacing) a system based on relations of personal dependence. Thereby, as Marx and Engels observed in the first part of The Communist Manifesto, capitalism had achieved productive wonders. Their mistake, and the mistake of so many who followed them, was in supposing that capitalism could be replaced in turn by a system of production based on “socialist relations,” a system retaining the productive powers of capitalism while assigning tasks and rewards on the basis of personal criteria, such as criteria of personal need and merit.
I suspect that the deepest root of this belief, a belief remarkably immune to either theory or evidence, is the conviction that an impersonal social system is morally unacceptable. This is a tragically mistaken prejudice. Impersonal does not mean inhumane, as we sometimes carelessly assume. Nonetheless, our only model for the good society seems to be the family, where production is from each according to ability and distribution is to each according to need and merit.
Perhaps our basic mistake is the belief that we must choose between personal, face-to-face societies and impersonal societies. If we accept as fully legitimate the impersonal, rule-coordinated societies in which we participate we are not repudiating or depreciating in any way marriage, the family, intimacy, I-thou relationships, the unique value of the individual, or the power and significance of personal caring and sacrifice. If we were in fact compelled to repudiate all of this in order to enjoy the benefits that only large and hence impersonal societies can provide, we would be foolish to opt for those benefits. In the long run that choice would deprive us of the advantages of both worlds because the moral values essential to the successful operation of a rule-coordinated society can only be nurtured in personal societies.
But we are not forced to choose. We are tempted to choose, it is true, and from both directions. The expanding wealth of opportunities that the impersonal society lays before us makes us progressively less dependent (or so we believe) on particular other persons. As we enlarge our individual freedom and power, we simultaneously declare our continual independence. We view commitments as entanglements and we work toward fuller emancipation. That kind of freedom is really perpetual mobility, and I doubt that it is ultimately compatible with the institutions and virtues of personal community.
But we cannot deal effectively with these problems by turning the economic system into a nuclear family. I am not saying it ought not be done. It cannot be done. Economic decisions, the day-by-day decisions of business executives, will produce chaos and injustice if they are not guided overwhelmingly by attention to profit maximization, under a regime of clear, stable, and essentially impersonal rules. That is a limited conception of business social responsibility, it is true. It is a thoroughly humane conception, however, because it is limited to human possibilities. If we were gods who possessed all knowledge, we might be able to pursue the good society more directly. But we are not gods. It is not irresponsible to admit that fact and to live together in a manner consistent with our common humanity.
An Economic Perspective on Illegal Drugs*
Think how many more muggings there would be if muggees sought the experience as eagerly as muggers do! That’s roughly the situation today with the trade in illegal drugs. The law is a weak deterrent because the absence of a self-identified victim drastically lowers the probability of apprehension, conviction and eventual punishment.
Our legislators have responded by adjusting the other factor in the formula for deterrence: severity of punishment. Since twenty lashes if convicted when the probability of conviction is only 5 percent will have about the same deterrent effect as two lashes when the probability of conviction is 50 percent, legislators have increased the penalties to compensate for the ineffectiveness of enforcement. But they have not done so in an even-handed way. Draconian penalties have been legislated only for suppliers, not for demanders.
One can usefully think of the penalty as a kind of tax on a criminal transaction. If the penalty for selling one unit of a drug is a $1,000 fine and the probability of having to pay the fine is 10 percent, then the penalty raises the cost of supplying the drug by $100 per unit. That is how laws imposing severe penalties on sellers, while only slapping the wrist of buyers, manage to deter use. In the jargon of economics, the law will reduce the quantity demanded (by raising the price), without reducing the demand itself. However, this approach has had some disturbing consequences that surely weren’t intended.
First of all, it’s not the objective penalty that increases the cost of supplying drugs, but the subjective weight prospective drug suppliers attach to the penalty. The possibility of ten years in prison will terrify conventional folk but will mean relatively little to someone who “doesn’t give a rip.” People who think of themselves as invulnerable, who believe in seizing the moment and letting the future take care of itself, will heavily discount the penalties with which the law threatens drug sellers. They will consequently be low-cost suppliers with the competitive advantage that this confers in the business of supplying illegal drugs.
What our laws have done, in conjunction with the processes of competition, is eliminate the profit from the illegal drug trade except for people who display very limited concern for their own future, for other people, or for the laws of the land. These people gradually come to dominate the business. That’s what happened between 1919 and 1933 when the United States tried to prohibit the consumption of alcoholic beverages by threatening suppliers without seriously threatening demanders. The demand remaining strong, huge potential profits continued to exist for those who were able to satisfy that demand at a low enough cost. Need I add that low-cost providers of illegal services are generally dangerous people to have in the neighborhood?
I have treated a legal penalty as if it were a tax. In a very important respect, however, it’s quite unlike a tax. Suppliers who pay their taxes are entitled to the full protection of the law. That’s not the case with suppliers whose costs take the form of criminal penalties. The police and the courts are not available to enforce contracts in business transactions that entail illegal trade. Enforcement of contracts must be entirely private. This implies that people who have special skills in the area of private contract enforcement—those who aren’t squeamish about mayhem and murder, for example—will have a comparative advantage in the business of selling illegal drugs. This is another reason for expecting the competitive process to gradually weed out all others and leave the business of supplying illegal drugs concentrated in the hands of persons predisposed toward violence.
We mustn’t speak harshly of all drug suppliers. There is one category of “nice guys” which also has a comparative advantage in the business, namely juveniles. The objective risk and hence the cost of doing business in the drug trade is considerably lower for juveniles than it is for adults because the law is so much more lenient in dealing out punishment to juvenile offenders. This is why they are so actively recruited into the business. Another important but unintended effect of current legal policies, then, is strong pressure upon juveniles to enter a business and social world filled with so many threats to their future: an arrest record, addiction, neglect of their education, and early, violent death.
The law sets itself an imposing task when it attempts to reduce the quantity demanded without reducing the demand. (Educational programs attempt to reduce demand, of course. But does anyone still take them seriously?) A strong demand will almost inevitably generate its own supply, and attempts to restrict that supply through threats directed against suppliers will produce powerful criminal gangs to supply drugs to those who want them and who are willing to pay the price. That price won’t even be very high if the threats are not credible.
The task would be less imposing in a less free society. It is usually possible to punish more of the guilty by being willing to punish more of the innocent. Local governments are beginning to hold the owners of buildings responsible for the illegal drug transactions that occur on their property, even when the owners have no effective way to prevent the activity, and despite the fact that the law itself sometimes prevents the owner from evicting drug traffickers. The property of law-abiding citizens has been seized, condemned and destroyed—essentially because the owners, with their limited resources, were unable to do what the official representatives of society could not do with far greater resources. This practice probably interferes modestly with the flow of drugs.
If we are willing to impose high enough costs on everyone who enters or brings goods into this country, we can probably reduce somewhat the flow of cocaine from South America. We have already experimented with “intercept” operations that managed to raise slightly the street price of contraband drugs at the cost of long delays for every honest citizen attempting to cross the U.S.-Mexican border. Customs officials have also begun to inflict heavy costs on selected importers by delaying and damaging shipments in their search for smuggled drugs. And we have done a remarkable job of tearing Colombia apart by intervening in that country to prevent its citizens from supplying a commodity for which our citizens are willing to pay. All these measures have their effects: huge violations of liberty and fairness and small reductions in the supply of drugs from outside our borders—reductions that can probably be made up quickly through increased production of wholly domestic methamphetamines.
What is it that prompts us to threaten suppliers with everything short of decapitation while refusing to legislate significant penalties on demanders? Is it because so many voters and politicians are themselves at least occasional users of illegal drugs? Is it because we see users as weak and helpless victims? Or is it because, as a basically liberal society, we are reluctant to punish people for behavior that principally damages themselves?
The last possibility suggests a new direction in which policy might try moving. Suppose we committed ourselves to the position that all adult persons have the legal right to mess up their own lives as long as they do not let the costs spill over onto others? They would be legally entitled to purchase and use marijuana, heroin, cocaine, methamphetamines or alcohol but would have no right to impose the costs of their altered mind states on other people who had not consented to bear those costs. Costs imposed on others without their consent are known in economics as negative externalities. The solution to the problem of negative externalities lies in turning the costs fully back upon those whose actions generate them.
What are some of the negative externalities generated by drug use that are clearly illegitimate impositions on others? Criminal behavior is one. Operating a motor vehicle in a drug-impaired state is another. Incompetent performance of tasks for which someone else is paying ought to qualify. And what about using taxpayer-funded medical care services for the treatment of conditions caused by the use of recreational drugs?
Suppose we conditioned bail, probation and parole upon the passing of regular drug tests? (You lose your right to an altered state of consciousness when you commit crimes against other citizens.) Suppose we denied the privilege of operating a motor vehicle to anyone who refused consent to a system for the random drug (including alcohol) testing of motorists? (We would first have to agree that no one has a constitutional right to propel a lethal object through crowds of fellow citizens; it’s a privilege to be granted only to those who earn it.) Suppose we allowed all employers to establish their own employment criteria with respect to drug use and to adopt the means they deemed most effective for monitoring these criteria? (Remember that tough criteria will be costly to any employer because they will contract the available pool of eligible employees.) Suppose we declared that those who impair both their health and their ability to earn income with which to pay for medical care through their use of recreational drugs have no right to taxpayer-funded medical care? (If this is too extreme, we could at least ask whether the promise of free rehabilitation programs doesn’t tempt some people into risky experiments.)
None of these propositions provides a solution to the drug problem, which has no “solution,” in any event, because it is not a single or simple problem. This essay is simply a suggestion for looking at what we are doing in a somewhat different way. Perhaps it offers a middle ground on which those who want to decriminalize drug use and those who want to intensify the war on drugs can meet to converse.
Economics, Ethics, and Ecology*
How much is enough? Are the costs too high to justify the benefits? As chapter 1 points out, we cannot ignore these questions if we want to be responsible guardians of the environment. They are ethical as well as economic questions.
During most of this century, economists who chose to write or talk publicly about ethics risked the contempt of their colleagues. The standard objection to mixing economics and ethics contained two arguments. One was that ethics should not be brought into economics classrooms, textbooks, or journals because economics is a science. As such it is in principle independent of any ethical or value judgments, and the progress and well-being of the science require that it be kept clean and clear of all corrupting admixtures. The objective truths of economic science would be contaminated if they were linked in any way to the arbitrary pronouncements of ethics.
Ethics, according to the orthodox dogma, was entirely arbitrary, a matter of subjective personal preference. That was the second argument. Ethical assertions rest upon value judgments, which, unlike factual judgments, cannot be true or false. Since there is no way to test ethical assertions, economic scientists should not touch them in the course of their professional work.
Do Economics and Ethics Mix?
This position would appear to be mistaken on both counts. Taking the latter argument first, we do not in practice behave as if our ethical judgments were nothing but subjective preferences that cannot be tested. What we actually do in almost all cases of ethical disagreement, at least when the disagreement is important enough to bother about, is discuss it. We give reasons, predict consequences, suggest principles, point to experience, argue for logical connections, compare alternatives. Economic science can be useful in such a process, especially when our ethical disagreements have to do with the operation of economic systems.
Of course, there is no ultimate foundation for ethical or value judgments that everyone is compelled to accept. But there is no ultimate foundation that everyone must accept for any other kind of proposition, either, including the propositions put forward in the name of science. That is the fatal flaw in the other half of economists’ traditional argument against mixing economics and ethics. Economic research always employs presuppositions, and some of these presuppositions will almost inevitably have ethical implications. Those who claim to be engaging in value-free economic analysis are simply unaware of all the subtle ways in which values influence economic inquiry.
The result of all this is that economists can now discuss ecology and ethics in public without losing their licenses. A good place to begin is with the concept of efficiency, a concept dear to the heart of most economists and usually central to any policy analyses they construct.
The Subjective Nature of Efficiency
The crucial fact about efficiency, although one widely ignored by economists, is that at its core it is fundamentally and inescapably an evaluative concept. There is no such thing as technical efficiency, an efficiency that is independent of subjective valuations. Efficiency refers to the relationship between ends and means. One process is more efficient than another when it achieves a given end with less means, or uses given means to achieve more ends, or does some of both. From a purely technical point of view, however, every process is exactly as efficient as every other process. The ratio of output or ends to input or means is necessarily unity from a technical point of view, if physics is correct in its claim that matter-energy can be neither created nor destroyed. Even when we do not realize that we are doing it, we always attach value to the ends and the means when we are trying to assess the efficiency of alternative procedures. The engineer who says that one engine is more efficient than another because it does more work with a given amount of fuel really means that it does more useful work, work that some party values.
Since the variables in any calculation of efficiency are valuations, not physical quantities, the question immediately arises of whose valuations are to count. I like to present my students with a multiple choice question before introducing them to the concept of efficiency: “Which is the most efficient way for a suburbanite to commute to work in the downtown area?” I give them a wide range of options: single-occupant passenger vehicle, car pool, bus, bicycle, on foot, hitchhiking. One option I always include is “In solemn procession, carrying candles and chanting psalms,” and another is “Whatever way the commuter chooses.” The point I want to dramatize is that, if the values to be served are the values of the individual commuter, the most efficient way to commute has to be the way that each commuter chooses. The commuter assigns values to all the inputs and outputs, including the values that decide whether a variable such as physical effort is an input (pain) or an output (exhilaration), weights them all according to a subjective calculus (which may well contain substantial amounts of concern for other persons), places the result in context (“Is it raining?” “Will I have a chance to jog when I get home tonight?” “Do I have a cold?” “What are the most pressing demands upon my time at the moment?”), and then chooses, almost surely while recognizing that it is not efficient to spend too much time worrying about how to maximize efficiency.
It follows that someone who tells suburbanites they are behaving inefficiently when they commute to work all alone in their cars is mistaken. If it were inefficient, they would not do it. The fact that they choose to do it is irrefutable evidence that, for them, it is efficient. What such critics may mean (assuming they aren’t just saying that their own values are different from those of the commuters) is that the suburbanites are paying insufficient attention to the costs that their decisions impose on one another and on noncommuters. Alternatively, the critics might mean that they can imagine a differently organized world in which people would not choose to commute to work each day in single-occupant passenger vehicles. Whatever the critic means, efficiency does not seem to be the relevant concept.
Why Does Efficiency Matter?
According to the conventional understanding of the concept among economists, efficiency is maximized when net value is maximized, which means when the difference between the value of benefits and the value of costs is at a maximum. Inputs or means are the costs; outputs or ends are the benefits. Efficiency so defined is an appropriate goal for social policy because it expands the range of possibilities. It enables us to obtain more of what we want without having to give up anything else that we also want. The opposite of efficiency is waste, and our moral intuitions tell us that waste is inherently reprehensible. It deprives us of resources that we could otherwise use for worthy purposes and represents a kind of ingratitude for what we have received. That is why everyone will agree that the first step in balancing the budget—any budget, but especially the government budget—is the elimination of waste.
The problem is that when we begin to talk about efficiency from the standpoint of society, we have no common denominator in terms of which we can compare the costs and benefits of different people. If we want to insist that individuals maximize—as many economists insist—then the single individual could be said to maximize utility. When we are talking about more than one person, however, utility fails to provide a workable common denominator, because we have no way to compare one person’s utility gain with the utility loss of another.
Economists usually dodge this difficulty by using the monetary values of costs and benefits. Thus most economists would say that protective tariffs are almost always inefficient because the increase in monetary wealth they create for those who benefit from the tariffs is characteristically less than the decrease in the monetary wealth of those who lose from the tariffs. Monetary value, or what people are willing to pay, provides a common denominator that allows us to aggregate and compare the benefits and the costs of different people. Sometimes this is expressed by saying that a change is efficient if the benefits to those who gain are sufficient for the gainers to purchase the consent of those who lose and still have something left over for themselves.
All of this depends, however, on the conditions from which we begin. The set of outcomes that is “most efficient” in one social context might be grossly inefficient under a different system of laws, customs, and property rights. The upshot of the matter is that the concept of efficiency is of very limited use when we want to resolve disagreements about the proper use of resources—including disagreements over environmental policy—because such disagreements are typically disagreements over what the rules of the game ought to be.
What Are We Arguing About?
The situation is further complicated by the fact that the contending parties often cannot even agree on what the rules are about which they are disagreeing. Consider, for example, recent controversies over the trading of rights to emit harmful substances into the air. Imagine the following dialogue between an efficiency-loving economist and a “typical” environmentalist:
“I understand that you want to reduce electrical utilities’ emissions of sulfur dioxide,” the economist says to the environmentalist. “What’s your goal?”
“Cut those emissions in half,” the environmentalist replies.
“All right,” says the economist. “Here’s what you do. First, assign each utility the legal right to emit, after whatever target date you choose, only 50 percent of the amount of sulfur dioxide being emitted currently. Then allow those rights to be traded. You will thereby achieve your goal at the lowest possible cost. Net value—taking your target as a given—will be maximized. We shall have achieved your environmental goal in the most efficient way.”
The economist is predicting in this case that the lowest-cost emissions reducers, the ones with a comparative advantage in emissions reduction, will specialize in producing cleaner air. This will occur because the utilities able to reduce their emissions at very low costs will find it profitable to reduce them by more than 50 percent in order to sell their unused rights to those utilities whose costs of reducing emissions are higher and that will therefore want to purchase rights to continue their higher levels of emissions. Economists proudly refer to such arrangements as “using the market to serve the environment.” They are somewhat hurt, as well as puzzled, when environmentalists spurn their offers of assistance and refer contemptuously to tradable emissions rights as “licenses to pollute.”
Costs and Moral Wrongs
Economists think of sulfur dioxide (or any other) emissions as costs, costs of achieving the much-desired benefit of usable electricity. The economist sees nothing immoral about the generation of costs in the pursuit of socially desirable goods.
Many environmentalists see it quite differently. They view sulfur dioxide emissions as wrongs. In an imperfect world, they will concede, wrongs can never be completely eliminated. But wrongs should never be condoned. These environmentalists might compare sulfur dioxide emissions to muggings. We could reduce the number of muggings that occur on our city streets to almost any number we chose if we were willing to pay for a sufficient quantity of police officers, but we accept some muggings, because “we can’t afford more police officers.” (The economist would prefer to say that, at the margin, we have more valuable uses for the police officers; but this is a quibble.) When we decide not to hire more police officers and thereby implicitly to “accept” a certain number of muggings, we do not thereby condone any single mugging! We do not “license” the muggers whose crimes we are in effect unwilling to prevent because the cost of doing so would be too high.
Similarly, we may decide to let electrical utilities put some sulfur dioxide into the air because it would cost too much to stop them completely. But we do not want to approve those emissions. We certainly do not want to grant the utilities a right to emit sulfur dioxide. If any utility finds itself able to reduce its emissions below the target level, it should do so. It should most emphatically not then be allowed to authorize some other utility to emit the sulfur dioxide that it has stopped emitting by selling a “right to pollute.”
The issue we must decide, therefore, is whether the emission of sulfur dioxide by electrical utilities is an immoral or only a costly activity. Let’s look at the matter more closely.
Can There Be a Right to Pollute?
One trouble with the argument just given is that the principle behind it cannot be consistently applied. If every action that contributes to what we call air pollution is morally wrong, then it is wrong to breathe, because the everyday act of breathing emits carbon dioxide and so contributes to global warming. I don’t know of anyone who thinks that exhaling is a wrongful act.
We can push this argument further. All of us want certain goods whose provision will necessarily entail the burning of fossil fuels and other acts that lower air quality. Is it not mere self-deception or hypocrisy to will the end and refuse to concede that we are willing the means? Is it not better to be clear and explicit about what we are doing? Do we really want to say that it is legally and morally acceptable to turn on your home furnace on a cold day but wrong to contribute to global warming through the burning of fossil fuels?
The fact is that we do concede rights to emit undesirable substances into the atmosphere. My favorite example is the emissions test form I must submit if I want to renew the license on my automobile. It states explicitly that I am legally and, I presume, morally, authorized to emit specific quantities of hydrocarbons and carbon monoxide when driving. While I am not allowed to sell my unused emission rights, I have without question been granted a “right to pollute.” I doubt that many motorists think of themselves as engaged in wrongful acts when they exercise such rights.
Open and authorized emission of sulfur dioxide is a costly act. Mugging, by contrast, is a criminal act. They are not the same. The person who emerges from jail and says, “I have paid for my crime,” is employing a misleading metaphor. You are not authorized to commit a crime if you are willing to go to jail for it or to pay the fine established by law. Someone who treats a fine as if it were a mere fee is likely to discover that the “fee” increases exponentially with consumption. On the other hand, if the generation of electricity in the midwestern United States is a socially desirable activity, as it surely is, then sulfur dioxide emissions should be viewed as costs, not as crimes. The owners or managers of a utility should indeed be able to say, “We have a right to emit these quantities of sulfur dioxide.”
This does not settle the issue of tradable emission rights, however. Steven Kelman has made the important point that a law which grants explicit rights to pollute—and the trading of rights will not occur in the absence of explicit, well-defined rights—interferes with consciousness-raising efforts (Kelman 1981). Some environmentalists will argue that the advantages of a system for trading emission rights are more than offset by the negative political consequences of granting that anything less than zero emissions is acceptable.
The economist has no conclusive rejoinder to such an argument, because it exposes a conflict between incommensurable goods. The economist wants to achieve given environmental targets at the lowest cost in other goods forgone. “At least everyone favors greater efficiency,” says the economist who is looking for a neutral vantage point from which to begin. “Whatever our goals, we all want to achieve them at the lowest cost.” Economists are completely baffled by environmentalists who refuse to specify any goals, because their objective is cleaner air without any relaxation of the pressure to do still better. Efficiency is for them a mixed good insofar as it pushes air pollution issues lower down on the political agenda.
Exclusive concentration on issues of efficiency does not, as it turns out, enable economists to deal constructively with environmental issues while avoiding all normative questions. One might even ask whether the concept of efficiency does any useful work at all. Nobody is actually opposed to efficiency. Moreover, the issue in dispute never turns out to be, “What is efficient?” but rather, “Whose valuations should enter our benefit-cost calculations?” Is there any point at all in asking whether it is more “efficient” to leave a section of national forest standing or to turn it into lumber? We cannot determine which alternative would have the largest net value without first deciding whose valuations we are going to count. That is a decision about who should have which property rights and about the processes through which we are going to arrive at decisions affecting the evolution of the natural environment. It is not a question about efficiency.
My doubts about the usefulness of the efficiency concept are not doubts about the usefulness of economic analysis. They are doubts about the usefulness of a certain kind of economic analysis, one that tries to aggregate different people’s benefits and costs in order to compare the totals. The type of economic analysis that I find useful in the examination of environmental issues and other problems of public policy is one that pays at least as much attention to processes as to outcomes, and that tries to predict or explain the consequences of alternative laws and institutions, without ever attempting the kind of quantitative measurement and summing-up required by the economist’s standard judgments of efficiency.
Recycling and Dumping: A Case Study
The current debate in our society about recycling as an alternative to solid-waste disposal nicely illustrates both the usefulness and the limitations of economic analysis in disputes over environmental policy. The rising cost of solid-waste disposal in the 1980s prompted many cities to promote recycling programs that would reduce the volume of solid waste. The programs made eminent sense, at least at the outset. Why should city governments pay large sums to bury old newspapers that, if properly collected, could be sold for a profit? Using a mixture of financial incentives, ecological appeals, and threats, a growing number of cities have in the past few years induced their residents to recycle large proportions of the solid waste that formerly had to be trucked to landfills for burial.
When recycling saves money, everyone is happy, from the environmentally insensitive boor who sees no further than his checking account to the environmental activist who with Wordsworth’s “high Heaven” totally “rejects the lore of nicely calculated less and more.” It is now becoming clear, however, that the rising cost of solid-waste disposal in the 1980s was due to a lack of political imagination. There are plenty of places in the United States to bury, at quite tolerable costs, the solid waste that Americans regularly generate. Clark Wiseman, a visiting fellow at Resources for the Future, has calculated that all the municipal solid waste generated over the course of the next 1,000 years would fit in a square hole 44 miles wide on each side and 120 feet deep. That may seem like a big hole to people living in the eastern United States; but it would scarcely be noticed in many of the western states. The problem is not a scarcity of land for fills but a scarcity of people willing to have landfills in their neighborhood.
To an economist the solution is obvious: pay the surrounding community to accept solid waste, just as we pay people in other areas of life to accept costs for the benefit of others. That is now beginning to be done. Early efforts are already demonstrating that the cost of constructing safe and environmentally sound landfills, of transporting waste to these sites, and of fully compensating people who are adversely affected by the landfill is far less than the cost of many of the recycling programs that federal, state, and local governments have either already instituted or are contemplating.
Many of the initiatives that advocates of recycling are pushing will have very large hidden costs. For example, have those who are eager to ban disposable diapers, because they use up space in landfills, thought about all the costs of the alternative? The effects on our water supply of laundering cloth diapers? The impact on urban air quality of all the diaper trucks that would return to circulation? The discomfort and diaper rash of the babies who are kept so much drier overnight by disposable diapers? The infections that would spread more readily through child-care centers? If the people who want to use disposable diapers are willing to pay the full cost of dumping them in landfills—through, for example, a disposal charge included in the price—why should they be prohibited from exercising their preference for disposable over cloth diapers?
The economist conceives of social problems as the product of systems in which, for some reason, people are either not compelled to bear the full cost of the burdens they impose on others or are unable to collect adequate compensation for the benefits to others that their activities will generate. The economist’s first move is therefore to see whether some low cost way can be found to assign the costs and the benefits to those who are responsible for them. If people who want to generate solid waste are not imposing burdens on anyone but themselves and others whom they are compensating appropriately, there is no problem.
Most environmentalists don’t see matters quite in that way, and some don’t see it that way at all. They think of recycling more as a moral duty than as an effort to minimize costs. The process of searching for products sold without elaborate wrapping; of separating junk mail, facial tissues, and newspapers; of sorting cans, bottles, and plastic containers; of putting all these things out at the curb in neat piles each week—this is a ritual of dedication through which we ought to go willingly. It is an educational, consciousness-raising process, that gradually changes the “tastes and preferences” beyond which economists refuse to go, even when those tastes and preferences are increasingly generating environmental problems. Recycling may cost more than it saves in the short run; but in the long run, when values have been transformed, it could well prove to be efficient from even the economist’s narrow perspective. In some ways the application of benefit-cost analysis to a household’s recycling efforts is akin to using time-and-motion studies to appraise the act of lovemaking.
Pursuing Justice Rather than Efficiency
What would happen if economists abandoned their preoccupation with efficiency and talked openly about justice? Since judgments about efficiency presuppose judgments as to who shall have which rights, economists who employ efficiency criteria are implicitly making use of a theory of rights. Does economics have anything useful to say about the rights that people ought to have?
One thing economists can say with some confidence is that clear and stable rights promote more effective cooperation than rights which are vague and subject to unpredictable alteration. Given that voluntary exchange increases the value of resources and that clear and stable property rights (and other “rules of the game”) facilitate voluntary exchange, economists can construct a strong argument in favor of clear and stable property rights. In doing so, they are also supporting a particular conception of justice, one associated with what has come to be known as “the rule of law.”1
“Unconstitutional by reason of vagueness” is a sound judicial principle for assessing legislation, because vague laws grant arbitrary power to enforcement authorities. The liberty of the citizen disappears in the presence of arbitrary governmental power. Unclear laws constitute a fundamental violation of the principles of justice for anyone who believes that arbitrary government is the essence of political injustice. It follows that the government is violating the rules of justice when it obscures people’s rights and makes it difficult, if not impossible, for people to know what they may and may not legally do.
It is also violating the rules of justice when it arbitrarily decrees that an activity which had previously been lawful and protected is now illegal. The emphasis here is again on the arbitrary nature of the government’s actions. An arbitrary action is one dependent solely on the will of the actor, rather than one that is determined or at least constrained by principles laid down and known in advance. While ex post facto legislation cannot in practice be avoided completely (an absolute prohibition of rules changes that penalize actions already taken would bar all new legislation), the avoidance of such legislation is a fundamental tenet in the American legal and political tradition.
A regime of clear and stable property rights, as it turns out, will be supportive of both efficiency and justice. If we pursue justice by establishing the rule of law, efficiency will largely take care of itself. This is, of course, a limited conception of justice: clear and stable property rights and other rules of the game. But it is not nearly so limited as one might at first suppose. It is a conception of justice deeply rooted in the American political tradition and one with extensive and important implications for environmental policy. I want to develop, apply, and defend it briefly. Those three activities—development, application, and defense—are interrelated. Showing the applicability of a theory defends it, and the process of defending the theory against criticism results in its development.
How Do We Begin Talking About Justice?
It may help the reader to realize at the outset how unsympathetic the writer is to all forms of foundationalism. A synonym for foundationalism is fundamentalism, a word familiar to most of us in another context. Religious fundamentalists have historically maintained that there are a few fundamental doctrines upon which all other doctrines can be constructed. If these fundamental doctrines are not affirmed, they maintain, the system collapses.
The same kind of fundamentalism can often be found in the sciences. Scientific fundamentalists also insist upon the acceptance of certain basic dogmas, such as “the scientific method,” the nature of causation, the non-existence of particular entities, or—to take a dogma from economics—the consistency of preferences. While I have the highest respect for heuristic postulates, I acknowledge no fundamental dogmas. I shall therefore not take the approach of beginning with the foundations. I have never found it to be true in political or moral discourse that we proceed most effectively if we begin with solid foundations. The best place to begin is with the questions that seem most interesting or important, or the ones on which progress seems most likely, or the ones that we need to settle to take the next step. And when we have finished, the whole will often be more than the sum of its parts.
The Importance of Property Rights
I have already suggested that disagreements about environmental policy can usefully be viewed as disagreements about property rights. They are disagreements about the property rights of human beings, it must be added, even if we should finally decide to grant legal rights to natural objects. As Christopher Stone observed in his seminal law review article “Should Trees Have Standing?” (Stone 1974), any legal rights assigned to natural objects would have to be asserted, so far as we can presently ascertain, by human beings acting as “guardians.” Moreover, any dispute about the rights of trees, streams, or mountains becomes at some point a dispute about the rights and obligations of human beings. So I think we beg no important question by saying that environmental disagreements are disagreements about the property rights of human beings.
It has long been complained by Marxists and other radical critics of orthodox economics that economists, or at least bourgeois economists, “take property rights for granted.” In one sense this is no longer true. The critics have not been keeping up. Bourgeois economists have in fact been diligently examining the origins and evolution of property rights systems and inquiring about the prerequisites and consequences of alternative systems for the past 30 years or so. There is a better response to the radicals’ complaint: “Of course! What else should we do? We take existing property rights for granted almost all the time.”
You do not upon leaving a restaurant ask whether the cashier is authorized by the owner to collect payment for the meal. You do not then inquire to find out whether the owner’s title is in order. Nor do you refuse to pay until you have been assured that the system which validates the owner’s legal title is itself valid against the claims of Native Americans. In some situations these might be legitimate questions to ask. But for the most part we simply take generally accepted property rights for granted. In part we do so to avoid wasting our time. But we also take for granted generally accepted property rights because it would be unfair not to do so.
We all make decisions, committing ourselves through our actions, on the basis of the rights we think we hold. Our opinions about our rights are continually monitored and confirmed for us by the ongoing actions of others in society, who acknowledge through their transactions with us that we do indeed own the resources that we are regularly controlling, allocating, transforming, or distributing. It is unfair for those who have encouraged us in our commitments by going along with our claims to declare suddenly and arbitrarily that we are not entitled to the rights we have long been exercising.
The key concept is unfair or unjust. I want to direct your attention not to justice but to injustice. When I ask, “What’s fair?” you can almost hear the skeptical tone and see the cynical shrug: “Who’s to say?” But we are much more ready to give definite answers when we are asked, “What’s unfair?” There are some very important differences between “striving for justice” and “striving to correct injustices.” The former is presumptuous and dangerous, at least insofar as it means anything more than trying to correct injustices. The only defensible way to pursue justice in the political realm, I submit, is to work at eliminating recognized injustices.
Although we cannot begin to say what justice would require for each person in our nation, Americans agree substantially and extensively about what’s unfair or unjust. Stated most simply, it is violating the rules.
I am here making an empirical claim, one that you should test against your own experience. My claim is that Americans overwhelmingly agree that injustice is done whenever persons are not treated in accordance with the rules that are supposed to apply in the situation. I test this proposition regularly, for example, when students come to me asking for some kind of special treatment. (I teach a lot of very large classes.) I always begin by pointing to the rules: the course syllabus, the university regulations, the other known and accepted rules of the game. And I ask them whether the exception for which they are asking would be within those rules. It would be unfair to grant an exception that violates the rules by, for example, giving this particular student an advantage that cannot be granted to everyone else who is similarly situated. And my students agree. I have regularly found that students arrive at the same conclusion I reach when they are asked to decide whether the granting of their request would be unfair to others.
An interesting book appeared about a decade ago, written by a professor of politics named Jennifer Hochschild, who wondered why the poor in the United States did not give effective political support to the downward redistribution of wealth. The book, titled What’s Fair? American Beliefs About Distributive Justice, was based on in-depth, open-ended interviews with 28 working adults who had been carefully chosen to represent both high- and low-income white residents of New Haven, Connecticut. Hochschild concluded from her study that Americans fail to support downward redistribution because they are confused, a state in which they are encouraged to remain by corporations and other components of “the hegemonic process.” But I was more impressed by the actual reports of her interviews than by her conclusions, which seemed to me to fly frequently in the face of what her respondents had actually said.2 For the most part they were saying that inequality, even enormous inequality, in the distribution of income was not in itself unfair. It was unfair only if it had been gained by cheating. By breaking the rules, in other words.
Does Agreement Make It So?
One could still ask about the significance of the fact (assuming it is a fact) that Americans generally agree on what violates the principle of fairness. Does mere agreement establish the truth of the matter? Was our treatment of women “not unfair” during all those years when almost everyone agreed that a woman’s place was in the home? Is the treatment of women in Iran today “not unfair” if almost no one in Iran considers it unfair? Was racial slavery “not unfair” in the United States at the time when the Constitution was approved?
My response is that I don’t know how we can talk sensibly and usefully about justice and fairness independently of specific cultural contexts. As what I have called “the rules of the game” evolve over time, so do our generally accepted notions of what is unfair or unjust. We can look back and claim that we have made progress with respect to justice, but we always do so from the perspective of our current values, institutions, and practices. We can also compare our culture with other contemporary cultures and make comparative judgments, but we ought always to recognize that we do so within the limitations of our knowledge and experience, and that injustice cannot be eliminated from any society until the institutions that permit it are in place. (I have long found the propensity to condemn other cultures and our own ancestors a pointless exercise at best, and at its worst a technique for justifying self-righteous obtuseness.)
The question about the relativity of standards is an important one, however, because many environmentalists are now objecting precisely to the reigning “rules of the game.” Just as we once enslaved Africans and even more recently denied women their basic rights, and did so with a good conscience, so we are now with a good conscience trampling on the rights of nonhuman nature. We cannot appeal to any American consensus, the environmentalists say, to find out whether our treatment of nonhuman nature is unfair, because there is no consensus, and because the closest thing we have to a consensus is woefully inappropriate.
These objections deserve thoughtful attention. But I want to postpone any attempt at discussing them until we have dealt more adequately with the issue of justice and injustice in our dealings with one another.
Promises, Rights, and Injustices
A crucial element in our concept of social ethics—our obligations to one another as human beings—is promise. Consider what it is we are objecting to when we complain about “unethical behavior” and what we are taking for granted. We are objecting because others have not done what they promised to do, either implicitly or explicitly. They have violated the agreed-upon rules. And that is simply not fair. If that is not the foundation of all social ethics in our society, it is certainly the dominant principle. The implications for environmental legislation are extensive.
To begin with, the principle calls into question the command-and-control approach to protecting the environment. The Annual Report of the Council of Economic Advisors for 1990 defined command-and-control regulation as “a system of administrative or statutory rules that requires the use of specific control devices on classes of selected pollution sources or applies admission standards to narrowly defined pollution sources” (Economic Report of the President 1990, 189-91). At first glance there would seem to be no ethical objection to such a system. In practice, however, the command-and-control approach will almost inevitably substitute arbitrary decisions for the rule of law. Fairness requires that the rules of the game be laid down in advance and that the rules treat those who are similarly situated in similar ways. This ideal is unlikely to be realized when the regulatory authorities are allowed or even commanded to operate on a case-by-case basis. Command-and-control systems provide no incentive to design a set of generally applicable rules.
Trying to protect the environment by requiring environmental impact statements is another approach that is ethically hard to defend for the same kind of reason. The law mandating the filing of environmental impact statements (EIS) arbitrarily and, therefore, unfairly reduces the property rights of the party that wants to act. It does so by allowing projects to be challenged on the grounds that the EIS is incomplete when, as everyone knows, all environmental impact statements are necessarily incomplete. In practice the EIS requirement enables determined parties to hold up projects indefinitely until the project developers agree to pay ransom or decide to abandon their project. It should be added that members of Congress were evading their ethical obligations when they mandated environmental impact statements as a way of satisfying the environmentalist lobby without offending any other specific interests. Bad laws often originate in this way.
Environmental regulations that impose politically intolerable costs are also ethically indefensible because they will not be uniformly enforced. It is unfair to impose costly requirements and then, after some have made substantial investments to meet the requirements, to suspend them for everyone else because it turns out to cost too much. Not only does that create incentives not to cooperate; it also discriminates against those who have been the most cooperative.
Allowing environmental regulations to be shaped by a political process that is dominated by special interests is another ethically indefensible procedure. While this is, of course, the only political process we have, we can at least recognize that environmentalists who object to the political influence of special interests are themselves often special interests, sometimes with no strong regard for the principles of fair play. The Natural Resources Defense Council, 60 Minutes’ Ed Bradley, and the others who orchestrated the national hysteria over Alar showed no concern for the apple growers who had to bear the cost of their publicity-seeking. This was inexcusably unfair behavior that was undertaken to promote the institutional interests of the NRDC and the CBS network.
Finally, there exists a strong ethical case for reviving and applying once again the constitutional prohibitions against uncompensated takings. When we discover that concern for the environment requires a change in property rights, the necessity of paying compensation acts both to avoid injustice and to assure that this really is a public interest requirement, not a special interest action. Rezoning, for example, is an unfair way to “preserve public amenities.” If the public interest requires that a particular urban hillside be left as a greenbelt, rather than be developed, the public should not be allowed to secure its amenity at the expense of those who own the land by rezoning the land to prohibit development. Fundamental fairness requires that the public purchase the development rights from the owner.3
Observations on Conservatism
It cannot have escaped the notice of even the most sympathetic reader that all these implications of the fairness principle are profoundly conservative, and that my conception of social ethics privileges the status quo. I am not bothered by that. If social justice requires above all else that we honor our promises, then social justice is itself profoundly conservative. Promise-keeping is conservative in that it binds the future to the past. And that is of enormous human importance. When we honor our promises, we help one another to realize in the future the expectations that we have formed on the basis of our past transactions. Promise-keeping facilitates planning, including the formation of those life projects that constitute our individual identity. There is an important sense in which the opposite of conservative is capricious.
As Edmund Burke observed, a society without the means of some change is without the means of its conservation. What was tolerable yesterday and therefore allowed may become intolerable with the passage of time. This would seem to be especially likely in the case of actions that damage the environment.
It must be noted first of all, therefore, that the principle of fairness does permit extensive revisions in the rules of the game. The constraint it imposes is the constraint of compensation for those who thereby become the victims of broken promises. Those who have incurred substantial unrecoverable costs by investing in good faith reliance on the laws of the land should not be made to bear a heavily disproportionate share of the costs of changes designed to benefit everyone.
“But polluters don’t deserve compensation,” someone responds indignantly, “any more than slave owners deserved compensation after the Civil War.”
I would ask in response whether the offer of compensation (prior to 1860, of course) might not have been a better route than civil war toward the abolition of slavery. Be that as it may, it is not at all clear that pollution, when explicitly tolerated by law and custom, is a morally reprehensible act. Moreover, when we reflect on the social changes that have produced the environmental movement and the demand for changes in the rules of the game, the case for compensation grows stronger.
One change has been rising private incomes and a consequent increase in the relative value of such public goods as clean air. When we were much poorer, we placed a positive value on discharges from factory smokestacks because they were signs of prosperity. Insofar as rising incomes have increased the demand for a cleaner environment, increased ability to pay for those improvements accompanies the increased demand for them. So we have the ability to pay the compensation that fairness calls for. We cannot plead poverty.
Another factor lending interest and strength to the environmental movement has been dramatic increases in the impact of human activities on the environment—due partly to rising income levels and consequent increases in consumption, partly to new technology, partly to population increases. The implications here for our obligation to provide compensation are less clear. New technology and increased consumption are associated with greater wealth and hence enhanced ability to pay, but population increases present more ambiguous implications. In general, though, there seems to be a strong case for purchasing the environmental improvements we want by compensating the losers. The temptation, of course, is for the most politically adept and influential—who are frequently also the most wealthy—simply to extort the changes they want from their victims.4 The necessity of providing compensation helps to counter this temptation.
Duties and Aspirations
The most interesting and challenging stream nurturing the environmental movement in recent years is the one that has been fed by changes in our moral conceptions. We have begun to develop new perceptions of our moral obligations and of the kinds of entities that are deserving of moral consideration. These changes are raising fundamental questions about the adequacy of our inherited moral traditions. How can we address these questions?
We might begin with a useful distinction made by the legal philosopher Lon L. Fuller between the morality of aspiration and the morality of duty (Fuller 1969, 3-32). The morality of aspiration has to do with the desire for excellence. It is an open-ended pursuit, one whose goals are never fully achieved. A person in the service of the morality of aspiration is always striving for more. The driving force is the desire to realize every potential excellence or virtue. Satisfaction with what one has achieved is in itself an offense against the morality of aspiration.
The morality of duty imposes much more limited demands. Its goals are clear and attainable. Its prescriptions are predominantly negative: “Thou shalt not.” The morality of duty is basic. It may not be particularly inspiring, but it is essential to social order, fundamental to all social relations. Its importance is demonstrated by the fact that it is regularly supported by legal sanctions to secure compliance with its demands.
The justice I have been talking about largely expresses the morality of duty. But the environmental movement is fueled by the morality of aspiration. Direct evidence may be seen in the phenomenon referred to earlier: the unwillingness of environmentalists to become specific about the goals that will satisfy them. They want less pollution, cleaner air, more recycling, less consumption. Environmentalists’ talk about the rights of nature is further evidence that they are serving a morality of aspiration. If nature has rights, where do those rights begin and end? If whales have rights, do other mammals have them, too? Do all animals have rights? And what about other living things, such as plants? What about such nonliving entities as rivers and mountains? It is not my intention to criticize the claim that human beings have duties to the nonhuman world, a claim which I shall subsequently defend. I am only trying to characterize the morality of aspiration and to make the case that the environmental movement is nurtured and informed by a morality of aspiration.
Aspirations and the Morality of Duty
Any good society will contain both a morality (or moralities) of aspiration and a morality of duty. But one component of any defensible morality of aspiration must be commitment to the morality of duty, or what we might call “a passion for justice.” Moral aspirations that ignore duty are a proper object of severe criticism. The man who aspires to help all of humanity, for example, but neglects his duties toward his wife and children is not an admirable figure. Does not the environmental movement sometimes slight the morality of duty?
Environmentalists want us all to live more responsibly, to be more attentive and respectful toward nature, toward that which is given to us independently of our own actions. This aspiration is certainly a part of my own morality. But we do not want to forget that the polis, the human community in which we live, has also been given to us independently of our own actions. Responsible persons are not free to improvise without regard for what has been given—including the legitimate expectations of their fellow citizens. In our efforts to express respect for nonhuman nature and to nurture that respect in others, we may not display contempt for the rights of those human beings among whom we live.
Many features of contemporary political conflicts over environmental issues can be usefully viewed as aspects of a struggle between the morality of aspiration and the morality of duty, in which our duties, including our legislated duties, are being raised over time by our aspirations. Two simple examples of how aspirations generate duties and of aspirations that cannot easily become duties may clarify the argument.
Nondiscrimination on the basis of race in hiring or promoting was an aspiration of many before it became a legal obligation for all. The duty was sufficiently clear (notice its negative character) to make it suitable for legal imposition. The contrast with “affirmative action” is instructive. As the controversy over “quotas” and “rigid goals” has shown, we cannot state the goals of affirmative action programs with sufficient clarity and precision to make affirmative action a duty. Significantly, the duty cannot be stated as a prohibition.
Child abuse provides another example. The moral aspiration to assure a safe haven for children has led to a spate of laws and ordinances that have not worked out as well as we had hoped. For one thing, it turns out that what we want from parents is considerably more than not beating their children. We want something positive. We want parental love and concern. But these are more a matter of aspiration than of duty. Moreover, our attempts to marshal the larger community against child abuse has produced laws imposing positive duties on doctors, ministers, social workers, and child-care providers whose effects have been quite mixed. Protecting someone else’s children against parental abuse cannot be made a clear, definable duty (and therefore a duty that may appropriately be imposed by law) unless we are willing to deny parents any special authority over their children.
Moral aspirations are important! But the moral aspiration to transform moral aspirations into legal duties must be examined with judicious skepticism before we act upon it. To what are we aspiring when we proclaim ourselves dedicated environmentalists?
When an environmental “extremist” says that human beings are not “superior” to animals, or to plants, or to natural objects, I have no immediate argument. Human beings, so far as I can tell, are in fact inferior to elephants, Douglas fir trees, and mountains. I am judging superior and inferior here by the criterion of height. I do so not to be perverse, but to make the point that in much of the debate over these matters the parties are talking past each other. What precisely is the criterion of superiority or inferiority that we have in mind? Is a newborn baby superior to its mother? Not by most of the criteria we could think of. But that does not prevent the child from presenting moral claims upon the mother that overwhelm, in the mother’s own judgment, any moral obligations the child might have toward the mother. If we want to bridge the gulf that is widening between many environmentalists and their opponents, we must think more carefully about what exactly we do and do not want to claim.
Forms of Tyranny
Some of the more extravagant statements of environmentalists ought to be seen first of all as responses to the attitude expressed in a sentence such as this: “A tree in the forest that few or no people can see may still exist in the philosophical sense, but a bloody lot of good it does for anyone.” Or this:
By fulfilling our nature and responsibilities as human beings, we bring meaning and value into the world. . . . [U]nseen and unappreciated, the environment is meaningless. It is but an empty frame, in which we and our works are the picture. From that perspective, environmentalism means sacrificing the picture to spare the frame. (Emphasis added.)
The authors of those statements, whose anonymity I shall protect, are saying explicitly what is implicit in the way many of us have learned to behave: There is no meaning or value in the universe except the meaning or value that human beings experience. But how can we possibly know this? It is sheer dogmatic assertion. What’s worse, it is self-serving dogmatic assertion, and it smacks of tyranny. It is a license to do as we please.
Statements of this sort remind me of Bishop George Berkeley, the eighteenth-century British philosopher who was able to deny the existence of a material world by pointing out that all we really know are our own perceptions. And I wonder why the authors of statements such as the two above don’t go all the way and insist that it is only their own private seeing and appreciating that allows the world to have meaning and value. I think I know the answer to that question. It’s because other human beings would protest such solipsism, and no one is indifferent to the opinions of other human beings. Why is that? Why do we care so much what other human beings think or say about us and our opinions? What gives their opinions so much weight in our calculations when all the rest of nature has no moral significance for us at all?
Jeremy Bentham, no one’s candidate for fuzzy-minded idealist of the year, inserted a disturbing footnote into Chapter XVII of his Introduction to the Principles of Morals and Legislation (Bentham 1948, 310-11):
Under the Gentoo and Mahometan religions, the interests of the rest of the animal creation seem to have met with some attention. Why have they not, universally, with as much as those of human creatures, allowance made for the difference in point of sensibility? Because the laws that are have been the work of mutual fear; a sentiment which the less rational animals have not had the same means as man has of turning to account. . . . The day has been, I grieve to say in many places it is not yet past, in which the greater part of the species, under the denomination of slaves, have been treated by the law exactly upon the same footing as, in England for example, the inferior races of animals are still.
Bentham suggests that we show respect only to what we have learned to fear. That may put the matter too harshly. It would be more accurate to say that we generally learn to show respect only for that which commands our respect. The key fact is that respect cannot be “given.” It has to be “earned” or it is not respect; it is only condescension.
This does not imply that we have no obligations in the matter. Our obligation is to be attentive. No person can earn the respect of another person who is not paying attention. Inattentiveness, of course, is commonly rooted in a lack of respect, which creates a circular bind. Think of the way we “turn off” someone whom we take to be merely babbling. Adults are often inattentive to children because they assume that the child has nothing important to say. Teachers are inattentive to the questions of students whom they do not take seriously. Members of groups with social power often block out the distinctive characteristics of “inferiors” with whom they interact by assuming that “they” are “all the same,” and that this “sameness” does not include the rich inner life that we are aware of in ourselves.
Nature will hardly be able to command the respect of anyone for whom it is an unchallengeable dogma that we human beings bring into the world all value. I have no cure for the disease of inattentiveness, especially since inattentiveness per se is not a disease at all but a condition for any sort of effective action and perhaps for sanity itself. How do we learn to ignore that which deserves no attention while remaining alert to everything that merits our attention? A short excerpt from Aldo Leopold’s Sand County Almanac presents the dilemma (1966, 19-20):
A cardinal, whistling spring to a thaw but later finding himself mistaken, can retrieve his error by resuming his winter silence. A chipmunk, emerging for a sunbath but finding a blizzard, has only to go back to bed. But a migrating goose, staking two hundred miles of black night on the chance of finding a hole in the lake, has no easy chance for retreat. His arrival carries the conviction of a prophet who has burned his bridges.
A March morning is only as drab as he who walks in it without a glance skyward, ear cocked for geese. I once knew an educated lady, banded by Phi Beta Kappa, who told me that she had never heard or seen the geese that twice a year proclaim the revolving seasons to her well-insulated roof. Is education possibly a process of trading awareness for things of lesser worth? The goose who trades his is soon a pile of feathers.
Rights and Duties
I am not now going to argue that nature or even nonhuman animals should have “rights.” Those who argue on behalf of rights for whales and trees risk losing everything by claiming too much. They fail to make an effective case for the duties upon which they really want to insist because they have pinned everything on a weak case for rights. They overlook the fact that, while rights entail duties, duties do not entail rights. For example, I acknowledge a moral duty to make charitable contributions of various kinds; but my acceptance of this obligation creates no rights for any potential beneficiary.
Laws that prohibit cruelty to animals are grounded in the belief that human beings owe certain duties to animals, duties to at least do no needless harm and to minimize suffering. I do not know of anyone who wants to remove all such laws from the books, although I know of many people who would vehemently deny that animals have legal rights. Here is a clear case where duties, even legally enforceable duties, exist and flourish in the absence of anything analogous to human rights. Our enforcement of laws against cruelty to animals reflects our widespread belief that animals suffer in a manner with which we can identify. There is no implication of moral equality in the assertion of a duty toward animals.
Do plants suffer? Most of us don’t seem to think so, at least not in any way that interferes with our pruning them. Does this imply that we have no duties toward plants? Not necessarily; the ability to suffer is not the only characteristic of nonhuman entities that is capable of generating duties toward them. We might have duties toward nonhuman entities that require allowing them to behave in accordance with what we perceive as their nature. We might have a duty not to dam a free-flowing stream, for example, or a duty to remove an obstruction that was causing a plant to grow in a distorted manner, or a duty to keep a wilderness area uncontaminated by machinery.
But are these moral duties? Are they duties toward the nonhuman entities? Or are they mere aesthetic preferences?
Duties, Preferences, and Other Distinctions
I might have a better notion of how to reply if I were more sure of the difference between the moral and the aesthetic, if I knew the grounds of duty, and if I could always distinguish duties from preferences. (Why do I so dislike the word mere?) This is not to say that there are no differences, or that one can be reduced to the other. It is rather a recognition that moral and aesthetic claims often overlap and reinforce one another, perhaps because they have a common ground in the way things fit together, and that we can have strong preferences (aspirations?) toward the fulfillment of our duties. Our duties do not necessarily conflict with our interests, and they will very rarely conflict for those with a strong interest in maintaining their self-respect.
I would particularly want to emphasize the way things fit together, or what we might call appropriateness. In The Theory of Moral Sentiments, Adam Smith pays a great deal of attention to propriety, or appropriateness (Smith 1982). All of Part I, one-sixth of the entire book, is devoted to that topic. We recognize that conduct can be appropriate or inappropriate. By what criteria? I suspect that we often recognize the propriety or impropriety of conduct more easily than we can identify the criteria by which we made the judgment. The concept seems to be closely connected with a sense of creatureliness. I am not the creator of all this; I am not even my own creator. While I do have creative capabilities, they are the capabilities of one who is himself a creature. The world is not mine to do with as I please. I may do much of what I please to do; but what I please to do will not be good—not true and right and lovely—if it is not appropriate to the world that has been given to me.
All this may strike the reader as bordering dangerously on the religious. Yet one need not be at all religiously inclined to agree that none of us has created the world in which we live. The implications of this fact will no doubt be perceived differently by religious people, but the underlying claim is quite similar to the one insisted upon by Richard Rorty, a thoroughly nonreligious philosopher, in his emphasis upon the importance of contingency for the understanding of oneself and one’s world (Rorty 1989, 5):
To say that the world is out there, that it is not our creation, is to say, with common sense, that most things in space and time are the effects of causes which do not include human mental states.
It seems to me that some of the more extreme claims of environmentalists have at least this virtue, that they call our attention to possibilities foreclosed by our attachment to modes of thought that are proving increasingly inadequate. Even their intolerance will have served us well if it reveals to us our own intolerance. “The duty of tolerance,” Alfred North Whitehead once said, “is our finite homage to the abundance of inexhaustible novelty which is awaiting the future, and to the complexity of accomplished fact which exceeds our stretch of insight” (Whitehead 1933, 52).
The comprehensive eloquence of that simple and powerful statement summarizes most of what I want to say in conclusion. The morality of aspiration is both essential to a free society and dangerous to it. It is essential insofar as it generates respect for the rights of others; and I do not see how a democratic society can remain free unless such respect deeply informs the great majority of its members. The morality of aspiration is dangerous, however, when it tempts us to employ coercive measures to establish a Kingdom of Righteousness.
We can recognize injustices; but we can never really know what justice requires. Central economic planning was perhaps the most momentous product of the godlike aspiration in this century. A godlike aspiration—the desire to establish a human regime that would be omniscient, omnipotent, and universally benevolent—was the source of the zeal with which Marxist governments pursued the conceit of a centrally planned economy long after its futility should have been obvious. This aspiration was also the source and justification of all the cruelties perpetrated in the course of that long and tragic pursuit. Ardent environmentalists need to discover and acknowledge that the same limitations which made central economic planning impossible will make it impossible to establish a comprehensive system of central environmental planning.
Some of the intransigence of conservatives in the environmental area stems from the fear that environmentalists are eager to legislate all their aspirations, with utter disregard for the costs that this will impose on others. The morality of aspiration will inevitably run ahead of—and ought to run ahead of—the morality of duty. It is legitimate to entertain, nurture, and advocate aspirations for which society is not yet ready, aspirations that cannot be considered duties and should not be legislated because the institutional preconditions for their implementation have not yet evolved. But our aspirations should not induce us to neglect or violate our duties. When we take the whole environment seriously, we will acknowledge that our primary moral obligations are to respect the persons, the liberties, and the rights of those among whom we live. After all, these are the people upon whose cooperation we must ultimately rely, whether it is to “make a living,” to “save the earth,” or to see the realization of any other of our larger aspirations.
The text of this book was set in Monotype Dante, a digital version of the hot-metal typeface designed by master printer Giovanni Mardersteig (1892-1977). Characterized by its even color and classic proportions, Dante was first used by Mardersteig in 1955 at his Officina Bodoni press for an edition of Giovanni Boccaccio’s classic, Trattatello in laude di Dante (Little Tractate in Praise of Dante).
Printed on paper that is acid-free and meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials, z39.48-1992. (archival)
Book design by Mark McGarry, Texas Type & Book Works, Inc., Dallas, Texas
Typography by Newgen-Austin Printed and bound by Worzalla Publishing Company, Stevens Point, Wisconsin
[* ] Unpublished typescript of lecture in a series titled The Moral and Ethical Dimensions of Democratic Capitalism, conducted by the Colorado Council on Economic Education and the Graduate School of Business Administration, at the University of Colorado, Boulder, Colorado, 8 December 1982. Reprinted by permission of Mrs. Juliana Heyne.
[* ] Originally published in Forum, Institute for Economic Research 1, no. 3 (February 1990). Reprinted by permission of Mrs. Juliana Heyne.
[* ] Originally published as chapter 2 in Taking the Environment Seriously, ed. R. E. Meiners and B. Yandle (Lanham, Md.: Rowman and Littlefield, 1993), 25-49; reprinted by permission of Rowman and Littlefield.
[1. ] A clear exposition of this conception of justice may be found in Leoni, especially Chapter 4.
[2. ] Hochschild summarizes her conclusions on pp. 278-83. The “ambivalences” she finds among her interviewees seemed to me largely their refusals to accept her interpretations of social reality.
[3. ] In some cases where government legislates controls on development, the incentive to develop was originally created by questionable government actions, such as bridges built from the mainland to barrier islands or implicit promises of disaster relief to those who then built in floodplains. To what extent is the government obligated to continue a promised subsidy? The ethical problem in removing an unjustified subsidy arises from what lawyers call detrimental reliance.
[4. ] In July 1991 San Francisco passed a law prohibiting owners of service stations from converting the land to other uses if they had earned a “fair return” over the past two years. The newspaper headline reprinting this story from the San Francisco Chronicle proclaimed: “Urban Ecology: New San Francisco law protects gas stations.” (Rights for gas stations?)