Liberty Matters

Doing the Dishes with Ethics and Institutions


I am astonished at Don’s ability to find just the right metaphor to make a scientific point.  In his first response he supplied us with the suggestive image of the tax on market/bettering  transactions, suggestive indeed of ways of measuring it.  The tax should show up as profit opportunities or price differentials, properly controlled for other sources such as transaction and transport costs.  Pick a place with evidently strong distaste for innovation and markets—the small Norwegian seaport in Ibsen’s first bourgeois play, Pillars of Society (1877), would serve, a town which the conservative schoolmaster Rørlund commends: “We ought to thank God, here in this town, that we live as we do....  We have to stand firm against all this experimentation that a restless age would like to foist on us” (act 1).  Measure therefore the shadow of the tax in profit opportunities disdained.
Now Don supplies us with the metaphor of the skyscraper and the wrecking ball, helping us—well, me—to admit that institutions, of course, have to matter some.  (The reason I am so hostile to the vapid assurance that “institutions matter” in recent economics is that it pointedly ignores the ethics required for an institution to be anything but a dead letter.  “No ethics, please.  We’re economists.”  Institutional analysis when not accompanied by serious inquiry into ethics and rhetoric is just a return to Max U unimproved (the character imagined maximizing under constraints).
Don assigns Good Institutions the role of preventing the wrecking balls from swinging.  Yes.  But I would merely add that a change in attitudes towards skyscrapers can help prevent them, too.  Economists are inclined to set aside changes in attitudes, in the style of the old paper by Becker and Stigler, “De Gustibus Non Disputandum” (The American Economic Review, Vol. 67, No. 2 [Mar., 1977], pp. 76-90; PDF).[29]  I approve of the humanistic use of Latin in the paper’s title.  But I do not approve of the anti-humanistic message, which is that tastes, attitudes, ideology, ethics, and rhetoric are all given, and outside economics, and probably pretty stable anyway.  No they aren’t. My favorite, bizarre example these days is ... dog poop.  Two decades ago you didn’t pick up your dog’s leavings.  (In Paris you still don’t.)  You took your dog over to the neighbor’s yard, let him do his duty, and then walked away.  Now everyone—for example in my very doggy Printer’s Row in Chicago—picks up.  Ethics changed, quickly.  A more serious example is the change in attitude created by the feminist movement about jobs for married women (something I’ve written a little on: yes, the Pill; but also ideological change, and amazingly quick).  The “absence of swinging wrecking balls” is not quite, as Don claims, merely about “the presence of good institutions.”
In accepting John’s suggestions, Don notes that I am fuzzy about the relation between ideology and action.  My only excuse is that everyone is, except people who take up a corner solution—either a Hegelian idealistic one or a Marxist materialist one.  But I do not accept John’s (perhaps?) implied position, which Don, I believe, would reject, too, that we cannot unfuzz the matter in actual historical cases by exercising the comparative breadth that John brings or the historical depth that Joel brings.
I see a paper we four can write together, called “Ideas Matter Deeply, Institutions Superficially, But Both Matter.”  Don can supply us with our ruling metaphors, John with our comparative scope, Joel with telling details from British, Irish, and a half-dozen other histories.  I’ll do the dishes.
[29.] Becker and Stigler, “De Gustibus Non Disputandum” (The American Economic Review, Vol. 67, No. 2 [Mar., 1977], pp. 76-90; PDF).