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A Primer On Pragmatism: Applications

Posts in this series. This post is updated from time to time with additional resources.

This introduction to pragmatism was motivated in part by the fact that the philosopher Elizabeth Anderson identifies herself as in the pragmatist tradition, but there are other reasons. Our political environment is toxic. It’s hard to maintain our sense of self, of our values, our hopes, and our sense of security. Philosophy offers us reminders of the existence of our values, and the role they play in holding us together as individuals and in our relations with others. It takes us away from the noise and the turmoil and puts us in a quiet atmosphere where we can nurse our wholeness. It can provide us with armor against the forces that are ripping at us.

With that in mind, I’ll close with a brief discussion of democracy and Modern Money Theory. Both begin with the key idea of pragmatism, that all our ideas, no matter how old, were formed for human reasons, and to meet human needs. All of them, no matter how old, are subject to rethinking in light of new conditions.

Democracy

Pragmatism is particularly well-suited to democracy. The most striking justification for democracy is found in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

I’m not so sure these truths are self-evident. Prior to that time, the dominant view was that some people are born to lead, and others are only fit to follow. As Peirce and James point out, philosophical systems then were grounded in the idea that there is a universal truth outside human experience, but one that the best of us can comprehend somehow. Those lucky people can construct a social system that accords with the will of the universe, or the Almighty. Many of them argued for centuries that the King ruled with the blessing of the Almighty, and everyone else was inferior, fit only to follow.

At the time Jefferson wrote, the French and the English were directly contesting the divine right of kings, and there was discontent with the idea of hereditary authority. But the US was the first country to adopt Thomas Jefferson’s formulation as a founding idea. It’s a revolutionary statement, and one we are still trying to reify, not just in our government but in our social lives, our work, and other institutions.

The Declaration was a break with what seemed like a firts principle. And that is fundamentally a pragmatist act: rejecting a first principle because it isn’t working to create the kind of lives people wanted. Jefferson’s formulation wasn’t totally original. It derives from prior thinkers, but instead of laying out a rule, it articulates a value, a value that should guide our efforts to create a decent society. The system of government created by the Constitution was supposed to be one that would enable the creation of a new kind of society, one informed not by rules thought to be eternal, but by values that are thought to be best for human beings.

There have always been people insisting that there are eternal rules, and that deviation from those rules would bring disaster. They settle all doubt by tenacity, as Peirce would say.

Pragmatists say that we have to justify our choices on the basis of what works. But the first step is to decide what our priorities are. We do that by defining our values and our goals, and then by working out the best way to reach them. Life, liberty, and the pursuit of happiness my not be the best goals for today, but they’re a start. Our task is to decide what that means in today’s society. Anderson says we don’t want to be humiliated or dominated. That’s a good way of talking about what liberty and the pursuit of happiness might mean today. We won’t the answers by looking outside our human experience.

Modern Money Theory

Much of neoclassical economics is grounded in normative concepts. One of these is Jeremy Bentham’s utilitarianism, discussed in §2.1 of this entry in the Stanford Encyclopedia of Philosophy. The economist and mathemetician William Stanley Jevons used this normative concept to create the economic idea of marginal utility, one of the foundations of neoclassical economics. See pp 9-10 here.

Utilitarianism is a normative idea. This is from the Stanford link:

… [Bentham] promulgated the principle of utility as the standard of right action on the part of governments and individuals. Actions are approved when they are such as to promote happiness, or pleasure, and disapproved of when they have a tendency to cause unhappiness, or pain. Combine this criterion of rightness with a view that we should be actively trying to promote overall happiness, and one has a serious incompatibility with psychological egoism. Cites omitted.

Jevons explicitly sets out to mathematize Bentham’s utilitarianism. Marginal utility is therefore grounded in a normative idea. It incorporates a specific value, but the value is hidden and ignored when it comes to putting marginal utility into practice. It is only loosely, if at all, based on practical experience of human behavior. Nevertheless, it is the foundation of large parts of neoclassical economics and of its modern version, neoliberalism.

Pragmatism rejects the idea of starting from normative theories. I don’t know how to deal with marginal utility from a pragmatic point of view, so I turn to another fundamental idea of economics, the creation of money. As best I can tell, mainstream economists say that banks create money. There’s a story about bank multipliers you can google. Governments get money by taxation or borrowing. In this story, the private sector is responsible for money creation subject only to some loose guidance from the Federal Reserve Board. This protects us by making sure Congress can’t ruin the financial sector with profligate spending and borrowing which would automatically happen, and which would be an inflationary disaster.

Modern Money Theory starts with a question: how is money created? It looks at the things that are done as a result of which there is money. Governments create money by spending it. They reduce the amount of money by taxation. They may or may not issue bonds. MMT is based on observable facts. The description of the creation of money leads to other testable ideas and to a completely different concept of the role of government in money creation and society.

Money creation is a governmental action, and thus is subject to politics. Congress decides how much money is created, and how the new money is used. The old story tries to deny this reality with cloudy abstractions and claims that it’s all the working of some invisible hand. Pragmatists don’t believe in invisible hands. They say that politics is the arena in which we decide about how to use the power to create money.

MMT isn’t just for progressives. Deficit hawks and small government supporters get to argue their opinions, and to assert their values. This is a quote from Modern Money Theory by Randy Wray:

However, I also believe that most of the tenets of MMT can be adopted by anyone. It does not bother me if some simply want to use the descriptive part of MMT without agreeing with the policy prescriptions. The description provides a framework for policymaking. But there is room for disagreement over what government should do. Once we understand that affordability is not an issue for a sovereign currency-issuing government, then questions about what government should do become paramount. And we can disagree on those. (Emphasis in original.)

The fact that MMT is value-neutral, that it can be used by people of every political persuasion is a powerful point in its favor. I don’t think we can say the same thing about neoliberalism.

Conclusion

There is much more to be said about pragmatism. It is a powerful tool we can use to cut through old ideas and useless distinctions. But perhaps its most important contribution is that it is an open-ended theory. It makes room for the endless possibilities of human beings. I think that is a powerful value.

Freedom And Equality: Anderson Against Libertarianism

Posts In This Series. This post is updated from time to time with additional resources.

The first four posts in this series discuss two articles by Elizabeth Anderson explaining her view of freedom and equality. The text for this post is her chapter titled Freedom and Equality in The Oxford Handbook Of Freedom And Equality, available online through your local library.

In the last post I said that relational equality* is a principle of social relations, and not a principle of the distribution of material goods and opportunities. But as Anderson says, relational equality entails a certain minimum level of material distribution. Material redistribution is flatly rejected by libertarians**. It’s easy for progressives to forget that there is a philosophical basis for libertarianism, with well-known exponents, including Robert Nozick. Anderson takes on the libertarians in this chapter. She argues that freedom as non-interference, the ground of libertarianism, cannot justify a regime of private property.

In Part 1 of the chapter, Anderson describes different ideas about freedom and equality, and gives some examples. This section covers the ground of the first four posts in this series, and is easy to follow. In Part 2, she addresses the libertarian arguments justifying private property strictly on the grounds of negative liberty*, that is, freedom from interference.

Anderson starts with a brief discussion of taxes. In standard libertarian thought, requiring someone to do something is normatively different from requiring someone to refrain from doing something. Thus, ordering people to supply others with goods and services is different from ordering people not to take the property of others. Libertarians say that taxes raise revenue for the government which is used to supply goods and services to others, and so taxation is normatively wrong. The basis for this assessment is that income is associated with labor, so that making people pay taxes is directly the same as making them work for others. Anderson points out that this may be true of taxes on wages, but it obviously irrelevant to passive income, as that from investments, capital gains, mineral royalties, rents, bequests and interest.***

She points out that taxes on land rents can be justified as “respecting the property rights in the commons of those who lost access to privately appropriated land.”

But that’s just the first point. Anderson’s focus is on the priority of positive freedom in connection with property rights. This argument is more complex. First, she points out that even libertarians do not argue for absolute negative freedom with respect to property. Perfect negative liberty means that no one has the right to demand that the state assist in constraining an owner’s use of property. As far as I know, no one, even the most rigid libertarian, makes tsuch an expansive claim. Therefore the claim to private property is a right.

If claims to property are rights, then they entail duties in other people. If the owner excludes others from property, exercising the owner’s right to non-interference, then others lack the right to use of that property. Their right to use of that property is interfered with. On numerical grounds alone, this negative liberty of one person creates a massive net loss of negative liberty.

… to secure the right of a single individual owner to some property, the negative liberty of everyone else — billions of people — must be constrained. Judged by a metric of negative liberty alone, recognition of property rights inherently amounts to a massive net loss of total negative freedom.

To justify this massive net loss of negative freedom, we must look to other kinds of freedom. Positive freedom* supplies a good answer. Private property can improve overall economic outcomes for the many. Properly used, it can create greater opportunities for many. Receiving the benefits from improvements can encourage more of these benefits. Freedom from domination* is protected and increased when in a system of regulated private ownership which prohibits the use of private property to dominate others.

To use these arguments, though, we must prioritize positive liberty and freedom from domination over negative freedom. This, of course, was the point Anderson is trying to show.

Instead of libertarian negative freedom as the primary principle of society, Anderson offers a social contract view of private property.

In this picture, the principles of right are whatever principles persons would rationally choose (or could not reasonably reject) to govern their interpersonal claims, given that they are, and understand themselves to be, free and equal in relation to one another.****

Generally people would choose a regulated system of private rights so as to ensure reasonable economic efficiency, order, and maximum positive liberty and freedom from domination. In this setting, individual rights are not grounded in selfish interests as in libertarian thought, but in the reality that we all have “a common interet in relating to each other through a shared infrastructure of individual rights.”

Discussion

1. As I read this section, Anderson is trying to show that prioritizing negative freedom, meaning noninterference, is not a solid foundation for a decent society; and I think she succeeds.

I have never thought libertarianism was sensible. In high school, I read Anthem by Ayn Rand, which I took to be an anti-communist screed, mildly enjoyable and short. In college, I read The Fountainhead and Atlas Shrugged, and I realized that Rand was actually arguing for radical selfishness. The books are badly written and laughably simple-minded, and impossible to take seriously. Essentially libertarians want social protection for themselves and their property, but think it is theft if taxes are used for anything besides protecting them and their rights and giving them stuff. Their society looks like the Gilded Age, when state and federal governments called out the militia to attack striking workers. Let’s just skip past all the jargon. As a practical matter, Libertarians need to explain why those workers should support their ideal society. A similar question should be asked of today’s plutocrats and their enablers.

2. The tax question is a good example. I noted Anderson’s view of earned vs. unearned income issue, and her argument based on the principles of social contract theory. Social contract theory is the idea that we as a group implicitly agree to certain rules and institutions, surrendering some of our rights and accepting some duties, in exchange for protection of our remaining rights and creating and maintaining social order.

The justification for this theory is that life is better in such a society. In a democracy we select our leaders and can vote them out. This is a form of freedom from domination by government, and to the extent we can force government to act, it frees us from domination by employers.

“Taxes are what we pay for civilized society” as Oliver Wendell Holmes said. For now, I’ll just note that in Modern Money Theory, Holmes is not quite right. In nations that issue their own currency there is no connection between spending and revenue. In the MMT model government spends money into the economy and taxes bring some of it back to the government; and this is done for several reasons, including stabilizing prices and the value of money. That model seriously undercuts the primary argument that taxes are extracted from the successful to buy stuff for losers.

———-
* These terms are discussed at length in prior posts

**Thus we are regularly treated to the idiot claims that taxation is theft, and that affirmative action is an unfair benefit to minorities and to the working class.

*** One thing I love about Anderson is that she never limits herself to a list of three examples followed by etc. Here she identifies 5.

**** This starting point is similar to the Veil of Ignorance of John Rawls in A Theory Of Justice.

Strikes in CA, Republicans in FL Admitting Loss of Quality: Fallout from Long-Term Underfunding of Higher Education

Since 1985, decreased funding of state universities has forced tuition to increase six-fold while consumer prices only doubled. (Bureau of Labor Statistics data via Economix blog.)

Back in early March, Catherine Rampell wrote in the New York Times about the ongoing trend since the mid 1980’s to cut state funding for higher education, noting that it has led to cutbacks in some of the very few areas of instruction where graduates actually face better employment prospects. She put up a companion piece at the Times’ Economix blog, where she was even more explicit about how it is the refusal by state legislatures to adequately fund higher education that is leading to the current problem of decreasing educational offerings despite skyrocketing tuition costs:

But at least at public colleges and universities — which enroll three out of every four American college students — the main cause of tuition growth has been huge state funding cuts.

There was quite a Twitter kerfluffle last week over the funding situation at the University of Florida, when it was claimed that Computer Science was being shut down while funds were being shifted to the athletic department. That was wrong on both counts, as the University is still struggling with how Computer Science will be organized, but it is not going away. Rather than taking money from academics, PolitiFact explains that the Athletic Association, which is a separate nonprofit, has given back over $60 million to the University since 1991 for academic use.

Unfortunately, that story obscured the real news on higher education in Florida, when Governor Rick Scott vetoed a bill that had passed the Florida legislature with a huge bipartisan majority, giving the University of Florida and Florida State University the ability to bypass the 15% per year limit on tuition increases in order to make up a larger portion of the huge cuts in state funding for higher education in this year’s budget:

The veto comes at a tense time, with universities bracing for a painful state budget cut for the fifth year in a row. This year, the total cut to the system is $300 million. Read more

Why Does Mitt Cheat His Country But Not His Church?

As tax day approaches, the presidential campaign has looked like this: 1) Buffet rule. 2) Mitt’s taxes 3) Who gives to charity.

In an attempt to shift focus away from Mitt’s efforts to make sure other rich people like him don’t have to pay taxes, John Sununu suggested that Obama and Biden don’t give enough to charity.

When Joe Biden went to New Hampshire on Thursday to attack Mitt Romney’s tax proposals, the Romney campaign greeted Biden by attacking President Barack Obama’s charitable giving rate. On a campaign conference call with reporters, former New Hampshire Gov. John Sununu, a Romney backer, said the following:

In their own private lives, it would be nice to see some contributions to charity that are significant out of President Obama and Joe Biden. I think it is an interesting contrast to make with the presidential candidate the Republicans have now put together a nomination for, that is Mitt Romney, former Governor Romney, who gave almost 15% of his income last year to charity.

In response, the White House has released the Obamas’ taxes, showing they donated 22% of their income, a higher percentage than they paid in taxes.

I expect we’ll dwell on this for a while, but the entire tax versus charity debate ignores one thing: 10% of Mitt’s money, by Mormon Church rule, goes to the Church. The only debate (and it is a big debate in some quarters) is whether that 10% is pre- or post-tax. So when Sununu boasts that 15% of Mitt’s income goes to charity, what he really means is Mitt gives 5% after paying the amount required to pay by his Church.

All that got me thinking. Why is it that Mitt cheats his country but not his Church? Read more