Monday, November 24, 2008

Does capitalism need cheap labor?

I heard recently from someone that one of the things wrong with capitalism is that it depends upon cheap labor. They were arguing for some form of democratic socialism with the workers owning the company they work for. I won't talk about that, simply focusing upon this idea that capitalism depends on cheap labor.

On the face of it, it is in a sense true. But we need to remember what "cheap" means. It is a relative term, so just as there will always be those who are less wealthy, and thus there will always be a group of relative poor, so there will always be people with lower skills and qualifications who are to be considered "cheap labor." But the person in question was making more of a claim than this. The idea is not just that the labor capitalism requires is relatively cheap, but is actually at what is indisputably a very low wage, barely enough to live off of. The evidence for this, is the way that, in wealthy countries, as their workforce becomes more highly paid, jobs are moved to cheaper locations, and cheap factories are opened that charge "slave wages." Of course, the people aren't slaves, voluntary taking the job and generally making enough to subsist off of, and with a consistency of income that makes it considerably more attractive than other options (considering how bad the conditions in a sweat shop are, I leave it to you to imagine these other options). But, to be fair, their wages are far from enviable, and do not give them a attractive livelihood. The question is, does capitalism depend on this cheap labor?

Lets look at a similar case. I have a job and need to keep myself clean and presentable, which involves daily bathing. In my apartment I have a shower and a bath. I use the shower, but do I need the shower? I could bathe solely using the bath, but I prefer the shower because it's quicker, more convenient, more water conservative, etc. I use the shower because its there, not because I need it. Similarly, the companies that use cheap labor, may not need the cheap labor, but rather simply use it because it's there. One fact that suggests that capitalism doesn't need cheap labor, is that companies are not drawn to the places with the cheapest labor, since these would probably be in some of the poorest African nations. These countries are too risky: unstable government, corruption, and weak laws and law enforcement. They seek out places that are stable and reliable that also have cheap labor, but certainly not the cheapest labor they can find.

Even more damaging to this position, is a recognition of the harm that cheap labor can do. It can be seen in the Roman empire, who had ample amounts of cheap labor in the form of slaves. But their slaves discouraged innovation. If you want to develop a new form of automation that would require less man hours, this requires time, investment, resources--in short, long-term risk. But if you've got slaves to give you all the man hours you need, why delve into the risks of innovation? The same goes with cheap labor nowadays. If the labor was expensive, the relative advantage of developing new technology to do it faster with fewer man hours would be much higher, so there would be faster increases in productivity and overall wealth. If there are abundant supplies of cheap labor its not worth it to innovate as much. Cheap labor creates a disincentive to innovate. Capitalism admittedly doesn't need innovation any more than it needs cheap labor, but in the long run it is a key source of wealth for all, and something capitalism is particularly good at encouraging and taking advantage of.

Of course, in the long run, free trade will tend to increase the wealth of these cheap laborers and essentially force greater innovation and less reliance on man power. But of course, that's the long run--years, in fact, generations into the future. Most critiques of capitalism along these lines seldom consider the long run and tend to seek out short-sighted politically exigent solutions. And that is something that capitalism definitely does not need.

Tuesday, November 18, 2008

Do the wicked prosper?

Our moral sensibilities can be sometimes rattled by the thought that wicked people prosper. We may even express a nihilistic execration that things are not right with the world, that there is something fundamentally wrong with the way things are. But do the wicked prosper? I don't mean to ask, do any wicked people ever prosper, since there are numerous examples of wicked persons prospering, but rather do we see a general pattern of wicked people frequently prospering.

I think the appeal of this idea is clear. I remember reading that there was a turn in pre-Christian Jewish theology, when a philosophy of apocalypticism rose to prominence. The problem faced was, how could a just God permit the world to be so bad? The answer was: we're only in a transition period before the apocalypse. Evil powers now rule, but after the apocalypse, good will reassume power and things will be hunky dory. That's apocalypticism in a nutshell, or at least one version of it. This leads to the assumption, that if evil powers are ruling, anyone who is in power is therefore evil. And it also can lead to the inverse assumption, that if you aren't successful, it's because you're a good person, a good concession prize if your life is constant struggle and you're barely subsisting and enduring trying conditions. Correlatively, if we comfort ourselves by saying that we aren't as successful as we'd like to be, because we're not willing to compromise our values. Those who are successful have compromised their values and are thus bad people. In other words, it's a good way to deal with envy of the successful, by denigrating them and lifting oneself up higher.

Still, I want to know, do the wicked prosper? Now, when I think wicked, two models come to mind: terrible murderous political or military leaders and serial killers. If we focus on serial killers first, we notice that they generally are not models of prosperity. Go through the rolls of known serial killers and you will find lots of people with low pay, low skills job, who are poorly educated and not terribly well off. There are admittedly famous aristocratic serial killers, like Elizabeth Báthory and Gilles de Rais, but these aren't models of success, rather examples of people born into wealth. There are exceptions of course. H H Holmes comes to mind, a man who lied, cheated and stole considerable wealth in his short life, in addition to killing a whole bunch of people. Of course, that he died at 35 should remind us that this is a risky line of work and not one we should pursue if we want to retire. Admittedly, not all serial killers are low class, but even some examples of doctors who prey on their patients, don't really strike us as models of success. I think the reason is simple: their consuming desire to gratify this murderous appetite eclipses the possibility of success. One theory of the identity of Jack the Ripper is that it is Walter Sickert, the British Impressionist painter, but to imagine that one could maintain a career as a skilled painter and still have time for multiple killings without being caught, seems like a lot to do (admittedly there are many other more serious problems with the Sicker-Ripper theory, but I leave that to others).

If we now focus on evil leaders, they of course are successful. By definition, as people who have attained to a prominent enough position to lead many other people, they are successful. The question is, are they successful because they are wicked, or rather wicked because they are successful? Power is known to corrupt--it provides temptations, and provide the freedom to indulge in desires that may have previously been barred. Thus, many wicked leaders may simply become wicked by their success. The wickedness doesn't help them succeed. And again, so far as they indulge their desires, it again must be a hindrance to further success.

And I think we also tend to overestimate the wickedness of evil leaders. Hitler may have killed millions, but a) he never did it himself and b) he did it out of a desire to actualize certain ideals for Germany, to contribute to its greatness. To accomplish something as terrible as the Holocaust requires a great many wicked people, of which Hitler is only one. Yet, I find H. H. Holmes, to be a far more wicked person. He killed people himself, he enjoyed it, took pleasure in it, liked to make people suffer, and he did it for no high ideal, but merely for the pleasure of it.

The qualities that make a person successful are things like determination, commitment, cleverness, resilience, self-control, interpersonal skills. Insofar as one's wickedness may undermine relations with others, insofar as one's wickedness involves indulging in twisted desires, and insofar as one's wickedness puts one on the wrong side of law, it certain must be more of a hindrance than an asset. Admittedly, there are wicked people that do prosper, which may still upset us, but it is more the exception than the rule.

Thursday, November 13, 2008

Curious lessons learned from numbers

To talk about something different this post I'm going to reflect on the meaning of some numbers from my younger days. The first incident is from high school. There were three students in my graduating class who essentially tied for valedictorian. They'd all three gotten straight As in every class and they'd taken six AP courses. My school was on a 4.0 system (A=4, B=3, etc) and AP classes were weighted so that in AP classes were A=5, B=4, etc. If you get 4 for all you're other classes (at least 158 credits), except 5 for your 30 AP credits (each AP class was worth 5 credits) then you're GPA will be about a 4.16. And they should all three tie for first, which they almost did, but Mike came out slightly ahead, Matt came in second and Kirby third. Here's the difference. Mike, the valedictorian, when he was a senior, he was taking four AP classes (that's 20 credits) but all seniors must take 22-24 credits. So, he could take a three credit graded class to give him 23 credits. But a better idea would be to take an easy two credits. He did two student assistant credits which basically amounted to being the personal assistant of a teacher. The class was Pass/Fail. He would go spend two hours a week doing basic office chores, no homework, no studying, and as long as he did what he was supposed to, he would get a Pass. Taking two easy credits turned out to be an auspicious choice. Pass/Fail courses aren't counted towards GPA, and he, in fact, took a number of Pass/Fail courses like this, in order to minimize his work load. Now, let's think about this. If your GPA is about 4.16 then every A in a non-AP class actually lowers your GPA. Thus, if he were to take a regular graded classes then that would've hurt his GPA, even if he got the best grade he possibly could. Mike was good with numbers and he actually set down and calculated the minimum number of credits necessary to graduate (turns out that if you took the minimum number of credits each semester 26 for Freshman, 24 for Sophomores, 22 for Juniors & Seniors you would achieve the minimum number of credits necessary to graduate, which is 188), and knew the maximum number of Pass/Fail classes a student could take and still graduate. In order to ease his workload (which admittedly is a lot, since he is taking 6 AP courses) he pushed towards the minimums. But Kirby, who came in third, was basically the hardest working, took the most credit classes and got the most As, and probably should have deserved to be valedictorian. But the numbers said she came in third. I guess things like this don't matter in the long run, but it is curious. I remember I was in Calculus with Mike, and he, Brian and I would complain about overachievers. The problem with overachievers is they raise the standards. They make it harder for the rest of us. The ideal is not to be an overachiever, but to do just the right amount of work, just enough to get an A. "Nothing to excess" as the ancient Greek maxim says. I never thought such a philosophy would pay off.

The second incident goes even further back, to my middle school days. In Social Studies we learned about the stock market, and, as a bonus, there was some sort of national competition that we could participate in. It's for students, to see how well they would do at picking stocks. The competition basically gives you a set amount of money; of course, they wouldn't literally give us money, but, you know, pretend to give us money. And then we buy shares of stock with that money, and after a set amount of time, whoever has made the biggest profit wins. Now, there're are many good strategies for investing, but generally over the long run the best strategy is to invest in large, stable, reliable companies that will produce stable, reliable long-term gains--namely, blue chips. This is the strategy I followed (per my father's advice) and it's sensible investing, but not for this game. There's no real money being made. The prize is only for the winner. It's not a good idea to play the odds and settle for modest profits, since you don't get to take the profits home with you. The best choice is to buy very risky stocks, buy a whole lot of shares of low-priced start-up companies. You'll make a lot of money with only small increases in price. Of course, you're taking high risks, and genuinely risk losing large amounts of money, but, as I said, this is only pretend money. There's no penalty for losing money. You have nothing to lose by taking high risks in this system Of course if you were to take the same risks in the real world, the losses would be real. But in this system, the gains only come about by winning the most, and you have nothing to lose by taking big risks. I didn't figure this out at the time of course, only much later. But maybe I'll have a kid someday and I can teach him how to game the system. I guess the lesson this contest teaches, whether it wants to or not, is that when there's nothing to lose, it's sometimes best to take big risks. Or at least that's what the smart ones 'll figure out. And what will they become when they grow up.

Sunday, November 9, 2008

Is the mind material

In De Trinitate (On the Trinity) Augustine tries to refute to position held by some of his contemporaries, that the mind is just another physical body, like air or fire or some other physical thing (Book X, ch 10, paragraph 15-16). That the mind is material is an argument that had been held previously by the Greek atomists Democritus, Epicurus & presumably Leucippus. The popularity of Epicureanism in Rome makes it unsurprising that there would be contemporaries of Augustine that would avow such beliefs. But for Augustine, who wanted to argue for a non-material part of the self, in particular to justify a soul that is imperishable and can ascend into heaven after death, this was unacceptable.

In Augustine's argument, he first asserts 1) the mind is known to itself. But then he notes 2) to truly know a thing is to know the substance of a thing. 3) Thus, we can say that the mind knows the substance of itself. In addition, 4) to know about a thing is to be certain about it. 5) Thus, the mind knows its substance with certainty. We notice, 6) that the mind is not certain that it is a body like air or fire or any other body or even a property of a body. Thus, 7) since the mind knows its substance with certainty and is not certain that it is a body or a property of a body, then it can't be a body or a property of a body.

The big problem with this argument is the premise that the mind knows itself. In the vague sense of know that we usually use, this seems uncontroversial. The mind is that by which we know other things, thus it would seem that the thing which knows would automatically knows itself. But Augustine very precisely defines knowledge as to know the substance and to know with certainty. Thus, if we plug in this definition, when he is making his initial premise that the mind knows itself he is actually saying, "the mind knows its substance with certainty." Step 5, as I labeled it, is not a conclusion from premises, it's merely a restatement of the initial assumption using the given definitions. To say that the mind knows its own substance with certainty is a dubious claim, which I think most people would want to deny.

"Know" in the opening premise is used as a weasel word, used to present what seems like an uncontroversial premise. But then "know" is redefined to present a more radical premise, which Augustine needs in order to prove his final point.

Wednesday, November 5, 2008

More democratic

I believe that democracy is a better way to make decisions, even more than the framers of our constitution did. The process they set up is one of limited democracy, with only direct popular election of congressmen. Election of presidents is by the state (used to be many states didn't use direct popular election, but picked electors in their state legislator), and most other positions are appointed without any popular involvement. I'd like to see things more democratic. Perhaps the reason that we have such low turnout at elections (even in yesterday's historically high turnout) is because voters recognize how undemocratic it is. But making things more democratic is not so simple as increasing the number of things we vote on, it also matters how you vote and what voting does. So how could we make a system that is more democratic?

The first thing to get rid of is indirect election. The most unpopular for of indirect election is the electoral college. Put to a vote, it would probably promptly eliminated. Don Boudreaux at Cafe Hayek makes an interesting comments about the Electoral College, that it is inconsistent for people to complain about how the electoral college is not democratic enough and yet not complain about other ways in which we are disproportionately or indirectly represented, like the Senate. I, on the other hand, harbor no inconsistency. I'm not too worried that the electoral college disproportionately distributes votes or in indirect. My biggest problem is that, by requiring a candidate to win a majority of electors and not just a plurality, it pushes it towards a two-party system. More choices is definitely more democratic, which is an even better reason to get rid of the electoral college (admittedly,there are bigger barriers than just the electoral college to third parties). Even better would be to get rid of all indirect representation. Better to have the people vote on new laws and not congressmen. I think many would object that the average voter can't vote knowledgeably or intelligently vote on bills, being not as well informed as professional lawmakers. But I think people completely overestimate the congressmen's knowledge of the bills they vote into law: they don't read most of them, they don't understand the repercussions of most of them, they sort of know the basic gist of the laws, but they primarily take into account which bills will best cultivate the image they want to present for their voters and thus are most likely to secure reelection (or which will best favor special interests who might benefit their campaign). At least direct voting would only permit laws that the people wanted, and it would certainly radically slow down the rate of buildup of the arteriosclerosis of excessive law. The big losers would be the lawyers.

Of course, the down side of this, is that people do make bad decision and we're sort of stuck with bad laws once we naively vote them in place. A good way to improve this would be to permit changeable votes. If I voted for a law or an official but changed my mind, I can withdraw my vote, and if they lose enough votes, then they're eliminated. Vice versa, I could also switch my nea to a yay, to bolster a law or official I had opposed. We could even somehow integrate the influx of newly registered voters, so that they could vote for or against laws that have already been passed, and thus add support to a law or increase the likelihood of its rejection. That would make it much more democratic.

Robert Lawson at Division of Labor also makes another comment about what he doesn't like about presidential voting, that, if you're in the minority, you're forced to go along with the majority. He contrasts this to a group of people voting on which restaurant to go to: this is better because you've always got the option of opting out if you really don't like the results. In the presidential election you can't opt out if the outcome isn't to your favor. I think this issue could be addressed. With elected officials, the simplest way would be a form of power-sharing. Let's say Obama gets 51% of the popular vote. He would thereby get 51% of the power, and maybe McCain would get 47% of the power, and the other 2% would go to various minor candidates. Dividing power wouldn't be too difficult for many duties. And, if in addition, votes were also changeable, and people who didn't vote had the option of adding their vote later, the power of officials could vary over time. How you might do the same thing with laws that are voted on by the people, I don't know. Maybe you'd have to simply settle with making most of them all or none, for lack of a better solution.

One of my favorite parts of The Moon is a Harsh Mistress by Robert Heinlein, is when the characters, at the beginning of a lunar revolt for lunar sovereignty, are thinking about how to form a new government in ways that the American Founding Fathers didn't. It's interesting to think about. I would make it far more democratic. I don't know if I'd go to an absolute extreme of direct democracy on everything, like people voting on Supreme Court cases. In this day and age, with the technology for voting, the possibility of actually putting into place such measures, even in a county as vast and populous as ours, is possible, and we could very well go even further than the direct democracy of the ancient Athenians. Admittedly, it would have many flaws, but the real questions is, "is it better in the aggregate?" I also don't take into consideration certain questions, like "is it more democratic to have no government at all?" or "should I participate in such an undemocratic voting procedure as it stands" or "is the free market more democratic than this elective, legal process?" Maybe another time.

Saturday, November 1, 2008

Duties in Kant continued

I talked about Kant's perfect and imperfect duties and the determination of duties based on evaluating the consequences of making a maxim into a universal law in my last post. I want to look more at the determination of duties again. John Stuart Mill's critique of Kant in "Utilitarianism" was simply that Kant's rules couldn't give us any reliable criteria for deciding whether even the most obvious injustices were immoral or not. We could always justify them on the grounds that if we universalized them, it would lead to no conceptual inconsistency. As I said before, the criteria for determining whether something was a duty is to make it universal and see the consequences--namely see what would happen if everyone followed it as a universal rule. I already pointed out an obvious problem case, murder. If I want to evaluate the maxim, "I should kill anyone who interferes with my desires," all I have to do is imagine what would happen if everyone followed this maxim all the time. What would happen is a lot of people would be killing one another, a skyrocketing death rate. People would take greater precautions to avoid death, but nonetheless economic activity would grind to a halt, life would be shorter and far riskier, survival would be tough, and so on. Maybe Kant could say that there would be a conceptual inconsistency between risk and safety, but this doesn't work, since that conceptual inconsistency is inevitable no matter what. I can still die in many accidental ways that would be nobodies fault even if no one every killed anyone, as well as from all the normal diseases and such that kill most people. In short, there's no conceptual inconsistency. Thus, I can't say that there's anything wrong, according to Kant's method, with the maxim, "I should kill anyone who interferes with my desires."

It appears as if the only case in which his method actually works is the lying promise, but, as I suggested in my last post, a lying promise is already conceptually inconsistent. Lying and promise are opposites and thus already conflict. You don't need to universalize it to bring out the inconsistency. And vice versa, if there is no inconsistency with the singular maxim (for example, "I should kill anyone who interferes with my desires"), then there'll be no inconsistency resulting from the consequences of universalizing it as a universal law.

Even looking at the imperfect duties, if I take many obviously immoral acts and try to justify them with Kant's method, I find no problems. Like eugenics for example. If I decide to test the maxim, "I should sterilize all substandard individuals," and then universalize it, I see no problem. It doesn't seem to lead to any empirical inconsistencies. Maybe the criteria of "substandard" is arbitrary, but I could surely use more precise criteria, like IQ, criminal record, BMI, whatever. Heck, if I took it one step further, and made the maxim, "I should eliminate persons of inferior races," then again there is no inconsistency and I could justify this with Kant's ethics.

Which of the Nazi war criminals was it who said he'd always lived according to Kant's Categorical Imperative? I guess Mill was prescient in recognizing that Kant's ethics could be used to justify even the worst injustices. Admittedly, the categorical imperative of "treat others as an end and never simply as a means to an end," actually is useful, but can his method even justify this maxim (he claims it can), and is there anything else useful in his ethics?