Economics is sometimes called the Dismal Science because of the dismal ethical implications of the discipline. Yesterday I was reminded of that when one of my smart students told me that I teach that altruism is impossible. I do not teach that and I have never taught that, but I understand where he got the idea from. It is implied by many parts of economics that I teach, and it is easy to see where a student might get that idea from studying economics even though I am trying to teach that it is only a mental crutch to make thought experiments easier by simplifying the world. Medianism.org is an attempt to make people think more critically about the mental crutches that economics has become dependent upon. These mental crutches have created a very peculiar ethical system that economists and unconsciously practice and it has bled into other academic disciplines and deeply influenced policy and culture. Economists like to say that we separate ethics (normative economics) from science (positive economics), but it is impossible to do any positive economics without ethical implications and we need to own up to the ethical prescriptions that are embedded in mainstream economics.
The most important strand of ethical theory in economics is a mutant form of utilitarianism. It is important to distinguish the ethics of economics from utilitarianism because self-proclaimed utilitarians reject what economists do and economists reject utilitarianism. The antipathy is mutual, so we cannot call both groups utilitarians. I call the tacit ethical theory of mainstream economics mutilitarianism to honor its roots in utilitarianism, but to distinguish it from what self-proclaimed utilitarians believe. The main difference between the two schools of ethics is a difference in the methodology of measuring utility. Utilitarians believe that utility is difficult to accurately measure in order to sum it up, but that it the ultimate goal. Mutilitarians believe that utility is easy to accurately measure by simply adding up money-metric utility (or mutility), as measured using willingness to pay in dollars. Economists do it all the time for cost benefit analysis and GDP-as-welfare. Utilitarians typically believe that there is diminishing marginal utility of wealth and this is one of the difficulties in measuring utility. Each person gets a a different amount of utility from the same amount of goods. That is the theory that Bill Gates gets less utility from finding a $20 bill on the sidewalk than a homeless guy. Mutilitarians reject diminishing marginal utility and just add up dollars to find the greatest sum of mutility. A homeless guy’s dollars have the same mutility value as Bill Gates’ dollars which means that Bill Gates is literally worth a billion times more than a homeless guy when deciding what is good for the economy.
In mutilitarianism, the value of any government regulation is determined by theoretically measuring the willingness to pay of all people and subtracting off the dollar costs. This is called cost-benefit analysis. The wellbeing of any group of people is measured by adding up all the dollars that they spend for final goods and services and dividing by the number of people in the group. This is called GDP which is the holiest measurement of mutilitarianism.
Medianism seeks to make a tiny improvement to economic thought by replacing mutilitarianist measures with measures based on median income or expenditure. For example, the medianist replacement for cost benefit analysis is median cost-benefit, and the medianist replacement for GDP is median expenditure.
There is nothing inherently ‘median’ about all of the positions that medianism.org advocates, but medianism is really about reforming mutilitarianism. Instead of calling this reform movement ‘anti-mutilitarianism,’ I am naming the movement after a particularly salient, simple, and powerful method for reforming ethical economics, the median. Economic policy should focus more on measuring the median individual rather than the mean dollars. Medianism seeks to reform other tenets of mutilitarianism including:
- Egoism in its various forms: Mutilitarians are philosophical egoists.
- Ethical egoism: moral agents ought to do what is in their own self-interest without altruism.
- Rational egoism: maximizing one’s self-interest is rational. This is also a normative stance because rationality is normative. And it is closely related ti ethical egoism. After all, it is hardly ethical for people to systematically behave irrationally! Most ethical egoists, like Ayn Rand, believe that ethical egoism IS rational egoism for this reason.
- Psychological egoism: people are always motivated by self-interest. Although this is described as a descriptive rather than a normative form of egoism, it is only natural for people to accept things that they perceive to be natural as being benign. The natural tendency to accept the natural and seek to change things that are artificial or mutable is sometimes called the naturalistic fallacy, but it is hard to avoid making appeals to nature and students who learn that selfishness is natural really do become more selfish as if they decide that it is a good thing. Even apparently altruistic behavior is really motivated by the desire for personal benefit according to egoism.
- Medianist alternative: Embrace a median between egoism and altruism. Real people are both selfish and altruistic. Even the worst monsters of history sometimes probably did something altruistic for somebody (or perhaps an animal) at some time in their lives. Hitler could never have become a powerful leader with devoted followers if he were completely nihilistic towards everyone. Society would immediately collapse if people were never altruistic. Furthermore, it is important to embrace and encourage altruistic behavior to strengthen society. Many philosophers have noted that altruism could get excessive in theory, but it is hard to find actual examples of altruism run amok and it is easy to find examples of excessive selfishness. Even if you agree with the psychological egoists that altruistic behavior is motivated by personal benefit, altruism is not always hedonistic. The soldier who sacrifices his life to save his comrades is not doing it for the hedonistic stream of experienced pleasures he expects to get out of it. Altruistic motivation is more complicated than hedonism.
- Positivistic fallacy: Mutilitarians believe in the fallacy that economists can avoid ethics and do a completely neutral science. This is nihilism. Avoiding ethics is impossible in a social science like economics whose ideas have, in Robert Heilbroner‘s words, “shattered empires and exploded continents; they buttressed and undermined political regimes; they set class against class and even nation against nation.” ¡¿Yep, nothing ethical about that. Move along now!
- Medianist alternative: We need to recognize the ethical underpinnings of economics so that society can utilize a more ethical economics. If we persist in the fiction that economics can be nonethical (positive), then we will end up with an accidental ethics like mutilitarianism.
- The efficiency-equity tradeoff: Mutilitarians worship at the altar of efficiency. This would not be so bad except that they emphasize that there is generally a tradeoff between efficiency and equity. As a result, an unstated goal of mutilitarianism is to increase inequality!
- Medianist alternative: There are many policies that increase both efficiency AND equity. These are also medianist policies because they will benefit the median person.
In sum, mutilitarianism is money-metric utilitarianism. It is a mutation of questionable morality and it should be replaced by medianism. This is a clear improvement, and it is cheap and simple to do. Although it is only a modest improvement, when multiplied across multiple policies that affect billions of people over decades or centuries, it is well worth the tiny investment it would require.