#marginal utility

[mostlysignssomeportents]

Rich People’s Gain is Worth Less than Poor People’s Pain

A new way to think about utilitarianism, courtesy of the Office of Management and Budget.

Like “realism,” utilitarianism is often code for “being a selfish jerk.” Think of “longtermism,” which concerns itself with a hypothetical future containing trillions of synthetic, simulated humans living inside computers. Making each of those synthetic people very slightly happier will produce a gigantic aggregate benefit.

Even a very small amount of additional happiness multiplied by trillions of imaginary people adds up to more happiness than all of the people currently alive can ever experience. By that reasoning, there’s no amount of misery one could inflict on today’s living people that would outweigh even the chance of bringing a dollop of joy to those far-future sims.

For the selfish, utilitarianism works best when it provides a justification for making themselves better off at others’ expense. At first blush, longtermism militates for everyone to don hairshirts in support of the happiness of those trillions of future sims.

But longtermism is an offshoot of “effective altruism” (whose leading spokescriminal and financier was Sam Bankman-Fried), which offers an ingenious solution to this problem: earning to give.

“Earning to give” is the utilitarian, effective altruist notion that one should take the highest-paying job one can get, even if that job involves inflicting untold misery through pollution, inequality and exploitation — provided that you eventually give all the gains away to good causes that outweigh the harm you did while earning them.

And since succeeding as (say) a high-powered investment banker requires that you wear the finest clothes, drive a showy car, live in a fancy home, fly first class and eat at Michelin-starred restaurants, all of these comforts can be explained as utilitarian necessities one must endure on the path to earning enough to give away so much that you make lots of people better off.

- Rich People's Gain is Worth Less than Poor People's Pain: A new way to think about utilitarianism, courtesy of the Office of Management and Budget

[yngwrthr]

Thus the law of value becomes a low of motion for a definite type of social organization based upon the production of commodities… We are thereby led, in the most striking contrast to the outlook of the psychological school, to regard political economy as a part of sociology, and sociology itself as a historical science. Böhm-Bawerk has never become aware of this contrast of outlooks. The question whether the “subjectivist method” or the “objectivist method”... Thus it happens that Böhm-Bawerk, unfailingly carrying on the controversy from his subjectivist and psychological standpoint, discovers contradictions in the Marxist theory which seem to him to be contradictions solely because of his own subjectivist interpretation of the theory.

Rudolf Hilferding, Böhm-Bawerk’s Criticism of Marx, 1904, New York: Prism Key Press, 2011, p. 71.

[skowhegan]

Astrid Bowlby (’02) When the Shadow is Not Your Shadow Marginal Utility, hosted by Arcadia University Art Gallery 450 S. Easton Rd Glenside, PA 19038 United States September 14 – October 29, 2017 Opening Event Tuesday, September 26 Conversation between Astrib Bowlby (’02), David Dempenwolf (’07) and Yuka Yokoyama 

[mostlysignssomeportents]

Rich People’s Gain is Worth Less than Poor People’s Pain

A new way to think about utilitarianism, courtesy of the Office of Management and Budget.

As Quiggin explains, this method would produce some pretty startling policy recommendations:

If a policy halved Elon Musk’s income, while doubling the income of a single randomly chosen US household, it would be evaluated as neutral. If the policy doubled the income of two households, it would be beneficial.

- Rich People's Gain is Worth Less than Poor People's Pain: A new way to think about utilitarianism, courtesy of the Office of Management and Budget

[mostlysignssomeportents]

Rich People’s Gain is Worth Less than Poor People’s Pain

A new way to think about utilitarianism, courtesy of the Office of Management and Budget.

This relies on a simple and irrefutable utilitarian observation: an additional dollar makes does less for someone who can afford all the necessities of life than it does to someone who has to choose between, say, buying groceries and paying the rent.

If you’ve got a million dollars in the bank, the additional dollar only causes the number in your bank balance to rise by one. You might experience a brief, warm glow when this happens, but that’s nothing compared to the difference that a poor person experiences if the same dollar makes the difference between eviction and homelessness, and staying put in their family home.

These marginal utility calculations are a well-understood, widely accepted economic fundamental, and we can use them to calculate the multipliers that the OMB could use to estimate the value of each program based on its beneficiaries.

- Rich People's Gain is Worth Less than Poor People's Pain: A new way to think about utilitarianism, courtesy of the Office of Management and Budget

[mostlysignssomeportents]

Rich People’s Gain is Worth Less than Poor People’s Pain

A new way to think about utilitarianism, courtesy of the Office of Management and Budget.

An intellectually honest utilitarian would trade place with the poorest, most abused person if it resulted in a net gain to the world’s supply of happiness. But these honest utilitarians are few and far between.

Here’s a daring litmus test for honest utilitarianism, courtesy of the US Office of Management and Budget (OMB), the agency charged with weighing federal programs to determine whether they represent value for money.

In a draft circular, the OMB proposes that these calculations should be weighted to account for the “marginal utility” to the beneficiaries of each program.

This may sound complex, but it’s quite straightforward. Here’s John Quiggin’s summary:

A project that delivers a dollar of benefits to each of a group of poor people is worth more than a project that delivers a dollar of benefits to each of a group of poor rich people.

- Rich People's Gain is Worth Less than Poor People's Pain: A new way to think about utilitarianism, courtesy of the Office of Management and Budget

[yngwrthr]

The Marxist law of value starts from this, that commodities exchange at their values, this meaning that commodities exchange one for another when they embody equal quantities of labor. The equality of quantities of labor is solely a condition for the exchange of commodities at their values. Böhm-Bawerk, entangled in his subjectivist interpretation, mistakes this condition for a condition of exchange in general. But it is obvious that the exchange of commodities at their values, while one the one hand it merely constitutes the theoretical starting point for a subsequent analysis, one the other hand directly controls a historic phase of the production of commodities, a phase to which a specific kind of competition corresponds.

Rudolf Hilferding, Böhm-Bawerk’s Criticism of Marx, 1904, New York: Prism Key Press, 2011, p. 73.

[yngwrthr]

The discovery of an objective law of value, no matter how it may be formulated, can never be consciously intended [by the Austrian school], because the individual will only follow the impulses of individual interest. The only question is whether, by the individual will doing this, by all the individual wills doing this, an objective law can (and indeed must) unconsciously and unintentionally arise, a law of value as envisaged by the classics of political economy, to whose rule all the individual acts of exchange are subject... whether these really operative psychological factors preclude the existence of an objective law of value or whether, on the contrary, they permit its existence or even presuppose it as a necessary consequence. The examination will be somewhat tedious, because we must begin with abstract isolated persons, as postulated by the barren arbitrariness of this school of psychologists.

Conrad Schmidt, The Psychological Tendency in Recent Political Economy, 1892, in Responses to Marx’s Capital: From Rudolf Hilferding to Isaak Illich Rubin, ed. by Richard Day and Daniel Gaido, Chicago, IL: Haymarket Books, 2017, pp. 414-15.