The common interest: Queen Elizabeth, professionalism and welfare economics

Queen Elizabeth the second

Queen Elizabeth II just died at age 96. If anyone asked me what I thought about this, I would respond that, in my view, nobody on earth has ever deserved to die and that while I detest the role of monarch, on the whole, Queen Elizabeth seemed like she did less harm than most randomly selected members of her family would have done. Given the queen’s upbringing and the opportunities her position provided, the queen never struck me as especially wicked. Granted, the lack of explicit harm through her actions may have made the implicit harms caused by her social role more insidious. May she rest in peace, as like all people who have ever been born, she was treated more cruelly by the world than merited.

But to really tell you what I think of Queen Elizabeth II, I need to get into what I think of monarchs. A monarch is effectively a device for pretending that we’re all in this together- for creating the concept of a common good. A concrete precursor of the idea of the nation as a floating abstraction. This is doubly true of a constitutional monarch.

A guy I met at a party once

I met a guy at a party once who had an interesting right-wing thesis that I’d never heard before. The minimum wage in Australia is 21.38 Australian dollars. However, for employees employed under American rules- that is to say no guaranteed hours, no guaranteed holidays or sick days and can be fired at will, there is an extra 25% loading they are entitled to. When all is said and done, the minimum wage in Australia most comparable to the US is about 18.30 in US dollars or 26+ in Australian dollars. It is also higher than that in many industries- that is just the lowest rate.

Anyway, this guy’s thesis was that we’d hit the limit. That is to say real wages for unskilled and low-skilled jobs couldn’t go any higher than that (in real terms, not including inflation). If they did go higher than that the kind of people who work low-paid jobs (who he took to be basically unmotivated) would start cutting back hours. In theory, if we extrapolate economic growth, we should be paying people 50 dollars US an hour to stack shelves in 50 years. However, according to this dude, that’s absurd- we’ll never be able to extract 40 hours of work out of people at that rate of pay, they’ll go part-time. Ergo we are at, or near, the maximum feasible wage for unskilled labor.

I had a number of questions for him as you can probably imagine. “Why shouldn’t people cut back their working hours- isn’t that a legitimate use of extra productivity?” [his answer: “but that will reduce economic growth”], “Wouldn’t people have said the exact same thing back when the wage was half what it was now and they could never imagine it reaching 20 dollars an hour?” [answer: yes, but this time it’s true].

However, the question I best remember his answer to was this: “Why should such people, condemned to never make more, care about economic growth then?”. He paused for a moment, confused, then said: “Oh well, because it’s in the national interest. Almost everyone cares about the national interest”.

“What does that mean?…”

I tried out different ideas on him. Maybe he meant it was some kind of utilitarian improvement for 70 dollars an hour to go to 140 dollars an hour, even if 20 dollars an hour couldn’t go to 40? Maybe he was talking about the risk of Australia falling so far behind economically that we become in danger of losing our sovereignty and thus, as citizens, liberty? Nothing quite worked. The national interest was this special distinct thing in his mind, and whatever it was, higher GDP was definitely in it.

Monarchs and such are a great help in creating this thick yet abstract concept by grounding it in a mortal heart.

The aesthetic grounding of the common interest by monarch

It’s well known that the monarch’s interests are identified with the interests of the nation. Indeed the monarch’s very body is often identified with the body of the nation.

It’s well known that in societies with a monarch, this identification of the monarch with the nation is used to strengthen the idea of the nation and nationalism. Further, it’s well known that a strong idea of “the nation” is used to submerge antagonisms between classes, and other antagonisms that exist within each country. In effect then, the queen is a kind of glass-darkly behind which the ruling elements of society avoid dissension by unifying us all behind one (living) banner. All this is so well rehearsed it’s a bit trite.

It’s also well known that the sovereign’s will and desire is always construed to be for the flourishing of the nation. When the song says “God save our gracious queen” the claim isn’t that the queen happens to be gracious, in the sense of bestowing grace on the nation. Instead, the queen in her official personage is necessarily gracious towards the country because the official personage just is the ‘loving the country role’- at least in theory.

If I could add a bit of commentary to this common knowledge it would be:

A constitutional monarch is particularly effective at embodying the idea of the common interest. In a sense, constitutional monarchy is the perfect form of monarchy. It is not the residual appendix of “real” monarchy from the past but more like an apotheosis. By not doing anything much of their own volition, we can imagine the monarch as a being of pure yearning for the good of the country. The queen is the embodiment of total desire for the public good, nothing but will for the national interest. Her will rises above the particular, the grubby, and the factional. By, paradoxically, never engaging in any discretionary action she never fails to totally embody that desire. Specific action, in its imperfection, in its factional leaning, in its ignorance, can never represent total, perfect, desire. Thus, to perfectly love the country, the monarch must be passive- moved only by rituals, rules and directions like a hand puppet.

The concept of the monarch’s good pleasure makes a kind of conceptual sense of how the butcher, the baker and the candlestick maker- or more aptly perhaps, the CEO, the small business owner, the worker and the pensioner can all have a sort of common “national interest”. It’s a kind of politico-rhetorical flourish that brings into being the common welfare imagined community of the nation for very concretely minded people who need something to identify it with (the good pleasure of the sovereign).

It’s no real grounding insomuch as it’s ultimately circular. What is the common welfare of the nation? The pleasure of the monarch. What is the pleasure of the monarch? The common welfare of the nation. However some people aren’t looking for a political-ontological grounding, they’re looking for a kind of aesthetic or symbolic grounding or even a narrative-psychological grounding using the minds of real people. The national good is whatever her will is, and her will is whatever the national good is and that’s good enough for me!

This is why there is so much distress about this particular monarch’s death. On paper we’d expect less distress than ever. The queen was very old, so we’re not looking at a ‘death of the young king’ type situation. The British are less monarchical than ever. Still, I bet the mourning is going to go on for a long time, at least by the standards of the contemporary news cycle. The key to understanding this is that it’s not really distress about the death of a leader, it’s distress about the death of the common good of a nation at a time when people are less sure than ever that such a common good can exist. This mourning will be bitter too and contested. Different factions will use it to try and engineer different visions of what the common interest that died- and is now to be reborn in Charles III- was, is and will be. So we wait with bated breath- will Charles III be able to convince the United Kingdom that there is a common good that stretches on one hand from the corpulent, overpaid, venal, hoarding, cruel CEO on one hand to the wicked BENEFITS SCROUNGER on the other?

There’s a few things further to say about this. First of all, while a common good should be constituted, in a utopia it would be constituted explicitly through discussion by the people, insofar as is possible by mutual consent, and where that is not possible, through vote after debate- visited and revisited as necessary. We should talk explicitly as a society about how we weigh needs against needs, and not hide behind a common good synthesizer like the heart of a monarch. Perhaps there should be a document, parallel to the constitution, maybe an appendix to it, that outlines the current working conception of what the common good is- formed through debate and discussion by the public, using devices like sortition. It would be a kind of qualitative and vaguer parallel to a Social Welfare Function, or maybe a range of functions and a way of mediating between them.

The just society needs to debate, discuss and deliberate on questions of distributive justice and the common good explicitly because if it doesn’t ‘the common good’ will drift towards being identified with the interests of the powerful- the tyranny of structurelessness on a mass scale.

Second of all, the process of constituting the unity of the nation by the monarch is not done ‘neutrally’. Regina/Rex was not, and never pretended to be, a utilitarian aggregator. Despite the passivity of her role and the deliberate stripping of her agency, she is still a particular individual. For starters, her good pleasure weighs herself above others. For seconds, her family. And for thirds, the class she was born into. She does not need to say this explicitly- we can all tell, and discourse is influenced. Even if she didn’t feel this way, such feelings would be imputed to her, and through her mere regal, yet -indvidual and classed- existence, she would pull the nation in this direction. If nothing else, by the sheer necessity of her being her, she communicates that inherited wealth and power is part of the constitution of the common good.

Whose professionalism? Whose bottom line?

On Slate Star Codex, U/Midnightrambulator wrote:

In personal life, most human behaviour is driven by pretty basic motives. People seek validation, hold grudges, form cliques, etcetera.

You go up one level in scale, towards the bureaucracy or the large corporation. There we find a whole machinery built to rationalise and professionalise decision-making. There are roles and responsibilities, protocols and policies, checks and balances – all limiting who can decide about what, and often requiring elaborate, quantified justification for those decisions. There is a host of disparaging terms for people who try to bring ordinary human emotions and relationships into such an environment: corrupt, arbitrary, biased, cronyism, favoritism...

But then you go up further, to where the big decisions are made, and... you're right back in the fucking schoolyard.

Local governments sink millions into giant vanity projects with little justification except prestige. National governments sink billions into propping up dead or dying companies because "we don't matter on the world stage if we don't have an X industry!" (Flag carrier airlines being the most egregious example.) Top politicians, under the magnifying glass of the media, are as obsessed as any 12-year-old boy with "looking strong" or "looking weak". The world's richest CEOs are engaged in almost-literal dick-measuring contests – who's got the biggest rocket? Wars are started because some leader felt insulted or humiliated.

Thoughts? Am I onto something? Has this been observed before?

This hasn’t been quite my experience. In my personal life, I’ve almost always individual found people and informal courteous and kind. This may be a result of me choosing my friends and friend groups very carefully. In formal groups though- formal groups of any size, whether government, NGO or business, I’ve found people frequently insufferable.

But I get what the user is saying. Here’s what I think is really going on here. I don’t think it’s really a petty-professional-petty process along a size continuum. like the user thinks- many corporations are quite professional, yet much larger than local governments. In my younger years, I was involved in student politics, the number of people involved could be tiny, but people were still extremely petty.

Here’s the real pattern. A lot of his examples of open displays of pettiness are government, and a lot of his examples of outward professionalism are businesses. The real reason the business groups the user has encountered are outwardly professional is because, at least outwardly, everyone has the same goal maximize shareholder or owner value. The government groups that the user alludes to are not outwardly professional- they are openly conflictual- because different actors in these groups have different ultimate objectives and state so publicly.

This is what some people find so attractive about anarcho-capitalism I think. People just do their own thing, people don’t have to share organizations or have a vote in the same governments as others who are trying to undermine everything they stand for. The problem is that even putting aside the question of whether it’s desirable, it’s impossible. There are always questions of common governance- e.g. externalities. Even beyond externalities, there are always questions like “who owns what land at the start”. This can never be treated as just another outcome of the market or individual action or whatever. Note that what I described as the attraction of anarcho-capitalism is also the attraction of a particular kind of dogmatic, idealistic communism in which communism represents a total end to the competition of interests in governance.

Business environments are often more sharp-elbowed than politics anyway they’re just sneakier about it. In politics, I was often fond of my rivals who wanted to steal my seat in a way that I have never been fond of people in business who wanted to take my job. So contra U/Midnightrambulator I don’t think it goes petty/professional/petty based on the size of the organization. Instead I think it’s hidden conflict and open conflict- with business tending towards hidden conflict and politics tending towards open conflict.

But here’s the most important point. To the extent that the additional professionalism of business, the sense of shared purpose, is genuine- really present in business and not in politics-, it’s maintained through blood. It’s maintained by kicking out people who don’t fit- sometimes through no fault of their own, and sometimes due to differences that are entirely legitimate. Being fired is calamitous- it’s one of the worst things that can happen to a person psychologically, and between 10 and 15% of workers are fired from their jobs per year. Even more, quit under duress. There’s a lot of friction involved in making the kind of frictionlessness you see in the business world. For all that people say politics is dishonest, at least in politics you talk about your differences openly

Welfare economics

There are many ways of splitting up any discipline by the debates that run through it, but one of my favorite ways to split up welfare economics is between those who take sides and those who do not. Welfare economics is the study, by economists, of how policy and economic arrangements, broadly construed, influence human welfare.

Now the problem is that certain policies make some people better off, and others worse off, so how are you to judge how economics affects human “welfare” in some overall way?

1. Firstly, it’s not clear that we have the means to quantify ‘welfare’ even within a single individual,

2. But even if we do, it’s not clear that we can add up across multiple individuals,

3. But even if we can, it’s not clear that we should be simply ‘adding up’ welfare, for example, some people think we should place more weight on the welfare increases of the worst off.

Now I said that the great split on these questions is between those who take sides and those who do not. Let’s start with those who avoid taking sides.

Not taking sides

Those who try to look for some way to avoid taking sides essentially look for some kind of cheat code to give policy recommendations without taking controversial ethical positions, one popular strategy is the appeal to democracy, here are two variants:

1. When considering economic policy, look for actions that result in outcomes where the winners could compensate the losers [these are called Kaldor-Hicks improvements]. Then argue that, if the government implements these policies, it can either choose to enforce the compensation or not enforce it. Either way, since it is the government’s choice, and we live in a democratic society, what we have here is a bigger pie, with the choice of how to cut it then sanctified by democratic processes- how could that possibly be objectionable?
   
   Objections: A). The winners are very unlikely to choose to compensate the losers of their own accord, and if the government chooses to force the compensation, there will be a deadweight loss - a cost to the taxes needed to enforce the compensation. Thus, even if the winners could compensate the losers in theory, in practice, there may be no economical way to restore the losers to their prior position. B). In a sense we live in a democracy, sure, but that democracy is weighted by wealth, perhaps nowhere is that more true than in decisions about the distribution of wealth. To treat the government’s choice about whether or not to implement compensation as the sacred voice of the people is… tendentious.

2. Another strategy is to argue as follows. The people, through their democratic government, have ordered the distribution of wealth according to their preferences on distributive justice, practicality etc. Since the distribution is democratically sanctified, an extra dollar at the margin for everyone has the same value.
   
   Objections: See objection B above, but even more so, since the reliance on the justice of the prior distribution is even stronger. Also, whether the conclusion follows from the antecedent is a really tricky question but I won’t get into that here.

What a lot of these objections amount to to is the concern that “not taking sides” is really no such thing. For example, if we go with strategy 1 and we implement the Kaldor-Hicks criterion, given the cost of transfers and their political difficulty in arranging them compensation will likely never be paid. Hence we are effectively taking the side of the ‘winner’ and not the person who could hypothetically be compensated.

Moreover, both strategies, in general, and in the long run, amount to preferring the welfare of the rich to the poor. Consider the second strategy- if welfare is a concave function on income (e.g. your millionth dollar doesn’t matter as much as your hundred thousandth), weighting a dollar to the rich as worth as much as a dollar to the poor is effectively to weigh the welfare of the rich much more than the welfare of the poor. Democracy- given the well-known flaws in real democracy- only goes so far in concealing this.

So what about the other broad family of approaches?:

Taking sides

The simplest form of the taking sides approach is simple indeed. Make an ethical judgment about how good an extra dollar for each person is.

The most common way to do this is with a social welfare function. Use a function of some sort to decide how much you, considered as a hypothetical social planner, value a universe of possible social outcomes.

Here’s how that might go in practice. Let the elasticity of the marginal value of a dollar equal, say, 1.5, meaning that for every 1% your income increases, the value of an additional dollar to you falls by 1.5%. This means, for example, that an extra dollar given to someone who earns 20,000 dollars a year is 8x more valuable than the marginal value of an extra dollar given to someone earning 80,000 a year (that figure, 1.5 is a common one, supposedly based on the intensity of people’s actual preferences derived using a variety of methods, ranging from gambling preferences to time preferences, to correlation with happiness surveys. Most methods suggest that the elasticity of the marginal welfare value of a dollar is somewhere in the ballpark 1.3 to 1.5. I’ve chosen 1.5 because it makes the maths come out nicer)

Now we have a mathematical rule which will allow us to compare policies with different associated profiles of monetary gains and losses for different people. Here’s how we could apply that in a particular case. Bob the billionaire (who receives 1 billion dollars a year in income) values a new bridge over a river at site A 1 million dollars more than he values a bridge over a river at site B. It will allow him to take his limousine rather than his helicopter to his favorite golf course. Now there is a village full of people who would prefer the bridge to be built at site A because they all have ailing mothers on the other side of the river and it will help them to visit their mothers much more quickly. 100 people from the village and who all have an income of $30,000 a year, would each be willing to pay 1000 dollars for the bridge at site A, for a total willingness to pay of 100,000 dollars.

Now our maths tells us that an extra dollar is worth approximately six million times as much to the villagers with ailing mothers than to Bob the billionaire. Thus, even though, in aggregate, the villagers would be willing to pay one-tenth as much for the bridge at site B, from the perspective of the government trying to maximize social welfare, it’s better to build it at site A.

You might be thinking “what about the Kaldor-Hicks approach you mentioned above, wouldn’t it be better for everyone if the government built the bridge at site A, took 999,999 dollars from the billionaire and gave approximately 10,000 dollars to everyone who had wanted a bridge at the other place?” This discussion is a bit beyond us here, but it’s probably just best to say taxes do not work like that.

There are many objections to the taking sides approach. But the simplest goes like this. Have you seen how much people argue about economic justice? Have you seen how controversial these issues are? And you really want us to just poke a flagpole into the sand and make a statement on how much a dollar is worth to everyone? That’s crazy.

My approach

My approach, in line with the meme, is neither taking sides nor not taking sides but “a secret third thing”. Technically it’s a variant of not taking sides, but spiritually I think that it is much closer to taking sides.

I think that rather than taking sides, welfare economists should provide quantitative information in a form usable for people who want to take sides. I think they should do this by working out what the probable effects of policy are on psychometrically measured wellbeing. Let’s say we have a happiness scale that goes from 0 to 10. We investigate the probable effects of a policy involving the distribution of resources. We find that the expected effects of the policy on psychometrically measured happiness will be as follows:

In expectation, the policy will move 100 people from happiness 6 to happiness 7, move 50 people from happiness 7 to happiness 8 and move 50 people from happiness 8 to happiness to happiness 7.

We report this information, along with other information like who those people are, what we know about why their happiness is being altered, etc.

This means that as welfare economists we have provided information rather than recommendations. We have fulfilled the ambition of the not taking sides approach in doing something almost ethically unobjectionable- giving relevant information [I’m sure many people will try to object, mind you]. We have fulfilled the ambition of the taking sides approach, by making a contribution that will- hopefully, help show what is just. The spirit of both, the downsides of neither.

No doubt you’ve got a lot of questions- how do we know psychometric data tells us anything about welfare? Can we compare psychometric data from between two people? Why psychometric data? My thesis answers all these questions in detail.

Anyway, if you’re interested in this issue of how we mediate conflicts of interest in welfare economics, read my draft thesis here:

https://docs.google.com/document/d/17dw0_Ukp_98jmWBr8eyLkxSB1vXeLpi9YbodhQm3q2Y/edit?usp=sharing

Feedback appreciated!

As always, check out my book, available for 5 dollars as an eBook here:

https://www.amazon.com.au/Cave-Scratchings-philosophical-left-wing-miscellaneous-ebook/dp/B0B8XXSKJQ

And available for free as a PDF here:

https://deponysum.files.wordpress.com/2022/08/book-google-docs.pdf

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