Wednesday, October 05, 2016

Empathy and the social contract

First, read the following excerpt:
It is impossible to imagine Bill Gates’s wealth without Bill Gates’s ingenuity and effort. But it is far easier to imagine Bill Gates’s wealth being produced by someone other than Bill Gates within the institutions of modern American economic society than it is to imagine Bill Gates generating Bill Gates’s wealth in a different time and place – in France in the 1700s, or in the Central African Republic today – in which society was or is less tolerant of entrepreneurial capitalism and the accumulation of personal billions, and where the community of engineers that gave rise to and became America’s tech sector is absent. Indeed, at some point in Microsoft’s history it was Microsoft the information-processing organism that was more critical to Bill Gates’s wealth accumulation than Bill Gates himself. People, essentially, do not create their own fortunes. They inherit them, come to them through the occupation of some state-protected niche, or, if they are very brilliant and very lucky, through infusing a particular group of men and women with the germ of an idea, which, in time and with just the right environment, allows that group to evolve into an organism suited to the creation of economic value, a very large chunk of which the founder can then capture for himself.
That paragraph can easily be used as some kind of an ideological  Rorschach test.  Upon reading that, one can get pissed off and defend Gates's gazillions, or one might applaud in agreement that Gates has been unfairly hogging it all, or ... whatever.

To me, what makes that paragraph standout is this: The author, Ryan Avent, is senior editor and economics columnist at The Economist.  You might remember him from one of my earlier posts?  One of the many reasons why I have been a long-time reader of the Economist is this: It is not an ideological outfit.  It is not like the Nation or the Wall Street Journal.  There is a sensibility that reflects a much broader understanding, which Avent also displays in his essay.

In the essay from which I had excerpted that paragraph, Avent makes an argument that will certainly make one sit up:
The wealth of humans is societal. But the distribution of that wealth doesn’t rest on markets or on social perceptions of who deserves what but on the ability of the powerful to use their power to retain whatever of the value society generates that they can.
His follow-up sentence?  "That is not a radical statement."

After quoting Adam Smith and the wonderful advantages of trade and specialization, Avent writes:
Secure in the knowledge that societal growth would not reduce redistribution (and could indeed increase the value available for redistribution by increasing global output) the incentive to draw the borders of society tightly would be curtailed. The challenge, of course, is to create the broad social interest in an encompassing redistribution. How to do that?
Isn't that the challenge that I have been struggling with all my adult life!  How do we create the broad social interest in redistribution that is needed along with the open borders, trade, and specialization?  How do we develop a social contract that will include redistribution, which the ideologues from the right hate, while also allowing for free trade that the ideologues from the left hate?

Avent writes that Adam Smith the philosopher wrote about that too.  "The force of human empathy can be made to serve either openness or societal mercantilism."  Here again the problem is that we are far more empathetic to people like us, but not towards people completely unlike us.  We conveniently forget that deep down we are all humans, but only view each other through nationalistic or religious or ethnic, or whatever divisive lens we want to use.
There is a better answer available: that to be ‘like us’ is to be human. That to be human is to earn the right to share in the wealth generated by the productive social institutions that have evolved and the knowledge that has been generated, to which someone born in a slum in Dhaka is every bit the rightful heir as someone born to great wealth in Palo Alto or Belgravia. ...
Rich societies can find ways to justify their great wealth relative to others: their members can tell themselves stories about the great things they did that others could not have done that made them wealthy beyond imagination. Alternatively, they could recognize the wild contingency of their wealth, cultivate human empathy, and do what they can to extend the wealth of humans to everyone.
If only we had more empathy.  If only we spent at least as much time thinking about what it means to be human as we spend on entertaining ourselves.  If only ...

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