We are good?

I was asked that question by a waitress in the restaurant at Holiday Inn in Port Moresby a few months ago. I told her that I was good and asked whether she was good. She responded: “We are good”.

This novel use of the hospital ‘we’ seemed amusing. But the incident came to mind just now because of the potential for ‘good’ to mean different things.

How do you respond when someone greets you by asking: How are you? There was a time when I nearly always said “I’m good”, but I became more conscious of what I was saying after some clever person responded that he was not asking about my morals. In retrospect, I should have told him that I was referring to my emotional state, which was good because I was in good health and also felt somewhat virtuous and competent.

A few years ago I wrote a post on the topic: Is our inner nature good? What I wrote still seems ok; perhaps I could even claim it is good. I ended up more or less endorsing the view that our inner nature must be good because moral beliefs and motivations come from a small set of intuitions that evolution has prepared the human brain to develop. Those intuitions enable and constrain the social construction of virtues and values. 

There is scientific support for that line of thinking, but a scientific approach cannot take us far in considering our inner natures.

It may be worth considering why a scientific approach cannot be particularly enlightening about our own inner natures. One basic reason is that we live our lives as players rather than spectators. If we try to observe ourselves in the way we observe other people we tend to make predictions that get in the way of our intentions. We cannot escape the fact that our perceptions influence our behaviour, and vice versa. If I perceive myself as the kind of person who behaves in a particular way, then that will influence my intentions and how I behave; and if I change my behaviour, that will influence how I perceive myself.

In order to become more like the person you would like to become, you need to know how and to “do it like you mean it” (to use a phrase I heard often as a child while helping grown-ups with farm work). A story told by Tim Gallwey in The Inner Game of Golf comes to mind to illustrate the point (p183). A golfer came to Gallwey for coaching to improve his golf swing. After the golfer demonstrated his dreadful swing, Gallwey asked him how he would like to be able to swing. When the golfer started to explain, Gallwey asked him to demonstrate. That resulted in an immediate improvement in performance.

Now, it is fairly obvious that people can’t become experts in any field by just pretending to have expertise. The golfer only had the potential to improve his swing instantaneously because he knew how to do so.

Going back a step, how do we know we can trust our intuitions about what kind of person we would like to be? Our perceptions about our inner natures must influence our thinking about what kinds of persons we would like to be. There are many different stories we can tell ourselves about our inner natures. If you tell yourself that “the flesh warreth against the spirit” then I guess your goal must be to overcome the temptations of the flesh.  If you tell yourself that your body is just a machine designed to make you happy then I guess your goal would be to keep all the parts in good working order and become a proficient machine operator. If you tell yourself that all sensations are illusory or impermanent and that attachment to them causes suffering, then I guess your goal would be to become equanimous. If you tell yourself that you have an authentic self which grows into a strong, healthy and peaceful presence when you practice unconditional acceptance of all your bodily sensations, then I guess your goal is to get into the flow and let that happen.

Although it must be fairly obvious that I think some of those stories would serve me better than others, I don’t think it is possible to prove any of them to be false. Even so, it seems to me that plausibility is still an important consideration in choosing which stories to accept. As a general rule small leaps of faith are probably better than large leaps of faith. That thought occurred to me as I was reading Michael Winn’s book, Way of the Inner Smile, a few days ago. For example, the following passage explaining how the inner smile differs from feelings of love and compassion seems to me to be a plausible description of personal experience:

“The Inner Smile is probably something closer to the experience of unconditional acceptance. The seed quality of unconditional acceptance is smiled through the outer biological layers of the self in towards the core of one’s being, and this generates a counter-wave of smiling energy that emanates back out from the core and flows in the chi (subtle energy) channels of the body”. (p 55)

The plausibility of that story relies on personal experience rather than on scientific verification of the existence of such things as smiling energy and chi channels. Some ideas in the book seem to me to be less plausible, but it would distract from the points I am trying to make if I elaborate now.

So, what points am I trying to make? Feeling good is about competence and virtue as well as health. Feeling good is about becoming more like the person you want to become. In order to develop a strong sense of what kind of person you would like to become it may be helpful to find a story about your inner nature that you find plausible. When considering your inner nature, the most relevant test of plausibility is personal experience rather than science. And we should not forget to smile.

Postscript:

Lucy Lopez has provided the following comment:

 You wrote: "Feeling good is about competence and virtue as well as health. Feeling good is about becoming more like the person you want to become. In order to develop a strong sense of what kind of person you would like to become it may be helpful to find a story about your inner nature that you find plausible. When considering your inner nature, the most relevant test of plausibility is personal experience rather than science. And we should not forget to smile."

Firstly, the thinking mind is almost never inactive and so intervenes in every experience.  So much so that most people find it hard to distinguish between their thoughts, beliefs and ideas and their FEELINGS.  In fact, most find it hard to actually allow themselves to feel, almost always reporting on what they think rather than how they feel.  

So, for instance, if I ask you how you feel and you say 'I'm good'. that is more than likely an expression of the idea of 'I'm okay' or 'There's nothing terribly wrong with me' rather than an expression of how you're really feeling.

But it is possible to get in touch with our feelings and acknowledge them even when we sometimes may not have any existing words for them.  When you really allow yourself to FEEL, or should I say to ACKNOWLEDGE how you're feeling, it can be quite a revelation.  That's because we have been so conditioned to deny, distrust and hide our feelings.  

When we do allow ourselves to tune into our feelings fully and acknowledge them, we can do two things:

1. We can decide if we want to continue feeling the way we are feeling or not.  If we want to continue feeling the same way, there is nothing more to do.  If we don't want to feel the way we're feeling, we can ask the question: How would I LIKE to feel?  Without presuming we know the answer (in other words, without resorting to thought/ideas, we allow that feeling to arise spontaneously.  Again, it may often surprise us how different that feeling is to what we might THINK we want to feel.  (BTW, this is a technique I teach).

2. We can look for the thoughts and beliefs that underlie our feelings and examine these for their validity, whereupon we might consider different thoughts and different beliefs.

The point to all this is that you don't need to rely on some intellectual concept of the kind of person you'd like to be.  Sure, you may begin by thinking about it but it is far more effective, efficient and natural to FEEL the kind of person you want to be because more than likely, you'll be guided by what feels good i.e. peaceful, joyous, blissful, equanimous even...The kind of states you experience during meditation as Voltaire describes it:

'Meditation is the dissolution of thoughts in Eternal awareness or pure consciousness without objuectification, knowing without thinking, merging finitude in infinity'.

Always happy to respond to your ideas :)

Lucy's blog:  "Get Enlightened Today"

Why are economists talking about income distribution?

The distribution of income was once at the core of economics because it helped to explain differences in growth of wealth and population in different nations. Interest in income distribution then shifted to the implications of income inequality for social justice and aggregate happiness. Around the middle of the 20th Century, however, most economists realized that they had no particular expertise in contemplating such matters. Economists retained some interest in income distribution because many governments pursued distributional objectives and it made sense to consider how such objectives might be pursued at least cost. Nevertheless, it is probably fair to say that income distribution became somewhat tangential to the main interests of most economists.

The situation seems to have changed radically over the last few months, following publication of Thomas Piketty’s book, “Capital in the Twenty-First Century”. The interest that leading economists have shown in the book seems to stem from two factors: the increased public interest in income distribution since the GFC; and respect for the amount of intellectual effort that the author has put into his book.

While the author may deserve some praise for his statistical efforts, in my view he does not deserve any praise for the clarity of his exposition. The main point being made in the book, over and over again, is that r (the rate of return on capital) tends to be greater than g (the rate of growth of national income) and that r > g  implies that “the risk of divergence in the distribution of wealth is very high”. I mistakenly thought that an explanation of the significance of this inequality might flow from the two “fundamental laws of capitalism” expounded by the author.

The first “fundamental law” is merely a definition of capital’s share of national income:

α = r × β , where α is capital’s share of national income, r is the rate of return on capital and β is the capital/income ratio (K/Y).

Although r > g could imply that β will rise (if we make the heroic assumption that the capital stock grows by r% per annum) it is still possible for α to fall if r is falling.  

Piketty’s second “fundamental law” is about the long-run implications of savings and economic growth rates for the ratio of capital to income:

β = s / g    where s is the savings rate.

When you put the first and second laws together you get:

α = r × (s / g)  .

That implies that what happens to capital’s share depends on what happens to r, s and g. The significance of r > g is not obvious in that context either. 

I am not alone in having difficulty in grasping the significance of r > g. Scott Sumner noted on The Money Illusion the difficulties he experienced with Piketty’s verbal explanation.

However, even if the distribution of income is becoming more unequal, why should that be of concern to us? It seems to me that the best answer is that distributional considerations are relevant to judgements about the quality of different societies. When I looked at these issues on this blog a couple of years ago I concluded that the distribution of opportunities is the relevant variable. Other people may make different judgements about such matters, but I find it hard to see how a society can be judged to  be better if it sacrifices opportunities available to low income earners in order to achieve greater income equality.

If we are interested in the economic opportunities of people who rely solely on labour income, it seems to me that Robert Solow made a highly relevant point in his review of Piketty’s book, entitled “Thomas Piketty is Right”:

“The labor share of national income is arithmetically the same thing as the real wage divided by the productivity of labor. Would you rather live in a society in which the real wage was rising rapidly but the labor share was falling (because productivity was increasing even faster), or one in which the real wage was stagnating, along with productivity, so the labor share was unchanging? The first is surely better on narrowly economic grounds: you eat your wage, not your share of national income. But there could be political and social advantages to the second option.”

(The significance of this point has previously been noted by others, including David Henderson.)

However, I don’t think we can assume that an increase in capital’s share will always be associated with higher real wages. What happens if technological progress makes capital a close substitute for labour? If a substantial component of the capital of the future can be thought of as a work-force of robots, the economic consequences might be a little bit like introducing slave labour to compete with the existing workforce. Real wages might fall under such a scenario, even though national income could be expected to continue to rise.

I wrote about that possibility on this blog a few years ago. It is a more challenging scenario than the one painted by Piketty, but I don’t think we should be losing too much sleep over it. There is still potential under that scenario for nearly everyone to be made better off than at present as a result of the introduction of new labour-saving technology. Governments may need to remain involved in wealth re-distribution to ensure that happens, but there is scope for them to do that in ways that are consistent with a high degree of individual liberty.

The most important point that should be made about Piketty’s book is that it suffers from the limitations of any analysis which seeks to hover in “the economy’s stratosphere, gazing down on the only phenomena visible from such a distant perch – big statistics such as population growth or the share of national income ‘claimed’ by the very rich”. The quoted words are by Donald Boudreaux, who made the point effectively in his review:

“Instead of actually looking at the behavior behind his statistics, the author serves up ad hoc and ultimately unpersuasive theories about the "behavior" of his big statistics themselves, including such hulking impersonal aggregates as the return to capital and the ratio of national wealth to national income. He imagines that such aggregates interact in robotic fashion through a logic of their own, unmoved by individual human initiative, creativity, or choice.”

How can desirable economic reforms be pursued more effectively in Australia?

Soon after the Abbott government was elected, I speculated on this blog that it could end up looking quite similar to the Fraser government which held power in Australia from November 1975 to March 1983. It seemed likely that there would be plenty of tough talk without much economic reform.

Perhaps I should apologize to Tony Abbott and Joe Hockey. The government has made some tough decisions in its first budget. I don't endorse everything they have proposed, but it is good to see a government proposing action to deal with a looming problem before a more painful adjustment becomes unavoidable.

Nevertheless, it still seems quite likely that the end result will be tough talk and not much action. These days the budget speech is just the starting point of a political negotiation. The final outcome is likely to be strongly influenced by minor parties in the Senate, which are seeking to increase their popularity by fanning the flames of interest group opposition to spending cuts.

The minor parties only pose a problem because the government does not at this stage have strong public support for its policies. Minor parties do not like to be seen to be obstructing popular government initiatives.

In an article in the Australian Financial Review a few weeks ago (May 28, 2014: ungated version here) Ian Marsh suggested that adverse public reaction to the budget reflects a more fundamental problem which afflicts any government trying make bold reform. He gives several examples: 

“The Resource Super Profits Tax was released in May 2010, and was followed by a public opinion firestorm which unseated Kevin Rudd. WorkChoices led to the downfall of John Howard’s government. Refugees and climate change destroyed Julia Gillard. Earlier, John Hewson was undone by Fightback and sponsorship of indigenous reconciliation and a republic contributed much to Paul Keating’s defeat. In all cases, an unprepared public opinion delivered a populist verdict.”

My problem with that list of examples is that I think public opposition was justified in some instances.

Nevertheless, I think Professor Marsh is on the right track when he suggests:

“There is no infrastructure through which more complex political narratives can be aired or debated. Political leaders have almost no capacity to build a supportive public opinion for significant policy change.

There is only one recent exception: John Howard’s sponsorship of the GST. He won the ensuing election but lost the popular vote. It was a dangerously close call.”

If we had adequate institutional infrastructure in place it might help to ensure that governments propose policies that deserve public support, as well as helping to promote broader public understanding of the need for policy changes.

Marsh seems to be correct in claiming that big policy change requires a solid base in public opinion, or bipartisan agreement. He noted that the big parties broadly adopted the same economic rationalist program during a short period of “acknowledged crisis” between 1983 and 1993. But bipartisan agreement evaporated after the crisis receded:  

“After 1993 the crisis receded, and normal politics resumed. But differences between the parties had narrowed. So how were they to distinguish themselves? Opportunism and manufactured difference were the new currencies of debate.”

Ian Marsh endorses proposals for a change in the role of the Senate to create the public conversation needed to build a support for significant policy change:

“The late Liberal senator David Hamer suggested converting the Senate to a committee house with ministers no longer appointed from that chamber. The Australian Senate would be more like its American progenitor. At present this seems the most likely path for the needed reform”.

However, I find it hard to see how that proposal would promote better outcomes. Despite its admirable Senate, the US seems to have even greater problems in pursuing desirable economic reforms than we do in Australia.

More radical change is required if we want Senators who are capable of getting beyond party political opportunism and the representation of narrow interest groups (including wealthy individuals). In my view we should consider a system of selecting Senators that has less political party and 'big money' involvement. For example, Senators could be chosen using a two stage process:

• Sortition (random selection) could be used to select candidates from volunteers who have the written endorsement of a minimum number of voters (e.g. 100). 
• Approval voting’ could be used to weed out those whom the electorate considers to be least likely to make a useful contribution. 

Even if the Senate played a more constructive role, however, we would still need political leaders who are willing to take unpopular decisions.

Postscript 1:

I have been asked whether the change proposed in selection of Senators would require a constitutional amendment. I don't think it would, although I do not pretend to be an expert in such matters. The Constitution provides:

"The Parliament of the Commonwealth may make laws prescribing the method of choosing senators, but so that the method shall be uniform for all the States" (Section 9).

The proposed change would, of course, require the support of the major parties, but that is not impossible.

Postscript 2:

Ian Marsh has responded as follows:

"I accept what you say about the US. Our political world is different. The argument is developed at much more length in my 2012 book Democratic Decline and Democratic Renewal. In an earlier study (1995) I had a detailed account of how a similar system worked prior to the emergence of the two party system in 1909 (Chapter 10). That first decade of federation is my template. I am not opposed to random selection etc. I just think its so far from the norms of representative democracy that it won't happen - at least short of some major crisis and/or decades of the development of public opinion. Deliberative democracy (on which this idea is based) is to my mind an invention of the US where the structure of power is frozen by the constitution. In Australia (and Britain and NZ) these things are governed by convention. Thus there is a possibility of peaceful change from within. That's what happened in 1909. Regards, Ian."

Will we continue to allow economic development to provide better opportunities for people to have happy lives?

Some friends who have visited my blog have told me that they have had some difficulty in understanding the purpose of my recent series of posts related to emancipative values. This post is dedicated to those people.

Recent posts on my blog have been concerned with the future of human flourishing in wealthy countries. Is the future likely to bring greater and more widespread opportunities for people to live happy lives in wealthy countries?

 Before attempting to summarise my answer that question I need to show how economic development produced better opportunities.

My story begins a few centuries ago when it was normal for the vast majority of people in all parts of the world to be preoccupied with obtaining adequate food and shelter. The threat of famine was never far away, even though there were seasons when food was bountiful and some centuries when the pressure of population on food supplies was reduced in the aftermath of plagues.  For the most part, people lived in small communities isolated from the outside world. They often lived under the threat of being robbed by their own rulers as well as by people in neighbouring communities. It was common for people who did not share the religious beliefs of their rulers to be persecuted and to be deprived of property and even their lives. Violence was rife despite widespread religious observance.

Everyone should be aware that the process of economic development began in earnest a couple of centuries ago with the industrial revolution in north-eastern Europe. Important technological innovations had previously occurred in various parts of the world, but this was the first time that technological advances led eventually to a sustained improvement in material living standards for large numbers of people.

A range of factors help to explain why the industrial revolution occurred when and where it did, but values and beliefs that became more approving of markets, experimentation, innovation and entrepreneurship were of crucial importance. Market exchange promoted more trustworthy behaviour, which reduced the cost of doing business and encouraged innovative investment activities. The new values and beliefs favoured greater economic freedom, including by removing regulatory barriers that had been protecting traditional patterns of production from competition. Firms were free to use new technology that enabled them to produce at lower cost and they were free to sell those goods to consumers.

Over the following couple of centuries, economic development provided greater economic opportunities to vast masses of people, first in Europe and then in many other parts of the world. As people satisfied their basic material needs to a greater extent they gave higher priority to such matters as having freedom to choose what kind of work to do, where to live and who to live with, having a say in community decisions and ensuring equal rights for women and members of ethnic minorities. That is what we mean by the growth of emancipative values.

So, will economic development continue to produce better opportunities for people to live happier lives in wealthy countries? There are several aspects to this question, but the one that concerns me most is that prevailing values in high income countries might take us further towards an ‘entitlement culture’ that will threaten economic freedom and further economic development.  

It is not hard to find evidence of the emergence of an entitlement culture in wealthy countries. Interest groups that might have had their origins in removal of discrimination or providing minimal opportunities to needy groups now often make a lot of noise in seeking additional entitlements for the people they represent. That tends to result in more government regulation of business, higher government spending and higher taxes i.e. a decline in economic freedom.

However, the results of my research provide some optimism that the entitlement culture can be prevented from taking over and bringing economic development to an end, along with the emancipation that has accompanied it. While economic freedom has fallen in some wealthy countries (e.g. US and Japan) it has risen in others (e.g. Sweden and Norway). There is evidence that the priority that people give to economic growth has risen in some wealthy countries in response to economic crises (e.g. Sweden) and that when this has occurred, economic freedom has tended to rise.

Most importantly, it is a mistake to think that there is some kind of battleground in society with people with high emancipative values on one side pushing for an entitlement culture and materialistic people on the other side pushing for higher economic growth. I could not find much evidence of a tendency for people with high emancipative values to give lower priority to economic growth – even after I went looking for it!

If you want more information on the  research that lies behind this post you will find relevant links in my last post.