Prudence, Practical Wisdom, and Advisors

Please indulge me in some spitballing.

I really like Deirdre McCloskey’s take on the virtue of prudence as encompassing the economist’s rational self-interest and more. I think interest—understood in a way Hirschman would approve of—is indeed a part of virtue rather than outside of it.

But there’s a problem when McCloskey attempts to equate this with Aquinas’ prudentia which is the latin translation of Aristotle’s phronesis; practical wisdom. While McCloskeyan prudence is much bigger than prudence understood by Bentham or Samuelson or even Kant, it’s still not nearly so big as phronesis. And Aristotle clearly thought interest of this sort was outside of virtue—the ancient debate centered around whether “external goods” (for instance: wealth) were part of eudaimonia (a good life). No one thought that it was part of virtue.

But I agree with McCloskey that it is. I just don’t think that prudence is phronesis. Considering your interests is a part of wisdom but nowhere near the whole of it. So prudence is a subset of phronesis, possibly a distinct enough virtue to stand on its own.

Now, consequentialists—and consequentialistic frameworks like neoclassical economics—have put a lot of thinking into their Prudence Only theories, and this need not go to waste for the virtue ethicist. Their hard work has yielded a number of useful tools to take into consideration when thinking about the most prudent path.

Moreover, deontologists have invested in a lot of theories of justice which we may also take into account when attempting to be just.

Justice is the intersection of what Oakeshott calls self-disclosure and self-enactment—the former being subscribing to a moral language which involves principles, duties, and obligations, and the latter being doing something in the right way (with the right state of character; in short, being virtuous). Justice is the intersection because having the character trait of being just involves being able to properly apply the concepts of justice that we are embedded in, given our particular community and culture.

Drawing inspiration of Adam Smith’s less famous work, I suggested that we might get better at being just if we consider our choices from at least three perspectives.There’s our own, of course, and whoever we are dealing with, whose perspective we can approximately enter into using the faculty of sympathy. Finally, there’s the impartial spectator, whom I take to be a random member of our community who does not have any stake in the outcome of our decision. In other words, they’re only operating on a shared sense of justice as well as of virtue; their interests aren’t going to be impacted by the outcome.

I actually think we can extend our panel of advisors much further than this, though for any given decision we only have so much time to deliberate, and often have to rely on habituated reactions. But when we do have time, there are all sorts of perspectives we are able to enter into. When it comes to discussion, I have a mental table at which I try to seat many different points of view.

In fact the only way we are able to aim at virtue is by emulating role models; family and friends and teachers of course, but also characters in stories (fictional and otherwise). To me, the moral theories and economic models mentioned above are another sort of advisor; rather like consulting a computer model rather than a person (though obviously you can and should consult both).

Phronesis—that is, true practical wisdom—is taking all of these ingredients and at the end of the baking process producing eudaimonia.

Money Can’t Buy Me Parental Approval

Help! I need somebody

Help! Not just anybody

Help! You know I need Spivonomist

In an earlier post the good Spivonomist answered a question I had about Transaction versus Exchange. Transaction, he explained,* is the umbrella term for all human interaction (I generalize). Since then, the stew pot has been simmering, and another gristly question has bubbled upward for skimming: might some interactions preclude material transaction? Let’s take an age-old melodrama: son cannot win father’s approval and lives his life to do so, angry at father and self.

In some cases, Father feels pangs of guilt, even from the very beginning acknowledging his shortcomings as parent (say, absenteeism at war or in business), whence he thus showers his son with material goods, even cash. Nevertheless, there is no sale in this particular attempt at exchange. The only valid currency is presence, warmth, and affection.

The same melodrama works in reverse: a dutiful child desires presence, warmth, and affection from a demanding parent, but none is forthcoming. Therefore, the child showers the parent with material goods, even cash. Nevertheless, the material goods do not purchase the desired goods.

If this were a Hallmark holiday movie, the snow would then begin to fall, “Silent Night” to chime, and the hearts to melt, and we would witness, just before the credits roll, the exchange.

I would imagine that the first two cases are actually one: there is no exchange, only transaction. Perhaps there is an exchange, but the desired product is not given in exchange for the money, only an undesired product. The Hallmark transaction is an exchange, but devoid of material goods.

Is there an economics vocabulary for furthering understanding the nature of these material-free transactions and exchanges? I mean, we are trying to achieve eudaimonia here.

Won’t Spivonomist please, please help me?

*To thank me for forgoing “Samsplained,” send money.


My friends, I had not intended to discuss this controversial subject at this particular time. However, I want you to know that I do not shun controversy. On the contrary, I will take a stand on any issue at any time, regardless of how fraught with controversy it might be. You have asked me how I feel about child labor. All right, here is how I feel about child labor:

If when you say child labor you mean the devil’s compact, the scourge of families, the bloody factory floor, that exploits the poor, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the limbs off the bodies of little children; if you mean the evil practice that topples the Christian father and mother from the pinnacle of righteous, gracious living into the bottomless pit of degradation, and despair, and shame and helplessness, and hopelessness, then certainly I am against it.

But, if when you say child labor you mean the early accumulation of human capital, an honest day’s toil, the camaraderie of common purpose, that puts food on the table and experience on a resume, and the satisfaction of useful work; if you mean saving for the future; if you mean helping to pay a heating bill on a frosty, crispy morning; if you mean investing in a child’s future and his happiness; if you mean learning to focus on a task so as to forget, if only for a little while, life’s great tragedies, and heartaches, and sorrows; if you mean that practice, the continuance of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it.

This is my stand. I will not retreat from it. I will not compromise.

Samsplaining Kayfabe

The idea is not original to me, but I have bothered myself to reject the null hypothesis that I am not primarily responsible for the specific neologism “political kayfabe.” I like the term because what it represents is immediately obvious to anyone even casually familiar with the many tropes of pro wrestling and with a layman’s interest in political science. It’s delightful shorthand for all the bluster and bravado on the pinewood stage of Congress, and it subsumes nicely some of the more important conclusions of both the median voter theorem and Duverger’s Law (sorry, I can’t find an ungated link to Riker’s ’82 paper). It’s also a good way of capturing the spirit of playacted audience participation. Kayfabe is chiefly characterized by feigned sincerity, particularly applied to rivalry. Ever-so-slight differences in opinion are greatly inflated in both importance and magnitude to the public, while backroom deal-making, bedfellowship, logrolling, and mutual backscratching is writ in Congressional ink along the dotted lines of each bill that squirms out of appropriations.

Kayfabe is not:

  • Baldfaced lying. The audience won’t buy anything that threatens their willing suspension of disbelief.
  • Scapegoating. Kayfabe artistes conspire to create scapegoats, but only as a by-product. It’s not essential to the practice.
  • Conspiracy. Well, not conscious conspiracy anyway. Kayfabe can arise naturally as a result of the incentives of a winner-take-all electoral process.
  • Insincerity. Not necessarily. Kayfabe demands the delicate craftsmanship of paring slight, legitimate differences of opinion, exposing and magnifying tiny fissures. It’s the art of re-scaling the Y-axis, so to speak. 
  • Sincerity. Not necessarily. The ultimate ends of kayfabe practitioners (be it soon parting a fool from his money or encreasing the dominions of the sovereign) tend towards sincerity, but typically in the narrow, limited sense of self-interest. Much of the difficulty in parsing political speech is that it can be difficult to distinguish between a skilled kayfabe practitioner and an honest believer. Fear the latter more than the former.
  • Propaganda. Propaganda can be a tool of kayfabe, but it’s also a tool of tyrants and totalitarians. 
  • Coercion. Kayfabe knocks on your door. Tyranny kicks it in.
Kayfabe is:
  • A means to an end. Strategic behavior suffuses politics. Particularly in the short run, budgets are fixed, and artlessly attempting to claim a portion of a fixed asset is doomed to failure. Without wheedling, conning, and fast-talking, without spirit, bravado, and a touch of derring-do. would-be politicians end up filtered out pretty early on in the selection process.
  • Participatory. Axiom: you can fool some of the people most of the time; you can fool most of the people some of the time, but you can’t fool all of the people all of time time. Lemma: unless they want you to. In The Power of Glamour, Virginia Postrel makes a very careful distinction between glamour and charisma. Glamour is good for winning elections; charisma is good for getting your way. They are separate but related skills. Kayfabe is related to both. Charming your audience [constituents|potential constituents] is valuable, as is charming your colleagues. However, charm fades quickly when folks refuse to play the game. Kayfabe can only persist when it’s mutually felicitous. 
  • Durable. Probably. This is a more tenuous claim, but audiences enjoy being in on a shared deception. We all know that Penn and Teller aren’t actually shooting each other in the face, just like we all know that there’s scarcely a dime’s difference between the dominion we labor under either Team Red or Team Blue, but if someone (not unironically someone like Penn or Teller) pulls the lid off the lie that is partisan politics, you can probably rest assured that either someone will hastily restore its integrity or will find a near-identical replacement (see Ch. 4 of Hinich and Munger for more).
  • Entertainment. One of the more tiresome (if accurate) neologisms that happened in my lifetime is “infotainment.” Yes, I read regularly, I even watch clips from The Daily Show from time to time. I’m also aware of “edutainment” as illustrated by the gloss-magazine character of the modern university textbook (including even my favorites). If we’re being thorough, we’ve also have coined “polititainment” and noted its prestigious lineage from Cicero’s grandiloquent orations through the Fireside Chat, Nixon’s “sock it to me” mugging, Clinton’s sax, and the entirety of Rick Santorum’s public career. Politics minus governance equals polititainment. And just like the Solow residual, that’s where the lion’s share sits.
Kayfabe on its own is neither harmful nor harmless. Its harm in the intents of the practitioners and the outcomes of their policies. It’s deadly fun, and exposing it is as dangerous as it is futile. But it’s a term that has a meaning, even if its true nature is difficult to scrutinize, even if it’s an eyeball attempting to gaze upon itself. I urge you to use it, but to use it correctly.
Cross-posted at Euvoluntary Exchange.

High-Skilled Labor Pricing and The Mobile Phone

Virginia Postrel has a delightfully counterintuitive take on the relationship of the high minimum wage to misery within the low-skilled labor market. In short, she argues that laborers cannot take lower wages for more predictable hours because of the high minimum wage, thus creating a short-circuit on a certain commodity on the market, namely, time structuring. Higher wages, she argues, gives the labor side negotiating leverage for more time structuring (I want to see my children at regular hours, so I’ll take less money to work the hours I want). The minimum wage creates a high floor, so a low-skilled laborer cannot use wages to negotiate for regular hours.

I react as a layman, not quite conversant with all things economic, so I pose the following as an inquisition, not as a critique:

My initial reaction was something like this: well, that seems to work in a high-demand market, where high-skilled labor is valuable, as in the retail pharmacy market. In the high-skilled, low-demand market, say, academics (which happens to be the marketplace for my accumulated skill set), wages have not hit the minimum wage floor yet, but they have sunk below investment (see: “Market for Humanities Sob Stories Is Also Flooded”). Moreover, the demand for residential scholarship has plummeted, meaning, you can stand at the gates begging for a job at any price; there just isn’t any work to be had, not for second-rate, glorified grad-assistant lecturers like myself, anyway.

Ah! But the internets! The internets! The internet has opened a new market, one which institutions have begun to exploit. The cost of maintaining residential humanities departments is prohibitive (as far as I can tell, anecdotally), but the demand for humanities instruction is still significant, though niche. Thus, universities and colleges are offering courses to meet niche demand on campus, taught by guest instructors, and they are offering courses in virtual classrooms, gathering students from the four winds, taught by instructors who lecture from the comfort of a home-office (or bathroom, whatever the case may be; you won’t know till I flush).

At this point belongs an excursus detailing the thousand weaknesses of the system, e.g., stagnant scholarship, quality control mishaps, administrative snafus, et. al., but suffice it to say there’s a market, a supply of labor and a demand for it, and I participate in that market as a laborer.

Now an excursus about my labor: as for me, I contract out my labor all over the Niagara Peninsula in Ontario and the Niagara Frontier in New York. I lecture thereabouts and online in linguistics and methods of interpretation. I also have my own business as a fully armed and operational battle station Registered Representative, working independently. Each of these contracts overlaps with the other, which I manage through the magic of a smart phone. I have weighed the opportunity costs and made the trade-offs so that I have some measure of happiness, which is measured in part by my ability to pay the mortgage and put two cars in the garage and a chicken in every pot, not to mention hockey and music lessons for the children, and the rest of the accoutrements I dreamed of when I declared myself a participant in the American Middle Class, by God!

It still stands, however, that there is only so much demand in my market, and the supply is overwhelming. I recently tried to negotiate one contract for better hours. It’s an online lecture every Thursday night from 8 pm to 10 pm from September through May. I’d be glad to take a few dollars less for the opportunity to have a Thursday night off in November and February. The answer came back cold and clear: we have more qualified names than will fit on a 40GB thumb drive, buster.

I need that contract.

If I can spin that many plates, just about anyone who manages to sit through eleven years of post-secondary education and a handful of exams and a dissertation defense can also spin that many plates, and probably has more desire than I do. Whenever I meet a fellow-traveler, I smile sweetly, expressing some banality about the market, and wishing him good luck, but inside, I boil, knowing that if he drives himself off one of the Skyways by happenstance, my price rises a few ducats.


Family and Embodied Virtue

“Everything in life is luck,” my grandfather used to say, “and the first, and most important luck is who your family is.”

If I become tedious in repeating this it is because both halves have stuck with me.

Virtue is the skill of active living, and this activity is embodied; embodied in the physical acts involved and in the objects of our activity. It is embodied in our relationships, especially the closest, dearest ones.

There is no relationship more natural, more dear than that of family. When we talk of “making your own family”, or of friendships that form the “family you choose” rather than the one you’re born into, we’re implicitly acknowledging the force and centrality of family in a human life. Nowhere are we more vulnerable to luck than in the family we are born into; no open wound festers so much as living with a toxic relationship to one’s family, no scar aches so painfully as cut family ties.

Like philosophers since time immemorial, Andrew Cohen set to work conquering luck at Bleeding Heart Libertarians this week. Channeling a scene from an old Steve Martin movie, he suggests (not for the first time) that we ought to have parent licenses. In other words, you should have to ask some government body for permission before you are allowed to raise a child. But don’t worry! You don’t have to have permission to have a baby—you just better hope you can convince a government official you’re worthy to raise that baby, or into the system they go!

Let us put to the side for the minute just how truly awful child services are already without flooding them with children of willing but “unworthy” parents. What I find truly distasteful in Cohen’s argument is that his default seems to be that family must be justified externally—it’s not a natural state, it’s not the starting point; family must prove itself worthy to the Cohens and the administrators who Cohen would make arbiter of their fates.

I sympathize with the desire to minimize child abuse, but to radically alter the terms of parenthood in order to do so is unconscionable. There is nothing more insidious and technocratic and—frankly—despotic than thinking of family relations something contingent on the approval of a central planner. We are surely most vulnerable to bad luck in the family we are born to, but family is also where we have the best chance of developing genuine, warm human relationships, and attempts to engineer that vulnerability away come at a very steep price. Nearly always, it means making us much more vulnerable.

It is no more worthy to cut off one’s arm to avoid injuring it in the future than it is to tear family relations apart and rebuild them rationally in order to avoid getting hurt by them.

Voting Prizes

Have you ever voted for a politician and then, once elected, they did something totally different than they promised they’d do during the campaign? It has certainly happened to me. Annoying, isn’t it?

There’s a body of research and literature on what motivates politicians to do what they do. Some people think campaign finance is a big deal, or that special interest lobbying is overly effective (to the detriment of the general public), or that we just have a bad habit of electing the people who enjoy running in campaigns (aka, Dark Triad sociopaths). Whatever the mix of problems, or what role they individually play, the fact remains that voters in modern democracies often feel like their wishes are not being respected by their “representative” government.

The main problem here is one of agency costs. The voters elect a representative to do their bidding, but once elected the politician is free to do pretty much whatever he wants. Assuming he wants to stay in office beyond one term, his only incentive is to do the bare minimum to keep getting reelected, and has no real incentive to do anything other than be slightly better than the next-worse alternative. Combined with an hen house electoral system designed by the foxes Congresscritters to make real competition for their seats as difficult as possible to materialize, and you have a recipe for 7% approval ratings.

If only there was a way to provide “pay for performance”! That should help, right?

See, I think our legislature should be more like my plumber Rick. When I have a problem, I call Rick, and when the problem is fixed (and not before) he gets paid. If he doesn’t fix it, I fire him and find another plumber (not that I’ve ever had to do that – Rick’s awesome). This, in fact, is how most of the service economy works, and it works well enough. It certainly has better approval ratings than Congress.

So how would pay-for-performance work for Congress?

Well the one thing Congresscritters really need is votes. Votes are even more important than campaign finance, since campaign finance is just a way to buy votes. If the Congressman already had a guaranteed and safe number of votes, he wouldn’t need to run a campaign at all, or even wake up early on election day.

Here’s my proposal: Prizes + Escrow.

Each citizen is given 10 vote tokens. We assume there is some technological wonder that keeps tracks of everyone’s tokens in a pseudonymous but transparent fashion and can audit the whole system in real time – maybe blockchain-based. Each of these tokens represents a vote in a future election. 

Any citizen can arbitrarily create a prize account. This account has conditions which are specified at the time the account is created and cannot be changed. The conditions are basically a request for legislation, and can be vague and general (i.e., “privatize Social Security”) or very specific (actual legislative language that must be adhered to exactly). 

(Why can’t the prize conditions be changed? Because when Bob puts his tokens in the account on Day N, changing the conditions on Day N+1 would effectively usurp Bob’s electoral intent.That’s an abuse of Bob’s rights. Any attempt to change the conditions should either be impossible or result in an immediate return of all Tokens placed in the account prior to the change)

Citizens can also contribute to each other’s prize accounts to pool their voting power, and my assumption is that many policy organizations that already exist today (such as the EFF, ACLU, or NRA) would create prize accounts with the assistance of like-minded attorneys, and then recruit their members to put votes into them. This would be the primary method by which large pools of votes would be stored. In this manner, the general interest of the greatest number of voters would be plainly evident.

Politicians who are already in office would then compete to win these votes by meeting the prize requirements as best they can. The representatives pass the law, and then the citizens who put the tokens in the pot are polled as to whether the law meets their satisfaction. Assuming it is, the votes are released and go into a special “vote escrow account” (VEA). The VEA is simply a tally of how many votes the legislator has unlocked. If the citizens vote that the law doesn’t meet the requirements the legislators can choose to nullify the law, amend the law and ask again, or keep the law as written and forgo those votes (after all, there may be multiple prize accounts at stake for any given piece of legislation).

(You’ll note that this system doesn’t have a method for electing an initial batch of legislators. That’s because most countries already have legislators. And in the odd situation where you’re forming a legislature from scratch, you could probably pick people at random out of the phonebook and still beat 7% approval)

Once a legislator has won enough votes by passing requested legislation, he’s guaranteed to win the next election. No need to run a campaign or raise money. And no need to listen to lobbyists either, since they can’t tell him anything that the public prize accounts don’t say more clearly and loudly. He’s sitting pretty, although it’s of course possible to win more votes and bank them for future elections if there’s prizes to be had. Let the people have the laws they want.

Once tokens are won by a legislator the vote tally is registered in his VEA, but the token then returns to the citizen. He can place it in another prize account if he wants, incentivizing his next-highest priority.

The above system doesn’t specify whether each legislator gets the full value of the tokens inside the account, or if the tokens are divided among all the legislators who voted for it. That’s on purpose. I’m not trying to discuss the nitty-gritty math details here, but rather the concept or prizes and escrow. I’m also going to ignore the question of how many votes a legislator needs to get re-elected. Obviously you’d want to balance that between “enough he has to work for it” and “not so much that it’s discouraging”.

And here’s one last detail, and it’s important. When a citizen places his tokens into a prize account, he specifies whether it’s positive or negative. A positive value represents a vote, and a negative value represents an anti-vote. The anti-vote cancels out someone else’s vote for that legislation. In this manner, the “silent majority” has a way of preserving the status quo if that’s their preference.