Tag: tr

Money Can’t Buy Me Parental Approval

On By John David Duke JrIn Economics, Social Science6 Comments

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.

The Opposite of Virtue: A Leveled Approach

On By John David Duke JrIn Economics, Philosophy, Storytelling1 Comment

Preface

This notion from Sam Wilson’s primer on transaction goosed my gray cells: “I encourage you, O dearest reader, to consider justice to be an additional salient dimension here. There is nothing that inheres to any of these three a particular notion of justice.”

“Well, yeah,” I said to myself. “Let’s talk about that.” So I tried, and my first attempt, subtitled, “A Volley,” left me dissatisfied. As they say in comedy: if the joke bombs the first time, repeat it until they laugh. But first, a graphic.

Here’s how I understand Sam’s taxonomy, of sorts: Action

Anything can do action: humans, mammals, snails, the wind. Humans, I believe, carry out their existence transacting. That’s the first half of my post. The second half of my piece is concerned with the difficulty of aligning oneself justly, or morally, or with virtue in order for transacting and exchanging to go on. While I do distinguish among the three, I do not see hard, fast lines separating them. Honest people, for example, do not steal. Moreover, honest people help those near to them prosper. And so, I asked, whence theft? Theft is not merely the absence of virtue, it is an action driven by a will to harm someone near at hand (virtually or presently). I mean, we watch each other like hawks to ensure that one does not make away with the other’s hawklings. Do we not presume to do so because we use virtue to temper our own nature to steal, also presuming that not all temper that nature?

Adam Gurri commenced to ask some questions which I did not understand, which told me that I probably laid an egg. Therefore, to illustrate…

A Story

“Once upon a time” is inappropriate here, even though it functions as a parable, because the following story is typological, meaning that, even though it is made-up here, this case recurs often enough to make it into clinical studies as textbook. Without further ado: Continue reading “The Opposite of Virtue: A Leveled Approach” →

The Opposite of Virtue: A Volley

On By John David Duke JrIn Economics, Philosophy5 Comments

Transacting, as Sam Wilson noted, has its uses and its abuses. Transacting, it seems, is essential. If it is true that transacting is essential to the human experience—and I think it is of the essence: almost nothing is human unless a transaction has occurred—then moral questions apply. Am I transacting with virtue, or am I transacting evilly?

It calls to mind the ancient question of evil, its quelle, that is, within the human breast. For the question, let’s add one more component to Sam’s taxonomy (Action, Transaction, Exchange): Interaction. Human interaction is much about transaction and exchange, which, of course, is all actionable, trying to manipulate the natural world into serving human needs and wants, yea, even that unquenchable desire to progress. For this activity to continue unabated to the benefit of many, including myself, virtuous behavior is required, and included in this behavior must be the notion of posterity. In other words, I measure my virtue versus my evil by my interaction with the other human(s) near to me. Was my interacting and transacting interacting and transacting I’d like done to me?

Ah! But evil lurks in there somewhere; otherwise I would not be measuring myself and those around me. We are constantly measuring each other by the consequences of our behavior. Consequences, as we all know, might not manifest themselves terribly quickly, sometimes not within the lifetime of the actor, and the wise have taught since time immemorial that considering posterity is of the essence to the survival of our institutions, which are necessary for acting, interacting, transacting, and, most importantly for progress, exchanging. It is the age old collapse of the distinction between little white lies and lies for deceiving one’s enemy to his death.

Consider theft, for example: civilized persons are quick to intervene when a child helps himself to a stick of gum from the corner convenience store; the act itself is inconsequential, but the evil which drove the act might have terrible consequences in posterity.

Put another way: a pickpocket engages in manifest thievery, which, when analyzed by justice, is 2 + 2 = 4. Judgment is easy and should be swift. A stock broker, on the other hand, may charge $25 for a transaction when $21 will do. Is the $4 theft? Or is it rightful profit for additional labor incurred in the transaction (I’m looking at you, Valued Client #xxx-07249)? Or should it have been $23.75? The market gives us freedom to steal/profit; it does not judge, not immediately, anyway; at best, it looks for patterns of bad behavior. The conscience, however, begins to judge immediately, usually commencing before the transaction. Then the conscience goes about the hard labor, thereafter, to justify the padded transaction fee or to accuse the self. What about posterity? What equation will posterity employ when it analyzes the slightly pudgy transaction fee? How will posterity apply justice when the self is pushing up daisies? What if posterity misjudges theft, because it was justified, as virtue?

Isn’t it fair to say that thievery leeches through virtue?

Action, Transaction, and Exchange

On By spivonomistIn Economics, Uncategorized1 Comment

Twitterward, Double-D asks “Can you recommend, SVP, a primer on “transaction” for such as I? And please pronounce it rhymes with trimmer. Thx.” & clarifies “not costs: the concept, definitions, et. al. ‘What is ‘transaction’?'” I assume SVP stands for s’il vous plaît, and not for senior vice president. I won’t stake my reputation on it though.

Let’s work backwards. As many of you know, I blog extensively at Euvoluntary Exchange. As such, I spend more than my fair share of time mulling the nature of exchange, including questions of consent and coercion. Most of what Munger, Horn, and I discuss at EE deals with exchange proper: the voluntary meeting of the minds that results in two parties transferring trade objects to their highest valued use. We’ve more or less settled (to my satisfaction, anyway) on something of a spectrum, with fully just euvoluntary exchange at one end and all-out coercion at the other end.

Reminder, the 6 conditions of EE are:
(1) conventional ownership
(2) conventional capacity to buy/sell
(3) absence of regret
(4) no uncompensated externalities
(5) neither party coerced by human agency
(6) neither party coerced by circumstance; the disparity in BATNAs is not “too large”

Sure, every now and again, we run across questions that don’t exactly fit into the bilateral exchange space (eg, Jeff asked me once if autocannibalism is euvoluntary. My answer is a hearty “it depends”), but I usually dodge questions like this by invoking the convenient fiction of the ersatz self: “you” can trade with “other you”, a mental fiction distant in time or space. This is usually good enough to get at the main moral intuitions, but it’s ontologically unsatisfying, at least to me.

Luckily, that’s not the question Double-D asked. Instead, I’d like to see how this question of the nature of transaction overlaps and maybe slops over the exchange spectrum.

So here’s what sort of makes sense to me. An “exchange” is de minimis voluntary: both parties to an exchange expect to be made better off, even if one or more EE condition is violated (except #5—coercion is not voluntary… unless it is, in which case, it may only look like coercion to third parties). So a robbery is not an exchange. But it is a transaction. A violent, unwanted transaction to be sure, but a transaction nonetheless. To me, the chief characteristic of a transaction is that it involves (at least) two people. Exchanges are therefore transactions, but not all transactions are exchanges. When your boss gives you a project, that’s a transaction, but not an exchange. When you withdraw deposits at the bank, that’s a transaction; when you agree to the terms of a loan at the same bank, that’s an exchange. Exchange (particularly euvoluntary exchange) is felicitous. Transactions needn’t be.

And then there’s action. Action subsumes the other two, but also includes “transactions” where one party is nature. Carting field stones all by your lonesome to build a fence for your sheep is action. Picking your nose is action. Writing blog posts no one will read is action.

I encourage you, O dearest reader, to consider justice to be an additional salient dimension here. There is nothing that inheres to any of these three a particular notion of justice. There are just, unjust, and injust actions, transactions, and exchanges (though, admittedly, Munger crafted the euvoluntary exchange construction specifically that it’d conform to basic justice norms). This matryoshka is intended in no way a shortcut around the very serious business of #phronesis.