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Private vs Public – A Failure of Modern Economic Thinking

Appearing originally on aeon.co

Dirk Philipsen

Adam Smith had an elegant idea when addressing the notorious difficulty that humans face in trying to be smart, efficient and moral. In The Wealth of Nations (1776), he maintained that the baker bakes bread not out of benevolence, but out of self-interest. No doubt, public benefits can result when people pursue what comes easiest: self-interest.

And yet: the logic of private interest – the notion that we should just ‘let the market handle it’ – has serious limitations. Particularly in the United States, the lack of an effective health and social policy in response to the coronavirus disease (COVID-19) outbreak has brought the contradictions into high relief.

Around the world, the free market rewards competing, positioning and elbowing, so these have become the most desirable qualifications people can have. Empathy, solidarity or concern for the public good are relegated to the family, houses of worship or activism. Meanwhile, the market and private gain don’t account for social stability, health or happiness. As a result, from Cape Town to Washington, the market system has depleted and ravaged the public sphere – public health, public education, public access to a healthy environment – in favour of private gain.

COVID-19 reveals a further irrational component: the people who do essential work – taking care of the sick; picking up our garbage; bringing us food; guaranteeing that we have access to water, electricity and WiFi – are often the very people who earn the least, without benefits or secure contracts. On the other hand, those who often have few identifiably useful skills – the pontificators and chief elbowing officers – continue to be the winners. Think about it: what’s the harm if the executive suites of private equity, corporate law and marketing firms closed down during quarantine? Unless your stock portfolio directly profits from their activities, the answer is likely: none. But it is those people who make millions – sometimes as much in an hour as healthcare workers or delivery personnel make in an entire year.

Simply put, a market system driven by private interests never has protected and never will protect public health, essential kinds of freedom and communal wellbeing.

Many have pointed out the immorality of our system of greed and self-centred gain, its inefficiency, its cruelty, its shortsightedness and its danger to planet and people. But, above all, the logic of self-interest is superficial in that it fails to recognise the obvious: every private accomplishment is possible only on the basis of a thriving commons – a stable society and a healthy environment. How did I become a professor at an elite university? Some wit and hard work, one hopes. But mostly I credit my choice of good parents; being born at the right time and the right place; excellent public schools; fresh air, good food, fabulous friends; lots of people who continuously and reliably provide all the things that I can’t: healthcare, sanitation, electricity, free access to quality information. And, of course, as the scholar Robert H Frank at Cornell University so clearly demonstrated in his 2016 book on the myth of the meritocracy: pure and simple luck.

Commenting on how we track performance in modern economies – counting output not outcome, quantity not quality, prices not possibilities – the US senator Robert F Kennedy said in 1968 that we measure ‘everything, in short, except that which makes life worthwhile’. His larger point: freedom, happiness, resilience – all are premised on a healthy public. They rely on our collective ability to benefit from things such as clean air, free speech, good public education. In short: we all rely on a healthy commons. And yet, the world’s most powerful metric, gross domestic product (GDP), counts none of it.

The term ‘commons’ came into widespread use, and is still studied by most college students today, thanks to an essay by a previously little-known American academic, Garrett Hardin, called ‘The Tragedy of the Commons’ (1968). His basic claim: common property such as public land or waterways will be spoiled if left to the use of individuals motivated by self-interest. One problem with his theory, as he later admitted himself: it was mostly wrong.

Our real problem, instead, might be called ‘the tragedy of the private’. From dust bowls in the 1930s to the escalating climate crisis today, from online misinformation to a failing public health infrastructure, it is the insatiable private that often despoils the common goods necessary for our collective survival and prosperity. Who, in this system based on the private, holds accountable the fossil fuel industry for pushing us to the brink of extinction? What happens to the land and mountaintops and oceans forever ravaged by violent extraction for private gain? What will we do when private wealth has finally destroyed our democracy?

The privately controlled corporate market has, in the precise words of the late economics writer Jonathan Rowe, ‘a fatal character flaw – namely, an incapacity to stop growing. No matter how much it grew yesterday it must continue to do so tomorrow, and then some; or else the machinery will collapse.’

To top off the items we rarely discuss: without massive public assistance, late-stage extractive capitalism, turbocharged by private interest and greed, would long be dead. The narrow kind of macroeconomic thinking currently dominating the halls of government and academia invokes a simpleminded teenager who variously berates and denounces his parents, only to come home, time and again, when he is out of ideas, money or support. Boeing, Goldman Sachs, Bank of America, Exxon – all would be bust without public bailouts and tax breaks and subsidies. Every time the private system works itself into a crisis, public funds bail it out – in the current crisis, to the tune of trillions of dollars. As others have noted, for more than a century, it’s a clever machine that privatises gains and socialises costs.

When private companies are back up and running, they don’t hold themselves accountable to the public who rescued them. As witnessed by activities since the 2008 bailouts at Wells Fargo, American Airlines and AIG, companies that have been rescued often go right back to milking the public.

By focusing on private market exchanges at the expense of the social good, policymakers and economists have taken an idea that is good under clearly defined and very limited circumstances and expanded it into a poisonous and blind ideology. Now is the time to assert the obvious: without a strong public, there can be no private. My health depends on public health. My freedom depends on social freedom. The economy is embedded in a healthy society with functional public services, not the other way around.

This moment of pain and collapse can serve as a wakeup call; a realisation that the public is our greatest good, not the private. Look outside the window to see: without a vibrant and stable public, life can quickly get poor, nasty, brutish and short.

 

Ethical Decision Making in the Age of Corona

Walter Sinnott-Armstrong

The current COVID-19 crisis raises many pressing ethical issues.

One is whether or when it is immoral to violate “shelter at home” laws and, when it is, how to get people to recognize that they morally should stay at home and how to get them do the morally right things—wash hands, avoid social gatherings, self-isolate, and share health messages. Will the most effective messages be about dangers to one’s own health or moral messages about dangers of infecting loved ones or strangers? What about messages that others in your society will morally condemn your acts and blame you if you go to parties or allow your children to play outside unattended while you work at home? Our research group at Duke (led by Jana Schaich Borg , Vince Conitzer, and myself) suspects that moral messages might be at least as effective as health messages, so we are beginning to test potential effects of accepting or ascribing moral responsibility for causing or risking infections.

Other ethical issues arise from the scarcity of medical resources during the COVID-19 pandemic. If only one ventilator is available, but two patients urgently need a ventilator, and it is not safe for them to share, then which patient should doctors give the ventilator to? In particular, if one but not the other is responsible for needing the ventilator, because that patient voluntarily exposed himself (and maybe others) to the virus, is this responsibility an adequate reason to give the ventilator to the other patient instead? These questions parallel our research on distributing scarce organs for transplant. Like all such triage situations, the best solution is to avoid scarcity in medical resources, but sometimes it is too late to implement that solution. Then we need to think long and hard about which of two imperfect options is morally best.

Check out ongoing work at the MADlab.


MADLab is a Kenan Institute sponsored vertically-integrated, interdisciplinary laboratory, co-directed by Walter Sinnott-Armstrong (Kenan, Philosophy, Psych/Neuro,  Law) and Jana Schaich Borg (Kenan, SSRI)

“Now…Back to Zoom”

Eric MlynOften a few of the 13 students in my seminar on Engaged Citizenship and Social Change arrive a few minutes late because the East West bus was full or delayed. Not so yesterday, the first day of my class going on-line. All 13 were there right at 1:25, one seemingly broadcasting from bed, one from a beautiful outdoor table, others from different parts of their house. I felt happy to see them all, to see that they were well and to launch this new way of learning together.

In most ways, it went very well. Over the last two weeks, I had taken advantage of the many seminars that Duke offered to learn how to use Zoom and other online teaching tools. The training and support for our great online pivot here has been simply incredible, even exciting. I was proud that I had learned how to share my screen, create breakout rooms and share audio from my computer. The students knew how to raise their hands virtually and were very engaged in the class material.

But also, and I think this is important to acknowledge for all of us, this is not what any of us signed up for and there was something missing. At the end of class, despite the fact that it had all gone well, I felt a hole. I missed the buzz of quiet conversation as I entered the classroom, the crinkle of students opening their potato chip bags, and my ability to walk around the room in a way that helped me emphasize a point, clarify a concept or ask a hard question.

So while we embrace this great pivot and figure out how to learn together while physically apart, let us allow for the full range of emotions that this entails. As Flower Darby of Northern Arizona University wrote of faculty in the Chronicle of Higher Education, “At some point, they will need time to mourn the loss of spring 2020.” And so as the dogwoods reach full bloom out of my dining room window and I prepare for my 3:05 class today, I try to embrace it all. I invite you to as well. Now… Back to Zoom.”

What Next? Thinking Ethically About Mitigating COVID 19 – A Focus on the Margins

“We are all in this together.”

Patrick T. Smith
Patrick T. Smith, Kenan Senior Fellow

This is no doubt true. Politicians, pundits and media outlets repeat this phrase as the reach of the coronavirus spreads. Senators, journalists, athletes, actors, doctors, and academic elites suffer alongside those without that same social standing, health security, and financial stability: small business owners, artists, service industry workers, the unemployed and underemployed, those who are homeless, those who are incarcerated and those who are employed to work in these spaces with them. And there’s a whole range of people in between.

The problem, however, is the suggestion that COVID-19 made this true. It perhaps naively suggests that all of a sudden we will act in ways that reflect human solidarity when deep social fragmentation mar important aspects of our collective life together. Our tribalism, unfortunately, is not so easily set aside.

The challenges resulting from COVID-19 remind us of something that has always been true ethically and sociologically. We are deeply interconnected…and yet our society is structured so that we lose sight of this reality. Those who are marginalized or part of vulnerable communities disproportionately suffer even when – and perhaps especially when – we say that we’re “all in this together.” COVID-19 is a reminder that we cannot easily nor without consequence separate our particular community’s well-being from that of others.

So, yes, “we are all in this together.” In saying this though, we must also be aware that when crises emerge, the long-term health and economic impact for those who survive is often felt hardest by those who already experience disparities in wealth, overall health outcomes and in access to and benefits of health care. All of this suggests that any pathway forward requires and must be attentive to particular and concrete forms of justice.

I am persuaded that what we need is a kind of justice characterized by, as some have suggested, a principle of redress. One that seeks a pathway to minimize the disproportionate negative impact experienced by those on the margins. A principle of redress takes into full consideration that many – even if not all – cases of existing health and economic inequalities result from social injustice. These inequalities constitute genuine health disparities. These states of affairs are not just unfortunate, but actually unjust. And even as we say “we’re all in this together,” a pandemic further exacerbates these situations, which stifle human flourishing and well-being.

So what’s next? In some ways, many of us don’t really know. And I certainly don’t presume to know. However, as we seek to navigate these murky and unprecedented waters, we need to think clearly and carefully about how decisions impact those on the margins of our society – those who may be part of, as Howard Thurman said, the disinherited, the disenfranchised, or those whose backs are already against the wall.

How might we address this pandemic while working hard to minimize the widening of existing disparities in our society? Any responses must take into consideration how policy decisions will impact the most vulnerable among us, including the sometimes overlooked first responders in our healthcare institutions and other frontline services who have an intensified occupational risk in light of the lack of Personal Protective Equipment.

We must frame ways forward with due attention and even preference for the most vulnerable amongst us. Whether thinking about allocating of scarce resources, safeguarding workers or other vulnerable populations, flattening of the curve of the pandemic, allocating money from the Federal government to American citizens, or supporting various industries, I would suggest this attention to the margins must be the case, not only for government, but also for health care institutions and local civic community groups engaged in mitigation efforts. It is problematic for public health professionals to encourage people not to go to work when for some people if they don’t work, they literally don’t eat. What does it practically look like for those who are asked to shelter in place who don’t have adequate housing? How do we discriminate the financial needs of American citizens who need immediate cash from those of us who don’t given current employment options available? Of course, many of these issues are being discussed and some are being addressed. But there needs to be, ethically speaking, concerted attention given to these matters and a fully coordinated federal response that has in its scope “the least of these.”

I am encouraged by the mobilization in localized faith and civic communities to act in medically responsible ways to mitigate the negative impact on vulnerable populations. Many such examples provide those of us who are not professionally trained health care workers opportunities to embody values of solidarity and subsidiarity. For these, we should all be grateful. As Martin Luther King, Jr. said, “We are caught in an inescapable network of mutuality.” As indicated in the title of the last chapter of his book, Where Do We Go From Here: Chaos or Community?, we all live in a shared “world house.”  In some ways, this is our question isn’t it? Where do we go from here? Whatever direction we take, may we develop the “eyes to see” and “ears to hear” those who are on the margins as we seek to reckon with the negative effects of COVID-19.