Steven Landsburg is exactly right: Here’s what I like about Ebenezer Scrooge: His meager lodgings were dark because darkness is cheap, and barely heated because coal is not free. His dinner was gruel, which he prepared himself. Scrooge paid no man to wait on him. Scrooge has been called ungenerous. I say that’s a bum rap. …
The technical term for the institution Robin inaccurately describes as "begging" is "reciprocal altruism" (RA), which indeed is common in forager societies and among other primates, but more generally is observed throughout kingdom animalia and beyond. I think "inaccurate" because the receiver doesn't have to do anything (do you really go from relative to relative with your hand out, asking for something on Christmas?), but also because stingy humans often draw resentment by third parties who could not possibly be receivers.
In fact, reciprocal altruism (RA) is one of the better studied ways to stabilize cooperative behaviors in evolutionary biology and anthropology. They work well in high-payoff, high-variance systems like hunting because individuals who bring home the meat can call in their favors when they bring home nothing. There's also a mechanism for punishment of Scrooges - you don't give them things when they are in need. I think Bowles' Microeconomics goes over the evidence that RA evolves spontaneously in environments where contracts can not be enforced.
I have great respect for economists, but I don't understand the need for Robin's turn from talking about RA to a morality play, where we psychoanalyze supplicants to discover secret hypocrisy; they claim to value selflessness but are in their heart of hearts secretly motivated by selfishness [citation needed].
Scrooge was a character created in a story by Dickens, published just days before Christmas in the early 19th century. Dickens used a miser like Scrooge as an object lesson on a principle life value, particularly poignant at Christmas time: "People and relationships are more valuable than money and material goods. A life spent accumulating wealth at the expense of accumulating relationships and good will is a life poorly lived." Your defense of the miser flies in the face of the fundamental wisdom behind Dickens' argument - we live in a society and we all benefit when we share our wealth. We also understand from an economic argument that money circulating has a multiplier effect and lifts the economy so that all benefit, where money hoarded drives the economy downward to the benefit of but a few. We are living out the miser's argument today with austerity programs in the US and Europe - how's that working out for us? I'll stay with Dickens on this Christmas, thank you very much.
The Miser DOES NOT do good to anyone, any more than the mortgage with the lowest monthly payment is the best deal.
FOR NOW, the miser does produce without consuming, does lower slightly the current price of items he might have consumed had he not been a miser. But he accumulates money. The amount of money he accumulates is a DIRECT MEASURE of the amount by which he will be able to undo any good he has done. The miser does not forego consumption using his money, he merely postpones it. He will eventually die or otherwise pass his money on to others.
When they tried to sell me a mortgage comparing only monthly payment, I insisted on seeing how much would be owed in 30 years, even though I might be dead then. Similarly when you try to tell me that a miser is making other people's money more valuable by not using his to consume or invest, I want to know how much consumption or investment will be done down the road with the money he has mised. Same difference.
On Twitter today Josh Barro was arguing that "buy American" is (or should be) as offensive as "buy White". He says its okay to prefer your family/friends over other people, but not strangers who belong to a category like race/nationality. That does seem more normal to me, but I'm not sure under which ethical theory that's preferable. Maybe some virtue ethics, though I don't know much about them. The perfectly egalitarian miser seems more in keeping with utilitarian theory than one who prefers friends & family, as most of us will do when buying gifts this Christmas.
It seems to treat consumption generally as zero-sum and miss the fact that if someone doesn’t spend their money they are depriving others of possible gains from trade. "Ideally," consumption is, trivially, a zero sum game. If some don't spend their money, prices go down correspondingly. There's less money to buy up what's produced, and each dollar is worth more, and those others holding dollars can buy more goods and services with given money. Since they end up buying the same amount—the value of their money rising as the money circulating declines—nobody is (necessarily) deprived of access to the externalities that they'd benefit from were the money spent. In real terms, the same amount gets spend, only differently distributed.
The problem is that this scenario depends on markets being much more efficient than they are. A decrease in by one person will tend to cause a decrease in amount consumed—for one reason, prices for many goods are sticky.
What's strange about the article—and about Hanson's liking it—is that it leaves aside everything we know about actual markets. When they invoke the "market," they have some platonic ideal in mind, rather like when some Republican presidential candidate chants the free market mantra. How can economists, of all people, be so blind to the market's real workings?
That's not to say the miser is the real villain. Shouldn't a person be able to save money without injuring people? But that's a gripe with the market itself. But maybe without the market, most of our notorious misers would lack the wherewithal to be miserly in the first place.
Why are we assuming the production possibility curve remains un-altered under relevant transfers, since apparently marginal changes in the real interest rate or price level are significant?This is the key issue. What's assumed is a supply-side version of macroeconomics. From a Keynesian model, the miser is, arguably, the arch-villain. (For an extreme antidote to supply-side thinking, see "Against Thrift: Why Consumer Culture is Good for the Economy, the Environment, and Your Soul" -- http://tinyurl.com/753v6tn)
Why should equitable distribution of good be the goal? I'd rather give $100 to someone I know needs it than $1 to a hundred random people. I'm not sure what "associates" you mean, or why I should care about their intentions. If I give because the Ghost of Christmas Present (or GiveWell) hints that I should, it doesn't matter to the family that gets those mosquito nets.
Upvoted-if I could-for making a good point that is likely to be ignored for social reasons. The very validity of using "Scrooge" rhetorically is rightly challenged, as is (indirectly) the post itself - as is (indirectly) the support of the post by other commenters.
Unfortunately, comments like this on Less Wrong, at least, tend to be downvoted - ironic given the community's supposed rationality, but it just goes to show we're all social creatures.
I'm also confused by this. It seems to treat consumption generally as zero-sum and miss the fact that if someone doesn't spend their money they are depriving others of possible gains from trade. I can see how this might work with natural resources such as coal, but not when the Miser buys a t-shirt or goes to a restuarant.
Miserliness is not the focus of people's ire towards Scrooge. Rather, it is the way he treats those under him and what it is that he values. He treats his employees like they are rats and values money qua money (Aristotle would laugh at him). And perhaps this latter point is why people have a problem with the miser. That which is merely a means has become an end. It's silly to waste your breath on "the miser" without first realizing the underlying values and worldviews involved.
It seems that one is getting into some sort of whacky zealotry when you worry about the effect of spending or hoarding a dollar. Perhaps we should next consider the effect of eating a helping of pinto beans on global warming.
orthonormal, agreed.M, yes the extravagant look worse.Preferred, yes the stoics look better.Jason and John, I claimed the miser did good, not that he was happy or admirable.Pyscho, no it doesn't require we assume that.GudEnuf, I said unusually equitably, not perfectly equitably.TGGP, I added to the post.
1) we all benefit when we share our wealth
This is patently false - x/y is always less than x unless y <= x
2) multiplier effect
Hahaahaahahaahaahaha *gasp* bwahaahaha
Anthropologist here,
The technical term for the institution Robin inaccurately describes as "begging" is "reciprocal altruism" (RA), which indeed is common in forager societies and among other primates, but more generally is observed throughout kingdom animalia and beyond. I think "inaccurate" because the receiver doesn't have to do anything (do you really go from relative to relative with your hand out, asking for something on Christmas?), but also because stingy humans often draw resentment by third parties who could not possibly be receivers.
In fact, reciprocal altruism (RA) is one of the better studied ways to stabilize cooperative behaviors in evolutionary biology and anthropology. They work well in high-payoff, high-variance systems like hunting because individuals who bring home the meat can call in their favors when they bring home nothing. There's also a mechanism for punishment of Scrooges - you don't give them things when they are in need. I think Bowles' Microeconomics goes over the evidence that RA evolves spontaneously in environments where contracts can not be enforced.
I have great respect for economists, but I don't understand the need for Robin's turn from talking about RA to a morality play, where we psychoanalyze supplicants to discover secret hypocrisy; they claim to value selflessness but are in their heart of hearts secretly motivated by selfishness [citation needed].
Scrooge was a character created in a story by Dickens, published just days before Christmas in the early 19th century. Dickens used a miser like Scrooge as an object lesson on a principle life value, particularly poignant at Christmas time: "People and relationships are more valuable than money and material goods. A life spent accumulating wealth at the expense of accumulating relationships and good will is a life poorly lived." Your defense of the miser flies in the face of the fundamental wisdom behind Dickens' argument - we live in a society and we all benefit when we share our wealth. We also understand from an economic argument that money circulating has a multiplier effect and lifts the economy so that all benefit, where money hoarded drives the economy downward to the benefit of but a few. We are living out the miser's argument today with austerity programs in the US and Europe - how's that working out for us? I'll stay with Dickens on this Christmas, thank you very much.
Looks to me like simple logic mistakes.
The Miser DOES NOT do good to anyone, any more than the mortgage with the lowest monthly payment is the best deal.
FOR NOW, the miser does produce without consuming, does lower slightly the current price of items he might have consumed had he not been a miser. But he accumulates money. The amount of money he accumulates is a DIRECT MEASURE of the amount by which he will be able to undo any good he has done. The miser does not forego consumption using his money, he merely postpones it. He will eventually die or otherwise pass his money on to others.
When they tried to sell me a mortgage comparing only monthly payment, I insisted on seeing how much would be owed in 30 years, even though I might be dead then. Similarly when you try to tell me that a miser is making other people's money more valuable by not using his to consume or invest, I want to know how much consumption or investment will be done down the road with the money he has mised. Same difference.
On Twitter today Josh Barro was arguing that "buy American" is (or should be) as offensive as "buy White". He says its okay to prefer your family/friends over other people, but not strangers who belong to a category like race/nationality. That does seem more normal to me, but I'm not sure under which ethical theory that's preferable. Maybe some virtue ethics, though I don't know much about them. The perfectly egalitarian miser seems more in keeping with utilitarian theory than one who prefers friends & family, as most of us will do when buying gifts this Christmas.
It seems to treat consumption generally as zero-sum and miss the fact that if someone doesn’t spend their money they are depriving others of possible gains from trade. "Ideally," consumption is, trivially, a zero sum game. If some don't spend their money, prices go down correspondingly. There's less money to buy up what's produced, and each dollar is worth more, and those others holding dollars can buy more goods and services with given money. Since they end up buying the same amount—the value of their money rising as the money circulating declines—nobody is (necessarily) deprived of access to the externalities that they'd benefit from were the money spent. In real terms, the same amount gets spend, only differently distributed.
The problem is that this scenario depends on markets being much more efficient than they are. A decrease in by one person will tend to cause a decrease in amount consumed—for one reason, prices for many goods are sticky.
What's strange about the article—and about Hanson's liking it—is that it leaves aside everything we know about actual markets. When they invoke the "market," they have some platonic ideal in mind, rather like when some Republican presidential candidate chants the free market mantra. How can economists, of all people, be so blind to the market's real workings?
That's not to say the miser is the real villain. Shouldn't a person be able to save money without injuring people? But that's a gripe with the market itself. But maybe without the market, most of our notorious misers would lack the wherewithal to be miserly in the first place.
Why are we assuming the production possibility curve remains un-altered under relevant transfers, since apparently marginal changes in the real interest rate or price level are significant?This is the key issue. What's assumed is a supply-side version of macroeconomics. From a Keynesian model, the miser is, arguably, the arch-villain. (For an extreme antidote to supply-side thinking, see "Against Thrift: Why Consumer Culture is Good for the Economy, the Environment, and Your Soul" -- http://tinyurl.com/753v6tn)
Why should equitable distribution of good be the goal? I'd rather give $100 to someone I know needs it than $1 to a hundred random people. I'm not sure what "associates" you mean, or why I should care about their intentions. If I give because the Ghost of Christmas Present (or GiveWell) hints that I should, it doesn't matter to the family that gets those mosquito nets.
Karl's co-blogger Adam piles on.
So when you see one of those bumper stickers that says "Live simply so others can simply live", you applaud it enthusiastically, right?
Upvoted-if I could-for making a good point that is likely to be ignored for social reasons. The very validity of using "Scrooge" rhetorically is rightly challenged, as is (indirectly) the post itself - as is (indirectly) the support of the post by other commenters.
Unfortunately, comments like this on Less Wrong, at least, tend to be downvoted - ironic given the community's supposed rationality, but it just goes to show we're all social creatures.
I'm also confused by this. It seems to treat consumption generally as zero-sum and miss the fact that if someone doesn't spend their money they are depriving others of possible gains from trade. I can see how this might work with natural resources such as coal, but not when the Miser buys a t-shirt or goes to a restuarant.
Can somebody explain the basic economics in this post? How does not spending money help others?
Miserliness is not the focus of people's ire towards Scrooge. Rather, it is the way he treats those under him and what it is that he values. He treats his employees like they are rats and values money qua money (Aristotle would laugh at him). And perhaps this latter point is why people have a problem with the miser. That which is merely a means has become an end. It's silly to waste your breath on "the miser" without first realizing the underlying values and worldviews involved.
It seems that one is getting into some sort of whacky zealotry when you worry about the effect of spending or hoarding a dollar. Perhaps we should next consider the effect of eating a helping of pinto beans on global warming.
orthonormal, agreed.M, yes the extravagant look worse.Preferred, yes the stoics look better.Jason and John, I claimed the miser did good, not that he was happy or admirable.Pyscho, no it doesn't require we assume that.GudEnuf, I said unusually equitably, not perfectly equitably.TGGP, I added to the post.