Martha Nussbaum on Creating Capabilities and GDP
Sep 29 2014

Martha Nussbaum of the University of Chicago and author of Creating Capabilities talks with EconTalk host Russ Roberts about an alternative to GDP for measuring economic performance at the national level. She is a proponent of the capabilities approach that emphasizes how easily individuals can acquire skills and use them, as well as the capability to live long and enjoy life. Nussbaum argues that government policy should focus on creating capabilities rather than allowing them to emerge through individual choices and civil society.

Martha Nussbaum on Alexander Hamilton
Martha Nussbaum, Professor of philosophy at the University of Chicago talks with EconTalk host Russ Roberts about Alexander Hamilton. Nussbaum talks about the tension between acquiring power and living a life of virtue. Topics discussed include Hamilton's relationship with Aaron...
Eric Hanushek on the Education, Skills, and the Millennium Development Goals
How important are basic skills for economic success and growth? Eric Hanushek of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the importance of basic education in math and literacy and their relationship to economic growth. Hanushek...
Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Steve Scanlan
Sep 29 2014 at 10:02am

Geez, she was tedious. Russ regularly says something to the effect that economics is not a science, but injecting philosophy, equality, fairness, happiness and all the other items mentioned into economic statistics shoves it in the direction of reading chicken entrails.

Roman Lombardi
Sep 29 2014 at 10:33am

I don’t know about anyone else, but I found this statement chilling.

“So we have to back up, and we have to have a big debate about ownership first, before I would even agree with you that what a tax system does is to take. I think it just actually makes sure that the money that already belongs to all of us, gets into the hands of all of us.”

Curtis Lanoue
Sep 29 2014 at 11:10am


What’s chilling about that? Property rights are central to capitalism. So agreeing on concepts of property has primacy over talking about taxation.

Even Nozick agrees that there are some things that “belong” (in Nussbaum’s sense) to all of us and therefore we should contribute to.

Keith Vertrees
Sep 29 2014 at 11:13am

Roman Lombardi writes:
I don’t know about anyone else, but I found this statement chilling.

“So we have to back up, and we have to have a big debate about ownership first, before I would even agree with you that what a tax system does is to take. I think it just actually makes sure that the money that already belongs to all of us, gets into the hands of all of us.”

Roman, it sounded better when Marx said it: “from each according to his abilities to each according to his needs.”

Since then Cuba, the Soviet Union, Venezuela, and Mao’s China have demonstrated how well that philosophy works in practice. Unfortunately, it appears that Hong Kong may be about to repeat the experiment.

Trent Whitney
Sep 29 2014 at 12:04pm

What was most noticeable to me was the tone of the interview. Prof. Nussbaum had a positive, happy tone whenever she was allowed to present her views unchecked. But when Russ asked a question, no matter how light the challenge, her tone changed dramatically, and it seemed like we were “treated” to verbiage right out of the socialist/Marxist playbook.

Overall, this podcast illustrates the problem of finding a replacement for GDP. Whether it’s the capabilities approach or a similar dashboard approach, what are the metrics to track and measure? Those on the left will want metrics like those advocated by Prof. Nussbaum. Those on the right will want metrics like national defense spending per capita, gun ownership rights, etc. I think the Hayekian approach would be that the right mix of metrics would ultimately emerge, though I fear for how long that process would take. After all, look at how many decades we’ve been stuck with GNP/GDP, even though its myriad problems are well known by all who have studied economics.

One point that Prof. Nussbaum made that I thoroughly agree with is that we shouldn’t focus on a metric simply because it can be measured; we need to figure out what it is that we’re trying to measure, then search to find/create a metric to measure it. I’ve encountered this a lot in business, and it can be frustrating at times. We’re able to measure X, and that X just feels important to VPs, who want analyses showing that X correlates to sales, to profitability, or something else that’s important. Yet no matter how the calculations are done, there’s no correlation……yet the company continues to value X and, of course, measure X.

I think recent history in Major League Baseball illustrates this point, too. Baltimore Orioles manager Earl Weaver was among the first to use basic statistics (righty v. lefty stats, previous batter v. pitcher history, etc.) in the dugout – manually using index cards to keep track. As data processing became computerized, Bill James helped revolutionize baseball statistics by trying to create new metrics to measure the value of baseball players (the ideas behind “Moneyball”). There’s still a battle within MLB teams among those who value what can be measured (speed of a pitcher’s fastball, time it takes for a runner to run to 1st base, etc.) vs. those who value the traditional statistics (batting average, slugging percentage, ERA, etc.) vs. those using the new metrics (wins above replacement, OPS, etc., etc., etc.). It’s been fascinating to see how these different practices play out (and no doubt will continue to be).

Jorge Besada
Sep 29 2014 at 12:15pm

Although this woman’s understanding of economics is easily surpassed by anyone who reads just a few chapters from Hazlitt’s Economics In One Lesson. I still find this interview entertaining and worthwhile. One can see how without the proper understanding of the evolution of market process and “Austrian Economics” people inevitably fall for all sorts of statist ideas whose execution would destroy civilization.

As Hayek so beautifully wrote:

“We have never designed our economic system. We were not intelligent enough for that. We have stumbled into it and it has carried us to unforeseen heights and given rise to ambitions which may yet lead us to destroy it.”

The lady mentions : “the hard thing is that economics uses a lot of mathematics. Very few philosophers command that degree of mathematical sophistication so it is hard for them to just walk over to the other department and engage. It requires good will on the part of the economist.”

She is obviously not familiar with Hayek’s Counterrevolution of Science.

Keith Vertrees
Sep 29 2014 at 12:55pm

I recommend the Baumeister Econtalk episode to Martha Nussbaum.

Sep 29 2014 at 7:12pm

Oops, it looks like some of the money that belongs to all of us accidentally happens to be in Prof. Nussbaum’s account. I’ll just send her my bank instructions so she can wire me my portion ASAP.

Michael M
Sep 30 2014 at 3:55am

[Comment removed pending confirmation of email address and for policy violation. Email the to request restoring your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]

Earl Rodd
Sep 30 2014 at 9:36am

To me, Martha Nussbaum identified herself as a Democratic left partisan, not a serious economist, when, in response to Russ Robert’s challenge about the government truly representing the people, she made a comment about “voter ID” laws being virtually the only possible problem. Russ talked about important things like large donors etc. and she came back with a “talking point”. Worse, she set herself up as the only arbiter of a common definition of “good” after dismissing Christianity. She defines her own religion, assumes it is superior and dismissed others (except for giving Islam, arguably the source of the worse abuses of her own definitions of “good” today, a pass). While most of her complaint was reserved for Christianity, in her zeal to give Islam a pass, she even said something bad about Hindus! (for persecuting Muslims).

Roman Lombardi
Sep 30 2014 at 10:17am

@ Curtis

I don’t know of what importance it is, but I always feel it necessary to qualify my statements with this: I am not an economist. I am a high school dropout with no formal training at all in economics. There is a high likelihood that I don’t know at all what I am talking about and I am willing to admit that. What I found chilling about it was the almost “sing song” tone in her voice like it was just a logical conclusion that everything belongs to everyone. I think your point is well taken in that property rights are central to capitalism, but in the context that she spoke, she didn’t strike me as a particularly staunch defender of individual property rights.

Sep 30 2014 at 10:27am

Lombardi put his finger on it. The tax system “makes sure that the money that already belongs to all of us, gets into the hands of all of us.” Yup. That’s exactly what the tax system does. Always & everywhere. Your money is mine, mine is yours. If you don’t quite see it that way, well, we can be very persuasive. You’ll be glad, as we all will, when you see how beautifully it works out in the end.

Sep 30 2014 at 11:16am

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Don Crawford
Sep 30 2014 at 1:15pm

I was amazed at how she was completely unable to understand Russ’s simple point that being able to decide whether to send money to a private charity is much more control than having a vote on who to elect to spend the money taken by the government. Tom, Dick and Harry went to dinner. After dinner a vote was taken whether Tom should pay or everyone should pay. Tom voted that everyone should pay. Dick and Harry voted for Tom to pay. Tom shouldn’t object because he got a vote, really? Yet that is the argument used to justify the morality of government action. Sure, you don’t like how your taxes are being used to prosecute wars in the Middle East–but hey, get active in politics and be sure to vote, you can have a say in things. Right.

Richard Fulmer
Sep 30 2014 at 3:46pm

It seems to me that Prof. Nussbaum wants to turn everyone’s individual wealth into a “commons” from which wealth is distributed according to some collective, democratic method. Inevitably such a scheme will lead to the “tragedy of the commons” in which everyone has an incentive to take and no one has an incentive to contribute to produce.

Because wealth is ultimately created by human production, though, we’re really talking about turning people into a commons.

Sep 30 2014 at 4:16pm

I thought it was disingenuous how Prof. Nussbaum kept dodging Prof. Roberts’ question about whether the state can rightly claim to represent all parties in a society. This is the question which gets to the core of the problem, namely voluntarism vs coercion.

Here’s the passage that really upset me:

Well, I guess I think, first of all, that to take the idea that one vote doesn’t make a difference and then to blow that up into a general conclusion that government is not accountable is a mistake. Well, of course in a large country one vote makes a very small difference. What do you expect? If it were 10 people, then it would make more of a difference. So you could choose to live in a very small country if you wanted to make more of a difference.

So let me answer her question: What do I expect? I expect the right to life, liberty and property — free from coercion by the state or any other third party.

I don’t like our political system. Nobody ever asked me whether I wanted to be part of this system. As a pacifist, I do not like the perpetual warfare which I am forced to finance with the productive energies & resources which are taken from me against my will through taxation.

I am forced to live inside this prison of a nation state, yet I have practically no say (“Well, of course in a large country one vote makes a very small difference”) in the policies which control and restrain my actions and which govern my path through life.

As far as I can tell, there is nowhere to which I can escape, which makes Prof. Nussbaum’s assertion that “you could choose to live in a very small country” all the more offensive. Well, no — I cannot choose to live in a vary small country comprised of 10 people. That place does not exist, nor would it be allowed to exist by the current nation state system which grows like a cancer upon this Earth.

If I could opt out of this system and stay where I am, on my property, with my family and friends nearby, then I would have nothing to complain about. But the point is: I am not allowed to make this choice for myself. There is no opt-out process.

Let me finish with Prof. Nussbaum’s point about the Catholic church as an example: “But good heavens, do you think that the Roman Catholic Church is free from those problems?” As Prof. Roberts says, “No” — of course the Catholic church is not free of problems. But the difference is that I can choose to join the Catholic church and, if I don’t like it, I can choose to leave it too. Membership — and the giving of alms — is entirely voluntary.

Not so with the nation state. It is a fraud. Unrepresentative. Coercive. Non-voluntarist. Anti-freedom.

It’s a criminal extortion racket from which there’s no escape.

Olivia Kember
Oct 1 2014 at 4:42am

Just finished listening to what I considered a rich discussion. Call me a crazy leftist foreigner (you could map just about the entire New Zealand political spectrum onto the Democratic party) but I’m astonished that Nussbaum’s support for democracy as the best method of representing the views of the country rather than relying on choice expressed through the medium of money is regarded by some commenters as controversial, let alone socialist.

Completely agree with Russ’s point that the current political system seems to combine the worst of both options but would suggest improving the representativeness of the electoral system rather than doing away with the government. Surely you could do a lot by addressing gerrymandering, campaign finance, the electoral college, lobbying and donations, and the first-past-the-post voting system that penalises alternative parties?

Barry Sawicki
Oct 1 2014 at 10:49am

I had never heard someone say “we need to define ownership” before, but it was a revelation to me. The only way that you can own something is that we all agree that you own it. Just try holding on to something that everyone in your community believes you don’t own (a house for example). You can’t sit over it and guard it all day, because you would lose your job.

American taxpayers spent trillions of dollars to rescue the banking system. Yet, we still believe that we don’t own the banks.

Fred Giertz
Oct 1 2014 at 12:42pm

I found Prof. Nussbaum’s characterization of India puzzling. She said:
“Because most of my own development work has been occupied with India, where you do have basically good government infrastructure, I haven’t really faced those particular issues head on.”

If she thinks India is well-governed, it has to cast doubt on her rosy view of the ability of government to provide services. By most accounts, India’s primary education system is terrible. Concerned parents typically send their children to private schools.


“Issues related to the Elementary Education in India
About 93% of elementary school students attend government schools. There are multiple issues linked with the government run elementary schools: high dropout (about 50% dropout before completion of primary school), poor infrastructure (47% do not have separate female toilet, and 33% do not have any toilet), poor accountability of teachers (almost 25% teachers are absent on an average day, and half of the teachers are involved in ‘non-teaching activities’), and poor quality of teaching (about 50% of 5th grade cannot read grade II level and about 58% cannot perform simple division and subtraction).”

Oct 1 2014 at 1:59pm

I could not get by this rather frightening part of the discussion:

They do not compare countries by, let’s say, the ability to ride a motorcycle without a helmet, which is a capability that some people value, but it doesn’t seem like one of the most important ones in the world.
Russ: It might not belong in the top 10.
Guest: It might not belong in the top 10, right. So, the reason I make a list is because I’m interested in constitutional law, and I’m thinking of this as closely connected to what countries do when they make lists of fundamental entitlements for all their citizens that could eventually be implemented through a combination of legislative and judicial action.

I thought that preferences were subjective and individual. There is no such thing as a group preference or a worldly preference. These are just statistics from surveys sheet or worse voting patterns.

But what is worse is that I am unharmed by the individual who wants to ride a motorcycle without a helmet. Yet I would be harmed by just about every stated preference from the guest if these preferences were in fact enacted. The reality is that the motorcyclist has completely moral but not common preferences. The guest has common preferences for the use of violence in society that are for the most part completely immoral.

Also, people do not have rights to invade the property or abuse others. They have powers to do so. These powers are in the current state of the world given by governments who have a monopoly on invading property and abusing others. The terminology of the guest is incorrect and misleading, and in my opinion from listening to the podcast, intentionally so.

Mark Crankshaw
Oct 1 2014 at 2:51pm

@ Olivia Kember

Surely you could do a lot by addressing gerrymandering, campaign finance, the electoral college, lobbying and donations, and the first-past-the-post voting system that penalises alternative parties?

Those solutions are equivalent to putting a band-aid on a cancer patient. The underlying problems with “representative” democracy are far, far deeper than those surface remedies.

Ms. Nussbaum, like Monsieur Piketty before her, represent the views of a leftist ideology that to me appears as a secular religion. As an atheist, their arguments mirror those made by religionists: start with an unproven (or un-provable) and/or dubious set of givens and then leap to whatever conclusion that you prefer.
Here’s how it works with Christianity. There is a God (how is this is so is taken on faith, existence un-provable, knowledge of this “God” dubious), he sent his Son (unproven and dubious), who died for our sins (unproven and dubious), and if you pray for forgiveness (with prayer having untestable efficacy and often outright fails) and believe (hand-wave word) all that malarkey then when you die you will go to heaven and live for eternity in bliss, forever overcoming our obvious mortality and fallible human nature (un-provable, illogical, highly unlikely but clearly representing the “wish-fulfillment” of the “true” believer). If you don’t believe this then you are damned to Hell (also un-provable, highly unlikely but clearly representing the “wish-fulfillment” of the believer). Trust Us.

Here’s how it works with Socialist-style “democracy”. The government represents “Will of the People” (how is this is so is taken on faith, existence unprovable and knowledge of this “Will” dubious), so, if we concentrate political and economic power into the hands of government and using “democratic” (hand-wave word) means, the “Will of the People” will be pursued (untestable, unproven and dubious). So if you vote and “get involved” your voice might be heard (unproven and dubious and outright fails most of the time). Here voting and praying are almost exactly alike: sometimes it works and sometimes it doesn’t since it’s only “God’s Will” or the “People’s Will” that decides not the voter or prayer. If you believe all that malarkey, then eventually we will, through social democracy and the democratic process, achieve “Heaven on Earth” through “enlightened” governance (un-provable, illogical, highly unlikely but clearly representing the “wish-fulfillment” of the “true” believer). We should believe this despite the fact that all of us have a human nature that is not at all conducive of “enlightened” governance. If you don’t like what the government does after your voting fails again and again or this think is belief represents the wishful thinking of the delusional, then you can just get-the-blank out (i.e., try to find a smaller/better government and also clearly representing the “wish-fulfillment of the “true” believer). Trust Us.

One political maxim I abide by is to never ascribe “noble” political motivations when an equally (or more) probable “base” motivation exists. Franz Oppenheimer in his work “The State” trenchantly outlined the origins of the State. The State (government) has always been the organization of the political means, whereby the ruling class unproductively lives by coercively appropriating the fruits of the labor of others. History abounds with examples of the exploitative State. There are contemporary examples too numerous to list. In a fit of Orwellian double-think, what the socialist/social democrat would have us now believe is that somehow the State, always and everywhere a base exploiter, can change or has changed its nature to its polar opposite to now become, somehow and for no apparent reason, the selfless noble servant of “the people”.

Rather than accept this imponderably improbable transformation of the nature of the State, isn’t it more plausible that democracy (and for that matter socialism or communism) is really a different means to the same oligarchical and exploitative end? The State hasn’t changed its nature, but has simply adopted new strategies by which the political elite continues to exploits others.

Here we again run into more “religious” thinking by the secular Left. Followers of most Religions will readily concede that all the other religions are all false, ridiculous and man-made. However, their religion is the one “true” religion, you see. Likewise, the secular Left will admit that all other forms of governments are, and have always been, brutally exploitative, but, you see, their favored form of government is different. It isn’t exploitative like all the others. It doesn’t serve the interests of the ruling elite like all the others. Even when a multitude of obvious contradictions to their belief are pointed out, where innumerable illustrations of social democracies, socialist states and communist states act like, well, ruthlessly exploitative oligarchies run by an entrenched ruling class, these shortcomings are dismissed as “flaws” that will soon be corrected. The State will control its own misbehavior and will resist the temptation to exploit all the power it has accumulated. Trust Us.

There’s one final similarity between the defenders of religions and the secular Left. It was the Church, and specifically its priest class, that defended the State and the privileged position of the ruling elite throughout most of history. In return for this support for the State, the Church received a share of the exploited loot, and a privileged position in society. So the Church (be it the Egyptian, Roman, Catholic, Mayan etc.) declared the social order as the Devine Will and that the State manifests Divine Justice. The social order, and the exploitation that entailed, was ordained by God, you’ll get yours in the next life, you see. Trust Us. And anyone who doesn’t believe that is a heretic.

It isn’t difficult to see the parallel between the priest class of old and the Left-leaning academic class of the present. In exchange of a share of the loot and a privileged position in society, Leftist academics and technocrats help spread the notion that the State is merely a benign, humble servant of the people. No exploitation here. The taxation that pays the academics bills coercive? Never! It’s only the “Will of the People”. We had a vote, you see. Why, the Left insists, if you simply gave the State even more power, this would virtually ensure that the State would then never abuse it. Somehow or other. Trust Us. And anyone who doesn’t believe that is a heretic.

Unfortunately, Ms. Kember, the tinkering around the edges you suggested isn’t going to change the exploitative nature of the State. That’s as improbable as changing physical mortal human beings into “spiritual” immortal ones. The State will remain a tool of the small ruling elite and the object of the State will be always be exploiting less politically powerful or able subjects. Only through magical “wishful” thinking can you believe otherwise…

The elite runs and directs BOTH of the dominant parties here in the US. This duality is a means of deception—a classic “divide and conquer” approach. One party advocates a strong military, an expansive Empire, and political support for entrenched business interests. The other party advocates a bloated welfare state, massive subsides to educational elites, and a tightly controlled, politically manipulated market. The elites in the US want: a strong military, an expansive Empire, and political support for entrenched business interests, a bloated welfare state (to control and marginalize the underclass, a la Bismarck), massive subsides to educational elites (to the Piketty’s and Nussbaums so they can be apologists for the State), and a tightly controlled, politically manipulated market—controlled and manipulated, of course, by the elite. All you have to do is just play the one party as the threat to the other, add a little racial and ethnic tension and, viola, the elites get everything they want.

If there were more parties, the elites would run and direct them as well. This is the case in all the world’s democracies around the globe (including New Zealand). Thus, no matter which party wins any particular election, the elite, the very people the politicians actually serve, controls every winning candidate. You may very well like the decisions arrived at by your ruling elite in New Zealand. But that doesn’t change the fact that an oligarchy in New Zealand makes all of the decisions and to the view of pursuing the political means of that oligarchy. A strong welfare State and a tightly controlled, politically directed economy, both of which restricts economic entry and political/economic competition thus preserving the existing social hierarchical order, is no doubt exactly what the elites in New Zealand favor. A different means to the same old end.

“Gerrymandering, campaign finance, the electoral college, lobbying and donations, and the first-past-the-post voting system that penalises alternative parties” may have a insignificant impact in the selection of the elite-serving winning candidate, but it doesn’t change the fact that the candidate who wins will be serving the elite. You’ve admitted that the scope of political debate in New Zealand in quite narrow, could that be exactly what the elite ruling New Zealand want? Those candidates (or parties) that would not serve the elite and the existing order would be ruthlessly marginalized in New Zealand as they would everywhere. This political narrowness is quite common and, of course, by design. The democratic system is designed as “Heads elites win, tails subjects lose”. It would be delusional to believe that the elites who control this fetid mess aren’t getting the kind of government they want and benefit handsomely from. Even more delusional to believe they would then allow it to be changed.

Brad Hutchings
Oct 1 2014 at 10:38pm

Today was a pretty hopeless day. I spent much of it arguing that Billy Beane is a wild success because his $75M payroll (27/30 MLB teams) almost beat a team with a $92M payroll (18/30)l in their house! And then I listened to this, which to me was a wake-up call as to the philosophical status quo underpinning our politics. There is a lot of work to be done.

Oct 2 2014 at 1:55am

The argument was sidetracked from GDP vs multiple measurement into Libertarianism vs Liberalism.


But it is more enjoyable since I always think that Libertarians’ ideals are like Unicorns, they are awesome and imaginary.

Oct 3 2014 at 6:42pm

It’s fascinating to me how quickly two people who broadly agree on liberal ends can so quickly diverge when it comes to the means by which they should be pursued. Of note was how flippant Professor Nussbaum was about some of the more well-known problems with democratic decision making and the many ways in which the process can result in outcomes that are not merely arbitrary or sub-optimal, but deeply unjust. It isn’t just that the unique and conflicting preferences of millions of individuals are not subject to quantification or capable of being aggregated by some ideal institution, but even supposing they could be, this would have profound effects on the critical processes of production and distribution–the “who gets what, when and how” of economics–with the effect of making long-term planning at the individual level impossible, since one’s vital resources are always at the mercy of a hypothetical fellow citizen who needs them more according to this hypothetically just redistributive institution.

The democratic ideal of political equality, “one person, one vote”, does not bypass this problem, and neither would “getting the money out of politics”. I’m reminded of a podcast Russ did with Yuval Levin about Burke and Paine, in which Paine is described as believing that many of the institutions of civil society are fundamentally undemocratic and therefore illegitimate, whereas Burke really emphasized creating a space for people and ideas to interact, compete and cooperate. What I find most threatening in political philosophy coming from a left-liberal, social-democratic leaning is that the day may come when all private institutions become politicized, the personal becomes the political, and the sphere of freedom and individual autonomy gets crowded out into irrelevance. And since autonomy, individuality, and human dignity are all core liberal values, that’s something I think both sides of the wide liberal spectrum (Martha on the left, Russ on the Right) should care deeply about.

April Harding
Oct 4 2014 at 5:51pm

Nussbaum seemed to not understand Russ’ queries about the value of institutional pluralism in the context of delivery of public and/or social services. She rejected this twice; first in rejecting public funds flowing to ‘non-representative’ religious organizations; and, charter schools’ “unclear” (to her) performance advantage. Regardless of the soundness of her criticisms of these specific instances, they in no way constitute a foundation for rejecting the value of institutional pluralism.
She clearly needs to read some of Elinor Ostrom’s work. Or at least listen to Russ’ interview with Pete Boettke about Vince and Elinor Ostrom’s work.
I had to laugh when she complained about how hard the Indian government makes it to establish a non-governmental organization. I wish Russ had suggested she give her research funds to the Gov’t of India, so that they can be sure to do some research that is really ‘representative’.

Oct 4 2014 at 10:00pm

“More freedom for some is less freedom for others, and so on. Any freedom is a freedom to do something, which requires constraint on other people, that they don’t impede you from doing that thing.”

While this point initially seems like hairsplitting, I found it oddly brilliant and have been preoccupied with it all day. While I tend to favor individual liberty, it is such a pleasure to have something like this to debate in my head. Thank you.

Oct 6 2014 at 1:27pm

Guest: “Well, I guess I think, first of all, that to take the idea that one vote doesn’t make a difference and then to blow that up into a general conclusion that government is not accountable is a mistake.”

That’s not quite it, Ms. Nussbaum. Thomas Sowell answers in 3 fine paragraphs, (from “Applied Economics”):

“Politics and the markets are both ways of getting people to respond to other people’s desires. Consumers deciding which goods to spend their money on have often been analogized to voters deciding which candidates to elect to public office. However the two processes are profoundly different. Not only do individuals invest very different amounts of time and thought in making economic vs. political decisions, those are inherently different in themselves. Voters decide whether to vote for one candidate or another but they decide how much of what kinds of food, clothing, shelter, etc. to purchase. In short, political decisions tend to be categorical, while economic decisions tend to be incremental.

Incremental decisions can be more fine-tuned than deciding which candidate’s whole package of principles and practices comes closest to meeting your own desires. Incremental decision-making also means that not every increment of even very desirable things is likewise necessarily desirable, given that there are other things that the money could be spent on after having acquired a given amount of a particular good or service. For example, although it might be worthwhile spending considerable money to live in a nice home, buying a second home in the country may or may not be worth spending money that could be used for sending a child to college or for recreational travel overseas. One consequence of incremental decision-making is that increments of many desirable things remain unpurchased because they are almost–but not quite–worth the sacrifices required to get them.

From a political standpoint, this means that there are always numerous desirable things that government officials can offer to provide to voters who want them–either free of charge or at reduced, government-subsidized prices–even when the voters do not want these increments enough to sacrifice their own money to pay for them. The real winners in this process are politicians whose apparent generosity and compassion gain them political support.”

John H Penfold
Oct 11 2014 at 10:12am

[Comment removed for rudeness.–Econlib Ed.]

Matt N
Oct 14 2014 at 4:43pm

[Comment removed pending confirmation of email address and for rudeness. Email the to request editing your comment and restoring your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]

Oct 27 2014 at 6:51am

As previous commenters have noted, she raised her pirate flag with the claim that “we have to have a big debate about ownership first, before I would even agree with you that what a tax system does is to take. I think it just actually makes sure that the money that already belongs to all of us, gets into the hands of all of us.”

Do we really have to “debate” such things again and again when history is a long tale of kings, kaisers, chairmen and “representatives” taking and squandering property from rich and poor alike?

Bastiat was much more clear headed about it than JS Mill:

“But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”

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0:33Intro. [Recording date: September 8, 2014.] Russ: Now, in your book, you criticize Gross Domestic Product (GDP), which is a standard measure of national progress in comparison to other countries. What's wrong with GDP? Guest: Okay. Well, first of all, even if we want a measure that's a single number--and I'm not going to agree with that in a minute--it's far from clear that GDP per capita is the measure we really want, because it's a measure that includes foreign investment and its proceeds, which in the real world are often repatriated, that is, taken back to the investing country. And so what that means is that that money gets counted in the GDP figure but it doesn't stay around to really improve the lives of the people in the country. So, for this reason, a number of international reports have indicated that if we wanted a single number, average household income would be a much better measure. So, that's the first point. And then the second point is: Do we want a single number? It's easy, it's quick. But actually it doesn't tell us all the things we want to know. First of all, it leaves out distribution, so it can give very high marks to countries that contain alarming inequalities. In the old days, South Africa under apartheid used to shoot to the top of the development tables because there was a lot of stuff in South Africa, even though the vast majority of the people were not doing very well. So, distribution--making sure that people are doing well even if they are at the bottom of the society. Then the third thing, which I think you can already see from this South Africa example, is that there are many different things that matter in life. Health matters. Education matters. The quality of political opportunities, the quality of race and gender relations. And they are not all that well correlated with GDP. So, if we look at a country like China, we certainly have increasing GDP. But there are problems with religious freedom and political freedom. If we look at a variety of other countries we might have GDP growing while health languishes and education languishes. So, GDP is some kind of quick and dirty solution to a problem of measurement that we have tools to do much better on. Russ: So, what's your approach, and the approach that others are starting to get interested in, the capabilities approach? Describe it. Guest: Well, I would say more than 'start,' by the way. I mean, our Human Development and Capabilities Association, the formal academic association, is celebrating its 10th anniversary this year. But the approach has been long used by lots of international agencies. The Chief Economist of the World Bank right now, Kaushik Basu, is a former president of our Capabilities Association. And it's used even in the--President Sarkozy, when he convened a commission to measure welfare and the quality of life, the commission ended up recommending the capabilities approach. So it's very successful and widely used. And basically, it involves just saying: look, the real question that [?], what are people actually able to do and to be? And then of course you have to get right away more specific and say, what are the opportunities or freedoms that we really think people should have in a country of decent welfare? And so I've produced a list of 10 central capabilities that include life, health, bodily integrity, the development of practical reason, the relationships one has, both political and personal; environmental conditions; labor conditions. So anyway, there's a whole-- Russ: Emotions. I have the list in front of me. The senses-- Guest: You have the list in front of you. Okay. Yeah. But I wasn't going to list them all. But emotional wellbeing is an important one, I think. I often approached it from the perspective of women's development, because those were the groups I was working with. And often even when women have the vote and they have various employment opportunities, their lives are still limited by fear of violence and by limits on how they can express themselves. Which often leads to emotional stress that undermines their performance in jobs. So, I really wanted to put that one on the list in a very robust way. So, yeah. And of course I talk about the control over your material and political environment. And so on. Now, my list is used by some people who support this perspective. But if people think we should proceed in a more comparative way and not plump for any one list is the list, but just say, Now if we compare countries along lines of certain capabilities that we'll select just for the purposes of this particular comparison, usually health and education are the ones that are front and center, well, how do countries stack up? So the human development reports of the United Nations Development Program, for example, rank countries in accordance with all kinds of different capability measures. So the reports are typically about 400 pages long; they look at a lot of different things; and they never say, these are the things that are really important. Although obviously they select the ones that they do think have some importance. They do not compare countries by, let's say, the ability to ride a motorcycle without a helmet, which is a capability that some people value, but it doesn't seem like one of the most important ones in the world. Russ: It might not belong in the top 10. Guest: It might not belong in the top 10, right. So, the reason I make a list is because I'm interested in constitutional law, and I'm thinking of this as closely connected to what countries do when they make lists of fundamental entitlements for all their citizens that could eventually be implemented through a combination of legislative and judicial action. So, I used the list for that reason. But other people are more ad hoc and informal. But the main thing is: We're looking at people's actual opportunities. We are not asking just about the resources that are washing around in that society, but we are looking at--how do resources go to work in making people really capable of making choices that are meaning to them in their lives?
7:24Russ: I think of a word that you use a number of times in the book, which is 'flourishing'--the ability of humans to use their gifts, develop those gifts, and apply those gifts, their skills, their desires, out into the world. And of course as you point out, most economists--not all--most economists have neglected that aspect of the human enterprise. Which is strange. And focused on the monetary side. I think part of it, of course, is that it's easily measured. Relatively. It's not easily measured--that's really not the right phrase. But I think one of the challenges of your approach, as you point out: a lot of times what is getting measured, what is getting counted, are just the things we can measure. Whereas many of the important capabilities are not measurable. Or are much more difficult. Guest: Well, you know, they're more difficult. But I think it's always a mistake to begin from, What can I measure easily right now; and then work back from that to, what are the most important things. Because a better way to proceed would be to think first: What are the most important things? And then figure out ways to measure that. Now, it's not always going to be perfect. Like in education, number of kids who are in school for how many years, only a really crude proxy for the real stuff of education. If we want to get more fine-grained about education, well we have no choice but to develop better and more flexible measures. Of course in the United States we know how difficult is to do. But in any case, we develop these measures. And I think that the evidence is that economists are coming around to this more and more. Because development economics is not abstract mathematics. It is working with real people, and their lives. I've just been reviewing a very impressive book by Princeton economist Angus Deaton, called The Great Escape. And it's about the escape of various nations from extreme poverty and the like. Some nations still seem to be stuck. But anyway, you know, he now just sort of as a matter of course says well obviously GDP is just one thing and it's not the only thing that matters. He points out, because he's a health economist, that even health is plural. It doesn't have a single measure. So if you look at life expectancy, well then you're laying greater emphasis on lives of very young people by your choice of that particular measure. So if you want to really look at lives across the board, you probably really want to combine life expectancy with other health measures. And you want to look at epidemiology. You want to look at the quality of life of aging people. There are a whole variety of other things. He discusses height as a proxy for certain kinds of robust stabilities in the prime of life. You know. So, I think economists understand this really quite well. And it would be very bizarre for a health economist to say, Oh, well, GDP is the only thing. Even though in countries with high GDP you often do have groups or individuals who are lagging behind on these other more fine-grained measures. Russ: We did an episode with Angus Deaton on that book. And you can find that in our archives. Guest: Oh, good.
10:41Russ: I want to get to the more, some of the subtler measures, though. You talk about the importance of emotions, the senses. What is your feeling about the seeming, the recent love that economists have for, it might be called, the happiness literature, of asking people if they are happy and comparing those across countries? Guest: Well, of course I think it is really a nest of confusion. First of all the word 'happiness' is used in so many different ways. It used to be used really very much in the way that you talk about flourishing--that is, what Aristotle meant what a whole many centuries of thinkers have meant; when they say that somebody is happy, it means they are having a good life. They are flourishing. They are doing things that are meaningful to them. So, Wordsworth wrote this famous poem called "Who is the happy Warrior?" and he describes this person who, because he's fighting for his country, he's doomed to go with misery and pain and so on. And so in other words, meaningfulness doesn't always bring pleasant feeling. It sometimes might bring great suffering and grief. But the question about happiness was a question about meaningfulness and richness of life. By now there's this other conception that just is the feel-good conception of happiness. You are happy just in case on these moment-to-moment questions of how you feel, you report that you feel pretty good. Now, to me, that just leaves out all kinds of important things. It leaves out, of course, most of the things on my list; because political opportunities and rights don't necessarily register in your moment-to-moment feelings. Moreover, someone who is deeply and meaningfully engaged with the politics in that person's country may not feel good. They may feel great frustration or even rage. But that's actually quite productive and quite good. So, the moment to moment gets at one thing. But it's only one thing, and probably not the most meaningful thing. Now, then, further confusion is that some of the same researchers have a different question that they ask, about how satisfied you feel with your life as a whole. Now that's a much better question and of course it doesn't correspond to the other one at all. Because you might feel quite satisfied with your life as a whole, and yet you might have quite a lot of grief, loss, loss of people you love, loss of political causes you believe in. But you might feel you did your best. John Stuart Mill, when he was on his death bed, his last words were: 'I have done my work.' Now, I think he was not feeling moment-to-moment happiness. He was about to die. He had lost the woman that he adored 7 years before. And because he didn't believe in God he knew that he wasn't going to see her again. And so he felt he had had a good life; he evaluated his life well. So I think that second question is much better. But of course it does ask you to compare things that are not easily comparable. I think if you asked most people, 'How is your life going?' or 'What do you think of your life?' you would probably get a more complicated answer. You might say, well, I'm really pleased that my children are doing well, but my best friend is dying of cancer and I'm very upset about that; on the other hand, I think my work is going well. So you get a very complicated answer. That's what life is like: you don't have everything going well at all the same time. Russ: It reminds me of the capabilities approach: there's a lot of stuff in it. And it's not always wise or informative to try to shrink it down into a single measure. The other issue I have--and I have this with the capabilities approach as well, though--is that it's hard to compare across cultures, across countries. I used to have a Russian friend. When I asked him how he was doing, he would say, 'Fine, like all Americans.' Because that's how we answer that question; we say, 'Fine,' and the Russians don't say 'Fine.' They give a face and-- Guest: That's a very good point; that's a great point. And of course it has to do with cultural ideals. Like, Americans are a feel-good society and they think there's something to be ashamed of if you are not feeling 'good.' If you're not you better take a pill and get to feeling good quickly. But--I've just come back from Finland, and that's just the opposite, because culture is strongly influenced by romanticism; the feeling is longing and striving and lonely, meaningful introspection. Those are the things that really count in life. So, if somebody said, 'Oh, I'm feeling great,' that would strike people as you're a pretty superficial person. Russ: Shallow. Yeah. I didn't realize I had a Finnish side. One of the other items in your list which I didn't mention which I'm a big fan of is play. And I've argued here, and I think it's important, that for all the problems we have in our economy right now, there's a relatively large number of people who get to play in their work life. I'm doing it right now: we're chatting and I'm having a good time. And it's rewarding. Fun is not the right word. Play, playfulness is a better word. Guest: Yeah. I think it's something that people don't think about very much. In fact, sometimes people ask me why is that on your list. Now, leisure time they can understand a little bit better. But I think as you rightly say, it's not exactly the same as leisure time, because you could have playfulness and creativity in your work life as well. But what really squashes it is when you have to do a rather monotonous job at work and then you go home and you have to do all the childcare, all the domestic labor. So I was thinking once again of women. In so many countries of the world, women's playfulness is just stifled by what's known as the double day: you come home from work and then another job begins. I remember that my Japanese translator of the list, she said, 'I understand everything else on this list, but this 9th one, play, what is that about?' And I explained it. And she was a very stressed out person, like many Japanese women that I observe. They don't go to the gym--I love to go to the gym, but they don't have time to go to the gym. They don't have time to cultivate singing or acting, whatever else they might like to do. And, in their work itself there's not so much play. So anyway, she finally did understand what I meant by it, and she said very sadly, 'Yes, now I see what you mean.' Russ: I have to comment on that and point out that, as a sometimes gym-goer, I am struck by how little play there is in the gym. I see a lot of people suffering. My gym doesn't have a racket ball court or a squash court. It's mainly machines and weights and classes where people go through an ordeal, which they call fun--when it's over, mostly. And they find that exhilarating. Nassim Taleb has pointed out that when a business traveller arrives at a fancy hotel, someone picks up their bags--they don't have to go through the exertion of carrying them. That same traveler then, half an hour later, is in the gym sweating away, simulating what would have happened if the traveler had carried the bags for themselves. I just can't help but note that. Guest: Well, I will defend that case. Because, the fact is that the machines are set up so that you use it correctly, so that you are not going to strain something. So I might, myself do that. Russ: That's the claim. Guest: But anyway, I think that people who used to be athletes in school, have the grim attitude you depict sometimes because they really feel they've got to keep up with youthful selves. Now, I was always the worst athlete in my class; and I was never on any team. Russ: A blessing. Guest: So I have the great pleasure of just running for my own pleasure. And I do half-marathons and such. But I just like going along the beautiful lakeshore. Like, yesterday, this incredibly sunny, clear day, so I just run very slowly; but I keep on going, and I listen to my audio books and I just have a great time. And I think that's really important, that you have that side to your life. I also am an amateur singer and I sing for about an hour a day. And that particularly infuses a kind of joy into my work that is very precious. Russ: I can only hope that I'll be accompanying you on your runs in the future as an EconTalk host, and you'll be listening to future episodes.
19:37Russ: Let's talk briefly about Amartya Sen, who you mention a number of times in the book and who is also connected to this agenda. Talk about his contribution and where it differs from yours. Guest: Okay, sure. Well, of course a lot of our work was collaborative. And Amartya, by the time I started working with him in the United Nations Institution, he had already formulated the basic idea of capabilities, and he had already been involved in the creation of the Human Development Reports. So, the project was fairly far along. But the philosophical side, even though Amartya is himself a philosopher and a very fine one, he hadn't had time to develop that side as robustly. So we formed a collaborative project where we brought in quite a number of other people. But in any case, to work out the philosophical arguments about all aspects of this approach in much more detail, including the very important thing that you mentioned a while back about cultural universalism vs. particularism and relativism. And then, out of that, grew this international association because some of the younger people who were working with us said, 'Well, we seem to really have this association to bring people together across many countries.' So by now we have 800 members from 80 countries. I just came back from the meeting, which was in Athens this year--we always go to some different place in the world. And this one, I have really been a little concerned about how economics is dominating and philosophy wasn't as adequately represented in the association itself. So I made a big push to make sure that this meeting would be all about the collaboration between economics and philosophy. And indeed, it's terrific. So, Amartya was there; and he was very happy to see that. Because he's always been very strongly supportive of this collaboration. So I think in the big things we agree totally. There's some smaller things that we seem to disagree about. Now, I say 'seem' because I think in the end it's mostly difference of project rather than difference of view. So, he is one of the ones who uses the idea of capability comparatively only, and doesn't make a list. But I think the reason for that is he's just trying to move the development debate into a new space of comparison. And he's not trying to think about constitutional law. And of course when he moves into the new space of comparison he does use certain specific examples--particularly health and education--that he does think of as centrally important. So, I think the difference is not so great. Then, there's the sole[?] question of whether all capabilities are good. Now, I guess I find this a little bit frustrating because I guess I think it's obvious that not all human freedoms or opportunities are good. Some of them are opportunities to trample on other people, such as the right of men to harass women in the workplace. Well, I think that's a capability all right, but it's just not a good one. It would be good to make that illegal. The capability of industry to pollute the environment, that's another one that's bad and that should be illegal. And so on. And Amartya, I think in the end he can't really disagree with those examples, but in some way he reformulates it to say, well, capability is always good but it could be used badly. So there's this kind of back and forth about that question. But I think it's because he kind of tends in a more libertarian direction than I do, in the sense that he thinks, other things equal, it's always better to have more freedom than less. Now, I guess I don't even know what that means. More freedom for some is less freedom for others, and so on. Any freedom is a freedom to do something, which requires constraint on other people, that they don't impede you from doing that thing. So I don't even think that his question is entirely intelligible to me. But these are some of the areas that we always discuss, that we always debate about. And it's fun to debate them, really. But in the bigger things we agree totally. Russ: Well, let me just say that I like your idea of getting more philosophy into your association. But personally I'd like to see more philosophy get into economics. And that would be a better way to get philosophy represented there, maybe, by having economists who are a little broader and a little better educated, and maybe a little more honest. Guest: The hard thing is that economics uses a lot of mathematics. Very few philosophers command that degree of mathematical sophistication. So it's hard for them to just walk over to the other department and engage. It requires good will on the part of the economists. But, you know, it does happen. First of all, it happens big time in law. We're the home of the Law and Economics movement, here in Chicago. But I co-teach with an economist colleague all the time, and I just finished a long email explaining some things about what philosophers are saying about motivation, just because he was writing something about environmental philosophy that needed to have that input. So, we co-teach; we schmooze; we talk about things all the time. And I find that legal economists are very open to that. Because they are dealing with the real world. They haven't got the luxury of saying, we're just going to prove our theorems, and forget about the world. But even in our economics department, my colleague James Heckman, winner of the Nobel Prize in 2002 and of course famous for his work on pre-K (pre-Kindergarten) intervention and childhood education, the person who inspired Mayor De Blasio. He's a great friend and colleague; and we've just succeeded in getting him to agree to give the Amartya Sen Lecture at the next meeting of the Human Development and Capability Association. So, you know, we are having our tentacles out there. There's going to be a conference on welfare economics and moral philosophy on our campus. It's sponsored by our economics department, not by the philosophy department or the law school, in late October. So, you know, there are a lot of things going on. And I'm actually getting more optimistic. Russ: I'm glad to hear it. I think most of the mathematics in economics is a barrier to understanding and particularly in the area of welfare economics, where just invoking a social welfare function because you can write one down is somehow seen as science. I'm not a big fan of that.
26:16Russ: I want to come back to Heckman, I hope, by the end. But meanwhile I want to read a quote from the book; and give a reaction to it; and then challenge you on where you go with it. Here's the quote:
The capabilities approach can be provisionally defined as an approach to comparative quality-of-life assessment and to theorizing about basic social justice. It holds that the key question to ask, when comparing societies and assessing them for their basic decency or justice, is "What is each person able to do and to be?" In other words, the approach takes each person as an end, asking not just about the total or average well-being but about the opportunities available to each person. It is focused on choice or freedom, holding that the crucial good societies should be promoting for their people is a set of opportunities, or substantial freedoms, which people then may or may not exercise in action: the choice is theirs.
Now, my view would be that that's a very nice definition of what I would call the good life, or what I mentioned earlier of flourishing, what each of us individually aspire to; and of course all of us want to live in a world where our children can live and have those aspirations met if possible, or at least have the freedom to meet them. And the question I have for you, which is a good chunk of the book and part I find most problematic is the role that government might play in that story. Why is that challenge a government challenge? Guest: Okay. Now let me first step back and make a couple of qualifications, which I do make in the book. The first thing to say is that I'm dealing only with a part of the good life. Not with the comprehensive conception of the good life. And the reason for that is that I believe, as John Rawls also believed, that the right thing for governments to think about when political principles are formulated is an area of possible consensus among all the different comprehensive doctrines that societies have. The thing is, though, all societies have different religions. They also have different secular doctrines about the good human life. So, it would be not just impossible, but actually ethically wrong to impose on people some tangled comprehensive doctrine for what the good human life is. And so I totally agree with Rawls about that. By the way, I think that's another difference between me and Sen. I think he does not agree about that. I think he's much more of a comprehensive doctrine guy. But in any case, let me just focus on what I think. So what would be right and appropriate would be to formulate political principles that could possibly be accepted by all the major religions, but also the major secular views of life, and form the object of what Rawls calls an overlapping consensus among all of these views. Now, what that means is, you don't talk about everything. So that's another reason for my list is: it's finite. They talk about only those 10 things. And if you want to ask about the wellbeing of the soul and whether there's an afterlife, it's not going to say anything about that. It's not going to say anything about a lot of things that people think quite important, but only the part that could be the reasonable subject matter of political principles. So, you know, the whole question of asking is what might be the reasonable object of political principles. And the other thing to say is they have to be formulated thinly. So, I don't want to say, all citizens get a chance to education defined as the enrichment of the soul. Because once again, we are using a notion that's religiously divisive, not everyone believes in that. And so you want to formulate it in a rather thin and noncommittal way so that people who have different religions, and some have no religion, can sign on to that. Rawls's image is that you can view the political conception as a module that different people can attach to their lives in different ways. So, the first answer to your question, why government, is: that's the question I'm asking. Actually, not even asking the question, how should people search for meaning in the rest of their lives. Because I think that's up to them. I think, you know, if you are a Roman Catholic you will ask your priest what to do, and if you are a Marxist, well, you are going to have a lot of trouble I think in the United States but you better figure out from your own doctrine what you should do. And so on. So, I don't think it's right for me to impose on anyone an answer to that larger question. Now, then, the next question is: Suppose that we argue that a just society is one in which all citizens have these 10 opportunities that I define on my list. How do those get delivered to people? And I think that is a good question to ask. Now, I don't actually believe that government ought to do all of it. But I guess what I think it's in the end, the buck stops there. That is, if we have a society in which people are massively unable to enjoy one of the things on my list, then something is wrong with the institutional arrangements of that society. So if that society wants to delegate a part of that job to private actors or the market, well, fine. Let them try that out and see how it works. But if it doesn't work, well, then they'd better do something different. So, you know, I have no objection to things like my mayor selling rights to the highway to some private group to maintain that part of the infrastructure. But if it doesn't work, and it's a mess, well then he's got to think again. Because he's accountable to the people of Chicago, and you know, with our previous mayor sold the rights to all the parking meters in the city to some private corporation with a 20-year lease. It was just a ridiculous deal. And you know, he left office before he paid the price; but the new mayor is on the hook for that, and he's trying to get out of that ridiculous deal. Because, you know, the buck stops there. People find that something is very burdensome and these private arrangements are not working, well, we have to do it some different way. So, I'm not saying for example that government has to be a direct provider of health care, although I do happen to think that a single payer system makes more sense than the baroque system that we now have. But anyway, you know, let them try to delegate to the insurance company and the employer and so on and see how that works. But in the end of the day, the voter is going to tell the story.
33:07Russ: Well, you are pretty--let me ask you about civil society. Which is not a very good phrase but for me it tries to capture the idea of people voluntarily choosing to help others through nonprofits. And you are very critical of it in the book. You talk about Peter Unger and trying to encourage people to give more charity, say, more philanthropy. And this is--I'm going to quote you again and you can put it in context again if you'd like. You say,
Finally, let's look at the world Unger recommends. It would be run by Oxfam and the other nongovernmental organizations, because if people did what Unger recommends, those organizations would be richer and more powerful than nations. However fine these organizations are--and let's just assume that they are as honest, efficient, and wise as we could wish them to be--still they are not accountable to people in the way that a democratic nation is accountable. If they listen to anyone when setting strategy, it is, most often, to their big donors. We would not like a world in which they (their trustees, their most wealthy donors) had all the power and the agenda-setting opportunity. Ironically--since the view is, in inspiration, egalitarian--such as scenario would mean that a global elite would have much more power than democratically elected governments.
And I guess I feel the opposite. I have trouble believing that democracies, even the good ones--we're in one of the better ones--are more accountable than Oxfam. They see--less accountable. They, too, pay too much attention to their donors, the taxpayers, the richest contributors in the case of politicians. So it seems to me it's an empirical question. Would you agree? Guest: Well, look. I think that, first of all, I'm talking there about the case of the global sphere. And that's a special case, because there is no world state; and I actually don't think there should be a world state. So let me just back up to the nation and ask: Should we think of nations as being run through well-intentioned NGOs (Non-Governmental Organizations)? Well, you know, now we get back to the problem of reasonable pluralism. Most NGOs in the United States are religious. And if you think of even a very well-intentioned project such as the Faith-Based Initiatives, we see right away that this runs into great difficulty in the area which I think is extremely important: showing equal respect to all citizens, no matter what their religious comprehensive doctrine. That was not the case with the Faith-Based Initiatives. They had religious tests for getting the money. So even the attempt that the government made starting with Bush to channel various funds through the churches--I think they did it because that these were more efficient mechanisms, right? Russ: Yeah; I thought that was the wrong reason. Guest: I think it was, well--I have no objection, in fact I'm all in favor of private philanthropy and I think it does great good. But the question is: to what extent that a government that purports to stand for all the people, and is the government of all the people, delegate its essential responsibilities to such a group? And I think there should be really great caution about that. Because groups, by their very nature--and it's perfectly good for them to be this way--are sectarian. They represent--whether they represent the liberals or the conservatives or the Catholics or the Mormons and so on, they represent some partial view of how one should live the human life. And they don't claim to stand for all the people. So one should be very, very careful. Russ: Well, they don't claim to stand for all the people, but at least they're honest. The government claims to. But I don't think they do. Guest: Well, some are honest and some are not. I mean, look, I wrote a whole book in 2007 about the Hindu right[?] in India, and there is a long unpleasant story about how funds given by well-intentioned non-resident Indians in America are channeled through various, I would almost call it a money laundering scheme, until they are used to foment violence against Muslims in India. So, you know, NGOs are[?] of many kinds. We must not forget that some of the worst organizations in history have been NGOs. And so I'm not going to agree with you that there is a general presumption that NGOs are good and honest. I think a lot of churches are among the most corrupt institutions in the world. Russ: I didn't mean to suggest they were good and honest. But what I meant to suggest is you often know what you are getting. And when you don't, like as in your case, if you reveal what's really going on, they may find it harder to collect the money. Government doesn't have that constraint. They usually can collect the money even when you don't like it. And so I'm curious why the fact that government claims to represent all the people is a selling point in your view--when in fact they don't do that; and they can't? We all differ. We have different viewpoints. They can't represent us. Guest: Okay. The reason I think the nation is an entity that has ethical importance is that it's the largest unit that we know yet in human history where the voters can decide. So it expresses a very important aspect of human beings--their autonomy, their right to give themselves laws of their own choosing. Now, of course it's not perfect--because of low voter turnout, because of voter ID laws which are coming in which exclude certain classes of voters. All kinds of imperfections we put-- Russ: But if those were all perfect, that wouldn't change the fact that governments inevitably take stuff from some people and give it to others. And without my consent. Without people's consent. Guest: Are you talking about taxation? Russ: I'm talking about everything that government does. Taxation-- Guest: Well, you are talking about taxation. I don't agree. Because we have to first say, what account of ownership do we have? If somebody has inherited wealth, do they actually own that? Such as libertarian liberal as John Stuart Mill thought they didn't own the money that was just theirs by inheritance. He didn't even think that they owned all the money that they got through their own work. Because he thought that whatever money is needed to support the basic needs of others is not owned by the person who is sitting on it. They don't have the right to it, if it's needed to support the urgent needs of somebody else. So we have to back up, and we have to have a big debate about ownership first, before I would even agree with you that what a tax system does is to take. I think it just actually makes sure that the money that already belongs to all of us, gets into the hands of all of us.
39:40Russ: But it doesn't get into the hands--I'm not trying to make an ideological point here, actually. I'm trying to make a philosophical point. And so you can--try to, um--I understand your natural reaction, but that's not the point I was trying to make. I'm thinking more of Nozick's parable of the slave. Which I know you've read. The idea that as a democratic voter, I don't have much sway. Like, mostly zero. So, forget whether it's fair or not, whether taxation is theft or whether it's not. The basic point is that government is not accountable to me. It's a very lousy system for aggregating preferences. We know that from the work of Kenneth Arrow at a minimum. But we also know it from our daily lives. It serves powerful people, not us. There is no 'us.' What's your reaction to that. Guest: Well, I guess I think, first of all, that to take the idea that one vote doesn't make a difference and then to blow that up into a general conclusion that government is not accountable is a mistake. Well, of course in a large country one vote makes a very small difference. What do you expect? If it were 10 people, then it would make more of a difference. So you could choose to live in a very small country if you wanted to make more of a difference. And in Finland one vote goes a lot further than it does in the United States. But that seems to be a fairly trivial point. And we've chosen to live in a large country, and so that means that each vote means less, if we are talking about national elections. Of course, in local elections it's a different matter. But, anyway, I guess what you are talking about though, in the last part of what you said is the undue power that the elites have over the political process. Russ: Correct. Guest: And there I would totally agree with you. But that's a flaw. It's a flaw that we are working to reign in and correct. But it hasn't been done sufficiently. Look Adam Smith, in the 1780s, pointed to the fact that manufacturers had a stranglehold on the legislative process. He said it was like a standing army surrounding Parliament, trying to make Parliament do what they wanted. And so, you know, at that time there were no laws against monopoly, even. So by now, we have a lot of regulations. We have laws against monopoly. We have securities regulation. We have various kinds of national regulation. Is it enough? No. Russ: I think it's worse than not enough. A lot of it serves the people that it allegedly is trying to protect us from. Guest: Well, you know, look. I think since the Great Depression, things have improved considerably, in the sense that people are protected against disaster in ways they were not before. But sure. There's more than needs to be done. And that's why I think citizens should be thinking much more about what more do we need to do. I'm all in favor of the Occupy Movement, except that it was intellectually quite crude and simplistic. So I think to think about these things, to think how government can work more effectively for the people is an urgent matter. And I think we definitely need to do that. So I'm certainly agreeing with you that democracy is not perfect. But good heavens, do you think that the Roman Catholic Church is free from those problems? Russ: No. Guest: In addition to having the problems that you've already named: the problem of non-accountability. The Roman Catholic Church has the problem that it can't possibly claim to stand for all of the people in America, because it has a specific view of the meaning and purpose of life. Which is fine for it to have-- Russ: I guess it-- Guest: But it is not the view of all America. Russ: But I guess the part I'm struggling with is that I don't understand how you can argue that any institution represents all Americans. Other than a national defense issue where we are under attack from an outside enemy who no one within the country supports their policies. And therefore of course we unanimously would agree to fight it. And it would be an agreed-upon action that would represent all of us. Everything else the government does--and I'll just take a couple of examples: the sugar lobby; the financial sector, the agricultural sector. Government favors some group at the expense of the rest of us. And even something where we would think that it wouldn't, which would be education, tragically, it has mis-served two generations of children in the inner cities. And yet, you favor, I think, a strong role for government in education. You [?] would not one to see--forget the Roman Catholic Church--you would not want to see private philanthropy, whether it was the Gates Foundation or others, create private schools that would serve poor children. Is that true? Guest: Well, let me talk about the general question first. Why do I say, 'government represents the people'? Look, you do not need to show that you win to show that government is in some meaningful sense, yours. Of course, if you have a vote, some people will win and some will lose. But having the chance to weigh in on those policies is what I'm talking about. In the era when women couldn't vote, well they might often get what they wanted by wheedling their husbands and getting the husbands to give them what they want. But there's a crucial difference--namely, that they are being dominated. The government is not accountable to them. And in the era where women have the vote, it's different. Women don't always win. No, of course not. But no individual wins all the time. That's what democracy is about. But on the other hand, you are in that process. And it is in that sense, yours. Even the Constitution, which I think does, by the way, command the agreement and assent of a pretty large proportion of Americans at some level of generality, you know, there's an Amendment process. So, you can always work at organized work to amend the Constitution if you don't like it, and see how it goes. You can't expect to win, but you can participate in that process. Now, as far as education goes, I'm back to what I said before. If government wants to experiment with charter schools or with vouchers, fine. Let them experiment with that. But in the end of the day it's a system supported by the people. And the results, we have to look at the results and see what they are. And politicians will be defeated if they don't do well by that. I don't know what will happen in the next mayoral election in Chicago, because I think, you know, the favor[?] that Rahm Emanuel, has shown to [?] charter schools--which on balance have no better or no worse records than the public schools--has actually make most parents distrust him. When they didn't distrust him before. Now, a lot depends on who the opponent will be, and so forth. But on that issue, I think that just having the ideological commitment to charter schools that he has struck people as having, was a mistake. You have to be open to empirical evidence, and what the empirical evidence shows is very mixed. I mean, of course. What would you expect? Some charter schools will be good and some will be not so good. Russ: Wouldn't it be lovely if the lousy schools disappeared and the good ones flourished? And we don't have that system. It's a shame. Guest: Well, right. Russ: It's a shame. Guest: We have, in addition, the problem that we have a decrease in the number of children living in the city. That has a lot to do with migration of young professionals into the city, migration of big families to the suburbs. But, so you actually have to close a bunch of schools. And that means even if they were good ones, well, they have to amalgamate. So the situation is complicated. And you just need good people to think in very specific and non-ideological ways about what works. And I think the fear about Rahm Emanuel--and it's probably not entirely correct, because he's an extremely honest and able politician--is that he has this ideological commitment to the charter schools that's getting in the way of his attention to empirical facts. Russ: Well, I think the empirical evidence is complicated. As you do. But we probably interpret it a little bit differently.
47:53Russ: But let's shift gears. I want to get back to, in our closing minutes I want to talk about philosophy, because you have some interesting things to say about stoicism. Talk about how stoicism has influenced our conception of human dignity and flourishing, what its influence has been. Guest: Oh, well, that's a fun question. So, stoicism--just to fill your listeners in, is a philosophical view that began in the 4th century B.C.E. in Greece but then migrated to Rome and was the dominant philosophical view of the early Roman Empire. And so we had leading politicians even who were Stoic philosophers. Seneca, who was the Regent of the Roman Empire in the 1st century A.D., and we have Marcus Aurelius, who was a ruling emperor in the 180s-200 of the Common Era. He was a stoic philosopher while he was emperor. So, it's one of the few times when a philosophical view has been kind of the creed for the rules of the world--we might put it that way not too melodramatically. So, stoicism was very politically important. The great thing, the great insight that stoicism had, was that all human beings have equal dignity. No philosopher had ever said that before. They thought that we were all unequal because of our talents. Now, stoics didn't disagree that people had different talents, but that they thought the worth of a human being lay elsewhere. It lay in your power of ethical choice, that however talented or untalented we are, we can all think about the good and we can make choices. So in virtue of that, they said, Rome, of equal worth and worthy of equal respect. So this idea of equal respect I think is the big thing that stoicism bequeathed to the world. And it was like they said that male and female were equal in these respects, slave and free were equal in these respects. Now, then, where they I think went badly wrong was that they thought that that was all that mattered and that it couldn't be affected by anything; so therefore, the conditions you lived in didn't really matter all that much. So the slave is equal in dignity; so why should we get rid of slavery? He's free within, worthy of equal respect, can't be touched by these bad conditions, so no need to change. And so they were actually quite quietistic[?] in not consistently but in a lot of cases about the political changes that would be needed to realize genuine human equality. So, you know, they're good and they're bad, but they are really always very, very interesting to argue with. Russ: It seems to me they had a big influence on economics through Adam Smith. Smith, when you read either of his great books, The Theory of Moral Sentiments or The Wealth of Nations, there's a respect for the individual and a respect for people's choices regardless of their class, regardless of their ethnic group. Which must have been somewhat radical at the time. But when you read that book, either of those books, he has nothing disparaging to say about--in fact he has a lot of respect for--poor people and for Africans who were enslaved at the time that he thought had deserved the freedom to make their own choices. And was not paternalistic about that, or cruel. In fact, respected them and saw their dignity as paramount and that they should be treated equally. Do you see that as the impact of stoicism on Smith? Or does it come from somewhere else? Guest: Well, that's something I'm very interested in. I've actually written a long piece on this very question, which--it's never come out because it's supposed to be part of a book that I've got on the back burner. But in any case, I think that Smith is torn. I mean, yes, I think that the good influence of stoicism on Smith is exactly what you say. But I think it's this other part, about whether bad worldly conditions really make a difference in the end, that he's really not consistent about. And in The Wealth of Nations, he makes it very clear that bad conditions really, really hurt, and they can even deform human--he uses the word--human capabilities. So, when he talks about primary education he says, these little kids who are made to do this monotonous stuff all day and they don't go to school, are really usually [?] deformed. He uses those very words. Whereas the kids in Scotland who get an elementary education, at least they have that chance to participate in discussion of issues of the day and so on. So I think there and in lots of parts of the Wealth of Nations, he's granting that worldly conditions make a huge difference to the development of your human capacities. And that therefore the equal respect we have for human capacities should lead to changes in worldly conditions. In the Theory of Moral Sentiments, which of course he revised and revised, but the editions where he laid his greatest emphasis on the Stoics, he really waffles on that. And he says, well, you know, the fact that there's high infant mortality, what difference does that make really because people can buck up and they can really be very tough under very bad conditions. Here he uses these examples which he's fascinated by. So he uses the example of the slaves on the slave ships. Which of course he deplores. But on the other hand, he says, look what magnificent human beings they are. So he's so caught up in the admiration he has for the African who didn't think[?] being mutilated and deformed even though they were on the slave ship--that he kind of loses the track of his opposition to the slave trade. And similarly, when he starts talking about the native Americans, he just thinks they're great, because they could be burned alive and hung over a fire for two hours at a time and they still don't let out a cry of pain. So, it's this kind of macho stoicism that he gets, I'm afraid, from Seneca and the people that he loved. Which kind of stops him from thinking, how should people actually live? What conditions would be worthy of their humanity? And I think it's somehow deeply personal with him because in his letters you see that Smith adored his mother, who was a very tough lady and who never complained; and she went to her death in her 90s without a whisper of complaint. And he himself was a lifelong hypochondriac who was full of complaint. So I think he kind of thought it would be better if you didn't mind your worldly conditions. But I just think he made a mistake there. Russ: Well, I'm going to defend him for a second. Then we're almost out of time. But just to defend him, I think he was telling us that even in the worst of situations people can buck up and have that stiff upper Scottish lip. And he was trying to teach us something there. I don't think he was suggesting it was a good thing. He also has the passage about the beggar sunning himself being as content potentially as the rich man, and the rich man is tormented by unsatisfied desires and wealth. And he does sometimes say that these situations can be dealt with. But he lived in a different time. There was a lot of suffering. And I don't think he saw the options--although, you're right--he fought slavery; he was anti-slavery. But you're right: he didn't take every opportunity to denigrate it. But I think his point in those passages was merely to say what human beings were capable of even in the worst of situations. So if you don't live in anything like that, surely you could get by. I take his--my summary of his view there is: Wag more, bark less. Guest: Well, you know, look, I love Smith and you and I would basically agree that he has his deep insights into all these things. I think the stoic view about complaining and moaning has some truth to it. But then it also has something wrong with it, because it might lead you not to protest against conditions that are really bad. I don't know--he certainly in the Wealth of Nations does not say those little kids should buck up and realize that it's okay to do these repetitive motions all day. Russ: It's true. Guest: So, you know, I think that we need room for protest; and he's uncertain about where that space is. But look, he's great.
56:36Russ: Let's close and talk about rich nations and poor nations. We live in a time where there's a lot of aid to the poor through the government. Hasn't turned out very well. One could argue it's achieved virtually nothing--trillions of dollars. What is your hope for your approach? You mentioned Angus Deaton earlier. What is your hope that your approach might influence how development aid is spent and how it might change things? Guest: Well, that's a very good question, because I actually think Deaton's arguments about foreign aid are on balance quite persuasive. Namely, he's arguing that it's a mistake for us to just unthinkingly salve our conscience by giving a lot of money to these poor nations, because often it does more harm than good by salving the conscience of the rulers, perpetuating them in power if they are bad, and then enabling them to use the hard-earned money they get from the people for things that they just feel like doing. So I guess I think the bottom line of what he says is that if you give aid, it should be given very, very cautiously. And he does identify areas, like certain kinds of one-disease projects which he calls vertical aid because it's not targeted to the creation of health infrastructure but rather to helping with one disease, that that would be a worthy thing to support. And then he says that the challenge, the Millennium Challenge constraints about good governance and so on might be enough to make a broader okay. And he's not sure about that because we don't have enough data. And so--I think he's right to be skeptical. I wish he had talked about more things. I wish he had talked about what he thinks about education, because--see, there, I guess I think if you are ever going to have good governance, ever, in countries that now don't have, probably a good idea is to start by the creation of systems and networks of schools. Because how do you get the next generation except by the schools? And so even if somehow the government is absolved of its responsibility for some of the creation of good schools, it might be worth it if you run the schools well and they are good schools. Then out of it will come people who eventually will give you better governance. So I'd like to know more about that kind of thing. Because most of my own development work has been occupied with India, where you do have basically good government infrastructure, I haven't really faced those particular issues head on. I think for India, the idea of just giving money to the government just is impossible anyway, because legally they make sure that foreign people don't give too much money to India. They don't want that kind of control. So my own university in setting up a research center in India had to set it up as a for profit company because they had posed so many obstacles to the creation of nonprofits in India. But anyway, it's a long story. But I think a country that's operating well as a democracy is one case; and a country that's a mere tyranny or kleptocracy as sometimes people call it, just mere crooks at the helm, is a very different case. And with that case, sure you want to try to help with specific health issues if you can. But you also, I think, want to kind of produce the next generation that could produce better governance. And I think some kind of education aid would be worth more investigation.

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