Pat Gunn (dachte) wrote,
Pat Gunn

Adding up versus optimising

(consider this a sketch; it's not that well written but I'm going to put it up for later restatement)

There's a dangerous conflation in how most people think about social policies, business, and finances in general that keeps them from appropriate thought; more socially-oriented societies can fail to make sure their books add up because they're so concerned about short-term goodness to people, and more finance-oriented societies fail to maintain their society because they're so concerned about maximising personal incomes of their people; a business likewise might find the profits/benefits it provides its employees to be difficult to set. When thinking about political philosophy, people frequently look at socialist nations and say "that doesn't work", talking about economies that existed for over 50 years as "failed".

So what should it mean for an economy to work? It shouldn't mean necessarily that it is the most optimal economy, by any particular metric or profile of weights in evaluation (and there are many) of directions of goodness. If it is solvent over enough years, with no accumulating debts or other concrete reasons it should collapse, then it's sound, even if there are ways to do better (for some notion of better). Generally, the oft-criticised past socialist economies, wasteful and messy as they were, with high levels of corruption and (often overstated but real) competitive failings compared to various (but not all) forms of capitalist economies, worked. We can and should be willing to engage in discussion on the specifics of those societies and economies and think about alternatives (in or outside basically socialist commitments, depending on our values), but we cannot generally lay the criticism that they didn't work.

Let's compare that to Greece, or to other forms of economics that are capitalist but that are also irresponsible in management of loans. THose economics are not sound so long as they are either hampered by commitments not to set taxes at a level suitable for maintaining their social programmes, and they would not be sound if they took on enough debt that servicing the interest were to cost more than they could plausibly collect even from a very high tax rate. The numbers would not add up, and even a good technocratic socialist would be compelled to do what it takes (from benefit cuts to tax hikes to selling off national lands to defaults) to ensure the soundness of the economy.

Healthy economic attitudes, both at the national and the institutional or personal level, are that while maximising profit (or efficiency) is not worth doing, behaviour and policy must be basically sound, weavable into and understandable in terms of a long-term plan that safeguards essentials and comfort with a reasonable risk profile, and not including an effort to optimise or be the best competitor with alternatives. On that personal or institutional level, the scientist or artist who is passionate about their works and maintains employment to live reasonably while doing it, or the collectively-owned company that's founded with a strong mission and aims for reasonable profit so they can keep doing it, should be celebrated over the businessperson or company that's aggressively elbowing others out and gaming the system to maximise income. Efficiency isn't worth every cost, but some level of it is essential for health.

Health of nations is not best understood entirely in terms of GDP. Happiness, pursuit of art and science and meaning, healthcare outcomes, and a plethora of other factors are available to us, and while some of them are (partly, and in a complicated way because GDP isn't evenly doled out to everyone in society) purchasable with funds, many are not. That doesn't make them dismissable.


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