When the Scientist Is Not Also a Philosopher

Greg Mankiw has another piece in the New York Times, this one titled "When the Scientist Is Also a Philosopher." Sadly, it was not a profile of Amartya Sen, but yet another piece of Mankiw's philosophical musings. In this piece, he goes after the minimum wage (again) and Obamacare, claiming that both violate the "do no harm" principle.

Mankiw's Philosophical Evolution

What's most remarkable about this piece and Mankiw more generally is that his deeply-held philosphical beliefs change nearly every week.

Desert. Recall in June of last year (and previously), Greg Mankiw declared that he was an adherent of the just deserts view, meaning that he believes that "people should receive compensation congruent with their contributions." Under this view, the economy is to be organized according to the principle: to each according to her marginal productivity.

Distributive Fairness. Then, in January of this year, Mankiw wrote a piece against the minimum wage, in which he argued that the minimum wage was a distributively unfair way to improve the lives of those with low incomes. He explained that "if we decide as a nation that we want to augment the income of low-wage workers, it seems only right that we all share that responsibility," not just low-wage employers. Accordingly, he favors expanding the Earned Income Tax Credit (EITC) instead.

This argument is in direct contradiction to his just deserts view. Economic theory, of which Mankiw is a scientist, tells us that those who benefit from the minimum wage do receive "compensation congruent with their contributions" or thereabouts. Otherwise employers would not hire them. Recipients of the EITC do not receive compensation congruent with their contributions, however. A just deserts adherent would favor increasing the minimum wage over increasing the EITC, but Mankiw curiously comes out in the other direction, using his newly-found philosophy of distributive fairness.

Process. Now Mankiw is out with yet another philosophical framework. He calls it the "do no harm" principle, but explains clearly that "this principle suggests that when people have voluntarily agreed upon an economic arrangement to their mutual benefit, that arrangement should be respected." This is the just processes view. Under this view, the minimum wage is wrong because it disrupts or disallows voluntary agreements.

It appears that what Mankiw fundamentally believes about economic philosophy depends on what day it is. It's clear he does not believe in utilitarianism, but whether he believes in desert, process, or distributive fairness, nobody knows. What Mankiw is doing when he engages in "philosophy" is not mysterious of course. Mankiw has a set of specific economic policy preferences and then adopts whatever post-hoc framework he thinks justifies each of them, even when those frameworks contradict one another.

Can't defeat the minimum wage on just deserts ground? Argue that it is distributively unfair and that we should do the EITC, even though the EITC violates just deserts. Still upset at the minimum wage? Argue that it violates voluntary processes, which is also true of the EITC you just advocated for. Whatever backfill, non-motivating philosophy you need to reach a given conclusion, pull it off the shelf and say you are a follower of it.

Voluntarism

With respect to Mankiw's brand new philosophy of "do no harm," which he defines as deference to voluntarism, regular readers here should already be familiar with how utterly bankrupt it is. Nonetheless, what follows is a refresher.

All economic institutions—whether property law, contract law, or minimum wage law—impose involuntary constraints on people. The only economic system that does not clamp down on people's ability to do as they please is the grab-what-you-can world. In this world, people are free to do absolutely anything they want provided they don't use force against the bodies of other people. They can walk wherever they'd like, roam into whatever buildings they like, grab whatever they'd like, and do anything else they'd like, short of acting out force against others.

Economic institutions disrupt this world of voluntarism. They create rules and rule-enforcers that, in the words of Robert Hale, establish "background constraints on the universe of socially available choices from which an individual might ‘freely’ choose." No economic transactions are truly voluntary because those who engage in them must always choose among a set of options that are involuntarily circumscribed.

The rent I pay my landlord, for instance, is not voluntarily offered. If it weren't for the country's economic institutions, I would move into the building without paying anyone. The state involuntarily and coercively forecloses that option though, forcing me to choose between paying rent to someone its laws has dubbed the "owner" or being homeless. The constraints imposed by the minimum wage are no different than this: like property law, minimum wage law restricts the "socially available choices from which an individual might 'freely' choose."

A philosophy that says economic institutions should respect voluntarily agreed upon economic arrangements is thus nonsensical on its face. Economic institutions necessarily destroy voluntarism strictly conceived and create a restricted domain of things individuals may chose between. That is their entire function. Minimum wage law prevents employers from striking a deal to pay less than the minimum wage while property law prevents low-income workers from paying themselves a minimum wage out of the pockets of their employers. It's all coercion all the way down.

Do No Harm Baselines

At times in his treatment, it appears that Mankiw is doing something else beyond extolling voluntarism. So I would like to briefly cover that as well.

When asking yourself whether something violates the principle of "do no harm" (using it here to mean something other than simply "promote voluntarism"), the question is always harm relative to what. This is what is called The Baseline Problem, and it plagues 99% of all punditry on economic justice.

Suppose moving the minimum wage from $9 to $10 increases the incomes of 1 million people and causes 20,000 others to lose their jobs. You could say that such a move violates the "do no harm" principle because, even though it may be a net good, it harmed 20,000 people. But we can reverse this scenario as well. If we had a $10 minimum wage and moved it to $9, 20,000 people would get a job, but 1 million would have their incomes decreased. It seems that both increasing and decreasing the minimum wage violates the principle of "do no harm." Implementing and repealing the minimum wage would both violate it as well.

But this conundrum only presents itself if we use the Status Quo Baseline to evaluate policy. What Mankiw probably has in mind when he determines whether something does harm is not whether some people will be adversely affected relative to the Status Quo Baseline, but whether they will be adversely affected relative to the Laissez Faire Baseline. This is almost certainly because he believes the Laissez Faire Baseline is not itself a construct of government policies, that the Laissez Faire Baseline is the pure, non-intervened, default economy against which everything else is deviant. This assumption is as obviously wrong as it is prevalent in our economic discourse.

The economy is a government program, constructed by government-imposed economic institutions. The laissez faire economy that basically all commenters implicitly use as their baseline comparator, if it ever were implemented, would be just as much a government-imposed system as any other. Using it as a baseline against which to judge whether some policy objectively violates the "do no harm" principle makes no more sense than using any other baseline, e.g. the Rawlsian Egalitarian Baseline.

Thus, even if we were to ignore the voluntarism fail endemic to Mankiw's actual piece and focus solely on the "do no harm" principle in the abstract, it would still render us no closer to a conclusion on the minimum wage. The whole piece runs afoul of the most basic problems identified in the economic philosophy literature, literature Mankiw is unaware of because he is not in fact a scientist who is also a philosopher.

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