Errors We Live By

Do Profits Prioritize Well? Mindlessness In Markets

Our ruling ideas grow evermore ethically evasive. Ignoring evident big picture problems, they have us mindlessly seeking the mathematically and morally absurd. Simple maxims can clarify:

Economics, the study of “what makes us better off,” and virtually our state religion, has made growth its holy grail. Its stern gods, markets, dispense rewards and punishments. But profits prioritize poorly.

1. “Letting the market decide” means making musical toilets while millions need food assistance. And the higher profits of lifestyle drugs (like Viagra and its female version) divert effort from life-saving antibiotics. Are these desirable or ethical priorities?

2. Kant said people should never be “merely...a means to an end.” But market theory (or market theology) can categorize people as “human resources,” to be used for market ends. Your worth is only what your skills can be sold for.

3. Economic self-interest often fails Kant’s universalizing test: Only rules that produce good outcomes when used by all are wise. Self-only-maximizing logic predictably produces bad outcomes in many situations (e.g. Darwin’s Wedges, Prisoner’s Dilemmas).

4. Economists generally love Bentham’s “greatest happiness [/good] for the greatest number” principle. But they often don’t incorporate its inclusive impulse: A gain is better if shared among a greater number. Markets can work contrarily to concentrate gains.

5. Greed = growth? Is inequality necessary (or justifiable) for growth? Many artists, scientists, and academics (even economists) do hard, innovative work without huge financial incentives. Markets misvalue much work (e.g. nurses less valuable than economists?).

6. If less loot means some titans work less, great. That creates opportunities for hungrier, smarter aspiring titans (and perhaps usefully limits corporate size).

7. "Growth… has lifted billions out of poverty." True and wonderful. But folly if it relies on “demand” for musical toilets.

8. Free-traders love the non-zero-sum “grow the pie” game. But don’t ignore it’s zero-sum evil twin: unshared gains from growth.

9. All growth = good? GDP growth doesn’t distinguish goods from bads/questionables (e.g. musical toilets or 1/3 of US health care).

10. Everlasting compound growth gets mathematically absurd: 1 cubic meter of stuff in ancient Egypt grown at 4.5% annually would now need 2.5 billion billion solar systems of storage space.

Markets are our ethics enacted. Ignoring their logical, moral, and mathematical problems is—to borrow from Bentham—“nonsense upon stilts.” We must somehow align the massive power of (mindlessly maximizing) markets to intelligently decided priorities.



Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.

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