“Non-Economic” Values | Basic Economics by Thomas Sowell | Ch. 25
In a world where an infinite variety of categories exist, there must be certain products or services which have “non-economic” values. Thus, in the 25th chapter of Thomas Sowell’s Basic Economics, we take a look at some of these things, and see what exactly it means to consider such ideas.
If you haven’t read my previous summaries and analyses on this book, please click here. Otherwise, here we go!
As Sowell points out at the very start of this chapter, economics itself is not a moral value. Instead, it is actually a way of weighing values against each other. Thus, “non-economic” values is a misnomer, since all values are non-economic. You can be a private business owner, and yet give your money to charity. Many people in the United States have done so, including famously wealthy economists and business owners. The market can be used to acquire or allocate resources, but what you do with the wealth that results doesn’t necessarily have much to do with economics at all.
When a lot of people talk about “non-economic” values, they are admitting that they don’t want values tested against others. It is a sort of “moralizing” that refuses to jive with reality. They may have good intentions, wanting to help the poor while also helping the environment while also trying to give indigenous people honor and respect, but they are really denying the reality that resources are limited (especially in access), and doing all those things will require choices and trade-offs that may actually hurt others (including themselves) in the long run. While politics attempts to sway people by telling them their desires are always possible, economics understands that reality is a world of trade-offs. With this in mind, let’s take a look at some of these “non-economic” values in specifics.
A popular political theme is the idea that “if it saves just one human life”, the policy is worth the cost. The problem, of course, is the reality that ‘saving lives’ is dependent on many factors, the solution of which is variable depending on which of those factors exist.
For example, natural disasters affect people in different ways in different countries. In terms of an earthquake, a wealthier country with better built infrastructure may withstand the shakings, and only a few will die as a result, whereas in Third World nations, thousands may die. Wealthier countries also have hospitals in which the injured can be rushed to better care.
Illustrated this way, the higher a nation’s incomes, the more lives that are being saved. Thus, any policy which costs more money than incomes can rise will be inhibiting economic growth, and thus actually not worth the lives it saves. Why? Because there would then be more lives lost than saved. Once again, the reality is trade-offs, not idyllic moralizing. It might be noble to say “there’s no limit on the value of a single human life”, but such doesn’t say anything about the actual policies often implemented with this attitude.
Markets and Values
The idea that the market, a decentralized reference to privatized ownership, cannot be entrusted with life-sustaining things is laughable, though popular in the mainstream. Oftentimes, this moralizing argument is used to prevent utilities such as water supply from being privatized. But in reality, the privatization of such things (like in Britain or Argentina) has caused a rise in life expectancy, higher quality drinking water, and better and more compliant sewage disposal systems.
It is easy for people to idealize what things are morally better, and then impose those decisions on others. Defining what the rich can or should do, what is better for the poor, etc. However, things in themselves change in value over time. In the past, oranges, sugar, and cocoa were luxuries only the wealthy could enjoy. Today, because of privatization and economies of scale, such things can be enjoyed by almost anyone, especially in the West. This is generally what the market does, and can be applied almost universally, from automobiles to telephones to fridges to air conditioners to computers.
All-in-all, while people may use “non-economic values” as a way to speak nobly, it often results in quite selfish enforcement of a single value at the expense of others.
For example, some journalist might drum up some rhetoric about how Wall Street analysts who demand annual profit requirement from newspaper firms are evil. But the reality is that the Wall Street analysts are in charge of a pool of money from the public, which seeks things like a return on investment on their pensions, 401ks, and IRAs. Thus, there is a requirement of return on investment for the newspaper company. In the end, it’s the decentralized market, a market made up of teachers, nurses, car mechanics, and more that determines such.
This isn’t to say that there aren’t financial problems in the newspaper industry. But we can’t ignore the needs of the market in order to acquiesce to the desires of few (in this case, newspaper companies). But this is often what happens in politics. Special subsidies are made to “rescue” or help a certain dying industry or even the poor. But such subsidies are always made at the expense of the greater market. As Sowell points out:
Taxing away what other people have earned, in order to finance one’s own moral adventures via social programs, is often depicted as a humanitarian endeavor. But allowing others the same freedom and dignity as oneself, so that they can make their own choices with their own earnings, is considered to be pandering to ‘greed’.
This is the problem with moralizing rather than understanding the economics of the market. Just because something happens in an industry that results in a certain outcome doesn’t mean that we know exactly what the cause of that outcome is. For example, as explained in previous chapters, businesses in lower-income areas charge higher prices, not necessarily because they are greedy, but because it’s more costly (e.g. need more security, have less space, etc.) to do business in those areas.
People as individuals make certain choices with their own morals. But when it comes to whose moral values are superior, the idea that one should impose their morals on another without proof of reality is what centralized government and politics is about. A market economy, on the other hand, permits people to make their moral decisions for themselves. Thus, in such a scenario, time in the market is what forces people to pay for their decisions.
Another popular thing today is to attack economic disparities between groups with labels like “privileges” or “advantages”. But it’s important to note the difference between privilege, which is at the expense of others, and achievements, which can actually add benefits to others. For example, because of past achievements of scientists and engineers, we have a society with electricity and computation along with cures for and even eradication of diseases.
But such things create economic disparities between the people with access to these technologies, and those who don’t. But we wouldn’t necessitate that those with access are privileged in expense of others. It might not be “fair” that some have more access than others, but it doesn’t make that access morally reprehensible.
To give another illustration, it may be morally accepted, and even celebrated, when we make transfers of wealth or income to help the poor and destitute. But developing the human capital in those areas is often more effective in sustaining wealth, even if it is more difficult. It may be moral to do one or the other, but the results they achieve are very different. Thus, while it’s important to have morals, we need to line up our morals with reality. When we are able align our morals with facts, statistics, and history, we won’t have the needless debates between economic and “non-economic” values.
There’s a lot to be said about moralizing, and it doesn’t just happen in the context of looking at economic and “non-economic” values. From religious institutions to politics to education today, there’s a large swatch in western society that seeks to moralize everything, all the while not looking at the evidence. I think 2020, and somewhat so far in 2021, has demonstrated that to a large degree, with riots, shutdowns due to pandemics, and other such chaos having happened, much due more to emotional turmoil and moralizing rather than evidence and facts.
As an example, there were large swaths of the mainstream that praised the riots and protestors reacting to the tragic death of George Floyd. Slogans like “riots are the language of the unheard” and such things were thrown around. All of it was presupposed on the idea that riots were the minority communities (especially Black American communities) rising up against oppressors. But the truth is that riots actually harm and historically destroyed minority communities. From the 60’s and 70’s to the LA riots in the 90’s and nowadays, riots almost exclusively take place in large urban centers where Black Americans inhabit, and often destroy the minority businesses which exist there.
Just take a look at this heartbreaking video, recorded after the LA riots of 92.
Another example: for the past four years, the mainstream media lambasted the previous US President for being a racist. They point to his rhetoric that seems to suggest ambivalence, and twist it to suit such a narrative. But what they ignore is that, during his tenure, especially during the first three years, his policies reduced black unemployment by large amounts. And it wasn’t just black Americans, but other minorities in the United States as well. To add in some snark, if Trump were an actual racist or white supremacist, he’s the most inept racist to ever have existed.
The point isn’t to put him on some glorified pedestal, but to recognize that, in spite of our desire to be morally correct, we must always bare with the facts, lest we reveal pride and arrogance rather than truth. The question we should always be asking ourselves is, “Do my beliefs line up with the evidence?” or even, “Have I looked into the evidence contrary to my beliefs?”
That doesn’t mean, of course, that we don’t attempt to help the poor, broken, and oppressed. But many political initiatives, even ones with good intentions, often end up harming the very people it was meant to help. And when we don’t look at the evidence from history and analyze the fruit of what we’re doing, our moralizing will always end up in that same place of doing more harm than good.