A Duke Blue Devil by Accident

Jonathan Wight:

First of all, let me say, Doug, thank you so much for this project that you’re doing. I think this has the potential to be really worthwhile for a lot of people. I became a Blue Devil by accident, which is to say I didn’t get into Yale and Princeton. And Duke was co-ed. And I needed that experience. I missed the female spirit. I went to an all boys high school last two years, and I really missed the female spirit. And it was the right thing to do, to go to a co-ed place like Duke.

Graduate training in economics at Vanderbilt

Jonathan Wight:

Vanderbilt was also an accident. I took a graduate school course in international trade theory, from somebody called Martin Bronfenbrenner, who was a crusty, cantankerous guy, really brilliant guy.

And the first paper I wrote for him, I got a C– and he said, “This is a Neanderthal paper.” And the second paper I was writing for him… I was in the library the night before it was due and I realized I was going to suffer the same fate, that I hadn’t caught on what he was trying to get me to catch on to. And like a bolt of lightning out of the sky, I suddenly realized what I had to do. So I went and added a bunch of graphs and showed through economic theory the point I was trying to make through words previously. This paper came back A++. “This is a master’s thesis quality work.”

And because of that brilliant insight that came out of nowhere in the nighttime, Martin Bronfenbrenner with this big name, was willing to write me a letter. And he said, “You need to go to Vanderbilt. They have a great program in Brazilian economic development.” So I ended up there, just out of this accident, that I had this rare insight, that wasn’t through design. It was just out of a bolt of lightning.

Why an economics professor? A passion develops

Jonathan Wight:

Well, I was interested in a lot of different subjects as young people are. I wanted to study medicine. I wanted to study psychology, public policy. But I had grown up in Africa and Latin America, and I was struck by poverty everywhere and by inequality and by injustice. This was fermenting inside of me. When I was taking my econ classes at Duke, there was a particular professor who just didn’t get it. He didn’t understand. I remember sitting in the classroom when I was a junior, or so, thinking, “He’s not getting it. There’s something important that he’s missing.”

And then I took another wonderful professor of economics who got it. And so I had this insight that, “Wow, this is a topic and area that I am passionate about, and that I thought I could make a difference.” I think they’ve pulled Nobel laureates, and about a third to a half of Nobel laureates have the same kind of idea that somehow they think they can make the world a better place. And of course, when you’re a teenager as I was when you get this idea, of course, it’s quite overblown. Teenagers have this huge arrogance about them. So I think I came to this the way a lot of people do, which is, again, by accident, through experience, through some passion that develops.

Why a career at University of Richmond?

Jonathan Wight:

I came to UR because it has a commitment to the teacher-scholar model where teaching is really first, and I would not have fit into a “publish or perish” top research place. They wouldn’t have wanted me for one thing and I wouldn’t have felt comfortable in that environment. I love the environment where you’re interacting with students and that’s your primary mission. When you think about it, when we’re all gone many years from now, how many academic papers get read? And the answer is very few. And so when you think about what your contribution to the world can be, I think it’s going to be to the next generation in some form or another.

So this has been a great place where research is encouraged. It’s given rewards and yet it’s within a wider context of teaching. My department has been wonderful. They’ve allowed me to branch off into this area of ethics and economics. And there are not a lot of departments I think that would be willing to give you the space to do that and mine has been very gracious and my dean has been very gracious. We have a young department now full of energetic, really talented people so it’s a fun place to be. And economics is a fun discipline to be in right now. We’re interested in experiments. We’re interested more in facts than in ideology.

Other interests?

Doug Monroe:

Just went, not mountain climbing, but?

Jonathan Wight:

Canyoneering in Utah, which was a stretch. But I love to hike, I love to bike, I love to walk, I love to see historical places. My wife is a lawyer turned into and kind of a historical preservationist, and we love to see history around the world as a way to learn about the world.

Doug Monroe:

Okay, great.

How to distinguish ethics from morality?

Doug Monroe:

… and whether it even exists?

Jonathan Wight:

Wow. That’s a really tough question, I think, and philosophers might give a different answer than I would. But to some people, ethics is considered one’s personal approach to issues of right and wrong, whereas morality deals with social issues use of right and wrong. I don’t tend to make those sharp distinctions in my own writing. I think they’re, to my world, somewhat interchangeable.

What is “right and wrong”?

Jonathan Wight:

So, is there a right and a wrong? In my approach, it’s all contextual. There are different ways of answering the question, is there a right and wrong? There are three moral frameworks that I address in my works, and they’re all useful and important and different. And they work together in some contexts to create a unifying whole. I am not one who thinks that it’s possible to have absolute moral theory. The Ten Commandments, for example, that are always true and can give you clear judgment about what your behavior ought to be. And I think theologians would agree with me because they’ve been debating for thousands of years what different kinds of things mean. And in the Judaic tradition, I think there are over 600 rules and there’s no clear way of understanding that except in the context of the situation and trying to understand a deeper meaning about God’s will.

Ethics and Economics

Jonathan Wight:

Yes, I think you could say it that way. It’s kind of getting at particular problems that economists think are important. And as you have noted in other places, there is no easy way to talk about right and wrong. I’ll give you a quick example. When we talk about what is the meaning of efficiency, economists have a particular version of efficiency that has to do with satisfying the preferences of consumers in the marketplace under certain ideal circumstances. And that is a very troublesome definition in some circumstances.

Can money, mathematics, efficiency, or science give us the answers?

Jonathan Wight:

I’ll give you a quick example. If you’re a doctor in a hospital and you’ve got limited resources and you could save the lives of three babies who have a particular illness; on the other hand, those same resources could save the life of one, maybe elderly person. What would you do if you’re the doctor? I think most doctors would say I have a moral obligation to save the most lives that I can. Saving three baby lives versus one elderly life that saves the most life years extended, that would be an efficient way to use the resources at hand. This is sometimes the way cost benefit analysis is used, quite rightly, but it’s different from what economists mean when we talk about efficiency.

In a pure form, efficiency in the modern era means satisfying the preferences of consumers so if that one elderly gentleman has the most cash and can bid for the resources of the hospital and pay the highest price, that one individual could survive. The three babies would die. We would say that’s economically efficient because the person who has the cash to spend gets their preferences satisfied. We can see that ethics in an economic context is really an interesting, interesting issue and we have to approach it from various different ways. If all you do is approach it from the standard economic view of the 20th century, I think you miss a lot of interesting insights that you could get that would help us analyze public policy issues.

How many ethics are there? Wight’s 3-D Model

Jonathan Wight:

I think you’re absolutely correct in asking that question. I don’t think that there is a different ethics. As I try to point out in my writing, there are three major ways that we seek to answer questions about right or wrong. These have to do with virtue ethics, duty ethics, or outcome-based ethics. And we could use any one of these approaches to understanding business, or medicine, or law.

So, for example, a lot of business ethicists use outcome-based ethics. We talk about when Milton Friedman is talking about the role of profit in a society, he’s talking about the good outcomes that can follow if you have the freedom to pursue profit. But at the same time, Friedman also relies on the duty of business CEOs to follow their obligations to shareholders. So, that’s a version of duty-based ethics. So I tend to think there’s one ethics or one morality, and we can apply it in these different areas perhaps emphasizing different aspects of it, depending on the situation.

What is a moral good?

Jonathan Wight:

A moral good has certain qualities which are intrinsic to that particular good or service that relate to ideals of the society in which you’re living at a particular time. So the reason we don’t sell babies is because that degrades the concept of parenthood and what an ideal parent is or ought to be, and whereas in Greek times, it was perfectly acceptable to leave a baby by the side of the road if you didn’t want to raise it and you left it to fate or chance whether that baby would survive. We don’t follow that anymore. We uphold a different ideal of what it means to be a parent. When you’re drafted into the Army today, we do not sell that right to somebody else the way they did in colonial times. We say, “You have a civic responsibility to uphold to your community if you’re called to serve.”

Likewise, we don’t sell grades because that degrades the academic process. The state has the sole authority to use violent, as in the death penalty, not that we need to debate that right now. But imagine what would happen if the state said, “We’re strapped for cash. Let’s sell the right to be the executioner on eBay.” If you have a particular heinous murderer who’s going to be executed, you could get millions of dollars that could be used for good things, education, libraries, healthcare. Why shouldn’t the state sell the rights to execute somebody? And the answer is because we uphold justice as a moral good that has certain ideals associated with it. And it degrades those ideals to sell the right to administer justice on the open market. When we have a hurricane that comes through and ravishes a community, a lot of very conservative Republican governors like Jeb Bush have put in place price controls.

They don’t want price gouging during hurricanes, yet higher prices would induce more supply of needed generators and water and other critical things. But we don’t allow the price to rise because in times of crisis, things like water become a moral good. They’re imbued with an intrinsic element of community and family that this is not how we would treat members of family in times of crisis. So there’s a lot of issues that get jumbled together into making these idealistic goods or moral goods. And they change over time. What was once considered a moral good in one era is no longer considered a moral good in another era. For example, pets in the United States are part of your family. You wouldn’t consider it appropriate to eat your cat or your dog, but in China, it’s perfectly okay. So this is an example of a different moral ideal in different cultures over time.

What is the role of profits in society?

Jonathan Wight:

Profits are necessary for sustainability. When we think about what makes the world go round, profits are needed. So profits are not a bad thing in the slightest. And yet in Adam Smith’s book, the founder of economics, “The Wealth of Nations”, he excoriates merchants and talks about how profits are highest in those countries going most rapidly to ruin. Where was he coming from? Well, he was trying to get at the issue of context. If you’re making high profits because you have a monopoly, you’ve got a rigged system in which you’re the only legal seller of a product, and everybody is forced to buy from you so the seller can jack up the price and take advantage of the buyer, then profits are a signal of exploitation. And that was a real problem in Adam Smith’s day, and to some degree we’ve been through mergers and acquisition, getting back to a time where profits in America are very high once again, and yet the middle class and many people in it are feeling like they’re not sharing in the benefits of that economy.

So profits are a really good thing in the right context. And the right context for Adam Smith and for me would be that you have a fair and open marketplace where people can compete on a level playing field. And I think that’s true not just of for-profit, but also nonprofits have to cover their bases. They can’t be relying on handouts to survive. I don’t think that’s sustainable, a sustainable model. And so the idea that we would live in a world where businesses compete and that they would try to earn profits and those profits act as a signal that you’re doing something good, you are guessing how to serve the public in the markets you’re in, that’s a wonderful idea, and we need to continue with that, in my opinion.

Doug Monroe:

Very good. I think you pretty much answered that you feel like it applies across the various sectors of an economy, profit and nonprofit, am I correct?

Jonathan Wight:

Yes, absolutely.

Doug Monroe:

Okay, not that that would be an answer that would show up.

Another definition of worldview. Does worldview determine the approach used?

Jonathan Wight:

There are no yes or no answers. Sorry, Doug. Short answer, yes. First of all, we need to define the term worldview, which for me comes from Joseph Schumpeter, Austrian economist, who basically said, “Worldview is your ideology plus random knowledge.” So your ideology is your characteristic set of beliefs about the world and the way the world works, and then added to that are particular experiences that you’ve had in your life that create a coloring around that worldview. So clearly someone’s worldview matters a great deal to how they would go about answering ethical issues. So for example, if I were brought up in a fundamentalist household, it might be a very duty-based or rule-based home in which I’m expected to do things because it is written somewhere that I’m expected to do certain things. And that authority comes from God and is not to be questioned.

On the other hand, if I’m a philosopher and I’m trained in a modern Western institution, I’m probably likely also a duty based thinker based on Immanuel Kant, Enlightenment thinker. And if you’re a Kantian then you have a duty also to follow your logic towards the answer of what is right and what is wrong. And Kant has two categorical imperatives to help you along the way. So if you were raised in either a fundamentalist home or in a full philosophical home, those might be two duty-based approaches. Many families, I think in America and in many other parts of the world are virtue-based. If you’re growing up in China under Confucianism or in India, under Buddhism or Hinduism, there are much more emphasis on virtue-based ethics. And in virtue-based, there are no simple answers, no simple right or wrongs, it all depends upon asking the question, “What would Jesus do?

What would Mohamed do? What would Moses do?” And you’re trying to find some ideal character that you can learn from and through your interaction of your experiences and your mistakes, you gradually learn what a virtuous life is all about. And Adam Smith, another Enlightenment philosopher was a virtue ethicist. Finally, if you’re a modern economist or a modern business person, and if you’re raised in a business school culture, it’s all about outcomes.

And that’s the third moral framework that I think is a very powerful influence in society today. And if that’s your context in which you have been brought up, you’re always interested in what’s the outcome for either society if you’re a philosopher or with your business, if you’re a business person. Or with me, if I’m an ethical egoist like an Ayn Rand-ian person. So I think that worldview that you’re raised with has a big influence in how you approach this issue. And what I try to do in my books is to say, if you find yourself only talking about one approach, then I think you’re missing something and you could widen your analysis a little bit and get some good insights.

Can government address market failures without a moral framework?

Jonathan Wight:

No, I don’t think we can, primarily because when we’re creating public policy, there has to be some normative basis for arguing policy X is superior to policy Y. We can have science that can present us with alternatives and can try to understand the consequences of our actions or the implications of our actions, but to actually make a choice, we have to have some sort of normative framework, and that normative framework, by definition, involves an ethical component to it.

I think, for example, one of your questions also relates to how do we measure good public policy. One way that we have done so in the past is to talk about what are the economic consequences? What is the impact of this particular law on GDP or growth?

If we are interested in stimulating faster economic growth, we might have certain tax cuts and we want to understand what are the implications of those tax cuts for growth as a measure, and there’s huge economic and ethical implications of that.

One of them would be, what are substantive versus instrumental theories of wellbeing? To get very quickly into that, and one of your other questions may relate to that, an instrumental theory of well-being would say, “We’re made better off when we have more income and we can use that income to buy whatever we want.” And based on that story, I could be a drug addict. Then, I could be made better off with more money so I could buy more drugs. There are real problems with the instrumental theory of well-being, which is to say, most people have a substantive model in their mind. They think that wellbeing has to do with life expectancy or literacy or low infant mortality or something substantive in that regard.

Does the notion of progress assume a moral framework?

Jonathan Wight:

Absolutely. In Adam Smith’s day, progress was about making the society better off through growth. Progress in a very narrow standard economic view today is kind of a short-run oriented efficiency argument that says we want to make the society more efficient which has a very different connotation sometimes. So whether we are long-run oriented or short-run oriented makes a big difference to our concept of what progress means. I’ll give you a quick example. Back in the 70s when you went to get on an airplane, sometimes you couldn’t get on the airplane because they had oversold the seats. And how do you deal with that problem in the 70s? Well, you simply say first come, first serve. If you got to the airport first, you get on the plane.

Nowadays we adopt a more economic approach which is airlines announced over the loudspeaker, “We have oversold. We need some people to voluntarily step off and go later.” Well that is re-arranging who gets the service right now and making it more efficient in a static sense and that’s a beautiful thing. That’s a wonderful innovation. And yet it doesn’t necessarily produce growth, that is, more flights or anything like that. So the framework of understanding what progress means is changing over time. As I mentioned in the last question, it used to be we thought progress meant a bigger GDP and today progress means something more substantive. It means longer life expectancy. It means a lower infant mortality. It means women are more literate in many parts of the world. So that whole idea of what it means to have progress is changing.

What is the difference between a need and a want?

Jonathan Wight:

This is a complicated issue. I could need something for life but I may not want it. For example, if I were a strict Orthodox Jew and I could need meat to survive and the only meat available is pork, well, I could need it to survive but I may not want it. Needs and wants are different and I think we should respect that distinction. It’s very hard to understand what our needs are in any type of physiological way. We talk about, well, we need so many calories per day to survive and those are what US recommended allowances for calories are and things like that, but we really can’t physiologically say what our needs are because that involves a value judgment.

When we talk about what you need, are we talking about what you need to survive, that is, not die? Are we talking about what you need to flourish, which could be a different level of caloric intake and a different mix of things in your diet. Adam Smith dealt with this issue and he talked about psychological needs of survival. He talked about the average person can’t go out in public unless they own a linen shirt, which in his day and age signaled that you were socially acceptable. Without that need, you were psychologically bereft so the idea of what do we need is a very tough nut to crack. It’s a mix of physiological things, ethical ideas, psychological ideas, and it also differs from what our wants might be.

How might the state address needs versus wants? The Negative Income Tax

Jonathan Wight:

If what we’re talking about is public policy trying to address needs and wants. I think there’s a very good case to be made for what Milton Friedman argued for which is something like a negative income tax, which is rather than having a plethora of government programs to provide public housing, public health, public education on so many different levels, why not simply give every citizen who has the need below some certain income level, a certain amount of income.

A number of states have tried this experiment I think to some good luck, which is to say, you give poor people money and let them spend what they want. And some people are going to waste money on things that you wouldn’t like. They’re going to buy alcohol. They’re going to buy drugs. They’re going to buy lottery tickets. But when you consider the huge waste in some cases of public programs and public housing, I think the idea that we should move towards a system of giving people simply an income transfer and then letting them be responsible for how they use it. That makes a great deal of sense to me in a public policy setting.

Does everyone need a narrative?

Doug Monroe:

Agree or disagree or elaborate on.

Jonathan Wight:

I totally agree. So when we’re talking about a narrative, we’re getting back to the issue of worldview and ideology to some degree and experience to some degree. And that narrative is a story that is touching us emotionally. That’s how stories work. And this ties in with Adam Smith’s first book, “The Theory of Moral Sentiments,” where he was trying to understand how do humans come to learn trust? How do we come to be able to share? And it relates to fundamental nature of empathy or sympathy, what Smith called it, our ability to walk in someone else’s shoes for a while and to feel what they’re feeling. And I think that’s intimately related to a narrative. If you can empathize with somebody else’s story, you are much more likely to cooperate with them than if you are not able to walk in their shoes in some degree.

So when we think about great literature that have changed people’s worldviews, that has changed policies and institutions. When we think about the narrative of slavery and slaves who have written stories of their freedom and what it means to them, this has a huge impact on the reader who is able to put themselves in the experience in the mind of the people whose experience freedom for the first time, and that changes everything.

So when you’re a virtue ethicist, you are operating from this narrative point of view. There is no simple, easy way that you come to a balancing of the seven virtues and you have to find balance through making mistakes and through… And Adam Smith wrote extensively about the need to learn how to become a more virtuous person through the arts, not just literature, but through opera and visual arts. And even things like stone renderings of people’s faces, statues, and so on can teach us about what it means to be a virtuous person. And so it’s all tied up in narrative.

What does “preferences” mean to an economist?

Jonathan Wight:

It has virtually no meaning and in modern economic theory, it has no context whatsoever, has no substance whatsoever. The only way that we would know any information about preferences is that in a certain context you choose A over B we would say you have a preference for A over B given the characteristics of the product, the price, your income, your wealth at a particular point in time. But preferences have no meaning whatsoever.

Where do preferences come from?

Jonathan Wight:

If I can add a little more about that. Economists like to argue that preferences come from outside the model, they are exogenous. That’s a helpful simplification because you can then make certain claims about if the economy satisfies a preference it is therefore doing something good. But what if in the real world preferences are not outside the model, they come from inside the economy itself? That is, businesses advertise heavily and they sway preferences and they create preferences. Thus, if you’re satisfying a preference that the market created itself, how can you say that that’s satisfying anything of value?

This is a really important point, that preferences could be “polluted” by the marketplace itself. We can create preferences for things that aren’t good for us and how can we claim that the market is doing something good when it’s just creating the very preferences that you’re then setting out to satisfy? We could take a look at prescription drugs, and we know that in the last few years we’ve been inundated on the airways by advertisements for all kinds of prescription products. These are things that I didn’t know I needed but suddenly the doctors on the screen are telling me I should ask my doctor about X, Y, and Z. That may be creating a preferences for things.

When the auto seller is showing me a car speeding on a California highway, beautiful man and a beautiful woman, what they’re really trying to sell is probably sex and yet what they’re pitching is the idea that if you get this car you’ll get sex. That’s the way car ads often work so that’s creating some sort of polluted preference for transportation. When economists leave out of the model the idea that preferences can be created by the very market itself, I think that’s a mistake. I think we have to look more holistically at where preferences come from.

Doug Monroe:

And as Adam Smith states in his first paragraph of “Moral Sentiments”, we influence each other.

Jonathan Wight:

We do. Yes, thank you. Preferences come from the society in which we were created.

Your own worldview? Human Dignity and Equality

Doug Monroe:

Curious.

Jonathan Wight:

So, yes, I think worldview is some mix of ideology and experience. My own worldview was shaped by my parents, like many people. My parents were diplomats and their worldview was one of openness to people who are different. So I think this comes across really strongly in my own life that when you meet someone who’s of a different nationality, a different culture, a different race, you approach them in a positive way, treating other people with dignity and respect and equality. And incidentally, this was Adam Smith’s worldview. The idea that we’re all the same.

We may appear different because some of us are rich and some of us are poor. Some of us have power. Some of us don’t have power, but fundamentally we’re all humans and Smith says there’s not much difference between the philosopher king and the beggar who’s sunning himself by the side of the highway. They’re really pretty similar people. So this fundamental ethic or ideology of we’re all equal in the sight of God. And that’s a profound, for me, ideology that has influenced my worldview.

Is human nature the same everywhere? How do we develop worldview?

Jonathan Wight:

I think fundamental human nature is much more tribal. I think when we think, how did we evolve to be the animals we are today, it’s because we have developed strong instincts for bonding with people who we relate to, and those tend to be our caregivers at birth. And from those people, we develop our moral sentiments or our feelings about right and wrong, and from that, we come to develop our trust. And if the people who are raising you look like you and speak like you and dress like you, that’s a very profound human instinct to have a openness and a trust towards people who are part of your tribe, whether you’re wearing the right clothes, whether it’s… If you’re a white collar, it’s a neck tie for a guy and high heels for a woman. If you’re a college student, it’s a Tri Delta sweatshirt.

If you’re a member of a street gang, it might be a tattoo of a certain kind. So there’s a very strong tribal instinct, I think. But the question is, how do we go beyond that? And that was the worldview of my parents, and that was Adam Smith’s worldview to some degree, because he writes about prudence being looking after your own narrow interests, which would certainly include the interests of your tribe. But he says, “A virtuous person, over the course of their life, comes to develop relationships with other people beyond their group, and this becomes superior prudence.”

And this is one of the strongest arguments for globalization and trade, which John Stuart Mill argued when he was arguing for freer trade, it wasn’t just because you become wealthier, which you will. It’s because you’re going to encounter people who are different. And by encountering people who are different and you interrelate with them and you interact and you develop moral sentiments for people who are different, that changes your worldview, and suddenly you are open to someone who might be of a different faith or a different culture. And that’s the real power of globalization and trade. It’s not just the wealth creation. It creates a different worldview.

How has your worldview changed over time?

Jonathan Wight:

Yes. So my worldview has had several cataclysmic changes over time. I think in the end, I’m kind of ending up where I began, which is pretty much a very spiritual person, I think, with hopefully a profound interest in connecting with a greater life force. And when I was younger, a teenager, that led me to be a, I’m going to call it with this term, which may be a derogatory term now I’m not sure, a “Jesus freak.” And I read the Bible, particularly those passages in Matthew where Jesus is throwing the money changers out of the temple. And Jesus was very concerned with many economic issues. And this was picked up in Brazil where I was living into the liberation theology movement, which was very Marxist. So I did become a Marxist in my earlier years. There’s a lot of inequality. There’s a lot of poverty. And Jesus talks about the necessity of the rich man giving up everything he knows to join the Kingdom of Heaven. Naturally, why wouldn’t the rich man do that?

So that was a youthful approach and a youthful worldview, which I held pretty much. And by the way, when I graduated from college, I worked for the Jesuit Volunteer Corps for a year doing social justice work in Portland, Oregon. And that, again, I think reinforced that perspective. And then I went to graduate school in economics. I went to Brazil to, returned to Brazil to work on my dissertation. And suddenly I’m confronting, actually, studying government policies of redistribution. And it was kind of revolting to see how government was manipulating the marketplace. And it wasn’t actually for the benefit of the poor. It was for the benefit of the elites. So we have in Brazil in the early 1980s, we have a mercantile system where the marketplace is rigged in the name of helping the poor, but was really helping the elites. And so that switched things around. My I worldview changed quite radically at that point of view. And I became much more market oriented at that time.

What basic worldviews in the global West do you see?

Jonathan Wight:

Well, I think there are a lot of perhaps clashing worldviews. So, this is true of all times. So, this would not be any different today than before, and I think also it’s hard when we talk about the Western worldview. At one point, I think we would set if you’re an enlightened, Enlightenment scholar, the Enlightenment means certain particular things in the West, but that may be perhaps an elitist view in some ways. So I see a lot of perhaps contradictory worldviews out there. One of them, a strong one in America today is obviously individualism and the rights of the individual.

And this is a strong ideal in American society, but like anything else that can be taken to extremes. In one of your questions you’ve asked about what would the Enlightenment fathers think about some of these worldviews? And I think the Enlightenment fathers believed in individualism, but it was held in check by your responsibility for the society in which you lived, certainly your civic duty to give back to the society in which you live. So individualism is a very big idea which can be taken to extremes.

The Ayn Rand version of individualism is to me not helpful because it is in fact taken to that extreme. It does not account for the ways in which we owe each other, some obligations to treat each other in certain ways and to pull together for the common good in certain times of crisis. Another worldview that is, I think, a strong one in the world we live in today in the West is a focus on outcomes, so having rather than being. Whereas when we think of Indian worldview, at least the Buddhist version of that, it would be being not having.

And yet the West is in the sense is time of profound transformation where we’re talking about we’re getting richer. We’re not necessarily getting happier. What is it that could create fulfillment in a company and the idea that I could belong to a company that is doing profoundly important things, that matters a lot to young people today. So it’s not just having a higher income. It’s being part of some important process. In fact, there was a study done at Cornell by Robert Frank, and he found that students who were graduating were willing to work for about 30% less or 35% less if the company was engaged in some sort of social endeavor that had some higher purpose.

That is a for-profit company that promotes as its ideal that it’s trying to help people in some way and sticks to it. It’s not just PR.

What other worldview related ideas are problematic today?

Jonathan Wight:

Another fundamental idea that has played havoc with us in the 20th century is the idea that greed is good. This has become embedded in some philosophies in America today. I think it misinterprets Adam Smith, who said that self-interest is good and self-interest is a virtue which has to be held in check, within the context of other virtues like justice, which is to treat other people a certain way appropriately. There’s another worldview that’s on the rise today, which is fundamentalism, both in Christianity and in Islam and maybe in certain other ideologies. That fundamentalism basically says there are a simple set of rules and what I completely dislike about that approach is that if you believe that there’s a simple set of rules that you can follow, then there are a certain set of self-proclaimed leaders who can interpret those rules for you. I don’t buy that at all. So, I think these are… So I’ve talked about individualism, the focus on outcome, greed is good and the rise of fundamentalism, as some important ideals, but I think there’s a lot of clashing and a lot of conflict going on.

Did a dominant worldview develop in logical historical progression in the West?

Jonathan Wight:

Well, I think the order that might be familiar to some people would be, well, first we start with God, and God gave us a set of moral rules. So those are our rules and duties. So one moral framework relates to rules and duties. And then the second would be, perhaps the rise of virtue ethics. When we think about Aquinas, interested in taking these rules and duties, and trying to understand how they relate to a life well lived. And then the third would be, in the Enlightenment where we talk about outcomes and science helping us to understand how do humans fit within nature, and how do humans create better institutions, say, government, to create a better world for the average citizen. So you could say that there has been this evolution from God-based duties, to virtue-based ethics, to outcome-based ethics. And that’s a nice lineology, which makes sense, but I’m not sure I buy it.

And I don’t buy it because we could start, for example, with outcome-based ethics. Imagine in early Jewish communities, that eating pork that was tainted with some illness caused people to die. Well, then you develop a rule very early that says, “Don’t eat pork.” That’s pretty simple. So what started out as an outcome-based ethic, how do you get people to obey it? You don’t have science then to tell you that pork contains whatever that bad thing is. You don’t have the science to tell you that, but you simply impose an injunction that says, “Don’t do it, because it’s bad to you.” And from on high comes this rule. Same with rules from The 10 Commandments. We think about, don’t cheat on your spouse. Well, why not? Well, because that produces all kinds of discord in the community, which is bad for the community. So what is an outcome-based reason for why you don’t do something becomes part of your duty-based ethics.

Likewise, in virtue-based ethics, I think it’s impossible to separate out these things. When we talk about Adam Smith’s version of virtue, it comes about through moral sentiments. How do I experience these moral sentiments in a very personal way? But it’s not my own personal moral sentiments that give rise to institutions or rules, it’s the wisdom of the crowds. If everybody comes to feel that it’s wrong, that Doug murdered somebody. Then, we’ll pass laws that say it’s wrong to murder. So it’s our empathy with the victim that gives rise to moral rules. So if you are a virtue-based person, you do have duties. But what comes first is not the duty, what comes first is the virtue, the moral sentiments. And if you are a virtuous person who follows the duty, that will give rise to good outcomes. So it isn’t that you can go from one to two to three in some linear fashion. I think these are much more interconnected. And there isn’t a simple way to go linearly from one to the other.

Does “I ought to do” something imply it’s possible to accomplish that goal?

Jonathan Wight:

I am of the opinion that the answer is, yes, we should not say something as ethical, unless it’s actually achievable by a human being. And this is where Adam Smith is very helpful to my way of thinking, because he was a pragmatist and he spoke loftily about human ideals, but when it came time to actually implementing public policies, for example, he was very concerned about whether we could actually achieve them. And you have to assume that there’s going to be a huge amount of failure or problems in human institutions. So he was not interested in lofty ideals. He was interested in what can we actually accomplish? So I think a good word for that would be practice. I think he would love your approach.

How important is “competition” to an economist?

Jonathan Wight:

Well, we like to think of competition in its best forms. We think of the Olympic athletes and bringing out the best of human character and spirit. And Adam Smith talks about this too, how it’s morally completely justified to want to win the race. But the context, again, matters. So competition, not in isolation, but competition in the context in which you’re actually competing. And so Smith talks about, it’s great to want to win the race and to strain every one of your nerves to race and defeat one of your opponents. It’s not okay to push them off the racetrack.

So context matters and here, competition by itself can be either very productive or very destructive. We think about the hunting of the sea otters off the coast of California, which proved to be totally destructive of the marine life off the coast of California, destroyed a whole industry. Why? Because it was competition without property rights. Nobody owned the sea otters. The sea otters were killed off. The sea otters held in check the sea urchin population. The sea urchins, being allowed to multiply, ate all the kelp forests. The kelp forests, which allowed the fish stocks to thrive. So when the sea otters were brought nearly to extinction, that destroyed the fishing industry off the coast of California. So competition in that context was destructive because you didn’t have in place certain constraints, like property rights and rule of law. And there were high transactions cost.

When does competition work well?

Jonathan Wight:

There’s a simple rule that a famous economist Ronald Coase came up with, which is if you have good property rights and low transactions cost for defending them, then the market can work competitively to solve its own problems. But that’s not the way the world works in most cases. Even Ronald Coase, famous Chicago Nobel Prize winner, said we need to have some recognition of the transactions costs that are in many cases high, and we need other kinds of institutions to help markets work most effectively when there are high transactions costs us like externalities. We need to have, in the case of the sea otters, we had a treaty that limited certain kinds of fishing or hunting. On the case of the East Coast, the crab industry and the oyster industry, there had to be governmental restraints that imposed kind of property rights on fishermen and women that enabled that industry to come back.

Why does Adam Smith remain important today?

Jonathan Wight:

Adam Smith is so important for one big reason in an economic sense, and he’s important for a big reason in a moral and psychological sense. His big reason economically is his book, “The Wealth of Nations,; basically lays out an understanding of where wealth comes from. Wealth, he argues, comes from the productivity of the labor force in your society. And how you do that is through a process of globalization. But you have to worry about everybody not being left behind in the case of unequal distribution of income.

And so, Smith rose to prominence again after the fall of the Soviet Union because he’s actually talking about the problems you have with a government making choices for society at large, which is the mercantilism system which was very inefficient and very destructive of the human spirit in Adam Smith’s day. So Smith deserves a lot of credit for drawing our attention to this instinct that humans have for bettering their own condition, and in a marketplace where you are allowed to explore your own choices how that leads to a flourishing of the human condition in a material sense as well as in a spiritual sense.

In another way, Adam Smith is more importantly known today, and that is his book on the theory of moral sentiments, which is a book about how do humans come to develop a sense of trust for other human beings, and how do we come to create conditions of self-control in markets and in our relationships. And if people can control their own behaviors to act in a just way towards others, then you don’t need a heavy hand of government. So you can’t really understand the wealth of nations, which is an argument for allowing markets in a certain context to work, without understanding where self-control comes from and how that whole process is important.

In the last 30 years, the theory of moral sentiments is taken off like a rocket. There are experimenters in biology, psychology, leadership, political science, and in economics, and we’re discovering things about the world, and we’re saying we can get insights from Adam Smith’s theory of moral sentiments to help us understand the world that we’re exploring today.

How did Adam Smith and the American founders view “selfishness”?

Jonathan Wight:

I don’t think the founders would at all agree that selfishness is a desirable characteristic, given that our founding fathers, I think, were pretty much all virtue ethicists. So we can start with a virtue, which we call prudence, which is having an appropriate regard to your future self. And it’s vitally important that people develop this virtue of prudence, because you don’t want other people to have to care for you if you’re in fact able to care for yourself. We don’t want to impose a burden on others if it can be avoided. And yet prudence has to be kept in context of all the other virtues. So one of those virtues is not just narrow prudence or concern for your own self, but you’re concerned that you’re treating other people in an appropriate way, which would be justice. And also moderation is another virtue.

So the problem with selfishness as a concept is that it doesn’t really fit within the virtue ethics approach, which I think the founding fathers would buy into. And all of them would be in favor of self-interest and hard work. We know Benjamin Franklin would be very much in favor of hard work and discipline and saving and being careful. And all of these relate to prudence as we properly think of it as a virtue, but not as the vice of selfishness.

Is virtue mostly about looking out for the other guy?

Jonathan Wight:

No. When we’re talking about prudence as a virtue, prudence means looking out for yourself, showing appropriate regard for your own future needs and taking appropriate steps to guard your own future needs. So virtue is not at all about simply looking out for the other guy. In fact, when Adam Smith talks about this issue, he would say we have three primary instincts. One is a pro-self, looking out for yourself. One is pro-social, looking out for others. And the other is anti-social, which is, we want justice. If somebody wrongs me, I want to get justice.

And of these three, Adam Smith says the most important instinct humans have in terms of the virtues is justice. Justice is by far the most important because that lays the foundation for having a society in the first place.

And the next most important one would be your instinct for yourself. We could have a society where people were only self-interested. As long as they were just, that would function okay. It wouldn’t break down. Smith says he wouldn’t want to live there. It wouldn’t be a great place to live, but it would work. So the idea of benevolence or beneficence, adds kind of the icing on the cake, but that’s not what the structure is built upon. The beneficence, or looking out for others, is a nice thing that a virtuous person might do over the course of a lifetime, you begin to develop that. But that’s certainly not the most important by far. It’s actually the last thing you would say is the most important.

What would Adam Smith say today about human progress since 1776? The drivers?

Jonathan Wight:

Well, the idea that globalization and trade and markets, along with appropriate governmental institutions, the idea that that could enhance human wellbeing and welfare, Adam Smith would not be surprised. He would be surprised, I think, by the speed by which this has happened in a couple of centuries, because progress in Adam Smith’s time was very slow. He was writing just as the Industrial Revolution was getting started, so the idea that there would be this dramatic change in technology is something new that he would be surprised by. But the idea that there could be slow and steady progress, I think he would accept that quite easily.

And what’s interesting about Hans Rosling’s approach is that if you look at many of these countries that are getting improvements in substantive wellbeing, that is, life expectancy shooting up and infant mortality going down and literacy rates going up, a lot of these changes took place when GDP per capita was not changing. So these are changes that are not necessarily happening because of the market. These are changes that are happening because of ideas that are spreading across the globe.

And this is what Deirdre McCloskey wrote about most recently in her most recent book, that it’s ideas, not income, wealth, or anything else that is allowing the world to become a better place. And it’s important to remember that, because a lot of people would say it’s higher GDP that’s promoting higher life expectancy around the world. And I really think that is partially true, but in many cases it isn’t the driving force. The driving force is ideas, that people are willing to accept new ideas and try new ideas that are producing these dramatic changes in human well-being around the planet.

Would he be astounded, or would he say, “I told you so”?

Jonathan Wight:

I think he would be astounded at the speed, in the 20th century, within the last 30 years, the degree to which human wellbeing across the globe has skyrocketed is truly astounding.

Doug Monroe:

It’s astounding us, isn’t it?

Jonathan Wight:

And it’s so astounding that most people are not aware of it. When my students come in, these are well educated young people, and you show them the facts and all they see on TV are all the negatives. And therefore it’s a shock to them that even in countries that are experiencing desperate conditions, that in many cases, human well-being is improving.

Was the Enlightenment trying to take God out of philosophy to prevent religious wars?

Doug Monroe:

Do you have any comments on that?

Jonathan Wight:

That’s a great question. Great insight. And I think it’s largely true. Adam Smith in the “Theory of Moral Sentiments” had to bring in God, because he was worried about getting a job and keeping a job. In those days in Scotland, certainly you could not be an atheist like David Hume and get an academic position. In Adam Smith’s model of the “Theory of Moral Sentiments,” there was a God at the top and God creates nature, and then God sits back. This is a deist view, which many of the founding fathers of America were deists, and many of the Enlightenment philosophers were deists.

In Smith’s view, God creates nature and nature embeds in the human animal this instinct for relating to other people through the moral sentiments. You could say, well, it’s just nature. There’s no reason to bring God into it. You could do that if you’re somebody who is a modern scientist. You could talk about Darwinian evolution without bringing in God. But I think even Darwin operated within the Church, and Smith operated within the Church. There was a place for God at the very top, but God, wasn’t playing an active day-by-day role in this world that was unfolding. But God created the general system by which the rules unfolded if that makes sense.

Is capitalism just what free people do?

Jonathan Wight:

I would say, as with all questions, it’s probably more complicated than that. I’ll give you a quick example. Milton Friedman and his wife were famous for their TV show and “Free To Choose,” and they highlight Hong Kong as being the freest place on the planet, for being a capitalist. And that sounds authoritative except when you dig a little bit deeper and you learn that the government controls all of the land. In fact, housing is subsidized, and healthcare is subsidized. So it’s creating a context in which people can go out and compete.

So again, it’s really probably wrong to say, “It’s just about freedom.” I think there are other institutions that are needed and are important like institutions of justice. We have to be able to enter into a contract to have a business, and yet who’s going to enforce that contract? There are private mechanisms of enforcement. Are they efficient? Do they work? Well, we typically have government kinds of enforcement mechanisms. And how do we prevent others from coming in and stealing what we’ve created through the marketplace? Adam Smith was very worried about this problem, because if you’re a successful rich nation, you are going to be invaded by the ghouls or by others who want some of that wealth. And so, you’re going to need some sort of national defense. And a private system can’t deliver as much national sense as is needed because of the externality problems.

So when you think about what is it that capitalism is, it’s a whole bunch of institutions mixed together. It’s not just freedom, but it’s a lot of other things involving justice and government. And to some degree in our world today, it’s a social safety net because capitalism, it’s ups and downs produces booms and busts, and we as a society are not happy with the busts. We would like to have some sort of minimum standard of living for our elderly or our children.

Does American business serve human needs?

Jonathan Wight:

I very much like that approach because it’s getting at the passions that drive our entrepreneurs. And I think it’s really a mistake, which is sometimes done in economics or business schools, which is to focus on profit making as if that’s the motive and Adam Smith deals at length with motivation. And he says, “What business people care about is often the applause of our peers.” And I think that hits the nail on the head a little bit more closely. Donald Trump has said, he’s not really after the money, he’s after just money as the symbol of accomplishment. And a lot of business people are driven by their passions to do something, to be the first, to do something, to be the best at what you do to create something that’s new and different and solve some problems on the planet.

The founder of Airbnb was on NPR the other day, and he was basically talking about, he was broke and he didn’t even know how he was going to pay his rent. And he was living in San Francisco and there was a conference being held of programmers or something. And so he just got this bright idea. “Why don’t I throw a couple mattresses on the floor and invite some of these guys to bed down with me and I’ll show them around the town” and whatever.

So he created a website for that and he was solving a real need because in San Francisco, housing is impossible to find. And so he solved a human need and he was passionate about doing that. And what was driving his model, he said, was his understanding of how strangers could come to trust each other. Well, that’s beautiful. That’s wonderful. And has it led to a company that has created a lot of profit? Yes. But there’s something else going on that’s really profound and really important.

So yes, where serving businesses can serve human needs. And I think the problem where the danger is if they lose sight of that and they are exclusively focusing on profits. Profits are obviously important for sustainability and other reasons, but if you lose sight of what you just said, serving human needs, I think you’re going to miss out on a huge part of what it means to be successful.

What is taxation? The Price Paid for Civilization

Jonathan Wight:

Well, I think people like to make outrageous comments because they love to get a reaction from people. I think it was Oliver Wendell Holmes who said, “Taxation is the price we pay for civilization.” So, it’d be very nice to live in a world where everything was privatized and there would be no need for government, and we can all kind of wander in this imaginary world, and some people argue for it quite vehemently. I don’t find it appealing to me, and it’s probably because of my worldview. I think we need to have some ability to raise revenue, to carry out functions that the private sector would not do as well, and these are ideas that Adam Smith talked about. We have a justice system, we have an educational system, we have a national defense system.

So, it’s nice to talk about privatizing all of these things, but I don’t think it works out always in practice quite so easily as that, and I think we do need to have revenue. Adam Smith, after all, spent the last years of his life as a revenue agent in Scotland. So, if he thought taxes were so bad, why did he go to such an extent to raise the taxes that he thought were needed?

That’s not to say that we don’t have a tremendous amount of waste. I think we probably do. The problem is that what you think is waste is different from what I think is waste, and when trying to cut out the waste, special interests play a special role in keeping their little rent-seeking activities going. So, if we could agree to cut certain things that are wasteful, I would be totally in favor of it. We could lower taxes because of that, but I do not think that taxation is legalized theft.

Do you have sympathy for the “forgotten man”?

Jonathan Wight:

Yeah, I am in deep sympathy with a forgotten man who is, we’ll call this person, the taxpayer, who is sometimes at the mercy of special interests who have certain pet projects that they want to do, whether it’s redistribute from one group to another group. My familiarity with this is actually quite local, where we have government agencies, local government agencies, trying to tax the citizenry to build sports stadiums for mega rich teams. And this is a ubiquitous thing around the country. These sports stadium owners are billionaires, and yet they won’t provide their own factory for their own products being produced. And so taxpayers are footing the bill.

The other thing that you see is the Olympics, the studies that have just come out in the last couple of days or so about Olympic spending costs the citizens of the host country billions of dollars that they never recoup in any of the traditional ways you would think of them recouping them.

And this is a scam, I think, and the forgotten people are the ones that are being forced to pay for the politicians picture in the paper cutting the ribbon. So should we be worried about the forgotten man? Absolutely, no question about at it.

At the same time I am a Keynesian, not a libertarian, so I think it’s entirely appropriate for us, collectively, to come together, to spend money in times of crisis during the Great Depression or even during the Great Recession to spend money, to bolster aggregate demand, to put people back to work if the private sector has abundant scarce resources that are plentiful at that point in time.

So I do sympathize with the forgotten man. I don’t think that’s the end of the story. I think sometimes if all we do is talk about lowering taxes, you end up not being able to help the society as a whole in times of depression. So as usual, I’m kind of floating somewhere in the middle.

Are there any areas government should not be involved in?

Jonathan Wight:

Well, I gave you one, which would be providing sports stadiums for professional sports teams. But I think you’re interested in more broadly, and I would say, for example, our agricultural policy is pretty mixed up. We have quotas on sugar coming in, so we are heavily, heavily subsidizing a few mega producers of sugar in Florida and Hawaii and Louisiana. This has totally destroyed the market system in many ways. It’s led to the creation of sugar from corn based sweeteners. We have the whole corn ethanol program which I consider to be a huge mess.

There are huge areas of, maybe you’d call it industrial policy, where we have made some pretty big mistakes. It would be nice to just wipe the slate clean. I don’t think that would be fair to actually now at this point, to just totally wipe it clean. But I think we could move towards a more market-based system and go towards, if we’re really worried about supporting farmers, let’s give farmers a cash subsidy, rather than saying every consumer in America has to buy gasoline that has 10% ethanol. I think that’s a crazy way to go about having an energy policy.

What have we learned since the Berlin Wall fell? (1989)

Jonathan Wight:

Well, one issue is that we probably overestimated the size of the Soviet economy and its ability to innovate. And so we were terrified of a paper tiger as it turned out. The other issue is that we have not done as good a job understanding how innovation has enhanced our standard of living here, even though it doesn’t show up on the record books as GDP. So we were really worried about an opponent who we thought was overtaking us, and in some ways in science, they were. Soviets were the first to put a person into outer space, and they had full employment. And we went through these episodes of great recession or unemployment. So we could look at them and say, “While they have a lot of favorable things going on, but we really didn’t understand the degree to which their circumstances were more dire and ours were in fact better.”

The other thing that I think we’ve learned is that we have become more like the socialist democracies of Western Europe, and they have become more like us. They’re now trying to open up to markets a little bit more. They’re trying to loosen up the labor system a little bit, and we’re trying to do some other things to create more equality of opportunity. I know that we say America is the land of opportunity, which in many respects it is. But if you actually ask the question, “If you were a young child and you were poor, where do you have a greater chance of moving into a middle class?” It’s not in the United States, it’s in Western Europe. And that’s because of the healthcare systems and the educational systems and the income support that a lot of those families get. So in terms of equality of opportunity, we are moving more towards like the Western European nations.

Institutionally imposed “social justice” v individually based social justice?

Jonathan Wight:

I think so. I think I do agree with that. So when I think about the issue of what you mentioned in your question about equality, I’m not a fan of worrying about equality. I’m a fan of worrying about what’s equitable. And what’s equitable is not necessarily equal. And I’ll tell you a quick story that brings that out.

One of the most interesting experiments in economics today is something called the ultimatum game. In this game, a researcher has $10 to distribute between two players who are facing each other on a computer screen. They’ve never met each other, they will never meet each other, so they’re playing anonymously. And when the researcher randomly picks who the proposer is, the proposer gets to say how they would divide the $10 as in, “I’ll keep six from me and give four to you.” Well, the person on the other end of the computer screen is the responder. They get to say, “I accept,” or, “I reject.”

And in that kind of a setting, what standard economic theory would say is, well, anybody who’s in a parking lot of a building, you look down and you see a dollar bill lying on the ground, wouldn’t you bend over and pick up a dollar bill?” “Sure.” “So that’s all it’s going to take for me to get you to agree with me is a dollar bill. So if I’m given the choice of how to divide $10, I’m going to offer to you, Doug, I’m going to give you a buck. And because you’ll bend over to pick up a buck, you’ll press on the computer screen, “Yeah. I want a buck.” Because if you don’t agree, neither of us gets anything. So you’d rather have a buck than nothing.

Except experiment after experiment all over the world has found people won’t go along with that. Their moral sentiments are enraged, their feelings about right and wrong. That when this money comes from heaven, like manna from heaven, from the researcher, then something closer to equality is the right thing to do. And in experiments, most people end up divining it up 50/50.

Now, so that gets to basic human nature about equality under certain circumstances. And if you’re two teenage boys and your parents give you a raise, an allowance, that’s higher than mine, that’s not equal and I’m going to be enraged. I’m going to be really angry.

But let’s change the scenario in the ultimatum game. Suppose instead of the researcher randomly picking who’s the proposer suppose that you, Doug, have to go out and do some work. And as a consequence of your hard work, you earn the right to be the proposer. Well, now we’re not expecting 50/50, you earned that, right? So something more like $8 for you and $2 for me now sounds a lot fairer. And that’s what people respond to. And they will, in fact, in the experiments go along with that because you earn that right. Just as two brothers and one of the brothers goes out and mows the grass, of course, they should get a higher allowance. So in thinking about economic justice or social justice, it isn’t equality that’s really the fundamental issue, I don’t think. It’s about equitable nature of the division.

On another level, it is about of opportunity, which is a whole nother thing because we talk about infants or children being innocent and not able to demonstrate any of the virtues of hard work or saving or anything that would be expected of them. And yet infants need food, medicine, education, all of these kind of things. So there is more of an instinct for equality when one of these groups is in a different situation like that.

So which of the two models of social justice do you favor?

Jonathan Wight:

Well-

Doug Monroe:

Is that fair to say or not?

Jonathan Wight:

It’s complicated.

Doug Monroe:

Because you’ve answered on both sides, I think a little bit, but …

Jonathan Wight:

Yes. I would say equality of opportunity in America today is much more dependent upon a system or a set of institutions for protecting certain … that every child shows up to run the race with shoes on, having had a meal in their stomach, having gotten their healthcare issues addressed. We would say we want to have the outcome of the economic system to be the outcome of a race, but if some children are showing up to that race without having had breakfast or without having shoes on, I don’t think we’re comfortable with that in a moral sentiments point of view. It just doesn’t feel right. We want to live in a society where there is, yes, people show the virtues of hard work and industriousness, but also everybody has the same chance at the starting line, which would mean some degree of intervention of a public nature.

Any comments on Thomas Piketty’s book on capital and inequality?

Jonathan Wight:

I think Piketty hits on some important ideas that we should consider and we should worry about. One is the idea that in capitalism, you tend towards greater concentrations of income and wealth. These are important ideas that we have to worry about, and they were certainly ideas that Adam Smith worried about because I think the natural tendency in business, according to Smith in “The Wealth Of Nations,” is that business people want to conspire to get favors of government and that will lead to monopoly powers that will lead to greater concentrations of income and wealth, so you’re essentially using your power to rig the rules of the game. Smith was really worried about that and I would say I’m worried about that as well. I think we’ve got degrees of concentration in many industries that would make me worried. We’ve got huge amounts of lobbyists spending billions of dollars to influence Congress, and they’re rigging the tax code and they’re rigging public policies. We mentioned earlier the agricultural interests that are coming up with policies. I do worry that the market is, to some degree, rigged, and that’s a very real concern.

I also worry because inequality does matter for human well-being. It matters for democracy. It matters for healthcare. It matters for equality of opportunity, which is something I would believe in. At the same time, no one wants to live in a world of perfect equality. That’s death. That’s disaster. I’m going to Cuba in a week and when you try to run an economy on the basis of family equality, it’s a disaster. You have to have freedoms. You have to have people making their own kinds of choices of where they want to work and the opportunities they want to seek out. And the heavy hand of government in the name of equality, that’s very troublesome to me. I do not think that equality is the goal. I think we need to worry about inequality. I think it has come to the point where it is hurting our democracy and hurting our economy in many ways, but I don’t think that a socialist solution or a communist solution offers much promise.

What do you think about the federal deficit?

Jonathan Wight:

The federal deficit rose to about 10% of GDP in 2009, obviously because of the great recession. And in times of recession, government spending goes up and government revenues go down. So it’s a normal part of the business cycle for this to happen. But the severity of the great recession led to this enormous bump in debt and deficits. The deficits now come down to about 2.5% of GDP and it’s falling.

The problem of course, is that projections are for it to start to grow again. And we also are in the middle of a political cycle in which at least half of the political field on the Republican side wants to give huge tax cuts to the rich as if that’s going to stimulate economic growth. And that’s very problematic on my end because we’ve had plenty of experience with tax cuts for the rich that ended up causing budget deficits to soar, which happened under Ronald Reagan. It happened under George Bush II. It simply doesn’t work, I don’t think.

The idea that trickle down is the way to conduct fiscal policy, I don’t think it works particularly in a world we’re living in today in which we’ve got a surplus of savings. The world is awash in savings. How do we know that? Because market interest rates are so low. And so giving a tax cut to people who are already very wealthy, they’re going to take the extra revenue that they saved and they’re going to put it in bonds or stocks that’s not going to contribute to spending.

And what would in my mind, contribute more to promoting the economy is actually if you want to give a tax cut, give a tax cut to the middle class or even more important than that would be to fix our public infrastructure. We’ve got roads, bridges, highways falling apart. The gift we could give to the next generation is an infrastructure that works. We don’t want to end up, pardon me for saying this, like India with broken infrastructure.

We’ve got a time and opportunity right now where interest rates are low, savings are abundant. This isn’t the time to give tax cuts to the rich. It’s a time to fix our infrastructure as the gift to the next generation.

So am I worried about budget deficits? Yes. Yes I am. But I’m not worried to the extent, when you look at the trajectory of them it might seem worrisome, but I’m more worried about other things at this particular point in time.

Is our welfare state healthy?

Jonathan Wight:

The entitlement situation is a concern, obviously, because social security is pretty solvent for a couple of decades, and I think could be made more solvent with some few changes. For example, and this may not make me very popular with people in my income category, but I would say you have to make income adjustments for social security. So right now, people who earn more than a certain amount, the extra amount they earn does not get taxed into social security. I think that’s a modest change you could make to try to get some more funds into the system. I’m not so much a fan of extending the age because people who work in hard jobs, in construction, for example, their bodies are worn out, their life expectancy is not the same as a white collar professional like me. So it’s very easy to say for someone like me, “Well, why don’t you work a couple of extra years and add to the system?” And I’m willing to do that.

But for someone who’s working hard construction jobs, it’s pretty hard to say, “You’re going to have to keep going into your late 60s.” I think that’s a tough call for them. With regard to Medicare and Medicaid, that’s a much tougher issue. What I hope we can do there is develop a more humane system and ethical system of dying. Something like a third to a half of all of our healthcare dollars are spent in the last year of someone’s life. And we’re spending money hand over fist to promote a couple extra weeks of life or a couple extra months of life.

And I would be in favor of a more humane system that would encourage people to go into hospice care rather than hospital care. And I would encourage them in the following way. If somebody has a terminal illness that would cost us $500,000 to treat over the next six months, and that might extend your life for another few months. Instead, why not go to that patient and say, “With your voluntary choice, if you go into a hospice now, we’re going to give you pain killers. And of that $500,000 you would’ve spent, we’re going to give you a lump sum of $250,000. And you can use that however you want.

Wild riotous trips to Vegas while you’re still alive, or you can use that to create a foundation to memori your name. You can give that as a legacy to your grandkids.” But we have just saved the healthcare system $250,000. And we’ve enabled someone to live the end of their life in a comfortable, humane, and a way that shows respect to that individual choice. So I think we have to figure out, not death panels, that’s not what I’m suggesting, which was such a controversial topic. But how do we allow people to die with dignity and provide that option on that choice and make it appealing to people? And that’s one way of addressing the excess healthcare spending that we’ve got going on today.

Comments on “consumerism”? Being rather than Having

Jonathan Wight:

In terms of consumerism, if it’s my spending, it’s good. If it’s your spending, it’s bad. So I think this is the way most people feel, right? I want to clean up the environment, but I want you to have to make hard choices to cut back on your gasoline. But I want my big SUV. I just don’t want you to have your big SUV. But speaking more seriously, I think we are at maybe I’ll call it a tipping point or a transition point where we are becoming a little wee bit more Buddhist, where we’re saying having something isn’t the be-all and the end-all, but being matters more. So being a human being that’s part of some world process that we love and can respect, that’s far more important than accumulating things.

And I think the technological revolution is playing into this as young people today say, “I don’t need a car. I can use a car whenever I want with Uber or other technologies available.” And so I think we are beginning to make a transition away from the consumer-driven society to the experience-driven society, call it what you will. And I think that’s going to be a really wonderful thing to be a part of as young people. Young people may be doing it more out of necessity, but it’s going to provoke the rest of us to think about it.

Is America more divided now than in the 1960’s or 1970’s?

Jonathan Wight:

I think we’re not in any way more divided than we were in the ’60s. I think we’re just divided in different ways. Certainly in the ’60s and ’70s, there were riots on college campuses, there was a terrible war going on, political crises with the vice president indicted, the president indicted. We were living through some really tough times. And we’re living through tough times today, but every generation has lived through tough times. My parents lived through the Great Depression and World War II. So I think we tend to maybe exaggerate a little bit the degree to which our times are politically tough or politically divided. I mean, look at what Lincoln had to go through, and that’ll make a little bit of a sobering point for us.

But in any event, we are in different ways divided. In the ’60s, you could certainly say it was the old versus the young. It’s the Bob Dylan. If you’re over 30, you’re part of the problem, not part of the solution. And I think today we’re divided more along the lines of, “Are you a white collar worker or are you a blue collar worker? Are you a college graduate? Are you not a college graduate?” There are clearly some demographic groups really hurting today. Non-college educated males in your 40s and 50s are really hurting badly.

The economy is not helping them with jobs or with wage growth. Indeed, in terms of productivity, the US economy has gone up by a huge amount of factors since the 1970s, but the median wage has not gone up. And this is making people rightly feel like it’s a ripoff, that worker productivity has skyrocketed, but wages have not. So this whole issue of economic insecurity is quite different than it was, I think, in the ’60s and ’70s, and that’s the big rift that I see today in American society, anyway.

Are you optimistic or pessimistic about America’s future?

Jonathan Wight:

Well, I get back to your worldview question earlier, and I was greatly influenced by Arnold Toynbee as a young college student. And Toynbee wrote “The Rise and Fall of Great Civilization.” So, once you’ve embedded in your mind the historical rise and fall of countless civilizations across the globe, I think it’s pretty easy to say that civilizations rise and then they fall. And that’s going to happen to America. I don’t think there’s any question about that. It’s only a question of timing. So, with that perspective in mind, the question is when is the US going to fall off from being number one? And by the way, it’s not necessarily bad to fall off from being number one. Great Britain fell away from being number one, and it hasn’t meant the end of the world for Great Britain. Having all of that hegemony and power comes with all kinds of responsibilities and problems, which Britain doesn’t have to worry about their colonial empire anymore.

So, America, likewise has got a huge set of problems relating to the fact that we’re number one. I think we will continue to be number one for quite some period of time. People talk about the rise of China. And I think everybody is aware that with Chinese society being so large in population and economy rising so fast, that they’re projected to be the number one power sometime in the 21st century. And that may happen. And India shortly after that. But I’m not terribly worried. India and China both have huge problems, both politically, economically, environmentally. And it’s not to say the United States doesn’t have those kind of problems, but we are much more likely I think, to be able to solve those kind of problems, I’m hoping. There’s a huge debate in economics now between Robert Gordon of Northwestern, who is basically arguing that economic growth in the United States is going to be sharply curtailed back to the standard 1 and 2%. The fabulous growth we had in the 50s and 60s, we’re not going to see that anymore.

Our technological innovations are not bearing fruit in the same kind of way they did in the past. That’s kind of a more of a gloomier view. And I’m more of the opinion that things are a little bit brighter than that. We’re not really capturing human wellbeing as well as we could. A lot of these technological innovations are making things better, but not showing up in the statistics. I went up to Northern Virginia recently and I used my GPS and it routed me around a problem on I-95, and I saved two hours of time. And that saving of two hour time actually made GDP go down, because I wasn’t buying as much gas. And yet I was able to get to my meeting on time. That saving of my time doesn’t show up in the gross national product and yet I’m better off for it. So, I think there are lots of ways in which evolution of the economy and innovations are making things better, but it’s not necessarily showing up in the numbers. So in general, yes, I am positive.

The Golden Rule needs Adam Smith’s Impartial Spectator

Doug Monroe:

Exactly right. I know that my wife and I… I use the impartial spectator as an analogy, but we call it the 10 people in the room with us and we say something like, “Well, if we’re having a point of disagreement, I would suggest that if we had 10 people in the room, eight would say this about my position, ‘That I’m wrong’ and two would say, ‘I’m right.'” And then we take it off us and we start talking about some objective spectator out there. And it’s amazing how well that works.

That’s not a question in here, anything. The problem is it’s what type of spectator have you got?

Jonathan Wight:

Is that your question?

Doug Monroe:

Who is that spectator? No, I’m really just making a comment. Kind of like the what free people do. Well, yeah free people are all good and virtuous, as we think of it, and probably you can minimize all the apparatus and so on.

Jonathan Wight:

Absolutely, yeah.

Doug Monroe:

But if they’re not, then you can’t, so.

Jonathan Wight:

Yeah.

Doug Monroe:

It all depends what type of person.

Jonathan Wight:

That’s a really good insight.

Doug Monroe:

And in addition to the institutions that support it.

Jonathan Wight:

Yeah, yeah.

Doug Monroe:

All right. Well-

Jonathan Wight:

So yeah, no, you’re raising the issue of virtue ethics as well, which I would totally agree with.

China won’t catch us!

Doug Monroe:

There ain’t no way China’s going to catch us anytime soon. They’ll catch us on an aggregate basis, but not on a-

Jonathan Wight:

Per capita.

Doug Monroe:

Per person, per capita. No chance.

Jonathan Wight:

Yeah, thank you. I should have said that. Yeah.

Doug Monroe:

There’s no chance. No chance. We’d really have to go to sleep at the wheel for 20 or 30 years. Which Americans, I don’t think, are capable of. We’re just…

Jonathan Wight:

Well, we are capable of political self-destruction.

Doug Monroe:

Yeah, that we are.

Jonathan Wight:

Which …

Doug Monroe:

We are.

Jonathan Wight:

We’re heading down that road at a rapid clip.

Doug Monroe:

Well, we did in 1965, too.

Jonathan Wight:

We did.

Doug Monroe:

Or at ’61.

Jonathan Wight:

Right.

Doug Monroe:

And we’re still standing.

Jonathan Wight:

Right.

Doug Monroe:

Thank you so much.

Jonathan Wight:

Thank you.

Doug Monroe:

I have enjoyed that.

Does the Golden Rule need a worldview to work?

Jonathan Wight:

I think it clearly does. I don’t think there’s any way you could say, “Do unto others as you would have them do unto you,” without knowing a context for what that is. And then being able to take that information and filter it through your worldview, which is your ideology and your past experiences to make sense of it. So again, the Golden Rule is a nice, simple, easy phrase, and yet it has to be interpreted within the light of experience or context.

Books:

https://www.amazon.com/Jonathan-B-Wight/e/B08V8SJTVG?ref=sr_ntt_srch_lnk_1&qid=1651075840&sr=1-1

University of Richmond:

https://www.richmond.edu/