by Ari Armstrong
The following article originally appeared at Boulder Weekly on November 3, 2005.
I picked up Freakonomics during a layover in Chicago. The book is oddly titled, but I learned many interesting facts from it, such that Superman helped stop the Ku Klux Klan.
One of the ideas in Freakonomics is that people are motivated by economic, social and moral considerations (or "incentives," as the book imprecisely calls them). The book relates that Paul Feldman sold bagels by delivering them to local businesses, where people voluntarily dropped a dollar into a box and took a bagel. Most people paid for their bagels, even without any monitoring, presumably because of moral reasons.
Tonight (Nov. 3) Craig Biddle will discuss "Ayn Rand's Morality of Selfishness" at the University of Colorado, Math 100, at 7:30 p.m. The lecture is free and open to the public. An announcement for the talk states, "Ayn Rand's morality of selfishness, or rational egoism, is the only morality that is conducive to human life, personal happiness and social harmony. It is the only moral code that provides people with a system of principles to guide their choices and actions in pursuit of their life-serving goals and values -- from career, to love life, to friendships, to recreational activities."
This idea that selfishness is morally virtuous seems, well, a little freaky to many people. How can selfishness lead to social harmony? Yet the whole point of Freakonomics is that positions that may seem strange or counterintuitive often are correct. Is it in one's enlightened self-interest to pay the dollar for the bagel, even when nobody's watching? Rand would answer yes.
The Ayn Rand Institute is a nonprofit educational organization that operates entirely on voluntary donations. How, exactly, is giving money to a nonprofit an act of selfishness? On its web page, the Institute lays out the ambitious goal of "spearheading a 'cultural renaissance.'" If we could achieve such a renaissance, we'd all be much better off.
Mature people, even if they don't agree with Rand's ethics, understand that we have a common interest in reducing crime, keeping our neighborhoods clean, promoting a civil society and creating institutions that protect individual rights and foster peaceful coexistence. And this vision of the world helps inspire actions that are morally motivated. That's part of what enlightens self-interest.
Yet economics seems to suggest that some economic incentives interfere with our sense of morality. Many economic problems can be explained as some variation of the free-rider problem. For instance, with the bagels, people realize that, if everyone pays, the service will remain, whereas if enough people steal, the bagels will go away or become more expensive to compensate for extra security. Yet the individual buyer realizes that, if he steals while everyone else pays, the bagels will remain. If everyone acts on that shortsighted incentive, everyone will be worse off.
If everyone who wants a nonprofit to succeed donates money, the nonprofit will do well. But if enough people try to free-ride on the efforts of others, the nonprofit will fail. If everyone works to establish and protect institutions that protect rights and keep the peace, we'll all be vastly better off. Criminals are parasites on the prosperity that the rest of us create. And a larger group benefits from the institutional work of others without bothering to contribute to or even understand those institutions.
If you free-ride, you encourage others to do likewise. If a society generally discourages free-riding, it's far better off. Freakonomics offers another example. The Klan appealed to certain members as a secretive, presumably exciting fraternity. Yet it was in most people's expressed interests -- and everyone's objective interests -- to stop the Klan's horrific actions. So Stetson Kennedy, the same guy who got Superman on board to fight the Klan, came up with a "Frown Power" campaign. The idea was to frown to express disapproval of bigoted speech. If everyone stood up to the Klan, it could be defeated. But individuals were tempted to free-ride on the efforts of others and avoid the costs of possible retribution.
Yet there is a problem with one of the central premises of Freakonomics: "Morality, it could be argued, represents the way that people would like the world to work -- whereas economics represents how it actually does work." There is an element of truth to this, but Freakonomics treats ethics as if it were completely unrelated to the real world, and it treats our moral sentiments as if they were merely inborn or automatic.
Rand's approach is that ethics is open to scientific investigation. If we hold the wrong ethical ideas, we will tend to behave in self-destructive ways. If we hold the correct ethical ideas, we will tend to live a flourishing life. And which ethics we adopt is under our volitional control. The point on which Rand and the authors of Freakonomics (Steven Levitt and Stephen Dubner) agree is that morality does strongly influence behavior.
Happily, our economic, social and moral interests generally are harmonious and mutually reinforcing. Our economic interests very much depend on social reputation, which in turn depends on our morality. Most of us tend to shun free-riders and pursue business and social relationships with those who have adopted better morality.
If you're among those who consider Rand's ideas to be a little freaky, come hear Biddle's talk. You might walk away thinking it's perfectly natural for selfishness to promote social harmony.