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Old 11-07-2011, 11:11 AM
Alexandrite Alexandrite is offline
Join Date: Feb 2009
Posts: 125
Default Re: The Big Interview (Karl Smith & Kelly Evans)

Originally Posted by karlsmith View Post
I prefer to think of it as second-semester sophomore nihilism combined with optimal control theory.

No, but the core of the issue is this:

If you think of policy as an infinite horizon problem, then there is always some discount rate that justifies an arbitrary amount of human suffering today, to relieve the probability of human suffering in all future periods.

Traditionally, people speak about policy as if this was the objective function we are maximizing.

Thus questions between suffering today and increasing the long run path of suffering are always value questions. How much do you care about the future?

However, once you accept that this is a finite horizon problem that changes. For some cases there exists no discount rate such that human suffering today can be justified by a lower probability path of human suffering tomorrow.

Doing the "responsible" is thing unambiguously worse for humanity irrespective of your valuation of the future.

I think this is important because its important to realize that some policy decisions to suffer now for the greater good can simply be wrong. Not a question of values or moral, but demonstrably wrong. The world simply does not operate under conditions that would allow that to be the solution to some utility maximization problem.
The difference between a socialist growth rate of 1% in Greece versus say, a Free Competition growth rate of 5% by merely the end of the century (which many people alive today in Greece should live to see), is the difference between the United States and Sudan today in terms of quality of life. If you would not make the argument for your ancestors in 1920 to adopt such anti-growth methods that would relegate your current living standards to Sudan, if you think there would have been something wrong about your grandparents or great grandparents destroying your future so they could enjoy high government wages and universalwhatevers, then you probably need to rethink your Got-mine-FU attitude towards the future.

There are worse things that can happen than cutting government spending 40% (Your 3% imf target is ridiculous nonsense). The fact is, the Greeks will never reduce their government to a level they can afford unless they take a bit of pain. The idea of buying stuff they can't afford needs to be so ridiculously painful they will never, ever do it again. It needs to hurt so bad, Italy, and Spain, and all the other nations of Europe back off of reckless spending as well.

All punishment is a moral hazard. All punishment is inflicting evil and suffering. Pointing out that this particular instance of punishment is painful isn't going to change the fact that punishment and justice serve purposes that are higher than the moral whims of the moment.
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