160. "Moral hazard"

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With the Greek bailouts and the Wall Street shenanigans we're certainly seeing a lot more references to a "moral hazard" than we did.  

Wikipedia tells us that in economic theory "a moral hazard is a situation where there is a tendency to take undue risks because the costs are not borne by the party taking the risk."

The hazard part is clear.  It's to the party bearing the cost and "hazard" is the right word.  It says to insurers (the people the theory was devised for), "Indemnify people who become more reckless after they're insured and you'll get hurt."  It's like a sign on a hiking path:  "Danger here."

What does "moral" say?  Enough to keep you thinking about it all week.  It seems to say, "These reckless people are immoral."  You hear it and say, "Oh yes, on this path we have physical hazards, falling rocks, and spiritual hazards, decaying ethics."  It's unethical to take chances with other people's money. The word makes recklessness a character fault or, in the old vocabulary, a sin.  And, if the recklessness is deliberate, a grave sin, fraud.

But apparently you'll only hear it say and do that if you are living in the past and are hypersensitive to words.  I say "hypersensitive" because many people now who are sensitive to words in every other connection are not sensitive to this one in this connection.  To the analysts on CNBC "moral hazard" regularly means only "commercial hazard" — on the way, maybe, to just "hazard."  "Moral" is dead, a throw-in.

How did it die?  We learn, from the same Wikipedia article, that for the actuaries who first spoke of this hazard "moral" still "carried negative connotations."  It implied "fraud or immoral behavior."  And we learn that economists of the sixties dropped such connotations in their use of the expression.  "Moral hazard" just referred to "inefficiencies" in the system.  The judgment adjective was dead.

Judgment words are not killed easily.  Would you like to know how it's done?  How to strangle an adjective, like "moral," that has come down to us with so much life?  There's a demonstration right in front of us, in that Wikipedia article.  There we're told that moral hazard, as understood by economists, is "a special case of information asymmetry" in which, most broadly, "the party [to a transaction] with more information about its actions or intentions has a tendency or incentive to behave inappropriately from the perspective of the party with less information." 

See how it's done?  First you quietly make a human being into a "party to a transaction," then you have that party, instead of making a choice, have a "tendency or incentive," and finally you call the result "inappropriate behavior."  "Moral" falls limp but, just to make sure ("inappropriate" does suggest a standard) you note that by "inappropriate" you mean only "from the perspective of the party with less information."  There goes the last twitch of judgment.

Kill the word, though, and you kill the past.  And oh what bodies lie on the field around this one.  Bodies of the judgmental.  There are all the Victorians who thought that if you gave money to the "undeserving poor" (the reckless, the freeloading) you'd encourage bad character.  That was the hazard they saw, and would have called "moral."  There, strangle-marks still on their throats, are all the Protestant preachers who for years had encouraged that view.

And don't I see (hypersensitivity alert!) a lot of other spokesmen for Christian ethics?  In literature?  Isn't that Henry James, the author who spoke to the fictional aunt about to bail out her spendthrift nephew: "I think if he made the debts himself he should pay the debts himself."  And Dante.  Talk about judgment.  Remember the way his underworld judge assigned con artists to their place of punishment: "You.  Fraud.  Eighth Circle.  Next?"  And oh Milton.  Do you think the reckless (his sinners) just show "poor judgment" and should have a second chance?  Remember what God's messenger told Adam after he argues please, please to be allowed to stay in Eden: "Out."  You think you know judges?  Try God.

One thing about those figures from the past, though: if you're a banker trying to slip your shenanigans past the public, you'd better keep them out.  And you'd better damp down the sensitivity that breathes life into them.  They'll get you thrown out of the Garden.  You could wind up in Hell.  But no doubt, with your PR skills, you know what to do.  Or at least where to start: with that damn word "moral" some dumbbell let slip into a perfectly scientific discussion.

128. Is Procreation Immoral?

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Who but a philosopher would ask a nerdy question like that? You know a question is nerdy when you try to answer it in your own regular-guy way. Say I, on my way to the marriage couch, am asked if I think my adding to the population of the earth is ethical. I'm stumped. "How does ethics get into it?" I wonder.

"Here's how," says Christine Overall, the first of three philosophers to speak in recent books (reviewed in the New Yorker, 4-9-12). "Your decision to have a child, generalized for your species, will, through either over-population or under-population, affect the happiness of all future children. Decisions that affect the happiness of others are ethical decisions" (extracted from the review).

Overall stimulates and expands my thinking, as regular guys count on nerds to do.  I hadn't thought about the over-population problem at all, at least with respect to my personal "decision." And over-population is just one of procreation's hazards. David Benatar ("Better Never to Have Been: The Harm of Coming Into Existence") shows me, through an argument I can almost follow, "that a life filled with good and containing only the most minute quantity of bad — a life of utter bliss adulterated only by the pain of a single pinprick — is worse than no life at all." My child could arrive in a one-pin paradise and still be worse off than if he hadn't been born.

Put Overall with Benatar and I'm thrown into a stew. Overall has taught me that I am ethically responsible for human beings that go onto any kind of planet. Benatar wants me to consider the candidates for occupancy of that planet, none of whom are born yet. Overall, I remember, said that "non-existent people have no moral standing." Does that take the "ethical" out of my choice? There I am, in the stew expert philosophers throw you in.

Now I think the better a reviewer (or teacher, or forum-presider) is at bringing philosophers together the hotter the stew is going to be and the more quickly you're going to be in it. With this reviewer, Elizabeth Kolbert, I get flame after flame and by the time the third philosopher, Bryan Caplan, enters I am really feeling the heat. Like the others Caplan thinks that "people need to think more seriously about the decision to have children." Seriousness to him, an economics professor, means careful, realistic calculation. You can see him at the board, drawing a graph. On the age scale his "pleasant number" (of children, for parents' pleaure) rises from one in the third decade of life to five in the seventh and beyond. He smoothes the curve, stands back, rubs his chin, checks with the class, and, for the rich, full life, goes for three. (While Kolbert, in the back of the room, bless her, is explaining to another regular babe that "kids are a pain in the ass when they're small.") Ah, but there's a hand. The over-population problem? Not to worry. "More people mean more ideas, the fuel of progress," says Professor Caplan.

It's hard to go deeply into an attractive subject without getting nerdy about it, I know, and English professors can be as nerdy as anybody, but their subject does do something for them that philosophy and economics just don't seem to do for these professors. It keeps them, through poems and stories, in touch with real life, messy life, the life regular people live. It's the life Overall and Benatar leave behind when they examine the claim that having a child will benefit (or harm) future generations. Regular people don't make such claims. Overall and Benatar are looking at graduate students around a seminar table. Apprentice nerds.

I know, they're doing that for the benefit of regular people, showing them how to "think more rigorously about the decision to have children" (Caplan) and that "morally rigorous analysis" (Overall) is what professors of ethics teach. I know that that's what academics generally do, teach rigor to the slack, and that it has many benefits. But it's often false to the real world, as it is here.

In the real world people can't see into the future clearly, and they, most of them, know it. So when a professor asks them, "Is procreation immoral?" (or, in their terms, "Is what I am about to do on the couch ethical?") they say something like this: "I know that there could be harm or benefit in what I am about to do but I just can't see how it will come. It's too far in the future and I don't have time to study it that much. So I'll leave it up to those responsible and the experts who advise them. They are my best guide. If they decide, when the time comes, that it's good for citizens to have or not have children I'll probably go along. In the meantime I'm not going to worry about it. I have too much else to worry about."

Stories and poems show how much else there is to worry about and how limited we are in dealing with it. They provide a constant correction to our tendencies to simplify and to over-presume — tendencies that appear clearly in the philosophers Kolbert has chosen. There's Caplan, reducing the good life to graphable numbers, there's Benatar removing common sense from his planet populators, there's Overall trusting a poll to gauge happiness, trusting happiness as a category. And there are all three, trusting that the human mind can adequately deal with these problems.

Poets show how complicated the problems are and some poets, older ones, show how foolish (or tragic) men can be if they presume that they have the power to solve them. Dante and Milton thought that presumption a sin, and had a name for it: intellectual pride.

This is not to set poets against philosophers. John Locke and John Milton warn against presumption in almost the same terms. Milton's finally wise Adam has learned that

     not to know at large of things remote

From use, obscure and subtle, but to know

That which before us lies in daily life,

Is the prime Wisdom.

Some things you have to leave to God, the angel Raphael has told him. "Be lowly wise."

That's just what Locke is saying, in philosopher's language:

Whereas, were the capacities of our understandings well considered, the extent of our knowledge once discovered, and the horizon found which sets the bounds between the enlightened and dark parts of things; between what is and what is not comprehensible by us, men would perhaps with less scruple acquiesce in the avowed ignorance of the one, and employ their thoughts and discourse with more advantage and satisfaction in the other.

Does Locke's nearby introduction of God, doing just what Milton's God does (giving mankind all they need for a good daily life), reduce the weight of this for contemporary philosophers? Will it do the same for their students, philosophy majors?  I mean, who on campus is better at doubting the existence of God?

If that's the case I think teachers and forum-organizers need to add more English majors to their stew. Since God fills most of what they read English majors have learned to separate questions of his wisdom from questions of his existence, and here questions of God's existence are clearly a distraction.  It's wisdom we're after.