Reading With: Fucking with Friedman

Source

My Comments

A central element in the development of a collectivist sentiment in this century, at least in Western countries, has been a belief in equality of income as a social goal and a willingness to use the arm of the state to promote it. Two very different ques- tions must be asked in evaluating this egalitarian sentiment and the egalitarian measures it has produced. The first is normative and ethical: what is the justification for state intervention to promote equality? The second is positive and scientific: what has been the effect of the measures actually taken?

(p. 161)

I provide the full quotation for context but focus on the highlighted (orange) text.

In the “normative and ethical” question the author already is narrowing his focus considerably, even compared to the title of the chapter “The Distribution of Income”.

The distribution of income might stem from many causes: violent coercion, social norms and expectations shaped in relation to historical legacies, among others. Yet here the political implications of distribution are narrowed to questions of the state, and specifically state policy. He does this because he is less interested in understanding the unequal distribution of income than in tearing down the power of the state.

Second, all state policy is here framed as intervention, which implies erroneously that simply work in the absence of a state. It suggests that no state is somehow a natural situation, and that any state effort is an unnatural imposition. Elsewhere in the text the author admits that some state action is necessary to set up and ensure economic markets function at all, so he actually contradicts his own narrow framing of all state action as intervention, and this, to my mind, suggests it’s a deliberate rhetorical strategy, though I that’s just a hunch.

Another implication of referring only to state intervention is to mistakenly suggest that inequality too is a natural state that can only be countered by the kinds of (unnatural) policies the author argues against. So at the outset he sets up the question as if:

1.     Inequality is the natural state of the world

2.     The only way to counter inequality is through (unnatural) state intervention

This allows him to argue that efforts to encourage equality in fact counteract freedom, and thus are a bad idea because they go against the natural state of the world, which is both free and unequal. But he’s only able to make this argument because he’s already narrowed the field of debate in such a way that many other normative, ethical questions are framed out.

First among these questions, in my mind, are the questions:

1.     Why is the world so unequal?

2.     Instead of focusing on state intervention as hampering the freedom of those in power, what happens if we consider inequality from the point of view of the people who are put in subordinate positions because of it?

Friedman provides (unsatisfactory) justifications in answer to the first question, but he doesn’t address the second, which will be the primary focus of my rereading. Instead, he only considers “intervention” as hampering the freedom of those who otherwise feel free—because have the privilege of imposing their will on others in ways that are erased from the author’s depiction of the economy. He doesn’t consider how state policy might enable freedom for those either excluded from the formal economy or subjugated within it. Considering their point of view allows us to focus not just on state “intervention” on existing markets, but also on how markets are set up, including the ways the state and corporate policy serve to produce particular kinds of socially unjust markets. In addition, we can explore how even framed as “intervention”, state policy might increase freedom overall by removing subjugation, and that the impositions on freedom the author’s so worrieds about actually pale in comparison.

THE ETHICS OF DISTRIBUTION

The ethical principle that would directly justify the distribution of income in a free market society is, “To each according to what he and the instruments he owns produces.” The operation of even this principle inlplicitly depends on state action. Property rights are matters of law and social convention. As we have seen, their definition and enforcement is one of the primary functions of the state. The final distribution of income and wealth under the full operation of this principle may well depend markedly on the rules of property adopted.

(pp. 161-2)

Three points in relation the first highlighted quotation and the text that follows: First off it is not clear at all that this “ethical principle” is the best foundation for an economy. For example, later in the text the author examines the impact of family wealth in shaping a person’s productivity. If your parents can afford to pay for your college tuition you might be able to produce more overall (depending of course on the definition of production and more) than if you are left with massive debt.

Second, after that first quotation, he confounds what is with what should be. Whereas he says he’s going to address what would (or should) be an ethical principle of distribution, he then notes that that enforcing property rights is (arguably) “one of the primary functions of the state”. So he conflates that what is, in terms of property rights, with what should be, in the form of his ethical prinicple, and doesn’t actually adress the ethical question of whether the state must or should take property rights as one of its primary functions. More on both of these first points below, but for those interested in the descriptive versus proscriptive (“what is” versus what “should be”), I’ve found Sergio Sismondo’s Introduction to Science and Technology Studies (https://www.dropbox.com/s/jcwx2ee0fxoziez/3%20Sismondo_Ch.%2017.pdf?dl=0) to be one of the clearest explanations.

Third, the phrase “and the instruments he owns” is especially horrendous, for starters because the distribution of who owns what is not free or undetermined by intervention.

In addition, it conflates what a person produces with what’s produced by what that person “owns”.   On its surface such owership seems relatively benign and might be close to waged income. Say that perhaps you own a 3D printer that makes souvenir pins, and you sell them on Etsy, so in a capitalist system you would expect to get some profits from those sales yourself, rather than give them to the machine which, under present laws, can’t own or do much with them. Perhaps you’re the one designing the pins, selling them, shipping them etc. so while not waged labor per se (no one’s giving you a wage, but you’re getting that from the sale as an entrepreneur), it is related to your labor.

But let’s scale that up and consider larger factories that have employees (“ownership” of a factory here relating to control over labor and others’ wages) as well as financial ownership—having control over others’ labor without actually putting in labor in the form of, say, directly managing the business. For “instruments” own might also mean financial instruments and ultimately the labor that helps to make those instruments profitable, then this is a recipe for expropriation: the one who owns the shares has the right to a factory’s profits rather than those people who work in the factory or even down the line managing, marketing, fixing lunches for the workers or doing the work that gives them time to fix their own lunches, maintaing equipment or otherwise doing something that actually making sure the factory runs.

Second for this second quote, let’s look more closely at the use of “production” First, notice that this interjection of “the instruments he owns” is very important here because most of the people who own things don’t actually produce very much on their own! So he’s taking what would have been a common sense notion (people get paid according to what they produce) and redefining it to include e.g. venture capitalists who live off of a combination of selling financial instruments (which is exchange, not production according to dominant definitions of production) and other practices like money laundering and tax avoidance. Now, for quite different reasons I’m all for including exchange, care, maintenance, design, and repair work (much of which traditionally was defined as not part of production) in notions of production, or of using a different term. BUT that’s not what he’s doing here. Instead he’s glossing over expropriation of labor, a contentious issue, by combining it with the common sense notion of “according to that which they produce”.

At the extreme, there is even a whiff of chattel slavery here. I could imagine, and indeed this argument was made in the US in the past, that enslavers absolutely argued that they had a “right” to the income on the “property” they owned, all while seeking to avoid defining enslaved people as people who themselves had rights.

Now on to the second highlighted quotation: Here Friedman uses a strategy that I’ve been calling “note and ignore”. Instead of either omitting counter arguments or engaging with them directly, he points them out and then says nothing further. That way he can’t be accused of not being aware of them, but at the same time he offers no arguments about them that can be refuted.

So he in fact acknowledges his awareness of the point I make above—that in addition to “intervention”, the funadmental production of markets is also a state matter, and that markets can be made in different ways. At the same time, he ignores what I see as the fundamental implications for his argument of the claim that “the final distribution of income and wealth…may well depend markedly on the rules of property adopted” by the state. For it’s also an interesting and even more relevant ethical question of how to come up with rules (perhaps rules of property and markets) that minimize injustice in economic systems. But the author spends no time here thinking about such constitutive rules as, I would argue, he’s not actually concerned with inequality but instead only wants to argue against “intervention”, so there’s very little in it for him to think about an actually productive way to combat economic injustice, since it would force him to refine his view, argued later in this chapter, that economic injustice is just fine or even logical, if only according to his incredibly narrow framing of the issue.

What is the relation between this principle and another that seems ethically appealing, namely, equality of treatment? In part, the two principles are not contradictory. Payment in ac- cordance with product may be necessary to achieve true equality of treatment. Given individuals whom we are prepared to regard as alike in ability and initial resources, if some have a greater taste for leisure and others for marketable goods, in- equality of return through the market is necessary to achieve equality of total return or equality of treatment. One man may prefer a routine job with much time off for basking in the sun to a more exacting job paying a higher salary; another man may prefer the opposite. If both were paid equally in money, their incomes in a more fundamental sense would be unequal. Similarly, equal treatment requires that an individual be paid more for a dirty, unattractive job than for a pleasant rewarding one. Much observed inequality is of this kind.

(p. 162)

With respect to “alike in ability and initial resources”: assuming the two people are alike means that any discussion of difference is already framed out, as are all of the complex needs and requirements that shape someone’s ability and willingness to work particular hours. Instead these are just called “taste.”

He only provides the example that one person might prefer time off for “basking in the sun” without considering, for example, the unpaid household labor that is disproportionately performed by women, people of color, and/or poor and working class people. Here a person who needs to, for example, take off work early to bring their disabled parent to a doctor’s appointment, is depicted as simply “basking in the sun” because they have a preference (for not abandoning their family).

If we don’t consider family obligations to becovered under taste, another option might be to cover it under “ability”, but later it becomes clear that the author is speaking only of personal abilities, innate or learned. It erases any connection or obligation between people that might affect resources, ability, and taste. Later he does address family wealth but primarily in the context of the debatable claim that “there’s nothing unethical if I’m rich and want to leave my wealth to my children.” So there again, leaving one’s wealth is a choice made by a person according to taste, rather than say a familiar or societal obligation that shapes their resources, ability and taste.

In addition, this also suggests that people choose the kind of work they wish to do, whereas in many cases people have to do the jobs that are available. In recent years the use of part-time temporary contracts have been used to pay workers less, and for companies to avoid being accountable for the rights and benefits of full time workers. But this isn’t a “choice” of precarious workers, many of whom have multiplte part-time jobs instead of one full-time one, and are worse off as a result of labor availability rather than personal choice.

Even in privileged jobs in finance and the corporate world, there are work cultures including dress codes, long hours, and so on, that are considered part of having a job. Workers can either “choose” to comply to the corporate culture and keep their job, or “choose” to defy it and become unemployed (though there are also shades of grey). There may be a company with different culture out there, but there may not. So the labor market is shaped by culture in ways that means that certain kinds of jobs with particular requirements are available and others are not.

Once you stop thinking of people as isolated individuals and include consideration of the various pressures, responsibilities, oppressions people face in relation to each other, then we can se that it is not self-evident that “If both were paid equally…there incomes…would be unequal.” Instead the model should take unpaid into account, either by paying people for it or incorporating it in another way.

Now on to the second quotation: “equal treatment requires that an individual be paid more for a dirty, unattractive job”. This ignores class power imbalances entirely. There is some allowance for e.g. garbage collectors but they’re still paid far less than CEOs who in theory have a more “attractive” job (though this is debatable). Also, the notion of what’s dirty is shaped by society and cultural factors, and it also depends on “preference” and opportunities.

One option here is to decouple money from labor and distribute certain kinds of labor among everyone who is able. So that would mean that there’d be a way and opportunity for people who could do so, to take care of your own waste, without leaving some people to handle it all. However, the details matter a lot here. In theory I’m interested in at least thinking about paying people more for doing distasteful jobs, but arguably in practice whatever premium they get is often much less than the class differences that shape the low wages they end up receiving.

Also it’s incredible that he claims that “much observed inequality” comes from the difference between preferable and unpreferable jobs. If difficult and “distasteful” jobs came with a wage premium then janitors and migrant farm workers would all be rich.