A Conversation with Thomas Pogge

Last week, philosopher Thomas Pogge spoke at Carnegie Council. Our intern Sarah Aston summarizes his talk below:

Today’s international and economic system is founded on the principle of “profit maximization at any cost” and our challenge is to change this attitude argues Thomas Pogge of Yale University. Talking with Carnegie Council as part of the Ethics Matters series, Pogge reflected on his education under the guidance of political philosopher and advocate of universal justice John Rawls, and how seemingly abstract theories of justice can, and should be, applied to areas of international and social politics.

Pogge is known for his bold comparisons of today’s population in the developed world with the German population of 1930s Nazi Germany. Like the latter, we are, according to Pogge, part of a huge organism that allows for terrible atrocities to happen to our fellow mankind. Statistics show that one-third of all deaths today are premature due to poverty and yet we do not actively seek any solution to this problem in our system.

Drawing on this comparison, Pogge explained that he was compelled to develop Rawls’s theory of justice and practically apply it to areas of society. Rawls argues that there are two principles of justice that must be met within society and that all rational human beings would agree to these principles under a “veil of ignorance” in which they are unaware of their position in society. The first principle of Rawls’s theory is “First: each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others” and this is where Pogge develops on Rawls’s work.

While Rawls argued that it was up to economists and politicians to satisfy this principle, Pogge argues that there must be clear instructions and guidance in order to change the system. His work with the Health Impact Fund is an example. Talking to Carnegie Council, Pogge explained that during research into the pharmaceutical industry he saw that the industry was driven by profit margins and competitive pricing rather than aiding those in need of the drugs. Pogge’s proposal to change the incentive system with a government - sponsored scheme of rewarding those companies that provide drugs to the most people with the highest impact and the lowest prices is a way of providing guidance on how to satisfy Rawls’s first principle of justice.

Pogge has chosen to focus on the pharmaceutical industry, but he told the Council that his work could be applied to all areas of the international system and that the system itself needed to address its system of incentives. When asked if he was optimistic about the future of the system he responded by saying we needed to design an economic system that meets the basic requirements of everyone and the way to do that is through education which will take a long time to filter through. The crisis we face today, however, offers an opportunity to reevaluate and re-structure our system.

- Sarah Aston

Economists Growing Brains

Economists often say they are embarrassed by their profession. I am not exactly sure why, but it probably has something to do with the common belief that economists are generally poor and work in the "miserable science." As John Keynes famously said, "In the long run, we are all dead."

Mainstream, neo-liberal economic theory, which students learn in most American universities, provides basic tools for understanding the underlying mechanics such as supply and demand.

I personally enjoyed my economics classes in college and grad school, but soon realized that the real world, not the hypothetical world of economics case studies, is far more complicated and even more counter intuitive than one would conclude after reading a microeconomics text book. No surprise. Like, if people maximize utility or wealth, how does one explain charity? A cynic would say that donors get some type of benefit, such as prestige, social standing, or other side benefits. No room for altruism. I remember talking to a brilliant French economist in Tokyo a few years ago and I was trying to make sense of some of his ideas by applying rational choice theory. He scoffed and called "rat choice" passe.

Remember, the answer to any economics question is, "It depends."

Seeing Joseph Stiglitz speak in Tokyo several years ago was also an enlightening experience. The Washington consensus of free trade and low budget expenditures was not the final word on development policies? Top economists, such as Stiglitz, Jeff Sachs, Larry Summers, Alan Blinder, and Robert Reich, are drawing attention to the failings of free market economics. Some thinkers, like our friends Sanjay Reddy, Thomas Pogge, and Christian Barry, are even applying ethics to economics, and asking is this policy just... is it fair?

New York Times reporter Patricia Cohen reports on this cadre of emerging heterodox economists in an article last week titled "In Economics Departments, A Growing Will To Debate Fundamental Assumptions." You can read it here. I remember just a year ago the phrase heterodox economist was alien to some. One person asked me what that was; I simply said, "the opposite of orthodox." Oh.

Cohen's point is that "in recent months" economists are feeling less ashamed about questioning the fundamental assumptions, less fearful of being ostracized. I might put the time frame in "recent years," but here are a couple of nice snippets from Cohen's report:

For many economists, questioning free-market orthodoxy is akin to expressing a belief in intelligent design at a Darwin convention: Those who doubt the naturally beneficial workings of the market are considered either deluded or crazy.

But in recent months, economists have engaged in an impassioned debate over the way their specialty is taught in universities around the country, and practiced in Washington, questioning the profession’s most cherished ideas about not interfering in the economy.

“There is much too much ideology,” said Alan S. Blinder, a professor at Princeton and a former vice chairman of the Federal Reserve Board. Economics, he added, is “often a triumph of theory over fact.” Mr. Blinder helped kindle the discussion by publicly warning in speeches and articles this year that as many as 30 million to 40 million Americans could lose their jobs to lower-paid workers abroad. Just by raising doubts about the unmitigated benefits of free trade, he made headlines and had colleagues rubbing their eyes in astonishment.

The article ends with this great story on Dani Rodrick:

Most mainstream economists think that voicing any skepticism or doubt provides “ammunition to the barbarians,” he said, and allows narrow-minded people to “hijack any argument to suit their purpose.”

Mr. Rodrik said he used to worry about this until he realized that “on any issue, there are barbarians on both sides,” so there was no point in shading an argument to “suit one set of barbarians over the other.”

“And I’ve slept a lot better since.”