Paul_Christiano comments on Economics, prioritisation, and pro-rich bias   - Effective Altruism Forum

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Comment author: Paul_Christiano 06 January 2018 08:21:44PM *  2 points [-]

If they endorsed the view you say they do with respect to scalping, wouldn't they say "provided there was perfectly equitable distribution of incomes, scalping ensures that goods go to those who value them most". Missing out the first bit gives an extremely misleading impression of their view, doesn't it?

When economists say "how much do you value X" they are usually using the dictionary definition of value as "estimate the monetary worth." Economists understand that valuing something involves an implicit denominator and "who values most" will depend on the choice of denominator. You get approximately the same ordering for any denominator which can be easily transferred between people, and when they say "A values X more than B" they mean in that common ordering. Economists understand that that sense of value isn't synonymous with moral value (which can't be easily transferred between people).

The reason that easily transferrable goods serve as a good denominator is because at the optimal outcome they should exactly track whatever the planner cares about (otherwise we could transfer them).

Expressing economists' actual view would take several additional sentences. The quote seems like a reasonable concise simplification.

Your version isn't true: an equitable distribution of incomes doesn't imply that everyone has roughly the same utility per marginal dollar. A closer formulation would be "Supposing that the policy-maker is roughly indifferent between giving a dollar to each person [e.g. as would be the case if the policy-maker has adopted roughly optimal policies in other domains, since dollars can be easily transferred between people] then scalping will ensure that the ticket goes to the person who the policy-maker would most prefer have it."

Immediately before your quote from Mankiw's book, he says "Equity involves normative judgments that go beyond the realm of economics and enter into the realm of political philosophy. We concentrate on efficiency as the social planner's goal. Keep in mind, however, that real policy-makers often care about equity as well." I agree the discussion is offensively simplified because it's a 101 textbook, but don't think this is evidence of fundamental confusion. If we read "equity" as "has the same marginal utility from a dollar" then this seems pretty in line with the utilitarian position.