Society According to Kevin: Introduction

I was recently having a conversation with a mutual friend of Rafe’s and mine.  Like the two of us, he’s quite smart, well educated, and socially aware.  I respect his thinking a lot. However, during the course of this conversation, it became clear to me that he holds what I think of as an overly moralistic view of human behavior.

From my perspective, it seemed like he thinks that people’s behavior is governed primarily by an internal moral compass rather than incentives. So if you want to change their behavior, you should redirect their moral compass rather than adjust their incentives. People who don’t adjust their behavior are defecting from society and should be sanctioned.

I encounter this view quite often in my social circle and this instance inspired me to write a series of posts to explain how I think things actually work.  You’re free to disagree with me, of course. In fact, I expect most people to disagree with me. But I’ve thought rather hard about this issue and I’ll put my model up against the moralistic view when it comes to predicting a population’s average behavior or choosing an effective policy prescription.

The concrete example from our conversation is instructive.  This friend lives in a large city and attempts to commute by public transit whenever possible.  He said he does this because he thinks it’s the right thing to do for the world we live in. I asked him what he would do if one of his neighbors were always driving a large SUV to run errands. His answer was to convince this neighbor of the error of his ways. If the neighbor failed to heed this advice, he would be doing something “wrong”. The implication I took away was that if enough people chose this “wrong” behavior, we should make a law to enforce the “right” behavior (though perhaps social shunning might be sufficient).

As you can probably guess from my series of posts on the Ascetic Meme (here, here, and here), I think this approach is misguided. If you read those posts, you can undoubtedly guess my policy prescription. Figure out how much “harm” consuming a gallon of gas does to society and set that as the gas tax. If there’s non-gasoline-consumption harm from the SUV, tax SUV’s themseoves. Then if this neighbor still decides to drive the SUV, the amount of benefit he gets outweighs the cost to society and he should be driving the SUV. Better yet, I don’t personally have to go around trying to convince a lot of people to change their minds. My friend objected that people with high disposable incomes wouldn’t respond to  such a tax so it would be both ineffective and “unfair”.

As you can imagine, there’s quite a lot of data on people’s response to fuel prices.  For the economically inclines, here is a good survey. The estimates for  long run response to a 10% increase in fuel cost range from a 2.3% to a 8% decrease in demand in the US. Now, my friend might argue that these results only apply at the aggregate level and may not affect wealthy people making the “right” choice not to own an SUV. It turns out that economists have tackled this problem as well using what are called discrete choice models. This paper shows how raising gas taxes will shift wealthy households from owning an SUV and a car to two cars and how a tax on SUVs will reduce SUV ownership across the board.

But let’s not get stuck down in the weeds. His larger point was that society doesn’t hold itself together because people do what’s in their self interest. Rather, the fundamental societal glue consists of most people making the right moral choices. I suggest that anyone who believes this run out and buy Tim Harford’s The Logic of Life for an engaging introduction to just how well people respond to incentives in a wide variety of contexts. For some reason, the moralistic view seems to seduces many intellectuals. I’m going to attempt to dispel this confusion. The first step is diving into my model of society’s foundations, which will be the first substantive post in this series. As a nice side effect, I think working through this topic this will bear fruit in Rafe’s and my ongoing discussion of “autonomy” as it applies to emergence.

Related posts:

1. Society According to Kevin: Part 1
2. Social Entrepreneurship Tax Credit
3. Global Warming
4. Switching Government Service Providers
5. Homelessness