How We Might Augment the Way We View Social Good
For this post, I ask you bear with me because it—this collection of thoughts that I’m trying to piece together—is rather disjointed. I haven’t quite figured it out in my head just yet, so forgive me if this all reads a bit too stream of consciousness-esque. You’ll likely be able to pick up on the thoughts I have been able to put together cohesively with clear sense of the direction I want to go in with them; contrastingly, you’ll also be able to see what thoughts of mine are still formulating, speckled with uncertainty and hesitation. Also, this took me about 3 months to write because… well, it just did. I hope it makes some sense to you.
For some context—and this will either help to fill you in on what exactly it is I’ve got going on in my head so that I might be just that much more comprehendible or it won’t help further elucidate my musings and this is all still completely disjointed—this all began with a very fleeting thought when I was doing my asynchronous study for economics about consumer and producer surplus. The course materials talked about [economic] social good (note: I am qualifying the economic concept of social good by adding the word economic in front of it because this conception social good, to me and prima facie, is not the same as other, more widely known and better understood conceptions of social good), the idea of a benevolent dictator, and how this benevolent dictator cares absolutely zilch-zip-nada for how the social good is comprised.
From there, my brain jumped from economics to philosophy, specifically John Rawls and his Veil of Ignorance, a component of a thought experiment on how a society should be, how a society should operate. Essentially, it goes like this: you’re in a room with strangers and some booming Morgan Freeman-esque voice says that everyone in the room has been tasked with creating society from scratch and that everyone needs to be in agreement on how society is set up. This is known as the Original Position. But there’s just one issue: architecting a society from scratch is exceptionally vulnerable to bias. After all, humans are a self-serving species concerned with self-preservation. It stands to reason, then, that people will try to build and structure a society that works in their favor, that maximizes benefit to themselves and their particular circumstances. To remove these biases in architecting a society, Rawls proposes that the people tasked with architecting society must sit behind a Veil of Ignorance. Behind this veil, you don’t know if you’re poor or rich, part of the marginalized or part of the majority (the bourgeois v proletariat, if you will), what your sexual orientation is, what natural advantages or disadvantages you possess (brains, beauty, brawns), etc. Because the details of who you are are unknown to you, Rawls believes that those tasked with create society from scratch will create laws and ways of governance that is fair and just to all persons. It’s a bias minimizing tool. Rawls’ Veil of Ignorance and the idea of a benevolent dictator are similar to the extent that both are concerned with maximizing what is good for everyone; Rawls’ Veil just so happens to also concern itself with how good is maximized whereas the benevolent dictator really doesn’t care about the how. If the good is 99% good for a company or 99% good for the common consumer.
Okay, so that’s the initial domino of thoughts that led me here. If you’re thinking, “how the hell are these things connected?”, good question. The result of that initial domino of thoughts led me to think about the concept of maximizing social good, and both its economic conception and philosophical conception. (I should note here that, in philosophy, the word concept is more or less an umbrella term and the word conception falls under the umbrella term, referring to a specific representation of the concept. Take, for example, the concept of justice. One conception of justice might be rooted in retribution: an eye for an eye whereas another conception of justice might be rooted in social equality and dismantling the -isms.) In thinking about the concept of maximizing social good in the economic conception, what came to mind were the parts that make the whole (how economists define social good); in thinking about the philosophical conception of maximizing social good, procedural justness (the means) and substantive justness (the ends) came to mind. Then, I wondered, “are these two conceptions of maximizing social good compatible?” and here we (or I) am.
From my (limited) understanding of economics, economists define social good as the sum of consumer and producer surplus. Consumer surplus is essentially what you, as a consumer, saves when you’re out shopping for things. For example, say you’re a huge fan of Taylor Swift and would gladly pay $2,500 for tickets to her Midnights concerts. That is the value of attending a T-Swift show to you. Now, let’s say you come across tickets (if Ticketmaster actually worked) for only $800 and you snag them (you’re the envy of the town). The consumer surplus here is $1,300, which represents the excess you were willing to spend but didn’t have to. Producer surplus is the same concept but for sellers or companies in the market. Take Apple for example: they might, in their planning and projections, come to the decision that they can sell AirPod Pros at $89.99 and make a sizeable profit. However, the market (consumers) demand turns out to be that people are willing to spend $169.99 on them, so why wouldn’t Apple sell at that price? The producer surplus here is $80, which represents the excess profit they make on each AirPod Pro.
This idea of social good falls under welfare economics, which is the study of how resource allocation affects social welfare. In a capitalist market, maximum social good is the same as optimal economic output: companies should produce up to the point where the marginal cost of production and the marginal revenue earned from each unit meet. This is also the goal of the benevolent dictator, which, by the way, isn’t an actual person, physical entity, or tangible governing/authoritative body. It’s just an idea of a figure concerned with ensuring that this social good is as big as possible (read: economic production is as efficient as possible). We can demonstrate this with a supply and demand graph, where everything under the demand curve and above the price line represents the consumer surplus and where everything above the supply curve and below the price line is the producer surplus.
In addition to being a visual tool to understand the concepts of consumer and producer surplus, and how those total up to be the social good, the graph also shows the equilibrium point (where supply meets demand). In economics, the equilibrium point is the extent to which a firm should produce and it is considered impractical for the firm to produce beyond the equilibrium point. It is considered impractical beyond that equilibrium point because the firm loses money: for every additional unit the firm puts onto the market, the firm won’t be able to see it because while there is a demand for the product, consumers are not willing to pay the price the firm would ask for it.
By the economic definition of social good, where “good” is is determined solely in a monetary sense, I get it. I might not necessarily appreciate or sympathize with it (because let’s be real: most firms’ cost of production is so cheap, especially when outsourcing labor to underdeveloped/developing countries or to China, and the mark-up/retail price is astronomical by comparison, so firms are making a pretty penny) but I can understand why a firm would not produce beyond the equilibrium point.
But, and maybe this is too big of a but or maybe I’m asking for too much, what if we look at these supply and demand graphs from not necessarily a different perspective but perhaps an augmented perspective? I’m attempting here to infuse some ethics into the economic lens through which supply and demand graphs are looked at; think of it like clip-on lenses to your glasses so that you now have sunglasses. Specifically, I’m wondering if we can view the white space that represents economic inefficiency or sub-/non-optimal output on this (and similar) graphs and think beyond the traditional thought of “this firm is losing money”? Can we infuse conceptions of justice into the way we see this graph? What if we look at the graph and, instead of centering the maximization of profits, we center accessibility as a value, as the our desired efficient outcome?
Well, in thinking about centering accessibility to resources, the first question that comes to mind is whether economics and accessibility are compatible with each other. The study (and science, because I really do think economics is a science) of economics, at its very core, operates on the premise of scarcity — that there is only a finite amount of resources. If we accept this premise to be true, then, naturally, we are inspired by a sense of competition (or perhaps it is instilled in us). The existence of scarcity, or when we describe some as scarce or rare, implies a conclusion that whatever is scarce is something that cannot be had by everyone. That not everyone can have something is the definition of exclusivity. It seems, then, that exclusivity is the logical outcome of scarcity.
(Tangent) Then, consider capitalism. It is one form of economics, one (of many? of a few? not sure here…) economic system by which resources are allocated. Capitalism adopts the stance that you can get whatever you want (for the most part) if you have the cash currency to exchange for it. (I am keeping this thought to the confines of cash currency because discussing alternative currencies will only make this so much more complex, and because we essentially no longer barter.) Capitalism is also an attitude, one that says to the poor “sucks to suck” and to the rich “can I get you anything else, sir/ma’am?”, and by that I mean “do you want to buy yourself anything else?”
But is this conclusion, that scarcity breeds exclusivity, sound? Is it necessarily true? Can something be scarce while also not exclusive? I’m trying to rack up some examples where the scarcity of a resource does not also mean that it is exclusive, and I’m coming up blank. Yet, I don’t think this challenge of finding something both scarce and accessible — communal, if you will — is due to the nature of the resource itself. Consider gold. It is rare (that’s why there’s an entire TV show dedicated to panning for it in Alaska) and we see it as exclusive: only the rich and wealthy can buy it. But is gold itself naturally exclusive? Does it inherently inspire or instill competition for it? Or is gold “exclusive” because of the method of resource allocation that we’ve adopted?
My initial thought, based on a more heuristic way of processing information, is that the incompatibility of scarcity and accessibility is due to the latter: due to the resource allocation we’ve adopted (and one could argue that we’ve been forced to adhere to). I say this because even resources that are in abundance, like potable water from natural springs, are made exclusive (ahem, Poland Spring and Nestle — we’re talking to you). Digging deeper though, there is a sliver of me that questions if it is capitalism that is to blame or if it’s just a certain aspect of capitalism. I could see a distinction between capitalism (as a resource allocation strategy) and commodification (a process of generating exclusivity and “value” employed in capitalist environments) being made.
I don’t really have an answer to these questions, and I’m not quite sure how else to dig into this deeper; perhaps this is why people get doctorates specifically in economics. I only have other thoughts, more musings, like maybe we ignore the equilibrium output and this idea of making only as much as there are consumers willing to buy at price X, and we acknowledge that people do want things but they simply cannot afford to spend their money this way. Perhaps if we turn away from this idea — that profit maximization is the superior, ultimate goal in doing business — then maybe this system (and we as a society) can stop punishing the poor and enabling greedy, Mr. Krabs money mentality, corporations through condoning (or lack of opposition to) their business rationales.