Monday, December 26, 2005

Social Darwinism just keeps on keeping on

In a column in today’s Oz, James McConvill discusses one of the great paradoxes of modern consumer societies such as ours, namely, the endeavour to promote and enhance commercial competition by way of state regulation.

McConvill writes in the context of the currently topical fall from grace of the entrepreneur Richard Pratt, who is in trouble with the Australian Competition and Consumer Commission (ACCC) for allegedly engaging in anticompetitive “cartel behaviour” between his company, Visy Industries, and competitor Amcor.

The column’s heading, “Law of the jungle is the best regulator”, more or less succinctly sums up McConvill’s position, which is essentially the laissez-faire philosophical position where almost all state regulation is considered futile, counterproductive, or perhaps even fundamentally immoral. Rather, virtually all social arrangements are best guided by the precepts elucidated in modern game theory.

Thus, for McConvill, “Cartel behaviour is not evil and it should not be outlawed. For that matter, we should not even have such a thing as competition law or a Trade Practices Act.” On the contrary, he says, competition law should consist of but one provision: “Just get on with business.” (The only exception McConvill allows is “when fundamental human rights are placed in jeopardy”, leaving the problem of defining which human rights are the “fundamental” ones.)

Businesses should not be burdened with the direct obligation of “enhancing the welfare of Australians”. If they can get on with business, unfettered by competition regulation, they will fulfil this anyway. Business will grow, jobs will be created, lives will be improved and society will become richer. The natural order of things sorts this out.

All well and good – at least, in theory – but as a society we are still left to deal with anticompetitive cartel behaviour, which if not outright evil, is troublesome all the same... “distorting” markets, limiting consumer benefit and choice, etc.

McConvill’s solution involves, on one hand, something more or less like ad hoc consumer activism: “If the anticompetitive behaviour affects the quality of products or results in an increase in prices, we can switch who we buy from, what we buy, or ... perhaps just not buy at all.”

This is, to say the least, a decidedly unreliable and contingent mechanism. But more importantly it fails to come to grips with the very nature of anticompetitive cartel behaviour as it affects consumer prerogatives. For starters, it is mainly due to the intervention of the ACCC that consumers have become aware of the anticompetitive behaviour in the first place.

“Alternatively,” McConvill continues, “we can ... get out there and set up our own businesses in competition.” Thus we citizen entrepreneurs are expected to compete in an already rigged, anticompetitive environment, so as to fulfill the holy writ of McConvill’s laissez-faire, free enterprise mantra. This presumably is our duty as individual social actors, rather than a function to be vested in the apparatus of state for the common weal.

What’s most interesting about the kind of position expounded by people such as McConvill is that this preferred laissez-faire, free enterprise, game theory-inspired conception of social arrangements involves a repudiation of human moral agency in the social sphere. For example, the Judaeo-Christian ethics of charity and goodwill are all but removed or sidelined, while an essentially social Darwinian model of society is given primacy.

Implicit in all this is the idea that the capacity of human moral agency to guide social arrangements is somehow inferior to “the natural order of things” – i.e., “the law of the jungle”.

On one hand, human attempts at moral governance of society sometimes produce demonstrably bad outcomes. Therefore, intervention by human moral agency ought to be vigorously discouraged.

On the other hand, laissez-faire free enterprise, while also sometimes producing demonstrably bad outcomes, nevertheless should be given free reign because it enshrines certain values and objectives that are apparently sacrosanct, which McConvill briefly sketches:

...[B]usiness, even very large business, is driven by individuals. These are individuals who had the initiative, the foresight and the perseverance to run with an idea, to build something of purpose of which they could be proud, and to make the lives of their own families as comfortable and rewarding as possible. This is a pretty good set of objectives, if you ask me.

Thus the overriding moral dimension of the kind of position espoused by McConvill focuses on the individual, and the obligation of the wider society to make the lives of certain individuals “as comfortable and rewarding as possible”. McConvill is silent, however, on the obligations such individuals have towards that wider society which provides those individuals with comfort and reward for their entrepreneurial efforts.

Game theory, as a discipline, has historically tended to underplay the factor of reciprocity in “transactions” between “players”. Moral agency simply isn’t in the equations, of course, rather it is an arcane human artefact that is all but irrelevant.

My own view is that game theory, rather than being ceded sovereignty over the human moral universe, should be kept at its rightful station as the handmaiden to sovereign humanity. As much as any other discipline, it may be used to guide human moral choice, but should not usurp our moral sovereignty by providing the de facto guiding principles for social arrangements.

2 Comments:

Blogger Jeremy said...

I just ran across this, 'tis a much more thoughtful piece than my hatchet job :). Nice work...

7/9/06 6:13 PM  
Blogger Jacob A. Stam said...

Thanks Jeremy; brief reply at your post.

7/9/06 9:59 PM  

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