Friday, October 30, 2015

Moral intuition versus logical intuition

Stumbling and Mumbling has a good counterpoint to my post about Scott Sumner's claim that economics is counterintuitive. I updated that post, but I thought I'd put the update out as a post on its own. 

As I said about Sumner's claim: "I agree -- there are lots of counterintuitive frames for results in economics." Framing (as Stumbling and Mumbling shows) inflation and unemployment as both bad can lead to the conclusion -- using the moral 'bad begets bad' heuristic -- that you get both together as opposed to the Phillips curve view (which may not be true at all times, but for sake of argument here let's say it is) that there is a trade-off. However, if framed in another way (would you rather have one, the other, both or neither) my intuition is that people would use a more 'logical' zero-sum heuristic. If you want low inflation, you have to tolerate higher unemployment.

Which brings us to the paradox of thrift. Is this result counterintuitive? Yes, if you use the 'good begets good' heuristic. If we all 'tighten our belts', we'll get more national income. But it's not counterintuitive if you use the logical frame where my spending is your income. Saying that we should reduce everyone income in order to have more national income is illogical on its face.

It is our moral heuristics that make us think economic results are counterintuitive ... using moral logic. This applies to the examples Sumner gives (price gouging, ATM fees). I immediately applied my logical frame when writing this post rather than my moral frame. I've always associated the word counterintuitive with a logical frame. The utilitarian solution to the trolley car problem with the fat man isn't counterintuitive so much as a dilemma.

It's not that economic results are counterintuitive, it's that they are immoral. They violate our moral heuristics like 'good begets good'. Since morality doesn't have a widely accepted purely logical framework [1], all that exists is our set of moral heuristics. Therefore violating those heuristics is violating morality. Price gouging as a result of the basic economics of supply and demand is a moral dilemma, not a counterintuitive result.


[1] Utilitarianism is a somewhat logical framework, but is not the only theory of morality. It in fact leads to some of the morally problematic results as economics for what are basically the same reasons (assigning a real number to human moral preferences).


  1. I think this is your best non-analytic post so far Jason, Kudos! Jonathan Haidt and others have done a lot of work to show that largely unconscious moral intuition drives intellectual thought. Jonathan Haidt and Joshua Greene (among many others) have provided a lot of fundamental support for these sorts of notions. For instance, people who have higher education who are conservative are less likely to accept evidence for climate change, and better at coming up with arguments against it. The argument is that moral intuition comes first, then comes the intelectualization/rationalization of their intuition. Seems to also go for a lot of people in academic Economics as well.

    1. "Reason is a whore."
      -- Martin Luther

  2. "The evil that men do lives after them;
    The good is oft interred with their bones."
    -- Mark Anthony, in Shakespeare's "Julius Caesar"

    Bad begets bad. Good begets good? Not so much. ;)

    This may also represent a belief in increasing entropy (disorder). The belief that things were going downhill in human affairs was a common belief, both in the East and the West, before the modern idea of progress came about.


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