On Language - Part II

Since there seems to be a continuing interest in language and "framing" I'm trying again...

This time I'd like to address the way unexamined words can force thinking along a certain path without anyone even taking notice. Here are some recent examples I've run across in my visits to blogs by economists and social philosophers.

The first essay in this series is here:
Does Language Make Policy?

Skill

In framing is that jobs for skilled workers will stay in the developed nations while those of unskilled workers will migrate to places with a less educated workforce. The particular essay I was reading hypothesized that this is why China can only produce cheap merchandise. Of course, this is factually wrong, just because Boeing is still in the US doesn't mean that China can't produce complex items. What used to be considered skilled work generally were factory jobs. But over the past few decades most of the most specialized steps have been taken over by automation. There may be a few skilled workers who are needed to program the machines and run the equipment, but the bulk of the jobs are unskilled. Thus, even highly complex items like micro-chips and computers can be built anywhere.

The real skilled workers these days are in the intellectual property and finance areas. Putting together complex financial deals and trading programs requires skill. The threshold for "skill" has shifted. This also implies that the advantage that a skilled workforce gave to industrialized countries is not assured in the future. The large number of graduates emerging in China and India will shortly be putting together their own complex intellectual property schemes and, unlike manufacturing, they won't need a vast infrastructure to go into competition with existing players. A few computers and some networking are all that is required.

Rationality

One of the axioms of economic theory is that people will act rationally so as to maximize their benefit. When real life doesn't match up with this model the response is that the people are acting irrationality. Maximizing utility must be inviolable. This leads to problems, especially since there are many studies which show that people value fairness and altruism over wealth in certain cases. The problem is that the implied definition of rationality includes the idea that wealth is the only factor used when making a decision. Other choices are therefore irrational.

Consumption and Savings

Many economists and politicians promote plans to promote "savings". But exactly what is savings and what is consumption. If I put money into the bank then most people would call this saving, but what if I buy common stock? Is that a (speculative) purchase or an investment? How about buying, one or more homes? Am I spending or investing so that I can resell later at a profit? Some people seem to think that if the purchase will depreciate then it is not savings, but most firms consider spending on plant and equipment an investment. Sometimes an item that might depreciate (like a home) appreciates instead, what then?

It seems to me that the definition of savings is based upon some sort of Puritanical, moralistic, unstated premise. Spending is profligate, saving is a virtue. Ben Franklin made a career out of preaching this, although he doesn't seem to have followed it once he had some wealth of his own. Even if I do put the money in the bank, the bank turns around and lends it to someone else. If I, instead, spend it on a new widget the widget maker can take the revenue and expand his business - an investment. I've directed my funds rather than letting the bank act as an intermediary.

Growth and Efficiency

The issue here is that both terms are taken to represent desirable attributes and thus any ideas that question the need for growth or improved efficiency are faulty. However, growth comes with a cost, something is being consumed to produce the growth. Until recently this was most often raw materials, but now as we see more intangibles being sold the cost has shifted to time and labor. When I take time to produce a new tune I've used up some of the finite time that I have on the planet. This is a cost to me which really can't be compensated for by money. In the same way when a firm improves "efficiency" what happens is that someone else gets less so that the firm can keep more for itself. This can be by cutting labor expenses or raw materials costs, or by cheapening the product. It can also be by shifting the costs of externalities like pollution elsewhere. There is more acknowledgment of such costs as shown by the rise in the requirement that firms pay to dispose of their waste products, but there is no good model for the value of non-renewable resources. The only models at present assume the value of the input is based upon the cost of obtaining it. The fact that it can't be replaced is not assigned a value.

Happiness

This has become a hot topic these days as some seek to measure and maximize happiness rather than material wealth. There is no consensus as to what happiness is, nor how to measure it. Many critics point to the fact that much self-reported happiness is based upon one's relative standing within the society rather than some absolute measure. Interviews with people who have suffered a terrible accident such as one leaving them paralyzed often report being happy again after a period of adjustment. Since there is no consensus on what happiness is how can we claim that we are measuring it. "I know it when I feel it" is hardly an objective criteria. If we, instead, used some objective measures to assess the well being of a society we would find a vastly different picture. There are such measures, but no one has tried to use them to debunk the happiness trope.

Liberty

When Jefferson wrote "life, liberty and the pursuit of happiness" he started a global revolution in thought about human rights. The implication was (whether he knew it or not) that each person is his own master. This led, inexorably to the abolition of slavery and the emancipation of women. The ideas are still resonating as oppressed minorities are still rising up against restrictions on their rights. The difficulty come with the word liberty. Just how much liberty is one allowed? As Justice Holmes said: "The right to swing my fist ends where the other man's nose begins." Pithy, but it doesn't provide much practical guidance. Can I say whatever I wish? In the US the constitution says yes, but the courts have imposed restrictions just the same. At various times there have been prohibitions against blasphemy, indecency, and support of unpopular political views. The liberty to do what one wishes with one's own person is also limited. There are rules against suicide, using forbidden substances, and even driving without a seat belt. Libertarians rail against such restrictions, but they also set arbitrary limits. They want to be able to buy and use whatever they want, but they also want others to be prevented (by force when necessary) from expropriating any of their holdings, no matter how they were obtained originally.

The liberty to push for the overthrow of the government, even by violent means, would seem to be a fundamental liberty, especially since this was the argument that the American revolutionists used to break free of Britain. Once in power, however, the rulers took a different view of this sort of "freedom of speech". In many cultures the idea of individual liberty makes little sense, the focus is on fitting in and contributing to the good of the overall community. The restrictions on a person's behavior are not noticed as strange in these societies even while they seem excessive to those in the west. The idea of going against the norms of the community just doesn't come up. Are these people less "free"?

The moral is: question definitions.