The economics of insanity

I learnt a new phrase today – “lexicographic preference” – courtesy of economics professor J. Bradford DeLong. Before I tell you what it means, let me show you what kind of thinking it produces (not on DeLong’s part, but on those he ridicules).

Here are two quotes (don’t look at the links just yet). First:

I think there’s a good case to be made that taxing people to protect the Earth from an asteroid, while within Congress’s powers, is an illegitimate function of government from a moral perspective.


We believe that the decisions of how to deal with the massive asteroid are best left to the individual.

You’d be right to smell satire. However, only one of the above quotes is satirical. The other is quite serious. (This is a manifestation of Poe’s Law.)

The second quote comes from The Onion; the first comes from Sasha Volokh, who apparently didn’t get the joke. I shall defer to some other great commentary on this by J. Bradford DeLong:

So not only does Sasha Volokh claim that it is immoral to tax people to blow up an asteroid (or install lightning rods, or mandate lightning rods, or pay for a tree-trimming crew on the public roads), but it is immoral to tell people of an approaching asteroid so they can scramble to safety because it will cause violations of rights through looting.

And then John Quiggin:

The general point is that if some physical state of the world would require government action inconsistent with libertarian principles or conservative tribal taboos, then since libertarianism/conservatism is always right, logic dictates that the physical state in question must be impossible.

DeLong attributes Volokh’s thinking to “lexicographic preference”, which is economics jargon. Imagine you are selecting between alternatives, and you have several criteria to base your decision on. If I understand correctly, choosing lexicographically means applying each criterion in turn (as if you were comparing the letters in two words to place them in dictionary order; hence the name). You stop at the first criterion that distinguishes the alternatives.

For such absolutist libertarians as Sasha Volokh, the first criterion is upholding individual rights. If the available courses of action both uphold rights, or both fail to uphold rights, then we can move onto the second criterion (e.g. preservation of human civilisation). However, (a) libertarians in general tend to argue that taxation is theft, and (b) Volokh in particular argues that we do not, strictly speaking, have the right to survive a natural disaster. Thus, the first criterion does distinguish between the alternatives, and so we never need consider any other factors. Thus, government is morally obliged to do nothing to save humanity.

DeLong also highlights another phenomenon – the tendency in the face of extremism to declare a legitimate debate (specifically, in this case, by one Ilya Somin):

Somin’s insanity is… a second-order insanity — the insanity of taking first-order insane claims to be questions about which reasonable people can disagree.

In other words, Volokh’s position is demonstrably insane, and those who think that it can form part of a legitimate debate, as opposed to an object of ridicule, are themselves at least mildly insane.

Now, having understood the preceding arguments, most thinking people probably have pet topics to which they envisage an application.

In my case, lexicographic preference reminds me a lot of the political quagmire associated with unathorised boat arrivals. Politicians and commentators (especially of the Liberal persuasion), cast this as a crisis in which the only acceptable outcome is the total absence of any further “boat people”. There is no consideration for either (a) the humanitarian situation, (b) the diplomatic situation, or (c) the costs involved (or indeed anything else). In evaluating a given policy, the last three factors are irrelevant as long as there is some effect – no matter how small – on the number of boats. A policy that results in x boat arrivals is incontestably superior to one that results in x + 1 arrivals, no matter the cost, diplomatic or humanitarian implications.

Unfortunately, this is such a widely-held variety of insanity that any second-order insanity (i.e. that there is a legitimate argument that we should favour fewer boat arrivals no matter the consequences) is redundant.

A better demonstration of second-order insanity lies in the never-ending racism/multiculturalism debate. Here, Kevin Andrews was one the latest purveyors of this particular type of nonsense (after the British PM David Cameron had taken the lead of Angela Merkel in announcing the supposed failure of multiculturalism):

Mr Andrews described the British prime minister’s comments as “fairly sensible” and relevant to Australia.

“I think there is a risk [of ethnic enclaves] in Australia,” Mr Andrews said.

“What actually concerns me the most is that we can’t have a discussion about it,” he said, as he pushed for a public debate on the issue.

Of course, we can have a discussion about the merits of multiculturalism, in much the same way that we can have a discussion about the merits of using tax dollars to stop asteroids from annihilating civilisation. It really just depends on your preferred level of insanity.