As Bernie Sanders laments, there are dozens of varieties of underarm deodorant, even though lots of people starve. We must not have our priorities straight.

I don’t have time for a direct response, but instead, here’s a draft of a chapter on luxury goods for Markets without Limits. (We ended up cutting it, rather than filling in the gaps, because we realized we don’t need it to defend our thesis.)

Here’s a key paragraph, extracted from the text below:

[Peter] Singer thinks we should stop buying DVD players and iPhones and instead donate the money to charity. Our view—consistent with development economics—is that first-worlders’ willingness to buy DVD players and iPhones, not their desire to donate their income, is that thing that actually makes the bigger difference in fighting poverty. Taiwan and South Korea grew rich and became First World countries, not because of handouts, but because they produced and sold luxury goods (on the broad definition of “luxury good”) to the First World.

 

YOUR LIFE IS REALLY EVIL

The comedian Louis C. K. jokes,

 

My life is really evil. There are people who are starving in the world, and I drive an Infiniti. That’s really evil…. There are people who are like born and then they go, “Oh, I’m hungry,” and then they just die, and that’s all they ever got to do. And, meanwhile, I’m in my car—boom boom, brrr!—like having a great time, and I sleep like a baby….I could trade my Infiniti for like a really good car, like a nice Ford Focus…and I’d get back like twenty thousand dollars, and I could save hundreds of people from dying of starvation with that money. And every day, I don’t do it.[i]

 

Louis C.K’s joke reflects a common complaint about markets—that markets enable people to purchase luxury goods while other people starve.

We suspect Louis C.K. based this bit on a famous article, “Poverty, Affluence, and Morality,” by Peter Singer. Singer has a simple, powerful argument against purchasing luxury goods. His argument goes as follows:

 

            Singer’s Anti-Luxury Argument

1. If one has the ability to help others in dire circumstances without giving up anything morally important, then one should do so.

2. One can help others in dire circumstances by giving up luxury goods. One can instead donating the money one would have spent on luxury goods to save those in dire circumstances.

3. Therefore, one should give up luxury goods and instead donate the money one would have spent on luxury goods to save those in dire circumstances.[ii]

 

To motivate premise 1, Singer asks us to imagine a scenario like the following:

 

Drowning Toddler: You are walking along one day when you see a toddler drowning in a shallow pool. You could easily reach in and save the toddler, though doing so will destroy your $1000 suede shoes.

 

Singer then asks readers to consider whether, according to their own moral views, they are obligated to save the child. On reflection, most people judge that saving the child is not merely a nice thing to do, but obligatory. They think it would be wrong to let the child drown. The child’s life matters more than the suede shoes.

Singer then asks readers to consider how they would respond to a slightly modified case:

 

Starving Toddler: There is a toddler starving on the other side of the world. You could easily save his life, but only if you decide not to buy $1000 suede shoes and instead donate the money to an organization that will save the child’s life.

 

Singer thinks Drowning Child and Starving Toddler are different only in their details, rather than their essentials. If it’s imperative that you save a drowning child at the cost of your fancy shoes, then, he thinks, you should just avoid buying the shoes in the first place, and instead use the money to a save a child’s life. Most people commit themselves to saying they have a positive duty to save the toddler in Drowning Toddler. But, Singer thinks, once they admit this, they will have to accept this Anti-Luxury argument.

 

WHAT COUNTS AS A LUXURY GOOD?

In the joke above, Louis C.K. was referring to his Infiniti G35,[iii] an entry-level luxury sports-sedan that cost between $33,000 and $50,000 new, depending on the options. In contrast, a new Ford Focus—one of the very best cars in its class—goes for around $16,000. But even a new Ford Focus is in some sense a luxury good. One could instead buy a used low mileage Honda Civic for half the price of a new Focus. But even a used Civic is a luxury good for many people, who could instead get by with a cheaper car or no car at all.

To our knowledge, there is no universally agreed-upon definition of the term “luxury good”. If we define a “luxury good” as anything one doesn’t need, then this just moves the question over to what counts as a “need”.

PBS Kids defines a “need” as something essential to survival, but a “want” (a luxury) as anything one would like to have but is not essential to survival.[iv] However, on this definition, almost everything anyone owns, including most of the goods the poorest people in the world own, are “wants” or luxury goods. Some philosophers, such as Peter Singer, seem to favor this kind of view of luxury goods.

One might instead identify as a “need” anything essential to realize Martha Nussbaum and Amartya Sen’s list of ten central human capabilities. Nussbaum and Sen think we should use a more expansive conception of need, such that when people get what they need, they do not merely survive, but have what is essential to leading a decent, fully human life.[v] Nussbaum and Sen argue that people need resources and an environment conducive to their being able to develop a conception of the good life, for them to be able to develop a range of proper emotional attachments, for them to be able to engage in imaginative play, for them to be free of violence, and more.

On a broad conception of luxury, any car counts as a luxury good for most people. On a narrow conception of luxury, an Infiniti G35 is a luxury good, but a Ford Focus is not. On a broad conception of luxury, any leather belt is a luxury (you could get a cheaper cotton belt instead), but on a narrow conception, a $20 leather belt is not a luxury, while a $4500 Hermes Constance belt is. On a broad conception, a new Timex watch is a luxury, but on a narrow conception, a new Timex watch is not a luxury, but a Rolex is a luxury. On the broad conception, a DVD-player is luxury, but on the narrow conception, the typical $30 DVD-player is not, though the $20,000 Meridian DVD-player certainly is.

 

CHARITY AND AID, OR DEVELOPMENT

Singer believes we should avoid purchasing luxury goods, broadly defined, and instead to donate our money to charities and organizations that will fight poverty. Our basic response is that Singer is just flat out mistaken about what it takes to fight poverty. Premise 2 of his argument rests upon known-to-be-mistaken empirical claims.

Overall, we are not against charity. We accept that charity is good on the margins. We both give money to various charities. But to focus on charity as means of fighting poverty is misguided. Mainstream development economics holds that that international aid and charity tend to do little good overall, and tend to do as much harm as good.[vi]

When philosophers talk about alleviating world poverty, they tend to argue that we should weaken property rights, reduce economic freedom, and transfer wealth from the First World to the Third World. In their eyes, the problem of persistent Third World poverty is a problem of allocation, a problem of cutting the world’s economic pie the wrong way.

But philosophers’ recommendations are the exact opposite of what mainstream development economics recommends. Philosophers advocate that we do what economists say doesn’t work and avoid doing what economists say does work. On this point, Bas van der Vossen rebukes his colleagues:

 

As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity. Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty. Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.[vii]

We share van der Vossen’s concerns.

Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does. The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development. These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade. Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.[viii]

So, for example, Daron Acemoglu and James Robinson, in their recent important book Why Nations Fail, argue that successful economic development depends on both inclusive political and economic institutions. Inclusive institutions empower everyone, while extractive institutions power the few at the expense of the many. Inclusive institutions encourage the benefits of cooperation to be widespread—they encourage society to be a positive-sum game. Extractive institutions encourage the benefits of cooperation to be concentrated in the few at the expense of the many—they encourage society to be a zero-sum game. On this point, Acemoglu and Robinson say,

 

Inclusive [economic] institutions … are those that allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skills and that enable individuals to make the choices they wish. To be inclusive, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it must also permit the entry of new businesses and allow people to choose their careers…[ix]

 

Now, not every development economist shares Acemoglu and Robinson’s exact views. But their general position—that private property, markets, and economic freedom—are needed for sustained growth, is the mainstream view.

To be clear, we are not saying that mainstream development economics calls for libertarian politics at a domestic level. Economists have varying positions about the degree to which governments can and should correct market failures. They also have varying positions about the extent to which countries should provide social insurance to their citizens.

Let’s turn back to Singer. Singer thinks we should stop buying DVD players and iPhones and instead donate the money to charity. Our view—consistent with development economics—is that first-worlders’ willingness to buy DVD players and iPhones, not their desire to donate their income, is that thing that actually makes the bigger difference in fighting poverty. Taiwan and South Korea grew rich and became First World countries, not because of handouts, but because they produced and sold luxury goods (on the broad definition of “luxury good”) to the First World.

We realize that in response to Singer, we have simply rehearsed the conclusions of mainstream development economics. We have not argued for these conclusions, nor have we even repeated economists’ arguments for these conclusions. This is no oversight. Rather, we believe we have no further burden of proof here. Some philosophers talk as if the way to alleviate world poverty is to shut down global markets and instead redistribute wealth. But, as far as we can tell, they talk this way because they are ignorant and/or misinformed about the relevant empirical work. Philosophers disagree with economists not because they have read and discovered serious flaws in the economists’ work, but because philosophers have for the most part just ignored development economics. Philosophers are of course free to disagree with mainstream development economics, but they bear the burden of proof of refuting it. We do not bear the burden of defending it here.

Van der Vossen thus responds to Singer,

 

Suppose rich people in the West give away most of their money. And suppose that, as the institutionalist theories suggest, giving away our money does nothing to remove the sources of poverty. What will be the result of such an approach? It will not be that poverty in the world is alleviated. For most of the money has either evaporated or, worse, lined the pockets of those in charge of the institutions that create poverty in the first place. At this end, little change will occur. At the other end, however, we can expect quite some change. Singer’s solution will likely mean that standards of living in the West dramatically reduce. When we give away the money we would otherwise have used for our expensive jewelry, we do not just lose that jewelry. The jewelry stores lose business. And when stores lose business, employees lose their jobs. Similarly, suppliers to jewelry stores lose their business, and their employees will lose their jobs as well. And the people providing the things on which all these people would normally spend their money, will lose their business, income, and jobs as well. This is not a recipe for helping people escape poverty. It is a recipe for making the entire world poor.

 

On this point, David Schmidtz adds that if we decide now just to redistribute the wealth of the First World to the Third World, we might, if we’re lucky, make some desperately poor people better off in the very short term. (If we’re unlucky, we’ll just help dictators build fancy airports and purchase guns to shoot their political rivals.) But in the long-term, we’ll shut down the very economic system that made the First World rich. The Third World doesn’t need to eat our success—they need to emulate it.[x]

 

DROWNING TODDLERS AND STARVING CHILDREN

Singer asks, if it’s obligatory to save the drowning child you happen to encounter at the expense of your shoes, why isn’t it obligatory not to buy the shoes in the first place, but instead to save a child in equally dire straights? Singer says Drowning Toddler and Starving Toddler differ in details, not in essentials. But insofar as Singer purposefully designs these thought experiments to differ only in details, he thereby inadvertently limits the value of the thought experiments in telling us about the ethics of rescuing people in the real world.

Consider two moral “policies” you might adopt:

1. Save One: I will save the first drowning child I come across.
2. Save Them All: I will save all the dying children in the world I possibly can before I die.

Singer seems to think that if we are committed to Save One, we are committed to Save Them All. But Save One and Save Them All are very different policies. We’re fairly confident morality requires something more than Save One, and something less than Save Them All, though we don’t know just what the actual requirement is.

The problem is that Drowning Toddler doesn’t reflect the actual situation we find ourselves in. Consider instead a different version of the thought experiment:

 

Many Drowning Toddlers: You are walking along one day when you see 10 million toddlers drowning in a shallow pool. Rescuing the first child will be easy, though it will destroy your $1000 suede shoes. After that, it will get progressively harder, as you will lose more and more. You could spend your entire life rescuing children, but never save them all.

 

Now, in Singerian style, we ask, is it obligatory to save 1 child’s life? How about 10? How about 1,000? How about 100,000? (If you save 1 toddlers per minute, and spend the next 50 years working 12-hr shifts saving drowning toddlers, you’d rescue only 1.3 million of them.) At what point are we morally permitted to say that we’ve done our part and walk away, letting some toddlers die whom we could have saved?

Suppose Singer is right that if you must save the first drowning child you come across, you should be willing to spend $1000 saving starving children on the other side of the world. Even if he is right, it doesn’t follow that you are obligated to spend your entire life saving drowning children.

Save One and Save Them All are different in how costly they are. Committed ourselves to Save One has a low personal expected disutility. Most of us don’t expect to come across a drowning child, and, even if we do, once we save that child, we get on with our lives. Save Them All has a high personal expected disutility. Save Them All never lets us get on with our lives. Instead, it demands that you just make saving children your entire life.

Premise 1 of Singer’s argument is “If one has the ability to help others in dire circumstances without giving up anything morally important, then one should do so.” He defends this premise by treating Drowning Toddler as equivalent to Starving Toddler, and in turn treating these both as equivalent to Many Drowning Toddlers. But there is no such equivalence. Drowning Toddler and Starving Toddler are morally similar, but they are quite different from Many Drowning Toddlers. Singer’s argument relies upon stressing the similarities among the cases while ignoring the disanalogies.

We don’t have an argument that premise 1 is false, but Singer, it turns out, doesn’t have an argument that it’s true, either. Instead, we will note here that commonsense moral thinking holds that one has some positive obligations to help others, but at some point, one has done enough, and can get on with one’s life. We have duties of rescue, but they are limited. Perhaps commonsense thinking is wrong, but Singer hasn’t yet produced an argument against it.

 

ROLEXES AND ROLLS ROYCES

Are our duties of rescue limited or unlimited? If Peter Singer is right, then the duties are close to unlimited. If so, then you shouldn’t enjoy any luxury goods, broadly defined, unless doing so somehow helps you save lives.

But if commonsense moral thinking is correct, then our duties of rescue are limited. Commonsense moral thought holds that we have some duties to rescue others, but we can eventually “do our share,” discharge that duty, and get on with our lives. (Commonsense moral thinking also holds that the wealthier one is, the higher the amount that counts as “doing one’s share”. But that doesn’t affect the argument here.) There is no overriding duty to spend our lives rescuing others.

If so, then one this settles the question of whether it is permissible to buy luxury goods, on the narrow definition of “luxury good”. (Recall: on the narrow definition, a Rolls Royce or even an Infiniti is a luxury good, but a Honda Civic or Ford Fusion is not.) There is some finite amount that we must sacrifice to help others. Once we meet that amount, then we may spend our money as we please, even if it is on Rolexes and Rolls Royces that we do not need.

Now, commonsense moral thinking may be mistaken. Perhaps Singer is right, and our altruistic duties are much stronger. But as we’ve seen, his argument for this conclusion isn’t successful, so he hasn’t given us a reason to depart from commonsense thought. Or, perhaps Ayn Rand is right, and our altruistic duties are much weaker. (We won’t review her arguments here, but we will just report we think these arguments also fail.)

If our duties to rescue are limited, then we can purchase luxury goods (both broadly and narrowly defined) as much as we please, so long as we meet our quota in helping others. If they are unlimited, then we cannot purchase any luxury goods, even on the broad definition of “luxury good”. In short, it seems that either Singer is right and you can’t even buy a Ford Fusion, or Singer is wrong, and you can feel free to buy a Rolls Royce instead of saving starving children, provided you’ve already saved your fair share of starving children.

 

MEAT

A common trope among environmentalists is that eating meat takes food out of the mouths of the hungry. For instance, PETA says, “It takes up to 13 pounds of grain to produce just 1 pound of meat, and even fish on fish farms must be fed up to 5 pounds of wild-caught fish to produce 1 pound of farmed fish flesh.”[xi] Some people use statistics like this argue that the luxury of eating meat cause other people to go hungry.

We don’t intend here to defend factory farming or meat eating. We leave it open that these are wrong because they inflict unjustified suffering upon animals. (Notice that either way, this coheres with our thesis. If meat eating is wrong, it’s not the market that makes it wrong. If the government produced factory-farmed meat and distributed it for free, it would still be wrong.)

However, we do want to point out that if even if it takes 13 pounds of grain to produce a 1 pound steak, it doesn’t follow that if we just gave up eating steak, then starving children in the Third World would be fed. Meat eating may be wrong for other reasons, but it is not killing children in the Third World.

First, the grain the cows eat was grown in order to feed the cows. It is not as though the children were going to get the grain, but then we selfish First Worlders outbid them on the market and gave the grain to our cows instead. Rather, the grain our cows eat was grown in expectation that it would be sold to feed cows. Had we not decided to raise cows for food, we would not have grown the grain in the first place. Starving childrens’ parents are so poor that they in effect are irrelevant to the domestic grain market.

Second, the history of food donations is fraught with peril. Donating food to the Third World sometimes alleviates a famine—it is sometimes the thing to do in an emergency. But, more frequently, first-world food donations just put Third World farmers out of business, and make them dependent on donations in the future.[xii] Again, the consensus in development economics is not that the Third World needs us to give them grain, but, on the contrary, that the Third World needs our governments to stop subsidizing grain production in the first world, so that we First Worlders instead buy our grain from the Third World.

Now, it’s true that instead of buying a steak for $8, one could purchase Kraft Macaroni and Cheese for $1 and then donate the remaining $7 to an organization that will save lives. But we have already dealt with this issue in the preceding section. Commonsense moral thinking holds that we don’t have unlimited duties of rescue. So long as a person has done his or her fair share of altruism, she may then splurge on fancier foods.

[i] See url=<ttp://www.youtube.com/watch?v=lC4FnfNKwUo>

[ii] Singer 1971.

[iii] http://www.esquire.com/features/man-at-his-best/q-and-a/louis-ck-interview-0611

[iv] http://pbskids.org/itsmylife/money/managing/article2.html

[v] Sen, Amartya. (1988). The Concept of Development. In Behram and Strinivasan, eds. Handbooks of Development Economics, pp. 2–23. Vol. 1. Elsevier: North-Holland; Sen, Amartya. (1989). Development as Capability Expansion. Journal of Development Planning 19: 41–58, reprinted in Sakiko Fukuda-Parr and A.K. Shiva Kumar, eds. 2003. Readings in Human Development, pp. 3–16. New York: Oxford University Press; Sen, Amartya. (1993). Capability and Well-Being. In M. Nussbaum and A. Sen, eds. The Quality of Life, pp. 30–53. New York: Oxford Clarendon Press. Nussbaum, Martha C. and Amartya Sen, eds. (1993). “The Quality of Life” Oxford: Clarendon Press; Nussbaum, Martha. (1993). Non-Relative Virtues: An Aristotelian Approach. In M. Nussbaum and A. Sen, eds. The Quality of Life, pp. 242–69. New York: Oxford Clarendon Press; Nussbaum, Martha C. (2000) Women and Human Development: The Capabilities Approach (Cambridge University Press, Cambridge).

[vi] William Easterly, The White Man’s Burden: Why the West’s Efforts Have Done so Much Ill and so Little Good (Penguin, 2007); Paul Polak, Out of Poverty: What Works when Traditional Approaches Fail (Berret-Koheler Publishers, 2008); Christopher Coyne, Doing Bad by Doing Good (Palo Alto: Stanford University Press, 2013); Peter Tamas Bauer, From Subsistence to Exchange and Other Essays (Princeton: Princeton University Press, 2004); see also Abhijit Banerjee and Esther Duflo, Poor Economics (New York: Public Affairs, 2012) for proposals about more effective forms of aid.

[vii] Bas van der Vossen, “Why Nations Fail: Lessons for Global Justice,” Global Justice: Theory, Rhetoric, Practice (forthcoming).

[viii] Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Propserity and Poverty (New York: Crown, 2012); Douglass C. North, Institutions, Institutional Change, and Economic Performance (Cambridge, UK: Cambridge University Press, 1990); Hernando de Soto, The Other Path: The Invisible Revolution in the Third World (New York: Harper & Row, 1989); David S. Landes, The Wealth and Poverty of Nations (New York: Norton, 1998); Dani Rodrik, Arvind Subramanian, & Francesco Trebbi, “Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,” 9 Journal of Economic Growth, p. 131 (2004); Daron Acemoglu, Simon Johnson and James Robinson, “The Colonial Origins of Comparative Development: An Empirical Investigation, American Economic Review,” vol. 91, No. 5 (2001), pp 1369-1401; Hernando de Soto, The Mystery of Capital (New York: Basic Books, 2000); Daron Acemoglu & Simon Johnson, Unbundling Institutions, Journal of Political Economy, vol 113 (2005), pp. 949-995 (2005); Sergio Berensztein and Horacio Spector, “Business, Government, and Law” in A New Economic History of Argentina, Gerardo della Paolera and Alan M.Taylor ed. (Cambridge University Press, 2004); Angus Deaton, The Great Escape (Princeton: Princeton University Press, 2013); Nathan Rosenberg and L. E. Birdzell, How the West Grew Rich (New York: Basic Books, 1987); Paul Collier, The Bottom Billion (New York: Oxford University Press, 2008); David Weil, Economic Growth (New York: Prentice, 2008).

[ix] Acemoglu and Robinson 2012, 74-5.

[x] David Schmidtz, “Islands in a Sea of Obligation,” Law and Philosophy 19 (2000): 683-705.

[xi] http://www.peta.org/issues/animals-used-for-food/meat-wastes-natural-resources.aspx

[xii] E.g., William Easterly, The White Man’s Burden (New York: Penguin Books, 2007); Chris Coyne, Doing Bad by Doing Good (Palo Alto: Stanford University Press, 2013).