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Here's another thought experiment - still public policy stuff but as I have just received the latest Philosophical Review hopefully I will have some more eclectic ones shortly. This one is decidedly less abstract, I'm not even sure if it classifies as a thought experiment, but there you go.
Say the Government decides to manage the money supply itself and take over the task of printing money from the central bank. Say then that there is an enterprising politician (call him William) that now thinks he can game the system to his own advantage. William has a sure-fire investment that is going to make him a millionaire, but he needs $10,000 to get in on it.
He figures that he can use the Government printing press to print the money. Sure, that devalues everyone's money, but what would be the inflationary effect of $10,000 more across the whole economy? Far less than would be even noticeable or measurable. How can you say your rights have been violated if you can't even notice the extent to which they have been? Is there even a rights violation at all? Or if you're not into rights, surely you would accept that this investment is going to make William much happier, without noticeable effect to the rest of us. By a utilitarian standard, wouldn't he be morally obligated to print himself money?
Question: Is what William does immoral? On what grounds? Assume that he doesn't get caught, and puts mechanisms in place so it can never be done again.
Monday, August 10, 2009
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I think it's immoral to print the money. William has stolen something that isn't his and he had no right to it. The use of printed money spreads the burden of the theft over the whole economy and hence the impact per person is slight. It is still wrong.
ReplyDeleteConsider another example. Suppose I have a scheme to somehow steal a penny from every bank account in a country. Would that be immoral? Like the original example, nobody would be materially hurt. Somehow in this case when the theft is more directly connected to individuals it seems worse.
I think theft is theft. Both cases are immoral.
I think you're right, it's very similar to the stealing of the penny, except that you are stealing fractions of a penny. It seems like it is less immoral than stealing $10,000 off one person though? Or perhaps not.
ReplyDeleteThe collective impact of the money you steal is surely the same as the net gain that you receive, assuming the same subjective value for money. If you assume different subjective value for money, then the proposition could merely be restated as "If you prefer money to another, is it OK to steal it?"
ReplyDeleteOn another note, I am confused as to the relevance of the investment. If you are, say, purchasing shares, then had you not purchased the shares then another would have received the increased value. In other words, we really just have two transfers.
Replace the example to one where William is an entrepreneur who lacks finance for a particular project. Of course, in that case it cannot be known that it will be succesful.
Sure, assume constant marginal utility of money.
ReplyDeleteThe word 'investment' is perhaps a bit misleading - it could easily be understood to be a entreprenurial project, or even an investment in William's own human capital. It's not too important to the thought experiment.
Can he print the money to buy ice cream?
ReplyDeleteNo.