Knowledge And Decisions

A people sensitized to act against virtually any injustice is a people engaged in a never-ending creation of costs, including artificially escalating levels of new injustices. To confiscate a family fortune that originated unjustly in times past is to create uncertainty among millions of home owners today who sacrificed for years to give their families a place to live. The government may have no intention whatsoever of confiscating the latter kind of private property, but once the common guarantee of property rights has been violated, uncertainty about all property rights increases — an immediate cost, measurable in tangible money terms in declining market values, regardless of whether the feared eventuality ever actually occurs. In short, an immediate confiscation — or rather destruction — of part of the value of other property would automatically take place as the result of a retrospectively just act of confiscating an ill-gotten fortune — which might well be only a tiny fraction of the value of all the losses suffered by millions of other people, such as homeowners. Moreover, in addition to the immediate costs arbitrarily imposed on third parties in this way, retrospective justice causes prospective changes of behavior — for example, in this case, a general shifting of assets from visible and immobile forms like homes and factories to more concealable and portable forms like gold. The incentives to work or to plan ahead would be affected, as time horizons shrink with increased uncertainty, reducing the level of job-creating investments in the country. Unemployed workers with neither homes nor fortunes could be among the chief current and future victims of this act of retrospective justice.

The point here is not to claim, as a categorical principle, that every act of justice or every consideration of morality must be counterproductive. Rather the point is to recognize, as an incremental principle, that unbounded morality ultimately becomes counterproductive even in terms of the same moral principles being sought. The law of diminishing returns applies to morality, as to other valuable social inputs.

In addition to the situation in which morality becomes counterproductive with respect to its own set of values, it may also become counterproductive by its effects on other values. For example, preoccupation with the morality of individual privilege may lead to ignoring important social considerations that are also involved. The question may be asked, what has a particular individual ever done to deserve the wealth, privilege, and power of being king — the answer usually being “nothing” — when the more weighty social question may be the costs and benefits of monarchy as compared to whatever realistic political alternatives exist at a given time and place. In less extreme cases, where the individual has made some contribution to his own good fortune, the question may still be asked whether it was enough to justify his advantages, when again the larger question may be whether there are institutional alternatives which would produce as good social results for others. The fortunate individual himself may tend to answer within the same moral framework as the critic, and depict himself as deserving — perhaps even regarding himself as a “self-made man,” to use an incredibly naive and arrogant expression. But the social issue may be systemic rather than individual, and preoccupation with morality can be a distraction from considering that larger issue.

SUMMARY AND IMPLICATIONS

Social decision-making processes, whether formal or informal, face the same basic problem of seeking to maximize well-being subject to some inherent constraint — whether of time, wisdom, or economic resources. Both the constraints and the maximization process are easier to quantify or visualize in economic processes, but the principles applied in economic processes are general social principles. Social values in general are incrementally variable: neither safety, diversity, rational articulation, nor morality is categorically a “good thing” to have more of, without limits. All are subject to diminishing returns, and ultimately negative returns.