8 results back to index
The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred
airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, new economy, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, trade liberalization, ultimatum game
A reduction in my relative income then implies a reduction in my opportunity to consume such goods. These are positional goods, since consumption is affected by relative position. Sir Roy Harrod, friend of Keynes and originator of the theory of economic growth, was the first to note the existence of positional goods. But Harrod did not attach much importance to his small contribution, a two-page article for a US conference, confessing later that he wrote it mainly because the conference organizers heavily subsidized his air fare to the US...30 So it was not until years later that the significance of positional goods was first appreciated, by Fred Hirsch. The essential feature of positional goods is some kind of inherent scarcity, so someone cannot ensure access to these goods simply by becoming wealthier.
The portrayal of rivalry as status-seeking or envy fits in well with the story of humanity as a crooked timber. Concern to maintain relative status or relative position shows the individual must be duped by advertising, or driven by envy or some other foolish or morally reprehensible motive. There are two distinct errors in this description: first, that concern with relative position implies the individual is ultimately motivated by envy; second, even if this is not the case, attempts to improve relative position are irrational — a futile waste of time and effort. The first error arises from interpreting rivalry as motivated by pure status-seeking alone. Other categories of positional good are ignored. Even when someone does appear to be driven by envy, the true picture may be more benign. Buying a grand and fashionable house may be less about statusseeking than a desire to live in the catchment area of a good local school.
The latest research confirms this: for almost all goods both relative and absolute levels of consumption matter, with relative consumption being the dominant influence for some goods, and absolute consumption for others.27 But what makes relative position more important for some goods than others? Since concerns with relative position are a major factor in preventing growth bringing extra happiness, explaining why relative position matters brings us to the heart of understanding why growth does not buy happiness. And it raises the possibility of switching consumption towards goods where relative position matters less, so that growth can bring increases in happiness after all. There are several interrelated explanations of why relative position matters more for some goods. One explanation is status-seeking and conspicuous consumption. This idea has become so prominent that many seem to think that ‘concern with relative position or relative consumption’ is just a long-winded version of ‘status-seeking’.
The Darwin Economy: Liberty, Competition, and the Common Good by Robert H. Frank
carbon footprint, carried interest, Cass Sunstein, clean water, congestion charging, corporate governance, deliberate practice, full employment, income inequality, invisible hand, Plutocrats, plutocrats, positional goods, profit motive, Ralph Nader, rent control, Richard Thaler, Ronald Coase, Ronald Reagan, sealed-bid auction, smart grid, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, trickle-down economics, ultimatum game, winner-take-all economy
.: on cap-andtrade system, 181; on climate change, 4; on IRS budget, 3 234 INDEX housing: context in evaluation of, 68–72; in economic downturn of 2008, 53; expenditure cascades in, 61–62, 77–78, 80; under progressive consumption tax, 77, 78–79 human motivation: culture in, 24; economic models of, 24–25; evolution of brain and, 24; relative position in, 25–26 Hurricane Katrina, 57 IBM, 144–45, 153 Iceland, lack of corruption in, 56 ideology, critical thinking impaired by, 35 ignoramitocracy, 3, 4 incentive to work, and income tax rates, 158–60 income: absolute versus relative, 23, 44; and happiness, 27; misconceptions in invisiblehand theory about, 23, 44; myth of ownership of, 120–21; per capita, and government corruption, 56–57; as positional good, 73–74; in winner-take-all labor markets, 148–55, 166 income growth: of CEOs, 1, 61, 149–55; fundamental shift in pattern of, 61–62; after World War II, 1, 61 income inequality: in cost-benefit analysis, 100–106; and economic growth, correlation between, 159–60; in efficient provision of public goods, 123–26; and expenditure cascades, 61–62; in public policy decisions, 102–4, 111–12; rise of, in U.S., 61; and willingness to pay, 101–11, 198 income tax, 119–39; consumption tax as alternative to, 76–77, 80; consumption tax as supplement to, 82; in efficient provision of public goods, 123–26; emotional reactions to, 141–42; and incentive to work, 158–60; libertarian objections to, 6, 119–21, 123, 157; marginal rates for, 77; morality of, 119–21; in myth of ownership, 120–21; perception of overtaxation, 141–42; versus progressive consumption tax, efficiency of, 81, 167–68 income tax, progressive: efficient provision of public goods through, 124–26; justifications for, 124–31; libertarian rationale for, 126–31, 137–38; mindless slogans opposing, 169; and rank, 126–31 income tax cuts: under Bush (George W.), 3, 119, 155, 170; as inhibitor of economic growth, 162–64; temporary, effectiveness of, 83; trickle-down theory of, 157–62 income transfers: in efficient public policies, 104, 111–18, 123–26; libertarian objections to, 104, 111, 117, 123–26 indirect harm, 11–12; in Coase framework, 98; libertarians on, 11–12, 44; measurement of, 12; taxes on activities causing, 187 individual rights.
See also specific types leisure time, versus income, 73 Leopold’s record store, 32, 34, 35 liability, for harmful activities, 91, 92 liberals: on cause of market failures, 11, 18–19, 30, 84, 138; hostility toward cost-benefit analysis among, 110–11; on progressive income tax, 126 235 libertarian(s): on acceptable reasons to constrain freedom, 10–11, 195; antitax slogans of, 168–71, 194–95; basic assumptions of, 11, 22–23, 211; on before- versus after-tax incomes, 154–55; Coase embraced by, 86, 94, 98–99, 178; as consequentialists versus deontologists, 94; Darwin’s view of competition and, 17, 22, 211–12; expectations regarding outcomes in free market, 22–23; flaws in framework of, 11, 23; on government as source of problems, 4–5; on indirect harm, 11–12, 44; influence on public discourse, 4–5; on Mill’s harm principle, 10, 98; on progressive income tax, 125–31, 137–38; rational, definition of, 195, 207; reasons for compromise by, 202–11; in society-formation example, 127–31, 199–207; on taxes as social engineering, 13–14, 122–23; on taxes as theft, 6, 119, 154, 202; type of government preferred by, 22, 23, 195; value of autonomy to, 194–95 libertarian objections: to helmet rules, 9, 189–92; to income taxes, 6, 119–21, 123, 157; to income transfers, 104, 111, 117, 123–26; to pollution tax, 177–79; to progressive consumption tax, 83; to regulation of harmful activities, 86; to relative position, role of, 29, 212–13; to workplace safety regulations, 41, 43, 206–7 Libertarian Party, 4 liberty. See freedom loans: cost-benefit test for, 161; to labor-managed firms, 32–34 Locke, John, The Second Treatise of Civil Government, 119 Lockheed, 58–59 London, congestion fees in, 182 luck, 140–56; in antitax slogans, 169–70; denial of role of, 142–44, 146–48; in environmental and genetic factors, 146–47; of Gates (Bill), 144–45; in sports, 145–46, 156; strengthening of relationship between success and, 154 luxuries: identification of goods as, 76–77; as positional goods, 76; progressive consumption tax on, 76–77 majority rights, versus minority rights, 207–11 Malthus, Thomas, 16 Mankiw, Greg, 193 236 INDEX mansions, in expenditure cascades, 61–62, 77–78.
Against the backdrop of this payoff structure, imagine two genetic variants —one that codes for a brain that cares strongly about relative position, and the other for a brain that doesn’t care at all about it. In general, caring more strongly about something inclines you to expend more mental and physical energy to acquire it. So individuals who care more about relative position would be more likely to muster the behaviors necessary to acquire and defend positions of high rank. That, in turn, would make them more likely to survive famines and marry successfully, thus increasing their genotype’s frequency in the next generation. The current environment is of course very different from the ones in which our ancestors evolved. But relative position still matters, often for purely instrumental reasons. When you go for a job interview, for example, you want to dress presentably, but the standards for looking good are almost purely relative.
3D printing, call centre, clean water, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, McMansion, mortgage tax deduction, new economy, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, Post-materialism, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War
As long as we have a constant flow of low-wage labor—legal or illegal—coming in from south of the border, then more native-born Americans can afford gardeners, nannies, or personal trainers. Third, we can live in a state of constant flux with respect to relative position, as long as we have a forum for its expression other than human-to-human services. In other words, we can—like an expansionary sports league—imbue more and more aspects of life with a positional element. So things—like meals—that once were produced and consumed in order to satisfy a basic individual human need can sometimes become positional goods, too. One consequence is the increasing role that material goods play as positional goods—something Hirsch didn’t consider. Mrs. and Mr. Elsewhere absolutely have to have the latest iPhone, McMansion, or SUV There’s nothing inherent about an iPhone that makes it a positional good. Some (but not all) of its features are material improvements on previous models.
However, to the extent that the pleasure from the iPhone or the Hummer or the $5,000 gas grill (a favorite example of the economist Robert Frank in his related book, Luxury Fever) stems from the fact that it is better—or at least more costly and thus rarer—than the grills of one’s neighbors, it has become a status or positional good. It is through this magical endowment of material objects with the powers of relative position that we think we have solved the problems inherent in mass consumption of positional goods—if only fleetingly Never mind the credit card bill that is to come: For now, the magical object has done its job, and we are satisfied (if not quite happy, since the actuality of the thing may be disappointing compared to the idea of owning it in the abstract). So, when people talk about the dematerialization of the economy, what they should be really calling it is a de-necessitation of the economy, as in a deemphasis on basic, physical necessities; or, alternatively, a luxurification or positionification.1∗ This view of the role of goods and services in the new economy stands in sharp contrast to that offered by folks like Chris Anderson, for example, in The Long Tail: Why the Future of Busi- ness Is Selling Less of More.
Ronald Inglehart called this “post-materialism,” in his 1997 book, The Silent Revolution.1 The critical issue is that an increasingly larger share of the goods or services we produce and consume in a post-material economy are what Hirsch termed positional goods. This type of good is distinct in that its value depends on the fact that others don’t consume it.2 Certain goods are inherently positional: A penthouse apartment is, by definition, a positional good since there can be only one top floor per building. So is a beachfront property, given the limited supply of coastline. Others depend on group social dynamics to attain positional status. Platform shoes at a crowded rally are a positional good, for example, to the extent that they serve the purpose of giving us a better view of the stage. But if everyone wore them, the initial purpose would be defeated. (They still might look cool, of course.) A gun, in a sense, is a positional good, too. That is, a firearm is most valuable when nobody else has one.
autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, Erik Brynjolfsson, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, performance metric, positional goods, post-industrial society, postindustrial economy, purchasing power parity, refrigerator car, rent control, Richard Feynman, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War
That’s typically why they come. Anecdotal evidence suggests, however, that immigrants’ relative position in the United States is often lower than their parents’ relative position in the country of origin. According to Julia B. Isaacs of Washington’s Brookings Institution, 67 percent of us have more income, after inflation, than our parents had (absolute mobility), and about a third of us end up more prosperous relative to our fellow Americans than our parents were (relative mobility).5 You more likely than not will outearn your parents. And you’ve got a one in three shot at making more money compared to your contemporaries than your parents made compared to theirs. But the greater likelihood is that your relative position will be merely as good as, or possibly worse than, your parents’. Intergenerational upward relative mobility from one generation to the next certainly occurs in the United States.
How many white children growing up in prosperous households can rationally aspire to the same fate? How many children, black or white, can match both Obama’s talents and Obama’s luck? (Luck is another notable factor that put Obama in the White House, to at least the same extent as it did for his forty-three predecessors.) Perhaps there is a benefit to lacking a realistic understanding about your odds of improving your relative position in society. Excessive optimism is, James Fallows argues in his 1989 book More Like Us: Making America Great Again, a major driver of the U.S. economy. Paraphrasing the Harvard psychologist David McClelland’s 1961 book The Achieving Society, Fallows writes that a society in which “people routinely overestimated their chances for success,” in which entrepreneurs “launched ventures that by rational standards were likely to fail,” was a society that, collectively and over the long term, would invent more, innovate more, and succeed more.
It found that about half of those in the bottom income quintile in 1996 moved to a higher quintile by 2005. But as explained in chapter 2, this isn’t a good way to measure income mobility, because people’s incomes follow a predictable pattern over time: The more work experience you acquire, the better you tend to get paid. That isn’t mobility. It’s life. A better measure—one closer to the way most of us actually think about upward mobility—is to compare one generation’s relative position in the income distribution with the next generation’s. Did the barber’s son become a dentist, or did he become a janitor? It’s here that the United States now falls behind most of western Europe. See “Income Mobility in the U.S. from 1996 to 2005,” U.S. Department of the Treasury, Nov. 13, 2007, at http://www.treasury.gov/resource-center/tax-policy/Documents/incomemobilitystudy03-08revise.pdf. 4.
The Paradox of Choice: Why More Is Less by Barry Schwartz
accounting loophole / creative accounting, attribution theory, Atul Gawande, availability heuristic, Cass Sunstein, Daniel Kahneman / Amos Tversky, endowment effect, framing effect, income per capita, job satisfaction, loss aversion, medical residency, mental accounting, Own Your Own Home, positional goods, price anchoring, psychological pricing, RAND corporation, Richard Thaler, science of happiness, The Wealth of Nations by Adam Smith
For example, not everyone will be able to own a secluded acre of land at the seashore. Not everyone will have the most interesting job. Not everyone can be the boss. Not everyone can go to the best college or belong to the best country club. Not everyone can be treated by the “best” doctor in the “best” hospital. Hirsch calls goods like these positional goods, because how likely anyone is to get them depends upon his position in society. No matter how many resources a person has, if everyone else has at least as much, his chances of enjoying these positional goods are slim. Sometimes these kinds of goods are positional simply because the supply can’t be increased. Not everyone can have a van Gogh hanging in his living room. At other times, the problem is that as more consumers gain access to these goods, their value decreases due to overcrowding. The New York City area has several lovely beaches, enough to accommodate thousands.
For example, people were asked to choose between earning $50,000 a year with others earning $25,000 and earning $100,000 a year with others earning $200,000. They were asked to choose between 12 years of education (high school) when others have 8, and 16 years of education (college) when others have 20. They were asked to choose between an IQ of 110 when the IQ of others is 90 and an IQ of 130 when the IQ of others is 150. In most cases, more than half of the respondents chose the options that gave them better relative position. Better to be a big fish, earning $50,000, in a small pond than a small fish, earning $100,000, in a big one. Status, Social Comparison, and Choice CONCERN FOR STATUS IS NOTHING NEW. NONETHELESS, I BELIEVE that the problem is more acute now than in the past, and once again it comes back to having a plethora of choices. Given Frank’s “choosing the right pond” idea, what is the right pond?
Van Yperen, “The Affective Consequences of Social Comparison: Either Direction Has Its Ups and Downs,” Journal of Personality and Social Psychology, 1992, 59, 1238–1249. big fish in our own ponds R. Frank, Choosing the Right Pond (New York: Oxford University Press, 1985). See also his more recent Luxury Fever (New York: Free Press, 1999), in which he argues that much of the modern American taste for excess is driven by social comparison. better relative position S.J. Solnick and D. Hemenway, “Is More Always Better? A Survey on Positional Concerns,” Journal of Economic Behavior and Organization, 1998, 37, 373–383. explosion of telecommunications For a discussion of how modern telecommunications as well as advertising has changed the relevant comparison group for most people, see M.L. Richins, “Social Comparison, Advertising, and Consumer Discontent,” American Behavioral Scientist, 1995, 38, 593–607; and S.J.
Creating Unequal Futures?: Rethinking Poverty, Inequality and Disadvantage by Ruth Fincher, Peter Saunders
barriers to entry, ending welfare as we know it, financial independence, full employment, Gini coefficient, income inequality, income per capita, labour market flexibility, labour mobility, low skilled workers, low-wage service sector, marginal employment, minimum wage unemployment, New Urbanism, open economy, pink-collar, positional goods, purchasing power parity, shareholder value, The Bell Curve by Richard Herrnstein and Charles Murray, urban planning, urban renewal, very high income, women in the workforce, working poor, working-age population
Neoliberal governments are also pursuing public–private partnerships—for example in secondary and tertiary education, in 23 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 23 CREATING UNEQUAL FUTURES? infrastructure provision for cities—and altering taxation systems for individuals and firms to the greater benefit of business investors and the wealthy. (Even if it can be argued that the incomes of poorer groups are not actually reduced in such moves their relative position is worsened.) Of course, the underpinning by governments of commercial law continues to provide advantages like limited liability to corporations and businesses which have never been available to wage earners and other citizens. What is being developed in Australia is a change in style and substance of governance. The adoption in government of neoliberal economic philosophies directs our national and sub-national involvement in globalisation to take particular forms.
At the wider level, there is evidence of serious concern among editors and journalists that newspapers, in their quest to be entertaining, may have lost touch with the serious concerns of their communities. Newspapers are still a significant force in our society. A 1995 survey indicated that 87.9 per cent of males and 82.4 per cent of females aged eighteen years and over had read a newspaper in the previous week, while a 1996 survey found that 63.8 per cent of people read newspapers or magazines daily (McLennan 1999). However, over the years the relative position of newspapers in the media environment has declined markedly, with per capita circulation halving between 1950 and 1990 (Morris 1996). There is a strong line of argument, particularly in America, that in seeking to arrest this decline via ‘infotainment’, newspapers may have compromised their traditional civic role to their own ultimate cost by alienating the very communities who constitute their audience.
Some of this literature has suggested that these anti-social activities and values are transmitted from generation to generation, so that the children of lone parents and the long-term unemployed are more likely to be jobless themselves and become dependent on welfare. These concerns have a range of policy implications. In particular, if welfare provision is not the ‘solution’ to poverty, but is itself the ‘problem’, then it could be argued that reductions in social security payments and tightening of eligibility conditions are appropriate policy responses. In addition, it is widely held in the United States that employment is positively good for individuals. Contact with the workforce is often regarded as maintaining skills and contributing to the development of positive social attitudes. Ellwood (1999) has argued that welfare reform in the United States has been driven by the perception that almost anything is better than welfare. In some senses this harks back to Edmund Burke’s views quoted earlier, that poverty necessarily implies absence from the workforce. 53 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 53 CREATING UNEQUAL FUTURES?
The Right to Earn a Living: Economic Freedom and the Law by Timothy Sandefur
barriers to entry, big-box store, Cass Sunstein, clean water, collective bargaining, corporate governance, corporate social responsibility, Edward Glaeser, housing crisis, joint-stock company, Joseph Schumpeter, labour mobility, minimum wage unemployment, positional goods, price stability, profit motive, race to the bottom, Ralph Nader, RAND corporation, rent control, Silicon Valley, The Wealth of Nations by Adam Smith, trade route, transaction costs, Upton Sinclair, urban renewal
Whether it be the pest control technician who wants to try a new method for preventing pigeons from landing on buildings, or the hair braider who wants to open a new shop to do hairstyles that consumers had never seen before, it is the newcomer who seeks economic freedom. And it is often the old, established businesses that want to be protected against new competition. Picturing the revival of economic liberty as a return to the past means getting the truth entirely backward. It is the future that needs freedom. Implementing constitutional protections for economic freedom will require a reevaluation of the relative positions of democracy and 286 The Future of Economic Liberty liberty in the American constitutional order. This will be difficult for some, but it is already starting. Prominent liberal lawyers like Professor Laurence Tribe,41 former Clinton administration solicitor general Walter Dellinger,42 and former American Civil Liberties Union president Nadine Strossen43 have joined libertarian writers like Richard A.
Holmes and his Progressive allies, however, believed the judiciary should abet these efforts in the service of social improvement and “the right of a majority to embody their opinions in law.”109 109 The Right to Earn a Living Progressivism transformed government from an institution for protecting rights into a tool for improving the living conditions of citizens; from a “necessary evil,” as the Founders saw it,110 into a positive good. And it shifted the focus of American constitutional law from liberty to democracy. From then to the present day, the primary concern of political leaders would be ensuring that legislative majorities could enforce their preferences rather than protecting the freedom and safety of individuals. For many people, this actually became the very definition of freedom: majority power, rather than the right to pursue happiness, came to be seen as the meaning of liberty.111 This explains Holmes’s otherwise perplexing statement in his Lochner dissent that protecting the rights of individuals was a “perversion” of the word “liberty.”112 Modern criticism of Lochner is based on the same appeal to majoritarianism that animated Holmes’s dissent.
The Transhumanist Reader by Max More, Natasha Vita-More
23andMe, Any sufficiently advanced technology is indistinguishable from magic, artificial general intelligence, augmented reality, Bill Joy: nanobots, bioinformatics, brain emulation, Buckminster Fuller, cellular automata, clean water, cloud computing, cognitive bias, cognitive dissonance, combinatorial explosion, conceptual framework, Conway's Game of Life, cosmological principle, data acquisition, discovery of DNA, Drosophila, en.wikipedia.org, experimental subject, Extropian, fault tolerance, Flynn Effect, Francis Fukuyama: the end of history, Frank Gehry, friendly AI, game design, germ theory of disease, hypertext link, impulse control, index fund, John von Neumann, joint-stock company, Kevin Kelly, Law of Accelerating Returns, life extension, Louis Pasteur, Menlo Park, meta analysis, meta-analysis, moral hazard, Network effects, Norbert Wiener, P = NP, pattern recognition, phenotype, positional goods, prediction markets, presumed consent, Ray Kurzweil, reversible computing, RFID, Richard Feynman, Ronald Reagan, silicon-based life, Singularitarianism, stem cell, stochastic process, superintelligent machines, supply-chain management, supply-chain management software, technological singularity, Ted Nelson, telepresence, telepresence robot, telerobotics, the built environment, The Coming Technological Singularity, the scientific method, The Wisdom of Crowds, transaction costs, Turing machine, Turing test, Upton Sinclair, Vernor Vinge, Von Neumann architecture, Whole Earth Review, women in the workforce
This is a major point, rarely made by anyone, never mind sports writers. The nature of the contest might change, of course, with significantly enhanced performance across the board. Some might, in response, want to change the rules of the game (e.g., a larger playing field). In any case, widespread performance enhancement might even make people more diligent and move them to try harder – generally considered a good thing – if only to avoid loss of relative position. And it’s hard to see, if the same people keep on winning and losing, how you’re getting an inappropriate reinforcement of something for nothing. True, absolute performance would seem to be heightened, suggested disproportionate returns. But the idea that you can get more bang for the buck might be far more reinforced if people were cheating and you knew they were cheating but you didn’t know who.
Allen Buchanan posits “that some enhancements will increase human productivity very broadly conceived and thereby create the potential for large-scale increases in human well-being, and that the enhancements that are most likely to attract sufficient resources to become widespread will be those that promise increased productivity and will often exhibit what economists call network effects; the benefit to the individual of being enhanced will depend upon, or at least be greatly augmented by others having the enhancement as well” (Buchanan 2008: 2). Buchanan points out that much of the ethical debate (cited above) about enhancements focuses on them as positional goods that primarily help an individual to outcompete his rivals. This characterization of enhancements leads quickly and ineluctably to pervasive zero sum thinking in which for every winner there is assumed to be a loser. Instead enhancements could produce substantial positive externalities. “Large numbers of individuals with increased cognitive capabilities will be able to accomplish what a single individual could not, just as one can do much more with a personal computer in world of many computer users,” writes Buchanan (Buchanan 2008: 11).