The Greatest Good
Since early in the history of philosophical thought there has been a dichotomy: the greatest good for
whom? And how is it achieved? Without delving into the details of general versus selective good it is
useful to repeat the obvious, that left to our own devices the good we achieve will not be equal – and for
many reasons, which, also, we need not belabor at this point. But however we approach the subject it
has to be observed and understood that the efforts of some make things better for all, and, of course, the
efforts of others make things worse for all, whereas the majority of us do well just to take care of
ourselves and our own.
Today nothing has changed much and the dichotomy continues to offer the same challenge: to
balance individual good with collective good. What it comes down to is providing an environment that
encourages individuals to make an effort that, while taking care of themselves also helps all collectively
to live better. It is a delicate balance. Too much individuality and those that can will tend to try to take it
all for themselves; too little individuality and those that can won’t bother and all will suffer. Then there is
another segment that no matter what will sit back and take from all the rest. What is the secret?
Strangely enough perhaps it really isn’t a secret, but it is a very difficult challenge.
Basically people will work according to their ability when there is something in it for them; and the
more ability they have the more they are able to contribute. And the more they are rewarded for whatever
they contribute, the more effort they are likely to expend in the pursuit of it. We all know there is more to
it than that: luck, connections, opportunities all figure in, but incentive is the driver. On the other hand
those that either cannot or will not expend the effort, or when they do do not achieve results, are envious
of those that do. This inequality is part of the human condition and all history, and all government, has to
do with dealing with this condition. And of course we must also recognize that in this pursuit things are
not and never will be entirely fair.
Unfortunately that being the economic point of view, many either don’t agree with it or fail to look that
far. Specifically they are focused on a result and assume it can be achieved if people want it to be
achieved, that is, they don’t accept the above human condition. Good, as John Stuart Mill saw it, “is the
greatest good of the greatest number.” Jeremy Bentham agreed but added a criteria that it should
include that the number of people affected by an act is also an issue. Extrapolate that to the greatest
good for the greatest number of people in terms of living conditions and the arithmetic is easy: since
there are more with less than with more, we take from those with more, give it to those with less and we
have achieved the greatest good for the greatest number. It is so simple. But it doesn’t work because of
that irritating little human condition. When you take away the incentive from those that contribute most
robustly, they contribute less robustly, and what is demanded of those who are less able to contribute?
Nothing. The net result is that less is contributed and there is less to distribute.
That, however, is also simplistic because merely having wealth makes creating wealth easier, and
not having it makes it far more difficult to achieve. Or stated economically it takes money to make
money. We have certainly seen the extremes historically. In a winner take all environment (unbridled
capitalism) losers lose their incentive to try – beyond subsistence. In an equal distribution environment
(communism and to a lesser extent socialism) incentive is taken away from everyone. So what is
required to achieve the greatest good for the most? Maximization of incentive – for all. And how is that
accomplished? Ah, there is the essence of the challenge; balancing incentive for the achievers and
incentive for those whose achievement capacity is less is a matter of continual battle over the details.
And the difficulty is clearly in the details, for modern commerce is built upon myriad decisions at an
almost infinite number of levels to maintain the balance. So who makes all these decisions?
History tells us, over and over again, that the only practical way for those decisions to be made is by
the free market – where incentive resides. The alternative, for government to make the decisions,
presumes government is capable of doing it, that is, has the knowledge to do it, and that it has the
detailed capacity to do so, which it does not. But there we are again at the extremes, and the success of
the powerful American economy has been a balancing of the pure free market capitalism with a
minimum of government adjudication, referred to as regulation. Regulation of course poses its own set
of problems: knowledge of or bias among regulators and the pressures of democratic republicanism.
The first is handled by recruiting regulators from business and listening to knowledgeable lobbyists.
Both suffer from human nature and self interest. Decision makers are prone to both and so are voters.
Our system appears to be the best we can hope for – in theory.
In practice it depends on the people on all sides; voters, regulators, lobbyists and government
officials to make it work; and though they will never agree it must be hoped that a balance can be struck
to maximize incentive throughout the market: investors, managers and workers. But it also necessitates
having decision makers in government who are more intent on the goal of incentive maximization than
they are in achieving power and longevity for themselves, something that is unlikely to occur unless the
voters understand the ultimate objective of the greatest good and how it is possible to achieve it. In
short, I have returned once again to my favorite themes: knowledge and ignorance, particularly of the
basic tenets of economics, something sorely lacking throughout much of the world; and willingness to
work together through compromise for a balanced solution.
And therein lies the basic problem and the ultimate challenge. There is no sweet spot, a perfect
balance once achieved to hold on to. It is more of a short period pendulum swing, a little bit this way and
then a little bit back, without interrupting the rhythm of the swings. It can be achieved, because we have
achieved it, more or less, and with quite a bit of difficulty and more than a little pain. Will we continue to
do so? We will find out.
Since early in the history of philosophical thought there has been a dichotomy: the greatest good for
whom? And how is it achieved? Without delving into the details of general versus selective good it is
useful to repeat the obvious, that left to our own devices the good we achieve will not be equal – and for
many reasons, which, also, we need not belabor at this point. But however we approach the subject it
has to be observed and understood that the efforts of some make things better for all, and, of course, the
efforts of others make things worse for all, whereas the majority of us do well just to take care of
ourselves and our own.
Today nothing has changed much and the dichotomy continues to offer the same challenge: to
balance individual good with collective good. What it comes down to is providing an environment that
encourages individuals to make an effort that, while taking care of themselves also helps all collectively
to live better. It is a delicate balance. Too much individuality and those that can will tend to try to take it
all for themselves; too little individuality and those that can won’t bother and all will suffer. Then there is
another segment that no matter what will sit back and take from all the rest. What is the secret?
Strangely enough perhaps it really isn’t a secret, but it is a very difficult challenge.
Basically people will work according to their ability when there is something in it for them; and the
more ability they have the more they are able to contribute. And the more they are rewarded for whatever
they contribute, the more effort they are likely to expend in the pursuit of it. We all know there is more to
it than that: luck, connections, opportunities all figure in, but incentive is the driver. On the other hand
those that either cannot or will not expend the effort, or when they do do not achieve results, are envious
of those that do. This inequality is part of the human condition and all history, and all government, has to
do with dealing with this condition. And of course we must also recognize that in this pursuit things are
not and never will be entirely fair.
Unfortunately that being the economic point of view, many either don’t agree with it or fail to look that
far. Specifically they are focused on a result and assume it can be achieved if people want it to be
achieved, that is, they don’t accept the above human condition. Good, as John Stuart Mill saw it, “is the
greatest good of the greatest number.” Jeremy Bentham agreed but added a criteria that it should
include that the number of people affected by an act is also an issue. Extrapolate that to the greatest
good for the greatest number of people in terms of living conditions and the arithmetic is easy: since
there are more with less than with more, we take from those with more, give it to those with less and we
have achieved the greatest good for the greatest number. It is so simple. But it doesn’t work because of
that irritating little human condition. When you take away the incentive from those that contribute most
robustly, they contribute less robustly, and what is demanded of those who are less able to contribute?
Nothing. The net result is that less is contributed and there is less to distribute.
That, however, is also simplistic because merely having wealth makes creating wealth easier, and
not having it makes it far more difficult to achieve. Or stated economically it takes money to make
money. We have certainly seen the extremes historically. In a winner take all environment (unbridled
capitalism) losers lose their incentive to try – beyond subsistence. In an equal distribution environment
(communism and to a lesser extent socialism) incentive is taken away from everyone. So what is
required to achieve the greatest good for the most? Maximization of incentive – for all. And how is that
accomplished? Ah, there is the essence of the challenge; balancing incentive for the achievers and
incentive for those whose achievement capacity is less is a matter of continual battle over the details.
And the difficulty is clearly in the details, for modern commerce is built upon myriad decisions at an
almost infinite number of levels to maintain the balance. So who makes all these decisions?
History tells us, over and over again, that the only practical way for those decisions to be made is by
the free market – where incentive resides. The alternative, for government to make the decisions,
presumes government is capable of doing it, that is, has the knowledge to do it, and that it has the
detailed capacity to do so, which it does not. But there we are again at the extremes, and the success of
the powerful American economy has been a balancing of the pure free market capitalism with a
minimum of government adjudication, referred to as regulation. Regulation of course poses its own set
of problems: knowledge of or bias among regulators and the pressures of democratic republicanism.
The first is handled by recruiting regulators from business and listening to knowledgeable lobbyists.
Both suffer from human nature and self interest. Decision makers are prone to both and so are voters.
Our system appears to be the best we can hope for – in theory.
In practice it depends on the people on all sides; voters, regulators, lobbyists and government
officials to make it work; and though they will never agree it must be hoped that a balance can be struck
to maximize incentive throughout the market: investors, managers and workers. But it also necessitates
having decision makers in government who are more intent on the goal of incentive maximization than
they are in achieving power and longevity for themselves, something that is unlikely to occur unless the
voters understand the ultimate objective of the greatest good and how it is possible to achieve it. In
short, I have returned once again to my favorite themes: knowledge and ignorance, particularly of the
basic tenets of economics, something sorely lacking throughout much of the world; and willingness to
work together through compromise for a balanced solution.
And therein lies the basic problem and the ultimate challenge. There is no sweet spot, a perfect
balance once achieved to hold on to. It is more of a short period pendulum swing, a little bit this way and
then a little bit back, without interrupting the rhythm of the swings. It can be achieved, because we have
achieved it, more or less, and with quite a bit of difficulty and more than a little pain. Will we continue to
do so? We will find out.
The Greatest Good