mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA
A catalogue record for this book is available from the British Library Library of Congress Control Number: 2008943095
ISBN 978 1 84720 047 1 Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Contents List of figures and tables Preface Acknowledgements 1 2 3 4 5 6 7 8 9
Towards the economics of hate The quiet and peaceful world of microeconomics (QPWM) Why is hate like raspberry jam? Hatred in conventional microeconomics Widening the economic approach to hate Applied hate in the material world at the individual level Hate in the air: the economics of psychic possession Phobias, -isms and schisms: group hate Is conflict resolution theory relevant? Is there a policy conclusion?
Income and substitution eﬀects for hate as a consumption good Income and substitution eﬀects for hate as a full-time means of support Backward-bending supply curve for hate Edgeworth–Bowley box diagram Hate code market Hate code market: alternative equilibria The hate nexus Dyadic hate functions Psychic production function Hate club membership function Conflict resolution production function
18 20 22 27 55 56 63 89 107 127 141
TABLES 1.1 4.1 4.2
Definitions of hatred and malice Hatred-relevant emotions and actions Hating self and hating others options
7 64 69
Preface There is little literature which directly links economics with hate. Some literature on hate mentions economic factors but it is not usually an economic analysis; rather some factor such as unemployment is brought in on an ad hoc basis when other explanations are found wanting. Paradoxically there is a strong economic basis to many discussions about hate. Hate is treated as a commodity with a price that can be controlled by measures that eﬀectively increase this price, whether these be longer prison sentences or tighter security measures at airports to impede terrorist bombers. In this book, I seek to explore the dimensions of hate as a commodity from a wider economic perspective which draws critically on research in other subjects.
Acknowledgements I would like to thank Matt Pitman at Edward Elgar for encouraging me to write this book. Also colleagues in many institutions who are too numerous to mention for providing relevant material. I have used some small parts of my previous publications, ‘Wiccanomics’ (Review of Social Economy, 2005a), the chapter on suicide in Bowmaker (2005) and The Economics of Sin (2002b).
Towards the economics of hate
It might not be obvious what economics has to do with hate. Let us begin that discourse by looking at the deliberations in the inner circle of the Nazi Party two days after Kristallnacht. As part of the discussion, Goebbels suggested that Jews might be excluded from sleeping cars (on trains) that contained Germans. He proposed that they might then be forced to sleep in the corridor. The following discussion is then reported to have taken place: Goering: In that case, I think it would make sense to give them separate compartments. Goebbels: Not if the train is overcrowded? Goering: Just a moment. There’ll be only one Jewish coach. If that is filled up the other Jews will have to stay home. Goebbels: Suppose, there won’t be many Jews going on the express to Munich, suppose there will be two Jews in the train and the other compartment will be overcrowded. These two Jews would then have a compartment all to themselves. Therefore, Jews may claim a seat only after all Germans have secured a seat. Goering: I’d give the Jews one coach or one compartment. And should a case like you mention arise and the train be overcrowded, believe me, we don’t need a law. We’ll kick him out and he’ll have to sit alone on the toilet all the way. Goebbels: I don’t agree, I don’t believe in this. There ought to be a law. Further there ought to be a decree barring Jews from beaches and resorts. (Quoted in Fischer, 1998, p. 285)
This leads on to an even more surreal discussion about trying to prevent Germans coming into contact with Jews while wandering through the forest. The allocation of sleeping car slots between two diﬀerently privileged groups where one group is thought to incur costs from contact with the other is an economic problem. Interestingly there is no record of anyone proposing higher prices for Jewish consumers, notwithstanding the hefty sequestration of Jewish assets by Nazis during this period. The lack of such a suggestion may perhaps give us an important insight into the essential nature of hate. Here are six statements about hatred: 1. 2.
Hatred is the most extreme emotion (if it is an emotion). Expression of hatred is more likely to provoke extreme social disapproval than expression of other emotions. 1
3. 4. 5.
The economics of hate
Displays of hatred exhibit more irrationality than displays of other emotions. (2) is due not so much to (3) as to fear of the consequences of the action of a hateful individual. With respect to (2) and (4) people are generally less likely to dismiss displays of hatred as temporary aberrations that will settle down than they are other emotions such as anger. Once formed, hatred is not easily diﬀused or deflected into ‘safety valve’ outlets.
Now you have read these you might like to consider the extent to which you agree with them as it provides a frame of reference for what follows. We will return to debate these propositions when we get to Chapter 4. For the moment, let me briefly expound on each. 1.
The claim that hatred is the most extreme emotion is founded on the virulence of its expression in terms of both intention and actions such as murder, mutilation and other forms of ruining or devastation of lives. It might be claimed that love shares this status. However, whichever of the regular five concepts of love (see Cameron and Collins, 2000, pp. 5–6) we adopt, they do not lead to very extreme outcomes unless, by being thwarted, they morph into hatred. We must immediately qualify this by saying that, where hatred is shared in a group (Chapter 7) towards a common goal then it can bring strong approval. Examples of this are attribution of heroic status towards extreme acts of hatred in the form of murder of the hated individuals. Where a specifically focused hatred is deemed non-acceptable it invites more censure than other forms of behaviour. To some extent this is a tautological remark as we define (see Table 1.1 below) hatred as something more than other forms of disliking or non-acceptance of others. As this is a short introduction, I will defer any in-depth discussion of rationality and stick to the idea that non-rational behaviour is that which may be self-defeating. If we want to be blunt about it we could simply call this ‘stupid’. Some would claim, with reference to statement 1, that love inspires extreme displays of irrationality. This is disputed further in Cameron and Collins (2000, Chapter 3) where many apparently strange customs and activities are explained in terms of rational utility-maximizing behaviour. That is not to say that some love-inspired choices might reasonably be deemed irrational. It is diﬃcult to establish objectively, in any empirical way, that hate generates a more substantial volume of self-defeating activity than love but
Towards the economics of hate
we can appeal to the casual evidence, such as the fact that love does not promote riots and wars. Returning to the love–hate nexus discussed with respect to statement 1, hate inspired by love may be a potent source of irrationality – for example the jealous lover who murders the person involved with the object of their aﬀection. Economists such as Glaeser (2005) will, of course, claim that hatred is susceptible to rational choice analysis. Fear of the consequences of hate can be explained in terms of rational behaviour. The individual involved in animal-using industries who finds paint daubed on their house by protesters may reasonably take this as a proxy for escalation of behaviour which may lead ultimately to extreme physical violence. Society, collectively, has reason to condemn displays of hatred due to the cost potential of the implied threats. Hence, we have the situation of rolling waves of legislation (see Chapter 9) to protect various groups from the consequence of hate. Some of this is economically based, as expressions of hatred can take forms which are extremely disruptive to trade. To some extent, the issue of the sustainability of expressions of hatred takes us into the distinction between hatred and anger (see Barad, 2004; Zizzo, 2004) which will be discussed later. An expression of anger which is not accompanied by force or credible threats of force might be dismissed as temporary. That is, people will say the person will calm down once they have expressed their feelings. However, what we would normally consider to be hatred we would expect not to abate, as by definition it implies something sustained. The prolongation could be because a person, or group, can not obtain satisfaction by altering the circumstances underpinning the hatred. For example, those suﬀering under the rule of fascist dictatorship have no reason to stop hating the dictator. If the hatred is embedded as a form of capital in the hater then the hatred may sustain long after the dictator is removed or the individual has removed themselves by migrating. Diﬀusion of states of emotion into ‘safety valve’ outlets again takes us into the anger/hate interface. The concept of ‘safety valves’ is easily understood. Let us imagine a son has had a vehement disagreement with his father. The father may storm oﬀ into a public house and vent his rage verbally with friends in similar situations whilst the son repairs to his bedroom and plays some corporate US rock music of the ‘I hate my parents’ variety. Neither of them goes on to poison, maim or covertly electrocute the other. This might be attributed to the beneficial eﬀects of their safety valves which might thus be deemed to have added to the welfare of society. But of course, we could say this only happened because they were angry and did not really ‘hate’ each other. If
The economics of hate
they ‘really’ hated each other would any safety valve style commercial product or social institution have worked?
OBJECTIVES OF THIS BOOK This book begins with the idea of studying hate in a general way. We then move to the concept of studying it from an economic point of view. Aside from the work of Glaeser (2005), there is no work in economics with the word ‘hate’ directly in the title although numerous works, which will be discussed in the following chapters, have some more indirect bearing on the topic. Perhaps more surprisingly the study of hate has not been established as a direct concern in other disciplines such as social psychology, sociology or politics. Only in the last five years or so have attempts been made to establish hate as a field of study. During this time two independent networks of scholars have sprung forth – the Wickedness Network and the Hate Studies group. Possibly the events of 9/11 in 2001 have inspired these formations. The formation of the Hate Studies group (centred at Gonzaga University in Washington State) which publishes the Journal of Hate Studies claims a more direct inspiration from the conscious decision of white supremacist groups to settle in areas of the USA where there were few ethnically despised populations. Both of these groups are interdisciplinary in nature. The Hate Studies group explicitly mentions economists in its website introduction although the papers published in its journal seem to come primarily from social psychologists, people of a religious persuasion and some people who would fit comfortably into the longer established field of ‘Peace Studies’, such as scholars on conflict resolution. The Wickedness group seems mainly to consist of people interested in literature, philosophy and religion. Other specialist social science niches of relevance are beginning to spring up such as the area of disgustology and the field of Humiliation Studies as shown in the Journal of Human Dignity and Humiliation Studies, and research groups on Forgiveness – we might note that the 63-page bibliography of articles on Forgiveness by Scherer et al. (2004) has only one item with hate in the title, by Baures (1996). The two areas of concentrated scholarship most relevant to hate as a general topic are the bodies of work on the introduction of the category of ‘hate crime’1 (discussed in more detail in Chapters 7 and 9) and on modern warfare and terrorism. Discussions in the warfare and terrorism areas do tussle with the relevance of economics to behaviour. For example, a recent textbook on terrorism (Weinberg, 2005) discusses, in Chapter 2, the history
Towards the economics of hate
of terrorism in terms of there being three waves. The third wave in which we currently live is depicted as largely arising from non-economic factors, in that it is not inspired by resource conflicts but by primarily religious factors. This issue is pursued further in the highly celebrated work of Stuart J. Kaufman (2001, 2006) who explicitly rejects both rational choice explanations of ethnic warfare and the ‘ancient hatreds’ view, which is said to have influenced Bill Clinton into thinking nothing could be done to ameliorate the problem. Kaufman argues for a shift in focus on to the central importance of myths and symbols. This is a position in keeping with the approach developed in Chapter 4 of this book. The element of ‘conventional’ rationality is still present, however, when we come to Chapter 7 where the issue of entrepreneurial management of myths and symbols is considered. Although Stern (2003–4), in the Journal of Hate Studies, calls for an interdisciplinary approach to the study of hate, there is no sign of such a thing flowering around us. Instead, the main publishing action in the field seems to be on hate crimes. One possible justification for an economic approach of the ‘wider’ economics type taken in this work is that it may provide the bedrock for an interdisciplinary approach. In exploring the contours of an economic approach in this work, I shall at points be drawn into critical reflection on some aspects of the work within the above-mentioned interdisciplinary umbrella groups. First, we need to be clear what we mean by economics. The key elements in economics are the notions of utility-maximizing individuals who are subject to constraints on the basis of resource scarcities which give rise to the idea of costs. Thus the statement above that mainstream economists would find most controversial is number 3, as economics disposes us to think of all behaviour (including rape, abortion, murder, drug addiction) (see Bowmaker, 2005) as rational. The majority of this book is devoted then to exploring the relevance of rational choice economics to the study of hate. I am not claiming that the discipline of economics provides an all-embracing universal theory of hate. It is clearly necessary at times that we engage in cross-disciplinary activity, particularly with respect to psychology. Apart from the determinants of the supply of hate, economics may also bring light to bear on the appraisal of the costs of hatred. An obvious illustration of this is the studies appearing on the monetary costs of 9/11 (for example Bram, Orr and Rapaport, 2002; Bram, Haughwout and Orr, 2002) but there have been studies of other areas such as the Basque region (Abadie and Gardeazabal, 2001). Studies of the costs of war and terrorism will implicitly include economic estimates of the costs of hate although this is likely to be underestimated if the psychological suﬀering of living under war and terrorist epochs is omitted (see Frey et al., 2007). In everyday
The economics of hate
commerce we also have such figures as the estimated 19–40 million working days lost in the UK due to bullying (House of Commons, 2003) as some kind of index of the magnitude of hate. The principal objective of this book is to provide input to thinking on a very hot contemporary policy problem – the increasing volume of anti-hate legislation being passed to protect vulnerable and/or outraged groups. This is very wide-ranging, from protection of people persecuted on the grounds of gender, race and religion, and those business or academic activities that lead them to be targets for organized hate groups. Recently there has been considerable debate about the protection of people’s identities from mockery and comedy. Like the combating of pollution, policies towards the regulation of hate are themselves additional costs of the primary activity. One is entitled to question whether any package of hate regulation measures is eﬃcient. In the extreme situation, hate regulation policy might be counter-productive – that is, it could inspire or provoke more hatred towards the protected group. Consideration of this possibility and the general issue of the overall eﬃciency of hate regulation policies needs to be informed by thought about the underlying nature of hating emotions.
HATE AND ECONOMICS, ECONOMICS AND HATE So far we have not defined hate, choosing instead to proceed on the assumption that everyone knows what we mean. It is time to remedy this. Table 1.1 gives a very brief and selective list of definitions, with the definition of malice (where given) as comparison point. The first definition is from an economist, and the rest are from general reference works. We will refer back to this table later but for the moment it is worth noting that Glaeser and Bierce appear to be defining emotional states other than hate. In the former case, malice and, in the latter case, jealousy/ envy. Dictionary definitions do not distinguish between hate and hatred, instead giving hatred as part of the definition of hate. There is a tendency to represent malice as active, and hatred as potentially only passive, that is not represented in actions towards the disliked entities. The origins of the use of the word ‘malice’ in English are from the word ‘bad’, whilst hate is supposedly from an Old English word ‘hett’ of Germanic origins. For the purposes of this book, we will use a wider definition of hate than that used by Glaeser. That is, we will take hate/hatred to include both the willingness to incur costs to harm others and the expression of violent dislike towards others. In the modern world, the Internet has spawned many virulent expressions of hatred which are not directly consummated. The best example of fully formed non-consummated hatred is
Towards the economics of hate
Table 1.1 Definitions of hatred and malice Source
OED OED Cassells Cassells
Hate Malice Hate Malice
Devil’s Dictionary (Ambrose Bierce)
‘willingness to sacrifice personally to harm others’ ‘willingness to pay personal costs to harm others’ ‘extreme dislike or aversion, hatred’ ‘active ill will’ ‘extreme dislike or aversion, hatred’ ‘the desire to harm others deliberately, active malevolence’ ‘a sentiment appropriate to the occasion of another’s superiority’
the ‘idle’ death threat, that is one which is not followed up with any action whatsoever. There are individuals who have received many thousand death threats by email (such as Mike Berry, the English ‘scambaiter’ who exposes Nigerian email conmen by conning them into posing for ludicrous pictures to be posted on the Internet), without the senders making any attempts to do anything which might lead to the death of the person in question. Is economic analysis relevant to any of the manifestations of hate? Let us consider further the non-consummated death threats, via email, experience. A rational choice model of economics would predict that the provision of widespread Internet facilities should lead to an increase in the number of death threats. One could argue that the threatening individuals conform to even the narrowest definitions of rationality as they are likely to be conducting the rest of their lives in an entirely ‘normal’ manner. We can make this same point about many racists, homophobes and suicide bombers. Issuing threats brings them utility in feelings of revenge and the satisfaction of scaring others. The harm to others does then fall within the Glaeser/dictionary definitions. However, the very limited personal cost involved in sending an email in a situation where there are very few likely cost risks (the police are not that likely to seek out and arrest individuals involved in serial hate email campaigns) means that the serious personal sacrifice element is not present. So, we may accept, under our definition of hate, that serial hate campaign emailers are indeed exhibiting hate and not some lesser status negative emotion such as anger. Given this, the prediction of increased non-consummated hate is largely driven by falling costs of production of hate. It is easier to find email addresses of individuals
The economics of hate
in order to reach them than it would be to send letters. It is less physically and monetarily costly to send an email than it is to send a letter. There are further economies of scale in blanket threatening of a collective of individuals – for example all members of an animal-using corporation or all the known abortion doctors. The wider economic issue is whether the culture created by non-consummated hatred ranging all the way from death threats down to vehement condemnation of celebrities, on websites such as amiannoying.org, creates a form of negative social capital which may breed an increased propensity for consummated hatred in general, that is not just towards those regularly vilified in typical non-consummated hate forums.
METHODOLOGY Mainstream economic methodology has been identified with logical positivism following Milton Friedman’s 1953 essay which diluted and simplified the doctrines of Karl Popper for a wider audience. It is fair to say this is still the dominant core methodology, notwithstanding assaults from an ideologically wide range of alternatives such as Austrian, post-Keynesian (critical realist), Marxist (old style), Institutionalism, social economics, autistic economics and feminist economics. The key to understanding the Friedman version of logical positivism is the role of empirical testing. Empirical testing matters because economics is seen as a science, not a subdiscipline of history or of moral philosophy as it was considered at various times and places long ago. Testing is of course challenged in philosophy of science but the bread and butter methodology of economics persists with the old-fashioned notion of ‘hard’ laboratory science. An empirical test is not to be a mere test of association between variables as that would render it mere statistics and not economics. It would be dismissed as ‘measurement without theory’. Rather, testing in economics is meant to be based on theories or, more usually, theoretical models. Thus we are testing some kind of hypothesis. For example, we have just discussed informally the hypothesis that increased Internet provision will lead to a bigger reservoir and expression of hate in the world. Testing this hypothesis properly requires data. Once the hypothesis has been tested, we look at the results, which are usually based on a number of strong (untested) assumptions about the properties of the data-generating process. The scientific research community then comes to some kind of agreement about how strong support for the hypothesis is based on tests of statistical significance and judgements about the adequacy of the data.
Towards the economics of hate
In the worst-case scenario the hypothesis has to be deemed to be rejected in favour of the null of no relationship between the variables suggested by the theoretical model. Friedman’s argument is that we should not reject the theory because of one such instance nor should we accept the theory if the opposite occurs numerous times. The approach is not one of verification or seeking ‘proof’ but rather of seeking out the absence of falsification. In an ideal world this should really involve improvement of the testing apparatus to rule out possibly contaminating factors and improved experimental design. Economists have long been noted for not coming anywhere near this ideal. If we wanted to be cynical we could say they have frequently engaged in data-mining – that is, repeated exploration of the same sort of data in the same sort of way with a deliberate intent to produce supposedly statistically ‘good’ results in order to enhance chances of publication. Despite attempts to improve the validity of data exploration, the discipline of economics still features quite a cavalier attitude to the quality of data. The major break with data analysis tradition in recent times has been the emergence of ‘experimental economics’ where subjects are usually paid and play games subject to instructions given to them by the researchers. Economists have not extended this approach to the study of hate although there are substantial precedents in the ‘laboratory’ style approach in social psychology experiments in the field, starting with the work of Stanley Milgram (1963) (see Harrington, 2003–4 for a review of such literature). Experimental methodology encounters some of the pitfalls in traditional positivist psychology research, particularly the endless exploration of a very limited sample of the population – to wit, students. In theory, research on ultimatum games throws up some relevant issues pertaining to hatred, but given that the study of hate is not the objective of these studies it is inevitable that they do not shed much light on it.
EMPIRICAL EVIDENCE ON HATRED How do we get evidence about hatred? Is this information of any use and is it of any use to an economic study? If hate is to be treated as an emotion then one can not reasonably expect there to be series of regular and reliable national statistics, as governments and agencies tend to measure tangible items rather than emotions. Opinion polls, one-oﬀ surveys and experimental studies can be used to provide some data on the hate emotion although continuing surveys often only deal with disapproval or anger and not full-blown hate. For example, 10 of the surveys that have taken
The economics of hate
place between 1983 and 2000, in the British Social Attitudes Survey (see Cameron et al., 2006), contained questions about the rights and wrongs of sexual relations between those of the same sex but nothing stronger than this on homophobia. We could look instead at the manifestations of hate. The statistics on these are, however, usually conditional on the hate activity acquiring the status of a crime, otherwise it is usually the case that no one will bother to record them. The most extreme recorded case of unidimensional hate crime would be the statistics on witch trials and executions which have produced estimates of many thousands of people (usually women) being killed in Europe between 1500 and 1700, especially (pro rata) in Germany and Scotland. The additional details about trials, methods of interrogation, and methods of execution from these records could be used to draw comparisons about the diﬀerential hate intensity in diﬀerent nations. Extrapolating this notion, one could draw on the statistics of time engaged in war, resources put into war and numbers of casualties in war as indicative of hatred. The obvious complication in war is that some of the activity will be defensive, and therefore can be used to measure the costs of hate but not the propensity to hate. Likewise, some individuals will be in a situation where they have little option but to engage in attempted murder of xenophobic or religious origins. The obvious problem with ‘hate crime’ statistics if they are to be used in any serious statistical analysis, is the diﬀerential selection rate over time and across areas. Further, there are also diﬀerences in the degree to which law enforcement agencies filter out attempts to report such activity or charge the suspected perpetrators. Even within an area where there is oﬃcial reporting like the case of homophobic incidents in the USA, the statistics have been very problematic. Burroway (2006) reports on the use of FBI statistics by anti-gay activists to claim that gays are not very victimized at all, and goes on to show how malleable these statistics are to manipulation, most notably because of the diﬀering requirements on reporting in diﬀerent states. One might just want to pause as preparation for Chapter 7 to reflect on the paradox of groups against something using the claim that it is not much of a problem as a rhetorical strategy to deal with it! Given all this, probably the most reliable source of data on hate is the court records of murders that have been attributed to hate origins, the most conspicuous volume of these being in the area of racial murder. Notwithstanding the various reservations just made about the use of data in this area we will at various times find ourselves discussing data and analyses of it (usually econometric). I do not, however, propose to provide large numbers of tables of incidents of hatred nor the detailed numerical results of other people’s statistical work. Engagement with empirical work
Towards the economics of hate
will be in the nature of critical reflection rather than attempting to make any use of parameter estimates that have been produced.
CONCLUSION This chapter has introduced the idea of studying hate in a general way and put forward the concept of studying it from an economic point of view. This is a big leap. Economics is not a subject concerned with hate. In order to explore how hate may be situated within it, we consider, in the next chapter, what kind of world view is implied by the discipline of Economics. As the book progresses, more in-depth discussions of the debates opened up above will be provided. The practicalities of perpetuating hate as a lone individual and as a coordinated organization will be explored with respect to such topics as animal liberation, homophobia, terrorism, workplace bullying and witchcraft. Ultimately, in Chapter 9, an analysis will be given of the recent trend, in developed economies, to pass a ‘patchwork quilt’ of specific issue hate legislation.
NOTE 1. What I mean by this is that the crime could not possibly be attributed to some other cause such as random physical violence or monetary crimes which might be attributed to hate because of the identity of the individuals involved.
The quiet and peaceful world of microeconomics (QPWM)
THE CONCEPTUAL IDEAL OF THE QPWM This chapter is a trip into the heartlands of the QPWM – the Quiet and Peaceful World of Microeconomics. It will quickly become clear why we call it peaceful. Quiet is often associated with peace. Quiet is a word which might be given diﬀerent meanings with respect to the core of microeconomic theory. Quiet is the opposite of noise. Some economists like to use noise as a technical-sounding term borrowed from engineers. They might talk about the share price for stocks in emerging countries being noisy. That is, in the sense of the ratio of ‘signal to noise’ which would be quoted as showing the degree of perfection of an audio system or an information spreading system. Markets send signals, economists like to say, in the form of prices. A sudden rise in the price of oil sends a signal that oil is becoming scarce. If it rises too much too often, or falls too much too often, then the signals are becoming noisy as the amount of incorrect information is too large. Quiet and peace are also words that might be associated with the concept of equilibrium as used in economics. Equilibrium is a state of rest in which there is no force for change unless an exogenous (from outside the system) shock occurs. It is fair to say that economists seem to be almost obsessed with equilibrium. In recent decades as the focus has shifted away from general equilibrium theory and competition, the field of game theory still shows a preoccupation with discovering equilibria that might be puzzling to the lay person. An economist might respond that there has been a lot of work on disequilibrium also but one could counter that this too shows an obsession with equilibrium. On the face of it there seems no reason as to why we might not then proceed to discuss the equilibrium level of hate. In the elementary textbooks of economic theory it is fair to say that one can get through the many hundred pages without finding any reference to anyone hating anyone or for that matter anyone loving anyone (bar the deleted book by David Friedman (1997) which has a chapter on romantic love, and the microeconomics text by Robert Frank (Frank and Bernanke, 2003) which has a chapter on altruism and thus might be said to be engaging with love). The 12
The quiet and peaceful world of microeconomics
most obvious reaction to this statement would be to say that this is not very surprising, as love and hate are not what economics is all about. Rather, it is all about interest rates, unemployment, prices, money, stocks and shares, international trade and GNP. This response of course implies that these things have nothing to do with love and hate. Since this is Chapter 2 of a book about the economics of hate, it would seem the claim is being made here that this is not true. To pursue this further, we need to delineate the world view that economists put forward. Let us be clear at the outset that I am to some extent in this chapter expounding a stereotypical or Weberian ‘ideal’ type for the purposes of situating hate in an economic model. Theoretical works, within a social science discipline, say many things by omission. The world view which is implied by the practitioners of the discipline has to be gleaned not just in what they say but how they say it, the context in which they say it and what they deliberately do not say in the process of saying what they do say. For example, it has often been pointed out that economists use words in a way which might appear to be innocuous but can be deemed to be laden with value judgements. Take the notion of ‘perfect competition’. Why is it perfect? The innocuous answer is that it is because it is a perfect state akin to the perfect vacuum – that is it is the ideal of the logical idea of competition. The criticism of this, as ideology, is that the word ‘perfect’ to the normal person means ideal or excellent in a normative sense and thus the accumulated weight of repeated use of the word gives credence to the superiority of the market form of economy. So why would we say that the world of the core economics textbook is one of quiet and peace despite the fact that it is depicting a universe of materialistic striving for profit? As implied above, the quietness of the economics textbook is arrived at by omission rather than design. The bald fact is that there are no emotions, in any shape or form, to be found in the economics textbook barring the very rare exceptions noted above. Even then, we could claim that when economists have engaged with emotions, they are not really doing so in a meaningful sense but just distorting emotions into an unrecognizable form in order to make them fit into the QPWM. In the QPWM, individuals interact in a narrow framework of markets – their reciprocity is thus not social or emotional. It does not matter who sells you your bread, meat or candlesticks. These are what we call goods or commodities, depending on your point of view. To the person in the street, these two ideas are probably equivalent. Most economists talk about goods and might see the term ‘commodities’ as having the faint ring of Marxism, given Karl Marx’s promulgation of the concept of ‘commodity fetishism’ as the driving factor in markets. Commodities also tend to be the word used by people of an anthropological bent. It does not seem to have led to any long-lasting repercussions, but the distinction was addressed forcefully
The economics of hate
in Gary Becker’s model of the allocation of the theory of time (Becker, 1965). Becker termed items which we buy in the market for a price, such as wood and nails, as goods. If we combine these with our time eﬀort inputs, or those of other people in the family, then we have engaged in household production which generates commodities. Although there is much literature on the economics of the family, and household production, no one has been particularly excited about the use of the word commodities per se. Anticipating Chapter 3, we may note that the basic port of entry for allowing hate into an economic model is to have it become a good or commodity. A person engaged in hate production could buy everyday household goods such as petrol and sugar and turn them into bomb-making equipment to kill an abortion doctor, animal-using producer or politician and so on. Likewise they could buy a video conveying violent racist or sexist content and take the time to consume it. Although the literature of economics says little about hate, it does not give any reason why these products would not exist. Nor does it say that there is any mechanism in markets which should tend to eliminate them. As implied, in the discussion in the last chapter, economic analysis might lead us to expect that there have been increasing volumes of hate displays in recent times. The ultimate object of production, in economics, is to increase the utility of an individual (or family or other group). Utility is a concept that economists first agreed to adopt as a general term, around 1890–1910, during the ‘marginal revolution’ in economics pioneered by William Stanley Jevons (in England) and Leon Walras (in Switzerland). We will have cause to explore utility more deeply, in the context of hate, in Chapters 3 and 4. For the moment, let us state the basics. Utility is an index of the satisfaction or well-being or welfare that an individual derives from their basket of goods/commodities. Originally, economists sought to measure utility in the idiom of weight or temperature. That is, as a number capable of meaningful ratio measurement. This use of cardinal utility reached its zenith in the Marshallian concept of consumer surplus where a money measure is assigned to the gain people get from being able to buy all units of a good at a constant price, rather than the maximum price they would be willing to pay. If we go back to the hateful bomb-maker, then we could suggest that their consumer surplus from petrol and sugar, both commodities being sold at a fixed price per consumer, would be higher than that of an otherwise identical person, as the value of the items is enhanced by the lethal potential unleashed when subject to a suitable process of production. That is, the market prices are determined by the marginal consumer who needs these products for fuel and sweetening, not by the added value as bomb ingredients. As economics became more mathematically formal, cardinal utility was progressively dismissed as ‘unscientific’ and therefore unacceptable
The quiet and peaceful world of microeconomics
as economics strove to attain scientific status. Economists have, however, been reluctant to give up the notion of measurable utility despite the obvious problem that it is very diﬃcult to believe that, for example, my utility today can be compared with my utility five years ago or that my utility can be compared with yours or that of a peasant, with bubonic plague, many hundred years ago. Attempts to measure utility keep rearing their heads. At various times we have had (amongst other more esoteric eﬀorts): ● ●
attempts to produce ordinal measures based on risk aversion (see Alchian, 1953) inspired by the development of the theory of games; the use of contingent valuation methods inspired by environmental research in the 1980s onwards – basically asking people to nominate losses and gains at diﬀerent stated bundles of situations; the current obsession with econometric work using surveys on ‘Happiness’ (see for example Ferrer-i-Carbonell and Frijters, 2004; Frey and Stutzer, 2002, 2005) using data and methods that would have been laughed at when economic theory was ‘going hard’ in the 1950s and when it went numerically ‘hard’ as econometric testing swept the profession.
Notwithstanding the above, the usual textbook approach is to present cardinal utility as a helpful heuristic to get across the derivation of the individual demand curve. Then we get told about the cardinal vs. ordinal utility distinction and are left with the impression that ordinal utility (as demonstrated in the indiﬀerence curve diagrams to be found below) is the more correct and scientific approach. Vital to this theoretical enterprise is the introduction of the notion that marginal utility, as opposed to total or average utility, is decisive in individual choice. Although utility is deemed to be immeasurable, in the textbook universe, we are given the belief that there is a law of diminishing marginal utility. There appears to be a contradiction here (but it does not really need to be faced) as no attempt is made to empirically validate the law of diminishing marginal utility. Diminishing returns run through the whole of economics. We find diminishing marginal productivities of capital and labour, when we move to the theory of industrial production. If we extrapolate this central proposition, of diminishing returns, then one thing we might expect in the field of economics of hate is diminishing marginal utility of hate, that is, if we proceed to treat hate as a conventional good/commodity and the hater as a rational consumer like all the rest of us. We shall have cause to question this in the next few chapters. For the moment, let us explain how it would be operational in the QPWM. A person sits down, let us say, to listen to the CD they have bought from a musical ensemble formed purely to promote extreme racist
The economics of hate
attitudes (such as the now defunct UK band ‘Dead Paki in the Gutter’). Despite the fact that they approach this with great enthusiasm, they find that each additional minute of the CD adds less to their total satisfaction than the previous minute. This does not mean they will get fed up, toss their racist CD in the bin, go into the next room, and watch Walt Disney cartoons and never consume another racist item. This takes us to the next section on the process of choice in the QPWM.
INDIVIDUAL CHOICE In the real world, an individual faces a potentially bewildering array of options meaning that their decision-making activity might be thought to be very diﬃcult to analyse clearly. The quickest way to cut through this is to make drastic assumptions about knowledge. Specifically, those individuals have accurate knowledge of all relevant items including their own tastes and changes in future prices and likely decisions of other individuals. This extreme simplification removes all issues of risk and uncertainty from choice. So let us visit the well-worn path of conceptualizing choice from an economics point of view. The basic model is that the agent (person, family, manager of a firm, whatever) maximizes their utility subject to constraints. Utility is, as argued above, not seen to be directly measurable in any kind of units. The ‘utils’ of a mathematical economics textbook do not exist. Notwithstanding this, and the textbook tales of diminishing marginal utility, the agent is able to maximize their utility by making an optimum arrangement amongst the options open to them. The dedicated racist thug who has a job, which aﬀords no opportunities for racism as such, will face substitution eﬀects against time spent in racist activities if their wage goes up. This is an illustration of the notion of ‘opportunity cost’. Time is money, and time spent at the weekend beating up the disliked group is forgone earnings. Granted, an individual at a point in time may have inflexible working hours, but over a period of time they could still exhibit their substitution eﬀect by switching to a job which provides more units of ‘leisure’ to input into the hate production function. Substitution eﬀects/ opportunity costs provide the rationale for anti-hate legislation. That is, such legislation will generate the following ‘costs’ to the would-be hater: ● ● ●
direct costs such as fines, prison sentences or curfews; indirect costs such as lost career opportunities; indirect costs of bad reputation due to wider knowledge of the hate attitude.