Economics of sacrifice and altruism

In 2007, I became too imaginative and extravagant when I saw a call for paper from the New School, New York, USA. The call was on behalf of the Human Development and Capability Association (HDCA) for the 2007 Annual Meeting of the Association. The call began with the famous mind-blowing statement of Keynes (The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.). I have been motivated accordingly to work on the income component of the Human Development Index with the ideas of sacrifice and altruism. My mind reached a state where there is no fear. Thanks to the statement of Keynes, I have developed a feeling that I may be right or wrong … but I have sufficient reasons to value what I am thinking. I wrote a paper: “Ability to sacrifice vs. propensity to absorb: a synthesis with the average and total principles in capability framework”  and presented it in the above mentioned conference.

Abstract: By making a logical foundation, the paper introduces new concepts like ability to sacrifice and propensity to absorb. The foundation is laid by combining basic principles and / or practices of Capability Approach with Derek Parfit’s framework on redistribution of resources. Parfit has beautifully elaborated the debate between the average and total principles and introduced us with his Utility Monster and a similar one imagined by Robert Nozick. These Monsters are based on sacrifice of resources (or whatever makes life worth living) from the better off groups in a society to the worse off ones. The paper projects the view that such redistribution of resources and the resultant outcomes are good or at least not bad for humanity. The ideas of ability to sacrifice and propensity to absorb are operationalised following appropriate procedures for 125 countries, and tested with the average and total principles.  The paper concludes with two paradoxes.

Citation: Majumder, A. 2007. “Ability to sacrifice vs. propensity to absorb: A Synthesis with the average       and total principles in Capability framework.” Paper presented at the International Conference on “Ideas Changing History” at the New School, New York, The United States, 16-20 September 2007.

Or

Majumder, A. 2008. “Ability to sacrifice vs. propensity to absorb: a synthesis in capability framework,” Artha Beekshan, 17 (2): 3-24.

The paper is available at:

www.capabilityapproach.com/pubs/Majumder07.pdf.

I am also enclosing a modified version of the paper here.


The “Prajapati Test” – a narrative from the great writings of Veda


(As above) I have been in search of answers to the questions like following for long:

… whether economics always deals with maximisation of utility or satisfaction

… whether a rational consumer always tries to maximise her or his own interest

… what would happen to ‘Rational Choice Theory’ if we become altruistic.

I have found some clues from recently developed literature on Capability Approach thanks to Reiko Gotoh, Paul Dumouchel and Marcel Henaff. I visited the Graduate School of Core Ethics and Frontier Sciences, Ritsumeikan University, Kyoto, Japan in the end of 2011.  I was gifted a book by Gotoh Sensei during my visit. Now I realise how precious the piece was for me!

In that book, Marcel Henaff (2009) presented the “Prajapati Test” – a narrative from the great writings of Veda, called Shatapatha Brahmana. The story in brief is presented below:

  • The first human being on Earth, Prajapati was unable to draw a distinction among the various spirits he saw in the universe and to separate demons from the gods.
  • Therefore, he offered them a feast of rich food.
  • Some started eating for themselves with gluttony and voracity.
  • Others did something quite different. They took the food with their hands and presented it to each other’s mouth.
  • Prajapati then understood that the latter were gods and were the ones that humans must admire and imitate.

The lesson from this zero-gain operation

If we observe this behavior with the eyes of the supporters of Rational Choice Theory, the demons are more rational and gods are stupid.

In another view:

(a) the gods affirm and confirm the fact that they exist for each other, and

(b) they want to express through the food that they eat the necessity with pleasure of being together, of being an organic and coherent group.

This is how and why we can be altruistic and move away from selfishness to reciprocal recognition to each other.

Now I understand what Amartya Sen (1977) tried to say to the supporters of Rational Choice Theory. As the theory does not allow one to think about others while maximising self-satisfaction, he calls its followers, in his well-known expression, as “rational fools”.

References:

Henaff, Marcel. (2009). “The Prajapati test: response to Amartya Sen”, in Against Injustice, Gotoh, Reiko and Paul Dumouchel (Eds.), Cambridge University Press, New York, pp. 66-70.

Sen, Amartya K. (1977). “Rational Fools: A Critique of the Behavioral Foundations of Economic Theory”, Philosophy and Public Affairs, 6 (4): 317-344.


Utility Monsters

Soon I will write about two Utility Monsters. One was imagined by Robert Nozick and the other by Derek Parfit. These Monsters are based on sacrifice of resources (or whatever makes life worth living) from the better off groups in a society to the worse off ones. Our view is  that such redistribution of resources and the resultant outcomes are good or at least not bad for humanity.The objection on concentration of resources in one individual entity may be averted if we shift our focus from individual well-being to social well-being.