When asked about the current economic downturn (or the prospects of something much worse) one of the things I talk about in my replies includes some version of the relationship between income and satisfaction. I contend, for a variety of reasons, that if my family loses a certain amount of income due to the recession, that those income losses would overstate the severity of the “hit” to my family’s satisfaction.
I do not wish to address why I make that case here (think about the availability of substitutes, and overall wealth levels today as compared to people in the past, as well as the option value of our education). What I want to do is address the folks that are skeptical of me having such a position. I am happy to grant someone a disagreement. However, a good portion of the folks that reject my thinking out of hand also carry with them the belief that aggressive progressive taxation is important AND just. And one reason that they cite for this is that additional income does not make wealthy people much happier – or that an additional $1 of income makes a poorer person happier than that same dollar would make a rich person. So from a utilitarian perspective, redistribution of income can improve overall welfare.
But if someone were to argue strongly in favor of both positions, I would shake their hand, thank them for their time, and walk away … because you simply cannot logically hold both positions. Why? How can you argue that when income increases, money and satisfaction are not related, and in the next breath passionately argue that we need to do something about a recession because if incomes fall, then happiness and satisfaction WOULD be adversely affected. I suppose one way to weasel out of this inconsistency is to argue that economic growth only affects those folks with enough income so that their happiness is satiated, and that declines in economic activity only affects those that do not have enough income to make themselves really happy. But holding such a position opens up a fairly squishy and tangly can of worms. Perhaps we can talk about that in a future post.
But no one yet has made such a point to me (they have never thought hard enough about their beliefs to get that far along). So, for such people, economic issues are a matter of religious beliefs, and not any sense of reason. And I no longer engage people that cannot reason. I have a 3 year old and a 1 year old with similar “problems” and it is far more profitable for me to engage my daughter in a discussion of the tooth-fairy than it is an adult.