Meconomics: Fear of Missing Out and Opportunity Cost

When you study economics, you get introduced to a concept called ‘opportunity cost’. The definition of ‘opportunity cost’ is:

“The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.”

For instance: “The opportunity cost of going to college is the money you would have earned if you worked instead.”

So – say that if you are choosing between two pairs of shoes in a shop – the opportunity cost of buying the one pair is the other pair of shoes that you did not buy but could have bought instead. This concept comes up very often in economics, where it is said that opportunity cost is what sets accounting apart from economics – because in economics, the opportunity cost is included in the cost of, for instance, running a business or making an investment.

Now – I had never considered the concept of opportunity costs within daily decision making. It was only once I had become familiar with the concept in my economics studies that I noticed how we actually include opportunity cost within decision making in our every day lives. Let’s look at some examples, starting with going back to the shoes.

Say that there are two pairs of shoes that each look really appealing – where you actually don’t want to choose between the two and if you had the money – you’d buy them both – but you don’t have enough for both, you only have enough for one pair. So – you have to choose – because in the end you reckon it’s better to come out with one nice pair of shoes than with none at all. So, you make up your mind and buy one pair – and, you know, these shoes are comfortable and nice looking, so you’re quite satisfied with your purchase. BUT – in the back of your mind – there is that other pair of shoes – the ones you didn’t buy and there’s this sense of being unsettled, because – what if you didn’t buy the ‘right shoes’? What if you would have ended up being happier or more satisfied with the other pair – now you’ll never know. That experience of feeling unsettled or uncertain, like a bad taste that kind of spoils your satisfaction with the shoes you bought – that is the opportunity cost of buying the shoes you have.

And it’s interesting – because you went in with no new shoes – and you came out with a new pair of shoes – but somehow it feels like you also ‘lost something’ – as though you had to ‘give up’ the other pair of shoes, because they ‘could have potentially been yours’. What we don’t realize is that: they were never actually ours. Rationally speaking, we couldn’t have lost them, because we never owned them. So – where does that sense of loss come from?

If you slow yourself down when deciding to buy shoes – you’ll notice that something plays a significant role in that department and that is: Imagination. As you decide on which shoes to buy – you’re imagining wearing them/owning them. You imagine wearing them to specific events, you imagine what others will say about the shoes while wearing them, you imagine how they will fit with your clothes and outfits. So – within your imagination, you ‘act as though’ the shoes ARE YOURS ALREADY. Then, when you step out of your imagination and have to now, in physical reality, decide which shoes to buy, it feels like you have to ‘give up one pair’ – because even though it was only in your imagination that the shoes were yours, you created in those fleeting moments of imagination/projection an actual emotional relationship of ownership with both pairs of shoes.

Let’s look at another example:

Have you ever heard someone (or yourself) say the following in relation to a potential partner that they are hesitant to go into a relationship with/commit themselves to, because: “What if he/she is not ‘the one’?” And “What if, as I commit to this person, I miss out on meeting my perfect partner?” Without going into a discussion about whether ‘the one’ or ‘a perfect partner’ or ‘a soulmate’ exists – if you look at the logic that is used in these instances: it revolves around opportunity cost – the fear of ‘missing out’ on all the things you can’t do because you’re committing to one option. In looking at these statements – it’s interesting to see that there is again a component of imagination – because, you only concretely have one potential partner in front of you – one real live person – but in your imagination there exists so many other ‘potential options’ or ‘one specific other perfect person’ that you might not have met yet. And – instead of making a decision about the one real live person standing in front of us and deciding whether or not to be in a relationship with them or commit to them – we allow ‘imaginary people’ to enter into the equation. And many times a relationship opportunity is passed up on, because of that notion of ‘what if he/she is not the one’ or ‘what if a better opportunity comes along and I miss it?’

There are many more examples, here are some common phrases that refer to opportunity cost:

“You can’t have it both ways”
“I could have done something else with my time, you know”
“I invested so much effort in this project and for what?”

In having defined the concept of opportunity cost and had a look at how we use this concept in daily decision making, we will continue in the next blog by looking at the consequences of this logic in our economy.







Other blogs in this series:
"Meconomics": ME-Economics

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Transcending False Dilemmas with Living Income Guaranteed – Part 3 – Tools of Intervention

This post is a continuation to the blog-posts:

Transcending False Dilemmas with Living Income Guaranteed – Part 1
Transcending False Dilemmas with Living Income Guaranteed – Part 2 – Sustainability vs Full Employment

Please read them first for context.




Example 2

‘The government has two kinds of policy at its disposal to correct market failures: fiscal policy and monetary policy – not using these policies means letting the free market dictate economic conditions.’

Most economists have come to accept that the free market is the ideal way of conducting economic activity – let market forces dictate prices and output and don’t try to control these forces, because they eventually create the best outcome for everyone. Most economists, however, have also come to accept that there are certain situations in which intervention is called for – to correct market failures and inefficiencies. Looking at only the national economy – the ways in which intervention happens, apart from declaring laws that set standards, minimum or maximum requirements, quotas, etc. – fall under the categories of either fiscal policy or monetary policy.

Fiscal policy refers to those policies that have to do with tax collection and government spending. In overly simplistic terms: if the government sees it is needed to increase output and income/employment – it can implement expansionary fiscal policy through reducing taxation and/or increasing government spending.

Monetary policy refers to those policies that have to do with the rate at which money is released into the economy. Here the government has no authority, it is the central bank in each country that influence interest rates to either contract or expand the economy.

Both kinds of policies, when used to achieve a certain goal, always have certain drawbacks in other areas. In other words, the usefulness of their application is always limited by the nature of the free market principles – where their use becomes a careful balancing of adjustments here and there to ‘kind of’ have ‘some’ movement in a certain desirable direction.

Problems such as poverty, deprivation, insufficient incomes and job insecurity, to name but a few, cannot be tackled directly from within this economic paradigm – to do so with the use of fiscal and monetary policies would in most countries require substantial interventions – and create substantial drawbacks, crippling the economy in other areas, and over time, undoing its own efforts. So – what can we do? This is just how it is, right? This is just the nature of economics, right? ‘Sorry for those fellas struggling to survive, but there’s really not that much we can do for you. Sure, in theory you have certain basic human rights, but looks like it’s just not gonna happen.’ In brutal terms, that is the attitude that has been adopted when it comes to our economies and the intertwined question of human rights.

At the Equal Life Foundation, we take the guaranteeing of human rights very seriously – in our view, they are not optional and they should not be seen as variables that are dependent on the grace of market forces that may or may not grant these rights at some points in time. Seeing that the conventional paradigm and available policies lack the capacity to ensure these rights, it became clear that it was necessary to step outside of this paradigm and dare to look for alternative measures that CAN guarantee human rights, yet won’t result in the crippling and destabilizing of the whole of the economy.

Providing a Living Income to those who are unemployed or retired through the profits of companies that are considered human rights companies and national resources companies is exactly such a measure. It’s not a fiscal policy, because it is not funded through taxation and it’s not a monetary policy, because it is not funded through printing more money. Fascinatingly – if a measure is none of those two – and it’s not purely free market… ‘well… well… then… it has to be communistic!’ Lol. Yet, it’s not communistic, because the economy will still operate according to free market principles, there will be no centralization of ownership – there will be decentralization – and the role for government would become smaller than it is now.

For more information about Living Income Guaranteed,
Read our Proposal
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Day 251: Living Income Guaranteed and Market Mechanics

This blog is in response to a comment made on Day 250: Economics Nobel Prize reduced to Laughingstock :
“Economics is about, or should be about, how to employ the available means in such a way that no want more urgently felt should remain satisfied because the means suitable for its attainment were employed - wasted - for the attainment of a want less urgently felt. This is what it means to economize: to allocate scarce resources to their most productive/urgent use. "Most urgent use" is determined by supply and demand as established on the free market. I agree with the criticism that empirical economics seem frivolous and misplaced. But I disagree with the conclusion of this article; the only way to make the world more wealthy is by increasing the ratio of capital to people through investment and savings. Wealth redistribution will only succeed in making us all equally poor. Well written piece, though, thank you for a thoughtful opinion.” - Matt Summers

“Economics is about, or should be about, how to employ the available means in such a way that no want more urgently felt should remain satisfied because the means suitable for its attainment were employed - wasted - for the attainment of a want less urgently felt. This is what it means to economize: to allocate scarce resources to their most productive/urgent use. "Most urgent use" is determined by supply and demand as established on the free market.”

The effectiveness of markets in being able to successfully allocate resources to ‘their most productive/urgent use’ is dependent on how effectively the market is able to capture supply and demand signals. Here, we currently have a problem as not everyone has an equal opportunity to access the field of the free market and cast their demand / signal their need. Access to the free market is restricted, and the only way to gain access is by having a ticket – where one’s ‘purchasing power’ is representative of such a ticket that will grant you access.

So long you do not have the money / financial means to back up your demands, your demands will fall on deaf ears and not be catered for. Alternatively, depending on the scope of purchasing power available to you, your demands may only be catered for partially, as you are unable to ‘validate’ or ‘redeem’ all of your needs into demands due to the size and scope of one’s purchasing power – and thus the free market will only pick up one those demands/needs that are backed up by purchasing power, while not registering others.
With not everyone’s demands in effect being picked up by the market, we get a distorted view and picture of what we believe is wanted/needed - and use this distorted picture as a map to allocate scarce resources. To actually be able to direct and allocate resources to their most productive and urgent use, we require a lot more information – information that is missing and not being received simply because not everyone has the capacity to validate their demands through purchasing power.

Whether we like it or not, we currently live in a world with huge levels of income inequality^[1] and thus purchasing power inequality – where there is an inverse relationship existent between the size of purchasing power and the amount of people who have purchasing power.
In terms of the mechanics of Supply and Demand, this structure gets translated into the market receiving a big amount of information about the demands of a few people, while receiving little to no information from the majority of the people who have smaller to no purchasing power.

Within providing a Living Income Guaranteed, the goal is not to ‘equalize’ the entire purchasing power structure – but merely to give those at the bottom / those who do not have access to the market mechanisms -- the chance to be heard and recognized within the market. Providing a Living Income Guaranteed effectively provides everyone with a base amount of purchasing power, so that at a minimum everyone can effectively signal their demands to be able to achieve a dignified living standard.

“Wealth redistribution will only succeed in making us all equally poor.”

Here I will assume that your statement is based on the same logic Nozick follows, where he perceives a problem in redistribution leading to disincentive for the productive members of the economy who would then produce less and less until they cover only their immediate needs and having no ‘surplus’ to redistribute.
In terms of the Living Income Guaranteed proposal, where we want to ensure that those who are unable to sustain themselves financially through providing them with a Living Income – we are not looking at a massive movement of redistribution. In terms of the capital and wealth that is available within the world, it only takes a small fraction^[2] being moved from top to bottom to give the majority of people the necessary ‘bump’ to be able to realize a dignified living standard for themselves.
There will thus still be a wide range of incomes, a wide range of competition and more than enough incentive to be innovative and keep producing.

A more drastic change will rather be seen within the market system within the mechanics of supply and demand being able to capture a lot more information about the needs and wants of people – which will provide society with more effective and accurate guidelines as to where resources should be allocated for their most productive/urgent use. The biggest change will be seen in the living standards of people and the actual realization of having everyone’s fundamental human rights secured.

Here, we can look for instance at the ‘ideal’ many people envisage when looking at the distribution of wealth in society. As you can see from the graph below, it still leaves plenty of incentive for those who are incentive driven to be productive and innovative – while at the same time allowing the bottom two quintiles to have sufficient wealth to live a dignified life (and to have any share of wealth at all for that matter! Since both the first and second quintile barely get registered on the ‘actual’/’current’ graph).

The Nozickian notion that redistribution will ‘leave us all equally poor’, is a very radical and extremist position, which takes on a very rigid and narrow view on human nature and values. It is assumed that we only care about ourselves and within this will go as far as compromising and sabotaging our own living standards just because we don’t want anyone else to reap benefits of ‘our work’ and ‘our effort’. There is no space for relating to one another and helping each other out – even when it comes down to something basic such as having everyone’s fundamental human rights covered. We suggest that humans are not the completely irrationally selfish beings Nozick assumes us to be, and that we are capable of compassion and can realize this compassion in the form of having everyone’s fundamental human rights secured.

“But I disagree with the conclusion of this article; the only way to make the world more wealthy is by increasing the ratio of capital to people through investment and savings.”

This statement is not necessarily true – as it assumes that we are currently experiencing a ‘lack’ in real capital and actual resources to effectively provide everyone with a proper living standard. The capital and the resources are already here – but through the market system operating at an inefficient level (due to our current supply and demand curves not capturing the full extent of demand as explained above), the capital/resources are not moving and not being directed towards those who need it most.

This is how we end up with scenarios of food dumping and having huge amounts of food destroyed and thrown away parallel to having high levels of hunger and starvation in the world. This is simply because our economic system is not sensitive and attuned to human needs and instead being irrationally driven by the profit motive. Economics and the market have become all about non-human elements as profit and numbers which have stopped serving the general human interest. By placing in a Living Income Guaranteed system, we are placing the human element back in the center of economics, allowing economics to be the life supporting instrument that it was destined to be. Economics and money are then here to support ourselves in living our life – and not the other way around where are lives are lived in the service of money and the economy, as how the majority of people’s lives are currently being lived.
It’s time to reverse the roles.
 
[1] See our blog on the World’s Lorenz Curve, which displays almost perfect inequality “Day 143: The Neo-Apartheid Era”
[2] See “World’s 100 richest could end global poverty 4 times over”, which is but one example of ‘how little it takes’ to make a ‘big difference’ for many

Related articles

• What is the Living Income Guaranteed?
• The Pope on Inequality and Unfettered Markets
• Day 251: Living Income Guaranteed and Market Mechanics
• Day 252: The Rich Be Cursed, The Rich Be Blessed
• Day 226: Living Income Guaranteed will Prevent Destruction of Homes

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Day 250: Economics Nobel Prize reduced to Laughingstock

“The award was for their work on the pricing of financial assets. Together they concluded that predicting the price of stocks and bonds in the short term is virtually impossible. But they showed it is possible to forecast the broad course of prices over longer periods, such as the three to five years.

Shiller was among those who warned in the 1990s that the run-up in stock prices as part of the Internet stock bubble was the result of "irrational exuberance." 

Last decade, Shiller made similar warnings about the run-up in U.S. home prices. That proved to be correct when the housing bubble burst and plunged the nation into the worst economic downturn since the Great Depression.”

http://money.cnn.com/2013/10/14/news/economy/shiller-nobel-economics/index.html?iid=s_mpm

Our expectations and standards of economics and economists really has reached an all-time low when we hand out Nobel prizes for work on how to improve one’s gambles in the financial market and for predicting failures in our economic system.

While we still haven’t mastered basic resource management, whereby we ensure that everyone has got access to those resources which safeguard human subsistence – we rather place value and importance on the speculative side of economics which only cares about profit and unsubstantiated growth at the expense of issues of real importance, such as eradicating poverty and starvation.

We entertain ourselves with the fringe side of economics while we haven’t even got the basics in place. Resource inequality and living standards disparity are skyrocketing. We’ve never had this many people living in poverty and we’ve never had this much wealth and ‘know how’ in the world.

And still, even though we have everything in place to create a world where everyone lives a life of comfort and dignity, we’re not moving the puzzle pieces in place to bring a better world into being.

Economics as a discipline has failed us in every way. Economics should be disqualified as a field from receiving any form of recognition of praise until we have put into place the basics as a foundation where everyone is able to secure their life. This should be the primary focus of economics, and so long primary structures and logistics are not in place to support life on earth – we shouldn’t bother indulging ourselves in fictional economics pertaining gamble and speculation.

If we really want to do something worthwhile in the name of economics, we would start with providing a safety net such as a Living Income Guaranteed, which practically ensures that everyone is provided with the means to live their life, without being deprived of basic necessities and living in a survival state of being - the way life is supposed to be lived.

To find out more about the Living Income Guaranteed, visit:

www.basicincome.me 

basicincomeguaranteed.wordpress.com

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Day 242: The EFF and Land Redistribution in South Africa

The EFF (Economic Freedom Fighters) in South Africa, under the leadership of Julius Malema, are placing some very cool points on their political manifesto. One of them is to nationalise resources, including financial intermediaries and the South African Reserve Bank. Reserve Banks being the institution that steers monetary policy in an economy should by principle be in the hands of the people and not an independent point where so-called experts apparently have the right to do what they think is best. Such points are too important to exclude from public decision-making.

Another point they insist on is the redistribution of land as land is so extremely skewly owned in SA at the moment as an outcome of colonisation and apartheid. To pretend that such huge disadvantage will simply 'fix itself' is delirious. Herein, the EFF wants a full audit to find out how much land is available and what it is being used for - where, land that is wasting away would be re-appropriated and put to proper use. Having this information mapped out would obviously be able to significantly speed up the process of equitable land distribution.

The problem comes in with the call to start occupying land as a statement of 'taking what's ours'.

"The position is that we are expropriating without compensation. We want that to be an act [of law], and before it becomes an act, our people should begin the process of occupying the land.”

Encouraging and enticing people to take the law in one's own hands will inevitably lead the country into disorder, chaos and conflict. Taking such route to increase the popularity vote without consideration for the repercussions is only a sign of immaturity and a lack of understanding of what true leadership entails. Within the international community no-one would take such leadership seriously as it undermines the very political and legal system that it is supposed to derive its legitimacy from.

http://www.news24.com/SouthAfrica/Politics/State-must-own-SA-Reserve-Bank-EFF-20130720

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Day 237: Planned Obsolescence becomes Obsolete with Living Income Guaranteed

During the war as countries no longer had access to their usual trading routes through obstruction like blockades and disrupted commercial agreements, industries had to start making the same things with inferior materials, simply because the usual materials which would ensure quality and durability were out of reach.

As time progressed, an interesting thing was noted. People who bought the products for which inferior materials were used, ended up having to buy the product again after a shorter period of time than what they were previously used to. While the use of inferior materials and the shorter life-span of goods was supposed to be a ‘negative side-effect’ of the war, it turned out to boost the economy as more people were forced to buy more goods to sustain their lifestyle.  After the connection was made between the inferior materials and diminished durability of goods leading to increased economic activity, it was made to be ‘a thing’.

People now started playing around and testing various materials and inputs and their durability within products to design and engineer goods with calculated life-spans. The use of inferior materials and diminished durability was no longer seen to be ‘unfavorable’, but necessary evils which our business men must employ to ensure the vitality and longevity of the economy. Planned obsolescence, had become an ethical thing to do.

Along with it, came also a culture of disposability. You could now use plastic cups, and plastic bags which you use once and then throw away. So that you can just keep on buying and disposing = it’s great for the economy!

While these manifestations may be ‘good for the economy’ in terms of manipulating consumers into extensive buying behavior, these manifestations by themselves obviously also bear great negative side-effects to the world outside of the economy. Re-producing the same products over and over simply to keep the buying going results in massive amounts of waste. Not only are we wasting tons of energy which we could have used more productively, we also end up with huge amounts of waste which accumulate in landfills and oceans. So while the economy may ‘thrive’, we are slowly but surely putting pressure on all other parts and areas of our society.

People are being put pressure on as they have to budget more carefully as goods who used to be once durable are getting a shorter and shorter life-span. What used to be a onetime big investment for which one had to go into debt, is now becoming a pattern where more people are living in debt and what they are receiving in return is of lesser and lesser quality.

Nature and the animal kingdom are being put pressure on as we pollute the environment and seize their habits for expanded production.

Our resources are being put pressure on as we exploit them at an unsustainable rate where they will soon be exhausted before we have put into place alternatives.

So all in all, the price we pay for our economy to thrive through planned obsolescence, is just not worth.

With the implementation of a Living Income Guaranteed as presented by the Equal Life Foundation, planned obsolescence itself will become obsolete within the economy.

Currently, we are placing our focus on ‘things’ to guarantee our spending, and thus to guarantee the spinning of the economic wheel. This, as we have seen, is simply ineffective and wasteful. Instead, it would make more sense to ensure spending by firstly ensuring that everyone has some level of purchasing power through having a Living Income Guaranteed in place, and secondly through placing our focus on human capital rather than repetitive buying patterns.

This practically implies that instead of depending on things to break for consumers to spend money in the economy, we move our focus to appreciating and rewarding human labour adequately and properly. This means that we can revert back a high standard of quality and durability, with prices that accurately reflect the amount of human labour that went into the product, so that we can establish wages from which people can live a dignified life.

At the moment, we are counting on low quality level goods and low quality standards of living through low wages for the economy to keep going. It does not have to be this way. If we re-arrange our values and priorities, we can still keep our economy going, but we can do it by directing our attention (and money) to quality, durability and human dignity.

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Day 234: Living Income to Cure the World of Crime

One of the objections that has been raised against implementing a Living Income Guaranteed to ensure that every person is secured with the means to support themselves - is that: one would be rewarding individuals without them doing any effort to create a better life for themselves - and so - implicitly, one is rewarding laziness.

This objection obviously does not consider the reality of the economic system we currently live in - where, motivation and one's best efforts are simply not enough to 'make it', let alone make a decent living for oneself and one's family. Those perceptions come from When the economy is in such a state as it is now - then, regardless of one's best intentions and efforts, one can remain stuck in a life of poverty and deprivation, simply because there are no sufficient jobs through which to earn money. Or, one could get a different degree to be able to have access to a particular job market - but this also implies that one requires to already have some sort of income to fund the studies. One can also not start one's own business, because that requires a starting capital.

So - what options are left? What are we encouraging when we say to a person with no means to support themselves that they are on their own and that they must devise their own way to make a living? Well - we are basically suggesting that they should become criminals. That is the one option they have available. And when the economy worsens and less jobs are created, more turn to crime - and when crime increases the economy suffers even more because no-one wants to invest in a country where the law is not enforced, because then there is no guarantee that the investors' interests will be looked after from a legal standpoint.

No - motivation is certainly not enough to make a decent living for oneself. But there is one thing - and if one possesses this one thing - a world of opportunity and possibility suddenly stretches out before one's feet. And that one thing is: MONEY. It only takes money to be able to feed oneself. It only takes money to be able to clothe oneself. It only takes money to be able to educate oneself. It only takes money to make the difference between disgrace and dignity.

Capitalism is a system of incentives and the implementation of a Living Income Guaranteed for all those who find themselves without a job - would be the perfect way to discourage crime - or otherwise, to stop encouraging criminal behavior. Because it is easy to say that those with nothing must just do some effort to improve their lives - but if we'd be in their shoes - having to provide not only for oneself, but a family too - with no support system to fall back on - what would you do? Would you sit at home watching your family suffer, or would you do whatever you can - even if it means stealing and robbing and conning - or making a deal with the 'wrong kind of people' where you get dragged into situations you never thought you would find yourself in - but what choice is there, there are mouths to feed, bills and rent to pay. How can we even call such people criminals? Wouldn't it be criminal to in those instances obey the law and not take one's responsibility within taking care of those around us? Then - isn't it criminal to allow a system where individuals are placed in a position where they have no means to adequately support their families within the boundaries of the law?

We're the criminals here because we make laws and follow economic rules without any consideration of what the reality, consequences and implications of these decisions entail.

We are the people and in any democracy - it is the people who are supposed to rule. And if that is not happening - then that is not the fault of those in power or of the corporations or anyone else's - but OURS - THE PEOPLE. Any democratic dispensation places the responsibility of what is allowed to happen in a country squarely on each and every single citizen's shoulders. So - be a citizen and take your responsibility - become politically involved so that you can stop the REAL crime that is being allowed. To create a crime-free and peaceful society - you're going to have to do something - and that is one simple thing: To give to another what you would want to receive if you were in their shoes. And this can at the moment practically be done through the implementation of Living Income. It is a workable proposal. It is a dignified proposal.

So - join the political party in your country that supports a Living Income or form your own - the time to act is here, nagging is just a waste of your breath.

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• Day 230: The Principle of Need and the Principle of Equality are One
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Day 230: The Principle of Need and the Principle of Equality are One

  
For context, also read:
Day 228: False Dilemma: Abuse or be Abused – Social Justice and Human Rights - Part 6
Day 226: Deserving Life or Death - Social Justice and Human Rights - Part 5
Day 224: Justice and Human Rights - Part 4 - Social Justice: Merits and Deserts
Day 222: Justice and Human Rights - Part 3 - Substantive Justice
Day 220: Justice and Human Rights - Part 2
Day 218: Justice and Human Rights

The question of who should get what has been answered by (most prominently) communists and socialists as: In accordance to people’s needs.

What is a Need?

When one researches this topic, it is fascinating to see how much fuss is being made on the concept and definition of ‘need’ – where it is claimed to be a vague and a ‘notoriously difficult to define’ concept. This is most fascinating, since ‘need’ is one of the most straightforward words that exists – and so, making it seem that it is not clear what need is, is merely trying to find fault so that one has an excuse to discard the principle altogether.

So, let’s humor everyone by showing what need is. When one lacks something that is causing harm to one’s well-being – then that something is a need. Herein – well-being is understood from a holistic perspective as including physical, social and psychological well-being. Why such a holistic perspective? Because all three dimensions of well-being influence each other. If one’s diet is inadequate, one will suffer on a physical level, but it will also affect one’s psychological well-being, since our psychological well-being is intertwined with the physical through chemical relationships. When we manifest psychologically imbalanced behavior, our roles and position in relation to others will be influenced, in turn affecting our social well-being.

Traditionally, the word ‘need’ has been approached to only consider the physical dimension – where well-being is not the goal, but survival is – where, as long as one has a basic minimum requirements to sustain oneself – such as clothing, shelter, food and water – one’s needs are met.

More recently the word ‘need’ has been expanded upon through making a distinction between ‘basic’ and ‘non-basic’ needs – where basic needs include the traditional meaning of the word as one’s most essential survival requirements and non-basic needs include things like education and healthcare.

Which definition of the word ‘need’ is valid and appropriate depends on our aspirations as living beings on this planet. Are we here to survive or are we here to live a life worth living? Considering the history of mankind and how much effort was put into researching and devising ways to enhance the quality of human life on Earth – it is safe to say that we as a race do not merely aspire to surviving and making it to the next day – we would all like to enjoy ourselves, fulfill ourselves, and make something of ourselves and our lives. Therefore, to only consider need in relation to survival is inadequate and a holistic perspective of need is appropriate.

To say, then, that the principle of need cannot be a basis for the distribution of goods because the word ‘need’ is not definable, is unacceptable.

The Principle of Need and the Principle of Equality

As discussed in Day 224: Justice and Human Rights - Part 4 - Social Justice: Merits and Deserts, the principles of justice include
- The principle of merit and desert
- The principle of need
- The principle of equality

Each one of these are regarded as different principles. However – in clearly defining what a ‘need’ is – we see that the principle of need and the principle of equality are one and the same. Because – if everyone is provided with all they require to live a life of well-being – then it stands equal to distributing goods in a way to provide each one with an equal quality of life – a life where each one’s well being is effectively looked after.

However, this is not how the principle of need and principle of equality are interpreted in academic thought. Distribution according to the principle of need has been interpreted in two ways.

In communist thought, the principle of ‘from each according to his ability to each according to his needs’ is put forward. Herein, what a ‘need’ is can be defined on an individual level – where each one ‘decides’ what one’s needs are.

According to the socialist tradition, some form of authority should define what ‘need’ is at a particular time. Their idea is that – once everyone’s needs are met – further distribution can occur on the principle of merit and desert. This view is in line with the popular ‘Basic Income Grant’ proposals

Both views are problematic.

I decide what my need is

When we rely on each one to decide what their needs are – we open the door for abuse. The temptation becomes too big to define a need beyond a need, entering the arena of pure desires and wants.

We have defined need in terms of anything one requires to live a life of physical, psychological and social well-being. Those are obviously things everyone would want. We can in fact ask the question: “What more could one want?” And it is exactly within this – the ‘more’ – that we are dealing with desires and wants. Desires and wants are things that – if given to one being, would deprive another being of one of their needs, and thus, cause harm. Desires can also typically not be given to all equally. Being famous is a desire, being better off than one’s neighbor is a desire, having power over another is a desire.

Within this scenario we cannot ensure social justice – because if we allow individuals to manipulate the system through including desires and wants in their ‘needs basket’, then harm would take place in respect of others’ psychological, social and physical well-being, and thus – defying the goal of ensuring each one with their needs.

The Basic Income Grant proposal

The basic income proposal is a nice attempt towards eliminating the dangers of the principle of merit and desert as discussed in the previous blog-posts – and so, we can say ‘a step in the right direction’. However – in the long run it is not sustainable. The combination of applying the principle of need and the principle of merit/desert, manifests inequality, where, for some, one’s needs is what one will be provided with, while others will be able to indulge in desires as well. We end up in the same position as when each one decides what their needs are – where the need of some will inevitably be sacrificed, in order to satisfy others with the desires they apparently ‘deserve’.

We continue this discussion in the next blog of this series.

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Day 228: False Dilemma: Abuse or be Abused – Social Justice and Human Rights - Part 6

Before we proceed with discussing the Principle of Need as a basis for social justice, as ‘what is a morally right and just way to distribute the goods and services in a society among the members of it?’ – more requires to be said about the Principle of Merit and Desert as the principle upon which we have built our current economic system, and this, simply because the gravity of the situation must be stressed and understood.

For context, also read:
Day 118: Justice and Human Rights
Day 220: Justice and Human Rights - Part 2
Day 222: Justice and Human Rights - Part 3
Day 224: Justice and Human Rights - Part 4 - Social Justice: Merits and Deserts
Day 226: Deserving Life or Death - Social Justice and Human Rights - Part 5


The Divine Power to Decide on Life and Death

When we say that one must deserve the support one requires to fulfill one’s needs in order to live a decent life in this world, we are literally holding people’s lives in our hands and stating that it is possible for us as humans to decide about life or death. Many Gods in various religions throughout time have been attributed this responsibility of power over life and death, but within accepting an economic system where merit determines value, we have come to now attribute this power to ourselves. There is a reason why this power has been linked with Divinity – because it requires an extreme level of insight, integrity, understanding and consideration to make such assessments. These are qualities we as humans don’t possess. We do not even understand our own mind, our own thoughts, our own experiences. We are not yet an Authority in our own Inner Realities, because that would require us to be fully Aware and fully Response-Able in every moment, where we have proven to ourselves moment after moment that we can be Trusted with Life. If this were the case, we wouldn’t have imaginary realms in our mind where we play-out our nastiness against others to prevent us from actually acting them out in this physical reality. We haven’t even understood that the nastiness of our thoughts, our secrets, our desires, our grudges, our spite – are showing us who we are and thus, indicate, that there is a serious problem with ‘human nature’. So long as we have a mind – we know one thing: We cannot be trusted with life. And yet – we’ve assumed the power to judge others, the power to judge their lives, the power to decide whether they should live or die, whether they should suffer or live in abundance.


We are All Accomplices in All Crimes against Life

There is a sense in which we feel that what is described above has nothing to do with daily human life and that we do not actually hold people’s lives in our hands, where we place their hearts on the one side of the scale and a ‘feather of justice’ on the other. We do not feel that this has anything to do with who we are and the life we live, because – obviously, it is not something that we actively and consciously do. And - we have an inherent belief and conviction that if we do not actively do something, then we didn’t do it – or that, if we didn’t have the intention of supporting such actions, then we didn’t. Yet, when we accept and allow a crime against life to take place – then we are part of the crime, we are an accomplice to the crime.

This notion of accomplice is contrary to what is commonly accepted under the term:

“An accomplice may assist or encourage the principal offender with the intent to have the crime committed, the same as the chief actor. An accomplice may or may not be present when the crime is actually committed. However, without sharing the criminal intent, one who is merely present when a crime occurs and stands by silently is not an accomplice, no matter how reprehensible his or her inaction.” [1]

Present or not – intention or no intention – when we within ourselves accept and allow the idea that it is ‘just’ and ‘righteous’ to place a condition on an individual’s access to the very things a person requires to survive – in the form of the principle of merit - then we are DIRECTLY responsible for ALL DEATHS resulting from lack. Why? Because, within ourselves, we gave permission for them to die - we gave the go-ahead for mass murder as soon as we thought ‘Yeah, it makes sense to have to earn one’s living’. It seems like such an innocent little thought, right? This is what I mean with: we do not even understand our own minds and we do not understand the consequences of our own thoughts.


Writing and Reading – our Responsibility with Words

When academics write out their convictions and ideologies in terms of what they envision to be the ‘just society’, they do not consider the power and implication of their words. Supporters of the principle of Merit and Desert did not in fact realize or even investigate what they were truly saying. And neither did those who studied their words – which makes it ironic to call it ‘studying’ – because all that happened within the ‘study’ is that either the information was merely copy/pasted into one’s own mind, or it was assessed whether one ‘likes’ the words in terms of the particular energetic experience that came up when reading the words, of which the student wasn’t even aware. That is why we say ‘it sounds good’ – not because the physical sound of the worlds have any particular harmonic qualities, but because when we read them, we ‘feel good’ – the words resonate with our own self-interest and our own hidden agendas – to which, most of us are oblivious.

And as soon as we feel good, we stop asking questions and do not see the implications behind the words, behind the thoughts – which is why we feel puzzled when we are shown what we are truly responsible for and why we do not remember having given these permissions – because we weren’t aware that we were giving them.

That is the reason behind this blog – to reveal the ‘whole story’ and how this story plays out in actual reality, in actual lives – so that we can look beyond our feelings and consider the reality of the situation in having all the information available before making any further decisions on which principles we should build our society and build our economic system on, for them to be just. And so that we can develop the skill of questioning our thoughts and their implications instead of blindly accepting them without consideration for the ramifications.


The Psychological Justification for the Principle of Merit or Desert

We can now further consider why the principle of merit or deserts is a principle that often ‘resonates’ with us as ‘sounding good’ or ‘sounding right’. The underlying psychological element that justifies the principle of merit and deserts is fear of being abused through being taken advantage of.

These fears arise specifically in group-situations where the well-being of the group is dependent upon the efforts and contributions of each individual – and where individuals are not the same in terms of intellectual capacity, creativity, discipline, physical strength, agility and perseverance. Within such a scenario, of course, not every individual contributes in the same way or to the same extent, because abilities differ. The fear of being taken advantage of steps in when one perceives that the level of well-being the group generates does not reflect the efforts and contributions one personally put in – where one perceives that one is not equally receiving according to what one gave. Herein, an experience of ‘unfairness’ will rear its head, because one perceives it to be unfair that those who one perceives ‘contributed less’ are receiving the same standard of well-being as oneself. The tendency is to then blame those that one perceives as ‘having done less’ for one’s own experiences of dissatisfaction. Almost immediately, a feeling of ‘being abused’ follows, because we feel conned by those we perceive has having done less, where we think that they deliberately took advantage of one’s efforts and contributions.

From here – those that perceive they have been abused will call for greater individualization – where the focus now shifts from the well-being of the collective as a result of a group-effort – to the well-being of the individual a as a result of individual-effort. So – it is fascinating that one immediately takes in an anti-group position in reaction to a perceived ‘injustice’ – where blame is placed on others and self-interest overrides any other consideration. (For those who still resonate with this justification in thinking ‘that sounds like the right thing to do’ – remember the above discussion in what the consequences are of reacting in such a way – where from a ‘seemingly reasonable mind-set’ we’ve created an economic system that outcasts millions because their value is not being registered as being ‘sufficient’ – and so they have been condemned to a life of suffering and premature death. Instead of trying to appease one’s conscience, we have the ability of actually fundamentally changing our attitudes in a way that would produce real solutions.)

Now, going back to the group-setting – what would be the alternative to individualization?

There are two possible scenarios in terms of why some individuals contribute less.
Firstly – there are those who, due to differing mental and physical capacities, will be unable to be as productive or as contributing as others. Herein, any reaction of feeling abused by them would be inappropriate, because no harm was deliberately being done. The reality of the matter simply is that each one is doing the best they can, and as such – the level of wellbeing in the group is as high as it can be. Does this mean that individualization is necessary so that those who contributed more receive a ‘higher share’ of the well-being? Obviously not – it is a matter of understanding that those with more ability have a responsibility towards those with less – simply because, if they were the ones in the group with less ability, they would want others to take responsibility for them too. Such attitude is one of caring, of consideration, of respect – all of which we is highly valued in any society. The best one can do is to ensure that each one is indeed contributing in a way that they are most effective, which would require them to be passionate about what they do, because passion implies self-motivation, which implies pursuing self-perfection within one’s particular expression. And so – with each one optimally contributing in their particular capacity and expertise, the group is like an organism that will function most effectively.

So – the critical factor in this scenario is that one places aside one’s fears of abuse, which – if one looks at it is irrational from the perspective that no-one is taking advantage of anyone, but that each one acts in accordance with their responsibility towards themselves and so each other – and that one practices the values that are preached, in order to build a group and an environment that is pleasant, that is supportive, that is cohesive – one that, in the end, everyone would benefit from. Why benefit? Because such an environment does not only ensure that the particular task at hand is being completed, but it also nurtures the social and psychological well-being of each one.

In the second scenario, some are contributing less because they are endeavoring to maximize benefits while minimizing costs – and thus, are purposely ‘parasiting’ off the efforts of those who put in more work. Now, if those who do contribute to the best of their ability would not react in outrage for perceived abuse – what would happen?
It would simply be assessed that there is a problem in the group where there are some that are not equally participating and who are placing their self-interest above the interest of the group and where – as a result – the group is less effective and each one enjoys a standard of living below the potential that would be achieved if each one would have actively participated. The common sense thing to do in this situation is to, as a group, intervene and confront the individuals in question with the consequences of their behavior and show how a change on their part is required for the group to function as a whole. If understanding is not sufficient for change to take place – then other factors must be looked at that may be contributing to a psychological state of apathy, where, for instance, the individual is not performing the task that they would particularly enjoy most, or the individual struggles with the task at hand, where, incessant experiences of inadequacy led one to ‘give up’ - and, in order to deal with experiences of failure in this regard, the person uses the self-manipulation of ‘I don’t care anyways’. It is not actually so that one doesn’t care, but a lie one tells oneself so one isn’t plagued by the same experience of guilt, failure, anxiety and inadequacy over and over again. So – here the apathy is merely a self-protective wall the individual put in place due to not seeing how to move oneself out of this situation. So – such underlying factors must be identified to bring clarity on how the individuals may be assisted and empowered to break through their apathy and allow the group to function most effectively.

In the second scenario the critical factor is to not take the situation personally – where, yes – those individuals were acting in a harmful way towards the group – but it has nothing to do with anyone on an individual level , where one is now ‘under attack’ and one requires to ‘protect oneself’ from the evil that is lurking. If one looks at it – those individuals who deliberately contributed less, within themselves, took on an ‘anti-group’ position. So – to now demand individualization, which is also an anti-group position, is like fighting fire with fire – an effort we can all see will not provide real solutions – because it is the very anti-group position attitude that is the cause of abuse and harm on the part of others within the group. Therefore – to attempt to protect those who perceive themselves to be abused through installing a system of reward based on individual merit – one is in fact attempting to manipulate the ‘flow’ of the abuse – where abuse is in fact accepted, but one directs it in such a way that it befalls on others.
And that is exactly what we see within the current capitalistic system, that it is in fact a system of abuse, where the abusers, which are the ones who live a comfortable life, will justify the abuse based on the fear of being taken advantage of by others. This is how those who fear being abused in fact become the abuser.


False Dilemma – Abuse or Be Abused

Ultimately, then, the psychological justification for a distributive system based on the principle of individual merit – lies within the false dilemma of ‘abuse or be abused’. We have shown above that this is indeed a FALSE dilemma because there are alternatives if only one practices the ability of placing aside one’s fear to be able to consider a common sense solution. The fact that these skills are not being practiced in a school or home environment as part of every child’s education may very well be the fact that the world is in such disarray.

One can argue that the principle of merit and desert is the only possible expression of ‘social justice’ exactly because of how humans are psychologically wired. Yet – if one looks at the very endeavor of implementing or bringing about social justice – it is to distribute goods and services in a way that is morally correct – in order to create a morally correct society. To believe that one can reconcile such a morally upstanding society with human beings that are unable to act in a morally upstanding way – is delusional. To attempt to change society without changing the humans that ARE the society, will never really create any change at all. So – change must happen both within and without, and if social justice is to become a reality, education must play its role within developing the required skills so that individuals are able to uphold a socially just society. There is simply no two ways about it.


[1] http://legal-dictionary.thefreedictionary.com/accomplice

 

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