This seems to be a thought experiment that is engaged in quite often at the Bleeding Heart Libertarians blog: imagine markets result in less preferable outcomes; would you still support them? The answer that they typically arrive at is “No,” and therefore the justification for markets rests at least partially on consequentialist considerations.
But imaginary scenarios presented to discredit some theory of ethics have never really sat well with me, particularly when I find them to be unrealistic. A ready example of this David Friedman’s critique of Murray Rothbard’s theory of natural rights in The Machinery of Freedom. Friedman is a utilitarian and thus attacks natural rights on such grounds.
One scenario he has us imagine is a gunman opening fire on a crowd in the street. However, there is a rifle sitting in the middle of the street with a sign put there by the strangely sadistic owner of the firearm saying that in the event of an emergency to not touch his rifle. Should his property rights be respected? A second scenario is even more ridiculous, where there is an asteroid heading towards the Earth and the only way to save the world is to steal a man’s briefcase which has a button inside that will destroy the asteroid.
I feel that under such wide latitude in creating objections that are extremely unlikely to ever happen, one can discredit any ethical theory whatsoever. This is why Rothbard rightfully has a chapter in his Ethics of Liberty objecting to lifeboat scenario criticisms. The real test is how an ethical system performs under normal conditions that exist the majority of the time.
Though not necessarily a “lifeboat scenario” criticism, it is my contention that thought experiments about markets done by BHL (such as the one presented here by Jason Brennan, where under markets 10% of the population would starve, 80% would be living near subsistence, and 10% would prosper) require imagining a different universe with different logic, somewhat like envisioning a briefcase that houses a button that will destroy an asteroid. The BHL thought experiment requires one to ignore the actual workings of markets and just think of it as a system with where one puts in inputs and the system spits out results.
Notice the title, “Imagine Markets Stink. It’s Easy if You Try.” This statement is true if one is totally ignorant of economics. To be able to accomplish this task, we have to disregard processes entirely and essentially imagine a world that is completely different than the one in which we live. Think about it: let us say the action axiom was false and people actually sought to make themselves worse off, that voluntary exchange was not mutually beneficial, that central planners can allocate resources better than markets, etc. We would have to imagine a vastly different reality that had a vastly different logic. It is only when we totally ignore these things that imagining free markets stink is “easy.”
In this case, Brennan would respond that modern economics could be fundamentally wrong in its assumptions, it could be too a priori and not have much basis in reality. But just looking empirically at the world, societies that are more economically free tend to be more wealthy with smaller percentages of the population starving or living at a subsistence level. It would seem that a priori economics, especially the work done by the Austrian school, has at least been partially vindicated by experience.
Ultimately what I want to get at here is that Brennan asks us to engage in a thought experiment that ignores causal connections. Brennan is childishly uncharitable to Ross Levatter, who actually illustrates this point quite well in his suggested alternative though experiment:
Imagine that a bunch of theologians provide compelling evidence that life in a strictly secular polity would be a disaster. Imagine that they show conclusively that if people everywhere were to not devote their lives to the Church, with everyone strictly observing tithing rules and the Ten Commandments, that 10% of people would starve, 80% would be near subsistence, and only 10% would prosper.” Does this thought experiment add anything to the question of whether or not secularism is reasonable? Would it become relevant if I said the purpose of this exercise is to see how your moral commitments interact with your empirical beliefs about how secularism actually works.
The obvious problem with this thought experiment is that there are no clear logical connections between a polity being strictly secular and poverty. And so it is with free markets! Levatter continues:
More generally: “Imagine the entire social world is different in numerous and unspecified ways than all evidence has ever demonstrated it to be” is not a helpful premise with which to begin a thought experiment. It is a rather major change from all experience and it is thus harder to trust our intuitions, and harder to analyze the implications of our intuitions. How would such a counterfactual lead us to any pertinent or helpful conclusions? Should libertarians be devastated to find our principles of political economy work only in the actual world we live in and fail in some other logically possible worlds that are not even close to ours?
And thus is the limitation of Brennan’s thought experiment: it is illogical to reject non-consequentialist ethical theories based on the real world with imaginary scenarios based on an imagined world.