I was just at a conference where several eminent economists embraced the following principle:
The United States should adopt whatever policies maximize the per-capita GDP of the existing population of the United States, and their descendants.
It was frustrating to listen. On the one hand, any philosophy professor could instantly produce devastating counter-examples to this principle of national egoism. For starters:
1. If conquering and enslaving Canada would increase American per-capita GDP, should we therefore conquer and enslave Canada?
2. If we could forever end world poverty by reducing American per-capita GDP by a penny, should we refuse to end world poverty?
3. If we could costlessly exterminate all Americans who produce a below-average quantity of GDP, should we exterminate them?[National Egoism and Vronsky Syndrome, Bryan Caplan, October 8, 2012]
(Unless, of course, the Canadians really piss us off. So, just watch your step, Canadians. You know what we`re talking about. Oh, where was I?)
3. I suspect reducing the income of 49.99% of Americans to zero would not, on the whole, be Good for the Economy — it would certainly be bad for the 49.99% — although I must admit that I don`t keep up with the latest fashions in economic thought, which seem to be moving in that direction.
Seriously, Caplan`s excursion into the fever swamps of why Godwin`s Law exists means he completely misses the point of “The United States should adopt whatever policies maximize the per-capita GDP of the existing population of the United States, and their descendants.”
The citizenist economists who so outrage poor Dr. Caplan are drawing an obvious analogy to the principle pounded into my head while getting my MBA in finance three decades ago that the board of directors of corporations should adopt whatever policies maximize the wealth of the existing shareholders of the corporation.
That doesn`t mean that the board of directors should conquer and enslave Canada. All ethical principles come with endless grown-up qualifications to fantasies hatched by childish minds.
No, the most important word in that principle of financial economics is not “whatever,” it is “existing.” When corporate directors forget the distinction between current and potential shareholders, corruption ensues. As I pointed out in VDARE in 2005:
By “citizenism,” I mean that I believe Americans should be biased in favor of the welfare of our current fellow citizens over that of the six billion foreigners.
Let me describe citizenism using a business analogy. When I was getting an MBA many years ago, I was the favorite of an acerbic old Corporate Finance professor because I could be counted on to blurt out in class all the stupid misconceptions to which students are prone.
One day he asked: “If you were running a publicly traded company, would it be acceptable for you to create new stock and sell it for less than it was worth?”
“Sure,” I confidently announced. “Our duty is to maximize our stockholders` wealth, and while selling the stock for less than its worth would harm our current shareholders, it would benefit our new shareholders who buy the underpriced stock, so it all comes out in the wash. Right?”
“Wrong!” He thundered. “Your obligation is to your current stockholders, not to somebody who might buy the stock in the future.”
Just as the managers of a public company have a fiduciary duty to the current stockholders not to diminish the value of their shares by selling new ones too cheaply to outsiders, our leaders have a duty to the current citizens and their descendents.