Ignorance, Apathy, and Greed

as Root Causes of Social Problems

by

Fred E. Foldvary

Working Paper #E95-08

April 1995

JEL Codes: A13, I30

Department of Economics, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061 USA.

(Currently at Santa Clara and JFK Universities, California. Email: [email protected])

Abstract

The root causes of social problems are traced to ignorance, apathy, and greed. These conditions are not necessary but sufficient to cause economic maladies. The paper analyses this tripartite foundation of social problems and the interconnections between the three causes. Two variables common to these causes are beliefs and values. An application to education concludes that an effective motivator of social action consists of propositions specifically directed to increase sympathy for some cause by changing peoples' beliefs and values.

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The root causes of social problems are ignorance, apathy, and greed. These are sufficient to cause social problems, but are not necessary causes, since other root causes can also cause social maladies. This paper argues that most significant social problems derive from these sufficient causes, and that their ultimate remedy requires the treatment of the ultimate causes.

Irrationality has been posited as a source of social problems as well. An example used by Robert Frank (1988) is the famous feud between the Hatfields and McCoys, in which each side kept attacking the other for decades in cycles of revenge and counter-revenge. But if revenge is a more important aim than life and safety, and if rationality is defined in terms of means rather than ends, the acts of the parties cannot be designated as irrational. If we agree that the murder of other human beings, even if in retaliation for previous killings, is morally evil, then the act constitutes greed, whatever the motive, and if the party is unaware of the evilness of the act, then ignorance is implicated as well.

As Frank (1988) notes, emotions are the proximate cause of much behavior. But if human action is purposeful, then while emotions provide human beings with ends (desires, hates, fears), action to attain an end is still a choice. The human will is a joint cause of action along with emotion. Hence, biologically-based emotions are not a sufficient cause of human maladies.

As an informal example of the interplay between ignorance, apathy, and greed, consider the problem of environmental pollution. Suppose the most efficient preventative is an effluent fee based on the relative social cost of each pollutant. However, the democratically elected governing authority operates under the proposition that pollution is a function of output, and therefore that the best remedy is a reduction of total output. This results in a reduction of employment as well as consumption. Thus the non-optimal remedy for one social problem increases the severity of another problem and reduces welfare relative to the optimal remedy. A cause of the policy failure is ignorance of the optimal policy.

But suppose the optimal policy is known. The owners of the polluting industries seek to influence legislation to prevent the implementation of the optimal policy. With sufficient inducement (such as campaign contributions and favors), the optimal policy is foregone. The cause in this case is greed (as defined below), both by the influence seeker and by government agents.

However, greed alone is not a sufficient condition for this policy failure, since by premise, a majority derives a net benefit from the prevention of the pollution. The question then is why they do not organize to counter the influence of the minority polluters. The well-known answer from public-choice literature is the rational ignorance of the voters, combined with the asymmetrical cost/benefit ratios. With the benefits of pollution (or the prevention of effluent fees) concentrated among a few agents and the costs thinly spread among the population, the incentives to prevent the optimal policy dominate the incentives to prevent it. For the average voter, the cost of organizing and lobbying is greater than the benefit to him (Olson, 1971). With logrolling or vote trading, legislators transform special-interest minorities into legislative majorities. Government becomes a market for legislation, with factions competing for transfers (Wagner, 1989).

But asymmetrical benefits and costs are still not sufficient to cause the policy failure. Voters could overcome their relatively low financial benefit if they were sufficiently interested and aroused to contribute resources to defeat the minority interests. Hence, besides their low catallactic (narrowly self-interested) incentive, there needs to be a low sympathetic incentive; a lack of sympathy constitutes apathy. Apathy combined with low catallactic or commercial returns is sufficient to prevent remedial action.

Apathy, greed, and ignorance are mutually reinforcing. With greater knowledge of the problem and the optimal remedy, apathy can be reduced; people can be aroused to action with a well-formulated presentation of some problem that evokes their sympathy, as is done with appeals to charity. The reduction of ignorance is also related to greed, since the sentiment of sympathy can offset to some degree the sentiment of greed. If one realizes the full effects of a policy, it is possible that the incentive to adopt the welfare-diminishing policy would be reduced.

This informal example is illustrative of how ignorance, apathy, and greed are sufficient to cause the policy failure. Of course these conditions themselves have causes, so they are foundational only in an economic context. Traits such as aggression have evolutionary origins, but these origins are not themselves causes of problems, because such psychological traits are evoked and acted upon under certain conditions. The psychological and sociobiological causes of greed, ignorance, and apathy would take the subject beyond the scope of this paper and possibly beyond the normal bounds of economic analysis.

1. An analysis of apathy, ignorance, and greed.

a) ignorance

It is assumed that there exists a reality, designated as R, which encompasses all existing time, space, mass and energy. This reality can be observed by persons, and it is possible to determine whether an observation is in accord with reality. Hence, this analysis assumes realism, waving off the deeper philosophical questions of the existence of reality and the epistemological problems of knowing when and how we can know reality.

To formulate the condition of ignorance, let "reality" be composed of arbitrary sets of units of data: {}. "True" means in conformity with R. A proposition is defined as a statement about some {} asserted to be true, or a statement about some combination set {, }. A belief is the acceptance of some as true. "Truth" is defined as the condition of a proposition being true. Hence, " is the truth" is thus equivalent to "the proposition is in accord with R."

Beliefs (=R) can have the truth values of "true," "false," or "indeterminate," with (=R) assigned the values 1 if true, -1 if false, and 0 if indeterminate or null. An indeterminate belief is one for which the formulation is too broad or indefinite to determine its truth value. Knowledge K is defined as a set of true beliefs, i.e. beliefs which are in conformity with R, K being composed of items of information, . Hence, K=[(=R)=1].

A theorem is defined as a true proposition , warranted by logic and evidence. A theorem can be conditionally true, valid only if the conditional premises are in accord with R at some time and place. Evidence consists of a one or more true observations about {}. Logic consists of rules by which true propositions are derived from observations or other propositions.

"Theory" is defined as a set of related theorems, or {, }, where consists of the rules governing the relationships among the theorems. Besides theory and data, knowledge is a function also of interpretation , since two persons can observe the same phenomenon R, but derive different propositions from the observation. An "interpretation" consists of the evaluation of the significance, meaning, and valuation of some observation or proposition. In art, for example, one can interpret a white space as being symbolic of snow, or truth, or innocence. The interpretation depends on one's beliefs and values. As an economic example, one can observe a tree and interpret it as an instrumental resource, wood for timber, or as an object of independent value, an organism which offers direct utility as an object of beauty. Propositions are thus laden with subjective values and beliefs as a source of contention about what is "true," an obstacle to agreement on truth. Two persons may disagree on the question of the "best" social use of the tree, whether for timber or kept alive for its utility as an organism.

Though interpretations of R can differ, an is also subject to the question, "how do you know?" Hence, in principle, interpretations themselves can be deconstructed either to personal values, opinions, and interests , which do not constitute knowledge, or to theory, which is based on knowledge. A proposition about the socially optimal use of the tree depends on theory about the determination of its social value, e.g. whether to base it on market value, some decision-making process, or some other means.

Belief is a function of data, theory, and values:

(1) = b(, , ),

and with interpretations not reducible to knowledge by premise excluded from true beliefs, knowledge is a function beliefs in accord with data and theory:

(2) K = {} = k(, , ).

"Ignorance" is defined an absence of knowledge about a proposition, i.e. [(=R)0]. The lack of knowledge can be due to (1) a false belief [(=R)<0], i.e. a belief that is true when in reality, it is not true; or (2) the absence of any belief about , or [=] (the null set of propositions). The statement "I don't know" implies that one has no beliefs about .

b) apathy

Apathy is a value of the more general concept of sympathy, which Adam Smith (1790, p. 9) described as an aspect of human nature:

"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it."

Sympathy is defined by Smith as "our fellow-feeling with any passion whatever" (p. 10). Smithian sympathy is a sentiment of affinity with some person, group, culture, organization, social cause, or other entity.

Henry George (1879, p. 458), in words similar to Smith, stated: "The desire for approbation, the feeling that urges us to win the respect, admiration, or sympathy of our fellows, is instinctive and universal".

Sympathy can be formulated as

(3) S_i(o) = u_i(o, v_j(o)),

where S is the amount of sympathy (cardinal but not measurable), i is an individual, o is the object of i's sympathy, u is the utility function of i, v is the utility function of j, and j is another person or set of persons. A negative S constitutes antipathy, a hatred or hostility for o or j. For action, antipathy can be as effective as positive sympathy, so antipathy is treated here as a type of sympathy.

Hence, person i can derive utility directly from the existence of o and possibly also from the knowledge that j is obtaining utility from o. Sympathy differs from altruism in that the utility is not derived entirely from the existence of utility in others, but also possibly from the existence of some object itself. Also, altruism is sometimes defined as acting to benefit others when this sacrifices one's own well being (Wilson, p. 117). Narrowly self-interested homo economics presumes the absence of sympathy, or presence of social apathy, but in practice, sympathy exists to motivate charity and other benevolent acts, and its presence can overcome a prisoner's dilemma. Its existence can neither be presumed nor denied; it is a quality which depends partly on culture, but which can be cultivated by social and political entrepreneurs.

A utility function can yield values which are positive, neutral, or negative, the latter being disutility. Hence, although the intensity of utility is not measurable, the sign of the utility is cardinal, i.e. has an observable sign. Sympathy, as a function of utility, is thus also positive, negative, or neutral.

"Apathy" is defined as the value neutral which S_i(o) derives in (3): S_i(o) = 0. An apathetic person derives neither positive nor negative utility from the existence of some object o or the utility of persons j with respect to o. A person with apathy does not care whether o exists or whether j has positive or negative utility from o. Positive sympathy can derive from the avoidance of negative utility in j, so that the prevention of j's negative utility can be a source of sympathetic sentiments.

The function u in (3), which yields sympathy, is itself a function of values , beliefs , and circumstances :

(4) u = w(, , ).

For example, if one values wildlife and believes that the circumstances in some area threaten its existence, and that some project (object o) will reduce the threat, then u will yield positive sympathy with object o. Hence,

(5) S_i(o) = w_i(, , , o, v_j(o)).

Apathy A is thus

(6) A = [S_i(o) = 0],

apathy being the condition where a person derives no sympathy (including no antipathy) from the existence of some object or from the utility of others in some context. A i person may thus avoid providing another person j of well being if i either has apathy or antipathy with respect to j. If in (5) =0, then S=0. Ignorance is sufficient to cause apathy, although knowledge alone does not generate sympathy.

Antipathy can be a source of social problems - mobs kill innocent persons. But this would not occur if the rest of the community had sufficient sympathy for the victim so as to stop the mob, both in particular cases and in the provision of systematic defenses against such mobs.

Ignorance and apathy have common variables and , beliefs and values.

c) greed

As an emotion, greed can be regarded as the desire for more than one morally deserves. Since mere desire does not necessarily cause problems, "greed" is defined here in terms of action rather than emotion: greed is the taking of more than one morally deserves. The relevant moral standard is necessarily independent of culture if there is to be a universal concept of greed. Such a function will be assumed to exist (for one derivation, see Foldvary (1980) and Foldvary (1994)).

Let be a "universal ethic" which is derived from human nature and is morally applicable to all humanity. By this ethic, compatible with both natural-rights and rule-utilitarian positions, evil consists of coercively harming others by invading their legitimate domain, such as by destroying or stealing their justly acquired property. Any act of acquisition that does not coercively harm others is thus morally permitted and does not constitute greed. Thus, greed is not merely the desire for goods or wealth. Greed consists of the desire for and willingness to take what morally belongs to others. Hence, greed is formulated as:

(7) G_i(x) = g(x, , ),

the greed of person i for good x being a function g of x, the values that i holds, and the beliefs of i. Hence, values and beliefs are common to the triad, ignorance, apathy, and greed.

The desire of a person for the goods of others can be reduced by any sympathy he has for the well-being of others, since the others loose utility if they lose their possession x. A greedy person might steal from strangers but not from a friend.

There are sociobiological explanations of ignorance, apathy and greed. Greed results in more material possessions, which increase the capacity to endow offspring with greater reproductive opportunities. Apathy keeps people from wasting their resources on the multiple of available causes and helps them free-ride on the efforts of others. Deliberate ignorance helps people avoid developing a conscience that would reduce greed.⁽¹⁾

2. The sufficiency of ignorance, apathy, and greed

Let a "social problem" P be defined as a public bad which is recognized by a majority of a community as detrimental to their well-being. The question to examine is what would cause the governing agency of a democratically governed community (designated as its legislature L) to reduce the severity of P, assuming it has the technology to do so.

If the entire community is ignorant of P, then it will not act to reduce it. Hence, total ignorance is sufficient for a lack of action. But what is needed for action are beliefs rather than knowledge. Either knowledge or false beliefs can stimulate sympathy. Whereas =0 can prevent a solution, either =1 or =-1 can provide a remedy.

Suppose that some members of the community are not ignorant of the problem and its remedy. If the removal of P does not reduce the well being of any members of the community, then greed is not an issue. The sufficient conditions for the removal of P are the dissemination of the beliefs to either private actors with an incentive to act, or else the dissemination of beliefs to L and sympathy by a majority of L with its removal. These are not necessary conditions, since L might accidently remove P by other legislation with the unintended effect of removing P. If the community is apathetic, then L will not act to remove P. In the absence of catallactic motivations, the apathy of a majority of the electorate is sufficient to prevent action.

The dissemination of itself requires either sympathy by members of L, so that they are receptive to the acquisition of , or a set of rules by which members who know have the ability to present to L. But the rules cannot offer unlimited access to L, since otherwise L might be flooded with proposals and not have the resources to investigate them all. So there must be some rationing device to filter various proposals, which ultimately depend on the judgment of member of L to accept only some proposals for consideration. Hence, sympathy by some subset of L for the knowledge of P and its removal is necessary if L is to act to remove P.

From (2), knowledge K = k(, , ), and from (5), sympathy S_i(o) = w_i(, , , o, v_j(o)). Data and theory needs to be imparted to members of L in order for them to obtain beliefs necessary to generate sympathy for o, which is the removal of P. The values held by L are assumed to be difficult to change in the short run, but include at least in a majority of L the capacity to be susceptible to the generation of sympathy. The circumstances are part of the knowledge to be imparted to L, and the sympathy that can be generated to L can include both that concerning o and the sympathy for the community j suffering from P.

There is a set M of members of the community with either a catallactic or sympathetic interest in the removal of P. A catallactic interest is a material benefit (catallactics being the system of market exchanges for self-centered benefits). There is a cost C of imparting just sufficient knowledge to L to generate the sympathy needed to pass legislation removing P.

(8) C() = c(, S, , , o),

where C depends on the pre-existing values of L, any pre-existing sympathy, the pre-existing beliefs of L, the particular circumstances of the object of sympathy (i.e. removing P), and the object of sympathy, o.

Suppose that the cost of imparting to L has a positive first derivative and second derivatives with respect to . Suppose also that the marginal sympathy generated by imparting has a positive first and negative second derivative. Then it is rational to expend resources until

(9)

Given N members, the total cost is C/N. The amount of funds they are willing to pay is proportionate to their sympathy S. Suppose they have no catallactic advantage and are equal in their sympathy for the project. The funds can be spent either to increase N by generating more sympathy in the community, or to influence L. The cost C_m of generating sympathy from a marginal community member is worth paying so long as it is less than C/N. An equilibrium member-recruiting expenditure is

(10)

N is a function of pre-existing sympathy, the marginal sympathy induced by propaganda, and the amount of funds spent to recruit another member:

(11)

If the total funds raised is not less than the cost of generating sufficient sympathy, L will act to remove P. The project thus depends on C/N, which in turn is a function of the pre-existing sympathy among the community members for removing P and the ease of generating more sympathy for it.

Suppose that some members of the community do benefit from the existence of P. For example, the owners of polluting firms would have to pay higher costs if L adopted a pollution charge, reducing the value of their shares. Let us assume the members of the community have a moral property right to the health of their bodies and to a pollution-free environment for their other property and the community commons. The desire of the owners to avoid the social cost of their pollution would constitute greed, a morally undeserved portion of income. Greed could also take the form of rent or transfer seeking, with undeserved subsidies or privileges, or protection from competition. Greed also motivates dictators to maintain their power; the high cost of opposing regimes which deal harshly with opposition keeps the population from rebelling unless desperation is high enough to motive extreme antipathy against the regime. Hence, ruthless dictatorships can persist as public bads.

From (7), the greed of person i for good x is a function of x, some coveted item, the values that i holds, and the beliefs of i. The values include the degree of sympathy for the community and some project, greed being reduced if sympathy for the community or the project (e.g. pollution removal) is increased or if other values such as moral duty overcome the greed. If the beneficiaries of P are a small minority and their gain is significant, they have an incentive to organize to influence L. The organizers of the effort to remove P then have a greater cost C, since they must not only arouse sympathy from community members and L, but also counter the influence of these motivated by greed. The amount the greedy members will spend depend on the benefits from x and their values . If they are apathetic, then their motivation is purely catallactic, depending on the benefits and costs of getting x. If their net benefit exceeds the cost C of generating sympathy, the project will be blocked. Given such benefits, greed is sufficient to block the sympathy needed to remove P.

Thus, greed, apathy, and ignorance can each be sufficient to prevent the removal of a public bad. Each is related to the others, with common variables in beliefs and values. Greed depends on the absence of sympathy and benefits from ignorance about a social problem. Apathy can be reduced if there is less ignorance and less greed. Ignorance is reinforced by apathy, since apathetic agents are not induced to obtain the knowledge which would reduce their apathy. Greed exploits the ignorance of the majority who do not have sufficient sympathy to counter a greedy faction.

3. Application to education

Propaganda, the transmission of beliefs, can be effective in helping to remedying a social problem P if it includes theory that is effective in the remedy and if it arouses people's capacity for sympathy by changing their beliefs and values. Otherwise, propaganda may be of no use to the removal of the the problem. Economic education which teaches the virtues of central planning will be of no use if central planning is the problem. Hence, even a general education covering wide fields of knowledge may not relieve ignorance of specific social problems, especially when the propositions concerning their remedies are controversial.

Education will also not likely reduce greed unless specifically directed to increasing sympathy for some remedy among those having greed.

One of the most effective forms of education has been that conducted by interest groups by imparting beliefs, whether true or not, specifically about a social problem and directed with the aim of arousing sympathy. Some social movements have been successful especially when their techniques involve arguments focused on inducing as much sympathy as possible. Charity drives and political campaigns typically focus on sympathy-inducing messages, which can include generating antipathy for the opponents of the candidate or cause. Negative advertising attempts to overcome apathy by inducing negative sympathy to an opponent. Such propaganda can also appeal to self-interest and even greed, promising benefits, deserved or not.

Neo-classical models are typically based on the premise of social apathy. More attention could be paid to sympathy as a motivator. As Petr Kropotkin (1914, p. 30) stated, "mutual aid is as much a law of nature as mutual struggle." Empirically, David Schmidtz (1991), among others, reports that in experiments on the voluntary provision of public goods, contributions have been positive. Robert Wuthnow's (1991) survey of volunteers found that they desire to live in a society which shows compassion. Henry George (1879, p. 462) proposed that sympathy is potentially a much stronger motivating force than self-interest:

"Shortsighted is the philosophy which counts on selfishness as the master motive of human action... If you would move men to action, to what shall you appeal? Not to their pockets, but to their patriotism; not to selfishness, but to sympathy. Self-interest is, as it were, a mechanical force - potent, it is true; capable of large and wide results. But there is in human nature what may be likened to a chemical force; which melts and fuses and overwhelms; to which nothing seems impossible. 'All that a man hath will be give for his life' [Job 2:4] - that is self-interest. But in loyalty to higher impulses men will give even life."

If apathy is a factor in maintaining social problems, the antidote, sympathy, offers the possibility of reform.

4. Conclusion

It is a puzzle, the question of why social problems such as war, crime, pollution, unemployment, poverty, and the restriction of liberty persist, when most people would agree to their removal. Ignorance of the cause and remedy of these problems, including a lack of consensus among social scientists, would be sufficient to prevent their resolution. Even if a remedy were known, greed would cause those who would lose benefits from the remedy to avoid implementing it. But greed is allowed to reign because the majority who do not benefit do not have sufficient sympathy with the removal of the problems to arouse action.

The proximate cause of social problems can be policies which cause them, make them worse, or at least are not suitable for their remedy. An analysis of why such policies are adopted reveals ignorance, apathy, and greed as root causes. Ignorance can be a reason for the failure to adopt and promote superior alternatives. Apathy, reinforced by rational ignorance, prevents much of the public from obtaining knowledge of the better alternatives and organizing to promote more effective policies. Greed by those benefitting from a problem and the failure to remove it raises the cost of generating enough sympathy to motivate its removal. Ignorance, apathy, and greed mutually reinforce one another as root cause of social problems or the failure of private and public agents to remove them. They appear to solve the puzzle.

Endnote

References

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Kropotkin, Petr. 1914 [1974]. Mutual Aid. Boston: Extending Horizon Books.

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Indianapolis: Liberty Classics.

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1. 1. My thanks to T. Nicolaus Tideman for suggesting these sociobiological origins. Tideman also points out that if the death of the body is not the end of a person's existence, then ignorance of that fact promotes selfishness, hence greed. Also, if there is a universal "life entity" shared by all persons, knowledge of its existence would spur sympathy, since if people believe they are part of some common whole, externalities would become internalized.