MAIN IDEA:

The main idea of this book is to summarize what is wrong with American society and provide some recommendations for Americans about the way to get back to fundamentals that made America great: free market economy and respect for individual rights.

DETAILS:

1. Introduction

This is about the point of this book – American deviation from the principles that made it great: society based on prosperity and individual rights. Here are author’s main points:

1. “Right” and “wrong” are very real concepts, which should possess great force.
2. We should be skeptical about the powers of the individual human mind.
3. Human life is complex and offers many different goods, not just one value that trumps all others.
   

Author discusses 6 issues he considers critical for getting back on track:

1. Time – present interests versus future
2. Aggregation – how resolve disagreements
3. Rules – how create and maintain rules and when to allow exceptions. Utilitarism and consequentialism of rules.
4. Radical Uncertainly – consequences of action could not possibly be known completely
5. How can we believe in rights – this is about rights (nearly absolute) and rules that could contradict each other
6. Common sense morality – “Common sense morality holds that we should work hard, take care of our families, and live virtuous but self-centered lives, while giving to charity as we are able and helping out others on a periodic basis.“

Author also defines fundamentals of his philosophy: Productive powers should not be taken for granted and future should have say about our actions in present

2. Wealth makes the world go round

This is about wealth creation and that’s how author defines it, going beyond usual GDP measures: “Wealth Plus: The total amount of value produced over a certain time period. This includes the traditional measures of economic value found in GDP statistics, but also includes measures of leisure time, household production, and environmental amenities, as summed up in a relevant measure of wealth.“

Author posits 3 key questions for growth, civilization stability, and environment, reviewing in the process of productivity growth versus increase in growth via increase in inputs, migration of people and capital, and West vs. Rest with special attention to Asian tigers and their fast development. Finally he discusses wealth / happiness relationship.

3. Overcoming disagreement

It starts with the point that economic growth could not satisfy everybody and there always be differences in preferences. Author defines 2 principles:

1. The Principle of Growth: We should maximize the rate of sustainable economic growth, defined in terms of a concept such as Wealth Plus.
   
2. The Principle of Growth Plus Rights: Inviolable human rights, where applicable, should constrain the quest for higher economic growth.

He also discusses Nozick’s idea about rights being “side constrains” on individual choice and Derek Parfit’s “Mistakes in Moral Mathematics.”

4. Is time a moral illusion?

Here author discusses time value of comfort or discomfort; meaning delays or speeding up events known to be not neutral for wellbeing. Being an economist, he brings in discount rates, applying it not to the value of money, but to the perceived value of event. He also refers to opportunity costs in the same way, as a moral choice.

5. What about redistribution?

This starts with usual staff of feeling guilty that somebody somewhere suffers when one eats ice cream. Then it goes to economic speak: “we should redistribute wealth only up to the point that it maximizes the rate of sustainable economic growth. “

It goes from there to all typical staff: how “we” should redistribute, who should and should not benefit and so on. He also discusses Solow model of growth via technological improvements. An interesting point here is the link of the scale of economy to innovations” it does not worth invent iPhone for population of New Zealand because not much return due to very small size of population.

6. Must uncertainty paralyze us?

This is about forks on the road: how many different ways life could develop depending on different choices made at key points. Consequently author discusses impossibility of knowing completeness of future result of any action. This could lead to paralysis by analysis and similar forms of fear to act. Then author discusses a couple of mental experiments like terrorist with biological weapon and John Lenman’s ideas of irrelevance of consequences as measure of right or wrong and his discussion of D-day beach and poor dog. Finally he comes up with “The Principle of Roughness:Outcomes can differ in complex ways. We might make a reasoned judgment that they are roughly equal in value and we should be roughly indifferent to them. After making a small improvement to one of these outcomes, we still might not be sure which is better.“  At the end of chapter author states that practical implication of this discussion are: need for agnostic and tolerant attitude to others and protection of individual rights.

Conclusion—where have we landed?

Here author once again repeats his main points about importance of economic growth in conjunction with morality and provides specific recommendations:

1. Policy should be more forward-looking and more concerned about the more distant future.
2. Governments should place a much higher priority on investment than is currently the case, in both the private sector and the public sector. Relative to what we should be doing, we are currently living in an investment drought.
3. Policy should be more concerned with economic growth, properly specified, and policy discussion should pay less heed to other values. And yes, that means your favorite value gets downgraded too. No exceptions, except of course for the semi-absolute human rights.
4. We should be more concerned with the fragility of our civilization. The possibility of historical pessimism stands as a challenge to this entire approach, because in that view the future is dim no matter what, and there may not be a more distant future we can look toward in order to resolve the aggregation dilemmas involved in making decisions that affect so many human beings. We should be more charitable on the whole, but we are not obliged to give away all of our wealth.
5. We do have an obligation to work hard, save, invest, and fulfill our human potential, and we should take these obligations very seriously.
6. We can embrace much of common sense morality with the knowledge that it is not inconsistent with a deeper ethical theory. Common sense morality can also be reconciled with many of the normative recommendations which emerge from a more impersonal and consequentialist framework.
7. When it comes to most “small” policies affecting the present and the near-present only, we should be agnostic, because we cannot overcome aggregation problems to render a defensible judgment. The main exceptions here are the small number of policies, which benefit virtually everybody.

MY TAKE ON IT:

It is somewhat typical academic work expressing feeling that something not right and providing recommendations in form of “We should” without going into details of “How”. It is also interesting because of author’s believe in necessity of convincing people that one should do something at all. It seems to be an issue in his environment due to complexity and unpredictability of any action. It is interesting to me because in environment I live in such question just plainly not exist. If you are not doing something you are not making money and cannot have even relatively good live so unexpected consequences of actions be damned. In my previous environment in USSR such question would be resolved simple: if you do not act, you die. It is also very funny to read his call to be more concerned about distant future, because we really do not know anything about it. Any guesses and speculations are inevitably meaningless because not only future science, technology, and even morality are unknowable, but we also cannot do anything about it. The scope of our action is necessarily limited to10-20 years at most – the time length of implementing some relatively big and complex project. I think our concerns should be limited to 4 basic issues:

• Prevent blowing ourselves up via use of weapons of mass destruction
• Maintaining effective market economy, the one and only known way effectively produce goods and services necessary for living beyond subsistence level
• Maximizing individual perception of living a good live for maximum number of people so they would not become susceptible to some violent ideologies like Marxism, Socialism, National- Socialism, Communism, Islamism, and such
• Preventing individuals who are already poisoned by these violent ideologies from causing significant damage.