because the supply of thankfulness is not fixed, it will not depreciate the value of Professor Dennett’s sentiment to add a word of thanks not just for goodness but for greed—the greed that inspired generations of inventors and investors, laborers and capitalists, doctors and nurses, technicians and scientists to envision and perfect such a thing as an artificial aorta, to educate themselves in the healing professions, and to show up for work every day. For the most part, they did it to make a buck.

I think it’s a mistake to call this “greed”. I don’t think that “greed” captures all that’s going on. Certainly they did it to make a buck. That’s true. But that’s not all of it.

In order to develop a profitable product or service, I can’t focus solely on myself. I have to also think about the needs of the other person. I’m going to trade with them my product/service for their money. And in order to get them to part with their money, I have to think about what they’re going to need. I’m not just focused on making a buck. I’m focused also on meeting their needs. I have to be, or they wouldn’t freely trade with me.

But if I were to simply call this “selflessness” because I’m focused on the needs of others, that would also not capture the whole of what’s going on.

It’s not greed. It’s not selflessness. It’s both. IMHO, it’s the practical experience of “love your neighbor as yourself”.

“Taxation for the sole purpose of redistribution” means taking a dollar from Peter in order to give a dollar to Paul. But in the headache problem, I claim that you’re taking a dollar from Peter in order to give two dollars to Peter. That is, Peter suffers a one-in-a-billion chance of death (which he values at one dollar) to cure his headache (which he values at two).

So the headache situation differs from the redistribution situation in two important ways: First, you’re doing more good than harm. And second, that good comes back to the very same people you’re doing the harm to, not some other people.

That’s why I think this is not an inconsistency. Now as to why I’d be cheerful about it even if it were: I introduced the headache problem in the course of illustrating the application of cost-benefit analysis to public policy; I also argued that by and large, this approach to public policy is a good one. I introduced the playground analogy in the course of trying to apply our instincts about fairness to public policy. I think this is a good idea too. But when you’ve got two different good approaches, you can’t expect them to always point you in the same direction. (Of course this leaves you with the problem of deciding what you should actually do, and I haven’t solved that problem.)

I also have a question, I enjoyed your book, but I think I found an inconsistency. I could be wrong, but how do you reconcile the following:

On page 161:

The Headache Problem. A billion people are experiencing fairly minor headaches, which will continue for another hour unless an innocent person is killed, in which case they will cease immediately. Is it ok to kill that innocent person?

Your answers: Yes

On pages 192 – 193

Don’t take things that aren’t your. You conclude this section with “[b]ut taxation for the sole purpose of redistributing income is closely parallel to behavior that we admonish our kids for on the playground.”

Thanks!!

Incidentally, I’ve been wondering lately why some things — medical care, car repair — are billed approximately on a cost basis (or more nearly based on an itemized invoice), while most things are paid for at a prix fixe. Procedure-billing drives the excessive use of procedures, and eliminates incentives for medical providers to keep costs down; this is in addition to the effects of third-party payment. Car repair is a less distorted market, and has ended up with the same system, though. The only reasons I’ve thought of are risk aversion (the auto shop doesn’t know well how much it will cost when they get the car — but shouldn’t I be more risk averse, on an absolute basis, than they are?) or information asymmetry (which, again, I would expect to work in the other direction, but I could conceive that the car owner would, a lack of expertise notwithstanding, know more about the situation than the garage). Or maybe there’s more something more complex — individuals want to signal that they have superior information, or enough of them do that any shop that tried to stick with an initial estimate would have an unbearable adverse selection problem. Any thoughts you can provide would be welcome.