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W4 economic approach.docx

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Department
Philosophy
Course
PHIL 224
Professor
Heather Douglas
Semester
Fall

Description
PHIL 224 week four Economic Approach example Proposal: reduce levels of ppm in the air Cost: new technology, high fuel costs, shut down some businesses and jobs Benefit: health (few expenses, few hospital visits), few lost work days, saving lives, less years of life lost (qualys: quality years of life lost). Benefits will last decades but the cost will only be temporary - Discounting: $ today= $ future / (1+R)^N N = number of years R = discount rate St. Petersberg Paradox: We’re flipping a coin. I will give you $2 for n head. How much will you pay to play? n Expected value = sum of pay (½) = 2(½) + 4(¼) + 8(⅛)... Expected value = sum of pay (½) = 1+ 1 + 1… Expected value = sum of pay (½) = infinity Reasons to Discount 1. Human have temporal preferences o Not sure what will happen in the future, future predictions are uncertain o So you would want the $10 now as opposed to a year from now 2. Economic arguments: investment inflation o Don’t want too much or not enough inflation o The $10 is worth more now, I can buy more with the $10 now o You may miss the opportunity cost of investment o Doesn’t work very well when it comes to arts of the environment (invest health now and get more health now) o Only applies well to money 3. We have to do it o The future is always making huge demands on the present Critiques on Discounting 1. Why? 2. Rate of inflection/investment: will the future be wealthier? Compensation for future? 3. Tie discount rate to specific epistemic warranty We should invest on science and technology so the future generation could be prepared. Why are we discounting? Because we’re using cost-benefit analysis. Instead of Cost-Benefit Analysis 1. Precautionary Principle  No new technology, stay in your comfort zone and know all the risks  This assumes that what we’re doing now is risk-free but that’s not true  Paralyzing and only looks at some risks and not others  When making a choice we should be looking at all risks  Not proceeding with something because it has risks  Ex. Fridges from the 1920s would leak and kill the whole family overnight. CFC didn’t kill you but it punches a hole in the ozone layer. Cars are great but there are car accidents 2. Anti-Catastrophe Principle  Risk = problem x harm/benefit  Decisions under uncertainty, no probabilities  Maximize the minimum outcome and make sure the worst case scenario doesn’t happen  What are some possible results from our actions? Let’s try to avoid the outcomes of people dying or other bad outcomes  What counts as a catastrophe? Climate change? We need to stop it? Critiques on Cost-Benefit Analysis 1. Utilitarianism: the cost-benefit analysis assumes a utilitarian system (thin version, does not take into account things like the higher or lower pleasures) 2. Methods for valuation: actual market for some things (ex. $1/marker) while non-existent markets for others (ex. clean air); bundled goods (ex. you can’t buy a Vespa but you can buy a house with a nice view); comparable options (except for one crucial difference); who actually pays (least sensitive); price to gain doesn’t equal price to give up 3. Costs of valuations (eg. when you pay for sex, it demeans it, it cheapens the value of it) There are many problems with cost-benefit analysis. We should discount everything if we have very solid predictions looking into the future. Economic approach: protects autonomous choice Problems: worries with calculations, rights distribution, lexicographic preferences, consumers only? Political approach: debates, cost-effectiveness analysis, market values can’t decide the choice Problems: complex, approach depends on what one is dealing with Future Generations Issues: the use of non-renewable resources, population growth, species extinction, waste (nuclear and regular), water quality, sea level, aquifer depletion, deforestation, arable land, climate change Background: friends versus strangers Do we only have moral obligations to those we know? (eg. Strict social contrast theory) Do we only have moral obligations to those who share our values? Do we have moral obligations to future strangers? The Futurity Problem (Kauka) 1. Temporal location (compare with spatial location) Past: we cannot casually affect things in the past so our choices do not affect the past Future: we can still affect it so we cannot ignore the future generations when making choices; we need to make moral decisions for the future 2. Ignorance a) What will our impact on the future be? It’s very unlikely that nuclear waste, species depletion would be beneficial to the future. We must use the best available projection⁄knowledge! (ex. You text and drive, cause a crash. I need to go fly to New York. The crash you caused made me miss my flight which crashed. I feel lucky but you are still in the wrong. Unless you know for a fact that the plane will crash, you are in the wrong.) For a lot of our choices, we do not know exactly what will happen. However, we do know what would happen if you deforest so we need to make moral choices. b) What will the future want? People are still going to like nature, so we should preserve nature. We should worry about the near future (the next 100 years or so). But what about the far future? What are something every human need? Clear air with oxygen, clean water, food, shelter, some kind of fuel (to run machines or for warmth). The future may not want certain things (ex. iPod) but they will definitely need certain things to survive and it is our moral obligations to provide them with adequate supply so they can survive. 3. Contingency a) Disappearing beneficiaries: we have kids, our kids have kids but our grandchildren do not have kids then the future generation might not exist at all (depending on our actions). Let’s worry about the future generation as a whole b) Disappearing generations: imagine a young couple with two kids. They are poor but want a third child. If they have a third child, then there will be less resources for the other two kids. The third child doesn’t exist yet. The couple already have two and they shouldn’t have another one because they are poor. The third kid is contingent. (If the promise does not exist, then you do not have an obligation towards it). Let’s make the other two kids happy. Based on this example: let’s kill everybody now so there won’t be a problem for the future – but that would be killing people now and that’s bad. So should we stop having future generations and make the present population now happy? Maybe we should stop having kids (mass sterilisation) and use up all the resource
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