Harsh, but fair

I caught up with some of my podcasts today, including a freebie that the BBC sent.  I subscribe to the "More or Less" podcast with @TimHarford, so the Beeb guessed I might be interested in "The Story of Economics".  As its title suggests, it looks at the basics of economics with a slight historical bent.

The first episode (linked) looks at the moral underpinnings of economics.  Apparently, and this is news to me, Aristotle thought it unnatural to buy something that you did not need, something that you planned to sell on at a profit.  So even he looked down on speculators; banker-bashing may have a longer history than we think.  But the part I want to recount for you is the hypothetical question that they put to a group of sixth form economics students, to illustrate the moral side of economics.

Suppose, they said, you have to choose one new employee from a shortlist of three equally-qualified candidates, each with one significant and defining feature.  Angela, the first, is generally and non-specifically unwell, with an illness that could be treated if she gets the job and can pay for treatment.  Beatrice is depressed, but the sense of purpose that she will obtain from a new job will lift her out of that.  Clarissa is very poor; the income that she will obtain from the job will easily improve her well-being by an amount equal to the improvement in Angela's health or Beatrice's psychological state.  Which should we choose?

Needless to say, the students did not have a clue, and made this clear at length.  Sadly, the BBC did not provide us with an answer, presumably to show that some questions are insoluble.

It isn't, though.  There is a clear, obvious, and moral solution.  Have a moment to think about it, then scroll down for my answer.

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First, and most obviously, it is impossible that all three will be equally qualified.  This never, ever happens.  So in real life, you choose the best-qualified. But, for the purpose of the question, I will assume that there has been a miracle and we do, indeed, have three perfectly even candidates.

In which case, applying a strictly moral and economic analysis, Clarissa is the obvious choice.  Why?  Well, the improvements for Angela and Beatrice are predictions, or assumptions, or estimates - whatever you want to call them, they are not 100% certain.  So we must assume that they may not come about.  In which case, Angela will take a lot of sick leave and will therefore be less productive.  Beatrice may well not take sick leave, but a depressive in the middle of the workplace will drag everyone else down, reducing productivity generally.  Clarissa's improvement, however, is bankable (literally).  So from the perspective of the business, Clarissa is the obvious choice.

Clarissa is also the moral choice.  Your job as the manager is to advance the ends of your business, which is why Clarissa should be chosen.  To choose otherwise is to shirk your responsibilities.  Angela, Beatrice, and many others like them can best be helped by a free medical care system, and by public amenities that create a pleasant living environment.  But that costs money, which will have to be raised from taxation of businesses such as the one employing Clarissa.  Therefore, by acting in the best interests of the business, you maximise the taxation income of the state and enable these to be provided for all, including Angela and Beatrice.

By choosing Clarissa, you help all of them.  Choose one of the others, and the tax take falls, and you may only be able to help two of them.

And that is why I hold the economic views that I do; it is because they are morally right.

(in my opinion)