The Federal Trade Commission’s newest commissioner, Alvaro Bedoya, gave a speech this week pointing out that fairness, rather than “efficiency,” is the explicit goal of various provisions in federal antitrust law. This is clearly true. But even as the legal program associated with the “economic style” set out to systematically erase fairness from the administration and enforcement of the statutory framework, it also advanced a very specific (and not particularly well-defined) conception of efficiency. It isn’t just about whether fairness or efficiency (or both) are the right goals of law, but about what we mean by efficiency in the first place.
This week I also finished harvesting the berries from my choke cherry shrubs. I did this in a few half hour to 45 minute increments in recent late afternoons or evenings, each of them quite enjoyable on their own. The berries as well as other plants are also interesting to the kids on the block, who at least pretend to listen to my botanical mini-lectures. On the “classical theory” for understanding gains and losses, my labor costs were thus zero or negative. If I had to harvest berries for an eight hour (or longer) shift, and if I was poorly compensated in addition to my role not being socially valued, I imagine practically every hour of labor would instead be associated with “disutility.”
One point that follows from this is that various types of small-scale production with less division of labor often may actually be more efficient, at least where labor costs are concerned, on the terms of the classical theory itself (which defines labor costs in terms of subjective utility). But this is the opposite of what conventional applications of neoclassical analysis to competition law have recommended (and institutionalized) regarding “scale.” (There obviously are limits and countervailing considerations to this point — but I don’t see it discussed or acknowledged much at all.)
The berries made me think about something else regarding “efficiency” too. As a gardener you are always thinking about what goes in and what comes out–even when you’re harvesting “intermediate inputs,” like compost! And you are trying to be efficient (in a somewhat more objective sense than the terms of the classical theory truly allow) even though you enjoy time in the garden. The principles of permaculture are all about operational efficiency: employing methods like no-till, and generally setting up the garden to work on its own as much as possible without constant high-effort intervention from the gardener. (The principles are also about operational efficiency in the sense of setting up systems that keep carbon in the soil, where it is affirmatively useful, rather than in the atmosphere where it is the opposite!)
My point is that nature is all about efficiency. The idea of efficiency, properly understood, isn’t an alien invention by rationalistic economists, an imposition of the “homo economicus” vision. On the contrary, the rejection (or demotion) of efficiency talk as lesser to real morals (“only” an instrumental value, etc) seems like the alien, rationalistic abstraction from nature. We can only say that efficiency (in the physical, operational sense) is not an “intrinsic” value if we imagine ourselves unembodied, and unencumbered by finitude.
Sanjukta Paul 