Euthyphro's Dilemma

In "The Poison of Subjectivism", C.S.Lewis asks, "But how is the relation between God and the moral law to be represented? To say that the moral law is God's law is no final solution. Are these things right because God commands them or does God command them because they are right?" [1]

This is the modern version of the dilemma first posed by Socrates in Plato's "Euthyphro". Lewis explains why he is unable to accept either horn of the dilemma.

"If the first, if good is to be defined as what God commands, then the goodness of God Himself is emptied of meaning and the commands of an omnipotent fiend would have the same claim on us as those of the "righteous Lord." If the second, then we seem to be admitting a cosmic dyarchy, or even making God himself the mere executor of a law somehow external and antecedent to His own being. Both views are intolerable."

Be that as it may, rejecting the dilemma is not a valid option here. In essence, the question posed is whether God's morality is subjective or objective and there is no middle ground between these two alternatives. [2] However, Lewis' concern with the "objective" horn of the dilemma turns out to be unfounded. An objective law need not be external and antecedent to the being that follows it.

To see this, consider the economic law of supply and demand. The truth of this law depends on the actual interactions between people. The law did not precede the existence of people since it depends on what people do. But neither did anyone create the law. Instead it is a discovered generalization of people's behavior. That is, the law of supply and demand describes what people do or, to phrase it differently, people act according to the law of supply and demand. [3] The law is objective rather than subjective because it exists independently of anyone's opinions about it albeit, in this case, not independently of people's behavior.

Similarly the existence of the moral law for God is conditional on God's nature and therefore not antecedent or external to it. Given God's nature, it prescribes what God should and should not do. That is, God is subject to the moral law which he did not create but which nonetheless depends on his existence. Adding the premise that "God is (always) good", the moral law also describes what God does and does not do. As Lewis says elsewhere, "... the Divine Will is the obedient servant to the Divine Reason." [4]

Note: The solution to the dilemma involves other philosophical issues which I haven't explored here but which I take a generally Aristotelian approach to. These include the problem of universals (what does it mean for abstractions, such as the moral law, to exist?), the is-ought problem (how does the moral law derive from a being's nature?) and the argument from morality (does the moral law require God?).

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[1] "The Poison of Subjectivism" from "Christian Reflections" by C.S.Lewis.

[2] Lewis is aware that he doesn't have a satisfactory solution to the dilemma. He says, "But it is probably just here that our categories betray us. It would be idle, with our merely mortal resources, to attempt a positive correction of our categories - ambulavi in mirabilibus supra me." (Translation: I do exercise myself in great matters, in things too high for me.) However, despite his rejection of the dilemma in this instance, Lewis' general tenor in this essay and other writings is toward the "objective" horn.

[3] The law of supply and command is usually thought of as being true all else being equal. So, for example, when demand increases for a fixed supply of oil, government regulation could prevent the price from rising.

[4] Letter from C.S.Lewis to John Beversluis a few months before his death in 1963. From "C.S.Lewis and the Search for Rational Religion", p295, John Beversluis.

Making good rules

At my kid's school we have an important decision to make when we get to the main gate. Do we go up the stairs to Liam's class first or through the gate to Michelle's class first?

Of course both my children want the opposite thing which is to go to their sibling's class first. So my choice would always end up with one unhappy child and a futile discussion. I sometimes have my one year old Jason with me so that complicates the herding process as well.

So I instituted a very simple rule. Let's go turn about each day. It seemed entirely fair and obvious - what could possibly go wrong?

Many things as it turned out. One problem was that neither of my kids could seem to remember who went first the day before despite my detailed descriptions. Also Joanne sometimes dropped them off, so I would get a conflicting story as to who went first then. And even I would sometimes misremember, escalating their sense of injustice.

So I finally came up with a new rule. If Jason is with us (which happens twice a week) we go to Michelle's class downstairs first. Otherwise it's upstairs to Liam's class. And it has worked perfectly every time. The rule works, I think, because it depends on something immediately observable by everyone and can be determined instantly without requiring discussion. It doesn't depend on memory or a past history of events which is what leads to the competing interpretations and conflicts.

There is a teacher who holds the gate open in the mornings. Our kids know he doesn't know the rule so they like to quiz him on which way he thinks we will go each morning. So instead of the walk into school being a painful exercise, it has now turned into a fun event for everyone.

Lunchbox game theory

A practical lesson in game theory: the three-person game.

When helping the kids pack yoghurt for their lunch boxes, I found there was only strawberry yoghurt left in the fridge in the tear-off individual containers. Their preferred yoghurts, mango and vanilla, were finished.

So I asked Liam to grab new yoghurt from the garage fridge. He came back with two large containers (there were no tear-off packs left) which happened to be mango and vanilla. Since we could only open one of them, I asked Liam which one he wanted.

"Mango."

Liam then asked Michelle the same question, who replied, "Vanilla."

I said, "Sorry, we can only open one. So which one will we have?"

Same responses.

"Michelle.", I said, "We can only have one, so how about we have mango this week?"

"No!", she says, "I want vanilla!", as she starts to melt down.

"OK, Liam.", I said, "How about we have vanilla this week, since it seems to be important to Michelle?"

"No!", he says, "I want mango and I said it first!", as he also starts to melt down.

"OK.", I said, "Since you can't agree, I'm going to put them away and you can both have strawberry today."

"Noooooooo!"

OK that was traumatic. Unfortunately, in addition to the yoghurt wars, I see that tomorrow we will only have one bread roll left and one of the kids will have to have sliced bread...

One trillion dollars!

You may be able to just make out a person in the bottom left corner of the image standing next to 10,000 double-stacked standard pallets each holding a million $100 bills. That's what one trillion dollars looks like.

Humans have trouble intuitively conceptualizing large numbers. A billion or a trillion can seem incomprehensibly large when you only have ten fingers. This means that any analysis involving large figures will often just confuse us rather than inform us. So, for example, when we hear that the public debt of the United States is $12 trillion, or the deficit is almost $1 trillion, it sounds both overwhelming and unsustainable. And maybe it is. But drawing that conclusion without knowing the yearly GDP figures or the historical record is unjustified.

So I thought I'd show two charts that help provide a basis for drawing conclusions. Both charts provide information as percentages instead of large dollar amounts which makes any analysis easier to understand.



US public debt as a percentage of GDP

The first chart shows the US public debt as a percentage of GDP. While the debt continually increases (and is therefore larger than it ever has been), GDP also increases and is currently $17 trillion. The current US public debt as a percentage of GDP is 73% and the 1945 high was 113%.

For comparison, the UK public debt stands at 76% of GDP with a 1947 figure of 238%. Japan's public debt is currently 220% of GDP.



US federal deficit as a percentage of GDP

The second chart shows the US federal deficit as a percentage of GDP. The current US deficit is $680 million - about 4.1% of GDP. It was $1.4 trillion in 2009 or about 10% of GDP.

The US deficit was 30% of GDP in 1945.

 

A brief guide to US monetary policy

When demand for goods is falling (such as during a recession), a central bank can respond by lowering the short-term interest rate. This results in more borrowing and spending and higher employment. Stocks go up, investment increases, the dollar goes down and exports go up. Good times!

However a special problem with the 2008 global economic crisis was that interest rates in areas like the US and Europe were close to 0%. Unable to reduce short-term rates further, the Federal Reserve has resorted to unconventional monetary policy to reduce long term interest rates. The Fed achieves this by declaring that it will keep short-term rates low, which helps lower bond yields. And it also buys bonds on the open market which further lowers bond yields.

For example, with Quantitative Easing, the Fed credits its own account (the digital equivalent of printing money) and then uses that money to purchase government bonds on the open market from financial firms such as banks and insurance companies. This procedure increases the price of the bonds which makes them a less attractive investment. The money that firms make from the bond sales can then be invested in other companies or lent to individuals, usually at a lower interest rate to attract borrowers.

Once the US economy is in good shape, the Fed will tighten (decrease) the money supply to prevent high inflation. It will do this by selling the originally purchased bonds and then debiting its account (thus destroying the money it originally created).

A Nobel effort

This year's Nobel Memorial Prize in Economic Sciences has been awarded to three path-breaking economists for their empirical analysis of asset prices.

Eugene Fama is the father of the Efficient Market Hypothesis (EMH) which states that financial markets instantly factor in all known information into asset prices. One implication of this hypothesis is that professional investors cannot outperform the market except by luck. Therefore the best strategy is to simply invest in an index fund.

Robert Shiller challenged the EMH with his findings that the volatility of stock prices is greater than would be expected by the changes in dividends. His work has been part of the behavioral revolution in economics which studies the psychological factors in economic decisions and their effect on markets.

Lars Peter Hansen developed statistical tools that greatly simplified the analysis of asset prices.

Of relevance to all this, in Thinking Fast and Slow, Daniel Kahnemen describes his statistical research that demonstrates the inability of professional investors (including fund managers) to consistently beat the market. As he puts it, "There is general agreement among researchers that nearly all stock pickers, whether they know it or not - and few of them do - are playing a game of chance. The subjective experience of traders is that they are making sensible educated guesses in a situation of great uncertainty. In highly efficient markets, however, educated guesses are no more accurate than blind guesses."