Harmgart and Huck on Dogville

There were a lot of interesting comments on my political art piece, and since I don’t have time to do a new topic today, I thought I would develop the idea a bit further, and also comment on a very recent article that illustrates some of the strengths and weaknesses of political art.  Next Sunday I hope to have something new ready.

First I should clear up a few misconceptions.  I am certainly not opposed to political art, nor do I think it is an oxymoron.  Rather, I think political art does some things well (critique other value systems) and some things not so well (evaluate competing worldviews.)  This is why I don’t believe that liberal artists are able to effectively critique versions of liberalism that differ from their own.  There are lots of examples of political art that effectively critique non-liberal value systems, as I mentioned.  I did not mention the opposite case, but if my memory is correct then Brave New World and A Clockwork Orange include critiques of utilitarianism.  I have only read a bit of Nietzsche’s philosophy, but I suppose it would also fall into this category.

Where political art gets into trouble is when it tries to critique liberalism from within.  Thus some utilitarians favor the death penalty, some oppose it.  Some favored the war in Kosovo, some opposed it.  Some favor capitalism others favor socialism.  Unfortunately, most art has limitations that do not allow it to advance the argument very far once the debate focuses on competing worldviews.  On the other hand, I don’t want to be too dogmatic about this.  Patrick had some very tenacious replies to my post, and in the end got the best of me.  I had argued that it would be hard to show the deadweight loss of a tax through art, and after an initial false start (an example that only showed the cost to consumers) he eventually found a passage in Shakespeare that suggested a high tax could cause many people in the clothing industry to lose their job.

I would make a few observations regarding this example.  If I am not mistaken, in those days a more liberal-minded person might favor lower taxes, as much of the revenue went to the elite.  In addition, a passage in a narrative work of art which describes the effect of a public policy will only be effective if it finds a receptive audience.  So perhaps the audience in Shakespeare’s day would find the supply-side argument against high tax rates intuitively plausible.  Perhaps they knew of sovereigns who had tried to maximize tax revenue.  I think we can assume that modern audiences are different in this regard.  Even very smart economists often find supply-side arguments far-fetched.  And economists are the group best positioned to understand just how important the incentive effects really are.   Art is probably most effective when it shows something new, rather than when it merely tells its listeners what to believe.  So although I will concede that Shakespeare said more about excise taxes than I would have imagined, I still think that political art quickly runs into problems when it tries to discriminate among various utilitarian worldviews.

As an example, let me talk a bit more about the Great Leap Forward.  In the previous post on art I hypothesized that the free-rider problem explains much of the suffering under that policy.  People won’t work as hard or as effectively if they must share the all fruits of their labor with thousands of others.  But we see the free-rider problem in real life all the time, as when an apartment shared by four single people isn’t kept clean because everyone wants the other person to do the work.  Why couldn’t an artist portray that problem with a little vignette about one lazy bum taking advantage of several other hard-working people?  One could, but the audience would not see any connection with a famine that killed millions of people.  Even lazy people don’t want to starve to death, and thus would presumably do at least enough work to survive.  In small groups it’s almost always possible to get enough agreement so that the group does not perish.  If they didn’t the audience wouldn’t see it as a critique of an economic system, but rather would (rightly) see it is a critique of several incredibly stubborn and foolish people.  Unfortunately, you can’t scale up the narrative arts to a level where incentive effects cause huge problems, without draining the art out of the narrative.  All of Shakespeare’s works are about relatively small groups of people interacting.  And there are some things that simply cannot be portrayed in that milieu.  Yes, a political argument may be conveyed in the speech of one of the characters, but that will usually mean either preaching to the choir, or having it falling on deaf ears.

Dogville

Dogville is a recent film by Lars von Trier.  (Oddly, this is the third post in which I have mentioned von Trier’s name.)  Nicole Kidman plays a character named Grace who wanders into a small town with no resources, and in need of help.  The townspeople offer her a job in exchange for food, but as her situation worsens (she is being pursued by the authorities), the townspeople exploit her more and more ruthlessly.

A few days ago Heike Harngart and Steffen Huck published an interesting analysis of the film in the online journal The Economists’ Voice.  (The article is entitled “Dogville or an Illustration of Some Properties of General Equilibrium,” and I believe visitors are allowed to access it by filling out a form.)  In the first couple of pages they discuss some interesting parallels between the film and various general equilibrium models, such as the Arrow-Debreu economy.  In my view, the essay is ruined by the final page, which argues that:

In our view, a (classroom) debate about whether or not what happens between Ben and Grace is pure exchange would be didactically valuable as it mirrors debates about the benefits of global trade where some appear to have more choice than others:

In my view such classroom use of Dogville would be a terrible mistake.  Dogville does make some interesting moral arguments, but they are probably not what Harmgart and Huck assume, and also far different from what von Trier may have intended.

I am not certain exactly what political point von Trier attempted to convey (if any), but most of the film’s reviews I recall reading assumed that Dogville was anti-American, anti-free market, or both.  Based on various public statements made by von Trier, I find that interpretation plausible.   Harmgart and Huck are careful not to make any sweeping claims about the film’s message, merely noting that it raises important issues about market economies–particularly how the initial allocation of assets impacts the final equilibrium.  Let me list a few tentative observations, and then try to justify them:

1.  The film was intended to be anti-free market.

2.  The film is an effective critique of an Arrow-Debreu economy where each person is selfish.

3.  The film has nothing of value to say about market economies.

Why don’t the first two observations imply the third?  Because market economies have nothing to do with selfishness.  People in a market economy may or may not be selfish, just as people in a socialist economy may or may not be selfish.

In practice, no economy could operate with the level of selfishness assumed in many abstract models of market economies.  Imagine the worst form of crony capitalism in the world.  Now imagine something ten times worse, an economy full of nothing but sociopaths, people so selfish that their own well-being was their only concern.  Of course we have to put aside the problem of children as without some altruism it’s not clear to me that children could even survive (and there are children in Dogville.)  But let’s be flexible and allow for altruism within the family, but not outside it.  So anyone working in a company could not trust any of their co-workers; they would constantly be afraid of being stabbed in the back.  Government officials would sell favors to the highest bidder, and thus rent-seeking special interest groups (who could easily out-bid unorganized consumers) would quickly create all sorts of barriers to entry.  I’ll let any socialist readers decide whether socialism could be made to work in such a society, but clearly the free market system would collapse.  (I recall that Sen made a similar point.)

So the first thing to keep in mind is that the sort of economy described in most economic models would be a nightmarish world that would soon collapse.  Then why do we use these models, if they are so unrealistic?  As many people have observed, models are useful precisely because things are left out.  Any model that perfectly replicated reality, would be reality, and hence would be useless as a model.

When I was a child I had a model battleship.   It captured some things well (the color and shape of the ship) and other things not so well (the size; and the materials used in construction.)  One would not want to use my toy battleship with a one MM thick plastic hull, to predict the ability of real world battleships to survive direct hits from artillery shells.  Similarly, general equilibrium models help us understand certain issues very well, such as the way markets with “self-interested” individuals allocate resources.  But they are a horrible way to evaluate the fairness of a free market economy, because they assume people have no sense of fairness.  Any society where people lack empathy for others is going to look bad when evaluated under almost any known value system (as all widely accepted value systems assume empathy to be a positive value.)

Here you might ask whether I contradicted myself, arguing a world of “selfish” individuals would be unimaginably awful, and yet praising models based on “self-interest.”  But I am merely following in the tradition of the most famous proponent of free markets, Adam Smith, who assumed that people generally do prefer more wealth to less (self-interest), but also have a wide variety of other human emotions (which I believe he called “sympathies.”)

Others might argue that although Smith had a broad view of human nature, many of his followers take a much narrower view, arguing that people are basically selfish.  I have met people that make that argument, but it’s hard to take them seriously, as they show moral outrage when people around them behave selfishly toward them.  As Shakespeare showed, people are not “basically selfish,” nor are they “basically unselfish,” they are a complex mixture of all sorts of vices and virtues, a mixture that economists will never be able to adequately model.

The Harmgart and Huck piece is an interesting essay that is worth reading.  And Dogville is an underrated film that has makes some powerful moral arguments.  But Dogville does not have anything useful to say about world trade policy, or free markets.  Rather what it shows is just how cruel it is to take advantage of people in desperate circumstances.  But don’t multinational corporations do that when they hire desperate workers in third world countries?  For my answer I will refer you back to the Paul Krugman quote in last Sunday’s essay (as I trust no leftist would believe a word I have to say on this issue.)  If you look closely at Krugman’s essay, you will see that he is implicitly criticizing the sort of policy implications that many would be likely to draw from Dogville, if they used the sort of reasoning Harmgart and Huck seem to recommend.  (I have to be careful here because H&H are very careful to say they are merely raising questions about whether some seemingly “free choices” should actually be allowed to be made, they are not taking sides.)  But because economics is so counter-intuitive, non-economists would be very likely to get the answers wrong.  That’s Krugman’s argument, and I entirely agree.

If I wanted to take a political message from Dogville, it would revolve around selfishness, not markets.  It exhorts us to have more sympathy for those whose “initial allocation” is much lower than ours.  Perhaps we should do more to help the world’s poor, or the poor in America.  But that question has little to do with free markets.  As I argued in an earlier post, Denmark is arguably the most free market economy in the world, where companies are free to fire workers if they chose to (unlike most of Europe.)  But if von Trier’s home country was his intended target, it certainly went right over the heads of even the most sophisticated film critics.

[There is also the problem of how to help the poor.  It is not hard to envision how people could be charitable if Nicole Kidman stumbled into their town with just the clothes on her back.  It's not quite so easy to figure out how to help 100 million very poor peasants in Bangladesh.]

I am reluctant to recommend films because I have offbeat taste.  Most viewers would not like this film, and I seem to recall that even high-brow critics panned it, despite it pretentious artistic style.  And yet even though my political views are very different from those of Mr. von Trier, I liked the film a lot.  He is one of the most talented filmmakers in the world.  Like Stanley Kubrick he often makes the audience squirm, but it is hard to deny his stylistic brilliance.  But please do not see this movie on my recommendation, and then complain.  As with David Lynch films; I tell people that if they would like it they would probably have already seen it.

One final point, could it be argued that free market economies make people more selfish?  Perhaps, but Dogville doesn’t make that argument.  On the other hand the classical economists, and more recently Deirdre McCloskey, argue the reverse.


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11 Responses to “Harmgart and Huck on Dogville”

  1. Gravatar of Nicholas Blanchard Nicholas Blanchard
    29. March 2009 at 20:32

    In response to the moral tendencies of individuals, I would characterize people as “conditional cooperators” and “altruistic punishers”.

    Just to have a platform to jump off of =].

  2. Gravatar of Blackadder Blackadder
    30. March 2009 at 11:49

    Looks like T.S. Eliot agreed with you (sort of) about Animal Farm.

  3. Gravatar of ssumner ssumner
    30. March 2009 at 12:09

    Thanks Nicholas. I recall a study that showed there are three types of people. Those who take advantage of others, those who are conditional cooperators, and those fools like me who cooperate with just about everyone. Even the relative numbers in the population are close to the predictions from game theory. Anyone recall the study?

    Blackadder, I don’t know if you read last Sunday’s post on art, but I mentioned Animal Farm in a similar context. I love the Times story you attached, and added a quote from it to the end of my political art post.

  4. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    30. March 2009 at 18:21

    Scott, I am still baffled as to what your point is. With the arrows in Shakespeare’s quiver, he could say anything he wanted to. The soliloquy being the case in point (and he didn’t even need to resort to it in Henry VIII to explain the welfare losses of taxation).

    Consider the opening of Richard III

    ————quote————
    Now is the winter of our discontent
    Made glorious summer by this sun of York;
    And all the clouds that lour’d upon our house
    In the deep bosom of the ocean buried. 5
    Now are our brows bound with victorious wreaths;
    Our bruised arms hung up for monuments;
    Our stern alarums changed to merry meetings,
    Our dreadful marches to delightful measures.
    Grim-visaged war hath smooth’d his wrinkled front; 10
    And now, instead of mounting barded steeds
    To fright the souls of fearful adversaries,
    He capers nimbly in a lady’s chamber
    To the lascivious pleasing of a lute.
    But I, that am not shaped for sportive tricks, 15
    Nor made to court an amorous looking-glass;
    I, that am rudely stamp’d, and want love’s majesty
    To strut before a wanton ambling nymph;
    I, that am curtail’d of this fair proportion,
    Cheated of feature by dissembling nature, 20
    Deformed, unfinish’d, sent before my time
    Into this breathing world, scarce half made up,
    And that so lamely and unfashionable
    That dogs bark at me as I halt by them;
    Why, I, in this weak piping time of peace, 25
    Have no delight to pass away the time,
    Unless to spy my shadow in the sun
    And descant on mine own deformity:
    And therefore, since I cannot prove a lover,
    To entertain these fair well-spoken days, 30
    I am determined to prove a villain
    And hate the idle pleasures of these days.
    Plots have I laid, inductions dangerous,
    By drunken prophecies, libels and dreams,
    To set my brother Clarence and the king 35
    In deadly hate the one against the other:
    And if King Edward be as true and just
    As I am subtle, false and treacherous,
    This day should Clarence closely be mew’d up,
    About a prophecy, which says that ‘G’ 40
    Of Edward’s heirs the murderer shall be.
    ———–endquote————-

    That’s all about the incentives Richard sees. And all the history plays are political.

  5. Gravatar of ssumner ssumner
    31. March 2009 at 12:53

    Patrick, I think you missed my point. I think art can critique the “political” wonderfully, if you mean by “political” the games people play, not whether interest should be paid on all reserves, or only excess reserves. The examples in Shakespeare’s plays tend to be very intuitive; ambition, treachery, honor, etc. Audiences can easily identify with human behavior. I am interested in the stuff that is counterintuitive. Yes, a character in Shakespeare could theoretically say “imports may appear to hurt an economy, but they actually help an economy” but what would be the point? If even very smart people who have studied alot of economics don’t get this insight, then what would be the point of a character simply saying something like that?
    I made a very specific point. I said that although many artists have tried to use art to critique capitalism, none have succeeded. What you should do is find examples of works of art that criticize capitalism effectively (rather than simply assume it is evil.) Prove me wrong. But first think about what it would take for a work of art to SHOW something, not just tell audiences what to believe. Or the same for socialism, if you prefer. Perhaps you’ve seen liberal movies like Brokeback Mountain. These movies have a political effect by showing something about the characters, not having speeches about gay rights. Those are political movies that are successfully political (I’ll put off the question of artistic quality, which is much more subjective.)
    Or consider something outside economics. How would a film critique the right-wing liberal view that the death penalty saves lives by discouraging murder. How would you show people not getting murdered? Would it be convincing? I have a hard time seeing how.

  6. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    31. March 2009 at 14:10

    Scott, the idea that criminals would draw the line short of murder because it carried the death penalty was a staple of 50s TV drama.

    I’ve also heard people express amazement that Danny DeVito’s speech to the shareholders in ‘Other People’s Money’, was so convincing. That is, it was counterintuitive.

    Do you really think Shakespeare would be incapable of writing a play about central banking, with Ben Bernanke doing a soliloquy about the pressures he was under?

  7. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    31. March 2009 at 14:19

    The clip from Other People’s Money is here:

    http://www.youtube.com/watch?v=MfL7STmWZ1c

  8. Gravatar of Nicholas Blanchard Nicholas Blanchard
    31. March 2009 at 14:55

    Scott, you may find this an interesting read:

    http://www.edge.org/3rd_culture/benkler09/benkler09_index.html

    I’m a big fan of Yochai Benkler, and I really like his book, “The Wealth of Networks”.

  9. Gravatar of ssumner ssumner
    1. April 2009 at 12:15

    Patrick, I absolutely agree that Shakespeare could write a play about Bernanke’s dilemma. And what would we learn about monetary economics? Nothing, that’s the purpose of this blog. The play would show the world of human interaction, how Bernanke faced all sorts of pressures, and had trouble convincing the other members of the FOMC. But what we really need to know is whether QE can work in a liquidity trap. And Shakespeare wouldn’t have anything useful to say on that question.

    I have never seen a work af art that convincing showed how the death penalty can deter crime. How do you know he didn’t refrain from shooting someone because he didn’t want life in prison?

    I agree about the Devito speech. In all my years of movie watching it is the only halfway intelligent discussion of economics I have ever seen. But it is a speech, it’s essentially a classroom lecture for 10 minutes. The ideas aren’t coming out of the drama, they’re being told to the audience. Nevertheless, it is a good example you picked. It certainly shows I have to be careful about what sort of claims I make, and I’m not sure I’m quite ready to come up with a specific hypothesis. I need to spend more time studying political art.

    Nicholas, I liked that talk as well. But one word of caution. I have often heard people say we need a new model along such and such lines. If it isn’t immediately obvious what sort of model we need, I have found out that it is really hard to come up with a model. We sometimes use the selfish/rational assumption because its easy to model. Like looking for keys under the streetlight. But the dark areas are very hard to model, so it might not be easy to achieve the things he talks about. Nevertheless it is certainly worth the effort, as the selfishness assumption is obviously way too simplistic.

  10. Gravatar of Mike Rulle Mike Rulle
    1. April 2009 at 14:36

    I just discovered your site in the last few weeks and have enjoyed it. You mentioned being open to reader questions. There is something about the recent crisis that is driving me a bit batty.

    Since last summer, I have been fascinated, if not hypnotized, by the idea that this real estate crisis, which transmogrified into a mortgage backed securities uber meltdown, was actually “only” a severe and localized predominantly west coast phenomenon that could have been and should have been contained. I explicitly compare Greenspan’s decisions (favorably) in 1998 regarding Long Term Capital with the Paulson’s et.al handling of the AIG bailout. The latter was woefully incompetent and conflicted in my view.

    I have pretty firm beliefs–based on proper analysis I hope–about what AIG was about. (One can read “Anatomy of a Bailout” on my website). One of the lynchpins to my argument is the William Lucy Study (of UVA) who makes a pretty strong case that housing value declines are a mere fraction of the losses banks have taken. This implies something else was going on in the mortgage market besides declines in the prices of houses. I make the case that one of those other things was the mishandling of AIG.

    My question is, have you seen the study by him? I continue to be flummoxed by the invisibility of this study and its potential implications. I have seen only a few newspaper articles and not one economist comment on it—and I peruse these sites fanatically. His study is descriptive. He makes few deductive policy links as to its meaning. I think the meaning is “profound”. It would imply this was a regulator based crisis–which has become my default position.

    Your comments on this question would be greatly appreciated.

  11. Gravatar of ssumner ssumner
    2. April 2009 at 17:15

    Mike, It is interesting that you mention this idea, because I have some recent posts that have a similar spirit, but reach slightly different conclusions. My newest post (the same day as your comment) argues the subprime crisis only caused part of the problem, and monetary policy errors explain most of the recent losses banks are incurring. Some indirect support for this comes from my other recent post on graphs.
    In my newest post I argue that much of the country saw only very mild real estate declines before last August. August was the month when commodity prices fell sharply and the recession spread from real estate to manufacturing (and became much more severe.) So a localized problem became much more national. And when that happened it was no longer just housing loans, but many other types of loans as well. I believe the Fed could have prevented this from happening. AIG is definitely a big story, but I regret to say I am not well informed. James Hamilton on econbrowser had a good piece on AIG less than a month ago. One of my posts (with AIG in the title) links to it.

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