I plan to start answering questions on Friday, August 20th.
About me
I’m the Flanagan Family Professor of Strategy, Economics, Ethics, and Public Policy at the McDonough School of Business at Georgetown University. I’m the author/co-author of fifteen books, including Business Ethics for Better Behavior (Oxford University Press, 2021), Why It’s OK to Want to Be Rich (Routledge, 2020), Cracks in the Ivory Tower (Oxford University Press, 2019) and In Defense of Openness (Oxford University Press, 2018). I work at the intersection of politics, philosophy, and economics, often focusing on the normative and empirical analysis of perverse incentives, on taboo markets, or on democratic theory. My most famous book is Against Democracy (Princeton University Press, 2016), and my books have been translated 25 times into 13 languages.
At Georgetown, I teach a range of courses, including “Managing Flawed People,” “Social Entrepreneurship, Non-Profits, and Effective Altruism,” “Business-Government Relations,” “The Structure of Global Industries,” and “The Moral Foundations of Market Society”.
I recently won a $2.1 million grant from the Templeton Foundation for a 3-year project on “Markets, Social Entrepreneurship, and Effective Altruism”. The funding will be used for visiting faculty, conferences, case competitions for social entrepreneurship projects, student research, pedagogical materials, and to fund the expansion of a social entrepreneurship project throughout our MBA program and at other universities.
The Ethics Project
The keystone project in each of my courses is the Ethics Project. You can read a lot more about it here and a little more about it here. Here is NBC Nightly News coverage of one student project.
The Ethics Project’s basic idea is simple:
Think of something good to do. Do it.
At the end of the semester, students, working in groups, are asked to make a presentation and write a report to answer a wide range of questions, including:
- How did you interpret the imperative to do something good, and why?
- How did you consider the trade-off between what’s best and what’s feasible?
- What was your opportunity cost?
- What obstacles did you expect to encounter, how did you plan for them, what obstacles did you in fact encounter, and how did you respond?
- Did you add value to the world, taking into account the value of your outputs and the costs of all of your inputs?
- Was your project a success, and how should we measure it?
- What did you learn and what would you do differently?
Student projects range from the profound to the mundane. For instance, some students helped teenagers in a poor country start their own business, which quadrupled their family income in a short period. Others have started their own businesses on campus—with the most successful grossing something like six figures over a few years with about a 33% margin. One group installed plumbing features which saved the university tens of thousands of dollars in wasted water per year. Others have conducted fundraisers (with the record now at about $17,000), run events, purchased goods for charities and schools, and more.
The Ethics Project is an excellent way to teach business ethics, management, philosophy, economics, and effective altruism, because rather than asking students to talk about ethics, it asks to students to learn by deliberating, acting, and then reflecting on what they did.
Ask me anything!
I’d be happy to answer questions on any of the topics I work on, teaching ethics and altruism, academic life, guitar/amp gear geekdom, work-life balance, or anything else you find of interest.
Let's say you have a 10 person workers' co-op which shares income equally. Each person now gets paid 1/10th the firm's profit. Thanks to diminishing marginal returns, if you add an 11th worker who is otherwise identical, they will contribute gross revenue/have a marginal product of labor that is less than the previous added worker's. When you divide the income by 11, everyone will make less.
This is a well-known problem in the econ lit. Of course, in real life, workers are not homogenous, but the point remains that in general you get diminishing returns by adding workers.
As a toy illustration, suppose that there two countries, Richland and Poorland. Everyone in Richland makes $100,000/year. Everyone in Poorland makes $2,000/year. Suppose, however, that if half of the Poorlanders move to Richland, their income will up by a factor of 15, while domestic Richlanders’ income will increase by 10%. Thus, imagine that after mass immigration, Richland has 50,000 Poorland immigrants now making $30,000/year, plus it’s 100,000 native workers now each make $110,000 a year. From a humanitarian and egalitarian standpoint, this is wonderful. Further, this isn’t merely a toy example; these are the kind of income effects we actually see with immigration in capitalist economies.
But this same miraculous growth looks far less sexy when it occurs in a democratic socialist society with equalized incomes. Imagine that democratic socialist Richland is considering whether to allowing 100,000 Poorlanders to immigrate. Imagine they recognize that Poorlander immigrants will each directly contribute about $30,000 a year to Richland economy, and further, thanks to complementarity effects, will induce the domestic Richlanders to contribute $110,000 rather than $100,000. But here the Richlanders might yet want to keep the Poorlanders out. After all, when the equalize income ((100,000 X $30,000 + 100,000 X $110,000)/200,000), average incomes fall to $70,000. Once we require equality, the Richlanders see the immigrants as causing each of them to suffer a 30% loss of income. While for capitalist Richland, the immigrants were a boon, for socialist Richland, they are a bust. Unless we imagine our socialist Richlanders are extremely and unrealistically altruistic, they will want to keep the Poorlanders out.
Things get worse once we consider how real-world ethnic and nationalist prejudices will affect things. In fact, people are biased against foreigners, especially foreigners of a different race or religion. However, the beauty of capitalism is that it makes employers’ pay to indulge their prejudices; it literally comes out of their pockets. Thus, it’s not surprising, despite what some journalists and academics claim, that when economists try to measure to what degree wage differentials are the result of employer discrimination, they find that at most it’s quite tiny.[1]
[1] Goldin and Rouse 2000; Betrand, Goldin, and Katz 2010; Bolotnyy and Emanuel 2018.