German is a remarkably expressive and adaptable language, in which words can be conjoined in ways that give precise expression to feelings or impulses. Everyone is familiar with “Schadenfreude,” or the feeling of joy we might have at the (deserved) damage to another person. I have tried to popularize “Tradenfreude,” or the joy I feel at observing the “well-contrived machine” of commercial society, with everyone trading with everyone else for conveniences and necessities. Of course, many people who loathe, or barely tolerate, commerce are more subject to “Tradenschmertz,” or hate-watching commercial society.
I have noticed a growing tendency toward the public expression of a particular kind of envy, an angry fear that someone, somewhere might be getting an undeserved benefit. Those who want to make policy based on this view, of course, would deny my claim that the motivation is envy, and instead would argue for “social justice” as the description. Regardless, the impulse is pernicious, seeking to deny unearned benefits to others even at a cost to oneself. I propose to dub this impulse “Nutzenschmerz,” or the indignant outrage over someone getting to use something I don’t have.
The initial distribution of the (eagerly awaited, by many) Covid-19 vaccines, especially in states where “social justice” is apotheosized, was a carnival of Nutzenschmerz. There were paroxysms of anger over the idea that someone might be jumping the queue, getting a vaccine they didn’t deserve; some claimed that “justice” should be the only consideration in deciding who got the vaccine.
The mania for “justice” reached such extreme levels that on December 28, 2020 New York Governor Andrew Cuomo signed an order imposing strict penalties—with fines up to $1 million per offense—for any injustice in the dispensation of vaccines. Since the criteria for “justice” were vague, and in fact contradictory, this meant that a large number of perfectly safe doses of the vaccine were intentionally thrown away in the first month, rather than give anyone an undeserved benefit. Cuomo, with the enthusiastic support of the legislature at the time, went so far as to threaten to revoke the medical license of any health care worker who gave a vaccine to anyone not in the priority list, even if the alternative was literally to throw the vaccine away because it spoiled quickly after being opened.
Liz Wolfe (in Reason magazine) illustrates the problem of being primarily concerned, to the exclusion of all other factors, with denying others any undeserved benefit. That is the essence of my concept of Nutzenschmerz.
The state is wrong to put these medical workers in a horrifying ethical bind where they must choose between violating the governor’s rules to help save people’s lives, or throwing scarce resources out at a time when we’re desperately attempting to reach herd immunity and avoid higher death tolls. Especially since vaccinating more people, whoever they are, is a Pareto improvement—something that would benefit at least one person (in this case, more than that, if vaccines reduce transmission too) while harming none. (1/8/21; emphasis added)
This statement of the problem reveals a gap between the way many economists think of the problem, and how politicians think of it. It is generally assumed, in blackboard economics, that a strong Pareto improvement—everyone is better off, and no one is worse off—is always unobjectionable. More importantly, it is simply assumed that even a weak Pareto improvement—at least one person is better off, and no one is worse off—is always easily implemented as public policy in a democracy. It’s actually the definition of “efficiency,” and efficiency is the goal of public policy.
But that’s clearly not true. A weak Pareto improvement, say giving any available person a vaccine dose if that dose would otherwise be thrown away, is precisely what many people object to. The idea that a benefit is undeserved implies that it should not be awarded, even if the alternative is literally dumping the benefit down the sink. The idea that public policy should be concerned first and foremost with preventing those undeserved harms, and confiscating unearned benefits from others, is the central premise of the new rendering of social justice and political responsibility. Nutzenschmerz is the denial of weak Pareto improvements to all members of the society, based on the insistence on a fanatically strict notion of desert. Any undeserved benefit is unjust; any cost incurred in correcting injustice is justified by the emotional group-think of Nutzenschmerz.
David Schmidtz’s 2006 book, The Elements of Justice, presents a remarkably insightful example of institutionalized Nutzenschmertz:
I pulled over. The cop pulled in behind. Walked to my window, peered inside, asked for my license and registration.
“New in town?”
Yes, I said. Got in five minutes ago.
“Know what you did wrong?”
“Sorry. There was no stop sign or stop light. The cars on the cross street were stopped, so I kept going.”
The cop shook his head. “In this town, sir, we distribute according to desert. Therefore, when motorists meet at an intersection, they stop to compare destinations and ascertain which of them is more worthy of having the right of way. If you attend our high school track meet tomorrow night, you’ll see it’s the same thing. Instead of awarding gold medals for running the fastest, we award them for giving the greatest effort. Anyway, that’s why the other cars honked, because you didn’t stop to compare destinations.” The cop paused, stared, silently.
“I’m sorry, Officer,” I said at last. “I know you must be joking, but I’m afraid I don’t get it.”
“Justice isn’t a joke, sir. I was going to let you off with a warning. Until you said that.” The reason that the example is ridiculous, and insightful, is that the main concern is ensuring that no one receives the undeserved benefit of being allowed to go through an intersection without giving a justification. Unless one has a persuasive justification, one must wait.
But then everyone waits, and waits longer than they might wait under a fair but arbitrary system such as traffic signals. Traffic signals are dumb, in the sense that one may (a) wait at a red light when there are no cars coming the other way, or (b) wait at a red light when one is in a desperate and morally justified hurry, while the cars passing through the green light could easily afford to wait.
The traffic light is an example of rule utilitarianism. Imagine that everyone is choosing behind a veil of ignorance about whether one is in the car for an urgent, or trivial, errand. In such a world, everyone would choose an unjust system based on traffic lights, with an average wait time of 20 seconds, rather than a “stop and justify” system that would impose an average wait time of 8 minutes.
Arbitrary traffic signals where the unworthy get an undeserved benefit are a Pareto improvement—a strong Pareto improvement, since the shortest wait time in “desert town” is greater than the longest wait time with electronic traffic signals. That doesn’t mean people care nothing for justice; rather, it means that justice is not the only value that should concern social policy. Sometimes the people who are waiting at the red light will be more deserving of immediate passage than the undeserving person who by chance passes through on a green light. But only a society afflicted with severe Nutzenschmerz would choose a system where even the neediest are harmed, to ensure that no one else gets an arbitrary or undeserved benefit.
This article, Nutzenschmerz, was originally published by the American Institute for Economic Research and appears here with permission. Please support their efforts.