The game-theoretical concept of a “Prisoner’s Dilemma” applies to situations where no overt defection has occurred. Many readers may be perplexed by this assertion since, by definition, Prisoner’s Dilemmas entail “players” selecting uncooperative strategies. However, there are scenarios where the selection of a specific approach could lead to non-optimal outcomes. But such a strategy would not be considered a direct form of defection. These strategies are analogous to a defecting because the participating economic agents are moving away from a given focal point; rather than converging upon it. Even though the participants are not directly undercutting each other but inadvertently select noncooperative strategies. One salient example of this is any situation in which both parties choose to lie to the other. Both agents believe it is in their self-interest to obscure the truth, but doing so will only engender more problems.
A novel application of this theory would be in job interviews. Why? The hiring manager and the applicant concurrently have incentives to distort the facts. The prospective employee stands to benefit from embellishing their credentials. Likewise, the hiring manager might think it is shrewd to exaggerate or overemphasize the company culture when it is difficult to find a qualified candidate. When used in unison, the consequences are disastrous. The new employee will not be unqualified for the position and will also have unrealistic expectations for the job role. Ultimately, creating more issues for the hiring manager and the jobseeker. Telling a lie may not be a direct form of uncooperative behavior, can often yield similar results.
At the center of every social interaction is some variant of exchange. Whether it be friends trading pleasantries or vendors and clients exchanging money for goods; every social interaction is an exchange. For this very reason, it is perplexing how once money enters the picture the interaction has been ethically tainted. Surely, examples of bribery have many moral considerations to address. However, the disdain expressed for people who monetize a hobby is devoid of any justifiable logic. In a sense, even the exchange of nonmonetary goods such as ideas and goodwill can be abstractly viewed as a form of commerce. Much like bartering goods and services, the trading of ideas tends to make people better off. Why should the exchange of ideas enjoy the moral high ground while trading tangible goods for money is treated with ethical inferiority? Odds are that will be a question for another day.
It should be noted that nonmonetary interpersonal exchange extends well beyond interchanging nontangible ideas. It can also apply to displays of affection. One form of interpersonal exchange that seems to be most salient in the minds of people would be sexual intercourse. Outside of the deeply ingrained biological proclivity to crave sexual contact, such acts have been mystified by being shrouded in a mystique of societal taboo. Only serving to make anything about sex more alluring; sex being nothing more than “..forbidden fruit..”. Especially when it is outside of the contexts in which is societal prescribed is being permissible. Irrespective of the context in which sexual intercourse takes place, if it is consensual, it is a form of exchange.
Even in instances where sexual relations are consensual, such interactions among co-workers operate in a moral grey area. Most Human Resource departments frown upon such conduct, but rather ever outright condemn it or impose disciplinary action. However, once the exchange is between various tiers of management and their subordinates any appeal to the morality of such an interaction becomes more dubious. Not fixate on equalitarian concerns, but there is an institutional asymmetry of power. An individual’s boss has quite a bit of authority over them. After all, having the power to sever someone from their ability to earn an income is a lot of power to wield. An individual’s boss can also influence the trajectory of one’s career. Introducing sex into the mix spells a recipe for calamity.
An hourly employee having a sexual relationship with their boss is a prime example of a prisoner’s dilemma. Ideally, both parties or either individual would decline to engage in any sexual conduct. As we all know the world, we live in is far from ideal. Even if it were to happen, to not allow the incident to influence any aspect of their professional lives. Again, humans are emotional creatures. When David Hume described the servile relationship between people and their passions, he was correct. Unfortunately, such an incident cannot remain neutral, almost always bleeds into other the work life. Regardless of whether the exchange occurs on or off company property.
It would be in the best interest of both individuals to move on from their regrettable tryst (or chronic series of amorous activities). That would defy human nature, even if it would be the rational course of action. There is the ill-fated inclination of people to weaponize such situations for their interests. Falling into the categorical definition of a Prisoner’s Dilemma. The manager could threaten to demote their subordinate or even fire them if they tell anyone about their affair. The same penalties could also be applied if the subordinate decides that they are no longer interested in continuing the sexual relationship. Reciprocally the subordinate could also fight fire with fire. Deciding to use the sexual encounter as a point of leverage for either reprisal or career advancement. Opting to seize this opportunity and continue this unethical relationship with their boss. Even in some cases using past encounters as the focal point of an extortion or blackmail attempt. Either individual using their past rendezvouses in a manner that will harm the other is an unquestionable noncooperative strategy. The key factors of lacking trust and the institutional/moral disapproval of such engagements are conducive to defection. If you can’t rely on the other to be cooperative and work in everyone’s mutual interest, you might as well save yourself.
The moral argument for a right to suicide is firmly grounded in property rights. To many readers the very notion that suicide and ownership of tangible objects are interconnected is farfetched. Upon a superficial assessment of the premise, it is easy to jump to this conclusion. Once we get to the philosophical taproot of the concept of ownership the overlap between the two concepts becomes much more apparent. Fastened to the pillar of natural rights, the right of ownership is crucial in establishing all other rights. The ability to retain, transfer, and exclude others from one’s property lays down the framework for all other negative rights we cherish. For example, if a dinner guest offends us with an off-color joke at our house, we have the right to ask them to leave. The right of excludability. If the dinner guest is aware, we are offended by specific kinds of jokes, they fully consent to the conditions of the dinner party by opting to attend. Due to this variety of informal rule creation, there is no need to implement laws prohibiting offensive speech. Individual property owners can decide what types of jokes or language will be tolerated in their household.
The basis for ownership of tangible items goes back to an even deeper principle of self-ownership. If we do not own ourselves how can we possibly possess physical property? Either in the title or tangible form. The philosopher who bridges the gap between self-ownership and ownership of objects, locations, and intellectual property is no other than the great John Locke. At the most rudimentary level, we must own ourselves before we can possess any additional property. The extent to which this self-ownership is applicable is debatable. We can legally own ourselves. We have autonomy over (in most cases) our corporeal vessel that holds our inner organs. An individual can also exert control over their mind. Where does the right of an individual to own one’s self arise from? This merely the abstract pontification of an out-of-touch philosopher? Most who have read Locke would staunchly disagree with the prior inference. Locke developed a concise explanation linking self-ownership to an unwavering natural right.
In Locke’s Second Treatise of Government (1689)he further expounds upon the natural basis for self-ownership. Arguably laying down the nascent substrate for the ethical arguments against slavery later on in the 19th century. The right to self-ownership is the result of divine providence. In Locke’s view, God gives us life and we are born free. For those who have more of a secular view of the world, it could state we are born free by our humanity. There is no grand authority that we must oblige by involuntarily transferring self-possession to as a result of cohesion.
“…Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his person: this nobody has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. (p.11)..”
Locke establishes that no one person has the right to own another human being. The implications of the above quote go beyond the abstract conceptualization of self-ownership. Due to a person owning themselves they also possess the fruits of their labor. If you work and toil to harvest lobsters in the icy waters off the coast of Maine, whatever you catch is rightfully yours. Providing you are not capturing so many lobsters that you are preventing others from having a chance to obtain the seafood delicacy. Nor are you procuring so many they will go to waste (p.12-15). Through self-possession and possession of our labor and the results of our labor, the natural rights argument for property ownership is pithily conveyed.
John Locke was correct about all people being born free and having possession of overall commodities, lands, and intellectual property that they have rightfully obtained through their labor. Where he went astray was asserting that natural rights are inalienable. Regardless of whether we procure these rights from god or as a result of our personhood, you can alienate these rights. Whether or not it is ethically justifiable is completely contingent on the consent of the individual. We have a natural right to free speech for example. While at work we temporarily or indefinitely suspend (for the duration of our employment) our right to unfettered speech as a condition of employment. There is nothing illegitimate about this arrangement because it expresses a form of tacit consent. If you truly disagreed with the rules of the company you otherwise would not accept the job offer. Agreeing to conditions of employment can operate as a form of selling our natural rights. If we truly own ourselves and possess all of the natural rights we are guaranteed in the Constitution, why couldn’t we sell the title to our rights to other people? That is effectively what we do when after signing an employment agreement. Our natural rights cannot be transferred or relinquished unless we willingly agree to conditions or arrangements that nullify these rights.
One particularly controversial example of this concept was formulated by the Austrian economist and political theorist Walter Block. Dr. Block postulates that voluntary slavery is not incompatible with individual freedom. Such a position sounds antithetical to liberty, however, understanding the context is key. There is a difference between being forced at gunpoint into slavery and choosing to be a slave. Why would anyone choose to be a slave? They or a family member may owe an astronomical amount of money to a private individual and the only means of making restitution on their debts would be a lifetime of unpaid servitude. It highly unlikely that anyone in modern times would consent to such an arrangement. Being able to sell one’s self to another person demonstrates an unfettered view of self-ownership. The laws prohibiting voluntary slavery are essentially are equally as unjust as keeping involuntary slavery legal. We can’t say that we truly own ourselves if we cannot do as we please with our bodies. That includes opting to sell ourselves into slavery.
The question becomes how does the argument for voluntary slavery apply to suicide? Logically it is predicated on the very same principle of self-ownership. If you truly own yourself and no one else has possession of your body and mind, then you have a right to kill yourself. As jarring as this statement maybe it is nevertheless true. If we truly possess an object or an idea we can do as we please with it. We can sell the item or bit of intellectual property, or we can dispose of it. Nothing is stopping us from purchasing the latest iPhone at full retail price and then upon receiving the device, abruptly throwing it into a trashcan. While by the assessment of convention sensibilities such an action would irrational or foolish, no one has a right to prevent this behavior from occurring. Regardless of the perception of others, the notion of ownership prevents others from intervening. Some may criticize this example because it is comparing a replaceable item with the irreplaceable essence of human life. This critique is a fair one, however, that does not make this a false analogy. The operative condition is the concept of ownership not what the individual is choosing to dispose of. Regardless of the origin of where we obtain our natural rights from we do own ourselves. Much like anything else we own we have a right to dispose of ourselves. This is not making a moral judgment about the act of suicide in-of -itself. Nor is this a tacit endorsement of suicide. However, legality is no measure of morality. Nor is pressure to conform to societal norms. If we legalized heroin use and prostitution tomorrow, these activities would not necessarily be moral. But they would be legal. While these activities may be immoral, inferring an individual’s right to poison their body or engage in infidelity is also immoral. Immoral on a grander scale. When victimless crimes have codified sanctions, they are generally backed by the threat of incarnation, fines, or state violence.
The decision to commit suicide is a deeply personal decision that should not be felt in the hands of doctors, psychologists, and especially nor legislators. Attempts to intervene in suicide attempts are naturally transgressive against the individual’s property rights. If indeed, we truly possess self-ownership.
The act of suicide is an action unconscionable to most people. Committing suicide violates one of the most basic tenants of human biology, the innate drive for self-preservation. Human beings are wired to avoid death at all costs. This proclivity towards instinctively evading peril is physiologically manifested in our internal fight-or-flight response. If our biologically ingrained will-to-live isn’t compelling enough to make the prospect of suicide perplexing, there are also normative reasons for finding the practice baffling. Some of these cultural norms have developed out of divine prescriptions. In the Abrahamic religions, for example, there are textual prohibitions against suicide. This divine restriction is even extended to instances of medically assisted suicide for the terminally ill. However, the philosophic obligation to live is not limited to a purely religious context. There are philosophical; traditions that shun suicide as an abdication of duty. One of the most salient examples of this is presented in the corpus of Immanuel Kant’s work. It can be argued that we have a duty to our family, friends, co-workers, and community to not kill ourselves. Some people love us deeply and count on us. How could we be so egotistical to not consider the radius of the fallout from such an act? The externalities of one person committing suicide stretch well beyond the victim.
Then again, this reason could be easily inverted. Who has the authority to mandate that suicide is a selfish act? God? Perhaps. Does divine prescription or other moral conventions give us a moral duty to intervene in suicide attempts? A resounding majority of people would unequivocally say, “yes”. Many would go so far as to advocate for codifying measures in formal statutes and ordinances to safeguard those with suicidal inclinations from harming themselves. This is substantiated by the fact that most states have laws that require mandatory involuntary hospitalization for suicide attempts. However, much of the conventional wisdom that surrounds the subject of suicide is quite perverse. Beyond the stigma that is attached to it, societally we have the wrong perspective on it. If people can subjectively determine the value of goods that they choose to buy daily, why can’t they do the same with their quality of life? Couldn’t we also extrapolate the same concept of marginalism to an assessment of individual wellbeing? Even the parameters set in place in jurisdictions where medically assisted euthanasia is permitted are too restrictive. The doctor tasked with ascertaining whether a terminal cancer patient should be able to end their own life is draconian. Involuntarily transferring this right to an authority figure by a matter of jurisdictional law. Who would be a better judge of the patient’s quality of life, than the patient? The judgment of the physician at best a partial informed inference. Lacking the all if qualitative sensations of anguish characterizing most terminal illnesses.
While medical-assisted suicide may be legalized in some regions for those at the end stages of palliative care, it remains taboo to permit suicide for those suffering from psychological distress. This discrepancy in logic is quite puzzling. In recent years there has been a plethora of campaigns to have mental illness be publicly recognized as an illness. Generally done so in a top-down and highly pedological manner (naturally the experts curing the ignorance of the commoners). Generating a myriad of various pithy slogans so succinct they could fit on a bumper sticker. There is some glaring hypocrisy in these initiatives. While yes, I agree that mental illness is an illness. In most cases, there is even a biochemical basis for the mental illness. For example, serotonin deficiencies resulting in depression. If there can be a terminal stage of physical illness, why wouldn’t there be a terminal stage of mental illness? Who would determine this arbitrary line in the sand? This unpleasant and inconvenient fact is conspicuously absent from the mental illness is an illness movement. That is unfortunate because the tendency of sugarcoating serious issues does little to solve significant problems. Trivializing this mental health movement to caricature of what it could be. Reducing it to a mere humanistic feel-good movement. Nevertheless, if as a society we aim to treat mental illness on an even field with physical illness, it is only reasonable we allow those with mental illness to commit suicide if they see it fit. This may sound callous or even cruel. The same could be said for forcing someone to live who does not want to.
The debate over whether Fractional Reserve Banking is ethical to proceed over approximately a decade (the late 1980s/ early 1990s to the early 2000s). Resulting from subsequent papers repudiating the previous claims over the researchers on the other side of the issue. It should be noted that in these series of retaliatory papers that technical arguments were presented in tandem with ethical justifications for or against this practice. For the sake of brevity, I chose to focus on the ethical considerations of the topic. However, this does not exclude a potential technical comparison of Fractional Reserve Banking in the future.
To any reader who has never thoroughly examined nor given a second thought to Fractional Reserve Banking, I hope reading this series of essays was illuminating. Fractional Reserve Banking is arguably the most prevalent banking system globally. Yet, something that impacts our lives daily we never think to question its inner mechanics let alone whether it is ethical. The ethics of banking extend beyond whether the patrons are benefiting at the expense of someone else, either through easy access to loans or interest payment on savings. There are potential ramifications to the economy.
Distortions in the credit market are precisely the impetus for business cycle calamities such as the cataclysmic burst of the Housing Bubble in 2007. Providing loans backed up by fiduciary media is nothing more than a house of cards waiting to fall done. Artificially manipulating factors such as prices, interests, and money supply can only facilitate the misallocation of resources. Such indicators operate as unspoken signals to consumers and entrepreneurs. Due to this fact, these distortions create an illusory image of the loan market and naturally economic agents respond accordingly (p.108). A fact that both George Selgin and Lawrence White are too quick to refute and dismiss (p.102). This carries the implications of defrauding the economy as a whole versus being isolated to the bank’s customers. Even if you are the type to limit all your transactions to precious metals or cryptocurrency, it is worthwhile to read up on this topic.
Summary of Compelling Arguments From the Austrian School:
It is difficult to say whether the Free-Bankers or the Austrians are on the right side of the debate. Both camps provided some truly convincing arguments. The Austrian opposition notes how ownership can only legitimately be taken on by one person and Fractional Reserve Bank obfuscates this immutable law of property ownership. From a contractual standpoint, that the agreements between banks and clients in such an argument are illegitimate. Since the terms are not only unclear to the typical layman but are a categorical misrepresentation. Presenting fiduciary media as actual money. The disingenuous nature of this faulty contract is only compounded by the fact that these claims for money are based upon the banknotes that are not back by currency or specie. Attempting to redeem them for actual currency is analogous to using a deed for a boat and attempt to claim ownership of a house. Also that it is a false analogy to argue that any devaluation of present money caused by the issue of fiduciary media is no different than an increase in the supply of a good due to protection or harvesting.
This is because the increase in the supply of lumber from harvesting more oak trees is derived from legitimate market processes and in-turn does not seek to directly devalue anyone else’s property. Also, that in no way can Fractional Reserve Banking represent the Demonstrated preference of bank clients. Demonstrated preference can only be expressed with one’s property. Fractional Reserve Banking by its very nature disrupts this relationship.
Summary of Compelling Free-Banking Arguments:
The Free-Bankers also bring up some compelling moral defenses in favor of Fractional Reserve Banking. They are even bold enough to directly claim the practice is not fraudulent. Through a banking client electing to accept the terms of service regardless of their understanding, the contract is still valid. It would be one thing if these banks purported to practice 100 percent reserve banking, but function as a Fractional Reserve institution. These contracts are formulated between consenting adults, it would be antithetical to the principle of individual freedom to prohibit such arrangements. The real trouble comes from government interference. One only needs to look at the large array of protections awarded to backs through the FDCI to see the true culprit in shielding unsavory banking practices from insolvency or litigation. Also, the ignorance or the naiveté of the consumer is not a reasonable justification for banning a product or service. Even though the risk of a bank run is present, it is a relatively rare occurrence from a historical standpoint. If faced with a potential bank run the bank can issue an option clause suspending redemption, solving the issue through valid contractual recourse. Speaking of redeeming bank deposits. A customer assumes the risk of not being able to redeem money when they agree to open an FRB account. They assume the risk. In turn, for the opportunity cost of having their liquid money held and the potential risk of a bank run/ insolvency, they receive an interest payment. Overall, patrons must prefer Fractional Reserve systems to 100 percent reserve banking. There have never been any governmental decrees in modern history that all banking must be done via a Fractional Reserve System. Despite its flaws, ultimately, the people prefer being paid interest payments versus having to pay warehousing fees.
Can There Be a Compromise?
There are certain aspects of both arguments that appear to be flawed. The Free-Bankers are too lackadaisical when it comes to distortions in the credit structure enabled by Fractional Reserve Banking. The Austrians to some extent seem too rigid in their interpretation of property ownership. Under many of their arguments likening the practice to a Ponzi scheme. Yet, to be conceptually consistent would not these same economists also take issue with multi-level-marketing? Then again it could also be counter-argued that MLM schemes and Fractional Reserve Banking while present similar confusions, property rights have much greater degree clarity in MLM arraignments.
Back in 2000, the economist Jorg Guido Hulsmann wrote an article in the Independent Reviewrefuting the Fractional Reserve practice of creating “money”. Hulsmann (see page 108) much like his anarcho-capitalist counterparts Hoppe and Block are opposed to government intervention. If FRB is morally and technically flawed how can we address the issue of it short-comings without introducing state involvement? In this twenty-year-old article, Hulsmann presents a summary of points previously made by Hoppe and Block that would alleviate some of the issues relating to the categorical confusion. It should be noted that Hulsmann in that these suggestions for informal rules and norms of banking presume no state involvement in banking. Also, the author details the intimate relationship between the FRB and the government. Going so far as to refer to it as a “handmaiden” of government (p.108). Making it easy to infer that Hulsmann believes that the intertangled marriage between Fractional Reserve Banking and government is an unbreakable bond. However, let’s take these suggested conditions as theoretical and contingent upon a banking system free of regulation. See his suggestions below:
“…Fractional reserve banks would have to use a different language than they commonly use because words such as “deposit” are deceptive. They would have to make it clear that money “deposited” with them is, in fact, a credit of unspecified duration. And the “banknotes” they issue would have to be presented not as money titles but as some sort of very liquid IOUs..”
“..On the “FR notes,” one would have to find a promissory note of the following type:
The FR Bank promises the holder of this note to try to redeem it out of its gold reserves. Because FR notes are not 100 percent covered by gold presently in our bank, in case we cannot redeem, the following rules apply. . . . (p.108)”
It is quite clear at this point that followers of Austrian economics view Fractional Reserve Banking as nothing more than a Ponzi Scheme. However, proponents of the Free Banking School (arguably an outgrowth of the Austrian School) believe that this practice is legitimate providing there isn’t any government interference in banking. Even the uninitiated observer will admit that this contingency is a highly unrealistic one. In the modern era, banking continues to be a heavily regulated industry. Free Bankers may have a relatively cogent ethical argument from a theoretical standpoint. After all, it is the responsibility of a mentally competent adult to be aware of the terms of service for any product or service they choose to receive. Ignoring the fine is not an exculpatory factor. Either from a legal standpoint or from an ethical perspective. Also, to be conceptually consistent one should scrutinize multi-level marketing schemes. Such a business model mirrors similarities to Fractional Reserve Banking. Hence why opponents liken it to a Ponzi scheme or pyramid scam.
Argument #1: It Isn’t Fraud.
From the Free Banking perspective, Fractional Reserve Banking is not a fraud. If the banking establishment makes it clear that the services provided constitute Fractional Reserve Banking, then the arrangement is legitimate. This is because the terms of the contract were not violated (p. 87). It would be problematic to present your services as 100 percent reserve banking if it encompasses the practices of the Fractional Reserve System. Fraud would entail a misrepresentation of the bank’s services.
Taking any measures to prohibit this system of banking is antithetical to the principle of individual freedom. Any such interference would be obstructing an existing contract between consenting parties. Doing nothing more than disturbing the economic liberty of freedom of contract, which is a pillar of private property rights (p. 87). Individuals who oppose the practice find the freedom of contract argument to be farfetched as few patrons have a firm comprehension of what Fractional Reserve banking entails (p. 88). The naivete of the consumer does not sully the legitimacy of the arrangement. Even Murray Rothbard himself has stated that historically banks have rarely retained a 100 percent reserve system (p.88). Why? Most likely because the banks clients preferred a Fractional Reserve system. If customers prefer an interest payment on their savings versus a maintenance fee for warehousing, so be it (p.88). The market for banking services has responded accordingly.
Circling back to the issue of misrepresentation of services, even the hardline naysayers believe that such a banking system could be admissible under certain conditions. Most notably if there was the further elucidation of the specific details of fractional reserve services. A long-standing concern of economists such as Hans Hermann Hoppe and Walter Block being that such ambiguity makes the practice fraudulent. Creates categorical confusions between money and fiduciary media (p.20-28). Professor Block asserts that the redemption requirements need to be clarified to set aside the concerns of fraud (p. 89). Whereas Block’s counterpart Hoppe stresses that banking institutions should present a warning regarding the suspension of redemption. He analogizes this precautionary courtesy to an option clause. Unfortunately, this concern does not comport with the facts of history. As is evident by the Scottish period of Free-Banking in which specie payment was suspended for decades (p. 89-90).
Another argument that grapples with the question of whether FRB is fraudulent pertains to the ability of the banks to fulfill redemption obligations. Keeping low percentages of reserves on hand turns money redemption into a gamble. However, this concern is inconsequential. Historically even in the absence of government intervention few banks have failed to fulfill any redemption obligations to patrons (p.90). For one, solvent banks are not prone to bank runs. Even in the event, a solvent bank runs out of currency, they can issue an option clause to temporarily suspending redemption. Resolving the issue through contractual channels (p. 91).
Argument #2- The Concerns Over Third-Party Effects Are Not Substantial
The most salient third-party effect or “spill-over effect” confronting the practice of Fractional Reserve Banking is a decreased likelihood of successful redemption. Obviously, in a Fractional Reserve Banking system, the more money that is lent out the fewer reserves the bank will have on-hand. Resulting in adverse consequences for the individual demanding to withdraw money from their account. It should be noted that the depositor agrees to this argument upon opening a bank account. Therefore, by signing on the dotted line of the terms and services of the bank, they choose to assume the risk (p. 93). Despite the risks, bank patrons continue to bank with these institutions. Alone based upon the Rothbardian theory of Demonstrated Preference the individual bankers must benefit from this arrangement. After weighing the benefits concerning the costs (p.93).
The spill-over effects of Fractional Reserve Banking are not solely confined to banking transactions. The practice has also been claimed to create other distortions throughout the economy. Through how loans are funded it compromises some say the credit structure is compromised. It should be noted that the risks are somewhat minimal. If anything it aides the economy by providing a larger stock of capital (p.94). The issue with this criticism is that much of the instability in the economy comes from the intervention of central banks and governments and not Fractional Reserve Banking. This form of banking is not prone to instability or “cylindrical over-expansion”(p.94). These claims underestimate the fact that the amount of “nominal money” issued offsets the “.. changes in the velocity of money..”. Fractional Reserve banking works to alleviate the disequilibrium and “ business cycle consequences”. Hoppe and the company also assert that any injection of fiduciary media will ultimately result in a business cycle. However, if the increase in fiduciary media is matched by demand a disequilibrium will not arise (p.101-103).
Argument #3: The Popularity of Fractional Reserve Banking.
The popularity of Fractional Reserve Banking is another factor to contend with. Banking customers have demonstrated their preference for FRB. Historically, few banks have remained a 100 percent reserve system. However, customers continued to do business with these institutions (p.95). Contributing to this popularity has been the incentive of banks paying interest on deposits versus requiring a warehousing fee (p.95). Banking patrons also held faith that their bank had sufficient funds to fulfill withdrawal demands. Bank runs were generally triggered by other factors signally insolvency to bank clients. Countries such as the United States with greater propensities towards bank insolvency tend to have many protective laws shielding the banks from market pressures (p.95-96). It should also be noted that back in the 1800s when banking legislation was being discussed in the press the banking system was openly described as a fractional reserve system (p.96). Not only fully informing the average constituent of the details of the Fractional Reserve system, even with this knowledge doing little to dampen its prevalence (p.96).
The use of Fractional Reserve Banking has never been compulsory. There has never been any laws or penalties compelling banking in the United States to levitate towards this specific banking system (p.97). Patrons voluntarily assume the risk of engaging in this variety of banking for the trade-off of being rewarded with an interest payment (p.97). The argument that clients are unwittingly tricked into patronizing an illusory form of banking is dismantled by the fact that banks compete for business. Nothing is stopping an enterprising individual from persuasively selling 100 percent reserve services (p.97).
The key arguments against fractional reserve banking being a moral system came from a 1998 paper co-authored by Austrian economists Hans Hermann Hoppe, Jorg Guido Hulsmann, and Walter Block. The white paper entitled Against Fiduciary Mediawas a response to a previous paper written by George Selgin and Lawrence H. White. Hoppe at al. crafted a repudiation against Selgin and White’s 1996 paper In Defense of Fiduciary Media or, We are Not Devo(lutionists), We are Misesians.In which both scholars provide a normative and positive defense of fractional reserve banking. Even utilizing Murray Rothbard’s Title-transfer Theory of Contract to defend the practice. However, this application of the Rothbardian contract theory did not sit well with Hoppe and the company. All being devoted and unwavering followers of Rothbard believed that Selgin and White’s interpretation of Title-Transfer Theory of Contract to be incorrect. Making their justification of fractional reserve banking on grounds of contract theory to be inherently flawed. It is worth noting that Hoppe was a direct protégé of Murray Rothbard and even owed his career and position teaching at the University of Nevada, Las Vegas to the late Austrian economist.
Rothbard’s Title-Transfer Theory of Contract:
Before claims that Selgin and White did not faithfully adhere to or misinterpreted Title-Transfer theory, it is important to thoroughly explain this concept. A reader without a firm comprehension of this idea cannot adequately determine if free-banking proponents of fractional reserve banking suffer from profound confusion. The proceeding section will provide a brief overview of this theory. Hereby providing the reader with the requisite background information to justly assess this debate.
Before diving into Rothbard’s theory, it is important to note his ideological disposition. Murray Rothbard was the modern father of an ideological subset of libertarianism known as anarcho-capitalism. Rothbard and his followers hold that there should not be limited government, but rather no government. All services and products can be produced by private industry with no necessity for government intervention. This even includes services that have been traditionally provided by the government. This includes defense/security services, law enforcement services, charity, resource management, infrastructure, private legal adjudication, and so on. Rothbardians even go so far as to assert that the government possesses a monopoly on such services. It is imperative to understand this aspect of Rothbard’s political economy and political philosophy. It illustrates the fundamental philosophical precepts that govern his theory of contract.
Rothbardian Contract Theory is expounded upon in his 1982 book The Ethics of Liberty. Rothbard derides that the concept that all contracts in a just society need to be enforced( P.133). He draws a sharp line of delineation between “promised” and “conditional” contingencies in matters of exchange. Per his logic, the utilization of legal channels to enforce a promise is wholly illegitimate. Constitutes the use of government force in a situation in which no property has been transferred. Making it equivalent to state enforcement of morality (p.133-134). The reason why the property needs to be involved for a contract to be valid pertains to the distinction between what is intrinsically alienable and inalienable to the individual. This has to do with the fact that a person cannot alienate their own will or relinquish control of their mind and body to someone else. Humans can quite easily dispense with tangible property, including money (p.135). Due to the fact enforcing a promise is a compulsion because it interferes with the free will of the individual. It is not technically a breach of contract. On the other hand, if the agreement included a transfer of property for non-compliance then it would be another story.
In instances of conditional contracts and agreements, noncompliance is equal to a form of theft. One salient example Rothbard provides is the circumstances of service providers receiving advanced payment but never providing the service (p.137). For example, if I were to offer to paint your house and I received an advanced payment of $300.00 and never show up your house that is theft. One contractual contingency that can shift a promise to a conditional agreement would be a performance bond clause within the agreement. For Rothbard’s example, if a movie theater has a meet and greet event with a famous actor, they can put into the agreement a clause where the actor agrees to pay the theater a sum of money for abdicating this obligation (p.137). Since a property can be transferred and not the will of the actor this is an ethically binding agreement. However, failing to fulfill a property-related obligation is not always necessarily deemed as implicit theft. In instances where a creditor provides immunity to a debtor who cannot pay their bill this is legitimate (P.144). Why? The creditor reserves the right to forgive debts due to the fact they are the ones who transferred their property under the condition of repayment. Please note that this scenario details circumstances in which the credit lent out their funds.
It should be noted that a Rothbardian conception of contractual property rights does not preclude someone from selling off a portion of their property. For example, if I own 100 acres of land in Montana. It is well within my rights to transfer you 5 acres for $20,000.00. Concurrently, retaining my claim on the residual 95 acres of land. This does not mean that mean I in any way still own those 5 acres. Through the sale of this land, I have effectively transferred ownership to you. In turn, I have relinquished by entitlement to the lands sold.
“Another important point: in our title-transfer model, a person should be able to sell not only the full title of ownership to the property but also part of that property, retaining the rest for himself or others to whom he grants or sells that part of the title. Titles, as we have seen above, common-law copyright is justified as the author or publisher selling all rights to his property except the right to resell it.”
How The Free-Banking Argument For Fractional Reserve Banking Violates Contract Theory:
Selgin and White claiming that fractional reserve banking is consistent with Title-Transfer Theory suffer from some blind spots. Blind spots that are fully magnified by Hoppe et al. One of the fundamental chinks in the armor of the Free-Banking argument is that fractional reserve banking inherently violates Title-Transfer Theory. It assumes that two people can own the same piece of property simultaneously (p.21). By the very nature of how fractional reserve banking engages in lending, it creates ambiguity regarding ownership. Through issuing more promissory notes both the bank and the customer assume ownership of the same banknote, which is fraudulent by nature (p.22). Creating more claims to money against the present supply of money will not create more money (p.22). Rather, will only serve to redistribute the present supply of actual currency from client to client without increasing the amount of money in the vaults (p.22). Effectively creating fiduciary media (money-substitutes issued by a bank that is not backed by gold or paper money) out of thin air without transferring assets or liabilities (p.22). As detailed in Rothbard’s theory, we can sell off a portion of our property. However, we relinquish our own once we transfer it to the party purchasing it.
This illusory arrangement also conflates property with property titles (p.23). Treating and categorizing banknotes( fiduciary media, money claims) as money (physical property). This only enables this fallacy to continue. Keeping in tune with the Austrian tradition the Regression Theorem states that all money had a prior use value (p.34-36). For instance, tobacco and nails at various times in human history have been used as money. Meaning that these banknotes cannot be money in the actual sense, but a claim or title to money. Through this categorical fallacy, the banks can divorce titles from ownership resulting in the redistributive practices of fractional reserve lending (p.23). Even going so far as to promising future entitlement to goods against present goods that may or may not be fulfilled. It would be honest to label these claims to future goods or debt claims, but not a claim to money (p.24).
An inquisitive observer may question why it is dishonest or even outright fraud to categorize future claims to money as money titles or even as money? Hoppe et al. frame this from the standpoint of we cannot claim or transfer ownership from a title to a car for anything but a car and the same applies to money (p.25). If we were using more precise language what banks and customers have truly agreed to is debate claims versus money titles. Per the authors of Against Fiduciary Media Selgin and White adopted a hyper-subjective interpretation of contracts to side-step this discrepancy (p.26). The misrepresentation engaged in by practitioners of fractional reserve banking extends beyond labels of goods, but to actual quantities as well. By treating fiduciary media as money, it creates the false perception that clients own more than what they truly due on paper. The fabricated money quantities do not reflect the amounts present in the vaults of the bank (p.27). Free-banking proponents may believe that fractional reserve banking isn’t so much the problem, rather government intervention. As long as the withdrawal requests are fulfilled it cannot be tantamount to fraud. However, even without state interference, the transfer practices of fractional reserve banking blur the lines of definitive ownership (p.29). Making the system incompatible with upholding property rights or just contract enforcement.
The norms of modern banking are something that most of us take for granted. Few ever question the inner mechanics of such transactions we engage in daily. However, banking has been steeped in a fog of mystery due to complex operations and seldomly failing to fulfill any obligated services. Beyond questioning the functions or internal workings of modern banking even fewer people recognize that most people are participating in a fractional reserve banking system. In a random survey of average people, you will be hard-pressed to find anyone aware of what fractional reserve banking entails nor any intimate understanding of its implications. That is to be excepted considering this is a niche area of expertise that is truly the domain of an economist, banking/ financial specialist. This assumption relieves us of any responsibility to cultivate a better understanding of these systems. After all, this is best left to the experts. How do we know whether there any inherent risks associated with fraction reserve banking? Do we just assume that due to the fact it is the most common banking system that it is the most effective and secure? Better yet, is it even a moral system of banking, or is deceptive by design and tantamount to fraud?
Over the past several decades, a controversy has been brewing among monetary economists concerning fractional reserve banking, Modern economic theorists of the Austrian School who are generally hard money advocates, find fractional reserve banking to illegitimate to its core. Equating it fraud and perceiving it to be antithetical to a free market in money. Whereas free-banking (an economic school that is arguably an outgrowth of the Austrian School) do not see fractional reserve bank as immoral. Rather, such institutions could not only ethically co-exist with 100 % reserve banks but also flourish. Any ethically questionable operations were the byproduct of government intervention and mutually exclusive from the banking practice (p.8). While their Austrian counterparts insist that the practice not only supports the monetary objectives of the state but owes its existence to the state (p.9, p.15-17).In this series of essays, we will examine the ethical arguments for and against fractional reserve banking. To present an unbiased account of the controversy.
What is Fractional Reserve Banking?
Before we can embark upon discussing the ethics of fractional reserve banking is important that we define what it is. On a high level, fractional reserve banking is a system in which banks are required to only hold a fraction of money deposited as reserves. This is done to enable banks to make loans. The recipient of the loan receives a transfer of deposited money upfront which they are expected to pay interest on. The bank customer who deposited the money that was lent out theoretically will receive the money-back in their account with sustained interest. This is done to expand the economy through “freeing capital for lending”. This is done without the depositor relinquishing their claim to this money. Effectively creating more money titles than physical money held on reserve at the bank (p.3) The foundation of this banking system is fastened to the assumption that most customers with savings accounts will not simultaneously withdraw all of their savings at once. Otherwise, this could lead to what is known as a bank run. A phenomenon where the bank as completely depletes their liquid reserves. Since they are only mandated to hold a relatively small portion of reserves on hand.
Reserve requirements typically hovering around 10 % (presumably applicable to central banks). Most reserve requirements are contingent on the bank’s size. Banks holding less than $15.2 Million in reserves are exempt from maintaining reserve minimums. The requirement of 10% reserves is applicable to banks holding over $100.2 million in deposits. Per the Garn-St Germain Act banks are free from any reserve requirements for their first $2 million held. This legislation was initially passed by the Regan administration as a means of relieving pressure on banks as the federal reserve significantly increased interest rates. Banking institutions that hold excess reserves or amounts of deposited money above reserve requirements are entitled to interest payments. Under the Financial Services Regulatory Relief Act of 2006, these interest payments are allocated by the Federal Reserve.
As mentioned above fractional reserve banks issue more money titles than currency on hand. Through this process, they engage in form of indirect “money” creation. The loan itself treats the money titles as being equally as valid as actual currency notes. When the loan is issued the bank “credits” the borrower’s account with an amount equal to the loan, mimicking a transfer of physical cash. The methodology of money creation on the part of fractional-reserve banks has been distilled down to a science. Guided by the money multiplier principle. This concept broadly describes how “.. initial deposit leads to a greater final increase in the total money supply”. More specifically how much commercial bank money ( demand deposits that can be utilized for credit and debit purposes, basically your residual after reserve requirements) using a defined unit of central bank money. Central bank money is any medium of exchange that these institutions acknowledge as being money. The correct proportion of “money” creation is determined by the below equation:
The recent findings regarding the validity of the Stanford Prison Experiment have been disappointing. Even on a personal level. While the study was morally questionable it was one of my favorite studies. In college, I majored in psychology. I found myself particularly drawn to social psychology. Naturally, my social psychology textbook dedicated several pages to the Stanford Prison Experiment. Despite the litany of ethical questions and procedural constraints that have spawned from SPE and the infamous Milgram’s Experiment, the controversial studies have always been the most intriguing to me.
When I was younger often flippantly reducing the ethical considerations to mere inconveniences. As I have gotten older, I have begun to take the ethics of research more seriously. Veering away from a sterile utilitarian mentality to one that holds the rights of the subjects in high esteem. Needless to say, I had to reluctantly acquiesce the fact that one of the most interesting studies conducted in the history of psychological research was a fraud. In science when new fact-based developments come to surface we must except them tentatively until proven otherwise. Even when the facts do not comport with our interests or opinions.
Even though it is reasonable to suspect that the Stanford Prison Experiment was fabricated, are any of the results salvable? The results certainly are not scientifically valid nor can be generalized. That is a difficult question to answer. An exact replication of this study is out of the question. As the purveyor of the Prior Probability blog has mentioned in the comments section of part II, ethical constraints prohibit an exact replication. However, in the United Kingdom, an amended version of the study was conducted back in 2001. Typically referred to as the “BBC Prison Experiment“. This more ethically amenable study did not fully verify the results of Zimbardo’s 1971 study. In 2018, Zimbardo came back and criticized the UK experiment and cited a 1979 study that mirrored his results. Such back-peddling can only be met with incredulity considering the ample evidence that Zimbardo heavily manipulated the results of his 1971 “experiment”.
Philip Zimbardo’s desired results do dovetail to our initiative assumptions about authority. We have all heard the expression of being “drunk on power”. It was the great Lord Acton that once said:
Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority…
It is quite evident that an implied potential for abusing authority is embedded in the human psyche. The problem becomes determining whether this qualitative attribution is factual or illusory. To do so through scientific means is downright cumbersome. Attempts to quantify an inherently qualitative value judgment is difficult. However, there seems to be quite a bit of anecdotally/observational evidence that does point in the direction of Zimbardo’s findings. The unfortunate aspect of observations is that we cannot deduce the prime cause of the observed occurrence. It is possible that the root cause could be an unobservable variable or our observation is clouded by bias.
The instances of torture at the Abu Ghraib prison would appear to be observational evidence congenial to Zimbardo’s results. Per a 2012 paper written by Kristin Richardson, the situational context of the Abu Ghraib prison may explain the behavior of the guards. Suggesting that the fact that senior leadership was complicit in the controversy for fostering an environment where such human rights violations can take place (p.76-77). This lack of oversight being prevalent in other areas of interacting with prisoners of war such as interrogation. Richardson also cites what is known as the Thomas Theorem for addressing how the soldiers guarding the detainees at Abu Ghraib could resort to inhumane measures. This theorem asserts that reality is a mental construct and that reality is real because we believe it is (p.9). Leading to the assumption that the guards did lose a sense of consensus reality while in prison. Started to relax their moral precepts to accept the role of an uncompromisingly tough prison guard. Keeping potential terrorists in-check. Providing some qualitative confirmation about Zimbardo’s assumptions regarding the behavior of the guards in the Stanford Prison Experiment.
Having an understanding of the human mind, I understand how powerful it is. It has the capability of making a delusion a reality. Reinforcing the observations asserted in Plato’s Allegory of the Cave thousands of years before the advent of neuroscience. People can get caught up in a fabricated reality. To not only believe they can get away with abusing prisoners but to believe they are justified. This distortion of reality being triggered by the context of the environment. That does not mean that reality is a complete construct. The fact that there is a consensus reality is a clue that not every aspect of experience is subjective. We merely interpret concrete reality through sensory input creating the spectrum of deviations. As intriguing as Richardson’s insights are they still do not provide us with any causal inferences. Due to ethical and methodological concerns, we may never be able to validate these observations scientifically.
One of the oldest epistemological problems is how do we obtain true wisdom. To reach a state of wisdom we must amass a substantial amount of knowledge. How do we distinguish true knowledge from misconceptions and opinions in our pursuit of the virtuous ideal? I have often asked myself what is the difference between common sense and ignorant old “wives’ tales”? Same principle different wording. Both inquiries reflect the larger premise. How do that the knowledge I have obtained is true knowledge?
The renowned classical philosopher Socrates believed he had the answer. That was to acknowledge the limits of your knowledge. However, he did this to the extreme. This principle has been enshrined in the Socratic Admission of Ignorance. Professing to know nothing being of the highest virtue. This is counter intuitive considering we would expect a man anointed as the father of Western Philosophy to have answers. Certainly, a man proclaimed by the oracle at Delphi as the wisest man on the planet would know something? (Silvermintz, 2020, P.11) . Conversely, maybe it takes a supremely wise man to see his knowledge deficits. Rather than blithely putting on the pretense that he knows more than what he does. Reflecting upon the Hayekian Pretense of Knowledge. The hubris that has consistently foiled the plans and aspirations of central planners. Would Hayek have ever formulated such a concept without any Socratic precursors?
Perhaps, a truly wise individual sees the process of learning as a continual process. Not a linear destination, that once reached it cannot be expanded upon. It is an ongoing search. Especially when we are confronted with the fact that there is too much knowledge for one person to possess. Making education a lifelong process. We need to be open to this fact of reality. To some capacity, we need to humble ourselves and be honest about what knowledge we lack. In the example of the central planner, admitting that they do not know what the long-term impact of rent control will be on the housing market. Here is where the Socratic omission comes into play, acquiesce the fact that you truly do not know. Socrates claimed that we do not possess any precise knowledge other than that of our ignorance. This may seem somewhat gratuitous. Isn’t it enough to admit our ignorance on topics that we do not have any expertise? Socrates was arguably an “expert” when it came to virtue yet he still claimed to be ignorant true virtue.
“ “I am wiser than this man,” as Socrates says of one of Athens’ respected politicians, “for neither of us knows anything fine and good, but this man thinks he knows something when he does not, whereas I, as I do not know anything, do not think I do, either” (Apology 21d). (Silvermintz, 2020, P.11) .”
This does seem like an outlandishly absurd thing for a man who has decided his life to morality to claim. It is important to note that while the truth isn’t fluid, what our perception of truth is. Old scientific theories are often debunked by new evidence. Social norms change in-lock step with the evolution of our social morality. For example, it is the abolition of slavery. A practice that was at one time viewed as being appropriate. Then years later was viewed as being immoral. However, was it ever truly moral? Through admitting to being ignorant of everything Socrates sidesteps this fatal error. Through claiming ignorance we have the freedom to reevaluate social practices without being labeled as a hypocrite. Beyond our reputation it also enables us the foresight to examine and abolish moral practices. If we believe we are on the moral high ground we are less apt to be critical of our current customs. By place an air of doubt around all knowledge we are enabling the flexibility for necessary revisions. Doubt is what gives malleability to the scientific claims. It also is what makes the U.S. Constitution a governing charter that grows with the country. Rather than keeping the U.S. held captive by the sins of the past. In my estimate, both the scientific method and the founding principles of the United States owes gratitude to Socratic thinking.
Socrates questioning the validity of everything helps delineate true knowledge from opinions (Silvermintz, 2020, P.11)  In our mind, we often conflate opinion with fact. How often is advocacy for political policies based on facts? Infrequently. In the mind of the advocate, their position on the issue is the only correct stance. This separation is an important one to make. It is a common fallacy to combine facts with opinions and to present opinions as facts. An increasingly prevalent problem in the area of news reporting. Whether a news outlet is right-leaning or left-leaning they do more editorializing than presenting the information. Making it impossible to be informed after watching the evening news. Rather we are inculcating ourselves with partisan talking points. Providing another modern example of why the Socratic Admission of Ignorance is still pertinent.
Over the years, people have taken liberties with ethics. Some could argue since the advent of modern philosophy pragmatism has slowly come to supplant true ethics. People are starting to see morality from more of a subjective point. Per a 2015 survey, 74% of all millennials surveyed agreed with the only true truth is doing what works best for you (Silvermintz, 2020, P.11) . Rejection of there being a true morality or ethics is profoundly problematic. Naked pragmatism can lead to a litany of reprehensible policies. Past regimes have utilized pragmatism to justify genocide. Morality is far from being black and white. However, that does not mean morality is relative. Treating morality as relative can be calamitous for humanity as a whole.
As technology progresses and becomes more competent, the looming fears of the perils of advanced artificial intelligence are starting to resonate. While the dreary and dystopian images derived from the archetypes of the science fiction narratives paint a very vivid account of the worst possible scenario. For example, a robot overlord forcing the entire human race into a servile existence with only a dismal future of misery and servitude to look forward to. While the horrors of technology running amok have been a standard motif in science fiction from the works of Issac Asimov to the parasitic parallel reality of The Matrix. However, do these works account for the contemporary and pertinent ethical concerns of artificial intelligence? I would personally assert no. While the previous works of fiction make for excellent entertainment and even pose some superb philosophical insight, the current concerns are more subtle and less radically outlandish.
The concerns that we face on a day to day basis are more pointed towards humans utilizing such technology to manipulate other humans. Complex algorithms devised to engage us to be complete fixated and engaged in social media, with the ability to react to real-time input. While this is certainly a very covert and deceptive way to utilize computer programming and the reward pathway of the human brain to capture the majority of traffic on the internet, that merely scratches the superficial level of ethical concerns. Aside from society’s growing addiction to social media, perpetrated by complex, adaptive, and near cognizant algorithms, there are a variety of other avenues that A.I has some serious ethical considerations. What about the creation of intelligent sex robots for individuals who are enticed by debased impulses and paraphilias? Could these dark and cardinal compulsions be extrapolated towards living humans and animals? If the robot sentient is it equally as reprehensible as sexually assaulting a human? While this may seem almost cartoonish, you need to consider the life-like nature of the sex robots being designed in Japan and the realistic reaction of the non-sexual robots being designed by Boston Dynamics. The whole concern of the potential exploitation and related issues of sex robots is a mere microcosm of the litany of moral questions surrounding artificial intelligence.
ETHICAL CONSIDERATIONS OF ARTIFICIAL INTELLIGENCE :
1.) One such concern that does not tend to occur to us is the concern of technical safety for example resistance to hacking. Essentially this concern applies to whether or not the artificial intelligence operates properly and the potential ramifications of A.I. failure. An example would be someone having died in a traffic accident engendered by a self-driving car, due to a situation that the program did not participate happened.
2.) The second talking point that the article expounds upon is the topic of Transparency and Privacy. The principle derives its rationale from the fact that the more powerful the A.I. the transparent the processes behind its decision-making functionality should be. In the same vein, the more component the A.I. the more privacy the user is entitled to. Due to the fact that advanced A.I. is very complex, this is a measure to ensure that the user understands the intent and helps control against the manipulation of the user.
3.) The third point of focus mentioned in the article was Malicious Use and Capacity for Evil. To summarize this point, it is the consideration of to what extent the A.I. can be used in a harmful manner. The examples of this subject can vary wildly, everything from the invasive to the nightmarish horrors of a cognizant and wanton robot assassin. I would rather focus on an example that is more applicable to the constraints of our current technological capabilities. For example, video surveillance, if it is programmed to record individuals in the restroom, would fall under the depiction of malicious use for wantonly violating an individual’s privacy for deprived sexual purposes with no consent.
4.) Another topic of concern regarding the ethics of artificial intelligence is the Beneficial Use and Capacity for good. This topic is the natural reciprocal of the previous subject addressed, its antithesis if you will. To what extent the A.I will be advantageous to the user and will improve/benefit them and potentially society.
5.) The next ethical concern discussed in the article was the consideration of bias in data. Standard artificial intelligence operates on a neural network where it converges the computer program with obtained data. Which can be advantageous as well as present some dangers as well. Specifically applicable is the phenomena of algorithmic bias. Where the programmer impacts the data procurement processes having the algorithm set to collect in a manner that conforms to humans’ own ideological perspective. An example would be having a school system utilizing a computer program to determine which students require tutoring after school. The program is set to select students who qualify for the free lunch program, due to the correlation between parental income and learning difficulties. Please note correlation does not equal causation and taking such liberties erode trust in the computer program as well as the institutions that use them.
6.) The next concern in regards to the ethical repercussions was in reference to what is Unemployment and Lack of purpose. With the advent of increased advances in A.I there we are seeing more human workers being replaced by machines. As more vocations become more automated, more people will begin to lose their jobs. How these individuals will support themselves and their families is certainly one question that fits into this category of ethical concern. On the other hand, even if these workers displaced are able to receive enough social welfare benefits, from the government, to support themselves what do they do from there? Many people have their sense of identity and overall purpose in life/ meaning in life contingent on working for a living. It gives them a reason to get up in the morning. What are they to do once their jobs have been made obsolete and they have nothing else of importance to occupy their time? Also, mitigate any psychological harm engendered by such an existential conflict?
7.) The seventh concern posed by the article was the growing socio-economic inequality resulting from the advances in artificial intelligence. In relation to the previous area of concern, how are the displaced workers going to support themselves? Many affluent and successful individuals, such as Mark Zuckerberg, recommend the implementation of Universal Basic Income. However, is it right to have the majority of society to support individuals who do not contribute to the economy? As you can plainly see this is will devolve into more of a political consideration versus a tech-based one.
8.) Another ethical concern brought forth by the article was moral de-skilling and disability. Many of you are probably wondering what in the hell does that mean? We are all familiar with the expression ” If you don’t use it you lose” from a physiological standpoint. However, this same principle can be extrapolated to moral reasoning and basically another skill set. If all of our criminal justice and political decisions are being ascertained by A.I. humans will lose the ability to make such decisions due to remaining cognitive sedentary.
9.) The nearing the end of the list, the ninth consideration was AI Personhood/ Robot rights. If a machine with advanced A.I. becomes self-aware, should they have any rights to protect them? As previously mentioned above, in regards to the sexual abuse example above, if they are sentient, is it ethically wrong to harm robots? Is it worse than doing it to a human? Should three be laws protecting advanced A.I robots to be protected from such mistreatment? Can this be translated from mistreating robots to mistreating people?
10.) The final consideration cited by the article was the effects on the human spirit. This concern was pertaining to how all of the ethical concerns above will impact how humans perceive themselves. If we put a value on our intelligence, and we are providing superior intelligence to external machines. Are we subjugating ourselves by such advances and are we inadvertently make ourselves obsolete .
Looking at the contemporary issues we as a society are facing with artificial intelligence are not quite analogous to the bleak predictions of science fiction. However, will Issac Asimov’s laws of Robotics may seem narrow in scope, there was also no way he could have had the foresight to accurately predict how our A.I concerns would manifest themselves. Our A.I. concerns are more subtle, nevertheless, they still provide us with some difficult problems to remedy. Like most philosophical inquiries there is no real silver bullet solution to the ethical considerations concerning A.I.
While my Socratic admission of ignorance to the how-to resolve these concerns, I always believe that education and awareness can always be advantageous. While these complex and abstract problems may not be easily fixed, it still does not mean we cannot become more informed about their impact on society or potential adverse consequences. I think we should certainly have social scientists and experts in the field of robotics and A.I. work together to analyze the adverse consequences. From there we can maybe potentially determine the full range of the impact and attempt to mitigate damage from there. However, even outside of the ivory walls of academia, there are still measures we can take to be more conscious of the ethical concerns of A.I. I personally believe that looking at the ethical concerns themselves and how they are related to our daily lives is a great start. We all might not be privy to the inter-workings of A.I. we can still see how it does impact our lives. From there we can attempt to surmise would responsibly use of artificial intelligence may look like.