My utility was increased by Bryan Caplan’s recent mention of this October 3rd EconLog post by Chapman University economist Bart Wilson – a post that I’d missed until yesterday. Here’s Bart’s closing paragraph:
Utilitarian behavioral economics falters because it undiscriminatingly accepts the fact that different environmental stimuli may appear to call for the same response (say, choosing the larger monetary payoff) and that the same stimuli sometimes appear to call for different responses. By employing a method that focuses on outcomes, utilitarian behavioral economics misses the scientific problem raised for explanation, viz., the perception of the situation is as much a response to the environmental stimulus as it is a reaction. Hence, it is an error for behavioral economists to use their own perceptions as elements of the scientific explanation of their subjects’ actions.
Here’s Bob Murphy pitting the perspective of Ludwig von Mises against that of Alan Blinder. (Similarly, I argue in this post from January 2007 that over an appropriately reckoned span of time, there are no losers from free trade – a conclusion that applies equally to free-market exchange generally. This conclusion is less startling if our perspective is one of choosing among rules rather than choosing particular moves within a given set of rules. [See, for example, Jim Buchanan's 1986 Nobel lecture.] Under the rules of free trade, for example, you might well lose in a particular circumstance – say, if you’re a steel worker who loses his or her job when your fellow citizens increase their purchases of imported steel. But by choosing to play by the rules of free trade for a sufficiently long period of time – or even finding yourself within a society where those rules reign – your standard of living over time, and that of your children and their children and their children, will be higher than it would be under protectionist rules, even if, under those protectionist rules, you never lose. This conclusion holds even after factoring in all the loses you suffer while playing by the rules of free trade.)
Speaking of which…. Richard Rahn explains that the good old days weren’t so good.
I brag that I had almost exactly the same reaction as did Greg Mankiw to a sentence in a recent New York Times report on Obamacare. But Mankiw explains better than I can just what’s wrong with this sentence.
Government kills. (HT Tim Townsend)