The world is not less sustainable and resilient today than it was before the Industrial Revolution. In fact, it is probably more sustainable and resilient today than previously….
If the world were less sustainable and resilient today, global population would be smaller today, worse off than in the past, or both. But the world’s population is at a record level. Equally important, human wellbeing is at or near its peak by virtually every objective broad measure.
Can we please stop pretending to know better than “the Greeks” what “the Greeks” should do! Greek pensions, austerity, and debt are international political issues only because the Troika bailed out private creditors such as Goldman Sachs. The Troika could have let Greece go into default and let Goldman et al. be left holding the bag. But allowing private losses to large, nominally private financial institutions is not a “viable” option for the apparatchiks of the international financial system. Now the majority of supposedly informed and intelligent opinion on the topic is given over to opining on the proper division of suffering between German taxpayers and Greek residents. The profits from Greek financing have been privatized. The losses are being socialized. It’s the cronyism of the experts, and it’s dirty business.
The behavioral economics findings that document systematic anomalies that lead to irrational decisions are important contributions to the field of economics. While these biases can be justifications for government intervention, our evidence suggests that a framework of behavioral public choice should take into account that policymakers and regulators are themselves behavioral agents subject to psychological biases, and further, that they are public agents subject to political pressures and biases endemic in the political process. The behavioral paradox is that government policies are subject to a wide range of behavioral failures that in many cases become incorporated in the overall policy strategy. We have documented many instances in which government policies institutionalize rather than overcome behavioral anomalies, and in some cases, attempt to justify inefficient “hard” regulations, such as mandates, based on the weakly supported need to correct individual irrationality.
Given that government policymaking is not immune to behavioral failures, we suggest a more cautious approach, one that in- corporates the insights of behavioral economics in a way that is less dismissive of the merits of individual choice.