Further (and contrary to the empirical evidence, but absolutely necessary for public choice theory) there is the notion (reified to the Nth degree by Caplan in the links I posted) that people are more rational when they are paying than at any other time.
The irony is of course, that in fact "rational" is in this construct simply a synonym for "miserly." In reality "generosity" is sometimes the "rational" action, but economics does not allow for that.
This is most evident in discussions over intellectual property, where the introduction of the question of payment creates largely artificial scarcity.
If I gain 100 pounds by exploiting someone who has nothing and they continue to have nothing, by economics there is only gain. No loss is measured. Sure you can construct "opportunity costs" models for simple situations, but no-one bothers to do this on a large scale. This is part of why various democratic decisions are so mystifying to economists, they are too lazy to attribute any value to the ending of widespread exploitation that seems (to them) to come at the cost of economic growth.
Whether the increases in the legal protection of intellectual property since 1976 have conferred net benefits on the U.S. economy is uncertain.
For another, F. A. Hayek:
A slavish application [to intellectual property] of the concept of property as it has been developed for material things has done a great deal to foster the growth of monopoly and...here drastic reforms may be required if competition is to be made to work. In the field of industrial patents in particular we shall have seriously to examine whether the award of a monopoly privilege is really the most appropriate and effective form of reward for the kind of risk-bearing which investment in scientific research involves.
What we learn when we learn economics
Gotta love this quote:
The more reading I do, the more sense the op-eds in the Wall Street Journal make.
But when equity and efficiency trade-offs do arise, economists like Sanderson are systematically biased in favor of efficiency because that's what they are experts on. Efficiency they can measure and analyze. Fairness? That's the turf of philosophers and politicians. This tendency is most pronounced in discussions of economic growth, and how the benefits of that growth should be distributed. Sanderson paraphrases his Nobel Laureate colleague Bob Lucas, who says that "once you start to think about the benefits of high growth, it's hard to think about anything else." In other words, first worry about how best to grow the pie, then how to slice it up. Let efficiency trump equity, create wealth, and then you can use the extra wealth you've created to alleviate inequality. This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
Ah yes, but it could be redistributed, they say... In the long run, we're all dead. John Maynard Keynes
As Caplan sort of sees a economic illiteracy in the populace, the negative consequences of which might be remedied by giving people an economic literacy test before they're allowed to vote, I'd like to reciprocate by proposing that economists have to read 'A Modest Proposal' after finishing their freshman year and answer these two open questions:
Did Swift, within his historical setting, have a point?
If not, what is wrong with his logic?
Depending upon the quality of their response, we might judge whether they are allowed to study on and are permitted to give any policy advice, ever.
(As a guideline: Caplan, it seems, would not have passed this test)
