oldschool CxC

Monday, July 02, 2007

The average person, he says, has four biases about economics—four main areas in which he or she differs from the economic expert. The typical noneconomist does not understand or appreciate the way markets work (and thus favors regulation and is suspicious of the profit motive), dislikes foreigners (and thus tends to be protectionist), equates prosperity with employment rather than with production (and thus overvalues the preservation of existing jobs), and usually thinks that economic conditions are getting worse (and thus favors government intervention in the economy). Economists know that these positions are irrational, because the average person actually benefits from market competition, which provides the best product at the lowest price; from free trade with other countries, which (for American consumers) usually lowers the cost of labor and thus the price of goods; and from technological change, which redistributes labor from less productive to more productive enterprises.

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1 Comments:

Blogger REkz said...

Sony, interesting quote. Bryan Caplan also said he prefers the low voter turnout b/c voters generally are ignorant and wrong.

While I agree, I think the solution is to educate and inform voters better.

In Australia, Aussies get fined for not voting. Makes sense to me.

As for economic angles, I often wonder if economists remember that 'free market', 'free trade', and 'market competition' concepts are generally never free from corruption, manipulation, and large-scale exploitation of subjugated groups.

The drive to infinitely increase profit, without any considerations (like putting people & planet before profits) is foolish.

Economists need to integrate 'having a soul' / 'having compassion' into their formulas for min/maximization.

4:38 AM  

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