jamesz

Myth of the selfish voter

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Every election time you hear the same old story that rational people don’t vote. Why is it that so many people mix up rationality with selfishness? Over at Vox a pair of political scientists set the record straight:

If you think your preferred candidate could bring the equivalent of a $100 improvement in the quality of life to the average person in your country… you’re now buying a billion-dollar lottery ticket. With this payoff, a 1 in 10 million chance of being decisive isn’t bad odds.

And many people do see it that way. Surveys show that voters choose based on who they think will do better for their country as a whole, rather than their personal betterment. Indeed, when it comes to voting, it is irrational to be selfish.

So the people who vote are the altruists amongst us, who care more for the nation than for themselves. It’s not just a heartwarming tale though: it’s a lesson in sensibly reconciling the evidence with the theory. If it doesn’t make sense for selfish, rational beings to vote then why would we model them as selfish?

Matt Nolan

Social devolution or individual freedom?

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Here I am going to discuss an issue that is way over my head – but is extremely important for the practical application of economic concepts. I am going to discuss how changes in economic policies can influence social structure.

I decided that I would attempt to write about this after reading this post. In the post the daily dissident laments the collapse of community and the movement in consumerism and its impact on individuals.

The first argument against this view is the idea of individual freedom – individuals have the right to make their own choices, and the frame of communal society alienates that right. However, it is possible to look at the idea of community while providing individuals with rights.

The most basic way to frame this problem initially is as a prisoners dilemma. Read more

jamesz

Doesn’t God love economists too?

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It seems the Catholic church has moved into the 21st century with the addition of a few new, and decidedly modern, sins. The new sins on the block are:

  • Environmental pollution;
  • Genetic manipulation;
  • Accumulating excessive wealth;
  • Inflicting poverty;
  • Drug trafficking and consumption;
  • Morally debatable experiments; AND,
  • Violation of fundamental rights of human nature.

I don’t want to be an alarmist, but this sounds like awfully bad news for Catholic economists. Read more

jamesz

Vonnegut on taxation

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In the comments for my post on taxing observable characteristics that are correlated with income, CPW asks what I think about Kurt Vonnegut’s tale of Harrison Bergeron. I don’t plan to venture into literary criticism which I have no expertise in, but I liked the story enough that I can’t resist posting on it! Read more

Matt Nolan

Capital market intervention: How can we make it sound like a good idea?

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A post at Kiwiblog reminded me of an issue I have wanted to discuss for a while – the optimality of capital market intervention. In this post I aim to discuss some of the basic issues surrounding capital market intervention from a selfish-country perspective.  Furthermore, I want to paint a picture where capital market intervention is actually optimal.

As DPF mentions it is fundamentally unfair that we want other countries to allow us fair access to their capital, but we are unwilling to give access to our own capital. Although this is true, the government of New Zealand is elected to maximise the welfare of New Zealander’s – not the welfare of people around the world. As a result, we have to ask if such controls are in the interest of New Zealand itself. Note: I would like it if other countries in the world cared about other people – sadly governments are really just local institutions that have been created to increase the bargaining power of a select group, so this isn’t the reality of it.

Read more

jamesz

Why economists are always right… or wrong

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Oliver Woods has used Matt’s post on the trade off between equity and efficiency to launch an attack on the separation between normative and positive economics. Matt’s busy with real economics today so it falls to me to defend his honour. Oliver claims that

…any ‘rational’ observer would see that economics and politics/society/morality are fundamentally intertwined. They’re really more or less the same thing…

There’s a very good reason why economics and politics are entirely different beasts: economists can be right (or wrong), but politicians can never be right. Read more