Friday, September 14, 2012

Replying to Andrea Clark

Yesterday's webinar produced the following excellent comment from Andrea Clark:

Your “ice after the hurricane” example: people object to price gouging because the exchange was necessary for life, etc., and this means that the parties are not contracting on an even footing. This means that non-euvolentary exchanges are prevented from occurring that would have helped the worst off. So, how can we overcome this moral smugness in order to help people? Charity is always allowed, as you said, but it is less efficient than market transactions. Is this dilemma resolveable? [emphasis mine]

I've already written a little bit on the subject of encouraging children to appreciate how voluntary trade makes people better off, especially when contrasted against the standard adult exhortation of "share". I believe that if we want to live in a world where people appreciate the benefits of trade, the easiest first step is in early education. Beyond that, the most persuasive argument I've found is to turn around people's moral intuition for care. For cases like opposition to sweatshops, the people who are concerned with the welfare of exploited worker are exercising the moral intuition of care. Simply remind them that if you boycott sweatshop labor, you will force them to accept a worse option. Ditto for immigration, for prostitution, for drug prohibition, for ice/taco truck sales et al.

Of course, you'll only end up influencing the people in your own social circles, or your readers, or anyone who consumes your ideas. The arguments in favor of freedom of exchange are simple, straightforward and (I hope) convincing. The tricky bit is how to get your voice heard. If you're interested in teaching, you've got a small window in a student's career to get the ideas across. You can also direct people to material available here (in the sidebar) or on popular economics websites like the Library of Economics and Liberty, which contain many of the same arguments. An excellent first start is Munger's EconTalk podcast here which presents the nature of the problem in very clear language.

I'd like to see changes to policy, which means the big project is to change the moral intuitions of the median voter. This task is... daunting, but not impossible. Some ideas spread quickly because they're good and they're convincing. I find the insights of EE to be both. So while I'm waiting for this wildfire to catch, I keep myself busy by teaching my daughter what I know about the value of liberty.

I don't know if this answers your question, but it is a question I think about quite a bit, and it's nice to know that it occurs to others as well.

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Do you have suggestions on where we could find more examples of this phenomenon?