Tuesday, April 23, 2013

Unemployment is not Euvoluntary

Thy Dungeonmaster takes free-market economists to the woodshed for a callous attitude towards the chronically unemployed. Do read the whole thing. It's excellent and difficult to excerpt. His point is similar to the one we push here at EE: if consequences aren't part of your moral calculus, you're leaving a big part out of the equation. Similarly, if your analysis of consequences is free of careful, correct analysis, your moral calculus produces the wrong results.

An empirical question, then. What is the form of the game played by the median voter, political elites, idea mongers, and the chronically unemployed? Is it a mere coordination game, where some admixture of folk beliefs about the effects of policy intersect with loss aversion and regret aversion by proxy to produce an array of policies, or is there something else going on, with asymmetries in the payoffs? How important is the bureaucratic apparatus in determining the scope and scale of the regulatory authority? Is there some sort of bureaucratic entrepreneurship effect at work, where folks in regulatory authorities bend their talent to identifying and creating political rent opportunities? How strong are the pressures to construct mercantile institutions whose misfortune is felt by the discarded margins?

Economics is often derided as pitiless, cold, desolate. It substitutes pessimism for the hopes of man to elevate himself beyond his station. Curiously, the opposite is closer to the truth. A supply and demand graph is a beautiful thing. It is shorthand for the hopes and dreams of men and women bound by neither dominion nor despair. It is no cold and sterile thing, no play model of mere elementary school arithmetic. Economics demands attention to the incontrovertible fact that people who pilot their own skiff chart a better course than those that deign to wrest the tiller from their grasp from afar. Economics forces our gaze onto this alien tableau, where intentions do not necessarily imply outcomes, where political elites speak with all the credibility of pro wrestlers, where non-euvoluntarity is simply insufficient justification for third party intervention.

Related, any good Principles of Economics course begins with this:

LVM ain't quite LVB, but close enough, I reckon.

No comments:

Post a Comment

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