21 June 2007

Economics and politics

I don't like to criticise an economist who appears to be relatively sympathetic to the idea of free markets — they're (we're) a relatively rare species. But I am not sure about this.

Among the fifteen commandments of economics composed by YouNotSneaky and Professor Dani Rodrik, most are unobjectionable expressions of the fact that contemporary economics can really say very little with any great certainty. But this one, contributed by Rodrik and endorsed by YNS, seems a bit odd.

People everywhere are pretty much the same. It is the incentives and constraints they face that differ.
"Pretty much the same", if it's to be taken as informational at all, and coming from an economist, sounds like an assertion about comparing individual utility functions. Implying that everyone's needs and preferences are pretty identical. If that is what it means, then it's an opinion, and one with which I beg to differ.

(h/t Tim Worstall)


Tim Worstall said...

See what you mean although I take it the other way myself. There's no such things as "New Soviet Man", The "Russian Soul" does not mean that kleptocratic authoritarianism is OK there, Confucianism does not mean that markets do not work in China, it is not true that Africans are "happy darkies" delighted to scrape in the fields with a stick to grow runty corn.....
People are pretty much the same everywhere, they'd (we'd) all like long lives, healthy children, the maximum wealth that currently available resources can provide us with etc etc.
Depends upon which level of detail you're looking at the statement perhaps?

Fabian Tassano said...

“People are pretty much the same everywhere, they'd (we'd) all like long lives, healthy children …”

Seems to me that this belief is consistent with more or less any political system. Communists, right wing authoritarians, free marketeers, socialists – they all claim to have the best method to get people those things. And I can’t think of anyone who would disagree with the idea that everyone wants a long life rather than a short life, and wants their children to be healthy rather than unhealthy, so Rodrik’s statement seems a bit vacuous if it was meant to refute that.

On the other hand, the idea that different cultures might involve different (average) preferences over things like (say) technological advancement versus environmental quality, or legal restrictions versus laissez-faire, doesn’t seem that farfetched to me. The claim that this is false would also (as far as I can see) have the character of an opinion rather than qualifying as a “commandment”.

Having said that, I agree (with the opinion that) everyone, more or less without exception, would like to maximise his or her own resources without interference. Whether he/she is willing to pay the price of also letting everyone else maximise their resources without interference is of course a different matter ...

NeoAuteur said...

I don't think this phrase can be taken literally. The two economists were trying to imply that most people , no matter how different they are from each other, share the same general concensus about how to go about making important decisions.

Fabian Tassano said...

See comments above, Neoauteur.

"Most people ... share the same general consensus about how to go about making important decisions."

This assertion is either trivial, or in need of empirical support.