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Tag Archives: Behavioral Economics

Generalizing Huemer

Mike Huemer has yet another great thought experiment: Suppose you learned that there was a school staffed mainly by right-leaning teachers and administrators. And at this school, an oddly large number of lessons touch upon, or perhaps center on, bad things that have been done by Jews throughout history. None of the lessons are factually false – all the incidents related are things that genuinely happened and all were actually done by Jewish people. For example,...

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The Non-Shopper Problem

In a few high-profile markets, prices seem to stay far above average cost even though there are tons of competitors.  There are thousands of credit card issuers, but the average interest rate is 18.26%.  There are over 100,000 real estate brokerage firms, but the default commission remains 6%.  Sure, unsecured credit has a high default risk, but high enough to justify an 18.26% rate?  And why on Earth would it cost $60,000 to sell a million-dollar home? From the...

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Yes I Can

“Do you mean to tell me that you’re thinking seriously of building that way, when and if you are an architect?” “Yes.” “My dear fellow, who will let you?” “That’s not the point. The point is, who will stop me?” This is one of my favorite passages from Ayn Rand’s The Fountainhead. The conversation takes place early in the novel. It’s between the Dean of the architecture school and budding architect Howard Roark. The Dean wonders how Roark will survive in the...

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Kevin Corcoran on the Importance of Framing

A regular commenter on this site, Kevin Corcoran, sent me the writeup below. I thought it was so good that I asked his permission to post it. He granted it. Here it is. I was thinking the other day about how people prefer to frame issues, and how that can either clarify or distort our thinking. People can react very differently to statements or suggestions depending on how you frame them, so getting the framing right matters both rhetorically in making your case...

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If the Welfare State Is So Small, Can We Just Get Rid of It?

I’ve done multiple debates with social democrats and avowed socialists.  Both groups unfavorably contrast the United States with Western Europe.  Social democrats tend to see Scandinavia as the pinnacle of human civilization.  Socialists usually hope for something more radical; “getting to Denmark” isn’t good enough for them.  But social democrats and socialists alike condemn the hard-hearted, Scrooge-like, laissez-faire United States. I have a standard reply. ...

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Why Can’t Everything Be Free?

“Why can’t everything be free?”  I’m always delighted whenever a child asks me, because I have an intellectually solid answer even a child can understand.  Namely: If everyone had to produce for free, there would be virtually nothing to buy.  If everything had a price of zero, consumers would strive to fill their shopping carts with anything they could get their hands on.  Producers, however, would basically stop working.  (To be clear, this assumes that government...

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Hanania Highlights, III

Chapter 5 of Public Choice Theory and the Illusion of Grand Strategy taught me the most.  Hanania provides a great survey of what we know about the effects of trade sanctions – and then gets meta. He starts by emphasizing the terrible harm of sanctions.  “Humanitarian” exceptions mean little in practice: Sanctions regimes that target the economy of a country usually have humanitarian exceptions. Despite this, other regulations usually serve to limit their...

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Thanks for Less Than Nothing

I know a guy who keeps getting hassled by his Human Resources Department.  Why?  Because he hasn’t submitted his official vacation paperwork. What’s the big deal?  It’s paperwork, and like most people, he hates paperwork. If the paperwork is so hateful, why does it exist?  Because the firm is located in a city where regulators require such paperwork, to ensure that every employee gets all the vacation they’re entitled to. Upshot: Due to regulation, this guy has to...

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Hanania Highlights, II

Continuing from earlier this week.  Military rivalry combined with economic cooperation is hard – but not impossible – to reconcile with “grand strategy.” Of course, in neither case were those who advocated for economic ties with the Soviet Union or China, or their intellectual opponents, devoid of rational arguments. Indeed, the similarities between the two cases are striking, with many in the United States calling for a civilizing mission toward the communist rival....

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A Discriminating Exception

Last month, I put the following on my list of potentially popular deregulations: Create an ironclad free speech limitation on discrimination law, which explicitly includes both (a) political speech, and (b) jokes.  Along the lines of, “Expression of political opinions or jokes by co-workers, managers, or owners are Constitutionally protected free speech and can never be treated as evidence of discrimination or a hostile workplace environment.” ...

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