We are staring down a hurricane and people are evacuating. Those that are not evacuating are stockpiling and hunkering down. And those who are outside of the era are watching and commenting. Inevitably, the following exchange occurs:
[Photo of bottled water with exorbitant price tag]
Normal Human: Can you believe that people are taking advantage of people in need like this?
One of my fellow economists: [pushes glasses up nose] well, actually prices should go up to prevent shortages so that water and fuel can get to where they are needed most.
So the thing here is that the economist is wrong, but I don’t think they will believe you if you tell them they are wrong because the only counter-argument that ever gets made is “you are a heartless egghead sociopath”. The economist knows that their approach maximizes overall human welfare and so relegates you to the bin of moral intuitionists incapable of stepping out of emotion long enough to make a clear-eyed executive decision to help people.
But the economist is wrong! Read the rest of this entry »
Filed under: Uncategorized
Think Economically 