What If Preferences Are Unstable?

Bad news for rational choice theory. New experiments show that “choices can be re-framed to obtain the dreaded negative time preferences, where people care more about the future than the present. Negative time preferences would cause most of our economic models to explode, and if these preferences can be created with simple re-framing, then it bodes ill for the entire project of trying to model individuals’ choices over time” (840 words)

Redistribute Respect

A dream of social justice. Don’t obsess about redistribution of money. Redistribution of respect would be a big step towards a happier world. “I want to move back toward a society where the hard work of an unskilled labourer is considered worthwhile in social interactions; a society where being a good parent or a friendly neighbour earns as much respect as making a hundred million dollars on Wall Street” (1,228 words)

Borrowing From The Future

The idea that fiscal deficits mean “borrowing from future generations” is a popular misconception. At an individual level, borrowing is truly borrowing from the future. But at a population level: “Government is borrowing from some people to pay other people, and paying back these debts, should it ever happen, simply reverses that flow. Either way, money is making its way from one group to another at the same point in time” (890 words)

Economics Is Good For Lots Of Things

“Just as some engineers study computers and others study nuclear reactors, some economists study taxes, other study financial markets, and still others study how psychological biases should change the design of policy. So to use the chaos in financial markets as a reason to discredit all of economics is analogous to discrediting all of engineering on the count of a Fukushima disaster” (1,750 words)

Four Levels Of Science

Short and highly readable note on the virtues of lab experiments versus natural experiments. Lab experiments are — in principle — easy to repeat, and you can control the variables so as to get a better idea of cause and effect, as opposed to mere correlation. But it’s always open to question how well lab experiments map to the real world. That’s where natural experiments score higher. The best course is to use both (1,200 words)

The Iraq War: A Cost-Benefit Analysis

Admirers of Mark Steyn will not enjoy the tirade in the first paragraph, nor perhaps this piece in general. But otherwise it’s a useful and straightforward attempt to provide an inventory of the costs and consequences of America’s war in Iraq — human, political, economic. Perversely, the “benefits”, to a liberal at least, may be said to include a revival of American liberalism. But that hardly counts. “You should never start a war in the hope that you’ll be defeated and that your defeat will invigorate the forces of good” (1,235 words)

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