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  •  An argument against the profit motive, (2+ / 0-)
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    drewfromct, nickrud

    full stop, is like saying the problem with economics is it involves people.  We need to find a way to work with the profit motive to make the best of what we can.  One way to do this is to distinguish between "short term greed," which results in a race to the bottom, and "long term greed," which results in virtuous circles of increased education, living standards, and therefore money pumped back into the system.  How we encourage the latter and discourage the former is not an easy one, I'll grant you.

    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

    by Loge on Thu Jan 20, 2011 at 07:58:51 AM PST

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    •  It's a question of incentives. (4+ / 0-)
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      Sparhawk, cardinal, nickrud, Loge

      (Yes, my thesis involves law and institutional economics, which shows). I find I have little patience these days for people who moralise.

      Machiavelli was right. People aren't particularly moral or particularly immoral (and that applies to whatever morality they may espouse). On average, they're not bright, but not dumb. Not brave, but not cowardly. And they like creature comforts.

      But some movements, when faced with the problem of what people are like, choose to solve the problem by breaking it: Reform man. Sure, it works, but only to a limited extent, the results take a long time to show and are unpredictable.

      The Church tried to create the Christian man. Even the Inquisition couldn't achieve that goal. Communist regimes tried to create the socialist man, selfless and inclined toward teamwork. It didn't work, and the regimes collapsed. Austrians and the radical branch of neoclassical economists tried to create the capitalist man. That didn't work, either.

      In short, it's better to plan for human nature than to change it. The chances of success improve.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Thu Jan 20, 2011 at 08:03:49 AM PST

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      •  I'm a law and econ man myself (2+ / 0-)
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        drewfromct, Dauphin

        I was initially skeptical, having been a philosophy major undergrad (though I studied the analytic school, which has at least some scientific pretensions), but enrolled at the University of Chicago law school because it was the best school I got into and I loved the people, the neighborhood, and Chicago, generally, when I visited.  Three things I learned early on:  (1) there are left wing as well as right wing economists, and (2) a lot of law, especially the kind I practice, involves business, so applying an L&E methodology makes sense; (3) economics is not objective (see point 1), but it at least tries to be, unlike appeals to morality.  The behavioral law and economics movement is especially appealing, because it dispenses with the "rational man" standard in place of analyzing where people are "predictably irrational."  Having said that, law and economics doesn't address a lot of issues, especially when due process or other Constitutional rights are concerned, but even in those questions, understanding incentives helps to clarify the issues to be decided by a case and the implications of a particular decision.

        "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

        by Loge on Thu Jan 20, 2011 at 08:21:22 AM PST

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        •  I agree. (2+ / 0-)
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          Sparhawk, cardinal

          I consider economics a useful tool which helps with law in all its stages, from the legislative process to drafting contracts.

          However, my interest is a bit different than yours. The approach I use for my thesis doesn't stress predictable irrationality so much as bounded rationality: People try to achieve their goals rationally, but are limited by the limits of brainpower, imperfect information, and uncertainty. You cannot plan all the outcomes in advance and stipulate against them.

          Add opprtunism and asset specifity (the identity of the parties matters, since changing them means a loss of value) into the mix and sprinkle it with generic transaction costs, and you have a formidalbe toolbox for institutional solutions which run from market to hierarchy.

          Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

          by Dauphin on Thu Jan 20, 2011 at 08:28:17 AM PST

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      •  Re (2+ / 0-)
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        melo, Dauphin

        In short, it's better to plan for human nature than to change it. The chances of success improve.

        This is a great point. You want systemic solutions in which the incentives of all parties tend to make the aggregate situation better, not worse. If you set up the incentives correctly, you can avoid "tragedy of the commons" situations and promote healthy civilizational growth.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Thu Jan 20, 2011 at 10:31:26 AM PST

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