Comments on: A Christmas Post

By: Steve Landsburg

Steve Landsburg — Sat, 26 Dec 2009 20:11:56 +0000

Patrick: You can’t hurt someone by giving him cornflakes. You *can* hurt someone by misleading him into believing you’re going to give him corn flakes in the future. You seem to be sayin that it’s hard to do the first without doing the second. That might or might not be true, but it’s still worth keeping separate track of the two effects.

Re your second paragraph: In the example you’re refererring to, the consumer was going to buy cornflakes anyway, so the government spending substitutes for the consumption one for one. Given this, there’s no other way to spend the tax revenue (at least if we confine ourselves to private goods) that could do you more good.

On your tangent, the Club might convert your car from being the easiest to steal to being the second easiest to steal, while simultaneously converting my car from second easiest to easiest. You are right that the average easiness goes down, so some theft is deterred.

By: Patrick

Patrick — Sat, 26 Dec 2009 19:34:31 +0000

@Steve: If the parents do not work as hard, then if the program is pulled, they will be unable to afford cornflakes, and will have to suffer during the readjustment.

Is there not also an (overall) opportunity cost to the taxes which have been paid for the cornflakes, which otherise could have been used to build a tractor (increasing the amoutn of corn flakes available, reducing the price).

On a tangent (I know this is unrelated), but when you spoke of ‘The Club’ in More Sex is Safe Sex, and how it doesn’t reduce, but only redirects crime. Using your analogy where my Club means a thief doesn’t want to steal my car, surely he only would have chosen my car if your car was easier to steal anyway, so The Club simply reduces the profit of crime by reducing the car pool for the thief.

By: Weekend Roundup at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics

Sat, 26 Dec 2009 07:04:06 +0000

[...] for the holidays and had a bit less content than usual—but we still managed to fit in a Christmas story, a cute puzzle, and the long-delayed solutions to my remaining honors [...]

By: Steve Landsburg

Steve Landsburg — Thu, 24 Dec 2009 18:02:10 +0000

Patrick: Surely if you give every family 2 boxes of corn flakes, they will buy fewer corn flakes and probably not work as hard, but it’s difficult for me to see how this makes them worse off.

By: Patrick

Patrick — Thu, 24 Dec 2009 15:48:10 +0000

I remember reading in one of the chapters of Amrchair Economist that if you give every family 2 boxes of corn flakes, they won’t buy them, so wouldn’t giving the turkey to Cratchitt actually hurt him, as that would make him not work as hard, or buy non-food items (like coal), so that if the charity dries up, he’s left starving?
Or have I missapplied the logic?

By: Steve Landsburg

Steve Landsburg — Wed, 23 Dec 2009 03:23:05 +0000

Steve Reilly: Yes, I think you are right about this.

By: Steve Reilly

Steve Reilly — Wed, 23 Dec 2009 00:26:48 +0000

Point taken about interest rates. But I still think the benefits Scrooge bestows on society would be spread among all people, including the wealthy. If he devoted himself to philanthropy, the benefits would presumably all go to the poor.

By: Ben Alexander

Ben Alexander — Tue, 22 Dec 2009 20:24:45 +0000

I had an immediate reaction to think that lower interest rates would benefit the poor more than the rich because the rich don’t have to borrow, while the poor do.

Then I thought that the rich typically have all the options available to them that the poor do, so they can’t be worse off than. Maybe if a business opportunity arose that warranted borrowing, the rich would generally have easier access to credit (perhaps because more favorable terms could be obtained if you could show that bank that you would lose something if they did — like the benefit you get with a larger down payment on a house)

Then I thought that the poor don’t have money to invest, while the rich do, so lower interest rates hurt the rich (who would be able to save) and can’t hurt the poor (who don’t have anything to save), so the poor can’t be any worse off either.

So being poor is the same as being rich.

Then I realized that I’m no economist, and shouldn’t comment on blogs after 3 glasses of wine at dinner. (Local time is 10:20pm)

Happy Holidays! Consider the opportunity to make fun of me my solstice gift to all of you!

By: Huck

Huck — Tue, 22 Dec 2009 19:12:21 +0000

When Scrooge forgoes a turkey an extra turkey goes to someone at the margin. When Scrooge gives turkeys to the poorest of the poor who can’t afford turkeys, are nowhere near the margin, and therefore value them more highly, the world is getting more happiness for his turkey. Why give the turkey to the kind-of-but-not-really poor person?

By: Steve Landsburg

Steve Landsburg — Tue, 22 Dec 2009 18:01:34 +0000

Steven Reilly: I don’t offhand see any reason to expect that lower interest rates benefit the rich more than the poor. My guess would be the opposite, though I haven’t thought hard about it.