Your President Hopes You’re Stupid

Joe Biden says that Mitt Romney has lied about Jeep and outsourcing; Romney intimates that President Obama has lied about Libya. I presume there’s been substantial truth-stretching on both sides and about many issues. Truth-stretching (or lying) relies on the ignorance of voters. There’s plenty of ignorance to go around, which is why truth-stretching works.

Treating voters as ignorant is one thing; treating them as stupid is quite another. You rely on ignorance when you cite “facts” that are hard for people to check — as, for example, when the President presents himself as sympathetic to immigrants and hopes you don’t know about the record number of deportations on his watch. You rely on stupidity when you blithely contradict yourself, hoping nobody will notice. The latter seems far more cynical.

I’m sure both candidates have been guilty of treating voters as both ignorant and stupid, and I called attention to several instances (on both sides) in my commentary on Debates One, Two and Three. But it does seem to me that it’s the President who is banking most heavily on voter stupidity.

A few examples:

  1. The President, not just in the debates but on the stump, frequently rails that “the government should not dictate the terms of insurance policies” — and then segues directly into singing the praises of Obamacare for — dictating the terms of insurance policies, particularly with regard to mandatory contraceptive coverage. It saddens me no end that a) the President believes there are voters stupid enough to swallow this whole; b) he’s probably right; and c) those voters are capable of swinging the outcome of an election.
  2. The President, not just in the debates but on the stump, frequently rails against corporate welfare for oil, gas and coal companies, and then segues directly into touting his own policies of corporate welfare for wind and other “alternative” energy companies. Once again, it’s sad to contemplate that there are voters too stupid to to be squeamish about this kind of direct contradiction, and sadder still to think that the President prefers cynically to exploit those voters than to, you know, make a sensible argument.
  3. The President tells us repeatedly that, in order to send more people to college, all we have to to is lower tuition. Are there voters too stupid to realize that you can’t send more people to college than the colleges have room for?
  4. The President rails against the Republican “War on Women”, which allegedly seeks to deny women the freedom to choose about this, that or the other thing. He frequently segues directly from this into boasting about the Lily Ledbetter Act, one of the first accomplishments of his administration.

    Here’s what the Lily Ledbetter Act effectively does: It denies women the right to accept lower wages in exchange for better working conditions, or to secure a job they might not otherwise be able to get. If a man wants to bring his baby to the office every day, or keep more flexible hours, he’s free to negotiate any arrangement he wants (which is likely to require some flexibility in his wage demands). If a woman wants to do the same, she’s much less likely to succeed, because, in the Lily Ledbetter world, employers are skittish about anything that might look to an obtuse regulator like wage discrimination against women.

    Or: If you’re a man about to be laid off, you can try offering to take a 10% wage cut instead. If you’re a woman, thanks to the President’s much-touted Ledbetter bill, you’re unlikely to have that option. Again, employers dare not look like they might be attempting to “pay women less”.

    In other words, the Democrats, with the President at their head, launched their own war on women when they passed the Lily Ledbetter act. More specifically, they attenuated the much-worshiped “woman’s right to choose” concerning conditions in the workplace. Touting that while denouncing a supposed Republican war on women is another instance of playing to voters’ stupidity.

It’s sometimes said that one difference between ignorance and stupidity is that ignorance is fixable. But more often, the opposite is true. There is much to know, and little time to learn, so we’re all doomed to be ignorant about most things, no matter how hard we try not to be. This inevitably makes us vulnerable to candidates who lie about facts, and there’s not much we can do about that.

But fixing stupidity often requires little more than a moment of reflection. When politicians ask us to believe two contradictory things at once, it doesn’t take any specialized knowledge to know that they’re insulting our intelligence.

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99 Responses to “Your President Hopes You’re Stupid”


  1. 1 1 Robert Easton

    Most voters deserve to have their intelligence insulted! There’s no “hoping” needed when it comes to median voter stupidity.

    In point 4 you explain why the Lily Ledbetter act hurts women. So for the president to contradict himself is assuming we are stupid. But then if you need to explain to us why it is a contradiction, doesn’t that mean you are also assuming we are stupid?

    “Your blogger hopes that you are stupid” … or perhaps people who don’t immediately understand point 4 are not so stupid after all.

  2. 2 2 Harold

    1). This seems such an obvious contradictiion that I can’t see why everyone does not see it. Obamacare may or may not be a good thing, but it clearly is (in part) the Govt dictating the terms of insurance policies.

    2) Probably also a clear example, but not if you give a consistent reasons for railing against coal and oil subsidies, but promoting wind etc. If you were to argue that corporate welfare for coal and oil was bad because it encouraged CO2 emmissions, then subsidising wind is not a contradiction -or at least not in the way that you would have to be stupid to fall for. If you argue that corporate welfare for coal and oil is bad because corporate welfare is bad, then there is a contradiction. Obama is clearly trying to at least imply some of the former, even if he doeas not say it.

    3) Forcing the colleges to lower tuition fees will not increase places, in fact quite the opposite, unless it is accompanied by other subsidies which make up the short-fall for the colleges. Say the Govt were to pay everyone’s tuition fees – Then colleges could expand to take everyone! There are presumably some people who do not attend college because of the fees.

    4) Your analysis denies the possibility of discrimination actually harming women. If this were the case, then the same applies to all anti-discrimination regulations and there is no need to single out this one. To avoid hypocrisy, the candidate would need to camaign to repeal all such laws – I doubt anyone would advocate that (since Ryan is only VP cvandidate). If we acknowledged that discrimination could be harmful to women, then we have a much more complex picture. The effects you discuss are real, and they would represent a downside to the law. But there would be an up-side also, and deciding which is greater may not be such a simple thing.

  3. 3 3 Ken B

    Bravo.

  4. 4 4 Ken B

    @Harold: On point 4 you argue that the government protects women by effectively restricting their choices.

    Steve’s argument does not ignore the possibility of discrimination harming women. It is quite possible to believe it does and to believe that the free market provides the most effective way to redress this. Steve is objecting to an interference in the free market. As a historical example, consider the segregation of buses and bus terminals. This was opposed by bus companies and forced upon them by Jim Crow laws. The market left alone would have addressed that particular invidiousness.

  5. 5 5 Harold

    Ken B. Yes, you are right, the point I was intending to address was the possibility that discrimination harms women and an unregulated market will not be the most effective way to address this. An unregulated market is not the same as a free market, and a discriminatory market is not a free one, I would think by definition.

    I am not arguing that the law in question necessarily improves the lot of women, but it is not just the simple matter of agreeing that it has a down-side. The benefits must also be counted.

  6. 6 6 roystgnr

    The phrase “X hopes you’re stupid” based on his attempt to sell you on obviously-erroneous argument Y implies that X is smart enough not to believe Y himself. Obviously it’s impossible to ever be sure whether that’s true or not without reading minds, but just based on other Obama interviews my best guess is that he’s being disingenuous on points (1) and (2), maybe on (3), but clearly just being stupid himself on point (4). I know Democrats used to advocate minimum wage type laws to hurt minorities, but that was a century ago. Today’s liberals aren’t evil enough to want to do that deliberately, they’re just not smart enough to realize what they’re advocating unintentionally.

    Even on (1), I wouldn’t be surprised if Obama doesn’t see that as “dictating” which of several equally-valid sets of coverage options could be offered, but rather just trying to close a loophole that evil insurance companies use to avoid providing the coverage that all right-thinking (left-thinking?) people want. Remember when he ranted about how evil his old auto insurance company was because he bought liability-only coverage and then was surprised to find out it wasn’t collision or comprehensive coverage?

    http://hotair.com/archives/2010/02/26/obamateurism-of-the-day-218/

    Was he hoping that voters were all too stupid to intelligently shop for auto insurance, or was he just (still!) too stupid to understand the pros and cons of each type himself?

  7. 7 7 Jonathan Campbell

    Ken B:

    “The market left alone would have addressed that particular invidiousness.”

    And when do you predict that would have happened. It had not yet happened (obviously) when the Civil Rights Act was passed.

  8. 8 8 nobody.really

    Presidents — how typical.

    Lincoln said that he was promoting the interests of Negros by outlawing slavery. Didn’t he realize that he was restricting their range of options for employment arrangements?

  9. 9 9 Todd

    Jonathan Campbell: “And when do you predict that would have happened. It had not yet happened (obviously) when the Civil Rights Act was passed.”

    Ken B’s point is that the market was NOT left alone, and thus was not afforded the opportunity to correct the problem. Racism was written into the law. And because politicians would never dream of simply repealing a bad law and allowing non-coercive market forces to correct a bad situation, they did what politicians always do—wrote another law.

    After all, it is somewhat more difficult for a politician to take credit for what the market does than for a law he or she has helped to pass. But that doesn’t stop them from trying!

  10. 10 10 Jonathan Campbell

    In some cases racism was written into the law and in some cases not. The Civil Rights act forbade private discrimination (e.g. hotels) as well as public. So my question relates to the former, not the latter. Or maybe you’d prefer that discrimination on the part of hotels should be allowed?

  11. 11 11 Jay

    I understand what you are getting at with point one, but I think what he meant is that the government should not prevent you from getting health coverage, or make it more difficult for you to do so. That’s how I interpret it, anyway, which makes it less of a contradiction and more of a difference in perspective.
    With regard to alternative energies, if you’re suggesting that moving away from oil and coal dependency to alternative resources is a bad idea then thats fine, but what youre calling a misrepresentation of facts is actually a difference of opinion regarding the viability of other forms of energy.

  12. 12 12 Ken

    Johnathan,

    It had not yet happened (obviously) when the Civil Rights Act was passed.

    Are you forgetting that markets were explicitly denied the ability to invidiously address discrimination thanks to the democrat party’s race based laws called Jim Crow? The idea that the replacement of one set of market distortions with another set of market distortions is somehow a refutation of market forces is really not a well thought out idea.

    Additionally, Thomas Sowell has debunked many of the claims about how wonderful the CRA was supposed to have been. In fact, since the passage of the CRA and its attendant welfare state, the black family has been destroyed far worse than anything under Jim Crow, mainly because it fosters a dependence culture.

  13. 13 13 Ken B

    @Jonathan Campbell: I cited a particualr example which you do not address. Why?

    If you do a little research you will learn the bus companies *did* oppose segregation. It was imposed upon them involuntarily, by law. The civil rights act (and some court cases) removed that legal imposition. It was one law overriding another. Todd has it exactly right.

    Hotels were segregated by law, and the law changed. Hotels were not legally segregated in Canada and were integrated in Canada.

    I can cite numerous other examples where the market was not legally segregated and the market integrated. Wonder did not sell whites-only bread, Esso did not sell whites-only gasoline, Wrigleys did not sell whites-only gum. Once Branch Rickey brought Jackie Robinson into the big leagues it was market forces which led to full integration, even over much opposition.

  14. 14 14 Ken B

    “Or maybe you’d prefer that discrimination on the part of hotels should be allowed?”

    Actually whaht I’d prefer is that debates be about ideas, logic, and facts rather than motives and ad hominem. I see you disagree.

  15. 15 15 Ken

    In fact, Jonathan, Jim Crow was the left’s response to the invidiousness of the market’s ability to refute its racist sentiments and prevent blacks from competing against white in a non-distorted market.

  16. 16 16 Jimbino

    It has long been the case that the law punishes a small-business employer who refuses to hire a woman because she’s pregnant, and he can’t even ask about her “plans” for family.

    Because of this silly law, a small-business owner, especially one seeking to fill a critical position, would be a fool to hire any woman in her breeding years; the result is that a woman who is in fact not planning to have kids, and especially one who is sterilized, will find it in her interests to mention it in the interview on her own initiative.

  17. 17 17 Ken

    Or maybe you’d prefer that discrimination on the part of hotels should be allowed?

    Why of course. Hotels are private property. Are you not allowed to keep whomever you want out of your house and off your yard? Property rights are specifically denied when laws force hotel owners to lease rooms to people to whom they don’t want. If a black woman wants to keep white men out of her hotel, as the private owner of that hotel, she should indeed have that right.

    You seem to think there are no costs to the hotel owner for discrimination, but that room leasers bear an extraordinary cost. This is of course wrong. In a market based hotel industry, the hotel next door will certainly lease to the white men the black woman denies. In fact, race based discrimination by hotel owners would certainly lower profits. If a hotel owner is willing to bear those costs, then let her.

  18. 18 18 Steve Landsburg

    Jay:

    With regard to alternative energies, if you’re suggesting that moving away from oil and coal dependency to alternative resources is a bad idea then thats fine, but what youre calling a misrepresentation of facts is actually a difference of opinion regarding the viability of other forms of energy.

    I quite disagree. Obama presents this not as an issue of energy choices, but as an issue of corporate welfare. He denounces “corporate welfare” one minute and then extols it the next.

  19. 19 19 Bearce

    Steve is objecting to an interference in the free market. As a historical example, consider the segregation of buses and bus terminals. This was opposed by bus companies and forced upon them by Jim Crow laws. The market left alone would have addressed that particular invidiousness.

    That’s actually not true in the slightest sense. If it is, then perhaps you have a credible reference? For the record, citing one, two, or few bus companies oppossed to the norm doesn’t reflect a trend.

    If that were the case then perhaps you could explain why ‘separate but equal’ laws in the South continued in full effect after Brown v. Board of Education? The SCOTUS had also to deal with private discrimination after the ruling, justifying that they could make private companies comply via the commerce clause in Heart of Atlanta Motel v. US.

  20. 20 20 iceman

    Harold #5: “An unregulated market is not the same as a free market, and a discriminatory market is not a free one”

    I don’t understand either of those statements.

    nobody.really #8: Any examples involving slavery are going to be quite wide of the mark here.

  21. 21 21 Ken B

    @Bearce 19: I’ll have more later. For now:
    “For the record, citing one, two, or few bus companies oppossed to the norm doesn’t reflect a trend.” For the record citing one, two, or a few would prove my claim. A “trend” is irelevant to the truth of my claim. It is also irelevant to the *import* of my claim, since my argument involves those companies being able to expand their market share and thus influence the rest. Nice try with the “oh but proof doesn’t count” gambit though.

    Second Brown v Board was about schools not Hotels. Why not cite Wickard?

    Third the existence of hotles that discriminated *in a market where they were sheltered from non discriminators* does not prove they were not eanbled to do so by discrimination. Odd you would not understand this after tossing “hysteresis” around the other day!

    There are also legal reasons why a hotel would be sued for following the state law.

  22. 22 22 Matthew

    It’s even sadder that you seem to be the only person pointing out these glaring contradictions. There’s a much stronger case to be made against Obama than Romney has made. The damage this guy is doing is an outrage.

  23. 23 23 Ken B

    Re 19:

    In Augusta, Savannah, Atlanta, Mobile, and Jacksonville, streetcar companies responded by refusing to enforce segregation laws for as long as fifteen years after their passage. The Memphis Street Railway “contested bitterly,” and the Houston Electric Railway petitioned the Houston City Council for repeal.

    http://www.econlib.org/library/Enc/Discrimination.html

  24. 24 24 Bearce

    For the record citing one, two, or a few would prove my claim. A “trend” is irelevant to the truth of my claim. It is also irelevant to the *import* of my claim, since my argument involves those companies being able to expand their market share and thus influence the rest. Nice try with the “oh but proof doesn’t count” gambit though.

    Actually no, one, two, or few would be what we call ‘anecdotal.’ Demonstrating that they have a greater market share also, even if it were the case, does not prove that private discrimination was a larger business and social norm despite the opportunity cost.

    Second Brown v Board was about schools not Hotels. Why not cite Wickard?

    Because it’s irrelevant to the point being discussed. Interesting case, but not relevant to racial discrimination.

    Third the existence of hotles that discriminated *in a market where they were sheltered from non discriminators* does not prove they were not eanbled to do so by discrimination.

    Sheltered? You just stated market forces would remedy this problem by having a ‘non-discriminator’ come in and capture potential black clients, and thus a greater market share over racist competitors. The lack of this occuring demonstrates my point that this didn’t happen and that racist business and social tendencies trumped market forces, you’re just pleading your case now.

    Odd you would not understand this after tossing “hysteresis” around the other day!

    I don’t even see what this has to do with anything, other than your typical snark that flares when you mask your lack of content. What’s up your ass today?

  25. 25 25 Ken B

    “… Private owners of streetcar, bus, and railroad companies in the South lobbied against the Jim Crow laws while these laws were being written, challenged them in the courts after the laws were passed, and then dragged their feet in enforcing those laws after they were upheld by the courts.

    “These tactics delayed the enforcement of Jim Crow seating laws for years in some places. Then company employees began to be arrested for not enforcing such laws and at least one president of a streetcar company was threatened with jail if he didn’t comply.

    Thomas Sowell, Preferential Policies

  26. 26 26 Ken B

    Second Brown v Board was about schools not Hotels. Why not cite Wickard?

    Because it’s irrelevant to the point being discussed. Interesting case, but not relevant to racial discrimination.

    Exactly right. Just as your citation of Brown v Board with respect to *hotels*. One irrelevant ruling is as good as the next.

  27. 27 27 Ken B

    “The lack of this occuring demonstrates my point that this didn’t happen and that racist business and social tendencies trumped market forces”

    Market forces were not allowed to operate. Jim Crow laws.

    Are you seriously under the impression that Brown v Board outlawed Jim Crow holus-bolus?? That’s the only assumpotion that seems to make sense of your argument here.
    Plus of course I was talking about the period when Jim Crow laws were in effect anyway.

  28. 28 28 Ken B

    As far as I know there was only one extended period when there were no laws either mandating or forbidding racial segregation of buses, trains, and trolleys. That is the period before after the Civil War and before the Jim Crow laws. During that period the facilities were private, there was a market, and facilities were integrated. That is why there was enough support to pass Jim Crow laws: the private companies in the market were not discriminating in the way the racists thought they should; they had to be forced by law.

  29. 29 29 Bearce

    Oh, Thomas Sowell? Yeah, not a credible source. Now I know where the revisionist history is coming from.

    Exactly right. Just as your citation of Brown v Board with respect to *hotels*. One irrelevant ruling is as good as the next.

    No, they weren’t irrelevant. Here’s why, Brown v. Board was the landmark case that led (amongst other race related cases, definitely not the sole one) to segregation becoming swept away, especially under government and government provided services. After Civil Rights Act of 1964, the law was immediately challenged by the owner of Heart of Atlanta on the basis that private business ought to be able to discriminate. I was trying to point out, despite the former rulings, ‘private’ discrimination remained strong in the south *despite* the rulings and market forces until that case specifically outlawed private discrimination in practice.

    27Ken B

    Market forces were not allowed to operate. Jim Crow laws.

    Ken, Jim Crow laws only affected ‘public institutions’ and not ‘private businesses.’ This is where the heart of your confusion lies.

  30. 30 30 Jonathan Campbell

    Ken B:

    “Actually whaht I’d prefer is that debates be about ideas, logic, and facts rather than motives and ad hominem. I see you disagree.”

    3 questions:

    1) do you know what “ad hominem” means?
    2) it seems to me that the burden is on you not to cite examples where an unregulated marget is integrated, but to show that there are no (or very very limited) examples where an unregulated market fails to root out commercial discrimination. do you disagree, and if not, do you contend there are (and were) no such examples?

  31. 31 31 desconhecido

    “Lincoln said that he was promoting the interests of Negros by outlawing slavery.”

    Because this is a discussion about pedantry it needs to be pointed out that Lincoln did not outlaw slavery. Slavery was outlawed by the 13th Amendment — Lincoln was dead at the time. In Delaware (and elswhere) slavery was legal right up to that time.

    Probably everybody here already knows this.

  32. 32 32 Bearce

    That is why there was enough support to pass Jim Crow laws: the private companies in the market were not discriminating in the way the racists thought they should; they had to be forced by law.

    This is absolutely incorrect. Jim Crow was about public, not private institutions. Private institutions had their own ‘Jim Crow-like’ discrimination, and it was numerous, but it wasn’t mandated by law.

  33. 33 33 Ken B

    Jim Crow laws were about “public places” not public *institutions*. They did apply to buses, trains and streetcars.

    You think not? Explain this contemporary cartoon from 1904 http://en.wikipedia.org/wiki/File:JimCrowCar2.jpg

  34. 34 34 desconhecido

    I think there is some confusion here about what the Lilly Ledbetter Fair Pay Act of 2009 actually did. The act was, as far as I can tell, just about the statute of limitations. Nothing that was not actionable before the act became actionable as a result and nothing that was not illegal became illegal; except with respect to the s.o.l. So, all the things listed as hurting women in the workplace were not a result of the Ledbetter act — unless the effect of resetting the S.O.L with every paycheck would cause these results.

    On the topic of Ledbetter:
    There appears to be plenty of misinformation about what the Supreme Court actually ruled in the Ledbetter lawsuit. The SC did not rule that the S.O.L time began to run even though Ledbetter was unaware of discriminatory pay until after the time ran out. Indeed, the court explicitly stated that they did not rule on that question because that question was not before the court.

  35. 35 35 Advo

    2. Oil, gas and coal have large negative externalities, renewables much less so. I see absolutely no reason to subsidize oil, gas and coal.
    Wouldn’t it make economic sense to subsidize renewables though? (Assuming they are a feasible alternative)
    Frankly, Steve, you’re looking at this issue through an extremely narrow lens – subsidizing renewables serves (or inteded to serve) substantial goals that subsidizing OGC does not. Point 2 is simply unjustified.

    3. First of all, you’re assuming that colleges in aggregate are operating at capacity. Which they may, of course, especially considering that they practice first order price discrimination. But is it so in practice?
    Secondly, you’re assuming that supply is static or that supply cannot be increased while lowering tuition, or am I wrong?
    There are obvious ways the colleges could increase capacity and lower tuition. For example, this could be understood as an appeal to colleges to change their capex strategy. The massive increase in tuition costs has been driven by spending that doesn’t increase capacity – prestigious new buildings, sports teams, etc.
    By redirecting their capex to increase capacity instead of the pointless (from a societal perspective) arms race for more prestigious campus monuments, colleges could indeed increase capacity and reduce tuitions.

    I note that you tend to interpret any of Obama’s statements and policies in the way most unfavourable to him. The same usually applies for Krugmann.

  36. 36 36 Bearce

    A cartoon doesn’t tell me anything. Link a legitimate source.

  37. 37 37 Ken

    Link a legitimate source.

    A list of Jim Crow laws by state. You can see for yourself that Ken B is correct in that the laws enforced a segregation norm in public places, not simply institutions. Many many laws required privately owned places, that were considered “public”, such as restaurants and race tracks, to segregate.

  38. 38 38 Ken B

    “A cartoon doesn’t tell me anything.”
    Oh, don’t stop at cartoons.

  39. 39 39 Bearce

    A list of Jim Crow laws by state.

    Now this is what I mean.

    Hmmm…interesting, I might have to eat a bit of Crow.

  40. 40 40 Ken B

    @Ken: Danke sehr.

    I think you’ll enjoy this summary of today’s exchanges. http://www.youtube.com/watch?v=4pmBC_CrQS4

  41. 41 41 Joel

    Steven,

    I looooove your powerful takedown of the Loony Leadbrain act. You are channeling Henry Hazlitt himself.

    Do I have your permission to repost an excerpt?

    Thanks.

  42. 42 42 Serban

    Out of curiosity –

    Are there any ever appropriate times where a government would and should start dictating terms to companies regarding their product’s features?

    SL seems very much against accidental or otherwise incentives being setup as a result of poorly formed legislation such as the Ledbetter act.

    But say for example Obamacare – Why is dictating terms to a health insurer regarding coverage ok – but its not ok to dictate terms to other insurance companies? Did voters just decide thats what they wanted?

  43. 43 43 maurile

    As desconhecido pointed out, the Ledbetter Act doesn’t do anything that Professor Landsburg says it does. The object of Professor Landsburg’s rant should properly be Title VII of the Civil Rights Act of 1964, which the Obama administration had nothing to do with.

  44. 44 44 Keshav Srinivasan

    Steve, I don’t think any of your examples show banking on voter stupidity (although there probably are plenty of good examples of that). Let me address each of your examples:

    1. This is what Obama said in the debate: “A major difference in this campaign is that Governor Romney feels comfortable having politicians in Washington decide the health care choices that women are making. I think that’s a mistake. In my health care bill, I said insurance companies need to provide contraceptive coverage to everybody who is insured.” In the first part of the quote, it doesn’t seem that he’s saying that the government shouldn’t dictate the terms of insurance policies. Rather, he’s saying that the government should not (through action or inaction) create conditions under which women cannot make healthcare decisions that they want to make. If he were making a libertarian critique of Romney, this would certainly be a hypocritical thing to say, but I think he was making a “positive rights” argument.

    2. Why is it in any way inconsistent to support to the idea of subsidies, but to believe that we are subsidizing the wrong industries? Now you may disagree with his motivations: he thinks that oil companies are “making enough money already”, and that the government should subsidize alternative energy because it is the “way of the future”. But I don’t think Obama shares your opinion that the government shouldn’t pick winners and losers.

    3. You ask “Are there voters too stupid to realize that you can’t send more people to college than the colleges have room for?” Well, until you made your recent post about this issue, I wasn’t aware of this point at all. I genuinely believed that more students could go to college if the major universities in this country lowered tuition costs. I think the vast majority of the American public believe this as well. Your economic point that colleges could only have spare capacity if they were monopolists, and monopolists who don’t price-discriminate in particular, had simply never occurred to me. You can call this economic ignorance, but that’s different from saying that American electorate is stupid. And in any case, your argument depends on the assumption that humans are rational, and that may be an assumption that has led to great success in economics, but it’s not one that most people or politicians share.

    4. I think Obama, and most Democrats, believe strongly in social liberty but not as much in economic liberty. As a libertarian, you may believe fervently in both, but does that mean that people who assign different weights to them are stupid? Obama believes in the Lily Ledbetter law for the same reason he presumably supports minimum wage laws: because he believes in positive rights.

  45. 45 45 Ken

    Keshav,

    “In my health care bill, I said insurance companies need to provide contraceptive coverage to everybody who is insured.”

    Requiring insurance companies to have contraception coverage is the very defintion of dictating terms of insurance policies.

    Why is it in any way inconsistent to support to the idea of subsidies, but to believe that we are subsidizing the wrong industries?

    You obviously didn’t read Steve’s response to Jay in which he replies “Obama presents this… an issue of corporate welfare. He denounces “corporate welfare” one minute and then extols it the next.” (response #18)

    You can call this economic ignorance, but that’s different from saying that American electorate is stupid.

    It’s stupid to think that the only reason more people don’t have more of something is because the price is too high. Gas shortages in the 1970′s occurred because people were stupid enough to think that high gas prices were in any way connected to the availability of gas. The price of gas was kept low then, but shockingly, gas shortages occurred all over the country.

    I’d like to add another point, which Steve has not addressed, is that reducing the price of college doesn’t all the sudden make someone who could afford the price smart enough to go to college.

    I think Obama, and most Democrats, believe strongly in social liberty but not as much in economic liberty.

    How can you have one without the other? How can you possibly have “social” liberty without economic liberty? Are these two things even different? If I am free to choose to socialize, i.e., engage in some activity, with a group of people because it satisfies one of my preferences, how is this any different from the freedom to socialize, i.e., engage in some activity, with a group of people because it satisfies my preference for earning money?

  46. 46 46 Paul T

    SL: “Obama presents this not as an issue of energy choices, but as an issue of corporate welfare.”

    Can you, or anybody, explain specifically what he means by corporate welfare, or subsidies, as it applies to the oil industry?

  47. 47 47 Steve Landsburg

    Keshav Srinivasan:

    In the first part of the quote, it doesn’t seem that he’s saying that the government shouldn’t dictate the terms of insurance policies.

    I believe I could find you quotes where he says this more explicitly, but even here, he quite unambiguously says that “Gov Romney feels comfortable having politicians in Washington decide the health care choices that women are making”, and presents this as a contrast between Gov Romney and himself. He then endorses the view that politicians in Washington should decide certain health care choices that women are making, e.g. whether or not to be insured against needing contraception. I don’t see how anyone can look at this and not see a blatant contradiction.

  48. 48 48 Steve Landsburg

    Maurile (and others who have made the same point):

    The object of Professor Landsburg’s rant should properly be Title VII of the Civil Rights Act of 1964, which the Obama administration had nothing to do with.

    Point taken; the key problem is Title VII. But of course the Ledbetter Act extends the scope of Title VII, and hence extends its assault on free choice by women.

  49. 49 49 Keshav Srinivasan

    Steve, I just think by “health care choices”, he means the choice to use or not use a particular health care service when confronted with a particular health problem. I think he believes in giving everyone such choices, whether they want to have the choice or not, even if they would prefer to be given cash in advance rather than be given such a choice later on. This is a philosophy of “positive rights”, which you may disagree with as a libertarian, but it’s not as such an inconsistent position to hold.

    What are your thoughts on my other points? In particular, why is it inconsistent to favor corporate welfare in one industry and not in another? Did Obama ever articulate a principle that no industry should ever receive corporate welfare? Also, can you see how things like anti-discrimination laws and minimum wage laws can make sense from a positive rights standpoint, even if they go against a libertarian view of rights?

  50. 50 50 Steve Landsburg

    Keshav Srinivasan:

    why is it inconsistent to favor corporate welfare in one industry and not in another?

    It’s not. But it’s inconsistent to oppose corporate welfare in one industry just because it is corporate welfare and then favor it in another, which is what Obama has repeatedly done. It might very well be true, as you say, that he has on some occasions endorsed selective corporate welfare. But it’s also true that he has on many occasions denounced corporate welfare qua corporate welfare, which is not consistent with endorsing any corporate welfare anywhere.

    Also, can you see how things like anti-discrimination laws and minimum wage laws can make sense from a positive rights standpoint, even if they go against a libertarian view of rights?

    Sure. But that standpoint is not consistent with a general endorsement of a “woman’s right to choose”.

  51. 51 51 Advo

    Steve,
    maybe you think of all subsidies as “corporate welfare”.
    Other people don’t.
    Someone could consistently argue that subsidies which achieve no substantial societal good (not even in theory) and only benefit a narrow group of corporate beneficiaries are corporate welfare, whereas subsidies which DO achieve a substantial societal good (at least in theory) while ALSO benefitting a narrow group of corporate beneficiaries are not corporate welfare.

    It’s a question of how you define the term corporate welfare – you seem to be unwilling to admit that someone might define it differently from you.

  52. 52 52 desconhecido

    Point taken; the key problem is Title VII. But of course the Ledbetter Act extends the scope of Title VII, and hence extends its assault on free choice by women.

    Unless I’m mistaken, the only thing the Ledbetter Act does is cause the statute of limitations time to restart with every discriminatory paycheck. I fail to see how this extends Title VII’s assault on free choice by women in any manner other than the trivial.

    I understand your argument that employment laws such as equal pay laws impact the freedom of women to make economic choices. I even agree that choices are good things and that we, through our government, should be expanding choice availability rather than restricting it. My point is just that the Ledbetter Act seems to be a poor vehicle for making this point — particularly when the subject of the thread is stupid people, ignorant people, and lying politicians.

    When trying to make a political point, it is best to not commit the same infraction that you are criticizing

  53. 53 53 Paul T

    KS: “3. You ask “Are there voters too stupid to realize that you can’t send more people to college than the colleges have room for?” … Your economic point that colleges could only have spare capacity if they were monopolists …who don’t price-discriminate, had simply never occurred to me. You can call this economic ignorance, but that’s different from saying that American electorate is stupid. And in any case, your argument depends on the assumption that humans are rational…”

    How does his argument depend on that assumption?

    “and that may be an assumption that has led to great success in economics, but it’s not one that most people or politicians share.”

    So, most people don’t assume humans are rational? OK, but what does that have to do with the point at hand?

  54. 54 54 Keshav Srinivasan

    Ken: “Requiring insurance companies to have contraception coverage is the very defintion of dictating terms of insurance policies.” Yes, I agree entirely. My point was that I don’t think Obama was criticizing the government dictating terms of insurance policies when he was attacking Romney. Rather, he was criticizing the government creating (or allowing) conditions under which women do not have certain “health care choices”. And I think “health care choices” here refers not to the choice of coverage, but to the choice of whether to utilize a particular health care service.

    “It’s stupid to think that the only reason more people don’t have more of something is because the price is too high.” I don’t think it’s necessarily stupid to think this. If it is wrong to think this, then it’s because of some combination of economic theory and empirical evidence (it’s not a trivially obvious point, since it assumes human rationality). Surely the appropriate characterization of a person who is not aware of this information is ignorant, not stupid.

    “How can you have one without the other? How can you possibly have “social” liberty without economic liberty? Are these two things even different? If I am free to choose to socialize, i.e., engage in some activity, with a group of people because it satisfies one of my preferences, how is this any different from the freedom to socialize, i.e., engage in some activity, with a group of people because it satisfies my preference for earning money?” Can’t you even imagine a reasonable person who ascribes different weight to the right to do one sort of activity vs the right to do another sort of activity?

  55. 55 55 Keshav Srinivasan

    Paul T: “How does his argument depend on that assumption?” Steve argues that the only way that lower tuition could lead to more people being able go to college would be if colleges are currently admitting fewer students than their capacity, and that would be impossible in a competitive market, so the only way it would be possible is if the market is uncompetitive, i.e. the college must be a monopoly. Now there are two kinds of monopolies: ordinary monopolies and price-discriminating monopolies. And Steve argues that if colleges are monopolies, they must be price-discriminating monopolies, because they charge different prices to different students. And economics teaches us that a price-discriminating monopolist would never leave seats unfilled, they would just charge less tuition to students who couldn’t afford to pay more. Thus, there can be no unfilled seats in college.

    The only problem with the argument is that it assumes that the price-discriminating monopolist is rational. If the college is irrational, and is leaving seats unfilled even though it could make more money by selling those seats for reduced prices, then Obama would be right that reducing college tuition would increase the number of students who could go to college. So it comes down to the question of human rationality, and surely differing opinions on the subject among non-economists does not constitute stupidity.

  56. 56 56 Ken B

    Also, can you see how things like anti-discrimination laws and minimum wage laws can make sense from a positive rights standpoint, even if they go against a libertarian view of rights?

    Sure. But that standpoint is not consistent with a general endorsement of a “woman’s right to choose”.

    Since abortion has been much discussed here lately … This is one of my pet peeves in the abortion debate: feminists who oppose amnioscentesis, or evealing ultrasounds, because some couples will choose to abort a female fetus. This makes hash of the “woman’s right to choose” argument.

    I had yet another discussion last weekend with a feminist who supports both a “woman’s right to choose” and the ban on amnio or revealing the sex after an ultrasound.

  57. 57 57 KS

    “Steve, I just think by “health care choices”, he means the choice to use or not use a particular health care service when confronted with a particular health problem. I think he believes in giving everyone such choices, whether they want to have the choice or not, even if they would prefer to be given cash in advance rather than be given such a choice later on. This is a philosophy of “positive rights”, which you may disagree with as a libertarian, but it’s not as such an inconsistent position to hold.”

    Agreed.

    Suppose there are two candidates. One says, “I don’t want to let black people vote.” The other says, “I believe the government should use its power to make sure everyone is allowed to vote”. I don’t see the candidates as holding logically-equivalent yet differing opinions on the relationship between government and individual rights.

    I.e., Mitt Romney says, abortion must be illegal (in most cases). Obama says, if you’re an employer, you must provide the option for your employees to purchase contraception. I don’t see those two as equivalent.

  58. 58 58 Ken

    Keshav,

    Can’t you even imagine a reasonable person who ascribes different weight to the right to do one sort of activity vs the right to do another sort of activity?

    I can imagine all sorts of differences between two activities in which there are no differences. For example, I can imagine that it’s somehow different to buy a Toyota rather than a Ford based exclusively on the fact that Toyota is a Japanese car and Ford is an American car. But, there is no difference. I bought a car I wanted from someone who accepted the price I offered. Imagining a difference is not the same thing as there actually being a difference.

    Additionally, you did not answer my question “If I am free to choose to socialize, i.e., engage in some activity, with a group of people because it satisfies one of my preferences, how is this any different from the freedom to socialize, i.e., engage in some activity, with a group of people because it satisfies my preference for earning money?”

    Now that I have answered your question, will you answer mine? Please explain the difference between “social” liberty and “economic” liberty. Then, please tell me how you can limit “economic” liberty without limiting “social” liberty.

  59. 59 59 Ken

    Keshav,

    “It’s stupid to think that the only reason more people don’t have more of something is because the price is too high.” I don’t think it’s necessarily stupid to think this.

    Really? There are many many examples if someone just took a moment to think. It’s stupid not to think. To believe that it’s not stupid to think that your gut intuition isn’t wrong without pausing for a moment to think about the many many times your gut intuition has failed you and to put at least a modicum of thought into whatever it is you’re thinking, like “the only reason people don’t have something is because the price is too high”, is indeed stupid.

    As I pointed out before a simple example of this is the gas shortages of the 1970′s. A situation that everyone is aware of. Because prices were kept low, by law, the shortages could not have occurred because prices were too high. The average American didn’t go without gas because he couldn’t afford it, but because it wasn’t available.

    To know this to be true and still think the only reason people don’t have a product is due to its price being high is indeed stupid. It certainly could be the case, but to automatically think that’s definitely the reason is stupid. I know people don’t like to be called stupid and resort to the “I was ignorant of facts” defense. But that defense fails as anyone can recall an example in which the above belief is definitely not true.

  60. 60 60 Ken B

    It’s stupid to think that the only reason more people don’t have more of something is because the price is too high.

    I have one biological mother. How might I obtain a second?

    You will excuse me if I don’t stay for an answer. Walmart has a sale on 25th hours of the day today and I don’t want to miss out.

  61. 61 61 Paul T

    KS: “The only problem with the argument is that it assumes that the price-discriminating monopolist is rational. If the college is irrational, and is leaving seats unfilled even though it could make more money by selling those seats for reduced prices, then Obama would be right that reducing college tuition… ”

    o “the college administrators are irrational”
    o “humans are irrational”

    I’d say the usual semantic parsing of these assertions would yield significantly different meanings.

    In any case, what IS irrational, is to believe that a career lawyer/politician would understand college income maximization better than those who actually do it. There’s a market economics lesson in here somewhere -

  62. 62 62 Ken B

    Jonathan Campbell addressing me: ” it seems to me that the burden is on you not to cite examples where an unregulated marget is integrated, but to show that there are no (or very very limited) examples where an unregulated market fails to root out commercial discrimination. do you disagree, and if not, do you contend there are (and were) no such examples?”

    Yes I disagree — mostly. After all I already cited typical examples: gasoline, gum. I could cite many more. Almost everything I can buy in Detroit.

    I also cited a period — the only relevant period — when it worked for buses etc. And it worked in Canada and around the world.

    Plus I think in general the onus is on the advocates of coercion, which you are in this case. I say give freedom a chance. I bet it will work, if not we can rethink.

    I agree that if I could only cite rare or funky cases you’d have a point. Or if I were arguing that coercion is never justified in these things (as Ken does) then you might have a point. But that’s not what I say.

  63. 63 63 Paul T

    Ken: “To believe that it’s not stupid to think that your gut intuition isn’t wrong without pausing for a moment to think about the many many times your gut intuition has failed you and to put at least a modicum of thought into whatever it is you’re thinking, like “the only reason people don’t have something is because the price is too high”, is indeed stupid.”

    There’s an ancient hindu prophesy, that any occurrence of a quintuple negative will cause every router on the internet to implode.

    So listen, Ken, not quite so breezy when hitting the send button, OK?

  64. 64 64 Daniel

    Steve: Politicians are speaking in a populist tone the electorate and not being completely honest. The horror!

  65. 65 65 Daniel

    And as if Romney isn’t banking about equally on people being stupid.
    Romney: Obama wants to cut Medicare spending.
    Romney: Obama’s entitlements are out of control and need to be cut.

    Romney: Government spending can’t get us out of this recession.
    Romney: Obama is cutting military spending and costing jobs.

    Romney: Deficits are too high.
    Romney: The answer is to cut taxes and raise spending on the things that I like.

    Romney: I have a plan for pre-existing conditions.
    Romney: Cites current inadequate law and hopes no one will notice.

    I feel that all too often you are willing to directly point out where the president contradicts himself and then make vague references to how Romney may do it too but let’s not go into specifics. To present it like its mostly Obama when Romney has his own fair share of whoppers is disngenuine at best.

  66. 66 66 nivedita

    I don’t quite get your point in (3). You seem to assume either that the only way to lower tuition is to impose price controls, or that one of the supply of college places or demand for college education is completely unresponsive to price signals.

    Isn’t it far more likely that tuition would be lowered by providing a (or rather increasing the existing) subsidy to either universities or students or both? In which case I would expect both the number of university places available to increase and enrollment to increase, and I don’t see anything stupid about that.

    It’s debatable whether this would be a good thing for society, but that doesn’t seem to be the argument you’re making.

  67. 67 67 Mike H

    Re #66, yes, it seems ingenuous to me, too, to argue that universities are already full, so lowering prices can’t increase supply – when the President actually wants to pump extra money into the system (and has said so on many occasions) which Econ100 says would increase supply and lower prices.

  68. 68 68 Seth

    #1 seems to be a typical Obama tactic.

    In the first video below, M. Obama first tells an 11-year-old reporter that her food movement isn’t about telling people what to do, because government doesn’t have all the answers.

    Then she says that parents need to make changes at home, they need the information to make good choices and need access to affordable food. But, I didn’t think government had the answers?

    In the second one, more of the same. At the 12 second mark: “Ultimately it’s the responsibility of parents to ensure kids eat right.”

    Then at the 57 second mark, “…we can’t just leave it up to the parents.” Of course, in between has the rational that we can’t leave it to the parents since the kids spend so much time in school — as if a parents responsibility ends once the kids leave the house.

    http://www.youtube.com/watch?feature=player_embedded&v=kX_1Ws-Dg2o
    http://www.youtube.com/watch?feature=player_embedded&v=cBYo_s2dLpE#!

  69. 69 69 nivedita

    Seth, this seems rather weak.

    Providing information and access to affordable healthy food is a far cry from telling parents what to do. Would you for example say that the SEC requirements around filing 10-Q’s and 10-K’s and reg NMS amount to telling investors what to invest in?

    Same thing with the second one. Would you say that since its every individual’s responsibility as to what they end up eating, we should just cut out all regulations around food safety and restaurant cleanliness standards?

  70. 70 70 Harold

    Iceman. “Harold #5: “An unregulated market is not the same as a free market, and a discriminatory market is not a free one”

    I don’t understand either of those statements.”

    I should make myself clearer. The term “free market” can have different meanings, but the way many people use it equates to “perfect market” more than “unregulated market”. The market is assumed to come to the optimum solution, which is only the case for a perfect market. A market free of Govt intervention but controled by the mafia is not really free in the sense it is generally used. The argument that interference in a free market must make things worse only applies to a perfect market. Economics simply applied cannot tell us much about the outcome of markets that are not perfect.

    A discriminatory market is one in which the actors are behaving irrationally – hence it cannot be a perfect market. This is using the term “discrimination” in the sense of irrational prejudice, rather than a technical term for choosing the best or most suitable person.

    Simple economic theory tells us quite convincingly that a perfect market arrives at the best solution. A market that is not perfect therefore can in principle be improved upon. A market based on discrimination is not perfect, therefore can be improved upon. It is conceivable that certain Govt actions could improve it. The argument must be based on whether the Govt imperfections add up to more than the market imperfections.

    I think that some people believe that the market without Govt. regulation is reaaly close to the perfect market. I do not agree. How many times has somebody said of some apparently unforunate event “that was the best thing that ever happened to me”? This is partly because they have irrational respnses and incomplete information, which traps them in less than optimum situations.

  71. 71 71 iceman

    #57 — “he believes in giving everyone such choices, whether they want to have the choice or not”

    Didn’t follow the context of this but it reads a bit odd. Why would someone object to having their range of options expanded? This suggests there is something else wrong with the picture, like maybe elsewhere some choices are being restricted.

    Question for those referring to “positive rights” as an alternative vision: how do you universalize this principle? Wouldn’t they come into conflict, so someone else has to lose rights?

  72. 72 72 Ken Arromdee

    In a market based hotel industry, the hotel next door will certainly lease to the white men the black woman denies. In fact, race based discrimination by hotel owners would certainly lower profits. If a hotel owner is willing to bear those costs, then let her.

    What’s to keep that from resulting in an infinite stream of hotels with lower profits and segregation?

    Or to put it another way, the hotel owner is willing to pay for segregation, said payment being in the form of lower profits. Segregation is, on its own, something with value to him. Economically, the hotel owner ended up with less money because he bought some segregation, just like the hotel owner down the street who has less money because he made the higher profit but then bought some season baseball tickets.

    Market competition doesn’t drive hotel owners out of business for buying things they like with their profits.

    (Also, just like you may have a whole street full of baseball fans, you might have a whole street full of segregation fans.)

  73. 73 73 Ken Arromdee

    A discriminatory market is one in which the actors are behaving irrationally – hence it cannot be a perfect market.

    If you adopt that definition, then a hotel owner who finds value in not having blacks in his hotel, in the same way that one finds value in good meals or paintings, isn’t even discriminating. After all, he’s behaving rationally–he receives less money, but since he receives both money and something else valuable to him, he has maximized his overall profit and is not being irrational at all by discriminating. It’s like receiving less money but getting a nice meal that makes up the difference. Except instead of a meal he gets segregation.

  74. 74 74 Harold

    Ken Arromdee. This is an interesting point, and gets at the heart of my argument. The hotel owner would be happier without the prejudice because he would make more money, and without the prejudice, would not suffer any loss. The black guest would also be happier, because he wouldn’t have to trolley round town trying to find a hotelier willing to take him, suffering considerable emotional hurt along the way. It is only the existence of the prejudice that makes the hotelier feel better off with discrimiation and fewer guests. The best outcome is one without irrational prejudice, since all parties would be happier.

    However, since hotel owner is prejudiced, lets assume that he feels it is worth the loss of income to maintain segregation. This sounds like he is getting the equivalent of a nice meal to compensate for the lower income. However the benefit of segregation is based on an irrational assumption – or to put it another way, a wrong assumption. The hotelier does not have full information. There is no rational reason why he should maintain that position. The benefit he thinks he is getting is illusory, because it is based on a false assumption. Remember, I defined the prejudice as irrational.

    So you could have it either way. You can argue that the market is a perfect market because it caters to his irrational preferences. If you maintain this, you must then maintain that a perfect market does not arrive at the best outcome – which is contrary to economic theory. This is because as we saw above, the best outcome is one where there is no irrational prejudice.

    Alternatively, you can maintain that a perfect market arrives at the best outcome, but the market with irrational prejudice is not perfect. This is the interpretation I prefer.

    Thirdly, you can maintain that the market is perfect, and arrives at the best outcome. However, since the outcome is not the best, this is an indefensible position.

    Fourthly, you can postulate that a discriminatory market is not perfect, but it is impossible for one to persist. I disagree with that because the benefit the discriminator gets may be illusory, but it is very convincing illusion.

    Fithly (I hadn’t realised there would be quie so many points), you can maintain that the benefit obtained is real, even if it is based on irrational assumptions. I would argue that you must push back until you obtain a real benefit not based on arbitrary falsehoods for a benefit to be real. A good meal is a benefit because it satisfies hunger, and stimulates a biological pleasure circuit. This is not arbitrary. Maintaining discrimination has no such non-arbitrary benefit. This point may be open to debate, but this is long enough now.

  75. 75 75 Ken Arromdee

    However, since hotel owner is prejudiced, lets assume that he feels it is worth the loss of income to maintain segregation. This sounds like he is getting the equivalent of a nice meal to compensate for the lower income. However the benefit of segregation is based on an irrational assumption – or to put it another way, a wrong assumption.

    How is it an irrational assumption? It doesn’t leave him with more money, nor does it leave him with a physical item that he can resell for money, but I’m not claiming it does; that’s why I chose the example of a nice meal–once he buys and eats the meal, the value is lost to him. You might claim that a meal satisfies hunger, but a nice meal and a cheap meal both do that; the extra cost for the nice meal doesn’t go into hunger satisfaction or any physical need. It is solely an intangible experience that brings him pleasure, exactly the same as for segregation.

    Another example is baseball games. You pay to see a baseball game, but you don’t get anything except an experience. Some people enjoy going to baseball games and some people enjoy having segregated hotels.

    People do pay money for intangible experiences that they can’t resell, and they’re not being irrational by doing so, nor does the market keep them from doing this.

  76. 76 76 iceman

    Harold – I agree with Ken A that in terms of “discriminatory”, you seem to be simply putting normative value judgments on the sources of utility. To me an objective example of irrationality would be “I’d like to go into that store but I’m afraid it’ll be filled with spiders”.

    I presume we could agree that a free market is at a minimum free of coercion, legal (govt / regulatory) or illegal, so the mafia example isn’t persuasive. To me this may be the only criterion required. I would hope most people don’t assume free markets always reflect the perfectly competitive model. However I agree this presents a crossroads of sorts. Some apparently believe we can “simply” choose which market outcomes we deem acceptable and rework the rest. Others think a more dynamic view of the process is required, e.g. creative destruction, and perhaps a more humble one as well: as Hayek said, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design”. So on your last example, except where there are significant externalities involved, the question is on what basis should we believe a group of bureaucrats are better positioned to process “complete information” than a market? Who’s more likely to respond to “rational” incentives, or foresee the hidden possibilities in an “apparently unfortunate event”?

    Today I’d just add that some people seem to convince themselves we can also have it both ways in terms of undertaking significant redistribution without trading off LT growth in living standards. And they will be in charge for the next four years. Sorry to vent a little.

  77. 77 77 Harold

    Ken Arromdee and Iceman. These are interesting and complex points. I think Iceman’s spider filled store is a good example. The person in question has a preference not to use that store because he believes it is full of spiders. We all agree (I think) that is irrational, and would prevent the market operating efficiently, even though the market would maximise his preference.

    The racist person prefers segregation because of…..what? I contend that the basis for his preference is just as irrational as the shopper’s preference to avoid the shop, and equally prevents the efficient operating of the market.

    His preference for a good meal, or attending a baseball game is different, because it is based on a rational assesment of the enjoyment he gets from the meal. There is no hidden, false assumption underlying that preference.

    So I do not believe that I am putting normative value judgements on the sources of utility. Rather I think you are confusing a rational preference with an irrational one.

    In a choice of one’s mate one prefers a particular body type, including skin color. This may be a rational preference, and if you prefer light skin no-one can justifiably call you racist on that basis. This is rational choice based (in part) on race.

    It is also possible that one does not want a dark-skinned mate because one has been brought up to believe dark skinned people are dirty. This would be the same outcome, but based on an irrational, or false assumption. In this case it would be a racist choice.

    It is obviously very difficult to pick these motivations apart, but any preference based on segregation, rather than simply a choice of one’s own intimate partner, is very difficult to justify without irrational racism.

  78. 78 78 Ken Arromdee

    <blockquoteThe racist person prefers segregation because of…..what? I contend that the basis for his preference is just as irrational as the shopper’s preference to avoid the shop, and equally prevents the efficient operating of the market.

    His preference for a good meal, or attending a baseball game is different, because it is based on a rational assesment of the enjoyment he gets from the meal.

    I could likewise say that he enjoys having a segregated hotel, and so his preference is based on a rational assessment of the enjoyment that he gets from the segregated hotel.

    There’s no reason why he gets enjoyment, but that doesn’t make it irrational; after all, there’s no reason why he enjoys the baseball game either.

  79. 79 79 Ken B

    “his preference is just as irrational”

    A preference really cannot be irrational by itself. It’s not irrational to prefer beets to carrots. A combination of preferences and actions can be; irrationality is an internal contradiction. It’s irrational to prefer Obama as president and vote for Romney.

  80. 80 80 Harold

    “There’s no reason why he gets enjoyment” Are you saying you do not believe in cause and effect? Of course there is a reason. We may not be able to determione that reason.

    To have a preference means there are at least two things to choose between. Ken B may be technically correct – the preference itself may not be irrational, but there must be some goal to make the preference rational or otherwise.

    Take the man and the shop. You said “To me an objective example of irrationality would be “I’d like to go into that store but I’m afraid it’ll be filled with spiders”.”

    You did not say whether the shop was filled with spiders or whether they were dangerous spiders, but I assume it is not. Lets say he has a goal to shop and a greater goal to avoid dangerous spiders. Each of these goals rationally fits with broader goals of staying alive etc. Lets say first that he has an irrational (and false) belief in the presence of dangerous spiders in the shop. He is thwarted in his goal to shop, but does not actually achieve his spider avoiding goal because he would not have encountered them anyway. His behaviour is irrational because it does not lead to maximising his goals. However, he is behaving entirely rationally from his perspective, because he genuinely believes it is full of dangerous spiders. Given that belief the rational choice is to avoid the shop.

    There is another way he could be irrational. Say the shop does contain some non-dangerous spiders, but he has a phobia of them. He has a goal to shop, and also a greater goal to avoid spiders. By not shopping he genuinely acheives the greater of these goals. Is this rational? He achieves his greatest goal. Yet this is irrational because his desire to avoid spiders is itself irrational. We must push the reason back until we arrive at a goal that makes sense. Why does he want to avoid spiders? Is this goal consistent with his wider goals? No – because it is a phobia, which is defined as an irrational fear. Pursuing this goal must clash with other goals that are rationally based, such as shopping. So we describe the behaviour as irrational, even though, given the phobia, he is behaving rationally to avoid fear inducing situations.

    Lets say the man has an irrational fear of black men. He avoids the shop because it contains a black man. Is this rational? I do not see how this can be if the spider one is not, even though it fulfils his preference and appears rational to him. What if he has an irrational dislike of black men rather than a fear? Would his subsequent behaviour be rational?

    It seems that the example of irrationality proves my case, but I could have missed some crucial difference. Please enlighten me if so.

  81. 81 81 Ken Arromdee

    “There’s no reason why he gets enjoyment” Are you saying you do not believe in cause and effect?

    Of course this really means “there’s no reason, by the same standards you use in the other case”.

    The “reasons” why someone gets pleasure from baseball games and segregated hotels are the same: personal preference–that’s the kind of thing they like. You don’t seem to count these as reasons, in which case neither one has a reason.

    Lets say the man has an irrational fear of black men.

    You’re stretching the meaning of “irrational”. Yes, his fear is irrational if by that you mean that the black man isn’t going to cause him injury, but the cheap meal isn’t going to cause him injury either. It’s not irrational to buy an expensive meal, because he enjoys expensive meals for no reason other than that is what he likes. He similarly likes whites-only shops (and hotels).

  82. 82 82 Harold

    Would you agree that it would be irrational for the spider-phobe not to enter the shop, or would you consider that to be a personal preference? If you consider this a personal preference, then I don’t see why you used it as an example of irrationality above.

    You are saying that preference for a segregated world is the same as preference for a good meal. They are not. Here’s why.

    Lets simplify, and say a man prefers the taste of apples to oranges. This is a personal preference, and I am happy to accept it as sufficient of itself. The stimulations of his senses directly produces better feelings with the apple than with the orange. At this level it is probably pointless to delve deeper into why he has these preferences. These preferences are more or less entirely focused within the individual. There is NO irrational component in this preference – no irrational link in the chain. This is one end of the scale.

    The same man has a phobia of spiders. This is an irrational fear of spiders. He has a strong perference to avoid spiders. This is irrational, because the original phobia is irrational. It is because his fear of the consequences is out of all proportion to the actual consequences. This produces a response that causes an internal contradiction. He wants to shop, but he wants to avoid the spider more, so he does not shop. Since the spider cannot harm him, this is an irrational response. Could the same reaction occur without the phobia? No, of course not. He may not like spiders much, but cannot have such a strong reaction to them without the phobia. There is no mechanism to provide the reason for this. Without the phobia, he could rationally not like spiders much, but would only take minor steps to avoid them.

    I said back in post 70 “This is using the term “discrimination” in the sense of irrational prejudice, rather than a technical term for choosing the best or most suitable person”

    If we accept that there is such a thing as irrational prejudice, then I do not see how it could not be exactly the same as a phobia. It must distort the preferences in such a way as to produce an internal contradiction. This is because the fear of the consequences is out of proportion to the actual consequences, just like with the spider.

    It may be possible for a person to have genuine, internal rational preferences for white people, or black people, or short people. To the extent that these apply, then desiring segregation may be a personal preference.

    If you agree with what I have said, you must then ask yourself whether irrational prejudice exists, and whether it exists to any appreciable extent. If so, the this must distort the market.

    You may believe that all preference for segregation actually comes from rational, reasonable assesment of the consequences of dealing with those of a different race. If so, then the personal preference model fits fine, but I fear you have been living on Mars.

    The key point is that we have personal preferences, but these must have a rational basis. IF our preference has an irrational basis, then our actions must be irrational.

    If you still maintain that desiring segragation is a personal preference, how do you address the spider-phobe?

  83. 83 83 iceman

    Since I threw out the spider shop example (quickly becoming a Python sketch), I’ll take a final stab at this…

    While much of this falls under “there’s no accounting for tastes”, I agree you can find or construct examples of irrational prejudice. It seems we’re honing in on a definition here that involves people taking actions they would prefer not to take (i.e. are utility-destroying), due to beliefs that are demonstrably false. E.g. the guy wants to enter the shop and has no reason to believe it’s actually full of spiders. This might also fit your example of someone who thinks skin is dark because it’s dirty. I’d call them ignorant first, and irrational if they “cling” to it after you show them someone of color washing their hands. But as you allude, under more general conditions some people may be more naturally comfortable around people who are “more similar” along various dimensions – height, weight, baldness, skin color etc. [Perhaps you’d argue this can reflect ignorance as well, but again I wouldn’t jump to calling that irrational until behavior defies broader experience.] Of course others may naturally find opposites attract; the point is I see no basis for *assuming* any such preferences are ‘irrational’. Perhaps we could agree most clearly on this in your examples involving physical attraction to potential mates, presumably something we can’t fake. (Caveat – any heterosexual male who would turn down a date with Naomi Campbell for any reason is clearly irrational.)

    I’d add that frankly I think one unfortunate but quite rational “real-world” reason people may be less comfortable around others is when they think the others feel (e.g. because they have been repeatedly and publicly told) that they have a grievance against their ‘group’. In this sense the problem of group identity politics is perversely self-fulfilling (if utility-inducing for politicians).

  84. 84 84 Ken Arromdee

    It’s irrelevant anyway. As far as the market is concerned, buying segregation and buying baseball tickets are the same: in either case the hotel owner is paying for something that he enjoys but which is otherwise useless and unprofitable. Even if you call one of them irrational and the other rational, the market is going to treat them in the same manner because they both have the same effect on the pocketbook.

    And it’s clear that the market doesn’t keep hotel owners from spending money on baseball games just because they are useless once experienced. So it’s not going to stop segregation, either.

  85. 85 85 Ken Arromdee

    It’s irrelevant anyway. As far as the market is concerned, buying segregation and buying baseball tickets are the same: in either case the hotel owner is paying for something that he enjoys but which is otherwise useless and unprofitable. Even if you call one of them irrational and the other rational, the market is going to treat them in the same manner because they both have the same effect on the pocketbook.

    And it’s clear that the market doesn’t keep hotel owners from spending money on baseball games just because they are useless once experienced. So it’s not going to stop segregation, either.

  86. 86 86 Harold

    Sorry – I seem to have mixed up the author of the spider shop sketch. I think we are getting somewhere. We agree that irrational prejudice would be “utility destroying”, I think. However you believe that the distaste people feel towards other races is just a preference, and not based on some irrational beliefs.

    The hypothetical of the dirty black man was not intended to be that the color was dirt, but a belief that black people were dirty in some way – perhaps literally, because they did not wash, or metaphorically, because they were afflicted with some sort of moral inferiority.

    I think that back in the 1950s when a system similar to apartheid was in place, there was irrational racism. I cannot see how making blacks occupy the rear of busses, and not being permitted to use the same drinking fountains etc. were based on rational understanding of the consequences of allowing blacks and whites to use the same facilities. Or if not in the USA, then in South Africa, I think it difficult to defend a position that irrational racism was not a major contributor to the chopices peoplemade. I hope we agree that this sort of utility destroying irrationality is more thsn just a hypothetical oddity.

    I still contend that my original point was right – where irrational racism is involved in the choices, the market will not maximise utility. I do not believe that hoteliers would prefer to exclude blacks unless the choice is informed by irrational racism. No doubt there ar some rational reasons, but I doubt in most cases the hotelier would be able to provide a reason that was not based on an irrationality.

    It is possible that the market would eventually be self correcting, but I think these systems can persist for a long time.

  87. 87 87 Ken Arromdee

    I still contend that my original point was right – where irrational racism is involved in the choices, the market will not maximise utility.

    That becomes true because defining the racism as irrational also affects your definition of utility–since you consider the racism illogical, the pleasure someone gets from a baseball game is real utility and the pleasure someone gets from a segregated hotel isn’t.

    They’re actually still behaving the same way–the “fake” utility someone gets from appreciating segregation is treated by the market just as if it was the real utility someone gets from a baseball game.

    If you’re going to insist that what someone gets from segregation isn’t real utility, you pretty much have to define a new term, perhaps “perceived utility”, which covers both the real and fake utility. Then we can agree that the market maximizes “perceived utility”.

  88. 88 88 Harold

    Ken Arromdee. This is indeed a difficulty for the proponents of the market. The utility gained from racism is counted the same as the utility gained from baseball. Yet we know the utility gained from racism (irrational racism that is) comes from a feature without a benefit. There is no actual gain, because it is based on a error – the racist has some reason for getting that response that is based on an error.

    I thinkthat utility as defined by economic theory is actually MY version of utility- because it is requires perfect knowledge and rationality. The utility that we actually get is only an approximation at best

  89. 89 89 iceman

    Still there?

    “This is indeed a difficulty for the proponents of the market.”

    It’s a difficulty period, for anyone who finds such behavior regrettable…perhaps especially for utilitarians?. E.g. unless passing a law changes people’s hearts or minds, it’s a utility loss. You might argue we shouldn’t value this kind of utility, and/or it’s more than offset by gains from would-be customers *who have no other options*. That’s where market proponents say absent discrimination-enabling laws, other businesses seek to serve the underserved and hire capable people, and overall utility is higher.

    “There is no actual gain, because it is based on a error”

    Ignorance is bliss? E.g. true phobias aside, it may be a sad fact that simply convincing oneself one is better than someone else for whatever reason can provide utility, no matter how small-minded or disingenuous that might seem to you or me. The point is we can’t tell someone what’s utility for them, we can only try to persuade them to see things differently.

    “utility as defined by economic theory…requires perfect knowledge and rationality”

    I think you’re the only one saying this, based on 1 & 2 above

  90. 90 90 Harold

    I had a much longer post, but I think the main point comes down to this. Can we add utility where a person believes we have taken it away?

    Say a person wishes to choose a car bases only on fuel economy. He believes he would get 80mpg from car A, when he would actually get only 40mpg. He chooses this car instead of car B, which he correctly believes would give him 60mpg. Unfortunately, his belief in the excellent fuel consumption of car A is a fixed delusion, and cannot be changed by evidence. Would utility be gained or lost if we forced him to behave rationally, and pick the car that would fulfil his real objective, i.e. fuel economy? I am only interested in whether utility is gained or lost, not whether such a compulsion would be justified on other grounds. Is there any way of knowing? We know he would gain utility from paying less for the fuel, since this was his objective. We also know he would lose utility because he wrongly believes he is paying more. Is there any way to know which is the greater? We know he believes he has lost utility, but has he actually? I would be interested to hear any comments on this point.

    I had other points on whether laws can change hearts and minds (yes) and whether the market does provide sufficient alternatives where racism is prevalent (no, or it doesn’t matter), but I will leave these aside for now as I think the above question is the heart of the problem.

  91. 91 91 iceman

    Since everyone else is on about Peano Axioms again…

    Sure if you can actually cure someone of a phobia, convince them of a misperception or otherwise persuade them to adjust their preferences in a way that opens up more choices, it seems to me that could be utility-enhancing. (You seem to suggest that laws can eventually shape opinion as the result of shaping behavior, but clearly that’s speculative and wouldn’t be universal.) Otherwise the heart of your argument still comes back to wanting to assign objective truth (e.g. using examples about MPG of different cars) to issues of preference, which I learned is a no-no per ‘positive’ econ 101 (e.g. I don’t care whether beets are healthier and you say they taste just as good, I like carrots…and I don’t have to explain why). Of course you’re free to offer ‘normative’ policy prescriptions that reflect your personal view of what types of utility should count more or less, but that’s not a basis for calling “market” failure. Note there are people here who believe we need to account for the utility of drug dealers and even murderers (or even think it’s OK to push people in front of trolleys).

    I’m sure I don’t understand why you also suggest that if the market were to provide sufficient alternatives, that “doesn’t matter”?

  92. 92 92 Harold

    I am not trying to assign objective truth – the mpg figures are only a way to measure the goal of the individual. If the man wished to chose the most expensive to run car, then that would be fine – I am not telling him he must choose the most economic. I am saying that IF he wishes to choose the most economic AND he suffers the delusion THEN he will fail to fulfill his goal. Everything is based on his own goal (hey – that works as a pun!).

    This is central to this whole phobia / racism / delusion thing. I think we can all agree that if you can “cure” someone of a phobia or delusion that would be a good thing (apart from contrived specific examples). In the car case, there would no longer be a conflict between the goal and the choice. I am considering the case where you cannot do that. If you force someone to act in accordance with their goal, in defiance of their belief, can we know anything about the increase or decrease in utility?

    The car example is a simple, understandable, (and contrived) clear cut case. If we prevent him choosing the car about which he is deluded, would that increase or decrease his utility? Can economics tell us anything about this? I think we know there would be both gains and losses, but which is bigger?

    This is analagous to the racist who holds irrational beliefs about another race. If we force him to act rationally, can we say anything about the relative gains and losses to his utility? We know there will be both gains and losses, since the irrational belief must conflict some of his goals.

    This is different from the case of forcing someone to choose beets because they are healthier. If they are informed and rational, then they can make their own choice and utility will be maximised. I am only talking about a case where the choice the person will make on his own is based on an error. The analogy here would be someone who believed carrots were healthier, when in fact they were not.

    You could argue that racism was a rational choice, not based on an error. I think there is at least a strong case that it is irrational, but that for now is a separate discussion. I want to know about the situation where there IS an error, without necessarily claiming that racism is such a case.

    Now the practical point about whether utulity can be increased by anti-discrimination laws.

    I think there is a strong argument that laws do change hearts and minds. By banning discrimination, people are forced to face up to their irrationality. They feel that there would be terrible consequences if black people stayed at the same hotel, for example. When it is forced on them, they find that there are no consequences, so become a bit less racist. Children grow up seeing black people in the same places doing the same things, and grow up less racist than they would if society were segregated. This argument again assumes racism is irrational.

    Where discrimination is not widespread, there will be almost no gain in banning it, since the alternative providers you mention will exist in profusion. This is why we should not have laws banning discrimination against, say, people exactly 5’8″. However, if we did pass such a law, it would have only a very small consequence, since no-one was going to discriminate on this basis anyway. No actual behaviour would be changed, and everyone would carry on with no impediment.

    Where discrimination is widespread, I think there is a real cost to the discriminated against. I think minorities can suffer if the majority is uniformly racist aginst them. An effective law will change behaviour, because there is a lot of the behaviour about. The minority will obtain benefit from this. Therefore any law that actually changes behaviour has potential to have large gains, and any law that does not change behaviour has only a small cost. (This applies only to laws regulating behaviour, not requiring for example structural changes). This is what I meant by “doesn’t matter”. If there are the market alternatives, then nobody is forced to change, if not, then forcing them is a good thing (at least it has good effects as well as bad).

    I am not suggesting that passing laws randomly is a good thing, even if they have few direct costs. All laws have costs, and should not be passed unless they are a net benefit. The point is that banning people from doing what they were not going to do has a relatively small cost, but preventing them doing bad things has a large gain.

  93. 93 93 Ken B

    I’ll believe it’s a crisis when the DATA those who tell me it’s a crisis look like DATA that show it’s a crisis. http://www.dailymail.co.uk/sciencetech/article-2217286/Global-warming-stopped-16-years-ago-reveals-Met-Office-report-quietly-released–chart-prove-it.html

  94. 94 94 Harold

    Hi Ken B – I think your comment has strayed into the wrong post!

  95. 95 95 iceman

    92 – To your basic question, I don’t see how forcing someone to do something they prefer not to do can increase their utility (as opposed to persuading them it is in fact in their best interest). Of course if you *assume* it’s irrational or “bad” *and* that you can “cure” them you get the conclusion you seek. If you believe it’s just bad in terms of the cost to those discriminated against, the argument is that if we first make sure govt does no harm, and the market can in fact provide alternatives which alleviate those costs, that would seem more likely to maximize overall utility, at least in the real world (as opposed to a utopia where laws passed by the same entities that gave us Jim Crow in the first place actually win over the hearts and minds of the irrational / bad people so they end up increasing their utility options, voluntarily).

  96. 96 96 Harold

    Forcing someone to do something against their will can increase their utility because it makes them acheive their goals. It seems simple enough to me. Forget racism for now, go back to the car example. If I make him choose the car with the better economy, I am forcing him to meet his actual goal. He will have more money to spend on something else. Remember, he actually wants the car with the best economy, he is just deluded about which one that is. This must have a positive effect on his utility, since it is his preference. Balanced against this indisputable positive effect is a negative effect because he is pissed off about being told to choose what he thinks is the less fuel efficient model.

    You could say that this is true, but it is so far removed from reality that it is irrelevent. Then we could discuss that. I don’t see how you can claim there is not some positive utility to achieveing your goals.

  97. 97 97 iceman

    “If you force someone to act in accordance with their goal, [but] in defiance of their belief”

    Hey I was out of town for awhile…last attempt to bridge the disconnect:

    You keep going back to examples where you can measure the goal in clear and objective terms like mpg. However -

    1) in such cases it should then be a simple matter to persuade / convince someone to *voluntarily* make the choice you prefer, so we can avoid the rest of this rat-nest;

    2) where the goals / beliefs involve more subjective tastes and preferences, to me “I order you to increase your utility!” is a non-sequitur. Even where you think you can figure out what their real goal is (not just should be) better than they can discern for themselves (and IMO a healthy dose of humility is warranted here), the point is in terms of their utility *it makes all the difference how they think they got there.* That is, they won’t assign the utility to the “goal” that you might expect if they don’t “believe” the ends and / or means were consistent with their preferences. I thought about the case where they might even have more money left to spend on something else, but the problem is they already *revealed* that they preferred to spend the money differently. So again it seems in order to get the utility (for that person anyway) you have to be able to change the heart and mind.

  98. 98 98 Harold

    Hi again – just checked back here on the off-chance.
    The argument I am trying to construct has stages, I think you are skipping some stages, which makes it hard to isolate the disagreement. Lets establish the argument, then see if it has any bearing on reality.
    Stage 1 is to assume someone has a simple goal and a delusion. This causes them to act in a way that does not fulfill their goal. You say it “should” be a simple matter to persuade them of their mistake, but lets assume for now it is not possible, and go from there.

    Stage 2 is to say that since they are not achieving their goal, compulsion could possibly improve their lot, since it could make them achieve their goal. At the very least, we must say that there will be positive effects of the (correct) compulsion as well as negative ones. Granted, there are negative affects as well, but in the language I used earlier, compulsion could get us closer to Pareto optimum.

    Stage 3 (which we never really got to) is to see if this has any bearing on reality.

    In fact, individuals have more than one goal – they have many goals, some in conflict (more money and more free time for example). If they are rational, they can weigh up the options and optimise their behaviour to get the most out. Summed over everyone this is Pareto optimum. If they have a delusion about the results of some of their actions then they cannot achieve Pareto equilibrium. In our simplified case of the man with the car, he will not get as much money to spend on other things because he is wrong about the fuel economy. His loss will not be made up by someone elses gain.

    In most cases we simply don’t know if a persons actions will achieve the goals they want. In the absence of evidence to the contrary, it seems that a reasonable default assumption is that they know what they are doing, so we can leave them to it.

    In an extreme case such as a phobia, we pretty much know it is not getting the best. We try to “cure” them of their phobia. It is not a simple task to persuade / convince them.

    Now we are getting to the case in question. Someone is racist. Is this a delusion, or is this a simple preference? If it is just a preference, then we cannot improve on the outcome – they will maximise efficiency by acting on their preferences. IF it is not a simple preferrence, but based on a delusion, then Pareto optimum will not be achieved by acting on their preferences – it is impossible, just as it is for the car driver with the delusion about fuel economy.

    So the real meat in this sandwich – is racism merely a preference? I seriously doubt that anyone is racist in the way we understand it without at the heart there exists an irrational belief. This may have been instilled whilst growing up, or resulted from extrapolating from specific to general. I contend that racism is not just a simple preference, and thus acting on racist beliefs cannot get you to the optimum outcome.

    Persuading someone of their irrationality about racism would of course be the best course, but unfortunately this is not simple.

    Since we are not at the optimum outcome, intervention has at least the potential to get closer to it. If you accept that racism is at heart irrational, then I don’t see how you can avoid this conclusion (although maybe I will be informed).

    This is a logical argument, which could be challenged at different points. Where I think it is sound is that from economic theory, Pareto optimum cannot be acheived if the party is not behaving rationally (except by coincidence).

    On a point about the revealed preference of the car purchaser, I do not agree that he revealed he prefered to spend it elsewhere. In this case, I am assuming a knowledge about his motivations. Given this knowledge (which I have because I invented him) we know that he did not reveal anything, he just made a mistake. He wanted the best economy, then chose the worst economy vehicle.

  99. 99 99 iceman

    Hey there. Just to remind myself of the backdrop here, I think you can make a case for anti-discrimination laws based either upon rights (but a right to the services of others would seem to bring rights into conflict), or that the utility gains of those previously discriminated against dominate the utility losses of those who wish to discriminate. A “libertarian” comeback to the utilitarian is that allowing competitive forces to operate – i.e. ensuring first that the *state* does no harm via laws or other anti-competitive regulations that protect the discriminators – can lead to an even better, coercion-free outcome, where the market can serve both groups so some gain utility from new options while others don’t lose existing options (we’ll set aside any direct utility discriminators may get from simply depriving someone else of something). I presume you’re skeptical of this outcome in practice.

    To your Stage 1 – if we assume irrationality and such a simply quantifiable objective preference / goal as MPG vs. sticker price, it ought to be trivial but you still have to persuade them (see below), and I don’t find this example to have much bearing on reality (Stage 3). (Where can you even get better fuel economy for less $?)

    Stage 2 – it seems to me the problem – *whether you assume the preference is irrational / mistaken or not* — is that *they believe they have achieved their goal*, and that belief is what matters for their utility curve. To me that’s the “real meat in the sandwich” (like that phrase). So unless you can persuade them to change their perception or goal, you’re merely substituting an outcome they view as inferior (they may also resent the coercive process itself.) This impacts all your statements about Pareto optimality.

    Note I do hold open the possibility that e.g. forced integration can promote greater understanding, over time, at least for some (but possibly with dangerous results for some in the process), but that’s conjecture not some new economic principle. I also find it more speculative than you to assign general irrationality; e.g. how to comment on two ethnic tribes who have been at war for centuries, with deep legacies of violence affecting almost everyone somewhere on the family tree, building an inherent dislike and preference not to associate with each other?

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