Intro to Concepts in Behavioral Economics and Decision Making - Mar 2010

Hello Ying,

Yes. In fact, in his previous work "The Theory of Moral Sentiments" he talks about sympathy as something to be essential for a functioning society and concomitantly a market.

There's a series of podcasts on the book at the econtalk book club: http://www.econtalk.org/bookclub.html

I highly recommend it.

As per topic that I would like to address is something very close to my heart, and somewhat painful I should add: "Do public media companies really exist to serve the public and in what sense?"

I had a project that wanted to make available a part of the archives of the portuguese public broadcaster under CC licenses. Inspired by the BBC Creative Archive that, curiously enough, also got terminated.

The project went completely off track when the executives at the broadcaster wanted to make it something much more in line with the organizational culture than trying to serve the public.

I believe that they act in a way that serves them better than they serve the public. In fact I got one of the executives being frank and telling me that "the public service is something totally inconsequential to most decisions made in the company".

I don't think that this is specific to Portugal, I think it's quite common in most European countries. What can BE bring about understanding how the issues of public service and public media companies are related?

> Thanks for the response Antonio. Like you said, this is an economics
> course not a philosophy course, but I always find that things come
> back to political philosophy one way or another.

I agree. Everything boils down to philosophy and morality is always
inescapably in the background. Since as humans we are always judging
things and judging is grounded in a moral evaluation.

> Governments aren't charities, of course, but the greater power of
> most governments gives them the ability to do much more harm, but
> also much more good, than most charities. You could say the same
> thing about some large corporations, which also have more power than
> some governments, and can use that power for either good or bad
> purposes. It doesn't matter who came up with the idea of abolishing
> slavery. The point is that every government had to decide whether to
> accept or resist that idea. Most governments took a long time to
> accept abolition, but when they finally did, surely it was a good
> thing?

Yes it's true. But governments are practical institutions in the sense
that going against an idea whose time has come is not conducent to its
popularity and ultimately to its long time survival as an accepted
institution. Remember that governments exits because the people accept
them. Not because of any metaphysical consideration about the
necessity of government. Also we could evaluate this decision not only
has accepting something which is morally "right", as the abolition of
slavery, but also has a way to coerce all those in favour of slavery
in obeying the government. There's no way around it each decision made
by someone in power always goes in the sense of increasing that
power. Even if its grounded in the respect of the most elementary
individual rights. Like the right of each individual to own
himself/herself, which slavery denied to a lot of humans.

In a nutshell: I heartily agree that abolishing slavery was a good
move by the government, but I cannot cast the government in a morally
good light because of it. Yes I'm sure that many individuals in the
government were for it, but it always ensues that through the new
power to make slave trade illegal the government gained more power.
And by the law of unintended consequences that increase in power could
be used for doing things that are not so morally good in an obvious
way.

> In relation to World War II, even if you trace the origins of the
> crisis back to World War I, every country had to decide whether to
> appease the Nazis (or 2even ally with them), adopt an isolationist
> policy, support their allies who were threatened with invasion,
> declare war themselves, and so on. National self-interest plays a
> fundamental role in these choices, of course, but are you saying
> that there can never be any moral difference between a Government
> that supports the Nazis and one who opposes them?

I happen to place it in an ideological framework a not a moral
one. There's also the question of survival and fighting the
invasion. My WWII history is shaky but if I recall correctly, Hitler's
first invasions and annexations were accepted by most European
governments. They tried to appease him first. And that falls under the
idea that wars are highly unpopular, unless they are of self-defense,
therefore going to war is something that governments avoid, since it
undermines its acceptance by the people and concomitantly its survival
as an institution.

> If 'madness' is the rule in 'groups, parties, nations and ages' does
> that mean that the governments led by Roosevelt and Churchill are
> just as mad as governments led by Stalin and Hitler? You want to
> avoid making moral judgments about governments, but I think it's
> unavoidable.

I agree. There's no way around moral evaluations of things. It's as
natural as breathing. But even if Churchill and Roosevelt differ in
very many respects of Stalin and Hitler, the institution that they
lead has the same violence monopoly. In fact as a proof of that see
how easy it was for democratic governments to become brutal police
states. There's an ontological question that government, due to its
very nature, cannot be "good".

> I'm very happy to be suspicious about the motives of governments, or
> the unintended consequences of their actions, but governments can
> sometimes do good things (as well as very bad things). And coming
> back to the ideas of 'libertarian paternalism', the question is
> whether the real risks of misguided government actions can be
> reduced if their main tool is persuasion rather than coercion.

You cannot base a functioning government, the way we conceive of it,
solely on persuasion. For example, I demand that the government let me
allocate the money I pay in taxes as I see fit. It's my money, why
should it's use be decided by bureaucrats? If I refuse to pay unless
my wish is granted, I will be coerced in to paying no matter what. I
can try to persuade the government for giving me the said allocation
power, but since I cannot coerce the government in doing it, it's
inefficient. There's an intrinsic asymmetry in every power relation.

My issue with the concept with the concept of libertarian paternalism
is that ultimately it can be used as a way to cloak coercion as
persuasion. And in the specific case of a monopolistic institution as
the government the margin for such is very large.

> I'm enjoying this discussion, and I hope it's not too far off
> topic. Best wishes.

Me too. Let's keep the fire burning.