One of my subjects at uni this semester (micro-economic theory and policy) is dedicated to analyzing welfare changes and in particular converting the infamous 'util' measure (an ordinal measure of preferences) to a dollar value. This (to me anyway) is extremely exciting stuff because now all of the theories about consumer behavior have some application.
As with most new things I learn, I spent hours daydreaming about how I could change the world with this new found knowledge. This got me thinking about the definition of welfare and prompted a bit of 'on-the-side study'.
So I found a video lecture (by George Loewenstein, Department of Social and Decision Sciences, Carnegie Mellon University) on 'lite (soft) paternalism'. Paternalism stems from the idea that people may not want whats best for them and therefore need a 'parent' to guide them in making decisions. So soft paternalism is basically not quite big brother but almost. Consumers still have complete choice over their actions but a governing body skews incentives towards 'better' products. For example, fast food tax to persuade us to eat healthier.
So is welfare to be measured on the conventional method of 'consumer knows best' or by a standard set by a governing body?
If you are anti soft paternalism think about the already existing policies like cigarette tax and (to a lesser extent) import tarrifs. Should we lobby against them?
If you are pro soft paternalism, how far do we go?
3 comments:
Good post Jake, and good questions too.
The most intelligent answer I can offer on the topic is that I really have no idea what I am talking about when it comes to these things.
My gut instincts though always err on the side of caution (with a little paranoia for spice). My limited understanding tells me these instincts are anti paternalism, or at least state paternalism. In my thinking, as you know, I always pull towards less controls on freedoms. Parenting should be left for parents to do, within what is legal of course. If governing bodies really cared about consumers making better choices then they would focus on educating them.
Lobbying is hard work though, especially when it comes to lobbying against things. People only tend to lobby for what they are truly passionate about, and what affects their world. I would like to lobby against cigarette taxes, but there are other issues that press on my life so I leave that for smokers. I will sign their petitions though, if they bring them to me.
Someone might ask how I see that a governing body can increase education without some form of revenue raising. I believe that private and benevolent organisations would take up the burden (financial and other), just like they did in generations past when government kept its nose out and stuck to building roads.
What you have written about choice made me think of a Ted Talk by Dan Gilbert I watched for some reason.
Here is the link, I think you will like it Jake-
http://www.ted.com/talks/dan_gilbert_researches_happiness.html
You can download any Ted Talks.
Thanks for commenting Nick. I think you are very right about the educating instead of controlling method. Behavioral economists might think that this is a method of educating but it does run very close to a scary level of control. Also I checked out the Ted talk and loved it. I think a certain level of economics should be taught to everyone just to make them more aware of their decisions.
Thanks again Nick.
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