Saturday, January 28, 2006

A prayer we should all sing

If you haven't heard of Ben Bernanke, go here. Then go here.

Wednesday, January 25, 2006

A per capita reminder

This recent blurb in Economist asks the question whether smaller can be better.

Friday, January 20, 2006

Brain evolution and decisions

In Frank's reply to Landsburg discussed in the post below, he says

Mr. Landsburg's argument finesses the important distinction between "statistical life" and an "identified life." The concepts were introduced by the economist Thomas C. Schelling, who observed the apparent paradox that communities often spend millions of dollars to save the life of a known victim -someone trapped in a mine, for example - yet are often unwilling to spend even $200,000 on a highway guardrail that would save an average of one life each year.
Why do people behave this way? Jonathan Cohen suggests an answer. Among other examples, he studies the Trolley dilemma

In the Switch Scenario, a trolley is heading down a track on which there are five railroad workers, who will be killed if nothing is done. You are an operator at the local switch station. You are too far away to warn the workers; however, if you flip the switch quickly, you can divert the trolley onto a sidetrack. Unfortunately, there is another worker on that track, and he will die, but your action will spare the other five. Is it morally acceptable to flip the switch? The question here is not whether you think you would flip the switch but rather whether you should or, in any event, whether it is ethically acceptable to do so. When asked this question, most people respond that it is acceptable to flip the switch.

On the other hand, in the Footbridge scenario
a trolley is destined to kill five workers. This time, however, you are a bystander on a footbridge that crosses over the track. There is also a very large worker on the footbridge who is close to its edge. You realize that if you push him off the bridge, he will fall directly on the track and block the trolley. Although he will be killed, this action will spare the five workers further down the track. You are certain that you can successfully push him off and that he is big enough
to stop the trolley, but you are too slight an individual to stop the trolley if you jumped off the bridge yourself. Is it acceptable to push the worker off the bridge? In this case, most people respond that it would not be morally acceptable to do so.
Cohen provides some evidence that although the same person answers each questions, one part of the brain dominates for the switch scenario, while another part of the brain dominates for the footbridge scenario. Check it out.

The right to life support

In a recent Slate article , Steve Landesburg, discusses the recent decision to end the life support of a poor woman. He argues that

A policy of helping everyone who needs a ventilator is a policy of spending less to help the same class of people in other ways. Accounting for "economic considerations" means—by definition—trying to give people what they'll value the most. In other words, economic considerations are the basis of true compassion.


Robert Frank responds here

Friday, January 13, 2006

Milton Friedman: still going strong at 92

Here is a broad ranging interview with Nobel Laureate Milton Friedman. Friedman's ideas on exchange rates, taxes, the military draft, schooling, and the like have had a powerful influence over the last 50 years. Robert Kuttner opens the interview

RK: You have obviously had the enormous satisfaction of seeing your ideas influence a revolution, both in the thinking of economists and in the premises of politics and the role of government. Does this make you any more optimistic about the ability of the political process to work, and of government to learn over time?
MF: I’ve always been realistic about this. I do not think you can change [government].
RK: Well at least it seems to prove that ideas have
influence.
MF: There is no question that they have influence. You know, I agree very much with the famous quotation from Keynes. Sooner or later, ideas matter.

Monday, January 09, 2006

Starbucks economics

Tim Harford, author of underground economics, says that you can get more for less at Starbucks, at least if you don't embarrass easily.