Quick Takes

1. Bryan Caplan, who is prone to wrong-headed generalizations, is at it again. He defends survey research (e.g., “how happy are you?”) by pointing out that all economic statistics are based on surveys — as if to equate subjective measures of happiness with objective (if not precise) measures of employment, unemployment, prices, etc., etc.

2. Caplan does himself one better when he argues for a “Consumer Satisfaction Standard.” He writes:

Most economists still cling to the Demonstrated Preference Standard: If A buys X, then X makes A better off by definition.

Actually, “most” economists (if I may speak for them) would say that at the time A buys X, he believes that buying X will make him better off. If A later suffers buyer’s remorse, that is simply the result of having acquired additional information that A can then apply to future decisions. Only a supremely naive economist (Caplan?) would believe that humans are perfectly prescient about the consequences of their decisions.

Unabashed, Caplan continues by offering the Consumer Satisfaction Standard (CSS):

[I]f A buys X, and would do so if he had the chance to make the decision over again, then X makes A better off.

The validity of the CSS rests on the assumption that the buyer somehow knows that buying something else (Y) instead of X would have made him happier. But the buyer can’t know that unless he actually buys Y and finds that he doesn’t suffer buyer’s remorse. This kind of imaginary second-guessing could go on forever.

3. I must give Caplan credit for challenging the addiction-as-disease school of psychology. He writes:

While I think that addictive behavior should be legal, it’s still irresponsible and emotionally abusive towards the people who care about you.   The addiction-as-disease story shifts the blame from where it belongs – the self-destructive addict – to family, friends, co-workers, employers, tax-payers, and other victims.  Calling bad behavior a “disease” may be merciful, but it’s unjust.

Bravo!

4. Megan McArdle, as usual, makes sense. Some of her predictions about Obamacare:

[A]t least one of the major funding sources, and possibly all of them, will be substantively repealed:  the Medicare cuts (except Medicare Advantage), the excise tax, and so forth.

This program will not reduce the rate of growth in medical costs by anything like 1.5% a year.

A fiscal crisis of some sort is quite likely by 2030, though not just because of this program.  But this program will make it worse, either by increasing the deficit directly, or by using up the low-hanging fruit that should have funded Medicare reform.

By 2030, there’s an 80% chance that the government will have imposed substantial price controls on pharma and other medical technology–and this will noticeably slow the rate of innovation.

5. Finally — and aptly — is a review of Thomas Sowell’s Intellectuals and Society. The reviewer, J.R. Nyquist, refers to the subjects of Sowell’s book as “Civilization’s Wrecking Crew.”  An excerpt:

. . . Sowell offers a detailed examination of those who carry today’s ideological equivalent of the Black Death. He defines the term “intellectual” as referring to those teachers and writers who chiefly deal in ideas, and are paid — by the media or the state — for batting ideas around. By focusing on intellectuals who are paid for intellectualizing, he is able to make a series of observations about their ideological tendencies, their lack of accountability, and their tendency to live outside the “real world.” . . . It is one of those sociological tragedies that intellectuals act as if “their special kind of knowledge of generalities can and should substitute for, and override, the mundane specific knowledge of others.” The intellectuals, as a class, tend to reject the first-hand knowledge of non-intellectuals as “prejudice” or “stereotypes.” Abstract formulas, adopted by the intelligentsia as dogma, are advanced as some kind of superior wisdom and used to undergird insane government policies that fly in the face of common sense. How else, indeed, has our Republic arrived at its present state?

Once established, the intellectual class continues to feed politicians and bureaucrats with ideas that point toward one solution: big government, interventionism, wealth redistribution, and other egalitarian absurdities. The country is pushed, inch by inch, toward an unnamed catastrophe. Who will name it? Who will stop the pushing? The intellectuals are feeding at the public trough, and they are entrenched. It seems that the rest of society is helpless to stop them.

To decry their push for “judicial activism” avails us nothing. If you stop them in the Supreme Court they will infect popular opinion and a new Congress will be elected. If they don’t elect Congress, they will elect a president. If they cannot act politically, they will take over the universities and bring out a generation of politically correct drones. Here we are not dealing with a particular set of abuses that can be fixed with appeals to democracy, Christianity, or legal reform. Here we are dealing with thousands of writers and professors who have, through some mysterious process, arisen from the lower depths, from the inner hell of a confused though fashionable relativism. The welfare state is their brainchild, and economic calamity is also theirs.

Civilization’s Wrecking Crew has been working overtime lately.