This post exhibits a common fallacy in both economics and politics. I’m not sure what, if anything it’s traditionally called, but for the moment I propose the “We are all on the same side” fallacy. Let me explain.
“Let’s say we are considering a law mandating businesses to lower their pollution levels. So far as I understand economics, the best decision-making strategy is to estimate how much pollution is costing the population, how much cutting pollution would cost business, and if there’s a net profit, pass the law. Of course it’s more complicated, but this seems like a reasonable start.”
Actually, no. Non-owners of a polluting business will rationally prefer that the business is to be made to stop polluting, even if that costs that business more dollars than they are willing to pay for clean air/water/etc. Classical economics suggests that in this case the business owner should pay the populace for the right to pollute, but that’s never been practical or seriously considered.
In reverse, owners of polluting businesses prefer to pollute even if the benefit to them of polluting is far less than the cost to everyone who suffers their pollution. This is the classic example of an externality in economics.
Politics, especially democratic politics, is the process by which people with differing and opposed interests compete to try to put their interests first. There is no one rational best choice for everyone. Different people have different wants and desires that cannot always be mutually satisfied.
None of this negates your discussion of how people use broader narratives to understand (or misunderstand) specific stories. Sometimes, as in the Duke Lacrosse case, it’s simply a matter of fact. And other times, though rarer than most people think, there is one obviously better solution for everyone; and we should all just rationally choose it.
But most of the time you need to distinguish the rhetoric and propaganda from the genuine interests of different parties. Take your example of “there would be seemingly good idea to regulate something that clearly needed regulating”. Maybe for the good of society something, call it a “boonlicket” to avoid triggering patterns on real products, needs regulating because fly-by-night producers are highly incented to produce dangerous boonlickets instead of spending ten cents more per unit. Or maybe retailers are incented to sell expired or damaged boonlickets instead of new ones. And let’s suppose that everyone who uses a bad boonlicket loses their little toe; and that this is a real problem and it’s really happening in the marketplace. Lots of folks are now walking around without little toes. (I’m being deliberately extreme here to make it really obvious that regulation is called for.)
Nonetheless retailers and manufacturers of good boonlickets may still not accept regulation because following the regulations will cost them a lot of money, even if it saves millions of little toes. (Then again, in some cases good manufacturers may actually request regulation if it puts the bad competitors out of business, and restores consumer confidence in boonlickets as a class; but for the moment let’s assume the costs of regulation are really, really high; or maybe the bad boonlickets only sometimes cut off a little toe.)
Either way, the manufacturers and retailers of the bad boonlickets are going to strongly oppose the regulations because they’ll lose everything they make on the bad boonlickets. Now of course they can’t go around saying they want to sell boonlickets that cut off peoples’ toes to save $0.10 a unit, so instead they try to obscure and obfuscate the problem. They talk about “Small government! Freedom! Capitalism!” though they don’t actually care about any of that stuff. They just want to continue selling the toe-cutting boonlickets.
To understand what’s really going on in these debates and disputes, you need to look beyond what people say. Ask yourself who benefits? Who pays for that benefit? How much do payers pay? How much do beneficiaries receive? A classical economist would identify this as a transfer of wealth from one group to another, though I think wealth isn’t a full description of what’s happening here. But it is a transfer of utilons from one party to another; and politics is one way of distributing a society’s gross utilons. It is by no means obvious or accepted that we should simply accept any policy that results in a net increase of utilons across the population, or reject any any policy that results in a net decrease of utilons across the population. The real question for politics is “Who gets what?”, not “How much is there?” Politics is about distribution, not maximization.
And then, all the totally unrelated industries that are at risk of losing money from regulation, and all the people pushing for regulation in any industry, will add their voices to the argument—a precedent will advance their goal, after all.
This post exhibits a common fallacy in both economics and politics. I’m not sure what, if anything it’s traditionally called, but for the moment I propose the “We are all on the same side” fallacy. Let me explain.
“Let’s say we are considering a law mandating businesses to lower their pollution levels. So far as I understand economics, the best decision-making strategy is to estimate how much pollution is costing the population, how much cutting pollution would cost business, and if there’s a net profit, pass the law. Of course it’s more complicated, but this seems like a reasonable start.”
Actually, no. Non-owners of a polluting business will rationally prefer that the business is to be made to stop polluting, even if that costs that business more dollars than they are willing to pay for clean air/water/etc. Classical economics suggests that in this case the business owner should pay the populace for the right to pollute, but that’s never been practical or seriously considered.
In reverse, owners of polluting businesses prefer to pollute even if the benefit to them of polluting is far less than the cost to everyone who suffers their pollution. This is the classic example of an externality in economics.
Politics, especially democratic politics, is the process by which people with differing and opposed interests compete to try to put their interests first. There is no one rational best choice for everyone. Different people have different wants and desires that cannot always be mutually satisfied.
None of this negates your discussion of how people use broader narratives to understand (or misunderstand) specific stories. Sometimes, as in the Duke Lacrosse case, it’s simply a matter of fact. And other times, though rarer than most people think, there is one obviously better solution for everyone; and we should all just rationally choose it.
But most of the time you need to distinguish the rhetoric and propaganda from the genuine interests of different parties. Take your example of “there would be seemingly good idea to regulate something that clearly needed regulating”. Maybe for the good of society something, call it a “boonlicket” to avoid triggering patterns on real products, needs regulating because fly-by-night producers are highly incented to produce dangerous boonlickets instead of spending ten cents more per unit. Or maybe retailers are incented to sell expired or damaged boonlickets instead of new ones. And let’s suppose that everyone who uses a bad boonlicket loses their little toe; and that this is a real problem and it’s really happening in the marketplace. Lots of folks are now walking around without little toes. (I’m being deliberately extreme here to make it really obvious that regulation is called for.)
Nonetheless retailers and manufacturers of good boonlickets may still not accept regulation because following the regulations will cost them a lot of money, even if it saves millions of little toes. (Then again, in some cases good manufacturers may actually request regulation if it puts the bad competitors out of business, and restores consumer confidence in boonlickets as a class; but for the moment let’s assume the costs of regulation are really, really high; or maybe the bad boonlickets only sometimes cut off a little toe.)
Either way, the manufacturers and retailers of the bad boonlickets are going to strongly oppose the regulations because they’ll lose everything they make on the bad boonlickets. Now of course they can’t go around saying they want to sell boonlickets that cut off peoples’ toes to save $0.10 a unit, so instead they try to obscure and obfuscate the problem. They talk about “Small government! Freedom! Capitalism!” though they don’t actually care about any of that stuff. They just want to continue selling the toe-cutting boonlickets.
To understand what’s really going on in these debates and disputes, you need to look beyond what people say. Ask yourself who benefits? Who pays for that benefit? How much do payers pay? How much do beneficiaries receive? A classical economist would identify this as a transfer of wealth from one group to another, though I think wealth isn’t a full description of what’s happening here. But it is a transfer of utilons from one party to another; and politics is one way of distributing a society’s gross utilons. It is by no means obvious or accepted that we should simply accept any policy that results in a net increase of utilons across the population, or reject any any policy that results in a net decrease of utilons across the population. The real question for politics is “Who gets what?”, not “How much is there?” Politics is about distribution, not maximization.
And then, all the totally unrelated industries that are at risk of losing money from regulation, and all the people pushing for regulation in any industry, will add their voices to the argument—a precedent will advance their goal, after all.