Abolish government regulation of food, what could possibly go wrong? Over the last few weeks the Irish and UK food industry has been rocked by the discovery that many beef products actually contained horse meat. This has raised all such of questions and it is highly likely that other frauds were committed. In this context, it is worth examining why we have government intervention in the economy. It is regularly asserted that the government is only a burden on the private sector and that we would all benefit if the market was left alone. Do consumers need the government to protect them from unscrupulous businesses or can the market regulate itself? Continue reading “Horse Burgers And Food Regulation”
In Chapter 9 and 10 (I combined them as they’re quite similar) of “Predictably Irrational” by Dan Ariely, the concept of how are expectations affect our decision making is discussed. We are not rational actors making choices in a vacuum but rather we are deeply affected by our expectations. If we expect a movie to be good, then it often is. This placebo effect is always to be found with prices. If we pay more for something, we value it more and get more from it. This creates serious problems for those who claim that market distortions will be corrected by market forces pushing a return to equilibrium. Continue reading “Predictably Irrational Chapters 9 & 10 – The Effect Of Expectation & The Power Of Price”
In chapter 6 of “Predictably Irrational”, Dan Ariely discusses a problem every student is familiar with, procrastination. You have an essay to do yet here you are browsing through facebook, looking at pictures of strangers and comments from people you don’t like. You know you should study but you could watch one more youtube clip. Every night you promise that the next day you will work hard and study, yet you never get around to it. You promise that you will exercise and eat healthy but end up sitting on the couch all day eating pizza.
In the run up to exams myself and my friends in college were all stressed over study and getting assignments completed. In the middle of this I noticed that some essays were individual and some were group essays. Seeing as I’ve been doing a lot of economic thinking, particularly about the difference between collective and individual, I thought I might try and see what economic lessons could be drawn from this. Continue reading “Applying Economics To Assignments”
Libertarians advocate reliance on the private sector and the down play or even abolition of the public sector. However, what they don’t seem to realise is that this system is enormously wasteful. Privatising public industries would result in duplication, under capacity and under use of resources. Libertarians fail to recognise the power of economies of scale that the state wields to keep costs low. There are simply are some times when we are better together than alone. Continue reading “The Waste Of Privatisation”
There is no such thing as a free lunch . . . except for free trade which makes everyone everywhere better off
It is naive and foolish to imagine there is some magic pot of gold which will make us all magically richer . . . but competition magically makes everyone richer
As Adam Smith said, the “invisible hand” of the free market ensures everyone is best off . . . even though Smith never said that about the market but rather about protectionism.
We should never rely on one-size-fits-all solutions that don’t take account of the specifics of each case . . . and cut taxes in response to every problem
The government makes everything worse . . . which is why countries like Somalia which have no government are so much better off Continue reading “Conservative Logic”
Having money linked to a Gold Standard is an idea that almost every economist opposes. It is described as the economic equivalent of creationism and a major cause of the Great Depression. It is ignored by policymakers and no country has one anymore. Yet there is some support for it on the internet. It is one of Ron Paul’s main ideas in his campaign for the Presidency and is supported to some extent by Paul Ryan. The Republican platform promises a commission to consider reintroducing it. So what is a Gold Standard and why is it so bad? Continue reading “The Fool’s Gold Standard”