- Kevin Williamson at National Review has a pretty good explanation for why market prices are so important. He uses Bernie Sanders’s now infamous plea for fewer deodorant choices for consumers. I especially like this quote (excellent use of em-dashes, colons, and semicolons, too):
This is a very old and thoroughly discredited idea, one that dates back to Karl Marx and to the anti-capitalists who preceded him. It is a facet of the belief that free markets are irrational, and that if reason could be imposed on markets — which is to say, if reason could be imposed on free human beings — then enlightened planners could ensure that resources are directed toward their best use. This line of thinking historically has led to concentration camps, gulags, firing squads, purges, and the like, for a few reasons: The first is that free markets are not irrational; they are a reflection of what people actually value at a particular time relative to the other things that they might also value.
- Richard Thaler’s new book is getting even more attention. I’m still working my way through it. But, speaking of ir/rationality, there is a big divide in the way neoclassical, behavioral, and causal-realist economists use the term. This quote is from the Bloomberg.com review:
People who read Thaler’s list might well just shrug and say, “there isn’t anything here that any good used car salesman doesn’t know.” That’s the point: It’s obvious to anyone who pays any attention at all to himself or his fellow human beings that we are not maximizers, or optimizers, or logical, or even all that sensible. In the early 1970s, when Thaler was a student, his professors didn’t argue that human beings were perfectly rational. They argued that human irrationality didn’t matter, for the purpose of economic theory, because it wasn’t systematic. It could be treated as self-cancelling noise.
- I’d be a spokesman for the 3M/MT if asked.