Tuesday, November 19, 2019

Szu Ping Chan - Why economists get things wrong'


                             We Want Dance!


People don't always want maximum efficiency. Economists who rely too much on maths to work out the most efficient way to run the economy will end up with everyone feeling miserable, and an economy that dives. Economics involves psychology and sociology - behaviour economics.

MMT even has the Job Guarantee because it is a people reoriented economics system.


What motivates us?

Conventional economic theory doesn't focus on what people actually care about, they say. Money matters, but in reality people are more concerned about "purpose, belonging and dignity" than in making a few extra dollars - even when times are tough.

This is a "huge blind spot in economics", says Prof Duflo, speaking to the BBC as economists often assume people will respond very strongly to financial incentives.



BBC News




5 comments:

Matt Franko said...

"People don't always want maximum efficiency. "

this is an absurd statement...

"Hey! I wish I was paying $4 a gallon for gas instead of $2!"

"Hey! I sure wish my power bill was at 13 cents/kWHr instead of 8 cents!"

"Boy! I sure wish my car only got 10mpg!"

"Gee I sure wish there was more traffic on this road so my trip would take another 30 minutes! How about closing down a lane!"

"Too bad this bridge is here otherwise I could drive all the way around!"

LOL!!!!!

Kaivey said...

'Money matters, but in reality people are more concerned about "purpose, belonging and dignity" than in making a few extra dollars - even when times are tough.'

S400 said...

”Gee I Wish the orchestras could play more efficiently” double the tempo and you get twice as much for the money.

Bob Roddis said...

The earth reverses its rotation! Matt Franko and I agree on something.

I was going to say....

Who wants efficiency from a vet surgeon when your cat has swallowed a ball of yarn?

Who wants efficiency when a poor person requires healthy and inexpensive food for their baby?

I could go on and on.

Bob Roddis said...

[P]eople are more concerned about "purpose, belonging and dignity" than in making a few extra dollars - even when times are tough.'

What better reason is there for the government to violently intrude upon voluntary relationships and exchanges and engage in violent economic intervention? It's for the DIGNITY!!!

Who knew?