Economics In Short Lessons: If You\'re Paying, I\'ll Have Top Sirloin

Don Boudreaux today linked to an old but excellent WSJ article by Russell Roberts. The article is a simple, classic example of how "splitting the bill" is a disastrous way to pay for things:

Suppose the tab is split not at each table but across the 100 diners that evening across all the tables. Now adding the $4 drink and dessert costs only 4¢. Splurging is easy to justify now. In fact you won't just add a drink and dessert; you'll upgrade to the steak and add a bottle of wine. Suppose you and everyone else each orders $40 worth of food. The tab for the entire restaurant will be $4000. Divided by the 100 diners, your bill comes to $40. Here is the irony. Like my neighbor at the theater, you'll get your "fair share." The stranger at the restaurant a few tables over pays for your meal, but you also help subsidize his. It all "evens out."

But this outcome is a disaster. When you dine alone, you spend $6. The extra $34 of steak and other treats are not worth it. But in competition with the others, you've chosen a meal far out of your price range whose enjoyment falls far short of its cost.

The fact that we pay taxes for things other people use, and they pay for things we use does *not* mean that it all evens out, even if everyone pays the same amount!. When our consumption decisions are decoupled from their cost, we end up consuming too much, whether it be health care, public transportation infrastructure, or groundwater. This might be an interesting argument to present to the anti-consumption left.

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"Conceptual flaws often lead

"Conceptual flaws often lead to characteristic errors. In my opinion, the standard model of rational expectation is tailor-made to support laissez-faire economics."

I don't see how. The model reveals success of perfectly competitive markets, but it also reveals market failures that theoretically justify market intervention.

Jeff, BWYW.

Jeff, BWYW.

It's not about believing

It's not about believing what I want, Brian; it's about believing what reason tells me. I'd say that the folks whose arguments (minus invective) can be summed up in only four letters are the ones who are engaged in wishful thinking.

Jeff, See there you go

Jeff, See there you go again, misinterpreting what is being communicated to you. Your first sentence was a good response. The second sentence is just plain wrong. I was not summarizing my position.

I truly believe that you just want to believe as you wish to believe. I don't think you are being rational. Why? Because you are giving no feedback that you are catching on. I think you are over your head in the sense that your statements and responses indicate that you do not understand the arguments and theories involved. I am not saying you are not smart. I haven't seen enough of your responses to make that judgement.

I once had a coworker who was not a very good programmer. She would go to other programmers when she couldn't figure out out to address a problem. Many times the other programmers including myself would think about the problem then tell her a solution. We would give her an algorithm that would work if implemented. However, she would see it and would start arguing that it couldn't work. The degree of her objection seemed to be in inverse proportion to how fast the correct answer was given to her. After a long and wasted debate we would just tell her to code it and see. Often it was because she misunderstood some terminology and thought we were telling her to do something else. Which was evident when she coded it and implemented the algorithm in a fashion that didn't match the solution given. She never once would admit she was wrong.

Your remind me of her.

You are the one who made pronouncements about other people being "more than a bit disingenous". That is, you were calling them liars. You don't think that counts as "invective". How about "Would a little consistency be too much to ask for?". This from someone who thinks that the "tragedy of the commons" is a problem for "Laissez-faire". That is you are using an example of a commune, which is what a commons is, to claim that that an system of private property won't work. Then you call us irrational. You just haven't done your homework. That's a fact, I'm sorry if you think that is invective.

I didn't post a crybaby message about your romps into invective. You started first. So don't be a crybaby when others play your game. Especially when it is the truth.

I was giving you the benefit of the doubt, on my first reading of you, and assuming the invective was your way of saying that "I don't understand". It became clear with your responses to others that it wasn't the case. You were actually claiming superior knowledge and were belittling the laissez-faire crowd, and individuals responding to you.

In the other thread I provided information that blew any idea of a social contract right out of the water. I also had communicated that telling me that I signed a social contract pushes my buttons. Then you turned around and did just that. What you didn't expect a spicy response? The concept of a "social contract" just a bad metaphor. One used to justify the violation of the rights and judgement of others.

Many people in this thread gave proper responses to the following:

So…wait a minute. Isn’t it a standard laissez-faire assumption that people will act rationally and with foresight, despite abundant evidence that they don’t? Now, when the subject is taxation, we admit that they’re irrational? Why isn’t that same admission made when we’re talking about other kinds of freeloading, such as overgrazing or pollution? Would a little consistency be too much to ask for?

They told you, "no" about the first sentence. To which you called them liars. In fact you also claimed I was making things up, when I told you economists do not mean the same thing you do by rational. So you have multiple people telling you different, yet you think they are all liars. You aren't even aware that their are different economic schools who use the term differently. None of them use it the way you do and some don't use it at all. If I recall correctly the Austrians do not expect people to behave rationally at all. Their assumption is that people will act on their own values. Not the same thing. Their might be problems with the assumption of rationality in some economic theory, but it has absolutely nothing to do with your straw man definition, or the "tragedy of the commons". No economic theory I know of predicts that people will behave according to your definition of rationality when it comes to a commons. So the answer is "no". At least have the courtesy of a response saying. "I see, I was wrong". Instead, you turn around and claim people are not being truthful. What's with that? I've read Keynes, scored 100% on my economics finals on modern economic theory, read Mises' "Human Action", Rothbard's "Man, Economy, State", read many other economics books. Here you come and don't understand the most basic of concepts and call me a liar?

Whatever you are doing, it has nothing to do with reason. Now try responding to the strong part of my argument. Don't come back with some interpretation that claims I was arguing you are female when in fact you are male, don't complaing that this was ad-hominem. Address the facts presented. For instance, explain exactly how you came to the conclusion that the "Tragedy of the Commons" is an issue for "Laissez-faire capitalists". Either that, or admit you were wrong. Otherwise it is pointless to talk with you. You just want to believe what you want without taking any personal effort. It's not up to me to work things out for you. Without any feedback indicating you are "getting it" I can't really waste any more time. So BWYW ('believe what you want' for those who didn't get it) till you show some signs of rationality on the subject.

You don’t think that

You don’t think that counts as “invective".

No, it is not. It's a bit sarcastic or cutting, but it's not invective of the same immature type as "you are like so lost" or "you need to think harder" or trying to get under my skin by comparing me to a bad programmer you once knew who bears no similarity whatsoever to me. Pointing out that you're an immature little cretin is not being a crybaby. Your childish antics have not affected my ability to hold my own at all, but that doesn't mean they should be ignored. They're still childish antics.

In the other thread I provided information that blew any idea of a social contract right out of the water.

In what universe does "X is just garbage" qualify as providing information that blows anything out of the water? That's all you've offered on the subject.

Many people in this thread gave proper responses to the following:

Yes, they did, and I had a civil discussion with them about the reasons for our disagreement. It was a quite productive conversation...until you jumped in with nothing to offer but vitriol.

try responding to the strong part of my argument

The what? No, wait, let me check....nope, no such thing. You've barely provided an argument at all, let alone a strong one. Your "argument" consists of no more than "X is garbage" and "you're out of your depth" and such - no facts, no logic, no citations.

Whether people agree with me or not, and I'm well aware that most here don't, at least I try to present an actual argument for people to chew on. You just wrote over a thousand words of pure meta, half of it misrepresentation and abuse. As I said before, that "style" palled for me when I was 19; until you outgrow it I won't waste any further time with you.

Jeff, You haven't been

Jeff, You haven't been holding your own. You never supported your original post on this thread, to anyone. It was a straw man argument and a put down. When called on it's factual inaccuracy you called the other posters disingenuous, and never addressed their objections. You just brought up more straw man arguments.

David Masten gave you a meaty response, The Unknown Professor, and Brandon Berg also addressed your mistake. To which you replied "I think people (e.g. DM, UP, BB) are being more than a bit disingenuous with the varying definitions of 'rational' behavior". None of the three gave a definition of rational behavior and I am sure they would all be happy with each others usage. All three claimed there was nothing irrational about the behavior. That's all you had to work with but somehow you deduced that they were using "varying" definitions. That is a crock. That was just one way in which you are totally lost.

Note for Jeff about the above paragraph: The above paragraph did not "consist of no more than" the words "That is a crock", even though it appeared in the paragraph. Also, don't you think it is a bit hypocritical for you be complaining about no facts, no logic, no citations. Where's your facts, logic, and citations. It's especially funny because the logic it's all right there in front of you. Did you follow my link on contract theory, and Rawls labeled “socialist style critique of Rawls”. Do I have to list facts and logic on each paragraph for you. I cut the citations out and pasted them directly in my comment. Now you’re telling me it didn’t exist.

You want facts? In the paragraph two above the fact is that you made a false claim about a use of varying definitions. Fact, you used an denuciatory language by calling them "disingenuous", which is also known as invective. Logic: no definitions provided by them so no varying definitions are possible. Logic: All three made same claim so no information to deduce that anything was varying, therefore you claim is baseless.

In the other thread I provided information that blew any idea of a social contract right out of the water.

In what universe does “X is just garbage” qualify as providing information that blows anything out of the water? That’s all you’ve offered on the subject.

I don’t know why people think they can lie like this when the stuff is all public. Here is my actual text and it wasn’t merely the sentence, “X is just garbage”.

Tell that to the slaves in any society. Remaining somewhere does not mean I endorse a particular system. It may just be in have no better alternative. You really have to think harder than this, as there are so many counterexamples in history. It is rare that you are free to seek terms elsewhere, for all sorts of reasons. There are issues of language barriers, cultural issues, clan issues, transportation issues, skills issues, etc. Besides, the idea that I am benefiting more from the particular rules society than a different set is exactly the issue in contention. You cannot just say “You benefit therefore you must submit". My retort is, “Well you know what. I’d benefit even more from a different set of rules. Not only that but so would everyone else.”
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