Inside Escape from patriarchy, Economist Mario J. Rizo and Glenn Whitman use massive amounts of behavioral economics, digest it and then excrete it, summarizing it. I am ashamed to say that I once believed that some policy “naz”, such as changing the default on pension contributions, is an acceptable policy intervention. This book, combined with the crazy policy environment of the last two years, has convinced me that all patriarchal principles, including Naz, must go, and get better as soon as possible.
The brightest chapter in Fleeing Chapter 8, which turns behavioral economics on its own after revealing the complete carnage on behaviorist speculations and studies in the first seven chapters. It basically asks how, if behavioral economists are correct that most people are suffering from a variety of irrationalities, people, including behavioral economists, can expect positive change in patriarchal policymakers. In a nutshell, if we are not all so stupid, how can we prevent the rest of us from abusing or doing bad things?
After all, as Rizzo and Whitman point out, behaviorists believe that individuals are subject to a wide range of biases, some of which work together to deceive people into believing the most ridiculous things. Confirmation bias, the tendency to seek information that confirms previous beliefs, is often combined with fluency, or the mere circulation of certain ideas or realities, to build mountains out of molehills.
For example, a policymaker who receives 700 “likes” on a social media post should consider that the basis of popular support for his policy, although the platform makes it much more expensive to show disinterest. Policymakers may even equate “choice” with a traditional letter of support, although the latter imposes much higher costs on senders. “I’m right and this proves it” is a Much more Probably a response to 700 “likes” “Well some people (or at least bots) want to like this policy but it’s only a small percentage of people who have seen my post and an infinite percentage of affected people, so definitely more information gathered.”
Similarly, “Effect Heuristic” reflects people’s tendency to rely on subjective feelings when evaluating options. It is closely related to heuristic motives, which motivate people to focus on the intentions of others rather than the outcome of their actions. While good intentions are more likely to lead to positive outcomes than bad intentions, bias means that people tend to ignore or reduce costs if they seem to have good intentions involved, with negative unintended consequences. So every policy is claimed to help widows and orphans or democracy, even if it hurts the same person or ideology.
Even as circumstances change, policymakers often rely on so-called prototype or stylized information to help guide policy decisions. The common belief that post-World War II war compensation for Germany leads to the rise of Hitler and World War II, for example, means that policymakers view all war compensation as bad. Compensation of energy against Russia for its aggression in Ukraine can, of course, help rebuild Ukraine and Improvement Russia’s economy and governance, the tendency to stockpile oil and other energy resources to fund authoritarian regimes, and anti-growth regulations and rent-raising policies are generally favorable to such regimes, reducing the “oil curse.”
Another cognitive bias characterized by behavioral economists is overconfidence, or the tendency of individuals to overestimate the accuracy of their abilities, knowledge, and qualifications. Policy makers, as human beings, tend to overestimate their own competencies in policy. But Rizo and Whitman show that extra confidence equals More Public sphere pronounced. “Understanding yourself as hard as it can be,” they note, “is a bigger challenge than understanding an entire society.”
The authors do not explicitly relate that insight to the COVID policy, but the implications are clear.
Overconfident policymakers “assume that their information is better and more reliable than this” Excessive accuracy), And their ability to create effective policies is greater than that (a phenomenon is called Overvaluation). “Therefore, policy makers are more likely to respond to pushback and”To support policies even when their costs exceed their benefits“From this point of view, the imposition of lockdown and other cowardly mandates becomes more plausible, albeit completely unreasonable on a logical basis.
Clearly, the more complicated the situation, the more confident policymakers will be. Instead of allowing markets or other selection processes to mitigate problems, policymakers feel that they “understand the issues in much greater detail, consistency and depth than they really are” which gives them the confidence – the hammerheads of Hubris – to mediate. Many policymakers become overconfident with common intuitive theories through channels, which led them to believe, without empirical evidence, that masks, plastic shields, and the ability to keep people away from other people would prevent viral transmission. Or the insight that the wage floor and interest rate ceiling will certainly help the poor by increasing their wages and capping their borrowing costs.
The consequences, such as coveted non-pharmaceutical interventions, minimum wage laws, and austerity measures, are often catastrophic. Instead of addressing the root causes, most people blame individual policy makers, policies themselves, or brutal external forces for policy failures. So instead of blaming Putin, the scapegoat, for the Russian confusion, the domestic terrorists, the greedy corporations and the real agents of this kind of costly chaos, we are now obsessed with civil society.
The real culprit is the fugitive government power. Policymakers do not personally suffer from their bad calls, and often benefit from them (remember that the governor of New York who received millions of dollars for a book explaining a good policy to kill nursing home residents? What was his name again? If you survive You know better in New York because he’s threatening to run for governor again This year!) So, unlike individuals, policymakers have no particular reason to learn from their mistakes or otherwise examine the irrational parts of their brains.
Rizzo and Whitman also point out that behavioral economists tend to be more steep and more slippery, due to the precise, slippery slope, the tendency to shake policies due to presumed precedents. It evokes the aura of public outcry, if not death, but of mere puppets, puppets playing things more power hungry, but not smarter than their control.
Most Americans want their government to protect their lives, liberties and property from bad American and foreign threats, but also from their own government. Americans don’t want bureaucrats, like everyone else, to try to protect themselves. O regulators, heal yourself! Return to us when you yourself do not suffer from weak cognitive bias.
Robert E. Right
Robert E. Wright is a Senior Research Fellow at the American Institute for Economic Research.
He is the author (or co-editor) of more than two dozen major books, book series and edited collections, including AIER. Best of Thomas Payne (2021) and Financial exclusion (2019). He has also written numerous articles for (including) important journals, including American Economic Review, Business History Review, Independent review, Journal of Private Enterprise, Money reviewAnd Southern Economic Review.
Since taking his PhD, Robert has taught business, economics and policy courses at Augustana University, NYU’s Stern School of Business, Temple University, University of Virginia and elsewhere. History from SUNY Buffalo in 1997.