A place for new ideas to settle.

07 December 2011

The economics of human rights

The other day I decided to skip class in favor of a discussion with my friend. Well, it was worth it: from that discussion came the ideas in my previous post as well as what you'll read below.

To summarize the last post: it was an analysis (and meta-analysis) of the classic Dickens fable, "A Christmas Carol." Suffice to say, the negative portrayal of Scrooge enrages free-market fundamentalists and intrigues me, because Dickens implies that it's possible for a person to be "not charitable enough." Enough for whom? Well, for society, I suppose. (And God, if you believe in a god and if your god believes in a certain level of charity from every human being.)

This, more or less, segued into a discussion of human rights, and (in my opinion) a very good economic argument for defining them. How? Follow me..

05 December 2011

An Austrian Christmas Carol?

Apparently the Ludwig von Mises Institute, a libertarian think tank, publishes a perennial blog post called “In Defense of Scrooge.” Yeah, as in Ebenezer Scrooge, the infamous miser from Dickens’ A Christmas Carol. Scrooge has become a byword for foul-tempered penny-pinching and disdain for those worse off than oneself. Yet the LvMI post claims exactly the opposite: that Scrooge is an exemplar of a free-market employer.

Shocking to hear, at first, but this is the Mises Institute’s modus operandi. They are what you might call “market fundamentalists,” and believe that any ‘problem’ with markets is really a problem with government rules restricting market forces and causing inefficiency.

Never mind the fact that neoclassical economists (otherwise known as “everyone but the LvMI”)  agree that certain natural markets will always break down if left to their own devices. If anyone can fish for salmon and everyone thinks about himself, the rational thing to do is to catch as many salmon as you can before anyone else does—what you don’t catch, you can’t sell, and it probably won’t be there tomorrow. The salmon will be fished out, in a classic tragedy of the commons.

And while Scrooge may indeed be an efficient economic actor in the eyes of the Mises Institute, his treatment of Bob Cratchit may not be optimal. As this essay suggests (and economic research supports), a little altruism can go a long way. Each lump of coal in the fire is, in essence, capital investment: warm fingers allow Cratchit to do more clerical work, and in turn make more money for Scrooge.

Okay, but let’s look at A Christmas Carol again. Maybe there’s something counterintuitive about it after all.