Bryan Caplan  

Deadweight Loss for Toddlers

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My boys' latest favorite book is The Tawny, Scrawny Lion. It's not only a great story; it also illustrates the concept of deadweight loss with greater clarity and force than most textbooks:

Once there was a tawny, scrawn lion who never could get enough to eat. He chased monkeys on Monday, kangaroos on Tuesday, zebras on Wednesday, bears on Thursday, and on Saturday, elephants!

And since he caught everything he ran after, the lion should have been fat as butter. But he wasn't at all. The more he ate, the scrawnier and hungrier he grew.

The other animals didn't feel one bit safe. They stood at a distance and tried to talk things over with the tawny, scrawny lion.

"It's all your fault for running away," he grumbled. "If I didn't have to run, run, run for every single bite I get, I'd be fat as butter and sleek as satin. They I wouldn't have to eat so much, and you'd last longer!"

A classic inefficient outcome, no? If the animals just drew lots to see who has to be the lion's lunch, the king of the jungle would save calories and some of the prey would save their lives! If you're looking for a libertarian outcome though, you'll have to go elsewhere - this children's story owes a lot more to Coase - or possibly Olson - than Rothbard.


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COMMENTS (7 to date)
Faré writes:

I don't see anything here that either supports or contradicts libertarianism.

The question of libertarianism vs statism is whether the principle of an a priori monopoly is a good one for helping these animals cooperate towards minimizing their woes. Would an elected body of animals picking the victim be a good way to help? Or would it just shift the hunting and eating from one individual (the lion) to many individuals (those meant to enforce the state decision)? Would the vote really benefit everyone, or would it only make it more likely for the weak animals to get eaten? Would the enforcement costs be lower than the savings in terms of not being eaten?

You can be a libertarian and agree that a "magic" source of cooperation would be good. Only a monopoly in coercion is not that "magic" source of cooperation. Or if it is magic, then you may rightfully call Government intervention Black Magic.

Silas Barta writes:

Um, it seems more like this story shows the emptiness of the concept of a deadweight loss. If they really drew lots like described, the one chosen for sacrifice would just run like normal, and the others, having let their guard down, would be easier targets. DWL elimination: zero.

Classic case of economists not "getting" what normal people understand: placating your enemy in the hopes he'll give up will just make that the baseline from whence he demands.

I've got a counter-children's economics story for you: camel in the tent.

Roehl Briones writes:

Silas,

If you are talking real world, then the other animals can just tie up the chosen animal. In short, the rationale of the lottery system is to shift the onus of catching the prey from the predator to the prey society, presumably reducing the energy dissipation from wasteful flight.

Criticisms of "unrealistic economists" often miss very commonsensical and realistic measures to make the economic policy work.

Silas Barta writes:

Roehl: The solution you've proposed is impossible. Defectors ruin it. It's not much of a Pareto improvement if the Pareto improvement is literally impossible. If you think the economic analysis is so realistic, propose exactly how, based on DWL analysis, you would make each animal better off or just as well off.

Robert Schwartz writes:

The lunchee's dilema? like the prioners dilema only worse.

liberty writes:

Yes, there are many reasons why your assumptions are wrong:

1. It would be inefficient if he ate them all at equal (stochastic) rates. He should eat the weakest, slowest, so that the other species can evolve correctly. Much worse inefficiencies than his "overeating" would result from nobody running away. The lion would not necessarily eat the slowest, but would eat whichever animal was given in sacrifice. He would get fat and not learn how to chase and if they stopped drawing straws he would starve to death.

2. They would stop drawing straws because of defectors. In fact they would have to make a more and more brutal ceremony to prevent every victim from running away right after he is chosen and the system would be both evil and unsustainable.

3. Enforcement costs and the costs to society of having your other neighbors turn on you would be worse than the individualistic running away. The society would have turned into that short story "The Lottery".

JM writes:
this children's story owes a lot more to Coase - or possibly Olson - than Rothbard.

Well, this particular story probably owes a lot more to this Panchatantra story from India than the aforementioned worthies. I really mean no offense to them. How do I know? My son loves it when I read this story to him. And I remember my grandmother telling me this story when I was a kid.

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