David R. Henderson  

Richard Epstein on Happiness, II

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The word 'friend' is an important word.

Last week, I posted about Russ Roberts's interview of Richard Epstein on the happiness literature. This is the second installment.

20:00. Epstein quotes Hayek pointing out that if we try to stabilize the incomes of one group, say, farmers, then the rest of society suffers more variability than otherwise. It's an important point, but have I ever heard an economics professor make the point in front of a class? No. Indeed, in about 30 years of being an economics professor, have I ever made the point in front of a class? No.

21:00. Epstein points out that people who try to make big decisions by themselves always make mistakes. That's part of the interview where Epstein's humanity, I dare say his love for his fellow humans, comes through. I wanted to hug him. I wish my brother, Paul, who made a decision to take his own life, had not made so many previous big life decisions alone.
Yet, as Epstein points out, much of the literature on experimental economics has people making decisions on their own. But the word "friend" is an important word. Great line: "You wouldn't know that there are friendships if you look at these experiments."

28:00. A beautiful exposition of how cooperation comes naturally to so many people and how that makes public good problems less of a problem than otherwise. I know Richard and I could picture him castigating someone for not cleaning up after the person's dog did his thing in a public park.

35:00-39:00. The problem with inequality, says Epstein, is not inequality per se but, rather, the fact that the regulatory state--think minimum wage, monopoly unionism, and lousy government schools--have made it so hard for low-income people to advance. When Epstein talks about his own son, Elliott (sp?) who teaches at a private school in Harlem, you can hear his justifiable parental pride. Russ was obviously moved also.

Later this week or next I'll do the final installment.


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CATEGORIES: Economic Philosophy



COMMENTS (3 to date)
RL writes:

28:00. I know Richard [Epstein] and I could picture him castigating someone for not cleaning up after the person's dog did his thing in a public park.
---
Yet, sadly, speaking so quickly that the person cannot follow his argument...:-)

Steven writes:

"...if we try to stabilize the incomes of one group, say, farmers, then the rest of society suffers more variability than otherwise."

To a first approximation (i.e., assuming lump sum transfers with no distortions), this is only true if (1) income shocks are perfectly correlated or (2) we try to reduce a group's income volatility below the volatility of aggregate income. In all other cases, it is possible to reduce the income volatility for every person in the economy.

MikeL writes:

David, I appreciate your insights into this fascinating discussion. In case others have missed it, there is also a complementary summary of the interview at Russ's page. Just scroll down past the intro material at top.

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