Saturday, November 8, 2008

Starting points

No discussion can go anywhere without a starting point. Before we can get to the point of determining the best policy to pursue, we need to establish a starting point or a worldview that most accurately describes the world we live in.

Most policy proposals attempt to address perceived symptoms. For example, I would wager that relatively few enjoyed the runup in gas prices this past (and the previous summer, and the one before that, etc). Oil companies were castigated for making "obscene" profits, the CEO's of the major players were dragged before a congress that demanded to know their annual income.

It is not my intent in this post to discuss this particular issue (plenty of time for that in future posts), just that focusing on symptoms - whether or not high profits and salaries are actually a problem, does nothing for determining proper action or inaction.

The best route to setting upon a particular economic policy is to focus on what drives individuals (and groups of individuals such as corporations and governments) to behave as they do. What drives people to provide a particular good or service.

Simple observation should suffice to determine that man is fallen. Most people, even if they don't believe man has a sinful nature per se, would agree that no individual is perfect. We can train our children to do right, but we cannot change the basic nature of mankind.

While the object of desire may vary from person to person - money, power, acceptance, fame or simply feeling good about oneself- individuals are at heart greedy for something.

Work ethic may differ among individuals, but we all seek to accomplish our goals with the minimum effort necessary to obtain. We are at our hearts lazy.

Putting these to notions together, we see that no individual is going to put forth effort without some sort of compensation (not to be confused with money) in return.

The best policies are going to make use of what we know to be true about the world and all it's imperfections. Policies that deny basic imperfections in the world or believe that the nature of man can be changed by legislation are doomed to fail.

No comments:

Post a Comment