If you're reading this blog, then you find economics interesting (I can't imagine why you would read it otherwise). I hope, then, that you will take this next lesson to heart. Do not mix moral judgement with technical description. Many times you will hear people talk about the greedy rich and the envious poor. These terms should be a marker that says "The following has nothing to do with economics and everything to do with morality."
People are people, and it's very hard not to have feelings about facts. There is definitely a place for acting on these feelings. However, if you are trying to pin down these facts, to find out what the truth is, you cannot let your feelings get in the way. To pick on the issue of the minimum wage, you might think someone heartless if they tolerate wages too low to buy basic necessities. If you stop there, if you act on those feelings, you will not come to the truth of the matter.
It is very tempting to call the rich greedy and the poor envious (although obviously the same person is unlikely to do both at the same time). It is very easy to conclude that, because someone continues to create value beyond their basic needs, that they are greedy. It is also wrong. It is very easy to conclude that, because someone wants someone else to pay for their basic needs, that they are envious. As judgements of rich people and poor people, without reference to the facts of the specific individuals, they are likely wrong. As economic pronouncements, they are certainly wrong, because economics does not make judgements of those forms, and when economists do that, they have taken off their economist hat, and should expect no special protection from criticism.
Ken Mortenson comments.
posted at: 00:38 | path: /economics | permanent link to this entry