Who Is More Irrational – Consumers or Regulators?
08 Sep 2014 Leave a comment
in economics of regulation, energy economics, entrepreneurship, environmental economics, environmentalism, global warming Tags: Bjørn Lomborg, expressive voting, futile gestures, global warming, Kip Viscusi, nanny state, regulatory failure, The fatal conceit, The pretence to knowledge
A study by Ted Gayer and W. Kip Viscusi looked into this implied irrationality of consumers. They have found no empirical evidence to support the view that if consumers are so irrational that government agencies must prohibit certain energy consuming products for us to make the right choices:
Rather than accept the implications that consumers and firms are acting so starkly against their economic interest, a more plausible explanation is that there is something incorrect in the assumptions being made in the regulatory impact analyses.
Indeed, upon closer inspection it is apparent that there is no empirical evidence provided for the types of consumer failures alleged.
Even the EPA acknowledged this logical gap in its economic analysis of energy efficiency regulations:
it is a conundrum from an economic perspective that these large fuel savings have not been provided by automakers and purchased by consumers
Not surprisingly Kip Viscusi observed that
The regulatory impact analyses examined in this study contain virtually no empirical evidence to support the irrationality proposition.
• This proposition ignores the fact that consumers and firms purchase products based on a number of factors—only one of which is energy efficiency.
• Government agencies exhibit a parochial bias by ignoring all product attributes other than energy efficiency.
Foreign policy in an uncontrollable world alert: Who was Obama arming today?
03 Sep 2014 Leave a comment
in politics, politics - USA, war and peace Tags: interventionist foreign policies, Obama foreign policy, The fatal conceit, unintended consequences
HT: Helen Dale
Ludwig von Mises on how people will sacrifice intellect before they will give up their political dreams
14 Aug 2014 Leave a comment
Zealots cannot countenance trade-offs and diminishing returns – Thomas Sowell
13 Aug 2014 Leave a comment
The West Wing – Ainsley Hayes on the ERA
13 Aug 2014 Leave a comment
in discrimination, gender, labour economics, liberalism, TV shows Tags: affirmative action, do gooders, equality before the law, labour market discrimination, The fatal conceit, West Wing
Adam Smith on the fatal conceit
19 Jun 2014 1 Comment
in Adam Smith Tags: The fatal conceit, The wealth of nations
The man of system… is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it…
He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.
He does not consider that in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon
Utopia, you are standing in it! 
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