Monday, 4 August 2008

Exactly...

There's a good review of Nudge from a persepective further Left than mine here. It's worth a read and I totally agree with, for example, their take on the comments in Nudge about privatising the US social security system. However this is the most important bit in the review in my opinion:

"[T]hese are important ideas, because they undermine the notion that free markets exist as neutral arbiters, showing markets as artificial constructs with important regulatory choices built into them. This is a newly emergent set of ideas, and who controls their interpretation will control the public policy choices they imply. As we move into an era where free market fundamentalism dies, it's important to keep our eyes on the framers of the new intellectual moment. Ideas can be used to prop up the corrupt system we have now, or to renew it."

This is it in a nutshell. Behavioural economics is no more Left or Right than any other bit of the world, it's how you apply the information it provides that matters. This stuff should better inform our understanding of how markets do and don't work - isn't that territory the Left ought to be fighting for?

2 comments:

Luis Enrique said...

"showing markets as artificial constructs with important regulatory choices built into them. This is a newly emergent set of ideas .."

Sort of. "artificial constructs" is pretty a content-free phrase in the context of things-made-by-man, like markets. And the institutional & cultural foundations of markets is an old idea, albeit one that's enjoyed more emphasis among economists in the last couple of decades. See Douglas North, for instance.

You might enjoy this
http://creativecapitalism.typepad.com/creative_capitalism/martin_wolf/

Tom P said...

Thanks for the link, will check it out. I find myself agreeing with some of his stuff.