A quick footnote to the Christmas talk: this article by Harvey Mansfield mentions the “deadweight loss of Christmas”:
“Economists as ambitious as they are cagey–perhaps bored with economics in its usual confines–have become critical of the frenzy of Christmas gift-making. The gist of what they say: Christmas is a highly inefficient way of connecting consumers with goods.”
So far, so familiar. After that, though, it’s is the best of times and the worst of times for the impression of economics it conveys. I think it’s worthwhile that Mansfield says:
“Most of the time economists these days do not care to pass judgment on the things people buy or sell. These are “preferences” not examined within economics; they are givens from which economists take their start.”
This is right on the message of the fundamentally agnostic approach to assumptions on what people care about. My only complaint is that “buy or sell” already shows a bias toward the tangible: I’d say “the things people care about”.
Mansfield goes on to speculate that the discipline of economics is in the business of trying to reconcile this idea of preferences being givens and some idea that the economist seeks to promote “economizing”:
“Here, too, is the connection we expect between economics and learning to be economical and to economize …. The fundamental incoherence in economics is that it wants to pinch pennies (utility) but has no reason to stop you if you don’t (liberty).”
An interesting discussion, but again, I can only argue again that economics does not – and in fact cannot – promote any one decision or system, but attempts to estimate what will happen and suggest some ways to compare outcomes. I don’t see the connection between “pinching pennies” and utility: Mansfield again incorrectly presents the economist as one who equates “utility” with money. I’d be embarrassed to meet an economist who assumed to know for sure what made every person happy.
OK, no more Christmas talk until at least November.