andrew_gelman_stats andrew_gelman_stats-2011 andrew_gelman_stats-2011-711 knowledge-graph by maker-knowledge-mining
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Introduction: About 15 years ago I ran across this book and read it, just for fun. Rhoads is a (nonquantitative) political scientist and he’s writing about basic economic concepts such as opportunity cost, marginalism, and economic incentives. As he puts it, “welfare economics is concerned with anything any individual values enough to be willing to give something up for it.” The first two-thirds of the book is all about the “economist’s view” (personally, I’d prefer to see it called the “quantitative view”) of the world and how it applies to policy issues. The quick message, which I think is more generally accepted now than in the 1970s when Rhoads started working on this book, is that free-market processes can do better than governmental rules in allocating resources. Certain ideas that are obvious to quantitative people–for example, we want to reduce pollution and reduce the incentives to pollute, but it does not make sense to try to get the level of a pollutant all the way down to zero if t
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1 Rhoads is a (nonquantitative) political scientist and he’s writing about basic economic concepts such as opportunity cost, marginalism, and economic incentives. [sent-2, score-0.335]
2 The final third of Rhoads’s book discusses difficulties economists have had when trying to carry their dollar-based reasoning over to the public sector. [sent-7, score-0.356]
3 He considers the logical tangles with the consumer-is-always-right philosophy and also discusses how economists sometimes lose credibility on topics where they are experts by pushing oversimplified ideas in non-market-based settings. [sent-8, score-0.232]
4 I also enjoyed the bits of political science that Rhoads tosses in throughout (for example, his serious discussion in chapter 11 of direct referenda, choosing representatives by lot, and various other naive proposals for political reform). [sent-12, score-0.286]
5 Most notably, economists have stepped out of the shadows. [sent-14, score-0.232]
6 For example, a few years ago economist Matthew Kahn asked why there aren’t more economists in higher office–and I suspect many other prominent economists have thought the same thing. [sent-22, score-0.6]
7 ) - On page 102, Rhoads explains why economists think that price controls and minimum wage laws are bad for low-income Americans: “It is striking that there is almost no support for any of these price control measures even among the most equity-conscious economists. [sent-31, score-0.648]
8 The political scientist in me suspects that a policy that is supported by poorer people and opposed by richer people might well be a net benefit to people on the lower end of the economic distribution. [sent-38, score-0.284]
9 Later on, Rhoads approvingly quotes an economist who writes, “Rent controls destroy incentives to maintain or rehabilitate property, and are thus an assured way to preserve slums. [sent-40, score-0.449]
10 - On page 139, Rhoads writes: “Most of the costs of business safety regulation fall on consumers. [sent-46, score-0.352]
11 - On page 217, Rhoads quotes an economics journalist who writes, “Through its tax laws, government can help create a climate for risk-taking. [sent-52, score-0.351]
12 This seems a leap beyond the principles of economic efficiency that came in the previous chapters, and I have some further thoughts about this below. [sent-62, score-0.234]
13 - On page 20, Rhoads criticizes extreme safety laws and writes, “There would be nothing admirable about a society that watched the quality of its life steadily decline in hot pursuit of smaller and smaller increments of life extension. [sent-63, score-0.238]
14 Another example from Rhodes’s book is nuclear power plants. [sent-70, score-0.304]
15 Some economists argue on free-market grounds that the civilian nuclear industry should be left to fend for themselves without further government support while others argue on efficiency grounds that nuclear power is safe and clean and should be subsidized (see p. [sent-71, score-0.905]
16 Ultimately I agree with Rhoads that this comes down to costs and benefits (and I definitely think like an economist in that way) but in the meantime there is a clash of the two fundamental principles of free markets on one side and efficiency on the other. [sent-73, score-0.362]
17 (The economists who support nuclear power on efficiency grounds cannot simply rely on the free market because of existing market-distorting factors such as safety regulations, fossil fuel subsidies, and various complexities in the existing energy supply system. [sent-74, score-0.686]
18 For example, on page 168 Rhoads quotes an economics writer who doubts that “we need the government to subsidize high-brow entertainment–theater, ballet, opera and television drama . [sent-76, score-0.298]
19 Crudely speaking, political scientists speak to princes, economists speak to business owners, and sociologists speak to community organizers. [sent-87, score-0.536]
20 Similarly, economists have their own cultural biases, such as preferring football to the symphony and, more importantly, viewing risk taking as a positive value in and of itself. [sent-90, score-0.307]
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