The Importance of Intentions in the Market

1min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

Economists have been saying for centuries that just because someone's intentions are self-interested, does not mean the social consequences will be good or bad. Most economists would say normally, under normal market conditions, the economic consequences of someone trying to make money are that they wind up serving their fellow men. If you always go and cheat your customers, people may eventually say, I don't really want to pay just to be cheated. And if they could raise their prices higher, they would. That's right.

Bryan Caplan, of George Mason University and blogger at EconLog, talks about his book, The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Caplan argues that democracies work well in giving voters what they want but unfortunately, what voters want isn't particularly wise, especially when it comes to economic policy. He outlines a series of systematic biases we often have on economic topics and explains why we have little or no incentive to improve our understanding of the world and vote wisely. So, it's not special interests that are messing things up but the very incentives that lie at the heart of a vote-based system. This is a disturbing and provocative lens for viewing political outcomes.