The Problem With Economists

"The problem is not that economists are unreasonable people, it’s that they’re evil people.”

You can kill a horse to make pet food in California, but not to feed a person. You can hoist a woman over your shoulder while running a 253-meter obstacle course in the Wife-Carrying World Championship in Finland, but you can’t hold a dwarf-tossing contest in France. You can donate a kidney to prevent a death and be hailed as a hero, but if you take any money for your life-saving offer in the United States, you’ll be jailed.

These prohibitions are not imposed because of concerns about health or safety or unfair practices, some economists say, but because people tend to find such activities repugnant. In other words, just hearing about them can cause a queasy sensation in the pit of your stomach.

People don’t pay enough attention to how repugnance affects decisions about what can be bought and sold, asserts Alvin Roth, an economist at Harvard University.

Mr. Roth spoke at a recent panel on the economics of repugnance at the American Enterprise Institute, a conservative research organization in Washington. For conservatives the issue can be particularly pointed. Economic conservatives tend to favor eliminating as many hindrances on the market as possible, while social conservatives believe some practices are so “repugnant” — because they violate traditional values or religious and moral prohibitions — that they should be banned from the marketplace altogether.

Of course the dividing line between mercenary, soulless capitalists and defenders of human dignity is not always clear. As Mr. Roth pointed out, ideas about what is repugnant change all the time. Selling oneself into indentured servitude was once thought permissible, while charging interest on loans was not...

In recent years Mr. Roth has helped set up “paired kidney donations,” in effect, allowing sets of donors and patients to swap kidneys in order to find a compatible one. These kidney exchanges, which started in 2005, have gained growing acceptance nationwide, he said.

To Mr. Novak instinctual human revulsion is an important attribute. Quoting Aristotle, he said “repugnance makes a necessary contribution to the good life, especially when there is not time for intellectual evaluation.” A number of psychologists, philosophers and biologists (most recently Stephen Pinker, also in The Times Magazine) have similarly argued that repugnance is morality’s early warning system, an alarm bell that warns that a subject deserves moral scrutiny.

Still, such intuitions are “not always the best director,” Mr. Novak said. As in the case of kidney transplants, one must choose “between two great moral ends,” he said.

That is why, he added, “mere repugnance is not enough.”

Read the whole thing.

(HT Greg Mankiw)