too much typing—since 2003

5.08.2005

I'm only temporarily a rational waiter - I'm really a rational actor

One problem with conventional economics is that the world that gave rise to it could not have anticipated the complexity of contemporary life, one consequence of which is that "rational actor" theory is impossible. (Never mind that it's also just plain wrong...as anyone who knows anyone who's bought a Hummer knows. Such purchasers think they're increasing their prestige - but large numbers of people only see them as increasing their assholity, and their prestige will be worthless once high gas prices bankrupt them, and their situation will be even more dire once the cumulative environmental impact of such irrational actors' actions comes to pass. A true rational actor, millennia ago, might have followed this monkey's lead, if the future had been known... Anyway...)

For example, consider the implications of this article on cosmetics. (The site is poorly linked: that URL will probably be good until 5/10 or so; afterwards, try this one.) As noted by the executive director of Commonweal, a group pressing for stricter regulation of cosmetics, "The public, bless our little democratic good government hearts, believes that there is some federal agency that makes sure that dangerous chemicals aren't put into the products we put all over ourselves. Sadly, it's just not true." So? argue free-market libertarians; that's not the government's job. Well, whose job is it? Because in fact, the complexity of the chemical makeup of products like cosmetics contributes to the near-impossibility of determining which chemical, or which combination of chemicals, might have negative effects, particularly since such effects sometimes take decades to manifest themselves. In other words, you can be as "rational" as you want - but even if you're a research scientist who can spend months conducting a study before you purchase a product, you still won't be able to know whether something's toxic. So much for "rationality."

In fact - as suggested in Gordon Bigelow's "Let There Be Markets" (in Harper's, May 2005 - not online yet, so I'm sorry, you'll have to leave your house and go to a newsstand or library), the mainstream of contemporary economics has more than a whiff of fundamentalist religion about it. Particularly, the variety that assumes just desserts as the wages of sinfulness: poverty is a consequence of (economic) sin.

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Now, when we think of "rational actors," we think of Leonard Nimoy. And when we think of Leonard Nimoy, we think of William Shatner. And Shatner covered Pulp's "Common People" on his most recent, Ben Folds-produced record. Here's the original: an incisive comment on irreconciliable differences, class category.

2 comments:

Larry said...

Government regulation of actually or potentially dangerous products is not at all incompatible with free-market principles. Only the most extreme of libertarians reject any role whatsoever for government in the economy.

2fs said...

Larry: In theory it's not incompatible...but in practice, corporations (kings of the free market) dislike regulations, since they impinge upon profitability. Even if it's true that "only the most extreme libertarians reject any role whatsoever for government in the economy," the folks currently in power are increasingly fond of that "whatsoever." Excepting, of course, insofar as government regs can enrich those folks - as in discussions of imposing tariffs on imports so as to protect US-based corporate profits. Fact is, opposition to regulation comes fast and hard these days, and is well received by the powers that be.