Shibboleth Watch

I thought I smelt a shibboleth the other day, and lo and behold, a couple of days later, I find "Mr. Shibboleth" himself, Noah Smith, signalling his membership in the ingroup:

"Just as an ecologist would assume that an ecosystem is working fine unless there were something obviously going wrong, economists tend to assume that markets are working OK unless there is obviously something the matter. The basic results in economic theory that say that "markets are good," although expressed in terms of voluntary exchange, utility maximization, etc., are really just formalizations of this naturalistic assumption." (Emphasis mine.)

Humans have been around for 100,000 years, give or take, depending on who you count as human, etc. Out of a very long time, markets have only dominated human life in a small part of the globe for a very small stretch of that time, and their "goodness" has been questioned as far back as we can discern. So how is this assumption "naturalistic"?

Well, because "naturalistic" is a very "in" word to use, and should be introduced in as many contexts as possible!


5 comments:

  1. "The basic results in economic theory that say that "markets are good," although expressed in terms of voluntary exchange..."

    I still don't see what voluntariness has to do with it it.

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    1. Samson, the working definition of efficiency in welfare economics is an allocation of resources in which there does not exist a different, feasible, allocation that every single member of society would prefer.

      Then there are theorems showing the conditions under which voluntary exchange would lead to such an outcome.

      But more generally, you don't see why keeping exchanges voluntary would be more likely to lead to goodness than allowing some people to take stuff against the will of others?

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    2. Well, Bob, I don't see how any of that is relevant. See here for a view that lines up with mine. When ever I hear someone like Friedman say "voluntary business transactions", all I can do is scratch my head because I'm not sure how the "voluntary" modifies it in any meaningful way.

      Samson, the working definition of efficiency in welfare economics is an allocation of resources in which there does not exist a different, feasible, allocation that every single member of society would prefer.

      I have a few things to say about this:
      ·People's desires often conflict with desires of others. This makes this state of affairs impossible in real life.
      ·Why is making sure everyone is satisfied important? There are plenty of people whose preferences I don't want met.

      Then there are theorems showing the conditions under which voluntary exchange would lead to such an outcome.

      Bob, most people have a vastly different view as to what constitutes "voluntary" than you.

      But more generally, you don't see why keeping exchanges voluntary would be more likely to lead to goodness than allowing some people to take stuff against the will of others?

      Again, they're just "business transactions" to me, not "voluntary business transactions". Also, using this in reference to taxes is a little strange: when the government collects revenue, you're not forced to anything. The government just collects it!

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  2. I think Noah Smith is using the word "naturalistic" to make an analogy to the naturalistic fallacy - just as people often assume something is good just because it's natural, he's saying economists often assume that the state that markets are generally in is a good state simply because it's the "natural" state of the markets.

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    1. No, there is no way that is what that passage means.

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