Thursday, February 20, 2014

New column day

Here, starting from Nattavudh Powdthavee and Andrew Oswald's study to discuss on how people have trouble telling the difference between luck and merit (particularly when they're enjoying the benefit of the former) - and how we should take that gap into account both personally and politically.

I'll add here one point omitted from the article. I'm skeptical in general of the all-too-common trend of public institutions like hospitals, libraries and schools being forced to rely on fund-raising lotteries rather than being funded directly. But the study hints at a hidden side effect - as a "successful" lottery which provides a large number of wins to a large number of people may itself serve to undermine popular support for sustained public funding.

For further reading...
- The study is summarized here, and accessible in full here (PDF).
- And for more on the "lottery winners going bankrupt" phenomenon, see here and here.

1 comment:

  1. There's a lot of components to the "rich deserve the cash" argument that sort of stay below the surface, assumed and so not challenged, and yet are probably false. Imagine for a moment that all rich people got the money through their own efforts, which others could have duplicated but did not due to some kind of personal lack. Does that mean they should keep it all?
    --What if the reason people get rich through their own efforts is generally some kind of antisocial, unethical behaviour? If someone gets rich through fraud, or robbery, or drug dealing, does that mean their efforts and ingenuity should not be taxed? How about if they get rich by breaking minimum wage laws, underpaying illegal immigrants under the table? How about if they get rich by ignoring health, safety, environmental impacts, and their money is counted in cases of cancer and broken backs? How about if they get rich through parasitic arbitrage, just increasing costs to consumers by inserting a middleman?

    --What if rich people don't actually create jobs? What if there would actually be more jobs if all the rich people had somehow failed in their quest to get rich, if all the money they grabbed had been more evenly spread?

    --What if rich people get rich by replacing public action which would be more efficient and spread its benefits more widely? Take pharmaceutical companies (and their big shareholders). They rake in windfall profits through claiming a monopoly on the results of their research into therapeutic drugs (well, and often by grabbing the results of public research, but leave that aside). But public sector research is more efficient, not biased towards false claims of efficacy for any given drug, more oriented towards cures relative to palliatives, and unlike private research it advances science because it is not kept secret. It would be better if pharmaceutical companies did no research and held no patents. It might be argued that at this stage, public models for publishing, internet and other communications services, and many other areas (affordable housing) would be superior to private approaches. In these sectors, even a private entrepreneur that succeeded by personal genius, did nothing very unethical, and in a sense created jobs, would be crowding out a superior public solution and we'd still be better off if they weren't rich.