The tricky new paternalists

Glen Whitman's recent article, Against the New Paternalism: Internalities and the Economics of Self-Control, offers a Coasean response to the paternalists' Pigouvian sin taxes (including fat taxes). Whereas the old paternalists argued

“We know what’s best for you, and we’ll make you
do it.” The new paternalism says, “You know
what’s best for you, and we’ll make you do it.”

The basic rationale of the paternalists is that your present self consumes more twinkies, cigarettes, and unsafe activites, yielding the benefits in the present, yet does not have to pay the costs of these activities. The costs are borne by the future self and as such, the present self "overconsumes" at the expense of the future self. A tax on the activity would reduce this consumption and thus benefit the future self.

The Coasean response is that there is no need for a tax. Indeed a tax may be inefficient if the reduction in benefits from reducing consumption are greater than the costs of employing counter-measures. Why should the future self get preferential treatment? By allowing the person most intimately aquainted with both parties involved, the individual making the decision, we allow her find the optimal balance between present, transient pleasures and the future costs of enduring or remedying the consequences.

This requires individuals to exercise responsibility of self, a necessary condition for self improvement.

Add this to my birthday wish list

Too bad this doesn't come out until March 16th...

Add this to the things that make me mad

Biographicalies

I think that movies "based on a true story" may mislead some to believe they are "a true story." But that is not what the subtitle says, nor is that what the movie is. In fact a true story, based on known and verifiable facts is almost never appropriate for a blockbuster type movie. The writers are always interpreting the lives of those they depict. All the non-public scenes probably never really happened, or if so, happened very differently from the way depicted.

That is all well and good except when these movies are the sole source of one's knowledge on the character. Indeed, without A Beautiful Mind, few non-economists would know about John Nash. And much of what I envision about Mozart comes from Amadeus. I don't see this as a huge problem as these movies are not a substitute for serious scholarship. But when people start talking about what some character did in his room years and years ago, I have shake my head at the faith placed in these entertainment industry films.

What does Unlikely mean?

I don't pretend to have the definitive answer. My more capable predecessors, Reagan, Mosteller and Youtz (1989) decided to find out what probability terms actually mean to people. Here are their results (in % probability):


A couple points of interest to me.

1. The median lower bound for Almost Impossible is 0. Um... that makes no sense. 0 means impossible, no debate.

2. Possible has the largest range. Okay that is not exciting, but that the range is 40-70 is quite interesting. Possible overlaps with Probable, Likely and almost Very Possible.

3. I figured Very Possible and Very Probable wouldn't overlap so much.

4. The 90% lower bound on Almost Certain seems a little low. If it fails 1 time in 10 I wouldn't say it would almost certainly work.