Preach with me
he's trying to say that economists aren't aware of the "problems" he cites. basically, he says that economists are unaware that how you count benefits and costs (and what benefits and costs you choose to count) impacts the analysis.
thats rubbish. there are good cost-benefit analysis, and there are bad ones.
if you pick the bad ones, that doesn't mean you can criticize the whole exercise of cost-benefit. the examples he cites are obvoiusly flawed, and designed to elicit the owws and ahhs! we hear in the background.
Sparks, it's called Okun's Leaky Bucket. Or more mundanely, the Robin Hood effect. At the econlib.org site, they discuss Okun's contributions. They state that "Okun introduced the metaphor of the leaky bucket, which has become famous among economists: 'The money must be carried from the rich to the poor in a leaky bucket. Some of it will simply disappear in transit, so the poor will not receive all the money that is taken from the rich' (p. 91)." See also my post at http://foolawecon.wordpress.com/...?
s=leaky+bucket.
gabby,
where did he go wrong?
mb,
i suppose its a chicken-egg relation. focusing on the factors that block equal opportunity needs political will, and w/o strong advocates on behalf of the those who do not benefit from the system, how will we institute these changes?
orlando,
what do you mean by do-gooders extracting something from wealth redistribution? pls explain?
I think inequality is a effect rather than a cause. The cause of inequality is the absence of equal opportunity. And the absence of equal opportunity and inequality, once that becomes prevalent, feed each other. The cycle can be broken by focusing on the factors that block equal opportunity.
i was listening to the podcast/lecture. its incredible how a harvard political scientist can be so wrong about cost-benefit analysis.
There is always this tension between "efficiency" and "equity." But the problem is not that simple, because the "do-gooders" actually extract something from wealth redistribution, even as the well-off resist publicly-funded charities. As the growth economists now know, it is the quality of institutions, both private and public, that matter for reducing poverty and saving the democratic experiment. And yet, institutions are a strange mix of democracy and "dictatorship."
Commenting by HaloScan
