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More compensation!
Would the world be a better place if we found (and made) it easier to compensate others?
It’s a beautiful Saturday and you’re invited to a barbecue. The hosts have a reputation for ensuring memorable occasions, with superb food and eye-catching decorations in the garden. In short, they will, as always, have put in a lot of effort. It’s the kind of event for which you’d actually pay good money. Yet you don’t: you will not arrive at the garden party, informing your friends that you and your spouse have just transferred £70 to their account. You will instead take three nice bottles of wine and a bunch of flowers.
We seem to make a strong distinction between our interactions in the market domain and those in the social domain. In one we pay money in return for goods and services, while in the other we either do stuff for free — like refereeing a football game at our children’s school or helping out a colleague fixing her car — or we reciprocate in kind, rather than at market rates. And never the twain shall meet. Or should they?
Compensation in international politics
I was reminded of this when I read an intriguing blogpost by economist Bryan Caplan, in which he wonders why not a single politician has yet proposed the simplest possible solution to Brexit…
