Where do you argue it then?

Well, nowhere really — at least not in such absolutist terms. The ability, nay the power, to choose what one considers best (= the optimum trade-off) is an important freedom, and a market is a good way of both ensuring this, and ensuring that it scarce resources are used optimally to deliver it.

Why are these things luxury items in the first place?

[…]

The price of something and its cost are not the same thing.

[…]

How is that, instead of them costing us what they really cost to bring to market, we need to ‘give money to the poor’?

Cost is overrated as an accurate metric of anything. The cost of the paint used in a Van Gogh work is less than that of even the cheapest frame you can put around it, yet a painting sells for many, many orders of magnitude more than that cost.

Even when you work out the ‘cost’ of a penny sweet, you’re really adding the prices you pay for each of the components of the eventual offer to the customer. There is no such thing as an inherent cost. There is only the decision of a seller to sell for a minimum price, and that of a buyer to buy for a maximum price, and a transaction taking place if the former is at not higher than the latter.

An item is a luxury item if you cannot (or don’t want to) afford it to the extent that you would want to consume it, were you not constrained. The affordability is essentially a question of supply and demand, therefore scarce items are more likely to be luxury items. (BTW, the market is an excellent instrument to ensure an increase in supply of goods in higher demand!)

And the point of government is to be paternalistic … to step in where people can’t behave like adults or simply can’t be trusted to behave decently. Otherwise, what is the point of government at all? If government isn’t going to step in and be paternalistic then we might as well not have one.

Ooh, that’s fighting talk. Governments are capable of providing public goods more efficiently than a market could, and I guess that some form of paternalism is inevitable. We cannot totally freely choose where to drive, we have to use the roads the government mandates.

My argument is that when government decides to limit choice in the name of the greater good, it should properly consider this. In particular it should ascertain that the greater good is truly served by this (i.e. there is a net benefit) and that there are no unacceptable costs placed on those for whom there is a net loss.

You strike me as a decent fellow, Koen … someone I would gladly have in my cabinet of Benign Dictators For Life

I am flattered, but let me assure you that I have no ambition in that direction. :-)

On the other hand … if you want Habeus Corpus instead, be careful what you wish for: have you seen your peers? Heaven preserve you if they’re Sun or Mail readers — they’d hang you for being a paediatrician!

Well… I used to think that, should I ever have the misfortune of being falsely accused of a crime, and have to face trial, I would prefer it to be in front of a tribunal with professional judges, rather than a people’s jury. I am not a paediatrician, but the thought of being judged by me peers, Mail and Sun readers, filled me with dread.

I have not yet been called for jury duty, but one of my daughters has, and what she reported was rather different from that assumption. Even though most members were simple people, with an average education, they were thoughtful, engaged in discussion, and actively considered multiple viewpoints. I have since heard more such evidence, to the point that I am not so sure any more that being judged by my peers would necessarily be such a terrible ordeal.

(Oh, and as a fellow pedant, I cannot let Habeus Corpus pass without a remark. It’s Habeas Corpus. :-))

Governments consist of people, so maybe we should be constructing a different form of government.

I hear good things about this AI lark.

The solution to Anarchy isn’t more Anarchy … it’s rules and the will and means to enforce them.

I have the feeling you’re reading more in this piece than I put in. I am not advocating the abolition of all government or calling for Anarchy. I am not saying there should not be any rules.

It isn’t the imposition of rules that’s the problem — it isn’t ‘government’.

It’s that we have the wrong sort(s) of rules — the wrong sort of people.

Well maybe, but the problem I am dealing with here is that, sometimes, those who make policy decisions or campaign for change do not properly consider the trade-offs involved.

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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