Pyrmonter on the Economic Society

A confession.  Pyrmonter is a member of the Economics Society.  He is a member because, at its best, the Economics Society presents challenging speakers away from the increasingly tribal outfits like the CIS: he re-joined to attend a talk given by Deirdre McCloskey.

The Society is, in part, the professional guild of Australian economists; in Pyrmonter’s now remote recollection of university, most of the academic staff and a good many public sector practitioners were members; it always struggled to gain traction with people from the professions or commerce.

Maybe it is that public sector ‘identity’ that explains the outcome of the society’s most recent poll of a selection of its more eminent members.  Happily, those members are agreed that Australian banks can do better.

Unhappily, when asked to explain why, the overwhelming majority consider more, invariably ‘better’ regulation (especially of ‘culture’) is the answer.  Several advocated the re-establishment of some form of state banking.  One, at least, of them might not have been in Australia in the late 1980s, but how quickly we forget.  Only one recommended increasing competition.

No doubt these same luminaries instruct their students about the importance of ‘nudging’ and the limits of homo economicus.  The reader has to wonder whether they’ve ever read much Smith; or have the insights most of Pyrmonter’s contemporaries gleaned from their studies about the way competitive markets operate.  Let us recall:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.

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11 Responses to Pyrmonter on the Economic Society

  1. Sinclair Davidson

    Pyrmonter is a member of the Economics Society.

    https://goo.gl/images/K3bHrG

  2. Rococo Liberal

    I know I’m not an economist, but can I ask what economists actually know about law?
    They talk a lot about regulation, but they are not trained to understand how regulation is written or how it works. Therefore their point of view is a layman’s view.

  3. Rococo Liberal

    Rather than proposing a single policy intervention this poll was designed to draw out a diversity of views and comments.

    Ha ha ha. Each of the respondents said ”more regulation”.
    In any case when I hear the word ”diversity” I reach for my revolver.

  4. Pyrmonter

    @ Sinc

    Change from within. Etc.

  5. Pyrmonter

    @ Rococo Lib

    That’s a good question. In the undergraduate economics curriculum when P was a student were works by the likes of Mancur Olson, George Stigler, Jagdish Bhagwati, Anne Krueger and Buchanan and Tullock containing various critiques of regulation, law-making processes and their operation. None of them would have been taken as an endorsement for the idea that governments can solve problems by fiat.

  6. Rococo Liberal

    @Pyrmonter

    In the undergraduate economics curriculum when P was a student were works by the likes of Mancur Olson, George Stigler, Jagdish Bhagwati, Anne Krueger and Buchanan and Tullock containing various critiques of regulation, law-making processes and their operation. None of them would have been taken as an endorsement for the idea that governments can solve problems by fiat.

    It seems that the Society’s ”prominent members” have forgotten what they learnt in their undergraduate days.
    Lawyers manque

  7. J.H.

    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.”

    Indubitably…. as an ex Commercial Fisherman, that above statement is utterly correct. Private enterprise is proud to be successful and to create success around them… It’s industrious what people do.

    Over regulate us… and we wither and die or are strangled unto death.

  8. J.H.

    correction… It’s what industrious people do. Sigh.

  9. Muddy

    Change from within. Etc.

    Off topic, but Conservatism needs more moles, and more strategic thinking.
    Or a biblical plague that affects economists, politicians, ‘climate’ scientists, Hollyweird … actually, most people except for myself and Kaley Cuoco.

    Back to economics now.

  10. Entropy

    Unhappily, when asked to explain why, the overwhelming majority consider more, invariably ‘better’ regulation (especially of ‘culture’) is the answer. Several advocated the re-establishment of some form of state banking. One, at least, of them might not have been in Australia in the late 1980s, but how quickly we forget.

    Quite so.

    A sad irony of public policy is that it is like the Circle of Life.

    Work in the one policy area for long enough and you get to enjoy implementing arrangements you expended a lot of late hours and time bolstering weak kneed politicians to get rid of twenty five years ago because they were failures, because the carpet baggers and rent seekers have now convinced the shallow politicians it will work better this time (see Katter, Bob Jnr).

    Ah, well. Hakuna Metata.

  11. Mother Lode

    It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.

    People are being brought up thinking this is the problem, that everyone should be dedicated to the welfare of a great transcendent idea of ‘the people’, even at the expense of individual actual people.

    One problem in a first world society with its (diminishing but still real) capitalist economy is that people learn of capitalism as it is practiced*, while socialism etc they learn only as a very pretty theory.

    Capitalism is also a lovely theory – if you work harder you get more to do with as you please, and the same goes for everyone. Voluntary cooperation means everyone gets more of what they want by giving other people more of what they want.

    *I realise what people actually live is the nobbled form of capitalism the government allows, and that many of the problems (excessive regulation, elevated unemployment, ‘market failures’) will be blamed on capitalism rather than the real cause, but as a simple demonstration of the common error of failing to distinguish between theory and practice it will do.

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