Tuesday, December 20, 2005

Economists and money

I liked this observation from Cafe Hayek:
The misunderstanding in these letters is evidence that economists are the last people who are obsessed with prices -- the last people who believe that the only things that matter are money and costs expressed in money. Rather, it's non-economists who are obsessed with money measures and money prices; it's non-economists who are most prone to overlook costs that aren't pecuniary -- to assume that only when people make monetary outlays do people incur costs.
The economic perspective forces you to be much more clearheaded about costs than people seem to be otherwise -- nominal vs real, out-of-pocket vs opportunity, time vs money are all considered.

I had a long email exchange with a reader (TY) regarding this post on torture. Ultimately, I asked what I should have asked right at the start and got the following response:
Q: If it could be proved that the benefit from torture exceeded the cost, would you change your mind an support it.

A: [No]. I think torture inherently debases human dignity, which I hold as a fundamental human right. But I also appreciate that my morality may not be my neighbor's, and that many people such as yourself are persuaded by a costs-benefit analysis. I think a policy of torture can be defeated on those grounds as well.
I don't think this is an uncommon position, but it is pointless to discuss. While TY argues that cost-benefit is not the right way to think about this, his position is essentially that he will bear any cost and forgo any benefit a priori. Costs and benefits do not go away just because you don't want to think about them.

In a seperate post, TY's position was summed up well in the comments "The question is how you justify torture without assuming that the end justifies the means. I don't know that that can be done." And that is exactly right.


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