So true

This week’s EconTalk podcast, with guest Anat Admati, is worth a listen. She explains, in an easy-to-understand way, how recklessness about risk contributed to the banking crisis. But, I especially appreciated this quote of her’s from near the end of the interview:

It is difficult to get a man to understand something when his salary depends upon his not understanding it.


Two Davids, an Optimist and a Diamond

Something made me think about this post from February 2012 and this post from May 2012.

In the first post, I try to explain to David Brooks that his social engineering predecessors created the problem he now wants to solve and he doesn’t recognize that the easiest way to solve it is to undo what they created.

In the second post, I discuss an EconTalk podcast with guest David Schmidtz who cuts right to the nub of the problem with the you-benefit-from-society-so-I get-to-tell-you-what-to-do mindset. The key phrase from Schmitdtz that jogged my memory of this post:

Tell me at what point other people helping me made me your property.

As I re-read that post, I had a couple additional thoughts.

First, not only is the do-gooder presumptuous enough to think they are entitled to tell others what to do, but they derive that belief from what others have done, not themselves. Indeed, when they say they get to tell you to be healthy because they pay for your health care, ask how much they’ve paid so far. Ask for a receipt.

This entitlement to tell others what to do is usually based on the idea that “society” has provided roads, teachers and police protection (again, usually provided by others, not them) in which we all benefit.

But, where did roads come from? From government? From taxes?

Where did those come from?

From wealth creation. At some point in human history we became productive enough through private trading to free up some spare time for some folks to be able to work on things beyond acquiring today’s calories — like protecting us and representing us from and for each other. ¬†Wealth creates government, not the other way around.

For more depth on that topic, I recommend Matt Ridley‘s The Rational Optimist and Jared Diamond’s, Guns, Germs and Steel.