The Limits of the “Rational Economic Man”

Greg Mankiw says there should be a market for kidneys, but not for paying drug addicts to get sterilized.

In this full-length interview from What Money Can’t Buy, political philosopher Michael Sandel and Harvard economist Greg Mankiw discuss the role of government, morality, and markets in public health.

[philipb]

If the "Rational Economic Man" truly existed, the advertising industry would be at least a thousand times smaller.

[ajitkirpekar]

I am surprised most of the comments missed Greg's bottom line. We want people to have the freest possible lives and to make choices that are in their best interest. But then, of course, there are certain limits to liberty. We don't want people killing others. But once we start to limit liberties, we need to be careful. And here he says - why is it fair for me to limit someone else just because I don't like what they do? What if they did that for a lot more things? Gay marriage was illegal for this reason. Jim Crow existed for this reason. These were awful policies, but the majorities at the time found them quite sensible. Its why its dangerous to impose your own sensibilities onto others as if you have the moral authority.

[Gi-Home]

Greg Mankiw really does not really understand the poor. Regardless I feel that Greg is a decent man, his lack of experience affects his capacity. The kidney is not the problem, the issue is that poverty should not exist.

[garrettroche]

"In the kingdom of ends everything has either a price or a dignity. Whatever has a price can be replaced by something else as its equivalent; on the other hand, whatever is above all price, and therefore admits of no equivalent, has a dignity. But that which constitutes the condition under which alone something can be an end in itself does not have mere relative worth, i.e., price, but an intrinsic worth, i.e., a dignity."
- Immanuel Kant

[aluminiumfish]

problem is that any monetising of your kidneys will be priced into the cost of living. So housing will go up as everyone has the possibility ( or have a relative) who can put down a $20k deposit for a home or college education with a kidney. So everything is priced up. People are priced into poverty. Its not a lack of money..its a pricing mechanism.

[caldweab]

What this economist does not seem to understand is that inorder for a transaction to be "voluntary", you have to have equality amongst the parties involved. If you need to work to earn money to eat, and someone is offering the means to get that money (a job) at preposterously low wages, but you are not in a position to get money any other way, that is not a voluntary transaction.

[enfomy]

Interesting conversation. I think financially focused individuals have trouble getting the right balance between protecting individual values and collective values. It was weird to say u would allow poor people to sell kidneys because it would help both poor people and people needing kidneys, then say it would be okay for people to buy kidneys for frivolous uses. I can understand the fear of the state abusing power, but preventing people from playing video games to read books is comparative to preventing people from using kidneys as ornaments to use them for transplants? One looks like a clear abuse of authority while the other shows a general respect for life. Shouldn’t economists look at the other factors surrounding the two individuals doing the exchange. If ur moral philosophy is based on doing no harm, but an individual can use organs as set pieces, in a world where those organs can determine life or death, I would need a definition for harm. Ethics is a dynamic field. U can say some preferences are bad. And really the immorality of the act comes from the scarcity of kidneys and their life or death value. If that attribute was removed, u could put kidneys all over ur house with no negative effects. Respecting preferences is important but it is based on the effect individual actions have on the broader society. Ethics is somewhat all about externalities, for personal preferences are somewhat easy, tho obtaining positive utility is difficult.

[howtomakeamonster]

Mankiw was chairman of the Council of Economic Advisers under President George W. Bush - let that sink in

[DrSanity]

The question is; Should we support a personality/entity that doesn't exist within natural constraints?

[HumbertoRamosCosta]

11:05 This is one common error people make and even some libertarian guys fails to address, is not the point that 'there is no harm', but the person don't evaluate as there is. One key element in libertarian views is the fact that we almost never have 'sufficient' information to make decisions.

Maybe i'm mistaken but there is a single queue for the kidneys and the government pay for the kidneys, and also the surgeries. Iran, maybe? This had 'zeroed' the waiting for kidneys.

[michaelbain]

I have trouble squaring the circle of why someone voluntarily selling their second kidney and the individual volunteering for military service are two different things from the rational individual self-interest economics perspective.

Further, the rational self-interest of the individual cannot explain the D-Day storming of Normandy Beach by American troops. One can be sure there were no economists there storming the beach on that day.

Economists have a huge problem here.

Suicide by the individual’s second kidney transaction is an insult to the state where storming the machine guns is not? (We will not get into the conceivable inheritance tax problem of that second kidney transaction)

Economists of the self-interest ilk have a core academic discipline problem they are not intellectually honest about.

Suicide is an insult to the state because the state loses a taxpayer and their economic potential for the employer. There is no other reason for the state, or the economist, to be insulted by suicide.

All-the-while, the volunteer infantryman gunned down is a hero because they protect the state and the economy by allowing both to move forward as going concerns.

There is nothing more here from the rational individual economic perspective than that.

This self-interest babble, on display here in this interview, is plainly vulgar to me as I ponder my year-end charitable contributions.

Michael Bain
Glorieta, New Mexico

[GenghisVern]

Why should people, anyone, have to choose between donating a kidney and sending their kids to college? Or paying rent for another six months? Kidney farming seems.. unethical

[julsius]

the market for real kidneys will quickly become irrelevant as kidneys grown in the lab will be soon available and therefore make real ones worthless (as the cost is higher to transplant). even if that weren't the case, the way to avoid coercion is the just UBI (universal basic income) from the just LVT (Georgist Land Value Tax) after core services are funded. we already let corrupt bankers create money from thin air via fractional reserve banking. this should be a universal but limited right aka UBI and would prevent poverty and such coercion.

[-uu]

Most markets are controlled by 1 or 2 firms. Those firms, in effect, dictate what everyone can do. The end result is no different from a central planner or a government.

[MarkoKraguljac]

What tops this whole discussion is the fact that there is no scientific evidence that humans have or could have anything resembling "free will".
That means that we are *all*, rich or poor, smart or not so smart, this or that, constantly at the mercy of circumstances. In a fundamentally scientific sense, rich/privileged are just fortunate the same way poor/unprivileged are unfortunate. Knowing this, its *supremely logical* to take proper basic care of everyone, using all available resources (UBI?). *Mr Mankiw's truncated "rationality" and "science" is a joke and a pile of stinky ideological dung.*

[BobQuigley]

It appears Mr Mankiw's favorite word is i

[LoopFlare]

The problem with a public market in kidneys is that people would start buying them like they do currencies and stocks and whatnot, spiking the price of kidneys. American economists are so fucking disconnected from reality that is painful to watch.

[jugutierrez]

no morals, very interesting and smart answers.

[bradchristo]

Give cash(drugs) to a drug addict isn’t the answer .

[HypothesisI]

Why are two mainstream economist on here? I am confused...