Hi, and welcome to my lair of introspection. I’m an avid reader of blogs, particularly economics blogs. Most are well written by well known economists, and I would like to join their ranks in providing an analytical and solutions based examination of the world we live in. I, however, am hopelessly unqualified for this endeavor. Some background information for you, I’m young, I have a bachelors(and will hopefully be getting my doctorate eventually) in economics with a minor in mathematics. While this makes me unqualified to even be called an economist, I do hope that my limitations in the more quantitative aspect of the field will help me to bridge the cavernous gap between the jargon of academia, and the real world, down to earth struggles that many people face. The short answer to the question of why I’m beginning this blog, is simply that I want to help introduce people to the world of analytical thinking about problems I have fallen in love with. The long answer, well, that will take a bit more writing.
As someone who enjoys contemplating issues, I find myself spending increasingly long hours reading about issues of social justice, inequality, finance, and anything without clear cut solutions. There is a trend however, that disturbs me. There are many strong, well written, and important pieces of writing that go heavily into the problems we face as people today. There is a strong focus on the historical struggles, patterns of interaction, and structural forces that lead to almost any predicament you can think of, and these are important. Lofty ideas of justice an fairness are important, and need to be considered with great care and effort. If there is one thing that stands out from a perspective from economics however, it is that people respond to incentives, and in order to make change in society, this needs to be addressed.
I will give a simple example here. Take the example of a used car dealer, who knows her wares are substandard. Assume that they will function perfectly for one year, than mysteriously break down. One year is quite a long time, and most people will not make the connection between the car dealer and the bad cars, but the dealer does have this information. The dealer sells all the cars, she has aggregate information that she can use to determine the value of the cars. The buyers however, really only have one data point, which is not enough to draw a solid conclusion. If there are enough good car dealers in the world, this dealer will be able to sell her cars for the same price, and make extraordinary profits from this(at least in the short run), and the consumers will pay the price. People may call attention to the injustice of the concept. The dealer herself may even hear these criticisms and feel guilt. There is however, a large problem with this. The dealer, when she began this business venture, knew she would be selling substandard merchandise. Without some sort of policy action to change the incentives that govern her behavior, there is no reason to expect a change in behavior, even if everyone feels like it’s unfair. Unless the aggregation of data problem is solved, the process will continue unobstructed.
That was of course, an oversimplified example, but it makes a point that is important to me. We need more than calls of injustice and inequality, we need solutions that address the root causes of these issues. I by no means think that these solutions are easy to come by. There are many trade-offs that need to be carefully considered, but I believe in the power of improvement. In this blog, I will do bits and pieces of a few things. I will, on occasion, attempt to explore issues from a moral standpoint, but this will only be a tool. What I really want to do is provide solutions. Note here, that my goal is not to provide the optimal solutions, or even good solutions. My ego is not so mighty that I believe I have these solutions. I do believe in the power of collective thought and debate to shape bad solutions into good ones, however, and that is the goal of this blog. I want to spur discussion of how to fix the problems we face today. I do hope that this will be a productive, and entertaining process, but love it or hate it, read it or don’t read it, I honestly don’t care that much. I just ask that you think, and examine what issues we as a collective face, and examine your own solutions, and possible improvements on solutions that have been proposed.