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Thomas Hobbes would be spinning in his grave

speed

A few years ago I watched a bunch of Speed Racer cartoons with Phil in a movie theater in the early 90s. These were low-budget Japanese cartoons from the 60s that we loved as kids. From my adult perspective, the best parts were during the characters’ long drives, where you could see Japanese industrial scenes in the background.

Similarly, sometimes the most interesting aspect of a book or article is not its overt content but rather its unexamined assumptions.

I was reminded of this today when reading the Times this morning. In an interesting column reviewing recent research on happiness (marred only by his decision not to interview any psychology researchers; after all, they’re the academic experts on the topic), Adam Davidson writes:

So much debate about government policy is based on economic statistics that come out of the market. But the goal of government is not just to maximize revenue.

This perked me up. Not just to maximize revenue? This has to be a sign of the times, the idea that anyone would think that “maximizing revenue” is the main goal of government, to the extent that it would be considered necessary to say it’s not the only goal. My point here is not to make some sort of political statement—it’s not about left or right, nor is it a criticism of Davidson. It’s more of a comment on the unexamined assumptions of our political discourse that someone would say this at all, especially in such a matter-of-fact tone, as if it’s some sort of standard belief that maximizing revenue is the goal of government. Weird stuff.

P.S. I’m also not so happy about this line:

There is no evidence, [economist Justin] Wolfers says, that an artist would be happier if she became a hedge-fund trader.

I think this is misleading because it implies an ability to switch between low and high-paying jobs. It’s not clear to me how relevant Justin’s comparison is, given that “becoming a hedge-fund trader” is not an option for most people. Lots of people can’t find jobs at all, and only a very small fraction of people can find jobs that are so well-paying. So Justin is, in effect, talking about a very rarefied group, for which the relation between income and happiness might be much different from that of the general population.

22 Comments

  1. john says:

    Of course there’s no evidence that an artist would be happier if she became a hedge-fund trader. I doubt anyone has done a survey of artists who have become hedge-fund traders.

  2. Dogen says:

    Sadly, this seems to be typical of Adam Davidson. I have come to avoid reading anything with his byline, it always seems to be unselfconsciously shallow.

    • Mark Palko says:

      I don’t know what happened to Davidson. Starting with “Giant Pool of Money,” he and Planet Money were doing some of the best journalism of the crisis. Since then, though, there has been a steady decline. Some Planet Money segments are still worthwhile, but none have been up to those early standards and a few have been really weak.

      • Steve Sailer says:

        It’s hard to come up with good stuff week after week for years. Every interesting individual has a unique take on the world that makes him novel for awhile, but after awhile you can guess what he has to say ahead of time.

  3. zbicyclist says:

    You do have the choice between artist and hedge fund trader, but it’s early in life, before you really know what you are doing.

    Later in life, you can go in one direction (from business executive to artist). A few people get quite successful, such as my old boss. His obituary reads, in part:
    http://articles.chicagotribune.com/2011-07-03/news/ct-met-eskin-obit-20110703_1_iri-ceramics-market-research

    “After he retired … in 1995, Mr. Eskin turned to his passion for ceramics.

    “He started throwing plates and cups, then moved to large platters, and later created towering structures and massive, haunting sarcophagus-type vessels.

    “His real strength was in sculpture,” said close friend Charles Hindes, professor emeritus of ceramics at the University of Iowa. “His work had historical reference to burial containers. So Gerry’s work was very personal and very distinct.” [I should note that Dr. Eskin had been a professor of economics at Iowa before he became a business entepreneur.]

    “Mr. Eskin, 76, whose ceramics work is held in collections across the U.S., died Tuesday, June 28 in Iowa City, Iowa, of complications from heart surgery, his family said.”

    Can you go from artist to trader (or, more generally, a business executive focused on money)? I’m sure there are some examples of that, as well — perhaps initially beginning by marketing their own work.

    • Steve Sailer says:

      Dr. Eskin was my old boss, too. Great guy. Gerry gave me his $9,000 PC XT in 1984 — complete with a 10 megabyte hard drive!

    • Steve Sailer says:

      Dr. Eskin started out as a professor of marketing research at the U. of Iowa and wound up a professor of fine arts at the same university. In between he made a fortune co-founding a marketing research company. He was a happy man, and he routinely made the people he came in contact with happier.

  4. Roger says:

    Economists model everybody and everything as maximizing revenue. It is not exactly true, but it is true enough for the models to be useful. Adamson is arguing that this does not take happiness into account. Ask yourself, if the govt were not maximizing revenue, then what would it be doing differently? Not too much.

    • Andrew says:

      Roger:

      Read Hobbes.

    • Chris G says:

      >Ask yourself, if the govt were not maximizing revenue, then what would it be doing differently?

      Government should provide institutions and infrastructure essential for maintaining a health democracy. It needs to raise the revenue necessary to fund those endeavors – no more, no less. Revenue is a requirement which follows from the function government is supposed to provide, i.e., the need for revenue is a consequence not a driver. The notion that government should seek to maximize revenue strikes me as utterly bizarre.

      • Jonathan (a different one) says:

        The quote is about maximizing national income — not government income, though admittedly the quote is somewhat clumsily worded. The argument for maximizing national income is that, given deadweight loss-free redistribution mechanisms (which we don’t have), you can then divide the maximally sized pie. as long as you don’t measure income too narrowly, and take into account risk and use good intertemporal discount rates, it’s not a terrible goal. It may, however, still be too narrow if the income goals are defined too narrowly (ie the equity markets) or too riskily (obviously) or without enough concern with what really matters to people (ie failure to consider true environmental externalities).

        • Chris G says:

          Yeah, it would have helped if I’d read Davidson’s piece first. Still though, I think focusing on maximization of income is off the mark.

  5. Fr. says:

    It might be Davidson means “the goal of government should not just to maximize revenue” but prefers to frame it as if it were a common wisdom to be battled by reasonable argument.

  6. dmk38 says:

    My guess is that the guy is just not well educated. I don’t think it is part of the zeitgeist to think of govt as “maximizing revenue.” Repubs & Dems argue about impact of cutting taxes on govt revenue, but neither has goal of “revenue maximization.” Maximizing welfare–that’s more plausible (as a candidate for how to think of govt, & one that would still cause Hobbes to roll over in grave if he were alive today)

    Roger: Economists don’t *model* govt as “maximizing revenue” either. They (or at least those who are in neo-classical mode) say *individuals* behave “as if” maximizing their revenue or equivalent. Mancur Olson would be rolling over in his grave to hear someone say economists model collectivities as if *they* were maximizing “their” revenue

  7. Steve Sailer says:

    My favorite unexamined assumption is how everybody in the press assumes that low wages are “good for the economy.”

  8. Mike says:

    My guess is that if Wolfers really thought about it, he would have used the term “day trader” instead of hedge fund trader. Anyone with a bank roll earned from the sale of their art, a laptop and access to a trading account can day trade, at least until they bleed to death.

  9. Bruce McCullough says:

    I guess that’s all she wrote for the idea of securing liberty as the purpose of government.

  10. zbicyclist says:

    The framers of the U.S. Constitution had a wider view in mind: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”