We're at a crux in the world today. Times of old like
when our parents were kids, government could be trusted, they weren't expected
to be scamming on a regular basis. Only recently have we as a population
jumped in at any opportunity to ask why, with what, for what reason, and again
why government does whatever it does. When a child goes from youthful innocence to the age of substance
"experimentation" and rebellion, parents begin to keep tally's of changed behavior,
erratic outbursts, contradictions in statements, and above all, complete
emotional apathy from the real world of consequences and the learning which takes
place in the wake of them. The only way for parents to arrest the behavior and maintain control over their house is to become more involved in the childs daily activities. Some may try to show the kid what other kids do in a effort to subliminally introduce ways of comparing and contracting a decision and its potential outcomes.
This same type of behavior is taking place in London. David Cameron has been talking about ways to control the part of the population that "wastes" electricity. I don't care what the model says, if the input is bad the output will be too. The specific way Cameron address the citizens who "waste" energy is by showing a citizen who pays for their own electricity (with their own money earned with the exchange of their time and skills for a common debt instrument) what the electric bill is, along with showing them their neighbors bill and the bill of the "A-student" (the citizen with the lowest "carbon-footprint"). Just another way government works its way into your life and strong arms control and obedience, like the parents of teenagers.
Per WillWillkingson:
I was glad to see this from George Loewenstein, in an interview in Money I can’t find online:
I’ve come to the view that behavioral economics solutions are often being used as a substitute for more fundamental efforts. British Prime Minister David Cameron is a big fan of behavioral economics and gave a talk in which he said, “The best way to get someone to cut their electricity bill is to show them their own spending, to show them what their neighbors are spending, and then show them what an energy-conscious neighbor is spending.”This idea plays on Bob Cialdini’s research documenting the impact of social norms on behavior. It’s a great idea, and leads to reductions in energy use of a few percent, but showing someone their neighbor’s bill is not the best way to get them to cut their own bill. The best way is to charge an amount that reflects the true cost of the electricity, including social costs from importing oil, pollution, climate change, and so on. Behavioral economics has a lot of great insights to contribute to public policy, but it will be unfortunate if it substitutes tried-and-true approaches involving taxes and regulation.Loewenstein loses some of the force from his point with his half-nonsense about the “true cost” of electricity. The larger point is that prices matter and money prices matter a great deal, even if all prices aren’t monetary. People generally prefer doing what everyone else is doing, so you can increase (or decrease!) the psychological price of energy use by showing someone they’re out of step with the Smiths, but you can increase the psychological price more and more surely by directly raising the monetary price of electricity.
The political thrust of this is what’s interesting. Behavioral econ offers policymakers an added dimension of evasion. A government can make a big hullabaloo of caring about energy consumption and climate change by sending folks mail detailing in vivid color their energy use relative to social norms instead of making themselves unpopular by making voters poorer.
Not only is behavioral economics not some sort of master-key for effective policy making, it gives politicians a fresh way to appear forward-thinking, activist policymakers while really doing nothing much at all.
Loewenstein has made this argument before:
behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.It’s a sound observation and bears repeating, though I think it’s a bit late for the behaviorists to try to take it back like this. Perhaps they can make up for their earlier naiveté by making the psychology and incentives of politicians a focus of their research.
