Saturday, August 07, 2004

Sometimes Economists Are Too Clever

Tyler Cowen of Marginal Revolution asks "Are people becoming happier over time?" His answer seems to be "yes" -- but he can't stop there:
Happiness research can be used to account for behavioral failures to maximize utility. Most alcoholics are not happy by traditional standards yet they drink of their own volition. So we might use happiness research to suggest a higher tax on alcohol than on vaccines for children.
We don't need happiness research to know that alcoholics have an addiction that leads them to engage in self-destructive behavior. Anyway, is Cowen suggesting that we "exploit" alcoholics by raising taxes on alcohol, just as we "exploit" smokers by raising taxes on cigarettes? Why be coy about it? Why don't we simply round up all alcoholics and smokers and throw them in sanitariums? If you're going to be a social engineer, just be one and don't try to conceal it with economic gobbledygook.