Economists do know what to do, no, really!


Given the current state of the world you might not wish to believe economists who tell you that they know what to do about things. But there are indeed things about which economists do know what to do. These are largely, although not exclusively, in the fields of microeconomics – the study of incentives and prices.

More specifically, when we start to talk about pollution, or climate change, economists are adamant that such things as taxes, or cap and trade systems, are hugely cheaper than the sort of command and control systems, the you may and you may not licences and insistences, beloved of bureaucrats.

But as the Economist points out, this doesn't seem to be what people actually like. Despite the fact that these rule rather than incentive based systems are hugely more expensive (recall, this means that people must give up more of other things in order to have less pollution, that's what "more expensive" means here) people still seem to prefer the rule-based systems.

All of which really leads us to two conclusions. The first being that the education system is even worse than we thought.

The second that clearly we need to elect another people.