I recommend Tyler's book for clear thinkers as well (How to control the world: the basics) but DeLong recommends Robert Frank, The Economic Naturalist, for intellectual balance.
Consider, for example, Cowen's discussion of tourists from affluent countries who travel in poor countries and find local guides and beggars waiting outside hotels. For the guides and beggars, waiting for the rare generous tip or gift is better than other available options — but not much better. More generous and well-intentioned visitors do not improve the well-being of local guides so much as they simply multiply their numbers. People who would otherwise be doing something useful wait instead for the relatively big score, and increased generosity becomes a social loss.
So what should an ethical liberal do? Many flint-hearted libertarians anxious to cast scorn on woolly-headed liberals would stop at this point, smugly pointing out that liberal generosity is counterproductive. Cowen goes a step further, and asks what a non-woolly-headed liberal who actually wanted to help would do. He has a simple answer: Get off the beaten track. Find somebody who is both poor — not just looking poorer than they are in the hope of attracting generosity — and busy doing something productive and useful. Give them the money. As Cowen puts it, "If you are going to give, pick the poor person who is expecting it least." That accomplishes the most efficient transfer of wealth.
Wednesday, November 7, 2007
What should I read after I finish Freakonomics?
Brad DeLong has some suggestions: if you are a liberal, read Tyler Cowen's Discover Your Inner Economist.