The bafflegab that is economics

Many years ago a paper by a Brown University economist was referred to as economic bafflegab in Newsweek magazine. I vaguely recall it having something to do with the economic tradeoffs of loving your family members or some such nonsense. The term economic bafflegab stuck with me.

To many economists, every problem is an economic problem. This leads to the application of economic thought to all kinds of situations. Here are some examples.

• Hurricanes are good for economic growth. That’s right. Economic growth is measured as Gross Domestic Product, the sum of all expenditures on new goods and services. When a hurricane destroys a community, it devastates wealth, the stock of old goods. The recovery causes a surge in spending on new goods and services causing a temporary spike in GDP. It’s hard to remember this when the roof of your house just blew down the street.
• Economists love to point out perverse incentives or, as the rest of humanity calls them, unintended consequences. Take seat belts for example. With a seat belt (and airbags and other safety features), drivers can drive faster and more recklessly with reduced adverse consequences. This is called the Peltzmann effect. Which led economists Gordon Tullock to propose, presumably with tongue firmly in cheek, to have a sharp metal spike installed on the middle of steering wheels. In fact, if you sit in a car made in the 1950s you’ll find all sorts of nasty stuff like toggle switches and metal dashboard that should have scared anybody into driving like a nun. I’ve heard that there are some people who say that wearing a bicycle helmet may be dangerous. The reasoning is that motorists are less careful around helmeted bicyclists than unhelmeted bicyclists. To offset this bit of unpleasantness, I always carry a bicycle death ray when I ride.
• Another example is the case of the murderous economist. Apparently displeased with his spouse, an economist bludgeoned his wife in their kitchen with a baseball bat, killing her. Realizing what he had done, he went about trying to make it look like an intruder had done the deed. He then called the police to report that his wife had been murdered. When he called the police, he didn’t use the 911 emergency line, because, as he explained to the authorities, there was no emergency; his wife was already dead. (I am not making this up.) He was convicted of manslaughter. (Full disclosure: I met the economist when he was a visiting professor at Brown. He seemed like a nice guy which is what people always say about the killer next store, isn’t it?)
• Our latest installment of economics gone batty is the case of the everyday bicyclist. This is the person that uses their bike instead of a car for regular transportation. This paper by a Wharton professor finds that people who substitute bikes for cars may actually do more harm than good. While it is true that using a bike instead of a car has the obvious positive effect of reducing energy consumption, there is a downside. The everyday bicyclist tends to live a longer and healthier life, thereby increasing population. Darn it if more people don’t consumer more energy. (I confess I only read the abstract. I didn’t delve into whether the increased population was caused by better health or that bicyclists are friskier than non-bicyclists.)

Of course, economics offers all kinds of interesting solutions for public policy problems. We all know that we consume far more health care resources in our old age than in our youth. The solution of course is to hand out cigarettes and whiskey to college kids.

Of perhaps we can paraphrase some Shakespearean advice: the first thing we do is kill all the economists.

I don’t know about you but I’m going for a bike ride, environment be damned.