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Saturday, May 23, 2009

SOCIAL NORMS VS. RATIONALLY MOTIVATED HOMO ECONOMICUS AS GUIDES TO SPECIFIC BEHAVIOR

Today's Buggy Topic Is . . .

. . . found, in a lengthy bugged-out commentary, at Economist's View, the laudable economic web site run by Professor Mark Thoma of the University of Oregon.  The thread began with a link by Professor Thoma to an article on the role of social norms as a way to promote changes in our economy, along with his own comments that thought a more specific economic approach to encourage new and desirable behavior --- say, reducing the high fat intake of Americans (with the resulting health dangers related to obesity) --- would likely be to impose higher taxes on fast-food.  That would raise the price, reduce the consumption, and eventually lead to a desirable outcome.

Such an approach is the standard way economists endorse for almost all policy changes --- such as putting a tax on polluting industries.  An alternative is equally endorsed in the latter case: cap-and-trade.  Which is to say, cap the amount of pollution in a region or country like the USA, then sell permits to the polluting firms.  This raises the price of their production and reduces consumption, just as a tax would.  The more efficient firms would reduce pollution to lower levels, then sell the permits to less efficient firms.  Just as taxes could be raised regularly if more pollution-reduction is desired, so the cap on polluting output could be changed or the permits made more expensive (or both). 

Social Norms

Others, like the economists and other social scientists who produced the article on social norms, think that they can be used to improve the diets of Americans --- a desired result.  Or, to return to the pollution-problem, to encourage behavioral changes by industry and consumers that would lead them to switch away, say, from fossil-fuels to alternative fuels . . . especially if, as most climatologists (but hardly all), the dangers of global warming materialize noticeably. 

(Elsewhere, please note, prof bug has also advocated reducing our reliance on imported oil and for national-security reasons --- the best way he can think of to offset the undue and dangerous importance of the volatile Middle Eastern Arab and Iranian oil-producing countries in current American foreign policy.  That security motive would lead to a variety of government taxes on fossil-fuels over time, plus --- as some alternative fuels become promising substitutes in cost/benefit terms --- some subsidies as well to those industries producing them.   These subsidies would have to be short-lived and the costs shared with those new promising industries.  Otherwise, we'd be back in the disasters of the Energy Department in the Jimmy Carter era of the late 1970s.)

Enter Prof Bug's Views

Virtually all the posters in the thread that followed endorsed the use of social norms as a way to encourage desirable economic and social change.  As prof bug noted, none of them seemed to recognize that social norms are hard to define --- at any rate, with specific references to inter-disciplinary work, he shows that there is no consensus on what they are, let alone how they originate and change over time.  Dealing with these problems is what his own lengthy commentary tried to do.  And though at times the buggy analysis is more abstract than he'd prefer if he had enjoyed more time or space for setting out his argument, it does use a fair number of examples by way of illustration toward the end. 

These include, please note, the effort over several paragraphs to draw on the admirable Showtime series, The Tudors, as well as the US and British roles during WWII and afterwords in Japan and Germany . . . where major institutional changes were imposed upon the defeated countries, which in turn encouraged a whole series of cultural and normative changes in the behavior of the Japanese and German publics.

For the Buggy Comments,

. . . click here.  Please be sure to read the initial post by Professor Thoma, and --- if you are interested --- the link to an outstanding multidisciplinary book on Social Norms --- the actual book title (2005) --- that prof bug provides.  That link is to the Google-book version, which (as many of you knew) is pretty complete, with only an occasional page missing deliberately from each chapter.