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FOR YOUR OWN GOOD.

Peter Ubel is a physician, and he sees people doing things that, while fun in the short run, are unhealthy in the long run. Yes, that's when Keynes says we're all dead, but Dr Ubel's thesis is that short run suboptimization accelerates the long run. And public policies that let people react to those short run incentives are part of the problem. Thus Free-Market Madness: Why Human Nature is At Odds with Economics -- and Why It Matters. I'll let the author write Book Review No. 31.
I write this book to highlight some of the dangers of liberty, but even more importantly to show how restricting some kinds of liberty can improve people's health and well being. I intend to highlight the harms that can befall people when capitalism meets human nature -- when their freedom to behave in the marketplace confronts their propensity to make flawed decisions.
People eat junk food because it tastes good and because it's cheap. That's the short form. The author does tackle some of the more challenging problems in economics. Where information is costly, discount rates aren't easy to establish, and there's plenty of experimental evidence that people react to prospects of loss differently than they do to prospects of gain, expected value otherwise equal, risk-aversion notwithstanding. Thus obese people and smokers and all the other ills that people subject themselves to, and quite possibly regret later. Dr Ubel's prescription:
When people fail -- fail to eat right, exercise, or stay away from cigarettes; fail to save for their futures or invest time to develop good habits -- we should at least be able to go to bed at night knowing that we didn't promote free market policies that doomed them to fail.
Advocates of food stamps and social security and inclusive government schools presumably can sleep soundly.
People deserve a large amount of freedom. But they also deserve to live well. And when freedom and well-being collide, we should be open minded enough to recognize that carefully calibrated restrictions on our freedom are a small price to pay for a healthier, happier populace.
In a world of costly information, that calibration need not be the province of experts in the employ of government.

(Cross-posted to Cold Spring Shops.)

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