A new branch of economics known as neuroeconomics claims to be able to prove scientifically that Adam Smith (who considered himself a moral philosopher, recall) was right:
Smith saw sympathy (compassion and commiseration for another person, even if you don’t share his troubles), or empathy (if you do), as an innate characteristic of man. It served, Smith suggested, as man’s moral compass, was difficult to overcome, and from it flourished an unwritten code of ethics that held society together.
Here's the proof (click the link to read about monkey experiments):
Professor Paul Zak, from Claremont Graduate University in California, cites a fascinating study in which two daycare centres adopted different approaches with late parents. One centre merely reminded parents that turning up late inconvenienced the teacher, who had to stay behind. The other centre imposed a $3 fine. After several weeks, the “penalty” centre was reporting more latecomers. The theory is that the fine somehow replaced the social undesirability of inconveniencing the teacher. Zak suggests that penalties and regulations “may crowd out the good behaviour that most people, most of the time, follow.”
Over at her place, ninme gives some other examples:
I’ve run into a lot of grownups that feel that way, and bugger the consequences. They’ll just pay the fine. Whether it’s watering a huge lawn during a drought, getting parking tickets rather than buying a parking pass, etc…
And so on down to the conclusion that for a good time, call off the regulation:
So we need a compromise — a skeleton of formal regulation to stop the sociopaths taking advantage, fleshed out with plenty of self-regulation. Thus, we have a neat scientific explanation of why moderately regulated economies are the most creative and thus the wealthiest.But I'm mostly posting this because this comment from one of her regular visitors amused me:
I wish people would stop saying 'regulation' as if the only type is government regulation. In fact the whole of a market economy is highly regulated - self -regulated. That's the point Adam Smith is trying to make.
It is this self-regulation which is the skeleton, the muscles, the skin - the whole freaking thing. Goverment regulation is the appendix. No one is exactly sure what it does, but it can get dangerously inflamed and threaten the whole body at times.
