Economists love to talk about incentives, but the bottom line is that people hate being controlled or manipulated, even when done through voluntary institutions. This is one of the most important tensions in capitalism.
Interpretation
People resist control and manipulation, even when they agree to it, which presents a challenge within capitalist systems.
In this quote, Tyler Cowen highlights a fundamental contradiction within capitalism: while economists often analyze behavior through the lens of incentives, the reality is that individuals generally dislike being controlled, even when the control is presented in voluntary forms. This tension reveals a critical aspect of human nature and economic interaction, emphasizing that autonomy is a strong motivator, which complicates the efficacy of certain economic incentives and institutions.
In practice
This quote can be used in a discussion on economic policies and the importance of autonomy in decision-making.
If you and your skills are a complement to the computer, your wage and labor market prospects are likely to be cheery. If your skills do not complement the computer, you may want to address that mismatch. Ever more people are starting to fall on one side of the divide or the other. That's why 'average is over.'
The key questions will be: Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? Worst of all, are you competing against the computer?
The raw fact is that every successful example of economic development this past century ... has taken place via globalization.
I'm just saying that if you understand how the economic machine works, it just works like a machine. There are cause-effect relationships.
Actually, in my advanced, high-falutin' frontier economics, I often work with what I define as 'money metric utility,' and I ask people, 'Do you really want that? What are you willing to pay for that?'
What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are.
What we know about the global financial crisis is that we don't know very much.
This long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
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