Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, March 8, 2016

AI Summary. Moral self-licensing describes a psychological pattern in which past good deeds lead people to feel justified in later engaging in unethical or problematic behavior, observed in domains including political correctness, prosocial behavior, and consumer choice. An open question is whether good deeds reframe subsequent bad ones as moral credentials or simply offset them as moral credits.

Anna Merritt, Daniel Effron and Benoit Monin Social and Personality Psychological Compass
Date Posted:
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Moral self-licensing, a psychological phenomenon where past good deeds allow individuals to engage in unethical behaviors, has significant implications for economic decision-making & policy.

Do past good deeds make people feel licensed to behave badly?

Core argument: Moral self-licensing describes a psychological pattern in which past good deeds lead individuals to engage in unethical or problematic behavior, with implications for economic decision-making and policy across political correctness, prosocial behavior, and consumer choice.

Moral self-licensing, a psychological phenomenon where past good deeds allow individuals to engage in unethical or problematic behaviors, has significant implications for economic decision-making and policy. This effect is observed across various domains, including political correctness, prosocial behavior, and consumer choice. For instance, consumers who make environmentally friendly purchases may feel justified in later buying luxury items, impacting market demand and sustainability efforts. Understanding this behavior is crucial for policymakers aiming to design effective interventions that promote ethical consumption and corporate responsibility. The challenge lies in determining whether good deeds reframe bad ones as moral credentials or merely balance them out as moral credits. Addressing these questions can help refine strategies to mitigate the negative impacts of moral self-licensing on economic systems and societal norms.

Takeaways by Macro Roundup® AI

  1. Moral self-licensing describes a psychological pattern in which past good deeds lead individuals to engage in unethical or problematic behavior, with implications for economic decision-making and policy across political correctness, prosocial behavior, and consumer choice.
  2. Consumers who make environmentally friendly purchases may feel justified in later buying luxury items, affecting market demand and sustainability efforts.
  3. An unresolved question is whether good deeds reframe subsequent bad ones as moral credentials or simply offset them as moral credits, a distinction that bears on designing interventions promoting ethical consumption and corporate responsibility.

“…Past good deeds can liberate individuals to engage in behaviors that are immoral, unethical, or otherwise problematic, behaviors that they would otherwise avoid for fear of feeling or appearing immoral. We review research on this moral self‐licensing effect in the domains of political correctness, prosocial behavior, and consumer choice. We also discuss remaining theoretical tensions in the literature: Do good deeds reframe bad deeds (moral credentials) or merely balance them out (moral credits)? When does past behavior liberate and when does it constrain? Is self‐licensing primarily for others’ benefit (self‐presentational) or is it also a way for people to reassure themselves that they are moral people? Finally, we propose avenues for future research that could begin to address these unanswered questions….”

Merritt, Anna, Daniel Effron and Benoit Monin, "Moral Self-Licensing: When Being Good Frees Us to Be Bad,"Social and Personality Psychological Compass, 2010. Available at:http://www-psych.stanford.edu/~monin/papers/Merritt,%20Effron%20%26%20Monin%202010%20Compass%20on%20Moral%20Licensing.pdf

Thursday, March 10, 2016

AI Summary. Elite defenses of globalization understate the distributional effects that standard trade models predict, and estimated gains from hyperglobalization amount to less than 5% of world GDP over a generation. The assumption that governments will redistribute income so that trade benefits everyone is undermined by political opposition to such redistribution.

Paul Krugman Krugman Blog
Date Posted:
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The elite defense of globalization often involves misleading claims, downplaying distributional effects & exaggerating benefits. Gains from hyperglobalization are less than 5% of world GDP over a generation.

Do elite defenses of globalization overstate its gains and ignore distribution?

Core argument: The purported gains from hyperglobalization amount to less than 5% of world GDP over a generation, a limited economic impact.

The elite defense of globalization often involves misleading claims, such as the inevitability of trade liberalization and exaggerated benefits, while downplaying significant distributional effects predicted by standard models. The purported gains from hyperglobalization are less than 5% of world GDP over a generation, highlighting the limited economic impact. Additionally, the assumption that governments can redistribute income to ensure universal benefits is undermined by political ideologies opposing such measures. This skepticism towards ever-freer trade resonates with voters, suggesting a growing political traction for protectionist sentiments.

Takeaways by Macro Roundup® AI

  1. The purported gains from hyperglobalization amount to less than 5% of world GDP over a generation, a limited economic impact.
  2. The elite defense of globalization rests on misleading claims, including the inevitability of trade liberalization and exaggerated benefits, while downplaying the significant distributional effects that standard trade models predict.
  3. The assumption that governments will redistribute income so that trade benefits everyone is undermined by political ideologies opposed to such measures, and voter skepticism toward ever-freer trade gives protectionist sentiment political traction.

"....But it’s also true that much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict. I hope, by the way, that I haven’t done any of that;I think I’ve always been clear that the gains from globalization aren’t all that (here’s a back-of-the-envelope on the gains from hyperglobalization — only part of which can be attributed to policy — that is less than 5 percent of world GDP over a generation); and I think I’ve never assumed away the income distribution effects.....So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don’t know exactly what form it’s taking...."

Krugman, Paul, "A Protectionist Moment?" Krugman Blog, March 9, 2016. Available at:http://krugman.blogs.nytimes.com/2016/03/09/a-protectionist-moment/

A Protectionist Moment?

Busy with real life, but yes, I know what happened in the primaries yesterday. Triumph for Trump, and big upset for Sanders — although it’s still very hard to see how he can catch Clinton. Anyway, a few thoughts, not about the horserace but about some deeper currents.

The Sanders win defied all the polls, and nobody really knows why. But a widespread guess is that his attacks on trade agreements resonated with a broader audience than his attacks on Wall Street; and this message was especially powerful in Michigan, the former auto superpower. And while I hate attempts to claim symmetry between the parties — Trump is trying to become America’s Mussolini, Sanders at worst America’s Michael Foot — Trump has been tilling some of the same ground. So here’s the question: is the backlash against globalization finally getting real political traction?

You do want to be careful about announcing a political moment, given how many such proclamations turn out to be ludicrous. Remember the libertarian moment? The reformocon moment? Still, a protectionist backlash, like an immigration backlash, is one of those things where the puzzle has been how long it was in coming. And maybe the time is now.

The truth is that if Sanders were to make it to the White House, he would find it very hard to do anything much about globalization — not because it’s technically or economically impossible, but because the moment he looked into actually tearing up existing trade agreements the diplomatic, foreign-policy costs would be overwhelmingly obvious. In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he’s never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn’t and can’t.

But it’s also true that much of the elite defense of globalization is basically dishonest: false claims of inevitability, scare tactics (protectionism causes depressions!), vastly exaggerated claims for the benefits of trade liberalization and the costs of protection, hand-waving away the large distributional effects that are what standard models actually predict. I hope, by the way, that I haven’t done any of that; I think I’ve always been clear that the gains from globalization aren’t all that (here’s a back-of-the-envelope on the gains from hyperglobalization — only part of which can be attributed to policy — that is less than 5 percent of world GDP over a generation); and I think I’ve never assumed away the income distribution effects.

Furthermore, as Mark Kleiman sagely observes, the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins — but we now have an ideology utterly opposed to such redistribution in full control of one party, and with blocking power against anything but a minor move in that direction by the other.

So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don’t know exactly what form it’s taking.

Ripping up the trade agreements we already have would, again, be a mess, and I would say that Sanders is engaged in a bit of a scam himself in even hinting that he could do such a thing. Trump might actually do it, but only as part of a reign of destruction on many fronts.

But it is fair to say that the case for more trade agreements — including TPP, which hasn’t happened yet — is very, very weak. And if a progressive makes it to the White House, she should devote no political capital whatsoever to such things.