A definition of paternalism
February 26th, 2010Just read Mankiw’s new paper and this occurred to me:
I’m definitely a jerk if I don’t have other’s outcomes in my utility function. I’m a paternalist if I have other people’s consumption in my utility function, not their utility.
This is why a paternalist can give you healthcare instead of cash because your consumption of healthcare matters to him more than your happiness/contentedness/life satisfaction/etc.
Interestingly, most folks are jerks with respect to foreigners, they’re paternalist with respect to other anonymous citizens and they’re neither with respect to their close friends and family. I can’t find reason in this mix of preferences.
February 26th, 2010 at 5:36 pm
One simple explanation is that interdependence depends on some measure of closeness. Foreigner’s aren’t similar at all, hence I don’t care about them very much. Strangers are only similar if they value the same things as I do (e.g. healthcare over gambling). Friends are close to me regardless of their consumption patterns.
February 26th, 2010 at 6:22 pm
Why would closeness change whether or not I care about the other person’s utility or their consumption pattern?
February 26th, 2010 at 8:26 pm
One reason for the ambivalence toward close friends and family — we surround ourselves with people who we think share our values. If you value something, youn can assume that your friend values that thing, as well.
Thus, we are less paternal with people we have intimate relationships with because we expect them to have the very similar utility function to our own, and if (even in our imagination) that is true, there is no need to govern another person’s consumption function — as we already “know” what it is.
As far as internationally goes, this is obviously a situation where people don’t know how trade works.
February 26th, 2010 at 9:55 pm
In other words, we’re actually all paternalists, but with our close friends we don’t look like we are.
February 26th, 2010 at 10:36 pm
People certainly don’t want to signal to those close to them that we think their choices are beneath ours. Parents do this to their kids because they are responsible for paternalism toward them…but other interactions are big deals, and often place a high amount of stress on relationships (even if for a short time, but possibly insurmountable). Think drug interventions.
February 26th, 2010 at 11:14 pm
I thought your first post in a few weeks would be on the expiring unemployment insurance benefits:
http://www.nytimes.com/2010/02/27/us/27cong.html
March 12th, 2010 at 4:01 pm
Let’s think about two axes here. On the x axis, put altruism (the weight my assessment of your utility has in my utility function) and on the y axis, put respect (if I assess your situation using my utility function, respect = 0, if I assess your situation using what I think is your utility function, put respect =1, and interpolate between these two).
It seems obvious why altruism decreases with distance/dissimilarity. I would submit that respect is more subtle.
1) Proximity decreases respect, as I may suffer alleged externalities (real, pecuniary, or psychic) from your choices, so I have a selfish motive to override your preferences.
2) Proximity also increases respect, because your internal emotional life becomes more real and vivid to me, instead of a highly abstracted model.