Saturday, December 04, 2004

Two more elements of ideology

1. Self-sufficiency. The idea that providing everything you need for yourself is somehow better or more satisfying in and of itself than providing some goods to the marketplace and trading for others. This idea underlies economic nationalism and "back-to-the-land" movements.

2. Interdependency of utility: standard economic models usually suppose a complete indifference to the choices and lifestyles of others: your utility is derived solely from your own consumption. But this neglects essential human emotions like compassion and envy. Sometimes our happiness depends on the happiness and well being of others (especially the poor, or our families). At other times, our sense of how well off we are depends not just on what we consume, but on what OTHER people are consuming. ("Keeping up with the Joneses"). We feel bad if we are lagging behind others, and we feel good if we have our "status goods". After all, do you ever wonder what kind of idiot would pay $10k for a Rolex watch? As time-keeping appliances they can't possibly be worth $10k, but as devices to communicate how rich and successful the wearer is relative to others, they are evidently worth every penny.

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