The decision of Wesley Clark to forego Iowa for New Hampshire is the hook for David Leonhardt to discuss the economics of intertemporal choice (”A Penny Saved Might Just Cost You an Election“—NYT). As with all such popular treatments of mainstream economic theory, the piece can only make an average reader think: is this really what economists do all day? Sample:
Traditional economic theory held that people simply acted in their best interest, saving what they needed and spending the rest. But a mountain of recent research has proved what most non-economists already knew: it’s hard to say no to a piece of cake sitting in front of you. Even if you know that you will later regret eating the cake, you might dig in. Or even if you had no cares about your waistline and someone appeared magically by your side to offer you two slices of cake tomorrow in exchange for the one slice sitting in front of you, you might turn the person down.
Who would know that the Austrians long ago examined issues of time passage, uncertainty, subjective values, and time preference, and what these ideas imply for a huge range of economic issues--and not just examining them on an ad hoc basis but in a logically integrated way as part of an overarching theory? Here’s a great page to keep in a permanent bookmark.
