Cafe Hayek — where orders emerge

Cafe Hayek — where orders emerge: "Second, I deny that behavioral economics strengthens the case for government regulation.  Indeed, I believe that it weakens that case.  Because the regulators have the same psychological foibles as the regulatees – yet face far less direct feedback on their decisions than do those whom they regulate – turning more decision-making power over to government increases the frequency of human error and amplifies its ill-effects.  Markets keep those errors less numerous and their effects more confined."

'via Blog this'

I was in a conversation recently where the conversant was defending mayor Bloomberg's restriction on soda size. The conversation went something like this (paraphrased heavily):

me: " People should be free to engage in activities, even stupid activities, when the consequences of those activities affect only themselves. Drinking big sodas is exactly that kind of activity. If you don't believe that people should be free to drink big sodas you don't believe in freedom. There is no activity where the consequences of the individual's decision are more thoroughly internalized to the individual."

her: "I agree that people should be free, but I don't believe people are rational. You argue from the premise that people are perfectly rational. They are not; they act in impulsive ways that hurt themselves. Government regulation corrects for this irrationality." (I think her implicit argument was that drinking big sodas was an irrational activity because it hurt the drinker, and government is correcting the irrational behavior in this case.)

me: "I agree people sometimes act irrationally. But why should we believe that the people in government are any more rational? they, after all, are people, too.

her: " . . ."

We went through this twice. I'd like to say I made some progress, but I don't think so, and she changed the subject.