What level of cynicism is optimal?
What a fascinating question to be asked, and I have had a lot of fun thinking about it. Here are my notes:
- An absence of cynicism is certainly not ideal, and although the idea is very tempting to me, neither should one be exclusively cynical.
- When I say that the idea is very tempting, I am not joking. Here is the definition of cynicism, taken from Google: “an inclination to believe that people are motivated purely by self-interest; scepticism.”
People respond to their incentives, in other words. That’s one of the building blocks of economic theory!
- But this is one of those cases where I think we economists would do well to think a little bit about philosophical questions, before embarking on economic theory. What are, and what should be, a person’s incentives? These are two very different questions, and economics spends far too much time on the first, and not enough on the latter.
- So here’s a first pass answer: given a person’s incentives, one should be a cynic. For example, politicians maximize votes. They don’t do what’s best for folks in the long run. Managers maximize short run profits. And so on.
- But one shouldn’t be a cynic, at all, about working towards changing incentives. Giving up on expecting politicians to do the “right” thing, given the status quo, is fine. Giving up on trying to come up with a system that incentivizes politicians better than the status quo wouldn’t be fine, as far as I am concerned.
- But that necessarily implies that one should be a very good (and eternal) student of getting the “right” incentives in place.
- And being cynical about that would be really and truly depressing 🙂