A recent article by Tim Worstall at Tech Central Station reminded me of one of Prof. Glen Whitman’s lessons from the IHS seminar I attended last month. The article reiterates Glen’s “two things” about economics. All you really need to know about economics is 1) Incentive matter and 2) There’s no such thing as a free lunch. Everything else is either BS or drawn from those two core principles.
In Glen’s original article about the two things, he requests that everyone defines the two things that’s needed for their area of expertise. With economics already covered, I turned to my other major from college: politics. The two rules of politics are 1) Incentives matter, but winning is the only one that counts and 2) There’s no such thing as a free lunch but saying otherwise will help you win.
Originally, I wrote it as a joke. But considering President Bush’s obsession with cutting taxes while inflating the government bureaucracy, John Kerry’s popular pledge to raise the minimum wage and the fact that virtually every politician’s celebrated promises are also economically backwards, there might be more truth to the two things than I thought. I believe every challenge can be overcome and every problem has a solution but if the incentive structure of politics is truly so backwards, how can we feasibly correct it?