Are People Stupid?

Yesterday I had lunch with Jon, an old friend from high school. Like myself, Jon majored in economics at a small liberal arts college (his was Grinnell). Unlike myself, Jon's first rule of economics is "people are stupid." This of course generates a great deal of debate between us.

I asked Jon what his evidence is and he went on to cite common actions that do not match with incentives. People smoke. People don't excercise. People acrue debt. People are lazy. I pointed out that he's making normative statements--just because he thinks the costs of smoking outweigh the benefits doesn't mean it does for the smoker. I also reminded him that mistakes are not the same as stupidity. If so, we are all morons.

Strange as it sounds, I'd venture to say people think everyone else is dumb because everyone is actually smart. Because people are clever, we rarely think twice of it when they act as such. We don't bat an eye when people hunt down good prices or flock to sales. We are more angry than amazed when people play office politics to get a promotion. We say nothing when fast food employees optimize their productivity in a way we never before considered. We are not suprised when crimminals outsmart detectives. We shrugged our shoulders when people all over the world took advantage of Napster. And we're not astounded when those same people stopped using it the moment you had to pay for it.

People are smart in the same way lawns are green. Every so often there's a patch, nay a leaf, of brown grass. It's obvious even to the causal passerby. But it would be a mistake to focus on that one instance and then conclude the whole lawn is dead.