Saturday, September 18, 2010

Stealing Wheelbarrows

There is an anecdote told by Slavo Zizek about a factory boss who was certain that one of his workers was stealing something from the factory. He hires some detectives who monitor the particular worker. Every day at closing, they see the worker leaving the factory with his empty wheelbarrow and, despite inspections, they never pin anything on the guy. Eventually, the detectives figure out that the worker is stealing wheelbarrows from the factory.

I have been thinking about this during the week as the vast majority of Irish public attention was dominated by a story about our Taoiseach (prime minister) sounding hoarse on an early morning radio interview (the implication being he had a hangover from a political social event the night before). This comes at a time when staggering sums of money are being transferred from the state to private banking institutions. Increasingly, behavioural economics is beginning to look at coarse thinking and attention processes as underlying distortions in political markets. It is worth thinking about how media cycles are working in the current recession in Ireland and the extent to which they are helping to draw attention to the major issues that will affect our welfare or conversely crowding out critical thought and attention to these issues.

As well as attention, the media is used as a tool of persuasion for different interest groups, again something that is being looked at more and more by people in behavioural economics research (see e.g. Shleifer's IDEAS page). Karl Whelan on irisheconomy has been doing a good job throughout the last two years of pointing out how plainly absurd arguments for large scale policy are trotted out routinely in the course of this financial crisis. One line of inquiry that needs to be developed further in the Irish case is how arguments for massive transfers from the state to private institutions are framed and the techniques used by proponents to hide huge damage in plain sight. An analysis of the stated positions of various interest groups on the Anglo bailout would be a good place to start. In general, the extent to which readers can gain access to unbiased news stories is discussed in this paper by Shliefer and Mullainathan.

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