Human Action Observed

People are always proposing Utopian dreams, but those dreams fail because of human behavior. While it may be interesting to speculate about why people behave as they do, it’s more important to simply understand how they behave, even if you’re not sure why. To that end, some simple rules of human behavior are helpful in looking at the various ideas for overhauling financial regulation in this nation. Lawrence Lindsey has taken a stab at it. I would have said it differently, to whit:

  1. All trends are pro-cyclical – they continue until they stop!
  2. Politicians are highly responsive to trends.
  3. Institutions act to continue their own existence.

This all flows from the core notion of human action: people act to improve their situation in life. What more do you need to know?


One response to this post.

  1. Posted by jsalvati on April 5, 2008 at 8:15 pm

    Do institutions act to continue their existence? Some do for sure, but is this a general feature?


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