Sunday, February 01, 2009

The long smoke of MUI 'fatwa'

I penned an op-ed in Jakarta Post (click here) on MUI fatwa.

The go-to model to analysed addictive behavior is the one developed (click here; JSTOR subcribtion required) by Gary S Becker, a Nobel Prize winner and briallant economist. A more recent model by O'Donogue and Rabin is worth a look (click here)

Interesting how religion could play part (or could they?) in policy debate.
Even more so since there is no punishment (or excommunication) for disobeying the fatwa in the way MUI structured in Indonesia. It is more of moral suasion than a directive. Would be interesting to analyzed the impact on cigarette sales figure

The responds to more article on the comment section of Jakarta Post website are quite lengthy and passionate. Still thinking whether to respond and in what tone. Any suggestions?


Anonymous said...

The Real price of Everything By Michael Lewis

Consist of : An Introduction by Michel Lewis, Adam Smith (An introduction to his life and work, An inquiry into the nature and causes of the wealth of nations),Thomas Robert Malthus (An introduction to his life and work, An essay on the principle of population), David Ricardo (An introduction to his life and work, Principles of political Economy and taxation ) , Charles Mackay (An introduction to his life and work , Selection from Memoirs of Extraordinary popular delusions and The Madness of crowds), Thorstein Veblen (An introduction to his life and work , The theory of the leisure class: An economic study of institutions), JM Keynes (An introduction to his life and work,The general theory of employment,interest and money)

Adam Smith: An introduction to his life and work
At first blush, Smith’s classic is a simple paen to the benefits of commerce: between neigbours,between town and country,between nations. The Adam Smith of the early chapters of The Wealth of Nations appears to believe that anything that interferes with this commerce – taxes,subsidies – does more harm than good.

But there is another Adam Smith who believe that self-interest is not the sole basis of human behaviour, and who leans toward the need for some visible hand to take hold of the market and improve it. This is the Adam Smith who wrote in The Theory of the Moral Sentiments of the importance of man’s natural sympathy for his fellow man to regulate his selfish instincts. This Adam Smith gets less attention than the other mainly,I think, because people see in Adam Smith what they want to, but also because The Wealth of Nations is a very long book that most readers put down after they get what they take to be the general idea of it. The passage about the pin factory comes on page 2 of the original text,which helps to account for its fame. Somewhere around page 826 of that edition, Smith offers up a gloomier view of his pin factory, as a soul-destroying enterprise calling for government interference. “The man whose whole life is spent in performing a few simple operations,” he writes,”…generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous,noble,or tender sentiment,and consequently of forming any just judgment concerning many even of ordinary duties of private life.” And off he goes, listing the many debasements inflicted upon the soul of ordinary worker by an efficient market economy, until he concludes that “ in every improved and civilized society, this is the state into which…the great body of the people must necessarily fall, unless government takes some pains to prevent it.”

Economics,as I was eventually taught it, has no serious place for such value judgments. Economics is a science whose job it is generate falsifiable propositions. But this isn’t Adam Smith’s economics; there are a great many shoulds in Adam Smith, and most of them concern the need to stop people from doing what they are inclined to do. The government should do something to offset the demoralizing effects of the market force; young men shouldn’t be allowed to travel abroad; the rich should pay more than the poor in taxes; princes shouldn’t engage in business, as they’re inept at it; and on and on.

fajar said...

salam kenal