Economics: Micro Conservatives, Macro Liberals

I’m starting to understand why econ. conservatives tend to think in micro-econ. terms and econ. liberals tend to think in macro-econ. terms. On the one hand, talking about individual actors complements an individualistic worldview, and talking about broad, systemic effects complements a worldview which includes groups and systems. So the perspectives of micro- and macro- are intuitively obvious to conservatives and liberals, respectively.

On the other hand, the recommendations of micro- and macro- also tend to match conservatives’ and liberals’ ideas of what successful human activity looks like. In micro-econ., government interference tends to get in the way of the efficiency of rational, individual actors, so laissez faire is usually the logical recommendation of a micro-economic analysis. Example: health codes merely get in the way of small business owners, who are already incentivized to keep their customers from getting food poisoning. Macro-economic analyses tend to notice the ways in which rational individual decisions can, when aggregated, lead to irrational and damaging outcomes. The logical recommendation of such an analysis is to create social conventions which discourage such damaging aggregate outcomes. Example: health codes give firms an additional incentive (i.e. financial penalties) to practice food-safety behaviors; even though this causes firms to be less efficient in some instances, it also creates a net-decrease in food-related illness.

So, both in terms of worldview and in terms of recommendations, micro-econ. tends to fit comfortably within an economically conservative worldview, while macro-econ. tends to fit comfortably within an economically liberal worldview. Micro- turns out to be about Me, while macro- turns out to be about Us.


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