Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, February 25, 2005

Can We Buy Off Our Enemies?

Probably not. If we tried, we would just create an incentive for more people to become our enemies.

Tom Hanna quotes favourably from Alex Tabarrok at the Marginal Revolution that the cost of buying and freeing the slaves was considerably less than the cost of waging the War Between the States. But that is a lot different from buying off the Syrians or the Sunnis.

Direct per capita costs for north were $140. Cost of the north buying and releasing the slaves would have been $90 per capita. Direct and indirect costs to the liberated land, the south, totaled $490 per capita.

Fast forward to 2005:

Cost to give every Iraqi citizen 5 years income (based on pre-war GDP): $189.6 billion. I suspect that even the much feared and overhyped Sunni population might settle their asses down and run the terrorists out themselves if we just paid them well enough.

Cost to buy off all Syrian troops in Lebanon with $1 million each. $16 billion.


My conclusion: Failing to buy off one's enemies? Priceless.

I'm sure Tom isn't serious. Offering money to buy off our enemies would just create an incentive for others to become our enemies. North Korea has been playing this game for years, and Iran is playing it with everyone these days.

Analogy: Trying to bribe a kid to stop having tantrums just encourages the kid to have more tantrums in the future.

People respond to incentives.
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