One of the big and (therefore?) overlooked questions in social affairs is: what's endogenous? I say this because Noah has pointed out that people's preferences are sensitive to how choices are framed. This contradicts standard neoclassical economics, which takes them as given, or exogenous.
In truth, Noah is only touching the tip of an iceberg here. A lot things which are sometimes assumed to be exogenous exemplifications of personal character might in fact be the endogenous product of situations. For example:
- Preferences adapt to circumstances. Although we associate this idea with Jon Elster's classic book, it was expressed earlier by G. K. Chesterton: "No man demands what he desires; each man demands what he fancies he can get." For example, if we see an unemployed man not looking hard for work, should we believe he is lazy, or should we instead suspect that his lack of job seaech is because he's reduced his preferences to fit the fact that there's no work available?
- People live up or down to their stereotypes. For example, women who are primed in such a way as to increase the salience of their gender become less competitive and select into "feminine" careers relative to women who are not so primed. If women earn less than men because of their career paths, should we thus assume this reflects women's exogenously differently preferences, or rather endogenous social conditioning?
- Confidence is endogenous; the well-paid become more confident. This can lead to further inequality, as the confident push for promotions and make risky investments, whilst others lack the confidence to be ambitious.
- Morality is endogenous; the poor can't afford moral principles, whilst the rich don't need them. So moral codes are stronger among the middling sorts.
All this corroborates Marx:
The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.
There's another example of endogeneity though - benefit fraud.Justina Fischer and Benno Torgler show that people's willingness to claim benefits they are not entitled to is higher the greater is inequality. There's a simple reason for this. We are all inclined to act better towards people like ourselves than towards others. The more inegalitarian a society is, the more likely claimants are to regard taxpayers as "others", and so the more willing they'll be to fiddle them.
To the extent that this is the case, complaining about benefit fraud is mistaking the symptom for the disease.
Now, rightists might reply here that even if benefit fraud is endogenous, it is still morally wrong and thus to be deprecated.
This, however, runs into a problem. There's something else that's endogenous - support for inequality. Rightists who overlook the endogeneity of benefit fraud can therefore hardly complain when leftists say that inequality is wrong even though it is tolerated by the public. And, I suppose, vice versa.
Perhaps there's a good reason why the issue of endogenous behaviour is ignored.