I'm really interested in microeconomies and making them work well. In the US and elsewhere there are really interesting microeconomies. Sometimes, it gets really interesting when the government supports it. Here in Brazil there is a food and everything else market. In the middle of this area is probably one of the most lively, interesting, family-oriented places I have seen to drink a beer and eat food at night. It's right on the water and there is probably a 5000 square foot area with 5*5 boxes with 2 sides of counter in groups of 4, perfectly spaced throughout. Behind each box is usually a cook and maybe a family member as dishwasher. Customers sit at the counter and the place is packed. Ships are nearby and during the day it's a relaxed, animated place to watch futbol. Now, I can write a whole book on what I think a family or community oriented place of FUN is, but suffice it to say that you'd raise your eyebrows at the engagement level here. On the microeconomies side what is interesting is this -- government and/or the cultural heritage helped to build this area (unverified, but it doesn't matter). It's set up so that everyone can have their little restaurant, they benefit from being in the center of it all, and although they're all selling similar food, they each have to share the total number of customers. Yet, there is room for diversity and real competition -- who makes the better fish, who has lower prices? Sometimes, these models are boring because everyone sells the same thing. Further, what's interesting is that everyone has a chance of being an entrepeneur and to grow their total net worth. I don't know how practical it is to get rich off of a restaurant like that but if you think about it from the other end - poor people without these kinds of set ups in similar gdp countries are more likely to be hawking wares on the street. This kind of set up seems like good infrastructure for setting up the poor to be slightly better off. The other interesting side is the diversity and creativity that is forced from this situation.

The point really is that to get people out of poverty, some smarter economists and urban policy makers (I studied urban planning) need to think about infrastructure that build on people's relationships and give everyone a fighting chance. That's what healthcare is, that's what headstart is -- it gave me a fighting chance. The secret to understanding how to have a better world is not economics per se, but more behavioral economics and political economy issues. How do you make it so that each person is inspired to do something with their lives and then do it? Then, how to end the corruption between people who have made it. I have a few answers to the first and the second...

From Stephanomics, a recap of a radio program with political philosopher Michael Sandel.

"I was interested in the economists [in the Obama Administration] who were making this critique. They said it's terribly greedy. What I wish the journalists had asked them was is there a distinction between greed and self-interest, do you think?

Strictly speaking, no mainstream economist would recognise any such distinction, and yet for political purposes they attack greed as if it's a thing independent of self-interest... Citizens generally who looked at this - at the bailouts and the bonuses and been outraged - they believe there is a difference between greed and self-interest. But there's no way of capturing that intuition in economic analysis because, according to economic analysis, in any case one is deploying self-interest or greed, which is simply self-interest squared, to serve a social purpose. That's what the economic model says. And you have to introduce some normative assumption about what is excessive pursuit of gain in order to make sense of greed as a vice independent of the self-interest that all of the economic models presuppose. So I think there are intuitions in everyday life that people have that the economic models simply don't capture, and greed is one of them."

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