Jun 15, 2013

My reading

I am reading The Odyssey, which is a fascinating tale in itself, but it is also interesting to economists, and institutional economists in particular, for the way in which Ulysses prepares himself and his men to avoid the temptation of following the enchanting songs of the sirens, which would lead them all to a sure dead. Knowing in advance of the danger Ulysses makes his men to tie him up to the mast of the ship, and to fill their ears with wax. 

For institutional economics the story is useful because it suggests that to avoid temptations such as those that come with power, like accepting bribes and engaging in corruption, people can design mechanisms in advance to elude falling into those practices. People can tie up themselves to a mast, so to speak. More generally, the same argument can be used to understand constitutions. 

What I find interesting, however, is that after successfully avoiding the sirens, another temptation comes and Ulysses and their men were not able to generate the mechanisms to protect themselves. When visiting what seems to be a paradisiac island, even though Ulysses asks his men not to kill and eat the cattle of the Sun, they do. As a revenge the Sun asks the gods to kill them all, and only Ulysses escapes. 

Reason trumps seduction in the first case, but hunger trumps reason in the second.   

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