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The problem is that the economy is often seen as more than a mechanism for efficient allocation and transfer of resources: for many, it's also a source and enfo

The problem is that the economy is often seen as more than a mechanism for efficient allocation and transfer of resources: for many, it's also a source and enforcer of moral order. "People who work hard and play by the rules should have a shot at success. People who don't work shouldn't be given handouts. Corporations who misbehave shouldn't be bailed out, because they're just incented to misbehave again. We should drug test welfare recipients even though it ultimately costs us more than it saves us, because drug addicts shouldn't get welfare." etc etc etc.

Houshalter 13y ago
I'm not saying it's true, but in all of those cases it intuitively seems like a bad idea to encourage/not discourage those behaviors. Giving people handouts might give them an incentive not to work, giving corporations handouts lessens the incentive to not fail (and keeps the competitors which did better from gaining a larger market share), refusing drug addicts welfare might encourage them to get help, etc. I'm not saying these things are necessarily true, but it certainly seems reasonable if you don't know otherwise. The point being that it's not because people necessarily see these things as moral issues, but just possible incentive problems.