Golden Rule = Knowledge problem
Mao’s China
· During the great leap forward, more people starved than previously thought
· 10-20 million deaths? More about 45 millions people died unnecessarily from starvation
Our culture doesn’t elevate…?
· Self interested actions in a market setting are frowned upon, but things like spending more time for yourself or working out everyone agrees are good things
· Rizzo teaches us economic which is a good service
· A person who goes jogging is virtuous but who sells the jogger the shoes is evil
Reciprocal Altruism
ex Tony needs a kidney, Tina anonymously donates her kidney
· 10 years later: Tina struggles with her mortgage, Tony randomly gave her $20,000
· If you shrink the distance and time and place, two altruistic actions turn into Tony buying Tina’s kidney which is “morally horrific”
· Which societies are the greediest? Wall Street made up of corporation, when they buy and sell they do it greedily
· We don’t view extreme couponing as greedy though, or Lebron James who sells his labor for a huge price
o Its not just selfishness that motivates people
o We’re motivated by love of family, motivated by wanting to do a good job, we don’t want to be bored, we’re anxious about how other people perceive us, etc…
Self interest is to pursue the projects that interest you
· Mother Teresa was very self interested bc she wanted to pass along a message of peace, so was Jack the Ripper
The Golden Rule doesn’t work in a big society or with the knowledge problem
ex: The bus shouldn’t stop for Rizzo
· What decisions do the bus driver have to make to make an objectively good choice?
o Figure out what Rizzo’s modus operandi is? Is he going to save someone or is he going to bomb a bank? How would the bus driver know?
o The people sitting on the bus matter, you will be delaying all those people, Our behavior today changes our long run incentives (waiting first 5 minutes of lecture ends up wasting 2.5 lectures total)
§ Lateness in Ecuador caused 4% of GDP per year!
o Must follow the rule of law
o The ethics of a market system must be more than intimate system
o Silver rule= Do not do to others what you would consider unfair or unjust if they did it to you
Imagine you have a struggling business, you have marginally productive workers like interns. Should the CEO let you go or should he let you stay?
ú Its okay to be charitable with your own money, but impermissible to be charitable with someone elses money
Running a good business requires that you use “soft” values 
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