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Megan McArdle

Megan McArdle - Megan McArdle is a senior editor for The Atlantic who writes about business and economics. She has worked at three start-ups, a consulting firm, an investment bank, a disaster recovery firm at Ground Zero, and The Economist. More

Megan was born and raised on the Upper West Side of Manhattan, and yes, she does enjoy her lattes, as well as the occasional extra-dry skim-milk cappuccino. Her checkered work history includes three start-ups, four years as a technology project manager for a boutique consulting firm, a summer as an associate at an investment bank, and a year spent as sort of an executive copy girl for one of the disaster-recovery firms at Ground Zero … all before the age of 30.

While working at Ground Zero, Megan started Live From the WTC, a blog focused on economics, business, and cooking. She may or may not have been the first major economics blogger, depending on whether we are allowed to throw outlying variables such as Brad Delong out of the set. From there it was but a few steps down the slippery slope to freelance journalism. She has worked in various capacities for The Economist, where she wrote about economics and oversaw the founding of Free Exchange, the magazine's economics blog. She has also maintained her own blog, Asymmetrical Information, which moved to The Atlantic, along with its owner, in August 2007.

Megan holds a bachelor's degree in English literature from the University of Pennsylvania and an M.B.A. from the University of Chicago. After a lifetime as a New Yorker, she now resides in northwest Washington, D.C., where she is still trying to figure out what one does with an apartment larger than 400 square feet.

Back to morality

By Megan McArdle
Oct 30 2007, 5:01 PM ET Comment

I know, I'm flogging a dead horse. Fly, Flicka! Fly, damn you!

It boils down the fact that I think either exit is the proper moral response to a failing system, or it isn't. It can't be good for some people, but not for others.

Many people trying to convince me that suburban liberal parents against vouchers are not gigantic, honking hypocrites, are groping towards an economic concept. Conceding that they think the school environment does make a difference (otherwise they wouldn't have moved to a good district), they say that it's okay to pull your kid out of a system that's failing, because unless other parents stay, yours won't do any good. But its still okay to bar those who cannot afford to escape on their own means from using government means to do so, because the system will collapse.

Let me give you a word for the concept you're expressing: economists (and other sorts of social scientists) call it a collective action problem. It's a problem that arises when we can all be made better off by doing something, but only if we all do it at once. If only some people participate, the system breaks down.

One classic example is casual Fridays. Say you work at a competitive workplace where everyone tries to dress up as much as possible in order to impress their superiors. Everyone would be better off if the uniform were converted downwards into something cheaper and more comfortable. But without some means of enforcement, some brown-noser will show up in a suit to get an edge, and pretty soon we'll all be back in suits and ties. (Or in my case--eek!--panty hose).

There are a variety of ways that have been explored to overcome these problems; the general solution is management fiat, combined with shunning those who violate the code. Fiat is generally the easiest (which is not to say the best) solution to the problem.

Voucher opponents are essentially saying, "It's a collective action problem. I bow to the inevitable, even though I don't like it."

And actually, I agree: it is a collective action problem, and moreover, one that is not reasonably amenable to fiat. I see no way, unless education radically changes, to keep schools from being fairly geographically concentrated. Nor any way to force yuppies to stay put when they spawn. After the other parents have left, you are entitled to leave to.

Here's the thing, though: collective action problems rarely have partial solutions. If exit is the correct solution for players 1-55, it is also the correct solution for players 56-200. Once you have committed to exit, you are committing to the fact that other players will either follow, or suffer terribly. Having conceded that exit is the best thing for your child, you imply that it is also the best action for every other player. Moreover, as the person near the head of the queue, your exit is much more damaging to the system than the exit of the 100th player. You exited because you could, not because you had a moral right to; the 100th player has a much greater moral right to exit than you do.

Saying that it is moral for you to exit the system, while denying exit to the 100th player, is the economic equivalent of "might makes right". You have no greater moral right to exit than that 100th player; in fact, considerably less of one. You merely have the economic means.

And that's something that liberals are supposed to fight.

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