Freakoutonomics

I've just learned a new word from Charles Morris: freakoutonomics. In the New York Times (normally behind a paywall but (Economist's View has helpfully reproduced Freakoutonomics), Morris describes the sort of uneasiness and lack of confidence that Ben Friedman wrote about in The Moral Consequences of Economic Growth.

Friedman argues that economic growth is essential to moral, social, political and cultural progress. He writes that the financial and social anxieties created by living in a stagnant economy lead people to look for explanations and answers in intolerance and fear. Furedi expands a form of this argument to argue for its role in the widespread internalisation of conspiracy theories: "[t]oday, acts of misfortune are frequently associated with intentional malevolent behavior".

Friedman outlines the comparisons that underlie the influence of income on well-being. For the first, we contrast our present and past circumstances: if we are better off financially that we used to be, and we can buy more with that money, then we feel better off. For the second, we use our present circumstances as a yardstick to compare ourselves to our notional peer group: if we are more prosperous then we feel better; if we are worse off, then we feel worse.