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Procrastination, obedience, and public policy: the irrelevance of salience
American Journal of Economics and Sociology, The, April, 1995 by Gary M. Anderson, Walter Block
However, Akerlof is not merely intent on proposing a radical new principle in the analysis of human behavior, but also intends that this principle has quite policy-relevant implications. These claims will now be examined in detail.
IV
Addiction and Procrastination
Akerlof applies his model of procrastination to drug abuse, and explicitly rejects the Chicago School's rationalistic model of addictive behavior (Becker and Murphy 1988; Stigler and Becker 1977). "Most drug abusers, like most chronically overweight individuals, fully intend to cut down their intake, since they recognize that the long-run cost of their addiction exceeds its benefits," Akerlof writes (1991, 5). But the "certain and immediate" (salient) rewards win out over the possibly lethal (nonsalient) costs.
It is important to recognize what Akerlof is not arguing. He bases his defense of government anti-drug policy on a purported failure of the individual drug consumer to rationally maximize his own utility, and does not make any claims concerning externalities purportedly generated by the consumption of drugs. Drug use may or may not produce detrimental impacts on society. But Akerlof takes no position on this question.
We readily grant that individuals with serious, physical, addictions to drugs do not seem to be plausible candidates for the role of rational utility maximizer. Some addicts do indeed seem to engage in fatal activities for what seems to an outside observer paltry short-term satisfaction, and a rationalistic explanation for such extreme cases is hard to accept. Even if we assume, however, for the sake of argument that such behavior is actually irrational, just how big and extensive is the problem?
The answer seems to be, fairly small. The long suffering addict is a comparative rarity. Most drug users seem to indulge occasionally, as a form of recreation. Most users of intoxicants (including substances like alcohol) seem to maintain homes, jobs, and families with apparent success. Akerlof exaggerates when he suggests that most "substance abusers" are comparatively helpless addicts. To the contrary, most drug users seem rather ordinary in all other respects.
One need not accept that all drug users are carefully calculating rational actors to recognize that most drug users seem quite rational in their conduct. Drug users, like practitioners of many other activities, accept certain levels of risk in exchange for expected benefits. Most drug use involves risk to the user, but does not represent assured self-destruction; moreover, the act of intoxication per se produces pleasure for the user that counterbalances the cost associated with the expected level of risk. That objective risk might be under or over-estimated by the drug user, but the model of rational maximization will still apply, subject to information constraints.
Akerlof's willingness to dismiss the drug addict's choices as irrational is unnecessary, but this does not necessarily mean that drug use can have drastic implications on the individual's utility maximization problem. Some drug addicts are, in fact, different after their experience of using drugs.
