If you found a wallet filled to the brim with hundred dollar bills, as well as the address and name of the person who lost it, would you return the wallet or keep it for yourself? Better yet, if you chose to return the wallet, can you can explain why that is a rational decision? In this episode of EconTalk, host Russ Roberts speaks with Michael Munger, economist, author and professor at Duke University, to answer this and other questions regarding the morality and rationality of preferences.

The conversation stems from Munger’s 2019 article for the American Institute of Economic Research, “What Preferences Do You Want?” The article poses the question: Can people change their desires so they can choose the preferences that they should have? Using the article as a guide, Roberts and Munger discuss the nature of preferences and morality and how they relate to economics. Let’s hear what you have to say about morality, desires, and self-interest. Answer our questions in the prompts below, or use them to start a conversation with friends offline.


I-Munger explains that in economic theory, preferences are fixed (people don’t have preferences about preferences). Economists use economic parameters, like price and income change, to explain changes in purchases, which is the maximization paradigm. However, Munger goes on to point out that the idea that some preferences are better than others has been a big part of every aspect of social life, except economics. How does Munger explain this issue to his students? How does this relate to Montesquieu’s idea that “the justification for liberty is so that human beings can do what they ought to will?”


II- Munger and Roberts discuss the differences between law and legislation (and eventually constitution). Munger uses the example of muddy paths around a new university to explain the differences. (Munger has a more in-depth article on his muddy paths example here.) According to Munger, the new university should wait two years before putting in concrete paths so they can just fill in the paths created by the students and staff of the university. However, when it comes to buildings, the same process cannot be used. Explain how Munger uses this to illustrate the distinction between law and legislation. How does Roberts bring in the idea of constitutions?


III- Roberts explain the scenario of finding a wallet full of cash on the sidewalk. Would you return the wallet? Roberts goes on to ask what preferences we should have in this situation. Should we want to feel the shame and guilt of keeping the wallet? What if we had no conscience to indicate that keeping the wallet is wrong? What connections do you see between this example and the earlier discussion on law, legislation, and constitutions? Are there any connections to Rousseau’s phrase “inscribe the law on men’s hearts?” If so what are the connections?


IV- What did you make of Munger’s story about the woman cutting in front of him in line at the movies? Roberts clarifies that in this case, morality is not a rational choice. How is morality a constraint in this example? What other examples are used to compare morality to a constraint? Who originally used this example? According to Munger, what does the original author have to say about these ‘hardwired’ features? To what extent do you agree that self-interest and morality are hardwired in man?