Economics, Gratitude, and Gains from Trade
A few days ago I gave a noon talk on my new book at the Cato Institute in Washington, D.C. while on my way to a conference at the University of Virginia in Charlottesville. I was due in Charlottesville by dinner time. Unfortunately, as I discovered, there was no public transportation that would get me there by then. Someone at Cato found one of their interns who generously offered to drive me down, a trip of between two and three hours.
Which raises an interesting question at the intersection of economics, emotions and etiquette. On net, who was doing whom a favor?
On the one hand, I had provided a talk in exchange for being put up for one night at a nice hotel, quite a lot less than other people have paid me for talks and, I suspect, less than Cato has often paid other people for talks. From that standpoint they were substantially in my debt; getting one of their people to give me a ride, while very nice, was not really enough to reverse the obligation.
On the other hand, they were providing me an audience for a talk intended to raise interest in my book. Not only did they sell a bunch of copies, one of the people who attended wrote a brief piece for Slate about the event, which is probably why the book's rating on Amazon shot up the next day. I expect I would have given them the talk even if they hadn't provided a hotel room; I have friends in the area who would have been willing to put me up. So, from that standpoint, I was already in their debt even before one of their people spent a fair part of his day driving me to Charlottesville and himself back.
The source of the problem, as any economist could see, is gains from trade. Almost certainly, both Cato and I were better off from the original transaction. Hence both arguments offered above are right—and wrong.
My conclusion is that we should both feel grateful, each to the other. That approach, not only in this case but more generally, strikes me as the best approach to individual happiness and social harmony.