No one could argue with a straight face that the couples getting married today are much happier just because their wedding celebrations cost three times as much as those in 1980. Bigger mansions and costlier parties are wasteful in the same sense that larger antlers on all bull elk are wasteful. The good news is that simple changes in the tax system can eliminate much of this waste without having to deny people the right to decide for themselves how best to spend their money.

Economics, as it is often taught today, portrays us as homo economicus-someone who doesn't vote in presidential elections, doesn't return lost wallets, and doesn't leave tips when dining out of town. Julie Nelson reminds us that most people aren't really like that. She helps point the way to a richer, more descriptive way of thinking about economic life.

The most common mistake we make as teachers is attempting to tell our students too much.

Adam Smith's uncritically enthusiastic modern disciples portray his invisible hand theory as saying that market forces reliably harness selfish individuals to serve the common good. That's often true, but as Darwin recognized clearly, many traits that serve the interests of individual animals make life more difficult for larger groups.

The private sector is first of all much larger than the public sector. The waste we see in that sector does not result from the fact that people spend their money carelessly. Mostly, it occurs because what one family must spend to achieve its goals often depends heavily on what other families spend.

Rising inequality hasn't really accomplished anything of value for its ostensible beneficiaries, the top one percent. They've all built bigger mansions and staged more lavish parties. But in so doing, they've simply raised the bar that defines what's considered adequate in these categories.

When the rich build bigger, they shift the frame of reference that shapes the demands of the near rich, who travel in the same social circles. Perhaps it's now the custom in those circles to host your daughter's wedding reception at home rather than in a hotel or country club. So the near rich feel they too need a house with a ballroom. And when they build bigger, they shift the frame of reference for the group just below them, and so on, all the way down.