Russell Roberts's Blog, page 1424

Quotation of the Day…

… is from EconLog's David Henderson who recalls how the Herbert Stein described the failure to understand that taxes on corporations are taxes on people:

I remember that in addressing the issue in the 1980s, the late Herb Stein said that it's as if people think that if the government imposed a tax on cows, the tax would be paid by the cows.

Reventing

Vain guy that I am, I'm always flattered when someone asks me to re-run an earlier post.  "LibertyBabe" – that's her e-mail name and her nom de e-plume – asked me to reprise this seven-year-old post:

Venting Against Mysticism

by Don Boudreaux on September 1, 2004

in Myths and Fallacies

The bottom-line, fundamental reason I endorse markets over government direction of the economy – the essential reason I support extensive and vigorous private property rights and the consequent decentralization of decision-making that this institution brings – is that I cannot tolerate the mysticism that motivates too much reliance on government.

Too many people, including otherwise very smart people, believe in secular magic. They believe that words written on paper by people, each of whom receive a majority of votes on certain days of the year of adult citizens living in certain geographic areas, and who utter ritualistic pronouncements under marble domes in buildings conventionally called "capitols," are somehow endowed with greater understanding of society's complexities and with superhuman capacities to care about the welfare of strangers. These priests preach devotion, dedication, and sacrifice to the One True State (your own government), even while each recognizes that legitimate disputes about the details of the dogma divide various cliques of the secular clergy. When they speak and act in their official roles, they expect – usually correctly – that the laity pay their words special heed as if these words have extraordinary power.

For example, what's so special about President Bush expressing his sympathies to victims of Hurricane Charley? I'm sure that Mr. Bush's sentiments are sincere. But does he feel for these victims more than I do? More than do, say, the presidents of USX, George Mason University, and the Saginaw, Michigan, chapter of the Knights of Columbus? I'm pretty sure that the answer is no. And yet, the media unfailingly report expressions of such presidential sympathies. When I ask myself why this is so, I invariably conclude that lots of my fellow Americans regard politicians – and the President especially – as possessing certain mystical powers, or an exceptional capacity to empathize and sympathize with strangers.

And, of course, the belief is rampant that enacting statutes with promising titles – for example, "No Child Left Behind Act" – will fulfill the aspirations expressed in the titles.

I suffer from an unusually acute aversion to mysticism, to unsubstantiated claims, and to mish-mash about "we as a nation," "the hopes of the American people," "pulling together as a country," and other romantic foolishness that inevitably is meant to submerge each person's individuality, wishes, and choices under the suffocating drabness of politicized and allegedly "collective" endeavors.

Why, Even Some Automakers Support it!

Here's a letter to the Boston Globe:

Contra Jeff Jacoby, Berl Hartman believes that the new government-imposed fuel-economy standard of 54.5 mpg is realistic because "many leading carmakers … endorsed the new standards.  Chrysler said it could use 'plain-vanilla technology' to meet the new standards, and all agreed that technology already in the pipeline could suffice" (Letters, Aug. 14).

Before rejecting Mr. Jacoby's argument, Mr. Hartman should ask why some "leading carmakers" endorse this mandate.  If such a magnificent increase in fuel economy is easily and cost-effectively achieved, government no more has to force automakers to offer it than government has to force automakers to offer air-conditioning, cup holders, and other amenities that consumers willingly buy.

Perhaps this 'endorsement' is simply the simpering "yes, massa" of corporate executives now servile to leviathan.

Or maybe this support reflects some automakers' realization that satisfying this mandate will be more costly for their competitors than for them – and, hence, that the mandate will increase the market power of these supportive automakers by differentially burdening, and perhaps even bankrupting, some of their rivals.

Either way, the very statement from Chrysler that Mr. Hartman finds so reassuring should plant in him deep suspicion of Chrysler's motives.

Sincerely,
Donald J. Boudreaux

Lagniappe

Being on vacation with my son, Thomas – we're at the big Star Trek convention at the Rio in Las Vegas – I have less time than usual to blog.  In particular, I'm way behind on my "Some Links" and "Quotation of the Day…" features.

But I steal this opportunity to offer one link from Mark Perry's Carpe Diem; it's to a post of Mark's entitled "Using Value-Added Trade Estimates, We Have a +$32.25B Trade SURPLUS with China for 2011."  The title should be sufficiently intriguing to click on the link and read the entire post.  Here's the opening:

According to research at the San Francisco Federal Reserve, 36% of the value of imported goods goes to U.S. companies and workers, and for Chinese imports it's much higher: the U.S. content of "Made in China" is close to 55%.  Reason? The SF Fed explains:

"The fact that the U.S. content of Chinese goods is much higher than for imports as a whole is mainly due to higher retail and wholesale margins on consumer electronics and clothing than on most other goods and services."

And apropos nothing save one of the general themes of this blog, I use this opportunity also to report that, during his time on stage this morning at the convention, actor John de Lancie (who portrayed the god-like character "Q" in several Star Trek episodes) speculated that his character "Q" is interesting because it combines "infinite power with no responsibility."  De Lancie quite properly suggested that this combination is a very bad one indeed.

So I ask: what is the state if not an institution that permits those who manage to get their hands on its levers of control to exercise vast (altho', of course, hardly unlimited) power with virtually no responsibility?  The responsibility that matters, of course, is personal responsibility – responsibility of those flesh-and-blood individuals who actually decide and act.  To say that "the state" as an institution is "responsible" for something – say, the welfare of society – and to point to formal documents in which that responsibility is trumpeted, is neither to create nor to identify genuine and meaningful responsibility.

Barney Frank, for instance, might work for an institution that professes that it is – and is alleged to be – "responsible" for this and that aspect of American governance.  And in so working for that institution in the high and exalted capacity in which he works for it, Mr. Frank is indeed invested with real and vast power.  But the same institution that gives him his power simultaneously shields him from taking responsibility for the very consequences of his exercise of that power.

And as Bryan Caplan explains far better than I ever can, the same is true – though to a much lesser degree – for each and every voter.

A Heinous Anniversary

Today is the 50th anniversary of one of history's most infamous, yet appropriate, monuments to statism: the Berlin Wall.

It was a wall – guarded by armed men – meant to keep people from voting with their feet.  It was a nearly impervious barrier that embodied collectivism's sophistication (brute and brutal force) and collectivism's ethos (individual human beings must live for the collective – in practice, for the state – and deserve to die if they refuse).

Soviet-style communism was among history's most barbarous manifestations of humankind's fatal attraction to collectivism.  As such, it was also among history's most honest and revealing manifestations of this attraction.  The Berlin Wall was concrete, solid, visible.  The armed-guards' guns were metal, loaded, visible.

I am not among those who believe that society loses its civility and sacrifices its right to call itself free merely because the state that lords over it is more intrusive and powerful than a night-watchman state.  I am not among those who believe that a state more intrusive and powerful than a night-watchman state necessarily, or even likely, condemns the citizens of the territory over which it rules to a future that can appropriately be called "tyranny" – at least as long as we have the actual historical benchmarks of the various People's Paradises engineered by the likes of Stalin, Mao, and Castro.

But I also am not among those who believe that just because the governments of, say, the United States and of France are not as brutal as were the governments of the U.S.S.R. and of China, that the obligations and prohibitions that Washington and Paris foist on their citizens are not properly described as manifestations of "force."

That Uncle Sam does not use force as consistently, as openly, and brutally as did the government of the U.S.S.R. does not thereby excuse most of the force that Uncle Sam's does unleash in his effort to interfere with people's peaceful choices and actions.  Nor does it make Uncle Sam's many uses of force something other than of force.

These facts aren't altered significantly by the fact that Americans enjoy (if that's the right word) a wide franchise.

One of the many dangerous delusions that too many people suffer today is the delusion that tells them that as long as 'their' government is democratically elected – and as long as 'their' government largely refrains from using brutality openly and of the sort that was routine in 20th-century hells such as the U.S.S.R. and East Germany – then 'their' government is largely civilized and an agent for Good for The People.

How Will Uncle Sam Survive?

Writing from London, George Will puts planned U.S.-government budget cuts in perspective:

The shrinkage of government is supposed to be more severe here [in the U.K.] than in America, where the supposedly "savage," "draconian," etc., cuts recently agreed to mean that for a decade Washington must scrape by on $43.7 trillion rather than $46.1 trillion. Really.

Those are cuts – should they actually occur (itself doubtful) – over each of the next ten years of, on average, $240 billion.

For such measly trimming of bloated and bloviating Uncle Sam we are subjected to an absurd orgy of sturm und drang.

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Just Nonsense

A faithful Cafe patron sent me this link to a Huffington Post essay by Mary Bottari.  I read it, and have nothing specific to say save that it's nonsense from top to bottom – nonsense of a sort that elicits no reply given that not the faintest whiff of reason wafts through the essay.

Anyone who finds insight in such an essay has as much hope of being reasoned with as a tree stump has of being taught to tap dance.

I confess to suffer occasionally the urge to address every such absurdity that crosses my path.  And I sincerely appreciate the Cafe patron sending to me the above link.  But some such ravings – such as the above – are simply too ridiculous.  Just as every verbal ejaculation by every New Age therapist professing the healing powers of crystals and stones need not be addressed by serious physicians, every shriek by pundits on the economy who know absolutely nothing about the economy need not be addressed by serious economists.

Choice is Diktat; Diktat is Choice

Here's a letter to the New York Times:

Seeking to dictate what other people eat, Elizabeth Newton opines that "In a perfectly functioning economic world, all consumers would receive perfect education about good nutrition and then simultaneously demand that fast-food companies and grocery stores start offering healthy options, thus forcing Big Food to supply what the people demand.  Until that happens, we need regulation of Nestlé, Monsanto, McDonald's and the rest of the moguls that dictate our diets" (Letters, Aug. 11).

If arrogance were calories, Ms. Newton's letter would make a Baconator Double burger seem like a broccoli floret.

She assumes that "Big Food" earns higher profits by selling products that consumers really don't want than by selling products that consumers really do want.  This startling proposition requires for its justification more than Ms. Newton's presumption that she knows other people's true preferences better than do those people themselves, and better than do the entrepreneurs who, in competitive markets, earn their livings by satisfying those preferences.

In fact, the likes of Ms. Newton are simply pests preening as know-it-all "Progressives."  Her superciliousness highlights the truth of H.L. Mencken's observation that "one man who minds his own business is more valuable to the world than 10,000 cocksure moralists."*

Sincerely,
Donald J. Boudreaux

* H.L. Mencken, "Another Long-Awaited Book" (1926), reprinted on pages 346-349 of Mencken, A Second Mencken Chrestomathy (New York: Knopf, 1995); quotation is on page 348.

And as GMU Law Dean Dan Polsby points out to me in an e-mail:

She [Elizabeth Newton] claims that the necessary precondition of liberty is omniscience!  Apparently, only God can be free!

Dan's is a deeper and better point than the one I focused on in my letter.

Also, Frank Stephenson from over at Division of Labour e-mailed me to point out that fast-food restaurants today do offer salads, bottled water, and other low-calorie fare.  No one is obliged to buy a Big Mac or a chocolate shake for lack of lower-calorie options.

But They're Senators….

Here's a letter sent yesterday to the Wall Street Journal:

U.S. Senators Mary Landrieu (D-LA) and Patty Murray (D-WA) are eager to "create jobs" by spending other people's money on a slew of top-down, bureaucrat-directed programs aimed at "closing the skills gap" ("How to Close the Skills Gap," August 10).

My how creative.

Overlook the questionable record of government efforts to educate children and retrain workers.  Ask instead: Why should anyone pay attention to what politicians say about job creation?  In this case, Ms. Landrieu has been in politics since she was 25 years old; Ms. Murray – after stints as a pre-school teacher and as an environmental and education activist – has been in politics since she was 35.  Apparently, the only qualification these women have to pronounce in your pages on the subject of job creation is their success at winning lofty political offices.

If the likes of Ms. Landrieu and Ms. Murray were to offer advice on how to repair your collapsed roof or on how to rid your house of termites, they'd be seen immediately for the imposters that they are.  But when it comes to economics, politicians' statements sadly are taken as serious contributions to the public discourse even though – as is the case in your pages today – those statements reflect a quality of thinking that would embarrass a twelve-year-old.

Sincerely,
Donald J. Boudreaux