Russell Roberts's Blog, page 1450

Caplan on Parenting

The latest EconTalk is Bryan Caplan discussing his new book on parenting, Selfish Reasons to Have More Kids. Bryan thinks we are the products of our genes and there are great limits to what parents can do to influence their children. I push back–I agree that there are limits but I am not as convinced by the evidence that Bryan provides as Bryan is.

People Like My Mom and Dad

My sister asked me to post again, on this Mother's Day, this remembrance that I wrote for my mom when she died three years ago.

People like my mom and dad would make far better government officials than do 99.5 out of every 100 such persons who hold, or who have ever held, elective political office.

But, of course, people like my mom and dad would never stoop to hold such office.  They would be appalled to be in a position to lord it over others, to spend other people's money, and to lie and pose and double-talk and dissemble and rationalize and compromise their fundamental values and to do all the other shameful things that 99.5 percent of successful politicians do in order to win the gaudy 'glory' of office.

In short, my mom and dad were decent people.  And with only the rarest of exceptions, decent people don't do politics (at least not successfully).

"I Want Plans by the Many, Not by the Few"

Here's a second response to Fukuyama's review of Hayek's Constitution of Liberty:

Reviewing F.A. Hayek's The Constitution of Liberty: The Definitive Edition, Francis Fukuyama writes that "there is a deep contradiction in Hayek's thought.  His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again.  They never have as much clarity about the future as they think they do.  But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail" ("Friedrich A. Hayek, Big-Government Skeptic," May 8).

Hayek was guilty of no such contradiction.  Mr. Fukuyama wrongly convicts Hayek on this count by mistaking government planning and "muddling along" as being "a similar process of innovation and discovery" that occurs so successfully in the private markets that Hayek championed.  The two processes aren't remotely similar.

Plans in private markets are decentralized; government plans are centralized.  Private-market planners risk their own money; government planners risk other-people's money.  Plans in private markets face constant competition from rival private plans; government plans are monopolies which face no such competition.  This competition prevents plans in private markets from growing in scope to outstrip the knowledge and capacities of persons who make and carry them out.  No such competitive check constrains the scope of government plans.  Finally, plans in private markets – unlike government-made plans – often cross-pollinate with each other to inspire the creation and discovery of entirely new possibilities that would remain unknown without such decentralized planning within competitive markets.

Sincerely,

Donald J. Boudreaux

Or, more eloquently, as Hayek raps to Keynes in "Fight of the Century":

I don't want to do nothing, there's plenty to do

The question I ponder is who plans for whom?

Do I plan for myself or leave it to you?

I want plans by the many, not by the few.

Not the End of Hayek

Here's a letter to the New York Times Book Review:

Reviewing on the 112th anniversary of the birth of F.A. Hayek that economist's The Constitution of Liberty: The Definitive Edition, Francis Fukuyama gets much right but also much wrong ("Friedrich A. Hayek, Big-Government Skeptic," May 8).  Two errors warrant correction.

First, Hayek never argued that (in Mr. Fukuyama's words) "the smallest move toward the expansion of government would lead to a cascade of bad consequences that would result in full-blown authoritarian socialism."  (Mr. Fukuyama should have detected the absurdity of this interpretation of Hayek when Mr. Fukuyama himself noted four paragraphs earlier that Hayek didn't object to government provision of health insurance.)  Rather, Hayek's famous "road to serfdom" is paved by government efforts to protect everyone against any and all disappointments that might arise as a result of economic change and growth.

Second, it was no "deep contradiction" for Hayek to argue that we cannot predict the future and for him to predict that government efforts to centrally plan the economy will fail.  Precisely because the planning and "muddling through" done by individuals pursuing their own ends in competitive markets are subject to ceaseless, detailed feed-back from other individuals pursuing their own ends – and because no individual plan in decentralized markets requires its maker to know the goo-gah-gillions of details that a central planner must know in order to succeed – it was perfectly consistent of Hayek to predict the failure of central plans made by officials who are oblivious to the impossibility of gathering and processing all the knowledge that must be gathered and processed centrally for central plans to work.

Sincerely,

Donald J. Boudreaux

Other flaws mar Fukuyama's interpretation of Hayek.  For example, Fuyuyama gets the title of Hayek's famous 1945 article wrong (forgivable), and (less forgivably) singles out Joseph Schumpeter as the chief proponent of the mid-20th-century belief among many economists that centrally planned socialism can work.  (Oskar Lange and Abba Lerner, among others, were far more insistent proponents of this view than was Schumpeter.  Indeed, Thomas McGraw argues – not entirely convincingly, I concede – that Schumpeter intended his claim that "of course" socialism can work to be a joke.)

Hypocritical Boeing

Here's another letter to the Wall Street Journal on the current, obnoxious attempt by the NLRB to protect labor-union members from competition:

Boeing is justifiably upset that the NLRB seeks to prevent it from buying labor services from lower-priced South Carolinians rather than from higher-priced labor-union members in Washington state (Letters, May 7).

I'm delighted that Boeing now feels strongly that government has no business forcing buyers to spend their money in accordance with the wishes of whining suppliers rather than according to how those buyers freely choose to spend their money.  So I trust that Boeing will quit its long-standing practice of lobbying Uncle Sam for policies that artificially raise airlines' costs of buying jetliners made by Airbus rather than by Boeing.

Sincerely,

Donald J. Boudreaux

The Wages of Domestic Protectionism

Here's a letter to the Wall Street Journal:

The National Labor Relations Board is trying to stop Boeing from moving the production of some of its jetliners from Washington state to South Carolina where less-burdensome labor-union privileges will allow Boeing to produce at lower cost (Letters, May 7).  One unintended by-product of Boeing's move, of course, would be greater competition for workers in the south and, hence, rising wages there.

Uncle Sam's willingness to deploy brute force to prevent the movement of industries to the lower-cost American south isn't new.  The most notorious instance of this nasty habit occurred in 1938 when, to strip away the cost advantage enjoyed by their rivals in lower-wage Georgia and the Carolinas, owners of textile mills in New England successfully lobbied Congress and FDR to enact America's first national minimum-wage statute.

Then as now, Uncle Sam – despite all his blah, blah, blah about 'justice' and being on the side of 'working families' – kept the wages of higher-paid Americans artificially high by keeping the wages of lower-paid Americans artificially low.

Sincerely,

Donald J. Boudreaux

One Long Infomercial – but With a Difference

I returned home a few nights ago from teaching a late class to find my son asleep on the couch.  He fell asleep with the t.v. on.  By the time I got home, one of those absurd late-night infomercials was playing.  I looked at it only long enough to determine that it featured a hip-looking young man explaining to an older, supposedly verily impressed host how he (the hip young man) has made "hundreds of thousands of dollars" in just a few months by investing in real-estate.  (Note that the year is 2011!)

And this hip young man – he looked so earnest! – was eager to share with every viewer his fail-proof secret of success.  "If I can do it, you can too!" the hip young man assured the no-doubt rapt and grateful audience out there in late-night tv land.

So it dawned on me.  Infomercials are the closest phenomenon that the private-sector offers to politics.  Fraudulent clowns, skilled at lying, promise gullible audiences something for nothing.

The difference, of course – and it makes all the difference – is that no one is forced to buy (either figuratively or literally) whatever it is the infomercial clowns are selling.  And those of us who don't buy these clowns' offerings aren't forced nevertheless to suffer the consequences of the fact that large numbers of our fellow citizens do consistently, even eagerly, fall for the idiotic claims and promises and assurances offered by these greedy imposters posing as our friends.

At the very least, it's a regrettable fact that all of us have much of our lives 'governed' by people who watch infomercials.  Those viewers vote.  And so politicians obviously appeal to these fools for their votes.  And everyone suffers from the resulting absurdities that emerge as "public policy."

What a joke politics is.

Fight of the Century with Polish subtitles

I Miss Julian Simon

Here's a letter to the New York Times:

In today's "Room for Debate" you ask "Can the Planet Support 10 Billion People?"  The consensus of the panel you assembled to discuss this question is 'No the planet cannot, at least not without major changes in the way we live.'  Given this consensus, I gather that the point of your photo of a crowded thoroughfare in Lagos – a photo captioned "Lagos, Nigeria, is one of the most densely populated cities in the world" – is to depict the sort of misery (and downright ugliness of our planet) that awaits us if we don't rein in population growth pronto.

Lagos is indeed densely populated, with about 20,170 persons per square mile.  And Nigeria is indeed poor, with a per-capita annual income of about $2,800.  (I can find no statistic on the annual per-capita income of residents of Lagos.  So let's assume, generously, that annual per-capita income in Lagos is $5,600, or double what it is for Nigeria as a whole.)

Contrary to the wisdom of crowds, however, population density isn't destiny.

Monaco, with a per-capita annual income of about $33,100 (more than six times that of Lagos), has a population density of 43,830 – more than double that of Lagos.  Or consider Macau, with its per-capita annual income of $33,000: Macau's population density is the highest of any country in the world at 48,000 person per square mile; it is 138 percent more densely populated than is Lagos.  Yet Macau's per-capita annual income, like that of Monaco, is almost six times higher than that of Lagos.

Popular discourse is overcrowded with factually and theoretically impoverished claims about the relationship between population and standards of living.

Sincerely,

Donald J. Boudreaux

Or is the problem that the sages at the NYT foresee one of dark and swarthy peoples especially being, well, you know, too numerous?  (HT Mary Anastasia O'Grady)

Reason.tv interview on Fight of the Century

Nick Gillespie interviews me about the Fight of the Century: