Russell Roberts's Blog, page 1497

All the devils are here

Latest EconTalk is Joe Nocera talking about his book (with Bethany McClean, All the Devils are Here. I learned something very important in this podcast about motives and ideology and politics. I knew it already but sometimes, a moment happens that drives something home in a way it hadn't been solid before. I'll blog on it later. Meanwhile, you can listen here.

A love song for Hayek

From Dorian Electra. Utterly charming. Don't miss it:

The Myth of the Transcendent State

Calling it 'government' and prefixing its officials' names with 'Hon.' doesn't change the essence of what is done.  This video is one of the very best that I've seen in a while.  (HT Frayda Levy)

Trade and Globalization

The scholars at the Cato Institute are constant sources of solid, fact-based reporting on the effects of trade and protectionism.  Here are some samples of essays and paper that are well worth reading:

Dan Griswold on hows imports are a boon to the economy

Dan Ikenson on "Made on Earth"

Dan Griswold on the Chinese-currency question

Sallie James on Uncle Sam's Generalized System of Preferences for developing countries

Jagadeesh Gokhale on the great promise of globalization.

Government'Rnt'Us

Here's a letter to the Los Angeles Times:

Tom Lutz is probably correct that Rep. John Boehner's much-publicized weepings are nothing more than trashy political theatrics ("A crying shame," Dec. 16).  But Mr. Lutz is incorrect to assert that it is a "contradiction" to claim to care about children while being against government programs such as "health insurance for children,…. against unemployment benefits, against equal pay, against food safety, against money for teachers, against raising the minimum wage, against tobacco education, mine safety, alternative energy, pollution control, whistle-blower protection, science and technology research."

To oppose government provision of such things is not to be "against" such things.  Many people – including myself – share Mr. Lutz's wish that every American enjoys unemployment insurance, safe foods, safe mines, scientific research, high pay, affordable health care, and all the other advantages of modern commercial society.  What we don't share with Mr. Lutz is his assumption that these benefits can be provided only (or best) by government.  The market, we believe, is a more reliable provider.

Maybe those of us who argue that ordinary people would be more prosperous and secure with less government are mistaken.  But as long as Mr. Lutz and other "Progressives" continue to impute sordid or schizophrenic motives to persons who wish to rein in the state, they disadvantage themselves politically by failing to understand their opponents.

Sincerely,

Donald J. Boudreaux

Government'rnt'Us

Here's a letter to the Los Angeles Times:

Tom Lutz is probably correct that Rep. John Boehner's much-publicized weepings are nothing more than trashy political theatrics ("A crying shame," Dec. 16).  But Mr. Lutz is incorrect to assert that it is a "contradiction" to claim to care about children while being against government programs such as "health insurance for children,…. against unemployment benefits, against equal pay, against food safety, against money for teachers, against raising the minimum wage, against tobacco education, mine safety, alternative energy, pollution control, whistle-blower protection, science and technology research."

To oppose government provision of such things is not to be "against" such things.  Many people – including myself – share Mr. Lutz's wish that every American enjoys unemployment insurance, safe foods, safe mines, scientific research, high pay, affordable health care, and all the other advantages of modern commercial society.  What we don't share with Mr. Lutz is his assumption that these benefits can be provided only (or best) by government.  The market, we believe, is a more reliable provider.

Maybe those of us who argue that ordinary people will be more prosperous and secure with less government are mistaken.  But as long as Mr. Lutz and other "Progressives" continue to impute sordid or schizophrenic motives to persons who wish to rein in the state, they disadvantage themselves politically by failing to understand their opponents.

Sincerely,

Donald J. Boudreaux

No Labels

Washington Post reader Saul Hoch sampled his socks, his jacket, and a few other goods in his home and – having found them all labeled as being made outside of the USA – concluded that Americans no longer produce enough output.

Mr. Hoch is a victim of misleading labeling.  The U.S. economy is overwhelmingly a service economy, specializing in producing ideas and in performing high-skilled operations.  Yes, Mr. Hoch's socks say "Made in Swaziland," but who developed the computer software to operate the loom that wove the cloth used to make his socks?  Who designed the loom itself?  Who figured out how to transform crude oil into the elastic in the socks?  Who devised the method for pooling risks so that the Swaziland factory is profitably insured against fire and that the cargo ship carrying his socks to America is profitably insured against sinking?  Who supplies the banking services for the factory to receive and make necessary payments?  Who's the architect that designed the department store where Mr. Hoch bought his socks?  The list of such questions can be greatly extended.

Most of these services were undoubtedly supplied by non-Swazis, including Americans.  Without them Mr. Hoch's socks would be a darn sight more pricey.  But services, by their nature, don't come with labels attached.  In fact, Mr. Hoch's socks – and nearly everything else that he consumes – should be labeled "Made on earth," for they truly are global phenomena.

L'etat

Here's a letter to USA Today:

Among your chief justifications for the estate tax is that people who inherit wealth did nothing to earn that wealth and, therefore, don't deserve to get it ("Tax deal showers billions on heirs to the largest estates," Dec. 17).

Overlook the fact that the persons who did earn that wealth can choose to bequeath it, or to deny it, to whomever they choose.  Instead ask: do the persons who get whatever wealth is collected from the estate tax deserve it?

If the fact that Smith did not personally earn the estate wealth in question is a good reason to keep Smith from inheriting that wealth, what moral justification is there for the likes of Jones and Jackson – who also did not personally earn the wealth in question – to acquire this wealth?

Sincerely,

Donald J. Boudreaux

Here's philospher Aeon Skoble's take, from several years ago, on the estate tax.

Asking vs. Commanding

Here's a letter to the New York Times:

Reproaching people who complain about taxes, Liane Ellison Norman insists that "taxes are really just prices" (Letters, Dec. 17).

No ma'am.  Prices are terms of exchanges voluntarily agreed to by willing buyers and willing sellers.  Because prices result from people spending – or not spending! – their own money, they reflect genuine consumer desires and resource scarcities.

In stark contrast, taxes are forced extractions.  Even when spent with the intent of benefitting taxpayers, taxes – unlike prices – are never the result of bargains between buyers and sellers.  Taxes, instead, are the result of commands issued by rulers to subjects.

Buyers who refuse to pay sellers' asking prices go without the goods.  Subjects who refuse to pay the sovereign's demanded tax go to jail.

Sincerely,

Donald J. Boudreaux

Obstruct Obstruction

Here's a letter to the Boston Globe:

Reporting on a new effort to curb the Senate filibuster, Joshua Green applauds this attempt "to limit the chronic power to obstruct" ("Dismantling the filibuster," Dec. 16).  I'm skeptical of reducing obstructions to the operation of an institution – the U.S. Congress – that, more often than not, is itself in the business of obstruction.

Some examples: minimum-wage legislation obstructs low-skill workers' access to jobs; high taxes obstruct the decision-making of consumers, workers, and investors; Obamacare obstructs people's freedom to keep uninvited strangers from meddling in their medical care; tariffs obstruct consumers' freedom to get the most for their money, as well as obstruct American producers' access to foreign markets and to foreign capital; the 'stimulus' and bailouts and government backing of GSEs such as Fannie and Freddie obstruct the market's ability to reallocate resources away from economically inappropriate uses and into economically appropriate uses.

These obstructions are only the tip of a very deep and jagged iceberg.

While not without its costs, the filibuster at least slows the pace at which these obstructions pile up.

Sincerely,

Donald J. Boudreaux