Russell Roberts's Blog, page 164

Instead of ‘Some Covid Links’ Today…

(Don Boudreaux)

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… I share Jeffrey Tucker’s new conversation with Jay Bhattacharya.

Quotation of the Day…

(Don Boudreaux)

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… is from page 90 of Thomas Sowell’s 1993 collection, Is Reality Optional?:

Those who are constantly demanding “safety” may sound more reasonable, but often what they are asking for cannot be delivered either. Some things can be made safer at a reasonable cost but others cannot. And some things cannot be made safer at any cost, because greater safety in one way creates more dangers in other ways.

Then Why Not Compensate Also the Losers from Tariff HIKES?

(Don Boudreaux)

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I had occasion yesterday to search for a link to a paper of mine, and in my search I discovered a weeks-old email from an occasional correspondent. (In this paper I argue that no compensation is owed to workers who lose incomes as a result of a freeing of trade.)

Mr. L__:

Thanks for your late January e-mail, and please forgive me for finding it only now. I apologize for the tardiness of my reply.

You ask, in response to this paper of mine: “Aren’t there losers if government cuts tariffs? Can’t it be said that workers that depend on tariffs for jobs lose what they relied on when tariffs are cut?…. Aren’t these workers at least in principle owed compensation for their loss?”

No.

One justification for my ‘no’ answer rests on a value judgment, one that I’m prepared to defend – namely, protective tariffs are unethical. Therefore, when workers are prevented from continuing to enjoy the fruits of this unethical privilege, what they lose is something to which they were never entitled in the first place. Your labeling as “victims of free trade” those workers whose incomes fall when trade becomes freer is no more appropriate than would be someone else labeling as “victims of law enforcement” those thieves whose incomes fall when law enforcement becomes stronger. In both cases, the “losses” suffered are to streams of incomes to which the ‘losers’ never possessed ethically defensible titles.

But I understand that you’re likely reluctant to join me in regarding incomes earned only as a result of protective tariffs as illegitimate. There is nevertheless a second justification for my answering your question with a ‘no’ – which is this: No compensation was paid to the (very real) losers from the tariffs when the tariffs were first imposed.

Imposition of tariffs results in consumers paying prices unnecessarily high. Imposition of tariffs results also in some fellow citizens losing particular jobs (jobs, by the way, that were held legitimately, unlike the illegitimately held jobs that are lost when tariffs are cut).

And so even if I were to agree – contrary to fact – that free trade “has both winners and losers,” I see no reason, when tariffs are cut, to compensate these “losers” given that no one compensated the losers who were created when the tariffs were earlier raised. Put differently, if “losers” are to be compensated when trade policy changes in one direction (becoming more free), then “losers” must also be compensated when trade policy changes in the opposite direction (becoming less free).

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Pittsburgh Tribune-Review: “A matter of principles”

(Don Boudreaux)

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In my column for the April 12th, 2012, edition of the Pittsburgh Tribune-Review I argued that the 2008-09 financial crisis was no time to abandon a principled commitment to free markets. You can read my column in full beneath the fold.

(more…)

Some Covid Links

(Don Boudreaux)

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Writing at City Journal, professor of public health Leslie Bienen decries the fact that “[s]ome deep-blue school districts and many parents still insist on masking kids, a policy with zero benefits and unforeseeable costs.” A slice:

Though many students have expressed anxiety about going to school without masks, it is also plausible that masks are making life tough on them in ways that are hard to measure. No research has definitively linked the uptick in mental-health problems among kids to masking, but this research has also simply not been undertaken. It is not a stretch to imagine masks contribute to feelings of isolation, helplessness, and anxiety. They are a constant and visible reminder of fear, stress, and disease.

Importantly, though, physiological and neurological considerations may also render masks detrimental. We interpret information and display emotion through facial expression and tone of voice; masking renders these two important aspects of communication less effective. Facial recognition, which relies on a network of six groups of neurons called the face-patch system, is so exquisitely sensitive in humans that entire fields of research are dedicated to understanding it. Neural systems governing emotions related to face recognition and facial-expression interpretation are unimaginably complex. Researchers studying face pareidolia, a phrase referring to the phenomenon of perceiving human faces in inanimate objects, have found that face-like objects elicit the same neural activity as does seeing actual human faces. In their paper published in the prestigious journal Proceedings of the Royal Society B, the authors write, “Facial expressions are one of the most powerful and universal methods we have for social communication.”

Before the pandemic, it was not controversial to assert that depriving children of seeing human faces in their entirety for six to eight hours a day could have detrimental consequences.

At D.C. Catholic schools, masks are no longer required.

Sarabeth Matilsky explains what the protesting American truckers want. A slice:

Since arriving in the DC area, the People’s Convoy has been working respectfully with law enforcement, circling the DC Beltway at particular times in peaceful protest, and all the time they have been requesting the attention of our elected officials. So far, two small press conferences have yielded mainstream media reporters as confused as our elected officials seem to be. Here is what the truckers want:

— All Covid Mandates Should Be Rescinded.

— Federal Emergency Powers Should Be Revoked.

Lots of pundits wonder: “Vaccine Mandates are falling everywhere – so why the protests?”

Not to get too technical, but you need to know that the USA “State of Emergency” that authorizes Emergency Powers at various levels of government was signed into place by Trump, and has been renewed by Biden twice now – most recently a few days ago, for another entire year.

The truckers demand that this emergency order be revoked, because while it is in place, some of our Constitutional rights are suspended, and there is no guarantee that the government will stay within bounds; lockdowns in theory could happen at any time again, for similar or different reasons. And of course, these orders should be rescinded for the obvious reason that there is no emergency.

Gabrielle Bauer continues to write wisely about Covid and responses to Covid. Two slices:

Even if the Covid science were perfectly settled, it could not tell us whether and when to put masks on toddlers, close businesses, let grandma have her family celebration, or let people say goodbye to dying loved ones. There is no force of gravity compelling these decisions: they flow from our values, from what we view as reasonable or unreasonable tradeoffs.

Yuval Harari nailed this point in a February 2021 essay for the Financial Times: “When we come to decide on policy, we have to take into account many interests and values, and since there is no scientific way to determine which interests and values are more important, there is no scientific way to decide what we should do.”

You don’t have to be a public health expert to have a valid opinion about pandemic policy. How bad is it to be sick? How bad is it to miss school? “Although we can’t all be experts in epidemiology, we are all equally qualified – and in a democracy, all obliged – to think through those questions ourselves,” notes Stephen John, a senior lecturer in the philosophy of public health at King’s College London, in an article for The Conversation. When weighing in on these fundamental human questions, epidemiologists don’t get more votes than anyone else.

…..

Around the same time, Saskatchewan premier Scott Moe affirmed, shortly after contracting Covid-19 himself, that he would not impose “harmful new restrictions in Saskatchewan,” citing lack of clear evidence that lockdown measures have reduced hospitalizations, ICU admissions and deaths in other provinces.Discussing tradeoffs isn’t heartless, it’s essential. How much quality of life and mental health do we sacrifice to keep more people alive? What is the healthiest balance between public protection and personal agency? Failing to confront these questions doesn’t make them go away: it only prevents us from making clear-eyed, ethical, and life-affirming decisions.

There is no such thing as zero risk in life. Risks can only be managed, not eliminated. Somewhere along the way, we lost sight of the fact that life has always carried risk: from other diseases, from accidents, from the mere fact of engaging with the world. We need to ask ourselves why we accept the uncomfortably high risks of moving vehicles, yet struggle to accept any Covid risk above zero. We need to reacquaint ourselves with the concept of acceptable risk and draw boundaries that allow us not only to save lives, but to live a little.

Joel Zinberg describes, with excessive generosity, the Biden administration’s new plan for Covid testing and treatment as “vague, unnecessary, and probably motivated by political considerations.”

“Airline Trade Association Calls For End of Face Masks for Air Travel.”

TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)

Jay Bhattacharya tweets:

“How easy it is to make people believe a lie, and [how] hard it is to undo that work again!”
–Mark Twain

(My god, he would have been so great on twitter).

Quotation of the Day…

(Don Boudreaux)

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… is from page 627 of the 5th edition (2015) of Thomas Sowell’s excellent volume, Basic Economics:

Seldom do people think things through foolishly. More often, they do not bother to think things through at all, so that even highly intelligent individuals can reach untenable conclusions because their brainpower means little if it is not deployed and applied.

DBx: True dat.

Too many people, when pondering economic reality and economic policy, see only surface phenomena and then mistake those phenomena for the entire reality.

Are some people paid what appears to the observer to be too little? No need to think further! The explanation must be greed and the solution is for government to force the wage higher. Problem solved!

Did supplies of certain goods that are imported dramatically fall during a pandemic or war? No need to think further! Government should use tariffs and subsidies to increase the domestic production of those goods. Problem solved!

Do some workers not have paid leave? No need to think further! Government should arrange to have these workers provided with paid leave. Problem solved!

Are people getting sick from an airborne virus? No need to think further! Government should restrict people’s ability to breathe in close proximity to each other. Problem solved!

Are prices rising? No need to think further. Government should accuse sellers of “greed” [Note: But why not also level the same accusation at buyers?] and forbid the prices from rising. Problem solved!

Are many K-12 students receiving poor schooling? No need to think further! Government should pump more money into K-12 schools. Problem solved!

Is there a recession? No need to think further! Government should spend more. Problem solved!

…..

Reality is so much simpler when you don’t think about it too terribly hard!

Some Non-Covid Links

(Don Boudreaux)

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Here’s the abstract of the just-published paper, in the Economic Journal, by my GMU Econ colleague Vincent Geloso, along with Phil Magness, John Moore, and Philip Schlosser; the paper’s title is “How pronounced is the U-curve? Revisiting income inequality in the United States, 1917-1960“:

Piketty and Saez (2003) found a pronounced U-curve pattern of American income inequality since 1917, displaying a precipitous decline during World War II to a level that would hold until 1980. We offer revisions to their income inequality estimates prior to 1960 with three important findings. First, Piketty and Saez overstate inequality levels in this period. Second, the decline during WWII was smaller than depicted. Third, the Great Depression, rather than WWII, played the more significant role. These findings indicate a need to reevaluate commonly held assumptions about the evolution of inequality during the period of the ‘Great Leveling,’ as well as the nature of its posited relationship to tax policy.

Citing the work of Gail Heriot, George Will rightly criticizes “America’s cultural sensitivity industry.” A slice:

In 1986, the Supreme Court held that the EEOC had correctly decided that employees have a right (herewith the court’s language) “to work in an environment free from discriminatory intimidation, ridicule, and insult.” Heriot correctly calls this “a somewhat unusual statement” because “no one has a general ‘right’ to be free from ridicule or insult, and the federal government cannot, consistently with the First Amendment, create such a right” for “the context of employment.”

The evolving law of “harassment” and “hostile environment” prompted attitudinal changes congruent with three emerging cultural ideas: That it is wholesome to define one’s identity with reference to race, sex or ethnicity. That this should make one acutely alert to affronts, even if micro. And that there is an entitlement to pass through life without emotional distress occasioned by abraded sensitivities.

GMU Econ student Dominic Pino schools the economically ignorant Elizabeth Warren about the reality and role of profits.

The great Bruce Yandle explains that the cause of today’s inflation in America is Washington and not Moscow. A slice:

For too long now, our political leaders have been unwilling to accept the notion that their policies are the major source of inflation, that the inflation embedded in our economy is not transitory, that inflation is not just associated with sudden supply chain problems, and that inflation is not caused by business leaders suddenly becoming unusually greedy. Few have admitted inflation is created in Washington, here to stay, and likely to worsen over the next 12 months.

Many analysts (and even Biden’s Council of Economic Advisers) now recognize that, fed by trillions of stimulus dollars distributed in 2020–21, surging consumer demand placed extraordinary pressures on the straining supply of home appliances, automobiles, residential structures, gasoline, paint, and even cat food. With money flooding and consumers shopping, prices had to sail higher.

Alan Reynolds calls Biden’s – and Jen Psaki’s – theory of oil prices “unintelligible.” A slice:

The White House needs a lesson in basic energy economics. The global market for oil depends on the amount demanded and supplied, not where it comes from or where it goes. The global market for crude oil does not depend on whether the U.S. imports oil from Russia or Canada, nor does it depend on whether Russia sells that oil to the U.S. or China.

Colin Grabow continues to explain the damage done to Americans by the Jones Act. A slice:

Passed in 1920, the Jones Act restricts the domestic waterborne transportation of goods—including energy products—to vessels that are U.S.-flagged and built as well as mostly U.S.-crewed and owned. Meeting these requirements isn’t cheap. A U.S.-built tanker is estimated to cost nearly four times more than one built overseas ($150 million versus $40 million) while operating costs are also significantly higher.

The inevitable result is expensive shipping rates that can make it cost‐​prohibitive to transport oil within the United States, thus tipping the scales in favor of imports.

My intrepid Mercatus Center colleague Veronique de Rugy explains that spending more on national defense doesn’t ensure more national defense. A slice:

Providing military defense is a valid function of the federal government. However, that doesn’t give license to Congress to simply pile on more spending, even when there are dangers out there. Nor does it mean that more spending will result in a completely safe world for us Americans. That’s in part because that world doesn’t exist. There’s only so much safety money can buy.

While I certainly don’t pretend to know what the optimal budget for our military is, we are already spending a large amount on national security and on the Pentagon. In fiscal year 2023, the United States is expected to spend more than $770 billion on national defense, with $729 billion of this amount being for the Department of Defense’s military operations. This enormous sum is more than the next 10 countries spend combined. Russia, for instance, spends close to $62 billion. France and Germany spend almost $53 billion each. Assuming China’s numbers are accurate, it spends $252 billion.

Alberto Mingardi remembers the late Antonio Martino. A slice:

He studied in Chicago, in the late 1960s (where he met his wife, Carol), and when he returned to Rome he soon became a University professor. In Chicago, he’d befriended Milton Friedman. Meeting Friedman reshaped his worldview. He was expecting professors to be cold and distant, as, particularly at that time, they used to be in Italy. Friedman was accessible, kind, and funny, and took the young Sicilian under his wing.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 31 of the late Melvin Reder’s March 1982 Journal of Economic Literature paper, “Chicago Economics: Permanence and Change“:

[For Chicago economists] [t]he state is considered an agent, and one that is exceedingly difficult to monitor or to control. Therefore the state is to be shunned as an inefficient instrument for achieving any given objective – it is better sought privately – and objectives that cannot be achieved except through the state are to be scrutinized carefully and sceptically. Either the political process will frustrate the achievement of the goals altogether, or will drastically alter them in the process of achievement and, in any case, waste resources.

The argument of the preceding paragraph is sufficient basis for a generally adverse view of government intervention. Any reformer must either refute it, or minimize its importance.

DBx: Mysteriously, however, many Chicagoans – and especially George Stigler – refused to apply this realistic understanding of the state to antitrust. While Chicago scholarship did much good to justify the consumer-welfare standard for antitrust, Stigler and many other Chicago economists continued to assume, contrary to the evidence, that antitrust legislation was adopted for the purpose of ensuring competition and helping consumers.

……

Pictured above are Milton Friedman (1912-2006), George Stigler (1911-1991), and Aaron Director (1901-2004) in 1947, at the first meeting of the Mont Pelerin Society. (Director, by the way, was born in Ukraine – as was his younger sister Rose [1910[?]-2009], who married Milton Friedman.)

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Some Covid Links

(Don Boudreaux)

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Reason‘s Elizabeth Nolan Brown reports on inexcusable Covidocratic mistreatment of young children.

Reason‘s Robby Soave is rightly critical of yesterday’s decision to extend, at least until April 18th, the air-travel mask mandate in the U.S. A slice:

Contrary to what the TSA and the CDC think, it would be perfectly reasonable for passengers and commuters to de-mask right now. At this point, mask mandates are arbitrary. There is no scientific rationale for forcibly masking young school children but not restaurant diners, or subway riders but not library visitors, or airline passengers but not members of Congress: Our elderly president, senators, and senior administration officials were nearly entirely unmasked for the State of the Union. Government planners are making up policies that have no basis in health.

In December, the heads of various airlines testified before Congress that the air filtration systems on planes are better than the air filtration systems in hospital intensive care units. “I think the case is very strong that masks don’t add much, if anything, in the air cabin environment,” said Gary Kelly, CEO of Southwest Airlines. “It is very safe and very high quality compared to any other indoor setting.”

A few days later, White House coronavirus advisor Anthony Fauci said that he thought people should wear masks on airplanes for… forever, essentially. “I think when you’re dealing with a closed space, even though the filtration is good, that you want to go that extra step when you have people—you know, you get a flight from Washington to San Francisco, it’s well over a five-hour flight,” he said. “Even though you have a good filtration system, I still believe that masks are a prudent thing to do, and we should be doing it.”

Passengers who want the extra protection afforded by masks are welcome to keep wearing them.

Good news out of Austria: “Austria suspends Europe’s strictest COVID-19 vaccine mandate.” (HT Jay Bhattacharya)

Jenin Younes tweets:

Every day more data pours in that COVID policies embraced by the federal & many state governments were ineffective and harmful. Instead of recognizing error, they are doubling down on censorship of those with dissenting views on the topic. This should terrify any thinking person

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Quotation of the Day…

(Don Boudreaux)

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… is from page 73 of Israel Kirzner’s March 1992 South African Journal of Economics paper, “Subjectivism, Freedom and Economic Law” as this lecture is reprinted in Austrian Subjectivism and the Emergence of Entrepreneurship Theory, (Peter J. Boettke and Frédéric Sautet, eds., 2015), which is a volume in The Collected Works of Israel M. Kirzner:

The tendency of market outcomes to reflect, at least to some extent, the realities which surround the society of men, derives from the propensity of men shrewdly to size up these uncertainties and to act purposefully to discover and overcome error.

DBx: Entrepreneurship in the market is nothing but the discovery of error and imperfections, or of situations that entrepreneurial discovery reveals to be the results of error or imperfections. To argue – as many economists do – that government intervention is necessary to ‘correct’ market imperfections and to protect people from error (either of their own or others’ making) is to utterly miss a key feature of the market process – namely, entrepreneurship.

Productive discussion and research can and should compare entrepreneurial discovery to government intervention. Under what conditions is entrepreneurial discovery likely to outperform government intervention, and under what conditions is it wiser to rely on government intervention? Questions such as this one are serious and scholarly. What is not serious or scholarly is to point to some existing problem in real-world markets and then leap to the conclusion that the best ‘solution’ for this problem is government intervention. (What’s even less serious and scholarly is to label all that you dislike about markets as market ‘failures’ that must be ‘corrected’ by government intervention. The results of even the most wisely made trade-offs are never what we’d have to suffer were we denizens of paradise. But we are not denizens of paradise.)

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