Russell Roberts's Blog, page 257
July 6, 2021
Some Non-Covid Links
Here’s deep wisdom from Glenn Loury. (HT Arnold Kling)
Juliette Sellgren talks with Scott Winship about poverty and welfare.
Jeffrey Singer writes insightfully about the new Alzheimer’s drug and the FDA.
George Leef decries the continuing demise of free speech.
Richard Ebeling writes about declaring independence from big government.
David Harsanyi corrects the record on AFPF v. Bonta. A slice:
Many in political media simply can’t help themselves. They synthesize everything through the prism of race or class — or both — and are unable to comprehend that neutral constitutional principles can often go beyond those issues.
According to Kristian Niemietz, young people today truly are scarily socialist. A slice:
It turns out that there is a lot of truth to the stereotype of the woke socialist millennial/Zoomer. The overwhelming majority of young people really do express stridently anti-capitalist views across a broad range of issues. Seventy to 80 per cent believe that capitalism fuels climate change, racism, greed, materialism, and runaway housing costs. Similar proportions support nationalisations and rent controls. Young people associate “capitalism” primarily with exploitation, unfairness, corporations, and the rich, while associating “socialism” primarily with terms such as “workers”, “equal”, “public”, “fair”, “communal”, and, yes, “Jeremy Corbyn” (no, this is not over).
Virtually nobody associates socialism with the erstwhile showcase of “21st century socialism”, Venezuela. On the contrary, 75 per cent agree with the statement that “socialism is a good idea, but it has failed in the past because it has been badly done (for example in Venezuela)” – the old cliché that “real” socialism has “never been tried”.
George Selgin continues to bust myths about banking and money.
A Declaration of Independence for 2021
My friend Jim Clancy updated for 2021 Thomas Jefferson’s soaring document of 1776. (I thank Jim for his kind permission to share here his revised Declaration.) It appears beneath the fold.
2021 ain’t 1776, so, to be clear, no one is calling for any armed rebellion. But what is called for, what we should fervently hope will transpire, is a rebellion of the mind – a peaceful reconsideration of the individual’s connection to the state – a renewed embrace of the liberalism that fueled the revolution that began in earnest at Lexington on the morning of April 19th, 1775, and whose justification was so eloquently expressed just over a year later by Jefferson – a revived awareness of the dangers of collectivism – a rejection of the mysticism that deludes so many people to seek secular salvation through the exercise of state power – a reinvigoration of the spirit of refusing to live at the expense of others, and refusing to impose one’s will on others – a restoration of the spirit of individualism and liberty.
Antitrust Replaces Knowledge With Ignorance
Here’s a letter to the Wall Street Journal:
Editor:
Robert Atkinson rightly warns against vigorous use of antitrust (“Antitrust Can Hurt U.S. Competitiveness,” July 6). Such enforcement removes responsibility for business decision-making from persons possessing both on-the-spot knowledge of relevant commercial details and incentives to use that knowledge productively, and places this responsibility in the hands of persons possessing neither. Judge Frank Easterbrook’s assessment from decades ago remains relevant today:
If judges had the data, we would not trust them to make good decisions. The business world relies on financial incentives to encourage managers to make the best use of knowledge and to weed out those who, despite their best efforts, cannot do as well as others. Judges do not profit from making astute business decisions and are not let go for making bad ones…. To the extent judges make economic decisions in antitrust cases, they are making predictions about tomorrow’s effects of today’s practices. This is problematic under the best of circumstances. Economists start from existing practices and try to explain why they exist and survive. Even when all agree about the effects so far, they disagree about impending effects under changed conditions. Experts will take diametrically opposed positions.*
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
* Frank H. Easterbrook, “Ignorance and Antitrust,” in Thomas M. Jorde and David J. Teece, eds., Antitrust, Innovation, and Competitiveness (New York: Oxford University Press, 1992). The quotation appears on pages 120-121.
Quotation of the Day…
… is from page 165 of the late, great Wesleyan University economic historian Stanley Lebergott’s insightful 1975 book, Wealth and Want:
There exist various lists of the very rich at different points in American history. They share a common characteristic: a substantial portion of the names on any list would not have been on a similar list a generation before, and often a mere decade before.
DBx: Pictured here is the richest American in 1982 – the first year that Forbes made its list of the 400 richest Americans. Do you recognize this tycoon?
I identify him beneath the fold.
July 5, 2021
Bonus Quotation of the Day…
… is from page 160 of the late Peter Bauer’s essay “Further Reflections on the State of Economics,” which is Chapter 10 in Bauer’s excellent 1984 book, Reality and Rhetoric: Studies in the Economics of Development (footnote deleted):
Statement of the obvious, which by now often amounts to rediscovery, has become a major task. But this may well be a more appropriate task than extensive preoccupation with refinements, at times indistinguishable from trivia, on the so-called frontiers of knowledge. Some of these developments give every appearance of being blind alleys. Indeed, they are apt to obstruct progress towards an improved understanding of reality. This preoccupation has in turn diverted attention both from the study of reality and from the exposure of transgressions.
An As-Yet-Undelivered College Graduation Speech
Pay close attention to your impartial spectator.
Note that this advice is quite different from that clichéd piece of graduation-day advice to “Go out and change the world.”
Please, don’t go out and change the world. Seriously, please don’t. At least, please don’t try to change the world in the way that such a challenge is typically understood.
Above all, our world – while of course infected with many correctable flaws – isn’t so awful that change for the sake of change is called for. Billions of people today are living longer, healthier lives than ever before. Markets are expanding and creating for ordinary men and women ever more widespread prosperity and opportunities that no one dared dream of before the Industrial Age. And so any individual’s efforts to “change the world” are far too likely to change the world for the worse.
Let me put the point differently: You don’t know how to change the world in any wholesale fashion, and you can’t possibly know.
No one knows. The world is too complicated to be changed for the better through any conscious effort at grand alteration.
Look at your graduation gown. Do you know where it was made? How it was made?
Do you know how matters are arranged such that every year at this time tens of thousands of graduates across America don for a few hours gowns that they will never again see?
Of course you don’t. (Don’t feel embarrassed. No one knows.)
And I guarantee that for you to learn all the relevant details of what it takes to bring that gown to you today would consume your entire working life.
You’re a long way from knowing enough even to change for the better the graduation-gown part of the world. So you can’t possibly know enough to tackle the task of changing for the better the larger world.
The best you can do is to change some of those tiny slices of reality that are within any one individual’s ability to understand. Start a new business if you sense unmet consumer demands. If your talents and tastes allow, become a physician because you know that illnesses still afflict people. Or become a lawyer to help people write better contracts or to provide needed assistance when legal disputes arise. Or teach, if that’s your calling, to help share knowledge.
Do something productive, of course, but not with the goal of altering history or of “changing the world.”
Instead, find your niche. Be creative in it. Excel in it. And know that, by doing so, you’ll almost certainly not change the world in any way that will make headlines or result in a statue of you being erected upon your death. But you’ll be part of a huge peaceful legion of people whose cooperation and peaceful competition within markets and civil society will change the world for the better, a little bit each and every day, and yet in ways that no one today can possibly foresee. Remember, open-endedness and unpredictability are good!
Happy graduation!
Please, No More Policy Voodoo
Here’s a letter to a new correspondent:
Mr. E___:
Thanks for your e-mail in response to my linking earlier today to this essay on trade by David Henderson.
You argue that Henderson’s case for free trade “would have been stronger if he qualified it by agreeing that any tariff cut should first have to pass an empirical benefit-cost test…. [J]ust because overall welfare was ordinarily raised by past tariff cuts does not mean every future tariff cut would be beneficial.”
With respect, I disagree with you. Here are three reasons why:
First, there’s no practical way that even super-genius econometricians can measure the full range of detailed costs and benefits that will result tomorrow from tariff cuts today. All such attempts at soothsaying are nonsense.
Second, given free-trade’s long track record (alluded to by David) of successfully promoting economic growth and of raising the living standards of the masses, the burden of proof is properly placed not where you’d have it – on the case for free trade – but instead on the case for protectionism.
Third – and as David says in a somewhat different context – your argument, if valid, has implications that I’m sure you reject. Making trade freer simply means allowing fellow citizens greater freedom to deal commercially with foreigners. Yet if you’re correct that any such freeing of trade “should first have to pass an empirical benefit-cost test,” then you must also believe that the abolition of, say, Jim Crow legislation ought not to have occurred until and unless “an empirical benefit-cost test” showed that net gains would result from freeing non-blacks to deal commercially with blacks. Ditto for policy changes that removed men’s barriers to deal commercially with women. Would you have wished to condition these policy changes on their ability econometrically to meet such a burden?
Calling for empirical evidence of the likely cost-benefit consequences of this or that policy is well and fine. But unless issued with a proper appreciation of the categories into which proposed policy changes fall, with a wise and ethically defensible determination of the appropriate location of burdens of proof, and with full awareness of the inherent strict limitations of empirical predictions, such calls aren’t so much for scientific policy analyses as they are calls for policy voodoo.
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
Some Non-Covid Links
David Henderson busts two myths about free trade. A slice:
Second, there is nothing special about free trade. Indeed, in a large economy like that of the United States, most trade is not across borders but is between people within the US borders. In 2019, imports were about 14.6 percent of gross domestic product. That sounds high, and is high, but that number confirms that most trade in the United States is between and among people in the United States. When a new technology or even a new way of running a business helps consumers, it also destroys many businesses and hurts workers who lose their jobs or who must work at a lower pay to keep their jobs.
We don’t need to go back far to see such examples. When I taught in the business school at the University of Rochester in the late 1970s, some of my evening MBA students who worked at Kodak called it the “big yellow money machine.” Kodak was riding high on the technology that innovator George Eastman and his successors had created and perfected. But digital cameras in the 1980s and 1990s and, later, cell phones that got better and better at taking still shots and movies, virtually destroyed the market for Kodak’s product. It’s true that part of the causes was international trade in cell phones. But even without cell phones from other countries, US cell phone producers were plenty capable of competing Kodak into bankruptcy.
Few of those who advocate compensating those who lose due to expanded trade across borders advocate compensating those who lose due to increased trade within borders. I hasten to add that I’m glad that they don’t. But the principle is the same.
My new GMU Econ colleague Vincent Geloso clarifies some Canadian history. A slice:
But what would have happened if the settlement of Canada had occurred with a smaller state presence? Would there have been fewer abuses of the rights of First Nations? In an article with Rosolino Candela (published in Public Choice) and in a working paper with Louis Rouanet, I argue that the relations between settlers and natives were essentially peaceful in settings with limited state involvement.
Yascha Mounk identifies a phenomenon that he calls 180ism. I believe he’s correct that 180ism is both real and lethal to productive discourse. (HT Arnold Kling)
Here’s good sense from David Bernstein. A slice:
I would add one more factor to Douthat’s analysis. As with the 1619 Project and Kendi and Reynolds, Stamped: Racism, Antiracism and You, activist historians and journalists play fast and loose with facts to suit their historical narratives. They also seem impervious to acknowledging, much less correcting, even the most glaring errors when pointed out to them. For example (in honor of Independence Day), no, the American Revolution was not fought primarily to prevent Great Britain from abolishing slavery in the colonies. Those who insist that public schools should teach made-up nonsense as historical fact in service of radical ideologies that most Americans don’t agree with will rightly get political blowback.
And here’s Mike Gonzales on that lethal mind-poison and soul-toxin called ‘critical race theory.’
The board paid a consultant to conduct a survey on whether those Virginian Founding Fathers’ slave ownership meant their names shouldn’t adorn school buildings. Three-quarters of the community members surveyed wanted to keep the names; the margins were smaller but still significant for current parents, students and staff. Overall, 56% of survey respondents supported keeping the names, about a quarter wanted to change them, and the rest had no opinion. Yet the board unanimously voted to rename.
That caught my attention. Regardless of the merits of Jefferson and Mason, how could elected officials be so oblivious to public sentiment? And this had nothing to do with national politics; Falls Church went 80% for Joe Biden in November, so the renaming survey didn’t reflect some inherent partisan divide.
Quotation of the Day…
… is from page 47 of Bernard Bailyn’s penetrating 1967 book, The Ideological Origins of the American Revolution:
They [the early 18th-century British writers who so inspired America’s founders] refused to believe that the transfer of sovereignty from the crown to Parliament provided a perfect guarantee that the individual would be protected from the power of the state.
DBx: And as Bailyn explains, no writers influenced America’s revolutionary generation more than did John Trenchard and Thomas Gordon, authors of Cato’s Letters.
July 4, 2021
Some Covid Links
Ethan Yang calls for a Declaration of Independence from the covidocracy. A slice:
Likewise, if we do not do something to prevent the gross abuses of power that have transpired over the past year and a half, the Fourth of July will cease to have any real meaning in this country and to all those abroad who look to us for inspiration.
Janet Daley continues to write eloquently against the covidocracy and its inexcusable abuse of power. Here’s her conclusion:
Until now, the Government has been able to exploit the people’s humanity – their conscientiousness and responsibility – to maintain an inhuman system. But that moment has passed: someday in the not too distant future we will wonder how it happened at all. The country has had enough. This is, you might say, the beginning of a brand new game.
Don’t look now, but the straw man is frolicking in Florence.
Jonathan Sumption reviews historian Niall Ferguson’s new book, Doom. Here’s Sumption’s conclusion:
Interestingly, the case of Covid-19 is inconsistent with Ferguson’s general theory that failures to manage pandemics stem from a lack of institutional depth and foresight. Britain and the United States have done badly, except on the vaccination front. Yet both countries, together with Germany, had comprehensive plans, the fruits of over a decade of planning, for just such a pandemic. Ferguson does not deal with these plans, but they are interesting because they envisaged a response very similar to the one that he recommends. They were based on selective shielding of the vulnerable and on limited and voluntary measures of social distancing. These plans were informed by the experience of earlier pandemics and by a review of the collateral consequences of different policy choices. This is exactly the kind of institutional preparation that Ferguson thinks we should have made. The fact is that we did.
The mistakes were made by the leaders, notably Donald Trump and Boris Johnson. Ferguson is keen to defend them, not on the ground that they did well but on the ground that the failures were institutional, not personal. The evidence does not seem to bear this out. Johnson threw out a decade of British planning in a weekend and replaced it with an indiscriminate lockdown for which there had been no preparation, research or cost–benefit analysis. This was his decision, and that of his sidekick Dominic Cummings. It is true that without good institutional preparation, leaders, however talented, are unlikely to do much good. But they still matter. At their worst, they can do infinite harm through ill-conceived measures. And at their best, they can stand up against public demands for such measures, if they have the necessary moral and political stature. In this country, we have strong institutions, as the contingency planning and the vaccine campaign demonstrate. What we lacked was the capacity at the top to use them intelligently.
Political scientist James Alexander ponders Coviathan.
Jay Bhattacharya describes the continuing masking of children as “a form of child abuse.”
Here’s the Babylon Bee on the Delta variant. (HT Todd Zywicki)
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