Russell Roberts's Blog, page 345

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 132 of University of Glasgow Senior Lecturer Craig Smith’s excellent 2020 book, Adam Smith:

Telling people how to use their capital is futile because statesmen will always have less knowledge of the specific circumstances of each individual and less incentive to invest the capital effectively than those individuals have themselves.

DBx: Hey! You advocates of industrial policy, you! Are you listening? Are you aware that for your proposed schemes to have even a remote prospect of working as you advertise, government officials must gather, process, and act on, in efficiency-enhancing ways, an unfathomable amount of detailed and ever-changing knowledge that is dispersed across billions of individuals producing and consuming all over the globe?

Aren’t you at least somewhat troubled that your proposals rest on the ridiculously unrealistic assumption that government officials can obtain such knowledge and have both the ability and the incentive to act on this knowledge in ways that promote the general welfare?

Seriously, all you industrial-policy advocates, left and right, what say you? What miraculous wand do you believe exists that, when waved by industrial-policymakers, will bestow on them the knowledge of how to improve upon the market’s allocation of resources?

Each of you industrial-policy advocates insists that those of us who oppose industrial policy naively – we being ideologically blinded by our stupid devotion to simplistic absolutisms – underestimate the ability of government officials to allocate resources effectively. Okay. So please, tell us: How will government officials obtain the detailed knowledge that they must obtain if they are to have any genuine hope of outperforming competitive markets?

Seriously. Tell us. I’m – we’re – all ears. So far, not one of you has even attempted to offer an answer to this question. Here’s your opportunity. The comments section is open.

Bonus Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 157 of my late, great colleague Walter Williams’s 2015 book, American Contempt for Liberty, which is a collection of many of Walter’s columns and essays; this quotation specifically is from Walter’s September 1st, 2011, syndicated column, “Blacks and Politics”:

Political power empowers – and even enriches – the political elite; for them, getting out their constituent vote is the be-all and end-all. It’s the economic arena, featured by personal liberty, that best serves the ordinary person.

As long as black politicians can successfully run a rope-a-dope on their constituents by keeping them focused on allegations of white racism and telling them that salvation lies in voting for them, little good will come to their poorest constituency.

DBx: I’m still trying to wrap my head around the awful reality that Walter is no longer with us. His courage, his clarity, and his commitment to the principles, and to the practice, of liberal individualism were rare – too rare. Walter was truly a great man.

Another Discussion of the Lethality of the Horrible Novel Disease, Covid Derangement Syndrome

(Don Boudreaux)

Tweet

Although the discussants in this video focus on Ireland, the general points apply across the globe. This discussion makes clear the folly, specifically, of relying on Neil Ferguson’s ludicrous Imperial College model and, more generally, of the belief that most governments’ response to Covid-19 is justified by ‘the science.’ Humanity is now gripped by CDS-20 rather than by any prudent respect for science.

Some Links

(Don Boudreaux)

Tweet

Writing in the New York Times, my intrepid Mercatus Center colleague Veronique de Rugy proposes three policy changes to promote economic growth. A slice:

Next, do away with all government-granted privileges, such as tariffs, farm and export subsidies, and most occupational-licensing requirements for fields like natural hair-braiding or interior design. According to the Institute for Justice’s occupational-licensing report, on average the requirements for low- to moderate-income occupations in the U.S. cost around $200 in fees and require nine months of training.

These requirements favor wealthier and politically connected interest groups at the expense of lower-income workers and consumers. And the health care industry should receive no exemption. Get rid of scope-of-practice rules which protect doctors from the competition of nurse practitioners. At the same time, allow doctors to serve patients all over the country and compete for business through telemedicine.

My colleague Peter Boettke remembers our departed colleague – who once was also Pete’s professor – Walter Williams. A slice:

He understood that economic processes take place against a backdrop of politics, law, and social mores and beliefs. He understood, as his long-time friend and colleague Thomas Sowell stressed, the first lesson of economics: We live in a world of scarcity, and thus we are required constantly to weigh trade-offs. In contrast, the first rule of politics is to deny that scarcity exists. In insisting that we never forget that hard choices must be made, Walter’s commentaries rained on the parade of promises from politicians and exposed the pretensions of the powerful. This led him to include moral arguments about personal responsibility and a deep commitment to liberty in his popular writings. His main argument was that human history is a story of the domination and arbitrary abuse of the powerful over the lives of ordinary individuals. What made America special was that we had found a set of formal institutions of governance and informal norms of morality that kept this power in check. Walter hoped that history would not record this period as an aberration, but rather as a critical turning point toward wider freedom. His advice to policymakers: adopt your own version of the Hippocratic oath and do no harm. Political institutions must not exhibit either domination or discrimination if progress toward greater freedom and prosperity is to be achieved.

John Cochrane, moved by the death of Walter Williams, rightly laments the fact that “the Chicago – UCLA – George Mason economic philosophy seems to take place increasingly in obituaries.”

Also remembering Walter Williams is Steven Hayward.

Helen Raleigh reports a rare bit of good news out of the elite academy.

Christian Britschgi explains that California’s dictator, Gavin Newsom, is destroying small businesses in that state. A slice:

Business owners working with the libertarian Pacific Legal Foundation filed a lawsuit back in October challenging Newsom’s last round of business restrictions on the grounds that he was usurping the state legislature’s authority.

So far, businesses have mostly taken Newsom’s various pandemic regulations on the chin. The more restrictive these regulations become, however, the less patience they’ll likely have for the governor’s central planning schemes.

Robby Soave reports on good reasons to exercise great caution before trusting the judgment of an epidemiologist. The title of his report explains why: “Many Epidemiologists Want Social Distancing and Masks Forever—Even After the Vaccine.”

Phil Magness shares a relevant quotation from Herbert Spencer.

Adam White talks again with Richard Epstein.

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from pages 128-129 of the recently released (2020) work – co-published by the Adam Smith Institute and AIER – by Deirdre McCloskey and Alberto Mingardi, The Myth of the Entrepreneurial State:

The statist faith [in industrial policy] is like thinking that your laptop in 2021 was envisioned in 1981 by IBM technicians making the first desktop computer. It infers direction and rationality, and therefore the efficacy of central planning ex ante, from a complex evolutionary result, ex post. It is similar to the inference to a Maker from the complexity of the eye. But in fact the products and processes evolve in the economic world in the way the eye evolved, by a back and forth between producers and consumers, as between biological variation and its environment. Bottom-up, as we keep saying.

DBx: Looming large among the many offenses committed by advocates of industrial policy is their wish to remove from the economic picture the consumer. Oh, there will continue to be, under industrial policy, consumption. People gotta be fed, clad, and housed. But what there will not be is the consumer – the person who is free to spend his or her income in ways that he or she chooses.

The reason is straightforward. Insofar as income earners are free to spend as they choose, their spending will almost certainly be inconsistent with the production plans that form the industrial-policy scheme.

Suppose that consumers prefer lighter and less-expensive cars made of aluminum or carbon-fiber to heavier ones made with steel. If consumers are allowed to express this preference by buying lighter-weight vehicles in lieu of heavier ones, the demand for domestically produced steel might well be inadequate to ensure profitable domestic production of the full amount of steel that is planned for by industrial-policy makers. If so, consumers must be prevented from expressing this preference. Were consumers allowed to express this preference, the details of the industrial-policy plan would have to be revised to accommodate this revealed consumer preference – in which case the very point of industrial policy would be undermined.

Industrial policy, although typically marketed as a scheme for enriching the masses, is by its nature no such thing. Or, at least, it’s no such thing as long as the mortals who design and implement such policies are denied superhuman knowledge and prescience. Industrial policy is necessarily, in practice, a scheme for maintaining certain patterns of production, ones envisioned by the bureaucrats (with help, perhaps, from their intellectual advisors) charged with carrying out industrial policy.

Compelled to consume only in ways that are consistent with the The Plan, individuals in their role as consumers are made to serve the The Plan. Consumers must be compelled to spend in ways that ensure that production plans are able to be carried out as envisioned by the bureaucrats who designed these plans. The particular, bureaucratically chosen details of production become the end to be pursued; consumption spending is reduced to being a mere means of ensuring the the fulfillment of the production Plan.

By making consumption the means and production the end, industrial policy practically guarantees, at best, economic stagnation. Consumer preferences and desires are no longer what producers seek to satisfy as fully as possible. With producers no longer aiming at improving the satisfaction of consumer preferences – and, importantly, also no longer aiming at enabling consumers to discover new preferences that rank highly – genuine innovation and economic growth stop.

One more observation: By removing the consumer from the economic picture, industrial policy also removes the entrepreneur. The entrepreneur, after all, is someone who seeks profit by finding better ways to satisfy consumer preferences. Because industrial policy must prevent consumers from responding to entrepreneurial innovation – for such response would disrupt The Plan – industrial policy has no role for entrepreneurs.

…..

Industrial-policy advocates – ones on the right, such as Oren Cass and Marco Rubio, and ones on the left, such as Robert Reich and Elizabeth Warren – of course deny the above. But such denials spring from the reality that industrial-policy proponents never both to think seriously about just what it is they are proposing. Read any proposal for industrial-policy: In the end it never amounts to anything more than the assertion that government officials with the power to override consumer and investor choices will allocate resources better than resources will be allocated through competitive markets.

Anyone can make such an assertion. But no one can explain just how imperfect human beings put in charge of allocating resources bureaucratically will get the knowledge they need to out-perform competitive markets. In short, all proposals for industrial policy are premised on a “Then a miracle occurs” step.

Bonus Quotation of the Day…

(Don Boudreaux)

Tweet

… is from this op-ed by Drs. Martin Kulldorff and Sunetra Gupta that appeared on November 29th in the Toronto Sun:

Lockdowns have generated enormous collateral damage on other health outcomes, such as plummeting childhood vaccination rates, worst cardiovascular disease outcomes, less cancer screening, and deteriorating mental health, just to name a few. Even if all lockdowns are lifted tomorrow, this is something that we will have to live with – and die with – for many years to come.

One of the basic principles of public health is to consider all health outcomes, and not only a single disease. Having thrown that principle out the window, we urgently need to bring it back to minimize mortality and to maximize overall health and well-being.

Actual Rather that Tweet Tyranny

(Don Boudreaux)

Tweet

Here’s an open letter to Café Hayek commenter Miles Cobb:

Mr. Cobb:

Upset with my opposition to the despotic lockdowns and other restrictions imposed in the name of fighting Covid-19, you posted the following comment at my blog:

Earlier this week Flynn gets a presidential pardon and then immediately tweets about violence if Trump doesn’t stay in office. Yet you continue to focus on the tyranny of disease control. Talk about derangement!

Seriously?

While such a tweet by Flynn (or anyone else) is inexcusable, it’s a tweet. In contrast, governors and mayors across the country are actually locking workers out of places of employment and shuttering businesses – actually restricting human beings’ social interactions – actually setting arbitrary limits on the number of persons who are allowed peacefully to gather under the roofs of their own private homes – actually siccing the police on some men and women who don’t wear masks outdoors – actually restricting attendance in places of worship (and openly criticizing the courts when the courts don’t cooperate in this tyranny) – actually, in short, deploying threats of coercion that are destroying our civilization without any credible evidence that this deranged despotism will achieve even the goal of saving lives.

My friend David Hart calls it “hygiene socialism.” I call it Covid Derangement Syndrome. But whatever one calls this cruel and lethal insanity, it’s deeply ironic that those who for years have most loudly warned against Trumpian tyranny are themselves today actually tyrannizing Americans – tyrannizing Americans with actual police, carrying actual guns and actual tasers, enforcing actual dictates that are completely and actually arbitrary.

So, sir, while I stand with you in condemning any such tweet by Michael Flynn, to treat such a tweet as a greater threat to liberty and civilization than is the actual bludgeoning of civilization now underway and cheered on disproportionately by “Progressives” is, frankly, simply another symptom of Covid Derangement Syndrome.

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

Wisdom from Hans Eicholz

(Don Boudreaux)

Tweet

My dear friend Hans Eicholz, after watching , sent an e-mail to a select group of people (including me) who are strategizing about how to protect liberal individualism in the face of hygiene socialism. I share here, with his kind permission, part of Hans’s e-mail (original emphasis):

My response has been and remains, that we need local targeted responses based on what is known of the demographics in specific areas, that is to say federalism and decentralization. Local leaders should be stepping up to make strong statements to specific institutions and populations. Here is where all classical liberals can push back in concert with some success I should think.

But our national leaders wish to make this a unified, not federalized approach. I do not understand why. All the major news networks are still beating the drum of consistent, uniform, national response top down. Is this not, at a minimum, and for those who still hold that “government” ought to play some kind of role in these matters, a huge misallocation of resources–of taxes, talent and people?

Are we so politically decrepit that we must now have, and can only respond to, a Czar? If so, then something has happened to our culture when we can no longer internalize any rule but a command.

Some Covid Links

(Don Boudreaux)

Tweet

State governments in the U.S. have a financial interest in keeping at fever pitch Covid Derangement Syndrome (CDS-20). A slice:

An end to the COVID-19 public health emergency would seem like good news for states. But state officials are dreading the end of that official designation because it will mean more work and less money for their Medicaid health coverage programs.

States have benefited from increased federal funding from the first COVID-19 relief law this year, and individuals who enrolled cannot be booted from coverage mid-pandemic. But both of these safeguards will not be in place after the public health emergency, or PHE, ends.

And consider also this revealing remark by someone described as “a former federal health policy official”:

“Unfortunately, all good things must come to an end. When the public health emergency ends, states will have to resume acting on renewals and changes.”

David Hart ponders what’s to be done as we face the onslaught of CDS-20-fueled hygiene socialism. A slice:

Fast forward to the present, and when we look out over the political playing field the most prominent and most successful players are those who are playing in the “Socialist League” not the “Liberty League”. In my opinion, the four strongest teams playing in the “Socialist League” are the Green Socialists, the Keynesian Socialists, the Cultural Marxists, and a new team called the “Hygiene Socialists”. The “Liberty League” seems to have suspended their competition for the time being for lack of teams or because many of their players have retired injured or defected to the “Socialist League”.

Wall Street Journal columnist Allysia Finley is rightly critical of the hypocrisy and partisanship of the tyrant currently called New York’s “governor,” Andrew Cuomo.

George Mason University law professor David Bernstein laments the recklessly poor reporting by the media on Covid-19. A slice:

The report [by NPR] then discusses ICU bed shortages and the like. Some context would again be useful. To keep costs down, hospitals try to limit ICU beds to expected demand. *Any* surge in patients, even a small one, will therefore test the system. Just having an unusual number of bad traffic accidents one weekend can lead to a local shortage of ICU beds, as can a flu outbreak. No one likes to talk about this, but rationing of ICU beds is done regularly whenever there’s a surge, and a 90 year old with a poor prognosis may be taken out and left to expire if a 30 year old with a better prognosis shows up. This sort of context would be useful… it’s not that Covid is taking up so, so many beds that it’s overwhelming an otherwise robust system, it’s that the entire system is set up such that any surge in need is going to try the system.

Speaking of the media, my colleague Bryan Caplan explains when – and when he doesn’t – take them seriously. A slice (original emphases):

Whenever the media cover a story, there’s a subtext.  And the subtext is: This is important! The also goes when the media ignores a story.  The subtext is: This is not important! Even if I knew nothing about the world, I would wonder, “What qualifies these people to adjudicate events’ importance?”  And since I do know a great deal about the world, I am convinced that the media’s sense of importance is radically defective.  These are the kind of people who would rather cover an insensitive tweet than Uighur concentration camps.  They would rather report a fatality-free nuclear accident than the vastly greater health damage of coal.  They would rather investigate the latest terrorist attack than discuss the global murder rate.  These are not isolated shortcomings.  The media’s main function is to distort viewers’ priorities.

Stephen C. Miller reminds us – and digs further into the empirical realities – of the fact that around 40 percent of Covid-19 deaths in the U.S. are of people in nursing homes. A slice:

Why were they so anxious to shut down schools and concerts attended by healthy young people — or just healthy people in general — while disregarding a vastly greater and more obvious risk? Instead of demanding stricter rules for everyone, governors should look to improve safety in nursing homes.

Steve Landsburg urges the use of the price system to allocate vaccines. A slice (original emphasis):

It is tragic that so much of pandemic-management policy has been made in defiance of basic science. It is equally tragic that so much policy is about to be made in defiance of basic economics. Because if there’s one thing that economics teaches us, it’s that you cannot distribute a scarce resource efficiently unless you use the price system. No bureaucrat at the CDC has enough information to distinguish Edna from Irma, or Tina from Gina. Therefore they won’t even try.

My intrepid Mercatus Center colleague Veronique de Rugy makes visible some of the unseen casualties of Covid Derangement Syndrome. A slice:

They are essential workers who have continued to labor hard to provide our health care and our groceries, even when their children were stranded at home in spite of overwhelming evidence that schools are not a locus of COVID-19 infection.

They are the countless children who have been dramatically falling behind in school. They are the children whose math skills are plummeting. They are the kids with disabilities and the English-language learners whose academic performances are collapsing. They are the kids who’ve dropped out of school entirely. They are the kindergarteners who sit in front of a screen for hours and have not experienced the joy of playing with other kids during recess, ever.

They are the college students who are locked in their dorms and “learning” online with little contact with peers or professors. They are all the other college kids who simply drop out of school to take care of their families.

They are all the children whose anxiety levels have dramatically soared. They have lost hope; they are depressed. Many are thinking of suicide. Some even commit it.

In the Name of Fighting Covid-19, Humanity is Being Terrorized

(Don Boudreaux)

I thank my GMU Econ colleague Dan Klein for sharing this discussion, out of Ireland, about the horrors of what I call Covid Derangement Syndrome (CDS-20). It’s just over 17-minutes long.