Russell Roberts's Blog, page 358
October 31, 2020
Quotation of the Day…
… is from pages 200-201 of Steven Landsburg’s 2009 book, The Big Questions (original emphasis):
But Jim Crow was (among other things) a barrier to trade between the races, and economists know that barriers to trade are generally detrimental to both populations. Whites who were discouraged from serving black customers, or patronizing black businesses, or hiring black workers, or working for black employers, were victims of Jim Crow, just as their counterparts were.
To argue otherwise would be bad economics. It would also be racist. Jim Crow prevented blacks from dealing with whites, and it also prevented whites from dealing with blacks. Who would want to argue that being denied the right to trade with white people is a form of oppression but being denied the right to trade with black people is no big deal?
DBx: Yes.
And do not forget that Jim Crow was enforced with legislation – evil legislation meant to prevent the civilizing, integrating, and barrier-busting forces of competitive markets.
October 30, 2020
Bonus Quotation of the Day…
… is from page 143 of Liberty Fund’s excellent 1993 collection of some of the writings of H.B. Acton (1908-1974), The Morals of Markets and Related Essays (David Gordon & Jeremy Shearmur, eds.):
[S]cientific and technological discoveries have considerable effects on the development of society. It follows that societies in which scientific and technological discovery is particularly frequent must be societies in which predictions of their future condition is particularly hazardous. Our society is certainly such a society….
DBx: Who can doubt the truth of this observation?
And yet, all calls for industrial policy – being calls for government to pick industrial ‘winners’ (and, hence, call also for government to arrange for other firms and industries artificially to become losers) – disregard the truth of the above observation.
The assumption made by industrial-policy advocates seems to be this: Under industrial policy, discovery of new knowledge will continue apace (or at an even quicker pace!), yet none of these discoveries will disrupt the industrial-policy plan. The plan – its advocates apparently suppose – will be drawn and administered with such genius that all new worthwhile discoveries will be incorporated seamlessly into the plan in ways that only make the plan stronger and an even better method of allocating scarce resources than competitive markets. Beneficial change of the sort that we have in markets will continue.
Furthermore, not only will this change continue, it will do so without any of the downsides of change; the “destruction” in “creative destruction” will be eliminated without affecting the “creative.” Indeed, matters get even better: Beneficial discoveries and change will be incorporated so smoothly into the industrial-policy plan that these discoveries and changes will appear in retrospect to have been anticipated in adequate detail by the plan’s genius designers.
Yeah. That makes sense.
Some Links
Jenin Younes tackles Paul Krugman’s execrable hatchet job on the Great Barrington Declaration. (If Krugman’s understanding of the Great Barrington Declaration and of AIER are any indication of his ability to understand epidemiology and the consequences of the Covid lockdowns, then there’s no reason to pay any attention to what he says about the disease and humans’ responses to it.) A slice from Ms. Younes’s essay:
Those who continue to advocate extreme measures, such as lockdowns and forced human separation, are making the extraordinary claim that we must disrupt the functioning of the traditions and institutions that societies have developed over millennia, and are vital to human flourishing, in response to a single problem: a pathogen with an infection fatality rate currently hovering around 0.27 percent, with deaths highly concentrated among those with very low life expectancies.
Never before have governments throughout the world ordered schools to close, businesses to stop operating, travel to cease, and people to refrain from interacting with each other, for an indefinite time period spanning months and possibly even years. As others have noted, this is an experiment of an unprecedented nature on an unprecedented scale, the consequences of which will undoubtedly ripple into subsequent decades and possibly beyond.
David Henderson replies to Tyler Cowen’s push-back against an earlier piece by David. (Now updated.)
Jacob Sullum reports that medical treatments for Covid-19 are improving.
The great Glenn Greenwald resigns from The Intercept.
Chris Edwards rightly warns of Joe Biden’s proposal to increase taxes on capital gains. A slice:
Joe Biden is planning large tax increases if elected president next week. He says that the increases would be just for high earners, but his proposals would hit all of us by damaging investment, entrepreneurship and job opportunities.
People have pretty much always bought and sold in markets, but they have not always embraced markets as dignified or even nonobscene social spaces in which anything but mutual swindling and plunder takes place. They have not always embraced the commercial and technological heresies we call innovations that raised the average rate of per-capita income growth in places like the modern United States from roughly 0% per year to the positively insane rate of roughly 2% per year that we Americans have enjoyed since the early nineteenth century.
This mind-blowing fact–increases in real standards of living from the bottom to the top of the income distribution, year after year, with the benefits accruing disproportionately to the poor and the descendants of the poor, with no end in sight–did not happen for the usual reasons people point to. It wasn’t natural resources. The value of your copy of Leave Me Alone and I’ll Make You Rich doesn’t come from the trees farmed to make the paper or the oil that was refined into the fuel used to ship it. Institutions like secure property rights are necessary in the same way oxygen is necessary for a fire, but they aren’t sufficient. Slavery, imperialism, and colonialism are popular (and resurgent) explanations from the left, but “We are saying, to be precise, that war, slavery, imperialism, and colonialism were on the whole economically stupid” (p. 118).
It happened because we embraced the liberal idea of profit-tested dissent (with modification) from old ways of producing and exchanging and doing–what Adam Thierer has called Permissionless Innovation. We didn’t execute Bill Gates when Microsoft released Windows 95 or throw Steve Jobs off a cliff when he rolled out the iPad in 2010. Jobs didn’t have to get permission from puzzled members of the commentariat who wondered “What is it for?” or Luddites who worried that it would destroy the publishing industry when he was explaining what this thing that wasn’t a smartphone or a laptop but maybe kind of something in between could do.
Dan Klein Makes a Prediction
My GMU Econ colleague Dan Klein – who has been a rock of reason within the swirl of what my friend Lyle Albaugh now calls Covid Derangement Syndrome – asked me to post the following. I do so very agreeably. (It is not incidental, I think, that Dan lives part of the year in Sweden and was there for the first few months of the global hysteria.)
Prediction: Covid Insanity Will Decline After the Election
By Daniel B. Klein
Back in July I suggested that much of the Covid-policy hysteria, propaganda, and over-reaction in the United States was a strategy – if only a subconscious strategy. By wrecking the economy and making people miserable, propagandists and lockdowners would talk voters into blaming President Trump and vote him out.
In September I doubled-down on the idea.
Now I’ll triple-down: I predict that—regardless of the outcome of the election—Covid-policy discourse in leftist media will change not long after the election. The Covid propaganda will start to fade away. It won’t happen over-night, but, I predict, that from, say, November 20 the insanity will begin to recede and that thinking and policy will start going back to normal. The main impetus of the propaganda and wreckage will have passed.
By December 1 we should be able to perceive whether such a trend had started from November 20. Let’s meet again on December 1 and see how my prediction has turned out!
Quotation of the Day…
… is from page 228 of George Will’s superb 2019 book, The Conservative Sensibility:
Capitalism requires, and therefore capitalism develops, a society in which economic dealings are lubricated by the disposition and ability to trust strangers.
DBx: No truth is more central to modern civilization. When I ponder it, I always recall an example that I first heard used about 25 years ago by Tom Palmer, and have since encountered elsewhere: You willingly fly in an airplane built, maintained, owned, and piloted by complete strangers, and upon arrival at your destination a rental-car company records some information that you carry on a piece of plastic and then that company gives to you the keys to an expensive vehicle that it owns.
While of course there are formal legal sanctions that kick in if something goes awry, practically speaking the only reason such transactions occur as frequently as they do is that all of the people involved, each of whom is a stranger to nearly everyone else, trusts that the strangers on the other side of the contractual bargains will abide by each of the contract’s formal terms and its spirit.
It’s beautiful.
And while there were some reasons to worry that such trust was declining a bit just before 2020, the pre-Covid-19 continuing increase in commercial activity, on a global scale despite Trump and heightened nationalism, suggests that that decline – on the whole and globally – was minimal.
Yet what will our world be like now that the mainstream reaction to Covid has conditioned people to view strangers as fleshy geysers of lethal pathogens? “Keep your distance!” “Cover your face!” “Talk to me only through plexiglas!” “Don’t you dare try to shake my hand!” “Work at home or otherwise in isolation as much as possible!” “Let’s meet by Zoom rather than, heaven forbid, face-to-face!” “We must trace your contacts before allowing you into our presence!” “Don’t congregate in restaurants, bars, coffee shops, and community swimming pools!”
This inhuman – for it is inhuman (and, hence, inhumane) – new way of life – or, rather, of “life” – is a bizarre manifestation of collectivism. The state, fueled not by liberal sensibilities but by collectivist ones, imposes on its subjects a way of life that, were the word not already spoken for, be called “individualism.” We the People are united only by our collective commitment to remain separated from each other.
How ironic. True individualism – that is, the individualism of liberalism – is typically caricatured by Progressives and other of its enemies as an ideology whose proponents believe that each person is an isolated egoist. Liberal individualism, we are told by those who oppose it, is a denial of human beings’ social nature.
Of course this portrayal of liberal individualism is utterly mistaken. Read the great liberals – scholars such as Adam Smith, Frederic Bastiat, Herbert Spencer, Rose Wilder Lane, Ludwig von Mises, F.A. Hayek, Milton Friedman, and Robert Nozick – and you will find celebrations of extensive social cooperation among strangers. You will find a steady insistence that each human being is constant need of the assistance of countless strangers. You will find denials – implicit and explicit – that each person is, or wishes to be, or should be, an island off to himself or herself.
In 2020, however, there has arisen a new individualism, one quite the opposite of liberal individualism. An accurate name for this new individualism is “collective individualism.” It teaches that each person should, as much as possible, truly isolate himself or herself and to be fearful of strangers. “Strangers can kill you simply by being near you! Beware!”
The horror of a “society” populated with individuals petrified by fear and loathing of strangers is tremendous. No such society can thrive. And no sensible individual would wish to live in that hell.
October 29, 2020
Bonus Quotation of the Day…
… is from an e-mail sent to me yesterday by my GMU Econ colleague Bryan Caplan; I share it here with Bryan’s kind permission (ellipses original to Bryan):
Leftists often talk about the importance of “quality of life” – but COVID policies (and norms!) have done more to destroy American quality of life than… well anything in my lifetime.
DBx: It seems that what Progressives mean by “quality of life” is life lived according to the fancies of Progressives. And Progressives now have come to equate “quality of life” almost exclusively with avoiding contact with the coronavirus: Because such contact has a greater than zero chance of causing harm, the only “quality” of life worth pursuing is escaping the risk, however minuscule, of a reduction caused by the coronavirus (and only by the coronavirus) in the quantity of life, however small.
Scant, if any, attention is paid to the greatly different risk profiles of different age groups by those who advise us, regardless of our age and health, to cower in fear indefinitely, to cover our faces even when outdoors,* and to behave like obedient prisoner-patients to the wise, all-knowing, Science-guided masters who alone can protect us from this unprecedentedly lethal devil of death.
…..
* On masks, this piece in today’s Wall Street Journal by Dr. Joseph Ladapo is superb. Here’s his conclusion:
Until the reality of viral spread in the U.S.—with or without mask mandates—is accepted, political leaders will continue to feel justified in keeping schools and businesses closed, robbing young people of the opportunity to invest in their futures, and restricting activities that make life worthwhile. Policy makers ought to move forward with more wisdom and sensibility to mitigate avoidable costs to human life and well-being.
DBx: Unfortunately, asking government officials “to move forward with more wisdom and sensibility” is as likely to have the desired effect as is asking a Madam to move forward with enforcing chastity within her premises. Most successful politicians are in that racket precisely because they enjoy exercising power. And, my oh my, what a gift is Covid-19 to such tyrants!
Some Links
Markets are positive-sum, culture and the arts are generative, religion is formative, sports are entertaining. Politics are none of these things (except possibly entertaining, though that’s a pathology, not a goal). When we politicize all aspects of our society, we don’t elevate our politics; we drag everything else down to its level.
So, again, I ask, why do people trust politicians? Are our memories so faulty? Case in point: During the last presidential debate, Joe Biden claimed that no one lost insurance due to the implementation of the Affordable Care Act. That’s a bold claim to make. That same statement, when made by former President Barack Obama as he pushed for the legislation before its implementation, was once named the “Lie of the Year” by PolitiFact. But Biden still felt it was safe to make such a claim.
Gene Healy writes with mastery about presidential powers. Here’s his conclusion:
All of this is a reminder, if one was needed, that real presidential power reform isn’t going to come from within the executive branch. The sorts of men and women who are willing to do what it takes to become president are unlikely, having won the prize, to turn around and say: “you know what? Now that I’ve finally made it, I’d like a whole lot less power!” At best, they’ll grudgingly accede to restraints imposed from the outside. Will the next Congress force the issue?
A New Yorker profile explained that Cuomo and his aides saw the battle over Covid policy as “between people who believe government can be a force for good and those who think otherwise.” For many liberals [DBx: that is, ‘progressives’] and much of the nation’s media, placing people under house arrest, padlocking schools, and bankrupting business vindicated government as “a force for good.”
The reality became clear months ago that the virus can’t be banished on government orders, especially as citizens suffer and chafe under the pain of lockdowns. Targeted closures that protect the vulnerable are better policy responses until better treatments and a vaccine arrive or some broader immunity is reached. U.S. policy makers should do their best to avoid following Europe into another tragic shutdown.
David Henderson shares a very good video on Covid.
Quotation of the Day…
… is from page six of the print version of Art Carden’s and Deirdre Nansen McCloskey’s superb lead essay for the September/October 2020 Cato Policy Report – an essay (“How the Bourgeois Deal Enriched the World”) that is excerpted from their forthcoming book (for which I have already placed my order at Amazon, and encourage you to place yours), Leave Me Alone and I’ll Make You Rich):
It would be cold comfort if the gains since 1800, or 1960, had gone to the rich, as you hear claimed every day. But the poor have been the big winners. The great economist Joseph Schumpeter described “the capitalist achievement” in his 1942 book, Capitalism, Socialism, and Democracy: “Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.” Marie Antoinette is supposed to have said, when told that the peasants had no bread, “Let them eat cake” (well, “brioche,” but same difference.) In rich countries now, people worry about different problems. All of us, even the poor, have too much bread. We eat too much cake. We are on our way to a world in which everyone has “first‐world” problems such as bulging waistlines, cluttered closets, and nothing good to watch on Netflix.
October 28, 2020
Open Letter to Matt Yglesias
Mr. Yglesias:
I guess if you have the Brussels/Frankfurt aversion to fiscal stimulus you end up in the same place as the Republicans and forced into the view that people need to die for “the economy.”
I can’t speak for Republicans, for I’m not (and never have been) one. But I can speak for myself, and I think also for many other lockdown opponents, when I decry your thoughtless mischaracterization of the motives and understanding of many of us who oppose continuation of the coercive suspensions of regular human commerce and engagement.
Specifically, we take offense at the impression you convey when you accuse us of believing that “people need to die for ‘the economy.’”
The economy is people – people producing, trading, cooperating, and consuming. Yet your wording conveys the impression that lockdown opponents wish to sacrifice lives to a non-sentient entity that is separate from people. In fact, however, to worry about the condition of the economy is to worry about the ability of people – actual flesh-and-blood-and-bone human beings – to continue to meet their basic needs, including putting food on their tables, roofs over their heads, winter coats on their backs, and knowledge into their children’s minds. To worry about the economy is also to understand that people are not provided for simply by being handed government checks. And it is further to realize that economic output – output of real goods and services – is not miraculously maintained by “stimulus” funds if workers are locked out of their places of employment.
To the extent that productive activity is obstructed by lockdown orders and threats of such – as well as by the context-free and irresponsible fear-mongering that’s gone viral – people will suffer and many will die as a consequence. Indeed, depending on the extent and precedents set by these orders, the result over the next few decades might very well be net loss of life as the economy is shorn of much of the flexibility and dynamism necessary to sustain economic growth – economic growth that alone brings better health care and enhanced ability of ordinary people to protect themselves from life’s hazards.
Reasonable people disagree over what are the best policies to deal with Covid-19. But contrary to the impression conveyed by your tweet, no serious person argues for sacrificing lives to “the economy” as a lifeless abstraction.
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 Covid Links
The politicians and intellectuals who put this new feudalism in place tossed out all normal concerns over freedom, justice, equality, democracy, and universal dignity in favor of the creation of a strict caste system. So much for Locke, Jefferson, Acton, and Rawls. The medical technocracy cared only about conducting an unprecedented experiment in managing the social order as if it consisted entirely of lab rats.
(DBx: I say again: If humanity ever escapes the consequences of its current derangement, the hysterical overreaction to Covid-19 will come to be ranked among the gravest mistakes ever committed on a mass scale – and our species has committed many mistakes. The persecutors of Salem’s witches will, by comparison, seem reasonable.)
Alan Reynolds writes wisely about Covid realty. A slice:
When TV and newspaper reports (1) harp on recent cases without mentioning tests, and (2) describe fairly small local increases in hospitalizations as national and huge. or (3) talk only about adding-up all cumulative deaths since January rather than the reasonably low level of recent deaths, they are doing a really disgraceful job.
Sheldon Richman shares the recipe for causing public panic:
1. Disseminate worst-case scenarios, taking care to ignore the dubious assumptions that go into modeling while vilifying anyone, no matter how well-qualified, who refuses to ignore them.
2. Emphasize the (alleged) benefits of a draconian government response, taking care to ignore the costs while vilifying anyone, no matter how well-qualified, who refuses to ignore them.
3. Repeat as necessary, preferably often.
Art Carden has assembled an excellent pandemic reading list. A slice:
Roger Koppl, Expert Failure. I caught a bit of flak after coming to Rand Paul’s defense after he somewhat clumsily said, “We shouldn’t presume that a group of experts somehow knows what’s best.” More than one person pointed out that in invoking Adam Smith, F.A. Hayek, and William Easterly I was appealing to (wait for it) experts to make my case.
That misunderstands what Smith, Hayek, Easterly, Thomas Sowell, and so many others mean when they criticize overreliance on experts. That’s where Roger Koppl comes in, noting (as Smith, Hayek, Sowell, and others do) that expertise in one area doesn’t mean expertise in another–and even within people’s fields of expertise, they are human beings who respond to incentives. About an hour into AIER’s Summit with Martin Kulldorff, Jay Bhattacharya, Sunetra Gupta, and Stefan Baral that led, ultimately, to the Great Barrington Declaration, Jay Bhattacharya pointed out that science per se cannot evaluate all the relevant political and economic trade-offs and say “Do this.” The reason, I think, is fundamentally Hayekian: individuals’ “knowledge of the particular circumstances of time and place” cannot confront the expert as data.
Writing in today’s Wall Street Journal, John Berlau and Seth Carter report on how Dodd-Frank impairs the fight against Covid-19. (Remember: The persons to whom pro-lockdowners wish to give more authoritarian power are the very sort of irresponsible, ignorant, grandstanding, and myopic politicians who wrote and enacted Dodd-Frank.)
This is why the epidemiologists who wrote the Great Barrington Declaration, which has been signed by tens of thousands of doctors and scientists, advise a focus on protecting the elderly. They also warn that government lockdowns lead to worsening heart-disease outcomes, fewer cancer screenings and more mental illness.
Nearly a third of the so-called excess deaths in the U.S. this year have been attributed to causes other than Covid, including cardiovascular disease and uncontrolled diabetes. Covid has accounted for less than 10% of deaths among those over 65 this year, and a much smaller share among younger people.
In the comments section yesterday at Marginal Revolution David Henderson’s identity was faked. The fake “David Henderson” would never be as gracious, open-minded, and honest as is the real David Henderson.
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