Russell Roberts's Blog, page 378

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(Don Boudreaux)

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My intrepid Mercatus Center colleague Veronique de Rugy, writing in today’s New York Times, reports on a Congressionally created cronyist program that I’ll bet not one in one-thousand students of cronyism were aware of (until now). Here’s her opening:

Right under the nose of a president who promised to drain the swamp, one of the government’s shadiest handouts to large banks and big companies looks like it will be renewed for another 25 years. It will not get adequate oversight and congressional review. All it will take is the approval of two out of three U.S. Export-Import Bank directors, who are political appointees.

That entity is called the Private Export Funding Corporation, or PEFCO.

I study corporate welfare, and even I was surprised to discover a government entity with such unchecked cronyism and self-dealing. How did it fly under the radar? Despite increasing taxpayers’ exposure to bank debt, it hasn’t received a public review since it made its first loan in 1971.

Another Mercatus Center colleague, Adam Thierer, writes insightfully about the meaning of the term “industrial policy.”

I was very pleased to again be a guest on Dan Proft’s radio program.

Ilya Somin is right to warn of the great danger lurking in the Trump administration’s moratorium on evictions. Here’s the post’s subheading: “It’s a power grab that could undermine federalism and separation of powers, and imperil property rights.”

Here’s the abstract of an excellent new paper by Chris Coyne, Thomas Duncan, and Abby Hall:

How can public policy best deal with infectious disease? In answering this question, scholarship on the optimal control of infectious disease adopts the model of a benevolent social planner who maximizes social welfare. This approach, which treats the social health planner as a unitary “public health brain” standing outside of society, removes the policymaking process from economic analysis. This paper opens the black box of the social health planner by extending the tools of economics to the policymaking process itself. We explore the nature of the economic problem facing policymakers and the epistemic constraints they face in trying to solve that problem. Additionally, we analyze the incentives facing policymakers in their efforts to address infectious diseases and consider how they affect the design and implementation of public health policy. Finally, we consider how unanticipated system effects emerge due to interventions in complex systems, and how these effects can undermine well-intentioned efforts to improve human welfare. We illustrate the various dynamics of the political economy of state responses to infectious disease by drawing on a range of examples from the COVID-19 pandemic.

Antony Davies and James Harrigan report on some of the costs of the covid lockdowns. A slice:

[P]oliticians invariably feel the need to “do something.” Despite volumes of evidence from disparate fields like economics, social work, ecology, and medicine, it never seems to occur to politicians that sometimes doing less, or even doing nothing, is by far the better approach. Why should it occur to them? When politicians act and their actions do more harm than good, they always say the same thing: “Imagine how bad it would have been had we not acted.”

But this time, we have evidence. We can compare what happened where politicians reacted with a heavy hand to what happened where they reacted with a light touch. And the evidence we have so far points to the same conclusion: Our politicians destroyed our economy unnecessarily.

Quotation of the Day…

(Don Boudreaux)

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… is from John Cochrane’s September 3rd, 2020, blog post, “On looting” (which is a riff on Graeme Wood’s must-read assessment of what is obviously one of the most lunatic books ever published):

Our society and our prosperous economy are built on the bedrock of private property and the rule of law which defends that property. That may not be pretty or fulfill a college sophomore’s utopia, but the hard lesson of a thousand years is that only private property provides the incentive for people to maintain that property — farms, houses, factories, stores — and to put in the immense effort to provide commodities of value to their fellow humans.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 113 of the 2000 Liberty Fund edition of Frederic William Maitland’s profound 1875 dissertation at Trinity College, Cambridge, A Historical Sketch of Liberty and Equality:

If the conventional theory leads to an ideally perfect democracy – a state in which all that the majority wishes to be law, and nothing else, is law – then it leads to a form of government under which the arbitrary exercise of power is most certainly possible. Thus, as it progresses, the conventional theory seems to lose its title to be called the doctrine of civil liberty, for it ceases to be a protest against arbitrary forms of restraint.

I Oppose Private-Property Appropriation

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

Tunku Varadarajan rightly decries progressives’ criticism of the British singer Adele for wearing African-style Bantu knots (“The Sun Never Sets on the Woke Empire,” September 3).

Progressives are bizarre: Hallucinating that disrespect and danger lurk in “cultural appropriation,” they’re blind to the very real disrespect and danger that lurk in private-property appropriation.

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 Links

(Don Boudreaux)

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My intrepid Mercatus Center colleague Veronique de Rugy isn’t impressed by Trump’s proposal to give many Americans a ‘holiday’ from paying payroll taxes. A slice:

I understand that people don’t like to pay the payroll tax. But it should go without saying that if you stop paying the tax that funds the Social Security system, you should pair it with an equivalent reduction in benefits. If that doesn’t happen, then the benefits for Social Security will have to come from the general funds, which is what happened during past payroll tax holidays. That means that the federal government will have to borrow the money and expect future generations to pay the bill plus interest.

Mike Munger chalks up one in the win column for Mises.

My colleague Dan Klein writes about the WalkAway movement. A slice:

One way to think about it is that because leftists have fallen into terribly wrongheaded beliefs, and become committed to them, they cannot tolerate civil discourse and civil social interaction: They have grown fragile, and as they replicate themselves in academia and elsewhere, increasingly more fragile all the time. Thus they rely on incivility to shield them from any stress that would expose their wrongheadedness.

Another way to think about it is that they choose to believe leftist ideas, and that choice is itself socially irresponsible and unbecoming. Adam Smith taught that justice is trilayered, and the most extensive layer is estimating objects properly.

In the Wall Street Journal Dan Akst profiles the wonderful writer Lionel Shriver. A slice:

“We’ve never before responded to a contagion by closing down whole countries,” she observes. The pandemic and lockdown created fear, isolation and a holiday from normal rules, which built a pyre: “The far left’s consuming obsession with race has been building for years. Then for months these same folks have been cooped up, fuming over their computers. The 2020 explosion of Black Lives Matter was enabled by Covid.” Floyd’s killing “just lit the match.”

From George Will’s latest:

In the current disorders, [Martin] Gurri says, mayors and governors have succumbed to “infantile panic”: Many state and local officials are liberal Democrats who share the ideals of the protesters and are “paralyzed by fear of doing anything that might transform them into villains of the narrative.”

Pierre Lemieux laments the economic ignorance that leads people – especially people possessing power – to support government-imposed controls on prices.

Quotation of the Day…

(Don Boudreaux)

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… is from page 519 of the 1988 collection of Lord Acton’s writings (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University; (I can find no date for this passage):

Authority that does not exist for Liberty is not authority, but force.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from pages 74-75 of Russ Roberts’s ingenious and moving 2014 book, How Adam Smith Can Change Your Life:

Being aware of reason’s limits doesn’t mean being anti-reason or superstitious or irrational even anti-science. Nassim Taleb points out that a map is very helpful for getting around Paris. But not if the map you’re using is a map of New York. Using the wrong map unknowingly is worse than no map at all – it leads you to overconfidence that can be more harmful than confronting the reality that you’re lost.

Scientists are human beings with their own limitations. Sometimes even the best quantitative analysis is worse than none at all because it gives the illusion of science, what Hayek called scientism.

Pittsburgh Tribune-Review: “Economy puzzle solved”

(Don Boudreaux)

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In the July 14th, 2010, edition of the Pittsburgh Tribune-Review I published the third and final piece in my series of columns on emergent order. You can read my column beneath the fold.

(more…)

We Need Refuge

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor

Jason Riley rightly warns of the dangers lurking in the Progressive assumption that humans are stupid, self-destructive, hate-filled hedonists who can cohere into a productive society only if so regimented by alleged experts – ‘experts’ whose commands each puny individual must obey (“Spare Us More of the Arrogance of ‘Expertise’,” September 2). Mr. Riley also rightly quotes the great Thomas Sowell in opposition to this arrogant and deeply mistaken notion.

But my favorite line from Prof. Sowell is a different one. It’s the closing sentence of his 1980 book, Knowledge and Decisions, in which he pleads for “above all, the right of ordinary people to find elbow room for themselves and a refuge from the rampaging presumptions of their ‘betters.’”*

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

* Thomas Sowell, Knowledge and Decisions (New York: Basic Books, 1980), page 383.

Quotation of the Day…

(Don Boudreaux)

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… is from page 25 of Kristian Niemietz’s excellent 2019 book, Socialism: The Failed Idea That Never Dies:

Despite the vehemence with which contemporary socialists reject comparisons with any variant of socialism that has so far been tried, they usually struggle to explain what exactly they would do differently.