Russell Roberts's Blog, page 428

Quotation of the Day…

(Don Boudreaux)

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… is from page 182 of my late Nobel-laureate colleague Jim Buchanan‘s 1973 paper “America’s Third Century in Perspective,” as this paper is reprinted in Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan:

Any political leader or party that promises to haul down the flag of federal government internal imperialism faces frustration at almost every turn. He finds himself advancing proposals that seem derived from “gut” reactions, and without the academic, intellectual respectability that is considered proper for serious media discourse. This is not because such proposals are inherently less amenable to such treatment. They can, in fact, be derived from arguments that are equal to if not more sophisticated than those which often accompany proposals advanced in opposition. Such argume nts are absent because of the dominance in the media and in academia of a near-monolithic point of view on social issues, a point of view that is, at base, dirigiste or collectivist.

DBx: Thomas Jefferson – born in Shadwell, Virginia, 277 years ago today  – would, were he still alive, surely agree with Buchanan.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from Deirdre McCloskey’s April 11th, 2020, Spectator essay, “Coronavirus must not rob us of our liberties forever” (link added):

The evidence suggests, in other words, that behind the growth of government there’s something deeper, and more recent, than mere wars. The missing cause is ideas, as [Robert] Higgs in fact came to believe – in particular a triad of anti-liberal ideas devised in Europe during the 19th century and implemented whole-hog during the 20th: nationalism, unlimited majority rule and socialism.

Quotation of the Day…

(Don Boudreaux)

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… is from page 150 of George Will’s excellent 2019 book, The Conservative Sensibility (link added; footnote deleted; ellipses original to Will):

The Declaration is not just chronologically prior to the Constitution, it is logically prior. As Timothy Sandefur writes, the Declaration “sets the framework for reading” the Constitution, so it is the Constitution’s “conscience”: By the terms with which the Declaration articulates the Constitution’s purpose – the purpose is to “secure” unalienable rights – the Declaration intimates the standards by which one can distinguish the proper from the improper exercises of majority rule. “Freedom is the starting point of politics; government’s powers are secondary and derivative, and therefore limited…. Liberty is the goal at which democracy aims, not the other way around.”

The progressive project, now in its second century, has been to reverse this, giving majority rule priority over liberty when they conflict, as they do, inevitably and frequently.

DBx: A common error is to mistake means – especially those that are either essential or unusually effective – for ends. The likelihood of committing such an error rises further if these means are unusually challenging to carry out. By treating these means as if they are ends in themselves – as if these means are noble goals rather than ‘mere’ tools for achieving noble goals – people become more likely to employ these means faithfully rather than skirt them.

Democracy is such a means. When there exists a widespread conception that collective decisions must be made, it’s of course better that everyone who will be affected by this decision have a say in arriving at its particular conclusion rather than this decision be made by some external agent or by only a subset of the persons who will be affected by it. This perfectly understandable justification for democracy, however, does not imply that all decisions that affect in some way persons other than the immediate individual who makes the decision ought to be made collectively and democratically.

One of the greatest contributions of economics is its demonstration that when individuals act on their own unique bits of knowledge in pursuit of their own individually held ends, the results are generally beneficial not only for each individual decision-maker but for countless others – strangers to the decision-makers. This happy outcome is made more likely the more secure are property and contract rights, and the freer are markets in which consumers can spend their own money (and only their own money) as they choose and businesses are free to compete (using only resources voluntarily entrusted to them) for consumer patronage as well as for workers and other inputs used to produce outputs.

Of course such markets are “imperfect” (that is, they don’t operate as smoothly as do their simplified models in textbooks). And of course there’s reasonable disagreement about just what are the appropriate details of the institutions that are most likely to reduce such imperfections as much as possible. But it strikes me that far too many people suppose that decisions made ‘privately’ – and especially commercial decisions – are ones that serve the interests only of the private decision-makers and will harm, or at least do nothing to help, others.

Ignored is Adam Smith’s invisible hand – or Hayek’s later, more general spontaneous order. Ignorance (or denial) of these realities naturally creates demand for open-ended collectivization of decision-making. Democracy – legitimately justified as a means of making genuine collective decisions – comes to be worshipped as being very nearly an end in itself.

CrossTalk: Losing My Cool and Signing Off of the Program

(Don Boudreaux)

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On Thursday I apologized for losing my cool on this program and storming off at the end. If you’re interested, here’s the video of the sorry affair. I cannot bring myself to watch it.

……

UPDATE: My intrepid Mercatus Center colleague Veronique de Rugy persuaded me to remove from the title of this post my earlier description of my actions here as “shameful.” Vero is correct that, however, unfortunate my own reaction, the truly shameful performers here are the defenders of totalitarianism.

Pittsburgh Tribune-Review: “Prostitutes, pimps & pols”

(Don Boudreaux)

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In my column for the January 27th, 2009, edition of the Pittsburgh Tribune-Review I suggested a better title for P.J. O’Rourke’s 1992 book, Parliament of Whores. You can read my column beneath the fold (link added and mathematics corrected).

(more…)

Quotation of the Day…

(Don Boudreaux)

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… is from page xv of the 2000 Liberty Fund edition of Geoffrey Brennan’s and James M. Buchanan’s 1985 book, The Reason of Rules:

Intelligence abounds, but wisdom seems increasingly scarce.

“We” Should Leave Us Alone

(Don Boudreaux)

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Here’s a letter to the Washington Post:

Editor:

Nothing is easier than doodling down fine words. Sen. Josh Hawley (R-MO) displays his facility for such in an April 9th op-ed, “Americans are ready for a comeback. Congress must help unleash it.” Much more challenging is the task of grasping the operational meaning of those words and tracing out the full consequences of putting them into effect. On this front, the senator’s silence reveals his intellectual laziness and ignorance.

Consider, for example, this aspiration: “We must also move decisively to secure our critical supply chains and bring production back to this country.” Who’s “we”? Is it “us” as represented by politicians on the Potomac? If so, why doesn’t Sen. Hawley expressly criticize the Trump administration for imposing tariffs on medical supplies from China rather than support additional such impositions? These tariffs disrupt American health-care providers’ immediate access to medical supplies. But they also, as explained by Chad Bown, encourage Chinese suppliers to divert export sales to countries other than the U.S., thereby reducing the abundance of such supplies to which we’ll have access in the future.

Some few of us in Washington, with no knowledge of the complex real-world details of actual supply chains, have moved to make insecure critical supply chains that many others of us, on the ground and with detailed knowledge of different supply opportunities, had on our own secured and would today be using to good effect but which instead are now disrupted – disrupted by the ignorant and arrogant few of “us” in Washington.

It’s downright Orwellian that Sen. Hawley and other apologists for a policy that disrupts existing supply chains call for further such disruptions in the name of better securing supply chains.

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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This column by Joseph Sternberg in today’s Wall Street Journal is one of the wisest pieces that I’ve read lately on humankind’s current unhappy predicament. A slice:

Politicians on the right made a pragmatic political calculation: A media incapable of sophisticated thought would never forgive them if they made a reasonable bet in favor of policy modesty and it backfired.

Conservatives aren’t wrong about the media’s general inability to process multiple variables, to judge from the way President Trump is scored for a national death toll primarily attributable to New York, whose Democratic governor somehow has managed to emerge from this situation as a hero. Hence the right has uncomfortably embraced draconian interventions, especially in Mr. Trump’s America and Boris Johnson’s U.K.

Meanwhile the left in most developed countries has settled on an embrace of progressive authoritarianism over the interests of what used to be its electoral base among normal working people.

And here’s Arnold Kling’s equally wise riff on Sternberg’s piece.

Also writing with great insight and humanity about the COVID-19 crisis is David Henderson. A slice:

Someone who had specific information that the CDC did not was Dr. Helen Y. Chu, an expert in infectious diseases in Seattle. In an excellent New York Times news story on March 10, reporters Sheri Fink and Mike Baker tell the tragic tale. As a result of her months-long research in the flu, Dr. Chu and her colleagues had a collection of nasal swabs from people experiencing symptoms. She spent weeks trying to get permission from state and federal officials to test the swabs for the coronavirus. They turned her down. The CDC told her on February 16 that if she wanted to use her test as a screening tool, she would need permission from the Food and Drug Administration. But because of regulations put in place by the Centers for Medicare & Medicaid Services, the FDA could not approve. Finally on February 25, in desperation, she and her colleagues did the tests without approval. And bingo: she found a positive test for a teenager who had not recently traveled. But for the regulation, she could have known this weeks earlier. And did the FDA see the error of its ways and give her credit? No. Dr. Scott Lindquist, Washington state’s epidemiologist for communicable diseases, says, “What they [the CDC and the FDA] said on that phone call very clearly was cease and desist to Helen Chu. Stop testing.”

Tragically, the CDC’s own tests didn’t work, thus losing Americans a crucial few weeks.

Robert Wright has an interesting explanation of politicians’ incentives amidst this crisis.

From March 13th is this superb analysis by Chad Bown of Trump’s harmful and unhealthful trade policies. A slice:

But a potential for crisis is not limited to the unnecessary costs and health equipment bottlenecks that Trump’s trade war with China has created. His continued mistreatment of many trading partners, imposition of tariffs and threats of tariffs on their exports, may make it difficult now to get new sources of supplies. Even allies are now lashing out and restricting the flow of medical equipment outside of their borders, including to the United States.

President Trump should immediately admit to the problem his policies have created. His administration should permanently and comprehensively suspend the trade war tariffs on critical medical products from China. And with its former allies, the administration should reverse its isolationist approach and reinvigorate the international cooperation that had formed the basis of US policy for over 70 years.

David Simon intelligently corrects the Wall Street Journal‘s recently expressed economic fallacies about oil and oil prices.

My intrepid Mercatus Center colleague Veronique de Rugy is rightly aghast at the cronyism and reckless fiscal incontinence now infecting Washington.

Quotation of the Day…

(Don Boudreaux)

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… is from pages 101-102 of the 2000 Liberty Fund edition of Geoffrey Brennan’s and James M. Buchanan’s 1985 volume, The Reason of Rules:

Keynes was successful in imposing on the mind-set of economists of the middle years of this century an abstract model of a high-unemployment, underutilized economy. And Keynes was surely correct when he noted that the ideas of academicians ultimately influence the actions of politicians. In the initial Keynesian model, demand brings forth supply, and increases in demand sop up underutilized manpower and capital, without creating increases in costs and prices. There are no supply-side constraints in the model, and quite literally public spending is costless in terms of effectively displaced alternatives.

DBx: Long-time readers of this blog know that I’m no fan of Keynesian economics. Its creation, development, and acceptance marked a decided reversal of economists’ ability to contribute productively to the public good. Rather than, as economists had done for so long – and as they continued to do in many “micro”economics fields – dispel popular misunderstanding, economists telling the Keynesian tale merely reinforced, with scientific-sounding jargon, the man-in-the-street’s ancient prejudices, superstitions, and simplistic fallacies about how economies work.

Yet however mistaken was the belief about how, in past episodes, jacking up aggregate demand is sufficient to restore economic vigor and material prosperity, that belief is today far more mistaken. In the past – say, during the Great Depression – it was legally possible for most workers and other resources to reenter the productive process and, thus, to increase the supply of real goods and services the availability of which is necessary to maintain and to increase genuine prosperity.

Today, in contrast, it is often illegal for people to return to work – and when not formally illegal, doing so is discouraged by new social norms. Under these novel circumstances, even if we take as true and realistic all the excessively simplistic Keynesian assumptions, government-induced increases in aggregate demand cannot today possibly have any good effect. The foundational problem is an “exogenously” imposed – that is, imposed by government and culture – prohibition on increases in supply. Insofar as this prohibition remains in place, demand cannot bring forth supply. It can bring forth, I fear, only inflation.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from this splendid March 11th op-ed by my Mercatus Center colleague Dan Griswold:

To argue that the coronavirus means we would be better off with less globalization is like arguing that a power failure shows we are too dependent on electricity, and thus we should go back to private generators or candles.