Russell Roberts's Blog, page 464

Why Should Serious People Take Such Reporting Seriously?

(Don Boudreaux)

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Here’s a letter to the Program Director of NPR’s Here & Now:

Sir or Madam:

Your segment today on climate change unwittingly offers reasons why so many people not on the political left remain skeptical of entrusting governments with more power to regulate in the name of protecting the environment. Almost every second of this segment’s nine-plus minutes portrayed life today as ghastly, treacherous, and destined only to get more hellish. Yet reality is very different.

Your reporting would be more credible if you at least acknowledged such facts as these – facts that uninformed members of your audience would be shocked to learn:

– Global death-rates from natural disasters have fallen dramatically. This rate is today 1/14th what it was a century ago and ½ what it was a half-century ago.

– The proportion of the world’s population with access to clean water is at an all-time high.

– The risk of dying from air pollution is at an all-time low. (Ditto the risk of dying of famine.)

– Life expectancy today continues to rise and is at an all-time high; today it’s much more than twice what it was before the industrial revolution. This happy trend is due in part to the fact that…

– Child mortality is at an all-time low. (Ditto for the maternal mortality rate.)

– People worldwide are better educated.

These and many other positive trends in human well-being are the direct consequence of economic growth – most of which is spawned by free markets and powered by carbon fuels. Your apparent blindness to this reality casts doubt, if not on your objectivity, certainly on your sense of historical perspective. (I laughed out loud when host Jeremy Hobson – talking about Europeans who today suffer from heat waves – said that “Many people don’t have air-conditioning because, over the course of centuries, they haven’t needed it.” In reality, of course, pre-20th-century Europeans didn’t have air-conditioning because innovative free markets hadn’t yet made it possible.)

The general public would surely pay more attention to climate reporting if programs such as yours were to substitute realism for incessant apocalypticism.

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

I’m Still Not the Least Worried About AI Causing Lasting Unemployment

(Don Boudreaux)

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Here’s an e-mail to an economics undergraduate who (I boast) says that his brother “is a fan of Cafe Hayek.”

Mr. Chad:

Thanks for your e-mail. And please pass along my thanks to your brother for his telling you about Café Hayek.

You ask how worried I am “about lasting unemployment being brought on by AI and robotics making robots closer and closer to human.”

For three related reasons, I’m not worried at all.

First, robots are tools that conserve human labor. As Deirdre McCloskey notes, by using robots today we humans do nothing that differs fundamentally from what we’ve done for millennia; conserving scarce labor by using robots is economically no different than conserving scarce labor by using the likes of levers, pulleys, ropes, and buckets. If the adoption of labor-saving tools 10,000 years ago, or 1,000 years ago, or 100 years ago, or 10 years ago caused no lasting unemployment, I see no reason to worry that such adoption today and tomorrow will do so.

Second, as George Selgin points out, labor-saving tools and techniques are not adopted until there’s an economic impetus for doing so. And the principal economic impetus for saving labor is a rise in the cost of labor. Because in markets a rise in the cost of labor – that is, a rise in real wage rates – is itself evidence of an expansion and improvement in labors’ opportunities relative to the supply of labor, the adoption of robots and other labor-saving techniques is a result of labors’ increasing scarcity rather than a cause of its superabundance.

Third, as I myself have somewhere observed, no robot is more human-like than an actual human. Therefore, each and every one-person increase in the labor force is akin to the introduction into the labor force of one robot brilliantly engineered to possess all the dexterity, flexibility, and intelligence of a human worker. And so because the huge increase in the human labor force over the past few centuries has caused no lasting unemployment, I’m confident that the ‘birth’ of human-like robots will have no such baneful consequence.

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

The Corporations Do Declare “Don’t Throw Us Into that Briar Patch!”

(Don Boudreaux)

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Here’s a letter that I sent last week to the New York Times:

Dear Editor:

Attempts by Pres. Trump, U.S. Trade Representative Robert Lighthizer, and the administration’s pundit-apologists to justify their rejection of free trade in favor of managed trade are a litany of fallacies (“Trump’s Trade Deals Raise, Rather Than Remove, Economic Barriers,” Dec. 17).

The most egregious of these fallacies is that “political paeans to free trade have largely been cover for multinational companies.” In reality, champions of free trade – from Adam Smith forward – have emphasized the importance of unobstructed international competition in holding companies accountable to consumers. Cover for multinational companies comes in the form, not of free trade, but of tariffs. Free trade alone subjects these companies to maximum competitive pressures to operate in the public interest, while tariffs allow them to profit by snubbing the public interest.

You show me a tariff, and I’ll show you one or more large corporations – such as the steel companies that once hired Mr. Lighthizer as a political-string puller – that lobbied hard for it.

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

Quotation of the Day…

(Don Boudreaux)

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… is from page 263 of F.A Hayek’s 1958 profound paper “The Creative Powers of a Free Civilization,” which is Chapter 9 in Essays on Individuality, Felix Morley, ed. (Indianapolis: Liberty Press, 1977 [1958]):

The whole conception of man, already endowed with a mind capable of conceiving civilization, set out to create that civilization as it was already preformed in his mind, is fundamentally false. Man does not simply impose upon nature a preformed mental pattern. His mind is itself a pattern constantly changing as a result of his endeavor to adapt himself to his surroundings. It is equally misleading to think that to achieve a higher civilization we have merely to put into effect the ideas now guiding us. If we are to advance there must be room for a continuous revision of our present conceptions and ideals as a result of further experience. We are as little able to conceive what civilization will be, or can be, five hundred or even fifty years hence as medieval man, or even our grandparents, were able to foresee our own manner of life.

Pittsburgh Tribune-Review: “Libertarians & immigration”

(Don Boudreaux)

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In my Pittsburgh Tribune-Review column for September 12th, 2007, I ponder the peculiar self-identification of some opponents of immigration as “libertarian.” You can read my column beneath the fold.

(more…)

Some Links

(Don Boudreaux)

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My intrepid Mercatus Center colleague Veronique de Rugy rightly decries Americans’ increasingly tight embrace of an entitlement mentality. A slice:

Looking back at 2019 is incredibly disorienting. The country is horribly divided. In fact, the president of the United States was just impeached along partisan lines. The government is running trillion dollar (and growing) annual budget deficits, even though the economy is doing well. Still, listening to many politicians and pundits, you’d think the nation is doing terribly and the government isn’t spending a dime. That’s 2019 in a nutshell.

Megan McArdle celebrates the glorious globalization that makes possible an Irish Christmas cake.

George Will laments Democrats’ denial of reality (including of the laws of arithmetic).

With Hayekian wisdom, the Wall Street Journal‘s Barton Swaim explains that capitalism isn’t a system. Unlike socialism, capitalism – what Deirdre McCloskey calls “innovism” –  is an emergent order. A slice:

But although capitalism keeps producing historically high levels of prosperity and order, its critics on the left keep hurling new terms at it. Capitalism is now called “neoliberalism” or “hypercapitalism” or, question-beggingly, “late capitalism,” and left-wing intellectuals keep pretending they have something wonderful to replace it with.

Jonah Goldberg writes wisely about Trump’s own role in his impeachment.

Here’s holiday wisdom from John Stossel.

Tim Carney understandably bemoans that great geyser of cronyism, the U.S. Export-Import Bank – and, in the process, he also exposes the hypocrisy of many American protectionists. A slice:

While its advocates claim Ex-Im helps the U.S. fight the trade war, reality is quite different. The number one destination where Ex-Im sends U.S. tax dollars is China. An overwhelming majority of that financing goes to state-owned enterprises such as Air China and the Industrial and Commercial Bank of China. Ex-Im isn’t a very good tool to counter China’s industrial policy since its top activity is funneling cash to China’s tools of industrial policy.

Quotation of the Day…

(Don Boudreaux)

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… is from page 287 of Deirdre McCloskey’s marvelous 2019 book, Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All:

Stuff, not jobs, are what we have economies for. If we can get more stuff by technological change or by trading with China and Mexico, good.

Quotation of the Day…

(Don Boudreaux)

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… is from page 105 of George Will’s superb 2019 book, The Conservative Sensibility:

The ever-expanding powers and pretenses of the presidency have become a menace to America’s Madisonian balance of separated powers. The powers and pretensions of presidents should long since have become an embarrassment to the public. Upon what meat doth this our Caesar feed, That he is grown so great? The presidential office has fattened on the exigencies of a sprawling, intrusive government and on the (somewhat consequent) childishness of its citizenry.

He Was a Man of System

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

You describe the late Felix Rohatyn as a Democrat who looked more favorably upon economic growth than do many of today’s Democrats (“Felix G. Rohatyn,” Dec. 24). Perhaps; the standard is quite low. But the case remains unclear. Mr. Rohatyn was dismayed that the creative destruction unleashed by the free market threatens the profitability of established industries. And so to protect these industries from competition, Mr. Rohatyn did more than promote (as you put it) “spending on public infrastructure”: he wished also to resurrect the Reconstruction Finance Corporation – a scheme of government allocation of resources that Elizabeth Warren and many other Democrats today would surely warmly embrace.

Also, Mr. Rohatyn’s skill in rescuing New York City from its 1970s financial straits were not remarkable. The bonds issued by the Rohatyn-led state-level Municipal Assistance Corporation were, as my late colleague Don Lavoie explained in 1985, “sold only when the federal government agreed to offer over a billion dollars in loan guarantees and other forms of support…. Rohatyn was able to save the city by spreading its burdens to state and national taxpayers.”*

Felix Rohatyn was a friend neither of taxpayers nor of the innovative market competition that alone delivers real, robust, and widespread economic growth.

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

* Don Lavoie, National Economic Planning: What Is Left? (Washington: Cato Institute, 1985), pages 191-192.

Quotation of the Day…

(Don Boudreaux)

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… is from page 292 of Deirdre McCloskey’s marvelous 2019 book, Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All:

Nor is job retraining a good idea if it is to be directed not by the worker herself but by wise heads in Washington or Columbus. The wise heads don’t know the future, and they end up training machinists for jobs that won’t exist. Workers themselves know how best to retrain, within the limits of an inevitable uncertainty that no one can remove, and know when to move out, such as the hundreds of thousands who moved to North Dakota during the brief oil boom there. The workers, to put it mildly, have skin in the game. We need to make the labor force as flexible as the capital force. For that we need liberty, not government programs.