Russell Roberts's Blog, page 50

Bonus Quotation of the Day…

(Don Boudreaux)

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… is this comment by Richard Fulmer on a recent post of mine at Facebook:

The rule, “from each according to his ability, to each according to his need,” creates incentives to demonstrate minimum ability and maximum need. Poverty is the inevitable result.

Be Grateful to Live In A World In Which First Responders Are Paid Less Than Professional Athletes

(Don Boudreaux)

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In my latest column for AIER I explain why we should be grateful to live in a world in which the wages commanded by workers such as fire-fighters and school teachers are much lower than are the wages commanded by workers such as professional basketball players and Hollywood stars. A slice:

Suppose Jones bought several dozen gallon-sized bottles filled with nothing but ordinary air: 78 percent nitrogen, 21 percent oxygen, and 1 percent other gasses. Jones then loaded these bottles into a pick-up truck and drove around town offering to sell each bottle for $229.99. As Jones drove he broadcast through a loudspeaker the following message: “Air! Authentic, breathable air available here at the amazing price of only $229.99 per gallon! Nothing, my friends, is more essential to life than air. If you’re denied air for even a few minutes, you’re a goner. So get your air here!”

How many bottles of air would Jones sell at $229.99? How many bottles would he sell if he lowered his price to $29.99? What about to $9.99? Or to $0.09?

The answer, in each case, is none. The earnings available to be reaped by sellers of air are so low that, in the real world, literally no one attempts to make a living at this trade. This outcome is the correct one. Because on the surface of the earth, breathable air is so abundant that it’s free for the taking, it would be wasteful to use even one second of human labor to deliver it to consumers of air.

But what if Jones nevertheless persisted in his attempt to earn a living selling air. He’d surely plead along the following lines: “It doesn’t make sense to pay so little – in fact, to pay nothing! – to sellers of something as essential to life itself as air when other people are paid much more to supply the likes of popcorn, beer, and bubble gum. If we don’t raise the pay of air sellers, we risk losing our access to air! Humanity will suffocate!”

Of course, upon hearing Jones’s plea, you would correctly conclude that he’s deluded. Precisely because air is naturally so very abundant, we need to devote no human effort to supplying it.

Yet Jones doesn’t give up. He, an aspiring seller of air, continues to plead, this time by taking humanity on a guilt trip: “It’s unjust for suppliers of a good – air – that satisfies an essential need to be paid so little while people who supply popcorn, beer, bubble gum, and other frivolous luxuries are paid far more! Humanity’s priorities are all wrong!”

Jones, though, has matters backwards. Yes, air is essential to life. Nothing is more so, and few things are as much so. But this fact does not determine air’s economic value. The economic value of a unit – say, a gallon – of air offered for sale comes from the satisfaction that a buyer would experience by acquiring that extra gallon of air. Because any person offered that gallon of air would, were he or she to reject the offer, continue to have access, free of charge, to all the air that he or she wishes to breathe, if that person did acquire that extra gallon of air it would add absolutely nothing to his or her satisfaction. Therefore, the maximum amount that this consumer is willing to pay for the gallon of air is $0.

Of course, what’s true for this particular consumer is true for each of the eight billion persons now inhabiting the surface of the earth.

This manner of price determination is what economists mean when they say that “prices are determined at the margin.” Air’s essentialness to human life is obvious. But the usefulness to humans of having access to any good in total, such as access to the earth’s air supply, does not determine the usefulness of any unit of that good. The determination of economic value – of market prices and wages – is affected also by available supplies.

The greater is the supply of a particular kind of good relative to the number of uses to which humans believe that good can be beneficially put, the less is the satisfaction that will be gained by using one additional unit of this good. The most urgent human wants that can be satisfied with this good are the first wants that units of this good are used to satisfy. After these urgent wants are satisfied, whatever additional units that remain of the good can satisfy only wants that are less urgent. In the case of air, it is fortunately so very abundant that any one unit of air satisfies no wants at all. Any one unit of air is useless to humans, despite the undeniable essentialness of air to human survival.

Because the price people are willing to pay for a unit of a good reflects the amount of satisfaction that acquisition of that additional unit is expected to bring, goods that are very abundant have low market prices, even if some uses of this good are utterly essential to human survival. This fact is why the market price of a gallon of air is zero: an additional gallon of air supplies zero satisfaction.

What does this esoteric economic reasoning about air and economic margins have to do with first responders and professional athletes? Answer: a lot! Just as you should be pleased that, in our world, something as essential to life as breathable air is more abundant than is frivolous bubble gum – indeed, air is so much more abundant that its price is less than the price of bubble gum – you should also be pleased that in our world something as essential as first-responder services are much more abundant than are the abilities to expertly drive golf balls onto greens or to routinely hurl 99 MPH fastballs into strike zones.

Unfortunately, supplies of first-responder and teaching services aren’t naturally superabundant, as is air. So we must pay positive prices – wages – in order to secure supplies of these services. But given this misfortune, we are fortunate that supplies of first-responder and teaching services are much more abundant than are supplies of athletic and acting abilities. The result is that the total prices that we must pay to be rescued by first responders and taught by teachers are much lower than are the total prices that we must pay to be entertained by world-class athletes and actors.

Some Links

(Don Boudreaux)

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Writing in the Wall Street Journal, John Sailer documents the malignancy of requiring “diversity statements” from candidates for college and university faculty positions. A slice:

Many critics rightly point out that diversity statements invite viewpoint discrimination. DEI connotes a set of highly contestable social and political views. Requiring faculty to catalog their commitment to those views necessarily blackballs anybody who dissents from an orthodoxy that has nothing to do with scientific competence.

The Texas Tech documents show how DEI evaluations can easily seek out these contestable social and political views. The search committees espouse a narrow definition of diversity, encouraging a myopic fixation on race and gender—a definition over which reasonable people can disagree. “Some of us were surprised that there was limited mention of BIPOC issues,” one evaluation notes, using a DEI acronym for “black, indigenous and people of color.” For another candidate, “Diversity was only defined as country of origin and notably never mentioned women.” Of course, many scholars actively seek to avoid a fixation on race and gender, preferring to promote diversity of thought and equality.

Throughout these reports, the search committees displayed an eagerness to find breaches of DEI orthodoxy. One cell biology candidate was given a “red flag” for alleged “microaggressions towards women faculty.” The report names two examples: “assuming one junior faculty was a graduate student” and “minimizing the difficulties of women in the US by comparing to worse situations elsewhere.”

The evidence shows that diversity statements function as political litmus tests, but it’s worse than that. Heavily valuing DEI while selecting cell biologists, virologists and immunologists constitutes a massive failure of priority. This is an issue of academic freedom, and it is a degradation of higher education.

“Remember to tell all of black history” – so write William Schambra and Bob Woodson. A slice:

The Hulu docuseries of “The 1619 Project” purports to “examine how the legacy of slavery shapes different aspects of contemporary American life.” But the program, which began airing right before the start of Black History Month, isn’t telling the whole story. Viewers won’t hear about Americans’ remarkable resistance to and triumph over slavery, which led to flourishing black communities and unprecedented achievements. Without that context, it’s impossible to understand the real black American story.

Black History Month would have been a great occasion to make that complex but victorious narrative better known. Black history is full of generous spirits, brave leaders and heroes who demonstrated virtue and achieved success in the face of adversity. And—perhaps above all—it is the story of racial and political coalitions that made the U.S. the most peaceful and prosperous multiethnic society in the world.

GMU Econ alum Dominic Pino, writing at National Review, understands better than does Ezra Klein, writing at the New York Times, why “we” Americans are getting worse at construction. A slice:

One of the primary reasons there are a million veto points for people to gum up the works is that government, intentionally, created those veto points to give them the ability to do so.

There is no reason, besides the National Environmental Policy Act of (guess which year) 1970, that environmentalist groups should be able to block new construction with endless litigation.

There is no reason, besides the Occupational Safety and Health Act of (guess which year) 1970, that a federal agency in Washington, D.C., should be setting safety rules for every worksite in the entire country.

There is no reason, besides the establishment of the Environmental Protection Agency in (guess which year) 1970, that construction projects should be consumed with years of federal paperwork before a single shovelful of dirt is ever moved.

Then, there’s the Clean Air Act Amendments of (guess which year) 1970, which the EPA has used (and abused) to expand its authority over just about every part of American life. The Clean Water Act came two years later, adding new regulatory hurdles for the EPA to enforce. A year after that came the Endangered Species Act, which explicitly puts “economic growth and development” in opposition to environmental protection in its preamble.

Klein considers state-level regulations and concludes that it “doesn’t lend itself to a clean story of red states and blue states, or urban states and rural states.” It never seems to occur to him that might be because federal regulations are causing the problem, specifically the federal regulations that flow from a series of laws affecting construction all passed right around 1970, when the decline in construction productivity begins.

Ross Clark explains “how the green elites are impoverishing the world.”

Howard Husock calls for letting housing markets work.

Inspired by a recent column by my GMU Econ colleague Tyler Cowen, Dominic Pino warns conservatives against joining in the left’s enthusiasm for industrial policy. A slice:

Tyler Cowen has a warning for industrial-policy advocates in his recent Bloomberg column:

Some conservatives criticize globalization while praising industrial policy. They are playing right into the hands of the Davos globalizing elite.

Cowen argues that they do so by setting up future globalization. He notes that, “Even the most successful ‘nationalistic’ industrial policies rely on a highly globalized world.” He points to semiconductors and the Covid vaccines as examples, both of which rely on highly globalized industries to produce their alleged industrial-policy successes.

I’d add that they also do so by embracing the same central-planning mindset that animates the people they claim to hate. Technocratic attempts to orchestrate economic output are going to run into similar problems whether they come from the left or the right.

Having a government official educated at Harvard, Oxford, and Yale spearhead an effort to use “transformational” subsidies to engineer a “better” economic outcome, which is what the CHIPS Act does, is exactly the kind of thing that impresses the people at Davos. That’s who they are. Those are the kind of people they admire. They believe they can do that sort of thing well, if only governments would give them the chance.

“Economics ought to be a branch of what sociology ought to be,” so explains Arnold Kling. A slice:

Students should come out of an economics course understanding that:

Profits are not automatic. The market is a profit-and-loss system. Profitable industries tend to expand, and expansion tends to compete away profits. Losses cause firms that make inefficient use of resources to disappear.Prices are determined by supply and demand, and they are held down by competition.Government-provided benefits require diversion of resources from other uses.In a competitive labor market, the costs of employer-provided benefits are borne by workers.(1)Markets and government are both imperfect. Markets have a mechanism for fixing problems and getting better. Profits and losses create incentives for improvement. Government lacks those incentives.Non-profits are not “nice” just because they do not seek profits. The nature of such organizations is that they focus on satisfying the desires of donors. Leaders of such organizations work to please donors. They can do so without necessarily doing good for the people that the organizations are supposed to help. Profit-seeking firms are accountable to customers. If customers are not happy, then they do not buy from the firm, and it goes out of business.

It is pretty clear that most college students who take an economics course fail to unlearn some or all of what they ought to unlearn. In fact, there are people who go all the way through a Ph.D program in economics without unlearning non-economic thinking.

Michael Brendan Dougherty: “Mask drama was probably for nothing.” A slice:

Reading into the quality of the studies, a pro-masker could make the argument that what we’re really seeing is not the uselessness of masks but the uselessness of mask mandates. That is, there is still enough uncertainty that someone could argue we just needed lots more coercion into better masks and education on how to wear them. But policy-makers should actually heed “real world” application of their policies, rather than notionally perfect compliance and execution.

Of course what’s so galling about these studies is not just that public-health officials oversold this “symbol” of good behavior, but that people’s workplaces, school districts, churches, and friends made this into a sole test of virtue.

I’m thinking particularly of so many co-religionists who portrayed the case for wearing masks as synonymous with “love of neighbor.” As if the only reason to be unmasked were some kind of libertine self-satisfaction.

Michael Senger decries the damage done by covid hysteria and the resulting lockdowns and mandates.

Quotation of the Day…

(Don Boudreaux)

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… is from page 29 of Eamonn Butler’s 2022 book, An Introduction to Economic Inequality:

The traditional explanations of global inequality are also both familiar and questionable. Colonialism and slavery are suggested, though colonies imposed costs on the occupying powers as well as delivering them benefits. Slavery, as Adam Smith noted, was not only morally offensive but bad economics too.

DBx: Slavers and slaveowners, of course, benefitted from slavery, just as successful thieves benefit from thievery. But just as society’s overall wealth is reduced by thievery, society’s overall wealth is reduced by slavery.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 42 of economists Phil Gramm’s, Robert Ekelund’s, and John Early’s superb 2022 book, The Myth of American Inequality: How Government Biases Policy Debate:

The explosion in transfer payments to low-income Americans since 1967 has induced twice as many prime work-age adults among the poor to stop working and accept government subsidies, exchanging development and use of their capabilities for idleness.

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(Don Boudreaux)

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Juliette Sellgren talks with Eric Daniels about history.

Wall Street Journal columnist Mary Anastasia O’Grady writes insightfully about the left-wing, economically ignorant populist now again ruling Brazil. Two slices:

Another democratic principle at risk in Brazil is free speech. Mr. Biden may have to avoid that topic too. During the presidential campaign last year Mr. da Silva benefited from an electoral tribunal that censored his critics. His new government will use speech police to shut down what it judges to be fake news and misinformation. This is an obvious violation of civil liberties and no way to run a democracy. But it’s also an idea that Mr. Biden tried last year and had to withdraw when it was widely mocked by Americans as a ministry of truth.

…..

Mr. da Silva won election on a promise to make poor Brazilians better off. But if he cares about making a dent in poverty, he has to care about growth, which he won’t get if he automatically reverses the constructive policies that worked for his predecessor. Mr. Bolsonaro had a recovery going earlier than other developing countries thanks to some deregulation and a partial pension reform that reduced fiscal pressure. Turning those gains back merely for revenge or to show his ideological chops would be a slap in the face of Brazilians. Yet he’s already signaling that reckless spending and an end to privatization will be at the heart of his economic agenda.

Investors are important to Brazil, whether foreign or domestic. But they’re not likely to bet on a country that is making utopian socialism its highest priority. Mr. Biden also might have trouble making that case to Lula.

“[Bayard] Rustin dismissed racial reparations as a ‘ridiculous’ idea” – so explains Boston Globe columnist Jeff Jacoby. Three slices:

For exactly that reason, the great civil rights leader Bayard Rustin — the organizer of the 1963 March on Washington and a close adviser to Martin Luther King, Jr. — rejected calls for reparations as “ridiculous.” He regarded Forman’s demand for $500 million as demeaning. “If my great-grandfather picked cotton for 50 years, then he may deserve some money,” Rustin said, “but he’s dead and gone and nobody owes me anything.”

…..

To date the War on Poverty has spent $25 trillion (not including Medicare), and whether those outlays ultimately helped or hurt Black Americans has been widely debated. But there is no disputing that they were intended, to a significant degree, to redress the harms caused by the racist policies of the past — to give Black people “the same chance as every other American,” as LBJ put it. That’s even truer of affirmative action in all its varieties — the decades of racial preferences by federal, state, and local governments, the minority set-asides, the de facto racial quotas in hiring and contracting.

In short, there has been for years in America a considerable, well-funded attempt to make amends for the legacy of slavery and segregation. Those today who wish to argue that an outstanding debt is owed to Black America have an obligation to account for all that has been done, in good faith and at great expense, to pay down that debt.

…..

When all is said and done, the reparations movement is grounded in a belief in collective racial entitlement and collective racial guilt. No belief could be more repugnant to America’s ideals — however imperfectly realized — of tolerance, individual equality, and the right of each of us to be judged on our own merits, not by our bloodline or skin color or ancestry. Perhaps reparations promoters mean no harm. What they are seeking would prove harmful indeed.

“The French versus the Journalists.”

Stephanie Slade: “The GOP’s Pitchfork Populism Is Older Than Trump.”

David French, now writing for the New York Times, warns of the very real dangers of hyper-partisanship. A slice:

The instant that a person or an institution becomes closely identified with one political “tribe,” members of that tribe become reflexively protective and are inclined to write off scandals as “isolated” or the work of “a few bad apples.”

Conversely, the instant an institution is perceived as part of an opposing political tribe, the opposite instinct kicks in: We’re far more likely to see each individual scandal as evidence of systemic malice or corruption, further proof that the other side is just as bad as we already believed.

Walter Olson reports on some potential constitutional amendments with cross-ideological appeal.

Alberto Mingardi will lead a virtual discussion group on Bruno Leoni’s brilliant 1961 book, Freedom and the Law.

David Livermore decries “the lethal cost of lockdowns.” A slice:

Extreme anti-vaxxers are pushing an equally simplistic view. They effectively claim that excess deaths equal vaccine deaths. If that were true, then why does Sweden, which has a high Covid vaccination rate, have so little excess mortality? And why haven’t there been big death spikes in the heavily vaccinated 15-44 demographic? Vaccines have provided useful protection for those most at risk. They broke the link between infections and deaths in 2021. Even with the Omicron wave in 2022, the over-80s of South Korea and Singapore – extensively vaccinated with mRNA products – recorded proportionately fewer deaths than the over-80s of Hong Kong, who were often unvaccinated or vaccinated with inferior Chinese products.

The bulk of the evidence points to lockdowns as the main cause of excess mortality. After all, lockdowns disrupted healthcare in myriad ways from which it has yet to recover. During the pandemic, the National Health Service was transformed into the National Covid Service. Routine activity was cancelled. Patients avoided seeking out healthcare, despite their symptoms. Either they feared catching Covid in hospital, they didn’t want to be a nuisance or they were frightened to leave the house thanks to the orders to ‘stay at home’.

“Chinese families can hug at last.” (HT Martin Kulldorff)

Wall Street Journal columnist Allysia Finley explains why covid-vaccine hesitancy is growing among Americans on the political right. Here’s her conclusion:

Authorities no doubt worry that alerting the public to potential safety risks could discourage vaccination, but their lack of transparency and dismissal of critics fuels the distrust in vaccines. Information about potential side effects is inevitably emerging in viral videos and Twitter threads. It would be better for Americans to hear it from their government.

Quotation of the Day…

(Don Boudreaux)

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… is from page 34 of Michael Shellenberger’s excellent 2020 book, Apocalypse Never: Why Environmental Alarmism Hurts Us All:

In Brazil, as in Nicaragua, my enthusiasm for socialist cooperatives was often greater than that of the small farmers who were supposed to benefit from them. Most of the small farmers I interviewed wanted to work their own plot of land. They might be great friends with their neighbors and even be related to them by birth or marriage, but they didn’t want to farm with them. They didn’t want to be taken advantage of by somebody who didn’t work as hard as them, they told me.

DBx: Socialism and communitarianism work much better on paper, in one’s emotions, and in discussions in faculty and grad-student lounges than they work in reality.

Bill Maher Eviscerates the Woke

(Don Boudreaux)

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I thank my dear friend Lyle Albaugh for alerting me to this brilliant clip.

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(Don Boudreaux)

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Andrew Sullivan reports on the media’s woke trance. (HT Peter Minowitz) A slice:

In the words of The New Yorker’s Jelani Cobb: “The most pernicious effects of American racism were to be seen in what happened in the absence of white people, not in their presence.” So we instantly knew this was not about bad individuals, or bad training, or bad policies, but about white supremacy. Because everything is always about white supremacy. The unfalsifiable nature of this assertion is key to its popularity.

It’s reminiscent of the moment Ta-Nehisi Coates saw the true depths of white evil, when a black cop killed a black friend. Coates explained the real culprit: “The Dream of acting white, of talking white, of being white, murdered Prince Jones as sure as it murders black people in Chicago with frightening regularity.”

This is why, in pieces devoted to the disproportionate number of black men in jail for murder, the MSM never provide data on the disproportionate number of black male murderers. You’d think that would just be logically relevant. Ninety percent of those convicted of murder are men — but we don’t view the system as biased against them, because they commit 90 percent of the murders! Similarly, if black men — around six percent of the population — have been responsible for more than 50 percent of all murders over the years, you can see why they might be over-represented in prison, without any reference to any system of “whiteness” at all.

But with critical race theory, the black officers didn’t actually kill anyone. Whiteness did — by infesting their brains and souls, like the fungally-challenged people in “The Last of Us.” CRT denies human agency to members of minorities, strips them of choice, renders them inert as individuals. They are only ever instruments of the “system.” They may identify as black, but they’re all Clayton Bigsby underneath.

(DBx: One reason my late, great colleague Walter Williams so loathed the progressive left is that he was often dismissed by progressives as an “Oreo” – black exterior, white interior. Never mind that Walter grew up in a Philadelphia housing project. His refusal to be an obedient mascot for progressives who stoke and use racism as a means of extending government control over our lives was simply intolerable to them. Progressives deal with the likes of Walter, Thomas Sowell, Clarence Thomas, Larry Elder, and Shelby Steele not with the respect that progressives disingenuously claim every person deserves, but with contempt and ignorant disdain. And the arguments offered by Walter, Tom Sowell, and others in support of free markets and against race-based government policies have long been, and continue to be, largely ignored rather than engaged. That’s how too many progressives do social ‘science.’)

Samuel Gregg discusses his latest book, The Next American Economy, with James Harrigan and Antony Davies.

Here’s David Henderson on Steven Camarota’s confused argument about immigration and inflation.

James Bovard rightly complains that “to vilify our founders, Hulu’s ‘1619’ ignores what actually sparked the American Revolution.” A slice:

The 1619 Project’s most harebrained idea is that the American Revolution was fought to preserve slavery. Slavery was barbaric, especially in the more southern states. But there was little slavery in the northern colonies, and they would not have risked their lives for its preservation.

Janet Daley warns of the dangers lurking in “the elevation of feelings into facts.” A slice:

It is only helplessness and victimhood which are rewarded as legitimate forms of individualism, not strength or initiative. “I am what I feel” is the definition of truth, rather than “I am what I can do.” Indeed, taking pride in what you are capable of, is the last thing this ideology would choose to venerate because rewarding people on their merits is seen as ruthless. It promotes talent and effectiveness which are not evenly distributed and which must, therefore, be inherently unfair. It is one of the chief propositions of this new philosophy that talent and competence are functions of privilege.

Richard Rahn decries “the ‘experts’ who misled us during the COVID-19 pandemic.” Two slices:

When it comes to understanding viruses, it is obvious that, particularly after the pandemic, much is to be learned. Government health officials like Dr. Anthony Fauci made major mistakes in giving the impression that they knew far more than they did about COVID-19 and the various vaccines and other treatments. The public was subject to endless revisionist history and denial about earlier statements (as if video recordings did not exist) about how effective the vaccines were, how many shots would be needed and at what intervals, and what side effects might occur. All of the doublespeak and mis-forecasts have caused the public to take a jaundiced view of the alleged consensus statements of the medical experts.

…..

The costs of lockdowns to schoolchildren, businesses, the economy in general and most importantly, civil liberties were never adequately considered and could justifiably be called criminal. The lockdowns caused a drop in real incomes, causing more economic stress, which led to more health problems and higher death rates. Many politicians made demands that the economy be locked down, upon the advice of medical professionals, without the benefit of a credible cost-benefit analysis of the lockdowns versus alternatives. The lockdown mandates were about government power — not knowledge — leading to absurd regulations where churches had to be shut, but not bars.

Vinay Prasad tweets: (HT Jay Bhattacharya)

It is anti-vax to not see a difference between an 85 yo who never had COVID getting dose 1 (a very good idea), and a 20 year old who got 3 doses, & had covid getting dose 4.

The latter has no data to support it; needs RCT

Not understanding the difference is bad medicine

Quotation of the Day…

(Don Boudreaux)

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… is from pages 205-206 of Robert Higgs’s July 1987 Reason article titled “,” as an expanded version of this article appears under the title “The Normal Constitution Versus the Crisis Constitution” in the superb 2004 collection of some of Bob’s essays, Against Leviathan:

Far from having their rights to life, liberty, and property upheld by the federal government, Americans have been routinely deprived of such rights under declarations of emergency and even by government emergency action absent such a declaration….

We will search the constitutional document in vain, however, for provisions relating to emergency powers. No such powers are mentioned. If the Framers intended the powers of federal officials or the rights of private citizens to be any different in national emergencies, it is curious that they neglected to express that intention….