Russell Roberts's Blog, page 63

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 87 of Julian Simon’s posthumously published 1999 volume, Hoodwinking the Nation:

Al Gore Jr.’s book is called Earth in the Balance. But it is truth that is in the balance, rather than our very durable planet. The book is as ignorant a collection of clichés as anything ever published on the subject. And there is much tough competition for that abysmal bottom spot.

DBx: In the book pages that follow this quotation, Simon reveals Gore’s appalling sloppiness with statistics and sources.

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(Don Boudreaux)

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George Will – born and reared in Illinois – rightly praises the Midwest. A slice:

Thanks to the Northwest Ordinance of 1787 — the nation’s finest act of statecraft prior to the Constitution — the region that would become the Midwest’s 12 states, all west of the Alleghenies and north of the Ohio River (Ohio, Indiana, Illinois, Missouri, Michigan, Iowa, Wisconsin, Minnesota, Kansas, Nebraska, the Dakotas) never, with the exception of Missouri, had slavery. Instead, these states had the crackling entrepreneurial energy that Alexis de Tocqueville, floating down the Ohio in Jacksonian America, saw to his right, in Ohio, but not, to his left, in slaveholding Kentucky.

[DBx: Tocqueville’s observation is powerful evidence against the economically (and historically) uninformed notion that modern capitalist prosperity is rooted in slavery.]

Phil Magness offers, on his Facebook page, this astute observation:

Effective Altruists: “Philanthropy should prioritize stuff that maximizes the improvement in people’s lives.”
Also Effective Altruists: “Let’s fling trillions at preventing extremely low probability catastrophes that I happen to obsess about because I’m an apocalyptic weirdo.”

Patrick West decries the rise of “the eco-cult.” A slice:

Similarly, it was perhaps unsurprising that, in 2022, doyen of environmentalism George Monbiot argued in his book, Regenesis, that ‘farming is the most destructive human activity ever‘. That’s right: for green doom-mongers, even farming – the very foundation of civilisation itself, the very thing we depend on to keep billions of people alive – is now considered a blight on nature.

Here’s more from my colleague Bryan Caplan on Alex Epstein and energy.

Arnold Kling continues to write wisely.

Liz Wolfe reviews Sebastian Mallaby’s new book about venture capital, The Power Law. A slice:

While detractors frequently downplay how much public policy can help or hinder innovation, Mallaby never neglects the subject. A reduction in the maximum individual capital gains tax rates in the late 1970s and early ’80s—from 35 percent for most of the ’70s to 20 percent by 1982—left venture capitalists flush with cash and eager to invest. Without these preconditions, Apple and Atari might not have flourished; Leonard Bosack and Sandy Lerner’s Cisco, which pioneered multiprotocol routers, might not have received enough investment; and advances in computing might not have taken off at the time and speed that they did. As Silicon Valley competed with larger, more established investing firms in Boston and Japan, its nimble spirit—a “bubbling cauldron of small firms, vigorous because of ferocious competition between them, formidable because they were capable of alliances and collaborations”—made it rich with creative ferment, especially when compared with the “self-contained, vertically integrated” cultures of its faraway competitors.

Three decades later, public policy was still shaping Silicon Valley. “While Wall Street recovered painfully from the crisis of 2008, its wings clipped by regulators aiming to forestall a repeat taxpayer bailout,” Mallaby writes, “the West Coast variety of finance expanded energetically along three axes: into new industries, into new geographies, and along the life cycle of startups.” Many politicians today threaten trustbusting crusades against Google and Amazon, or rumble about changing which types of speech are allowed on Facebook and YouTube. What legislators and regulators do now could shape V.C. appetites for years to come, altering which types of investments firms make or how many new entrants can emerge in the face of greater regulatory costs.

Chris Edwards is understandably underwhelmed by economists’ ability to make accurate macroeconomic forecasts. A slice:

Businesses and stock market investors often make mistakes, but they can change direction quickly as conditions change. The government, by contrast, is a rigid institution led by people who rarely admit mistakes. So when politicians move economic resources around, the resources usually get stuck in low‐​value uses for years on end, as discussed in this study on government failure.

“Free-Market Capitalism is the Next American Economy.”

Wokism gets ever-nuttier.

In response to a covidian’s deranged remarks about the great Great Barrington Declaration, marypmadigan tweets: (HT Jay Bhattacharya)

What was the GBD’s evil plan? To stop lockdowns and mandates from turning the formerly civilized world into an economic & social dumpster fire? To give poor kids a decent, uninterrupted education? To prevent rabid, prissy hypochondriacs from destroying third world economies?

Quotation of the Day…

(Don Boudreaux)

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… is from page 173 of the original, 1964 edition of W.H. Hutt’s The Economics of the Colour Bar:

When we buy a product in the free market, we do not ask: What was the colour of the person who made it? Nor do we ask about the sex, race, nationality, religion or political opinions of the producer. All we are interested in is whether it is good value for money. Hence it is in the interest of business men (who must try to produce at least cost in anticipation of demand) not only to seek out and employ the least privileged classes (excluded by custom or legislation from more remunerative employments) but actually to educate them for these opportunities by investing in them. I have tried to show that in South Africa it has been to the advantage of investors as a whole that all colour bars should be broken down; and that the managements of commercial and industrial firms (when they have not been intimidated by politicians wielding the planning powers of the state) have striven to find methods of providing more productive and better remunerated opportunities for the non-Whites.

DBx: A few ideologically blinkered, poorly informed, and – judging from what they write – reading-challenged ‘intellectuals’ have been on a crusade lately to portray Hutt as a racist. Fortunately, anyone with the reading comprehension of at least a sixth-grader can directly consult Hutt’s work in order to judge for himself or herself if Hutt was a racist. Such a person – one who is actually able to read, and to do so without a pre-ordained conclusion in mind – will clearly see that the charge of racism against Hutt is pure nonsense.

Most Lockdowners Can’t Admit They Were Wrong

(Don Boudreaux)

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Matt Ridley is that rare person who, in a brilliant essay in the Telegraph, admits this: “To my shame, I was not a lockdown sceptic from the start.”

Editor:

At the conclusion of his scathing criticism of lockdowns, Matt Ridley castigates publications such as The Lancet and The New York Times for their silence today in light of now-powerful evidence that lockdowns were a calamity with virtually no upside (“China’s Covid nightmare is the final proof: lockdowns were a total failure,” December 28). He’s right to decry this silence, but no one should be surprised by it.

Ignorantly supposing themselves to be uniquely committed to – and informed by – science, the laptop class regarded everyone who wasn’t on board with their draconian diktats as knuckle-dragging and unethical imbeciles. Now that the scientific (!) evidence clearly shows lockdowns to have been a grotesque mistake, it’s psychologically impossible for most lockdowners to admit that those persons who all along had the correct take on both the science and the reality of covid were not themselves (the intellectual and media elites) but, rather, the imbeciles.

This scientific truth is simply too much for lockdowners to process.

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

Bonus Quotation of the Day…

(Don Boudreaux)

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… is the opening paragraph of Scott Atlas’s excellent essay – “When Will Academia Account for Its Covid Failures?” – in today’s Wall Street Journal:

Many in America’s academic class betrayed the public trust during the pandemic. To sway the American people to accept lockdowns, professors with prestigious titles and affiliations denied scientific data about risks, effective mitigation and biological protection. They spouted politicized opinion as if it were objective truth and demonized views counter to their preferred narrative.

DBx: Pictured here is Scott Atlas who is indeed one of the too-few academics who spoke out courageously and with clarity in support of the great Great Barrington Declaration and, of course, also in opposition to lockdown madness and other covidian tyrannies.

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Matt Ridley, writing in the Telegraph, is correct: “China’s Covid nightmare is the final proof: lockdowns were a total failure.” A slice:

Excess mortality is the only true measure of the impact of an epidemic, as the 19th-century epidemiologist William Farr insisted: “The death rate is a fact; all else is inference.” And lockdowns cause excess mortality outside the virus itself: from untreated cancer and heart disease, from suicide and mental illness. If you look at excess mortality over the past three years, on most data sets one of the countries with the lowest overall mortality increases is Sweden, the only country that stood against the herd and refused to implement widespread compulsory lockdowns or close schools.

Over the period from March 2020 to June 2022, Sweden’s cumulative, all-cause excess mortality was not much higher than that of its Nordic neighbours and significantly lower than that of most other countries.

Those who argued that Sweden was being sensible in relying mostly on voluntary measures were routinely vilified during the pandemic. We know with certainty that the Swedish model has failed, wrote Peter Geoghegan in The Guardian a year ago. Swedes are different, we were told: they live in the forest (no they don’t: the country is more urbanised than the UK); are more socially responsible (cultural stereotypes, anyone?); can be compared only with Danes and Norwegians.

In his fine book The Herd, the Swedish journalist Johan Anderberg has chronicled the development of the Swedish policy and how tough it was for its architect, Anders Tegnell, to stay the course as country after country was stampeded into compulsory and comprehensive lockdowns. “Shutting down society completely won’t work,” said Tegnell on March 12 2020, while watching with admiration Boris Johnson preach the same message. He was devastated when Britain about-turned 10 days later, leaving Sweden alone to be the world’s control experiment.

Britain changed course after the release of unrealistic and oversimplified models produced by Imperial College. The same trick was tried in Sweden by Joacim Rocklov and colleagues at Umea University, using a version of the same Imperial models. Unlike Sir Chris Whitty, Tegnell called it a “horror scenario of no use to anyone”. Honourable British exceptions include the epidemiologist Mark Woolhouse, who wrote a book accurately titled The Year the World Went Mad.

We now know – from Matt Hancock’s diaries – that one of the worst decisions, restrictions on children in schools, was driven not by any evidence that it would save lives but by a fear of being outflanked by Nicola Sturgeon.

To my shame, I was not a lockdown sceptic from the start. But when lockdowns kept happening and failing, my doubts grew. Being preached at by the mainstream media that protests against racism in 2020 were not super-spreader events but family funerals or protests against lockdowns were – that stuck in my craw.

Then, in December 2021, came the final proof that the lockdown fanatics were wrong. The science establishment tried to bounce Boris Johnson into a Christmas lockdown to prevent the omicron wave. Ignoring evidence that omicron was mild – and not just because many people had been vaccinated – they produced models showing a range of possible outcomes: very high to massively high death rates if we did not lock down.

Egged on by Liz Truss and Rishi Sunak, Boris called their bluff and refused to cancel Christmas. As Fraser Nelson has chronicled in The Spectator, deaths and hospitalisations never reached a small fraction of even their lowest predicted levels. That emperor had no clothes.

Until 2020, lockdowns were never part of the plan to control pandemics. The reason they happened was twofold. The internet for the first time allowed economies to limp along, at least for the middle class, while locked down. And an inordinately gullible admiration for China had spread within academia and the World Health Organisation.

Emma Green, writing in the New Yorker, reports on a covidian cult. A slice:

In the progressive imagination, science is sometimes treated like a static text that’s easy to interpret, with clear takeaways for behavior. “One of the big mistakes in our field is this mantra ‘Follow the science,’ as though science is not contested, as though there are not evidentiary gaps, as though there are not conflicting reports and data points you have to navigate your way through,” [Amy] Fairchild, the O.S.U. professor, said. The People’s C.D.C. talks about “science” as proof that the members’ position is correct, when in reality they’re making a case for how they wish the world to be, and selecting scientific evidence to build their narrative. It’s a kind of moralistic scientism—a belief that science infallibly validates lefty moral sensibilities.

Jay Bhattacharya tweets:

It’s time for a change in leadership in public health. This generation of public health leaders repudiated basic ethical principles of public health and thereby failed to secure the health of the public.

Iain Murray writes insightfully about the recent air-travel debacle caused mostly by Southwest Airlines. A slice:

It should at this point be apparent that none of the proposals mentioned would provide what the [New York] Times and the aggrieved passengers really want: “a better chance of getting home for the holidays.” Only more flights at affordable prices would do that, and more regulation is likely to produce the opposite.

George Will traces out the consequences of Putin’s invasion of Ukraine. A slice:

Three of the most spectacular geostrategic blunders of the past 250 years have involved Russia: Napoleon’s invasion 210 years ago, Hitler’s invasion 129 years later and Russia’s invasion of Ukraine 81 years after that. Putin aimed to show that Russia is a formidable nation — and that Ukraine is not a nation. He insisted that “Ukraine” is merely a geographical, not a political, designation. Instead, he demonstrated that Russia, with an economy significantly smaller than Italy’s — and smaller than the gross domestic product of Texas — is even less impressive politically than it is materially because its authoritarian culture breeds stagnation, corruption and toadyism.

Wall Street Journal columnist Daniel Henninger writes that members of Congress, with their recent passage of a $1.7 billion omnibus spending bill, “make drunken sailors look respectable.” Here’s his opinion of Biden’s economic policy:

That path was described on these pages recently by Treasury Secretary Janet Yellen’s defense of the administration’s economic policies. I searched her piece for the phrase “economic growth.” What appeared—once—was “stable growth.” Mostly she described the administration’s spending proposals and transfer payments.

“Stable growth” isn’t just a sentiment. For Democrats, the U.S. economy is understood now as primarily a public economy in which well-being for most people comes from government payments to individuals, rather than from private economic activity or even work.

In this view, the role of the more heavily taxed, government-guided private sector is to keep the economy’s heart beating with “stable growth,” which means settling for the trade-off of long-term growth rates under 2%. This is socialism American style: lowered personal expectations, flattened well-being, more justice. Add to this the progressive goal of an economy of renewables, which will require massive public subsidies for a decade or more.

“Where do the savings go?”

Richard Vedder explains that “Lobbying has made American higher education fat and ineffective.” (HT George Leef) A slice:

Federal student financial-aid programs have not only made college less affordable but have crowded out (via an enhanced administrative sector) the academic emphasis that used to be the reason for colleges to exist. Federal student aid comes with no meaningful academic standards. The student who takes five years and barely graduates will likely get far more aid from the feds than the hard-working, brilliant student graduating in three years. The feds have promoted mediocrity and reduced intellectual emphases by flooding schools with weak students who are just looking for an easy credential.

Tom Grennes ponders diversity.

Quotation of the Day…

(Don Boudreaux)

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… is from page ix of Thomas Sowell’s 2004 book, Affirmative Action Around the World: An Empirical Study (original emphasis):

Many – if not most – people who are for or against affirmative action are for or against the theory of affirmative action. The factual question of what actually happens as a result of affirmative action policies receives remarkably little attention.

Innovism’s Packaging

(Don Boudreaux)

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In my latest column for AIER, I celebrate the marvelous yet largely unnoticed packaging brought to us by capitalism. Two slices:

Even the simplest packaging – such as the paperboard box that held the shirt you received as a gift – required innovative design and efficient production. The top half of the box fits like a glove over the bottom half. Each corner is a sharp 90 degrees. The paperboard is just the right weight for holding your shirt. A lesser weight would be too flimsy; a heavier weight would have been unnecessary and, thus, wasteful of material.

Not impressed? Then take a look (if your trash-disposal company hasn’t yet carted it away) at the Styrofoam or molded-plastic shell that held and securely protected your new laptop computer or flatscreen TV, with the screen wrapped for further protection in a delicate translucent material. And perhaps your new countertop kitchen appliance was held firm in its box by air-filled pillows or honeycomb wrap paper.

Ponder for a moment the different kinds of packaging materials that you, eager to hold and behold each of the gifts that Santa brought, excitedly pulled out or cut away, and quickly discarded as trash on Christmas morning. Try to recall the many different shapes, sizes, and textures of the outer boxes. Each one was perfectly designed to hold its contents. No heavy cardboard or foam rubber was wasted to package your new pair of jeans; a thin and pliable, but surprisingly tough, piece of plastic did the job. In contrast, that wonderful new pizza oven came to you in an outer box of rigid cardboard that encased a thick shell made of molded paper pulp. Being made in China, the heavy oven and its fragile parts had to be packaged securely for shipping to you abroad.

And voila! Each part is present and intact.

…..

Only a very wealthy society can afford to devote so much human ingenuity and effort to the careful production of packaging materials that are promptly discarded, in most cases, without a thought after a single use. Yet the innovativeness that is entrenched within even the most mundane of modern-day packaging materials (stuff such as cardboard and Styrofoam) is essential to modern prosperity. Modernity as we know it exists because humans’ innovative spirit was unleashed, to be bridled not by the state or by elites, but overwhelmingly by market forces responding to the demands of ordinary people as consumers. This innovative spirit is so central to capitalism that Deirdre McCloskey proposes renaming capitalism “innovism.” This innovism, unsurprisingly, occurs not only for the production of consumer goods and services, but throughout the vast unnoticed regions of the entire economy – even in the supply of the packaging materials that almost no one notices.

Again, the packaging of our holiday gifts is something that we aim to cut through and discard as quickly as possible in order to lay our hands on the marvels within. We pay no attention to it. Boxes and packaging material are literally thrown away with nary a thought. But next Christmas do try, for just a moment or two, to marvel not only at your gifts encased within their protective packages, but at the packaging itself. And give thanks that you live in a society that rewards individuals to apply their creativity and effort to making such packaging so abundant that you hardly ever notice it, and think nothing of throwing it away.

Ronald Coase (1910-2013)

(Don Boudreaux)

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On Ronald Coase’s 100th birthday – a birthday he was alive to enjoy – I wrote this short post on him. See below. (I then got the date of his birth wrong; it’s not December 30th but, rather, December 29th.) Also, while my opinion of Coase’s famous 1960 paper was then, as always, high, I’ve since come to appreciate even more the magnificence of that paper.

…..

Today is the 100th birthday of the great scholar Ronald Coase. Fortunately, Coase is still with us – and I’m told by friends who know him well, he’s still working diligently to deepen our understanding of the role of property rights, law, and (of course) transaction costs.

My doctoral dissertation (fortunately unpublished) was on Coase’s theory of the firm. And as my dear, late friend Hugh Macaulay never tired of saying, Ronald Coase is a “genius among geniuses.” (Hugh was referring to Coase the LSE student studying under the likes of F.A. Hayek and Arnold Plant, LSE faculty members.)

PERC’s Terry Anderson offers this excellent essay to celebrate Prof. Coase’s centennial. (HT Laura Huggins)

Coase’s most famous articles are his 1937 “The Nature of the Firm,” and his 1960 “The Problem of Social Cost.” And these articles are indeed worthy of their fame. But Coase’s much-less-celebrated 1946 article, in Economica, is my favorite: “The Marginal Cost Controversy.” Study carefully this article – absorb its wisdom – adopt its perspective – and you will be a damn good economist.

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Oliver Traldi explains how the Google/Ludacris “Buying All Black” effort inadvertently reveals its backers’ belief that most Americans are indeed colorblind, at least when it comes to doing commerce.Two slices:

Google and the rapper Ludacris released a music video, “Buying All Black,” to promote the company’s post-Thanksgiving “Black-Owned Friday.” This event began in 2020 and celebrates a Google feature, also added in 2020, that allows black-owned businesses to be identified in searches by a special badge. The idea is that identifying businesses as black-owned will help bring them customers.

…..

The Ludacris/Google collaboration should put to rest the idea that we live in a white-supremacist society. If we did, telling everyone which businesses were black-owned would be like putting them on a list of targets—for boycotts or even for destructive violence.

Google’s project makes clear that we live in a society with the opposite expectation. Google and Ludacris think it will help stores if everyone knows they are black-owned, because more people, not fewer, will choose to patronize them. The assumption is that people—not only people of any one demographic category or political leaning, but Americans on average—will either remain colorblind or actively favor black-owned businesses.

“Corrupt and Bankrupt FTX Got Higher ESG Rating for ‘Leadership and Governance’ Than Exxon Mobil” – a fact on which Art Diamond blogs.

David Shaywitz reviews Erica Thompson’s Escape from Model Land. A slice:

Beyond the inherent inability of models to account for the unaccountable, models also reflect the biases of their creators. We may be inclined to regard models as objective expressions of truth, yet they are deliberately constructed interpretations, imbued with the values and viewpoints of the modelers—primarily, as Ms. Thompson notes, well-educated, middle-class individuals. During the pandemic, models “took more account of harms to some groups of people than others,” resulting in a “moral case” for lockdowns that was “partial and biased.” Modelers who worked from home—while others maintained the supply chain—often overlooked “all of the possible harms” of the actions their models were suggesting. And even when models try to describe the effects of different courses of action, it’s human beings who must ultimately weigh the benefits and harms. “Science cannot tell us how to value things,” Ms. Thompson says. “The idea of ‘following the science’ is meaningless.”

Steve Milloy explains why “barring some unforeseen miracle technology, ‘net zero by 2050’ won’t happen.” A slice:

So there you have it: We are dangerously dismantling our electric grid while burdening it with more demand in hope of attaining the goal of “net zero by 2050,” which the utility industry has admitted is a fantasy.

Mike Munger continues to dispense important wisdom. A slice:

If Progressives understood that the politics of democracy meant that market processes were no worse, and might be better, than elections, why did they favor expanding government? The answer is that Progressives did not, do not, favor democracy, at least not majoritarian democracy. They favor the suppression of individual discretion in favor of centralized planning, government control and direction of resources, and the suppression of individual discretion.

It’s the Progressive “social contract”: government experts know what voters should want, and would want if they were correctly informed and had altruistic motives. Real voters fall short of this ideal, of course, but that’s why voters should want to give up their own power to make free (wrong) choices, in favor of a priesthood of technocrats who will run things.

Pigou was not alone; everyone in the Progressive movement fully recognized the problem with populist movements, of the left or the right. Paternalism is their preferred alternative to actual agonistic politics, and the reason was government failure, not market failure!

John O. McGinnis sees signs of life in classical liberalism. A slice:

But there has been better news from the Supreme Court. It took up a challenge to the constitutionality of the loan forgiveness plan, likely vindicating the separation of powers by restricting the executive branch’s power to spend without well-grounded statutory authority. From the oral arguments on Harvard’s admission program that discriminates on the basis of race, the Court also appears ready to end such racial and ethnic preferences, ideally through reading Title VI to mean what it says—that universities receiving federal funds cannot discriminate against any race or ethnic group. These developments underscore the power of our classical liberal traditions encoded both in past statutes and the Constitution to arrest the decline of classical liberalism long enough to permit a contemporary democratic counter-reaction.

John Stossel argues that, when it comes to lifting people out of poverty, “charity and capitalism are better than government.”

Christian Britschgi notes this irony: “Politicians who supported $54 billion in airline bailouts now pose as industry critics.”

My intrepid Mercatus Center colleague Veronique de Rugy wonders if the Fed will blink in its effort to stop inflating.

Decrying the “costs of a closed society,” Wall Street Journal columnist James Freeman reports that “U.S. kids pay a staggering bill for government’s suppression of Covid debate.” A slice:

Now the latest release of internal Twitter files reports that the federal government was leaning on the social media company to suppress even well-informed messages from highly accomplished doctors who didn’t toe the government line. Specifically suppressed were those who accurately pointed out that children were not at great risk from Covid.