Russell Roberts's Blog, page 77

Quotation of the Day…

(Don Boudreaux)

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… is from page 148 of the 2021 updated version of Bjorn Lomborg’s 2020 book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet:

Climate alarmism too often leads us to policies that while well intentioned, crowd out much more effective ways of helping people. It comes down to this: when we see a malnourished child or a town hit by a hurricane and seriously suggest that we should make lives better by cutting a ton of carbon dioxide, we are not actually trying to do good, but rather imposing our own priorities on people who have little power to assert their own. It has become too easy to believe that policies aimed at cutting carbon are the answer to everything. They’re not, and we need to stop campaigning for and enacting policies that will have the world’s poorest paying for our mistakes.

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(Don Boudreaux)

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Phil Magness and Michael Makovi report on their important research showing that Karl Marx’s reputation was given a real boost by the ‘success’ of the Bolshevik revolution. A slice:

In his classic book the Logic of Collective Action, Mancur Olson observed a peculiar feature about socialist political organizing. Marxist theory envisions itself as a manifestation of collective class interests, with the proletarian class being the most numerous. Yet as Olson noted, “the ‘Marxian’ revolutions that have taken place have been brought about by small conspiratorial elites that took advantage of weak governments during periods of social disorganization.” Marxist revolutions, it seemed, were not an inevitable result of a basic numbers game once class consciousness had been awakened. They emerged from Lenin and his many copycats staging violent coup d’etats to place themselves in power.

Marxist intellectuals have long struggled with this implication, as it points to political actions – including actions involving insurrection, subterfuge, and mass bloodshed – as the primary mechanisms for bringing their desired socio-economic system into existence. Perhaps understandably, they wish to retain the theoretical framework of Marx but strip it of the violent legacies of Lenin, Stalin, Mao, Pol Pot, Castro, and other discrediting political figures.

In a new article, we examine a related question: to what degree is Marx’s own reputation as an intellectual dependent on the political “successes” of his followers in the early 20thcentury? The answer, it turns out, is quite a lot. Our full paper recently appeared online in the Journal of Political Economy, and presents an empirical investigation into the role of the Soviet Revolution of 1917 in “mainstreaming” Marx’s intellectual reputation.

George Will writes eloquently, forcefully, and wisely about Trump’s entrance into the 2024 presidential race. A slice:

Florida Gov. Ron DeSantis, who is as serious about governance as Trump was frivolous, last week assembled an electoral coalition in the nation’s third-most populous state that was broader than Trump ever assembled anywhere. DeSantis is the first, but not the only, plausible claimant to the leadership of the Republican Party. Because DeSantis is sometimes parsimonious with smiles and rhetorical grace notes, he runs the risk of seeming to be a sore winner. He is, however, notably intelligent, a nimble learner and a harbinger of the multiplying hazards Trump faces, including this:

The midterm elections indicate that a growing number of voters seem inclined to make cool-eyed calculations as unenthralled adults: Do not seek the best imaginable political outcome; seek instead to avoid the worst.

Also warning of the danger to the country of Trump’s entrance into the race for the presidency is the Wall Street Journal‘s Editorial Board. A slice:

But his character flaws—narcissism, lack of self-control, abusive treatment of advisers, his puerile vendettas—interfered with that success. Before Covid he was headed for re-election. But the damage from his shutdown of the economy combined with his erratic behavior in that crisis gave Joe Biden the opening to campaign for normalcy. Mr. Trump lost a winnable election.

And to Trump’s new campaign, The Editors of National Review say “No.” A slice:

That said, the Trump administration was chaotic even on its best days because of his erratic nature and lack of seriousness. He often acted as if he were a commentator on his own presidency, and issued orders on Twitter and in other off-the-cuff statements that were ignored. He repeatedly had to be talked out of disastrous ideas by his advisers and Republican elected officials. He turned on cabinet officials and aides on a dime. Trump had a limited understanding of our constitutional system, and at the end of the day, little respect for it. His inability to approximate the conduct that the public expects of a president undermined him from beginning to end.

The latter factor played an outsized role in his narrow defeat to a feeble Joe Biden in 2020 in what was a winnable race. Of course, unable to cope with the humiliation of the loss, he pursued a shameful attempt to overturn the result of the election. He didn’t come close to succeeding, but it wasn’t for lack of trying. The episode ended with Trump, in a grotesque abuse of his powers, trying to bully Vice President Pence into unilaterally delaying or changing the count of electoral votes on January 6 and with an inflamed pro-Trump mob storming the Capitol while the president gave no indication that he particularly minded.

In the midst of this, he threw away two Georgia Senate seats in a fit of pique over Governor Brian Kemp and Secretary of State Brad Raffensperger refusing to bend to his will. The resulting loss of Senate control allowed Biden to get trillions of dollars in spending that he wouldn’t have gotten otherwise and confirm large numbers of progressive judges.

GMU Econ alum Dominic Pino looks first-hand at evidence of the economic damage done to America by the cronyist Jones Act. Two slices:

The Jones Act requires that ships transporting goods between U.S. ports be built in the U.S., flagged in the U.S., and owned and crewed by Americans. Very few ships meet these standards because modern shipping is a very globalized industry. As a result, transporting goods between American ports is much more expensive than transporting the same goods over similar distances internationally.

The law especially harms Puerto Rico, a U.S. territory that is economically underdeveloped compared to the mainland. Since so few ships meet Jones Act standards, only a few companies deliver goods to Puerto Rico from the mainland U.S., which is Puerto Rico’s largest trading partner.

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Ships that comply with the Jones Act are generally quite old. As Colin Grabow of the Cato Institute pointed out earlier this year, Jones Act ships are generally expected to last 40 years, while 20-year lifespans are more normal in the rest of the world. He calculated that the average age of the last 15 Jones Act ships that were retired was 43. Older ships cost more to maintain and operate, are not well-suited for mobilization in a time of war, and can be less safe.

Samuel Gregg ponders economic liberalism’s uncertain future. A slice:

This is further complicated by the proliferation of claims by interventionists that are, to put it mildly, highly contestable. We have been informed, for example, that Adam Smith only applied his free trade principles to domestic investment. That’s simply untrue. Other conservatives tell us that the New Deal was a marvelous thing, despite the mountains of evidence assembled by economic historians indicating that it did not in fact get America out of the Great Depression. As no less than FDR’s Treasury Secretary, Henry Morgenthau, stated on May 6, 1939, “We are spending more than we have ever spent before and it does not work. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

Yet other conservatives (echoing arguments made by progressives almost 15 years ago) insist that we can learn many things from Chinese state-capitalism. This flies in the face of growing evidence (which Beijing is trying to hide) that the wheels are falling off that particular wagon.

But while such propositions are easily rebutted, they have acquired considerable traction for several reasons. They provide, for instance, support for what some people want to hear: that economic salvation via the state is possible, despite the many indications to the contrary. In other cases, they create rationales for those whose primary goal in life is the acquisition of power, either for its own sake, or because they believe that technocrats can overcome complicated social challenges through top-down economic tinkering. Once such mythologies permeate public discourse, ousting them is very difficult.

David Hart has done great service in sharing here – and introducing – Thomas Johnson’s 1645 A Discourse on Freedome of Trade. A slice from David’s Introduction:

He is also scathing in his critique of the unjust political privileges which the monopolized merchants enjoyed. He lists in great detail the ways in which the merchants used the law to exclude newcomers to their association, or to fine and otherwise increase the costs of doing business for those who did join their “fraternity of Ingrossers”, their “self-enriching Society”, which was more concerned with “feathering their own nests” than with increasing the prosperity of the nation as a whole. He thought that monopolists are “like *Incubusses* (who) doe suck the very vital spirits, and drive into one vein that masse of blood which should cherish the whole body.” Those who were excluded from membership in this fraternity and those who had to bear the increased costs caused by monopoly, were forced to suffer “a kind of slavery upon him in his own country” which Thomas Johnson wanted to see abolished as soon as possible.

Nick Gillespie talks with Chris Snowdon and Tom Slater.

Martin Kulldorff tweets:

To counter growing authoritarianism, Dr. Scott Atlas and @joshrauh has founded the independent Global Liberty Institute. Follow @_GlobalLiberty.

Jay Bhattacharya – in this piece that originally appeared in Newsweek – reveals the dangers of Biden’s pandemic ‘plan.’ Two slices:

The Biden plan enshrines former president Donald Trump‘s Operation Warp Speed as the model response to the next century of pandemics. Left unsaid is that, for the new pandemic plan to work as envisioned, it will require us to conduct dangerous gain-of-function research. It will also require cutting corners in the evaluation of the safety and efficacy of novel vaccines. And while the studies are underway, politicians will face tremendous pressure to impose draconian lockdowns to keep the population “safe.”

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This policy effectively guarantees that lockdowns will return to the U.S. in the event of a new pandemic. Though the lockdowns did not work to protect populations from getting or spreading COVID—after 2.5 years, nearly everyone in the U.S. has had COVID—public health bureaucracies like the CDC have not repudiated the strategy. Imagine the early days of the next pandemic, with public health and the media fomenting fear of a new pathogen. The impetus to close schools, businesses, churches, beaches, and parks will be irresistible, though the pitch will be “130 days until the vax” rather than “two weeks to flatten the curve.”

More on Personal Liability for Lockdowners

(Don Boudreaux)

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Over at EconLog David Henderson favorably linked and commented on my recent AIER essay in which I warned against efforts to impose criminal or civil liability on the individuals who were prominent in inflicting on humanity the calamitous and inexcusable lockdowns.

In response to David’s post, commenter Joseph Sleckman wrote:

Mr. Boudreaux’s argument reminds me of the question “When did you stop beating your wife”. As I interpret the article, he argues that he is against revenge in the form legal panels that could lead to putting Dr. Anthony Fauci behind bars, and fines that would bankrupt Dr. Birx and Governor Whitmer. But he nevertheless would find these punishments satisfying. It seems to me that his opposition to revenge, if so, does not flow from the wisdom of Confucius, but rather from pragmatic political considerations.

Here’s my reply (slightly modified), also posted as a comment at EconLog, to Mr. Sleckman’s comment:

Mr. Sleckman: My opposition is to holding lockdowners personally liable, under criminal or civil law, for their policy decisions. (Obviously, if in the course of their reign they violated any extant criminal or civil laws, then they should be held personally accountable for having done so.)

My warning might fairly be described as “pragmatic.” But contrary to what I think is your implication, the pragmatism here is not unwise, but wise. (Or so I believe it to be.) It is wise not to impose personal penalties under the law on government officials for their policy decisions. The reason is that, were we to do so, a very dangerous precedent would be set that would constrain – and not in good ways – government officials going forward in the policy choices they make. Nearly every time government changed hands from one party to another, persecution of the ousted officials would occur. We’d be completely transformed from a constitutional republic into a banana one.

Is the following calculation pragmatic?: Sacrificing the satisfaction that would come from personally punishing lockdowners for their calamitous policy decisions is not worth the likely harm from the newly created precedent. Again, I’m not utterly opposed to using that term in this way. But I think the better term here is “wise.”

Thomas Sowell warns against “the quest for cosmic justice.” If an omniscient, omnipotent, and omnibenevolent deity governed human political and legal affairs, I’d trust that deity to punish as it sees fit. Such a godly creature is fitted to mete out cosmic justice. But we mortal humans are not. We must beware not to allow today’s fury, no matter how justified it might be in ethics, to unleash political and legal precedents that we’ll regret. I think that such prudence is the course of wisdom.

Quotation of the Day…

(Don Boudreaux)

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… is from page 265 of F.A. Hayek’s December 1961 speech in New York City titled “The Moral Element in Free Enterprise,” which appears as chapter twenty of Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by Paul Lewis), of The Collected Works of F.A. Hayek:

It is true that a free society lacking a moral foundation would be a very unpleasant society in which to live. But it would even so be better than a society which is unfree and immoral; and it at least offers the hope of a gradual emergence of moral convictions which an unfree society prevents.

Vernon Smith: “Markets Are Incredible”

(Don Boudreaux)

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Do watch or listen to Stephen Blackwood’s discussion with my emeritus Nobel-laureate colleague Vernon Smith. (HT Roger Meiners)

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 110 of F.A. Hayek’s 1991 collection, The Trend of Economic Thinking, which is Vol. 3 in The Collected Works of F.A. Hayek; specifically, it’s from Hayek’s 1963 University of Freiburg public lecture “The Legal and Political Philosophy of David Hume”:

Hume’s further concern is chiefly to show that it is only the universal application of the same “general and inflexible rules of justice” which will secure the establishment of a general order, that this and not any particular aims or results must guide the application of the rules if an order is to be the result. Any concern with particular ends of either the individuals or the community, or a regard for the merits of particular individuals, would entirely spoil that aim. This contention is intimately bound up with Hume’s belief in the short-sightedness of men, their propensity to prefer immediate advantage to distant gain, and their incapacity to be guided by a proper appreciation of their true long-run interest unless they bind themselves by general and inflexible rules which in the particular case are applied without regard to consequences.

DBx: The approach to both life and government policy that is championed by Hume and Hayek is mature and wise. In contrast, politics in practice brings out the child in us.

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(Don Boudreaux)

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Using insights from Eugen von Böhm-Bawerk, Mike Munger eloquently explains that “you buy from other consumers, not from producers.”

Connor Vasile asks: “What Happens When You Google ‘Capitalism Fights Racism.’” A slice:

Sears revolutionized the buyer’s experience with the use of catalogs, allowing consumers to mail-order goods to their homes. This put the company at an enormous advantage by expanding their market, serving many thousands more customers than a typical brick-and-mortar shop could. Taken for granted today, the idea of ordering and receiving your product without leaving your house was a novel—and potentially life saving—invention for 20th Century families.

This innovation allowed southern blacks to order items otherwise unavailable at their segregated stores. With mail-order, black customers also didn’t have to experience the racism and inhumanity they experienced during some public outings; they could order what they wanted when they wanted, just like the average white at the time. Capitalist innovation not only worked to benefit the companies involved, but also served to bring value to diverse communities; in this case, it acted as an escape for so many black consumers constrained by Jim Crow.

Here’s Marian Tupy on the world’s human population reaching eight billion. A slice:

Every new human being comes to the world not only with an empty stomach, but also a pair of hands, and, more importantly, a brain capable of intelligent thought and new knowledge creation.

In the process of economic development, human beings cause environmental damage, but the new wealth and knowledge that we create also allow us to become better stewards of the planet. That is why all environmental ranking tables are dominated by developed nations.

Doomsayers concerned about population growth are right to note that the world is constituted of a finite number of atoms – be they of copper or of zinc. But the finitude of atoms (i.e., resources) is largely irrelevant to human well‐​being. What matters is our ability to create new knowledge that combines and recombines those atoms in ever more valuable ways.

Here’s the full text, available free of charge, to David Henderson’s Wall Street Journal essay on this year’s Nobel Prize winners in economics.

My GMU Econ colleague Bryan Caplan reviews, in Reason, a book on immigration by another of my GMU Econ colleagues, Garett Jones.

On Twitter, Martin Kulldorff exposes an error committed by Paul Krugman:

Children with bigger feet are better at mathematics, ….. because they are older.

Florida has higher mortality, because they are older.

Nobel laureate @paulkrugman could learn a thing or two from children with big feet.

Jeffrey Tucker writes about covid tyranny a piece with which, I believe, Bob Higgs would agree: Beware the ratchet effect.

Bill Hayton asks if the Chinese state can let go of zero covid. A slice:

More fundamentally, Zero Covid is an opportunity for the Communist Party to do what it loves doing most. As John Culver, former US National Intelligence Officer for East Asia, has noted, this is a chance for the Party to return to its old ways. The economic reforms of the Nineties that drove the country’s rapid economic growth also brought about the end of the Party’s “work unit” system, which had been the foundation of its control over the population throughout the post-revolutionary period.

Quotation of the Day…

(Don Boudreaux)

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… is from page 161 of the 2007 Definitive Edition (Bruce Caldwell, ed.) of F.A. Hayek’s classic 1944 book, The Road to Serfdom; specifically, it’s from the chapter (number 10) titled “Why The Worst Get On Top”:

To treat the universal tendency of collectivist policy to become nationalistic as due entirely to the necessity for securing unhesitating support would be to neglect another and no less important factor. It may, indeed, be questioned whether anyone can realistically conceive of a collectivist program other than in the service of a limited group, whether collectivism can exist in any form other than that of some kind of particularism, be it nationalism, racialism, or classism. The belief in the community of aims and interests with fellow-men seems to presuppose a greater degree of similarity of outlook and thought than exists between men merely as human beings. If the other members of one’s group cannot all be personally known, they must at least be of the same kind as those around us, think and talk in the same way and about the same kind of things, in order that we may identify ourselves with them.

DBx: The difference between, say, Donald Trump and Bernie Sanders is nowhere nearly as great as it appears at a glance.

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Here’s the abstract of a new paper by Michael Strain and Jeffrey Clemens:

This paper presents strong evidence that minimum wage increases lead to a greater prevalence of subminimum wage payment. Using the Current Population Survey, we estimate that increases in measured underpayment following minimum wage increases average between 12 and 17 percent of realized wage gains. Our baseline analyses focus on workers ages 16 to 25, while additional analyses consider workers ages 16 to 65. In addition, we find that firms and workers comply to a far greater degree with minimum wage increases that are forecastable, modest, and regular than with minimum wage increases enacted through new legislation. We also find evidence that states’ enforcement regimes influence the compliance patterns we observe. We interpret these findings as evidence that while minimum wage compliance is the norm, noncompliance is an important, economically nuanced reality in the low-wage labor market.

George Leef joins Arnold Kling in objecting to naive realism.

Arnold Kling writes insightfully about the macroeconomy. Two slices:

What everyone thinks of as macro is top-down. Nominal Gross Domestic Product is determined at the top, and it filters down to individuals.

In Scott Sumner’s market monetarism, for example, the Fed has a dial, like the temperature control on an oven, that it can turn in order to keep NGDP on a trend path. When NGDP differs from that trend path, the Fed has messed up.

I think that the Fed’s controls are ineffective. They are more like the steering wheel on a bumper car. If you’ve ever been on a bumper-car ride, you know that as much as you want to avoid getting hit from the side or from behind, you just do not have as much control over the car as you would need.

I think of NGDP as built from the bottom up, not from the top down. Households and businesses create patterns of specialization and trade. That is real output, or real GDP. They make pricing decisions. Once you have prices and real output, you have NGDP.

There is a relatively new macroeconomic statistic, called JOLTS, or Job Openings and Labor Turnover Survey. It shows that each month, about 4.5 million people take new jobs, and about 4.3 million people separate (voluntarily or otherwise) from their previous jobs. These flows are enormous. The payroll employment survey, in contrast, will show a net gain or loss of about 200,000 jobs in a month. That is only 0.2 million.

It is the small net number of job gains or losses that determines the change in real GDP. A huge amount of bottom-up churning (4.5 million new jobs) lies underneath the GDP gain, which comes from the net new jobs (0.2 million).

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To buy into the bottom-up view of how NGDP gets built up, you have to discard the assumption that the Fed is in control. Dropping that assumption takes many people out of their comfort zone.

Raymond March and GMU Econ alum Byron Carson warn of possible dangers of subsidizing the production of insulin.

Matt Welch writes that Nevada’s governor was done in last week by covid lockdowns.

Ramesh Thakur wonders if lockdown zealots are capable of introspection. Three slices:

Sorry, but the whole Covid debacle needs to be turned instead into a parable with a moral for the ages, to show how easy it is for a civilized society to be terrorized into believing blatant falsehoods and turn on one another with shocking savagery.

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In a recent review of several studies, John Ioannidis and colleagues conclude that the age-stratified survival rate of healthy under 70s infected by Covid-19 before vaccines became available is a staggering 99.905 per cent, and furthermore, under 70s make up 94 per cent of the world’s population or about 7.3bn people. For children and adolescents under 20, the survival rate is 99.9997 per cent.

Experts from Oxford University’s Centre for Evidence Based Medicine used subsequent actual data to back-calculate a survival rate of 99.9992 per cent for under-20s in Britain. Official data from the Office for National Statistics for 1990–2020 show that the age-standardized mortality rate (deaths per 100,000 people) in England and Wales in 2020 was lower in 19 of the previous 30 years. Remember, this is before vaccines.

The doomsday model from Imperial College London’s Neil Ferguson in March 2020 that precipitated lockdowns estimated the survival rate to be twenty times lower.

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Policy advisers and governments were willfully blind to the reality that national wealth is an essential enabler of a first-world health infrastructure and services. They covered up their cussedness by vilifying lockdown critics as wanting to prioritize the economy over lives.

No rational public health harm-benefit analysis could justify the lockdown restrictions and mandatory mask and vaccine requirements. Not before 2020, not in 2020–22, not now. Rooted neither in science nor data but in smug self-righteous groupthink and assumptions-driven abstract modeling, the set of coercive restrictions and mandates made a metaphorical bonfire of hard-won and cherished liberties and freedoms.

All the institutions designed to check arbitrary abuses of power failed us miserably, from parliament and the judiciary to human rights machinery, media and professional associations.

John Mark Taylor tweets: (HT Jay Bhattacharya)

It is fascinating to me that anyone can argue intermittent and indefinitely mandatory face coverings don’t constitute a loss of freedom. If mandates are not a loss of freedom, what is?

Quotation of the Day…

(Don Boudreaux)

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… is from page 165 of Phil Gramm’s, Robert Ekelund’s, and John Early’s excellent 2022 book, The Myth of American Inequality: How Government Biases Policy Debate:

Knowing that some people had extraordinary amounts of both ability and ambition, the Founders set about to build a government where the talented and ambitious could not seize control and use the power of government to endanger the freedom and property of others. They equally feared both the man on the white horse and the enflamed masses who, by either force or the ballot box, might seize the power of government and use it to destroy the rule of law.