Russell Roberts's Blog, page 79

Quotation of the Day…

(Don Boudreaux)

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… is from page 28 of F.A. Hayek’s great 1973 essay “Liberalism” as this essay appears as chapter one 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:

The test of the justice of any particular rule is thus whether its universal application is possible because it proves to be consistent with all the other accepted rules.

DBx: By this criterion, protectionism is unjust in a society in which an accepted rule is that the income that each person earns belongs to him or her and is free to be spent by that person in whatever peaceable ways he or she chooses.

It’s All Banditry

(Don Boudreaux)

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Here’s a letter to a frequent correspondent:

Mr. Y__:

In response to my recent letter to National Review you argue that I “remove every bit of credibility from the case for free trade even [by] comparing protectionism to criminal activity.”

I stand by my comparison.

Suppose the CEO of the local tire-manufacturing plant hires agents to stand on the wharves to do violence to buyers of imported tires if those buyers refuse to pay these workers big bucks for each imported tire that they buy. You would agree, I trust, that this action is criminal. But how does this action substantively differ from that same CEO persuading Congress to hire agents to stand on the wharves to do violence to buyers of imported tires if those buyers refuse to pay these workers big bucks for each imported tire that they buy?

I see only two substantive differences between the two cases, each of which is unfavorable to the second case. In the first case, the CEO pays for his own protectionist enforcers (rather than use enforcers paid for by taxpayers), and he probably doesn’t insult his victims’ intelligence with idiotic assurances that his banditry is for the country’s greater good.

It’s true that, unlike privately enforced protectionism, government-enforced protectionism is widely regarded as legitimate. One of my goals, as an economics educator, is to reveal the folly of treating any form of protectionism as legitimate. It’s all banditry.

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 from page 307 of Thomas Sowell’s monumental 1980 volume, Knowledge and Decisions:

It is not the source or the ruthlessness of power alone which defines totalitarianism, but the unprecedented scope of the activities subjected to political control.

DBx: Indeed. And in this way progressivism is an even graver threat to liberty than is populism, for progressives are far more intent than are populists at subjecting to political control as many activities as possible.

Please do not read into the previous paragraph any suggestion that populism is acceptable. Populism is deeply illiberal and much to be feared. It must be fought against and subdued if liberal civilization is to survive. But the enemy of my enemy is not thereby my friend. Progressivism – if only because, compared to populism, the mask it wears is friendlier and the tones in which it speaks are more dulcet – is an even greater threat to liberal civilization than is populism. Embracing, or even tolerating, progressivism as a means of subduing populism – or simply because progressivism is currently the most practical political option to populism – is a foolish move for anyone wishing for a revival of true liberalism.

Some Links

(Don Boudreaux)

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GMU Econ alum Rosolino Candela, writing at EconLib, ponders monopoly power.

Wall Street Journal columnist Mary Anastasia O’Grady reports on a dangerous decision by the Mexican government to phase out use in that country of genetically modified yellow corn.

U.S.-Mexico relations are on the rocks again, but that isn’t because of a fast-talking American politician who insults the neighbors. (That was Donald Trump, in case you forgot.) The latest confrontation is a looming commercial conflict triggered by Mexican President Andrés Manuel López Obrador, aka AMLO.

Last month Mexico’s Deputy Agriculture Minister Víctor Suárez told Reuters that his country plans to go ahead with a 2020 decree that aims to phase out genetically modified yellow corn. The target date for implementation is 2024. AMLO wants Mexico to end the purchase and production of food that relies on the use of the herbicide glyphosate and to return to only consuming foods produced with non-GM corn.

…..

This view is entirely in keeping with the antiscience bias that the AMLO administration is known to harbor. But it’s hard to square with the country’s obligations to keep the market open under the U.S.-Mexico-Canada Agreement, an updated version of the 1993 North American Free Trade Agreement.

In his interview with RFD-TV, Mr. Vilsack said he hopes Mexico will recognize that under the USMCA “they have a responsibility to respect the science.” Failing that, the U.S. and Canada are likely to take the matter to an arbitration panel. If Mexico loses, its trading partners will have the right to retaliate by imposing new tariffs on Mexican exports.

Trade policy is said to produce winners and losers. But if AMLO prevails in this case, almost everyone will be a loser.

(DBx: Mary is right to have written “is said to” rather than “does” because, properly understood, free trade produces only winners.)

Robert Maranto, Michael Mills, and Catherine Salmon ask: “What do we really mean by ‘diversity, equity and inclusion’?” (HT George Leef) Two slices:

With rapidity and stealth, diversity, equity and inclusion (DEI) ideology has come to replace the classical liberal values of merit, fairness and equality (MFE) in the academy, professional organizations, media, government and large technology companies. DEI bureaucracies have mushroomed. Many operate behind the scenes with ambiguous DEI definitions, goals and policies.

This is a significant cultural and ideological revolution, one that has been accomplished with almost no debate or operationalization of terminology. Who originated DEI? Why DEI and not another set of laudable values? Does “equity” refer to opportunity or result? How do those of mixed race fit in diversity assessments? Is the goal of racial representation proportionate to that of the population, the history of marginalization, or something else? DEI terms are defined so obtusely that they can refer to a spectrum of policies from mere platitudes to radical agendas including litmus tests and racial quotas.

…..

Enter University of Chicago Professor Dorian Abbot’s DEI alternative, merit, fairness, and equality (MFE), which is consistent with traditional Enlightenment and scientific values. Under MFE, academic decisions are based primarily on academic merit, well validated standardized test scores, grades and, for faculty, publication and teaching records. Individuals are primarily evaluated on their achievements, not by their group identities. This respects individual dignity and promotes the primary mission of research in higher education: the production of knowledge.

George Leef reviews John Staddon’s book Science in an Age of Unreason. A slice:

Powerful forces that dislike the neutrality and objectivity of science threaten to take us back to earlier times when it was more important to enshrine certain beliefs than to allow free‐​wheeling research and discussion.

If you doubt this retreat is occurring, think about the way officials in the United States (and many other countries) reacted to COVID. Doctors and medical researchers were told not to dissent from government pronouncements about vaccines, masks, and treatments. For example, rather than engaging with skeptics such as the epidemiologists who wrote the “Great Barrington Declaration,” National Institute of Allergy and Infectious Diseases director Dr. Anthony Fauci and others sought to discredit them immediately. That is not the way of science, but the way of autocracy. Galileo would have understood just how the Great Barrington authors felt after the federal government dismissed their work and denigrated them.

Staddon argues that science is in dire straits in America because of the way it has become politicized. Many topics are now “off limits” because their exploration might offend politically important groups. Science should be dispassionate, but in the modern university passion often carries the day.

Fraser Myers explains that the masses of people in poor countries need their own industrial revolutions, not so-called “climate reparations.” Two slices:

No you are not imagining it. As absurd as it may seem, it is really happening. The world’s great and the good have descended on COP27 in Egypt – in their private jets, natch – to denounce the evils of the Industrial Revolution. The process that birthed the modern world. That has lifted billions out of poverty, expanded life expectancy and delivered every modern comfort we now take for granted. According to the leading lights at COP, that process has proven to be so evil and destructive that its instigators should pay ‘reparations’. Reparations for the Industrial Revolution – as if the most liberating moment in history were the equivalent of a disastrous war or the enslavement of an entire people.

…..

What developing countries need is to have their own industrial revolutions. Globally, thanks to industrialisation, the number of people dying from climate-related disasters has plummeted since the 1900s – by 95 per cent. And despite the focus on ‘loss and damage’ at this year’s COP, there is no evidence that economic damage from climate change is rising worldwide. In fact, as a percentage of GDP, weather and climate losses have decreased since the 1990s. In other words, even as CO2 emissions have increased substantially, and even as global temperatures have risen, the climate is causing proportionately less damage to humanity than it was 30 years ago – a time when few paid attention to the climate. This is true not just as a global trend, but also for every individual continent on Earth.

The reason is simple. As climate writer Ted Nordhaus explains: ‘Most of the costs associated with present-day climate disasters… are determined by economic development and societal resilience, not the intensity of the climate hazard.’ The only proven method of saving ourselves from climate-related disasters is development.

Yet it is precisely this development that those gathered at COP are determined to limit. And reparations, or ‘loss and damage’ payments, could easily become a tool for limiting that development.

Mitch Daniels notes that “modern monetary theory” is debunked everywhere save in the minds of big spenders of other people’s money. A slice:

One recent bit of hogwash appeared to have expired quickly. A concept dubbed Modern Monetary Theory(MMT), after percolating for years on the fringes of economics, enjoyed a brief run of massive publicity a few years ago when an academic trying to popularize it was, for a time, taken seriously in suggesting the modern equivalent of alchemy. The suggestion was that a government could borrow unlimited amounts of money in its own currency and repay it without risk simply by printing more of that currency.

There was nothing modern about a government spending wildly beyond its means and searching for an easy way out. In 1455, Henry VI granted patents to those pursuing alchemy for the purpose of “enabling of the king to pay all the debts of the crown in real gold and silver.” “Medieval Monetary Theory” would have been a more apt label for the recent version of Henry’s fantasy.

And yet for those whose zeal for bigger government was not sated by the trillions already on or headed for the government’s books, MMT offered a fig leaf of validity. It came under George Orwell’s familiar heading of an idea so absurd that only an intellectual could believe it, and the theory probably only attracted any attention at all because the academic in question was associated with a presidential campaign.

Writing in the Telegraph, Robert Dingwall worries that children will never fully recover from the damage done to them by covid lockdowns. A slice:

Pandemic isolation weighed most heavily on children who were already deprived by poverty. They could be confined to rooms in temporary housing with a single parent for long periods. Councils closed parks and playgrounds where they might interact with other children. Even where parents could work from home, children’s opportunities for language learning and social development were limited.

When small children could go out, they encountered masked faces everywhere. The importance of faces has been clear to psychologists since filmed studies of mother/child interaction in delivery suites during the 1970s. From the first moment a baby is handed to its mother, it focuses on her face and establishes eye contact.

Small children need to see lip shapes and movements to be able to form words and make the correct sounds. Too often, these instances were denied. It must be said that these fundamentals of child development were as evident two years ago as they are today. The risks were spelled out by psychologists from the beginning of the pandemic, and largely ignored.

“Sweden Wins! Country That Refused Lockdown and Kept Schools Open Has Lowest Pandemic Mortality in the World.”

Jay Bhattacharya tweets:

[M]ost of the leadership of public health during the pandemic has embraced sanctimony, bias, and bullying. Public health should be, but is not embarrassed, by its pandemic failure.

Quotation of the Day…

(Don Boudreaux)

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… is offered on this 33rd anniversary of the glorious fall of the Berlin wall; the quotation is from page 307 of Kristian Niemietz’s important 2019 book, Socialism: The Failed Idea That Never Dies:

Deviations from the government’s economic plan cannot be allowed, because the different components of the plan depend on each other: the plan must be a coherent whole. Planners lack the relevant knowledge, so resources are misallocated and economic chaos ensues.

DBx: Indeed so. And the same reality also poisons industrial policy.

Industrial policy isn’t as damaging as is full-on socialism only because industrial policy is less extensive than is full-on socialism. Industrial policy, more so than full-on socialism, allows resources to escape the grip of its economic engineers. But as with full-on socialism, if industrial policy is to achieve the goals that its advocates proclaim, there must be no disruption of the industrial-policy plan. The plan must be sealed off not only from entrepreneurial innovation and technological advances, but from all genuine change. Somehow, industrial-policy planners must immunize the plan from unanticipated changes in consumer tastes (including such changes that are caused by changing demographics), from unanticipated decreases and increases in supplies of inputs, and from unanticipated economic consequences that stem from changes in law, legislation, the weather, and the global economy.

Until and unless advocates of industrial policy explain how industrial-policy designers and administrators will come to have the power to predict the future in such detail as would be necessary for industrial policy to perform as promised, you are advised to ignore pleas for industrial policy.

Protectionists Are Shielded From Embarrassment By Their Formidable Ignorance of Economics

(Don Boudreaux)

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Here’s a letter to National Review:

Editor:

Scott Lincicome’s criticism of Wells King’s and Dan Vaughn’s purported demonstration of the success of the voluntary export restraints (VERs) that Pres. Reagan unwisely pressured Japanese automakers to adopt in 1981 is devastating (Letters, November 7). In contrast, King’s response to Lincicome’s criticism is as lame as is King’s and Vaughn’s fallacy-filled original essay.

Overlook King’s commission of the post hoc, ergo propter hoc fallacy. Focus instead on his continued sidestepping of the fundamental criticism of protectionism, namely, even if – indeed, especially if – it successfully buoys some particular industries, protectionism necessarily imposes larger costs on the rest of the home-country economy.

Protectionism’s harm to consumers is obvious. Having to pay more to buy the outputs of ‘successfully’ protected firms, consumers must reduce their purchases of other goods and services or reduce their savings. To grasp this economic reality is to realize also the harm that protectionism inflicts on other home-country firms and workers. Every input that protectionism diverts into protected firms is an input diverted away from other productive uses. Non-protected firms thus have less access to raw materials, tools, intermediate goods, and labor. Their outputs fall. Further, because workers in non-protected firms have fewer or lower-quality tools and inputs with which to work, these workers’ productivity falls. And falling productivity means falling wages.

Looking only at the alleged ‘success’ of protected firms and then confidently concluding that protectionism is a boon to the entire country, King reasons as would an apologist for successful thieves – an apologist who points to the thieves’ bustling business in larceny, and to the thieves’ high ‘earnings,’ and then confidently concludes that thievery is a boon to the entire country.

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 from pages 176-177 of Frank Knight’s 1940 review essay titled “‘What Is Truth’ in Economics?” as this essay is reprinted in Knight’s 1956 collection, On the History and Method of Economics:

The formal principles of economic theory can never carry anyone very far toward the prediction or technical control of the corresponding economic behavior. But such a result, by any method, is both utterly abhorrent to all human thinking and self-contradictory. The intelligent application of these principles is a first step, and chiefly significant negatively rather than positively, for showing what is “wrong” rather than what is “right” in an existing situation and any proposed line of action.

DBx: Economic science – and it is a science in the proper sense of this term – is not a tool for social control. Indeed, one of the great lessons of economics done well is that economies marked by extensive specialization and (hence) exchange are far too complex for their relevant details to be known to any one controlling mind (or committee of minds). This complexity makes it impossible for the course of real-world economies to be predicted with anything remotely close to the same precision with which, say, astronomy allows specific predictions of the timing and course of lunar eclipses.

Economics provides a scientific explanation for the emergence of the economic order that we observe in our world, but, again, it does not allow any detailed prediction of how that order will change. Nor does economics supply the information that would be necessary for a central agency (practically, the state) to rearrange the elements of the economic order in ways that improve the overall operation or sustainability of that order. The reason economics supplies no such information is that such information by its nature is dispersed, largely subjective, and rapidly changing; such information is impossible to be collected and ‘had’ in one mind or place.

The practical purpose of economics, therefore, is largely confined to exposing the folly of proposals for government intervention into the economy. Persons who push such proposals always proclaim their excellent motives, and very often these proclamations are sincere. But economics almost always reveals that these proposals will fail to achieve their objectives, or will unleash undesirable unintended consequences (or both), because the proposed interventions will inescapably be made without the detailed information necessary for them to have even a reasonable chance of success.

“No; flapping your arms will not send you soaring into the sky like an eagle.” “No; tariffs will not make the people of the country as a whole wealthier or more economically secure.” “No; those pills will not enlarge your manhood.” “No; the minimum wage will not yield net benefits to all unskilled workers.” “No; responding to the email from the sister of the dead Nigerian prince will not bring to you the promised $14.5 million from the prince’s alleged estate.” “No; government-imposed price ceilings on propane and bottled water will not increase poor people’s post-natural-disaster access to propane and bottled water.”

Humanity is endlessly populated with individuals who peddle fallacies, and with even more individuals who fall for fallacies. The most important role of economics is to constantly refute as many of these fallacies as possible. This task isn’t glamorous, and it’s repetitive. But it’s necessary.

Some Links

(Don Boudreaux)

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This letter in today’s Wall Street Journal is wise:

There will be no shortage of vitriolic recrimination about who was right and who was wrong during two-and-a-half years of Covid disputes (“Now They Want a Pandemic ‘Amnesty,’” Review & Outlook, Nov. 2). Although it isn’t clear that those disputes are over, I recently saw more masks in our local coffee shop in California than I did in a month of traveling in Scandinavia. Apparently, the dogma lives loudly within many.

However, we should really be discussing the strength of governments’ authoritarian impulses and how quickly we relinquished our rights. Fear overcame reason with astonishing speed. When we obsess about threats to democracy, this needs to be part of the dialogue.

Timothy Brown
Davis, Calif.

Justin Hart tweets: (HT Jay Bhattacharya)

Never forget: unelected health bureaucrats decided to padlock my kids’ swing-set for a year. It’s my mission to make sure this NEVER HAPPENS AGAIN.

A student continues to protest Wellesley’s unscientific vaccine mandate.

In China, “Zero-Covid is the new one-child policy.” (HT Toby Young)

For those of you who continue to doubt that covid tyranny is real and dystopian, read this report.

TANSTAFPFC (There Ain’t No Such Thing As Free Protection From Covid.)

Leila Mechoui reports that a formal inquiry into Canada’s Freedom Convoy has yet to find evidence of the violence that Canadian strongman Justin Trudeau used as the pretext to invoke martial law. A slice:

For days Canadians were told by the Trudeau government, the media and a mass of other political commentators that the Freedom Convoy were, as a group, racist, violent and spreading “misinformation”. This was the reason why, we were told, they needed to be removed by any means necessary.

So far, the inquiry has revealed this “literal” violence was nowhere to be found. For example, the Ottawa Police Chief Steve Bell has admitted that there was no actual violence according to the technical definition in the Criminal Code of Canada. Instead, the atmosphere only “felt” violent due to the truckers using their horns.

Hayek would almost certainly agree with Greg Conti that the covidocracy reflects Auguste Comte’s authoritarian vision of science and society. A slice:

But when experts go beyond serving collectively determined ends and instead arrogate to themselves something akin to the “spiritual power” Comte advocated for them, they unconsciously channel this forgotten precursor. Today, we desperately need the vigilance of a democratic citizenry to check the scientists’ and administrators’ yearnings to rule as an overweening clerisy. As the usurpations of the pandemic revealed, the potential for drifting into Positivist technocracy overseen by a zealous priesthood of experts remains all too real.

My GMU Econ colleague Bryan Caplan says it loudly and proudly: the only fair price is the market price!

Barry Brownstein decries the cancerous consequences of the woke on the foundations of civilization. Here’s his conclusion:

Today there is little appetite to look at the consequences of policies destroying not only freedom of speech but freedom of conscience. The right to speak and even to hold a view has eroded. The Chinese are not alone in suffering from “historical amnesia.” Today, Americans are refusing to learn from past totalitarian regimes. Just as in Mao’s China, “nothing of value” will be achieved from today’s woke “leap forward.” Just as in China, the moral character of Americans is being degraded. As more and more of us remain silent, morality degrades, and the social order on which we all depend loses its capacity to facilitate human flourishing.

Tom Slater argues that “[e]nvironmentalism has become a creepy bourgeois cult.” A slice:

We need to stop calling Just Stop Oil a protest group. Protesters is far too positive a word to describe this strange assemblage of middle-class agitators, with their cut-glass accents and self-parodying bohemian names (shouts out to Indigo Rumbelow), who have been gluing themselves to roads and throwing soup at great works of art in an attempt to end oil and gas production. This thing is a doomsday cult, masquerading as a political campaign. There’s really no denying it any longer.

Take the case of that 24-year-old woman who climbed up one of the gantries over the M25 this morning, in order to bring all the ignorant, carbon-spewing plebs to a standstill. She posted an unnerving video online. In it, she is fighting back tears. She gives vent to a seemingly sincere apocalyptic terror. ‘I’m here because I don’t have a future!’, she says, in between sobs. She accuses the government of murder, of fuelling a ‘climate crisis’ she seems to be convinced is killing millions, for having the temerity to exploit oil and gas to keep the UK’s lights on.

That what she’s saying is alarmist nonsense should be obvious to anyone. The truth is almost the inverse of what she is saying. Thanks to economic development, fuelled by cheap and reliable energy, annual deaths worldwide from climate-related disasters have plunged by more than 95 per cent over the past century. She also implies that the floods in Pakistan are the fault of fossil fuels, even though those feted IPCC reports say there is insufficient evidence to show that climate change is making floods more frequent, lengthy or intense. What would be considerably more murderous would be for our government to shun reliable oil and gas supplies as the nation’s pensioners head into a harsh winter, amid sky-high energy prices and talk of blackouts.

Such blithe disregard for the details reminds us that these people don’t really care about climate change. They’re hysterical about climate change. They’re apocalyptic about climate change. They aren’t taking to the streets, motorways and art galleries because they are convinced of a particular scientific view with regards to the environment and think something really ought to be done about it. They are in the grip of a fact-lite and doom-laden narrative that insists literally billions will die in short order, that the twentysomethings of today might not live to see their dotage, because of our damnable desire to live comfortable and free lives.

A big cheer for the Goldwater Institute and its recent victory fighting the banana-republic practice of civil asset forfeiture.

Quotation of the Day…

(Don Boudreaux)

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… is from page 179 of Robert Higgs’s October 26th, 2011, blog post – a post that in 2022 is even more relevant than when it first appeared – “The Euthanasia of the Saver,” as this post is reprinted in Bob’s superb 2015 volume, Taking a Stand:

The politicians constantly bark about their solicitude for those who are helpless and in difficulty through no fault of their own. Yet the scores of millions of people who saved money to support themselves in old age now find themselves progressively robbed by the very officials who purport to be their protectors. There are many reasons to oppose the Fed’s policy. The reason brought to mind by the official euthanasia of the nation’s small savers deserves far more attention than it has received to date.

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 187 of Joseph Epstein’s Spring 2020 essay “Immaturity on Campus,” as this essay is reprinted in the 2020 collection, titled Gallimaufry, of some of Epstein’s essays and reviews:

Panels meet, dialogue ensues, the conversation rambles on, while one awaits the next set of student demands. New deans and associate provosts are hired and put in charge of diversity, of inclusivity, of safety, soon no doubt of sexual satisfaction, transgender bathroom maintenance, and who knows what else. The beat, as the old disc jockeys had it, goes on, and is likely to continue until an impressively authoritative figure arises to cry out to these kids: “Enough! Cut the crap! Act your age! Grow up!”