Protectionism and Stimulus

Great work Don! Your juxtaposition was perfect:

"That's excellent news indeed, but it is only half the picture. Although they swore allegiance to free trade, the G-20 countries promised to simultaneously pump $1.1 trillion of government stimulus into the markets. The two ambitions are diametrically opposed."

Yes, government "stimulus" realloactes resources away from uses that would have occurred had consumers spent their earnings as they pleased. Just as you explain and as Milton Friedman often stated: "no one spends someone else's money as carefully as he spends his own money." And the other point I would like to make more explicit is that in order for government to get the resources to "stimulate" with, they must either tax (or confiscate) them their citizens (subjects), or reallocate other, less stimulating government spending, into "stimulating" government spending. Since I haven't heard any discussion about massive cuts in "less stimulating" types of government spending, I assume that the new governmental "stimulus" spending will be based on increased taxation/confiscation.

Given current levels of taxation in the G-20 countries, these higher rates of taxation/confiscation will only serve to cripple Adam Smith's invisible hand further (that is further dampen its ability to channel resources via individual self-interest to uses that as an unintended consquence of the individual end up promoting properity generally).

From the context of LowcountryJoe's post, I take it that his comment was not about my post, even though it appears immediately above his.

Protectionism is economics's equivalent of the Ptolemaic theory of the solar system.

It appears plausible, even obvious, on first inspection, but everything we know about the it — everything we learn whenever we look at it objectively and carefully — reveals it to be utterly, unquestionably, and fabulously wrong.

Because of your educations you guys can discuss this issue on a higher level than I tend to do. Let me point out what offends the street person.

I, vidyohs, find biggest offense at the idea that somehow I am obligated to protect (guarantee) the job and income of people I do not know and have no relationship to.

Being in the same territorial boundaries is not a relationship, it is a coincidence.

If I am obligated to do it for someone in Maine, why not in France? What is the difference to me? None, the drag on me is the same.

Carry this idiocy to its logical excess and if I should protect (guarantee) his job and income, should I not also act to ensure he has a decent girlfriend or wife? Hell, why not a well behaved dog, a car that never malfunctions, an IPOD stuffed with his favorite music, a refrigerator filled with food and beverages of choice. Literally, if I am agree or acquiesce to the former, how can I balk or refuse the latter?

Those who believe that protectionism is a good idea stop before they think through all the logical conclusions and courses of action to which that belief can take them.

I wonder what Friedman would say about Obama. If the most responsible steward of one's money is himself, could Obama actually be the best steward of resources? He does seem to actually think the money is his, so why wouldn't he be? (Leaving aside the concentration risk for a minute)

"Being in the same territorial boundaries is not a relationship, it is a coincidence.If I am obligated to do it for someone in Maine, why not in France? What is the difference to me? None, the drag on me is the same."

I agree. Not only that, but why should I care that on Sept 11th some towers in NYC fell? I wasn't in any of those towers. I didn't know anyone in the towers or the planes. But I'm suppose to care? Once global terrorism shows up at my door and starts affecting me personally, then we'll talk.

Patriotism, civic duty, the common welfare, the so-called interdependence of mankind–these kinds of ideas are for the uneducated and for fools. I don't give a hot damn about my "fellow countrymen" or "fellow citizens". JUst because I was born in a geopgraphic area called the USA doesn't mean I should care about this imaginery thing called "USA". If this thing called the USA declines and falls, why should I care unless it has direct financial consequences for me? I am glad there are websites like Cafe Hayek which recognize these fraudulent ideas for what they are–potential roadblocks to our paths to wealth

We won't have a better world until all of us accept the notion that we should care only about ourselves. "What's in it for me" is my guiding principal. And I would recommend this guiding principal to everyone.

Cafe Hayek: Where tenured US professors complain about job protectionalism.

Indiana Jim:

Clearly you have not be enlightened by the thinking on this excellent blog. Keep reading until your lips tire. Protectionalism of any kind is bad, especially that which protects college professors from the pleasures of being employees-at-will. Professors should–like all employees– play to the rules of those who pay. That is free trade economics at its best. A college has no obligation to pay for the "free" speech of professors by giving them tenure. If professors want the right to say whatever they please, then they can become self-employed and write books and lecture away on their ideas. On the other hand, when professors work for a college, they shouldn't burden themselves upon the students with this outmoded concept of tenure. If the students and/or college likes what the professor says, then the professor will continue to be employed. If not, the colleges should be able to deposit the professor by the roadside just like any factory owner should be able to jettison any factory worker who is no longer desireable. Thank God for this website! Hopefully our ideas will filter thru, even to the colleges. I know Don hates being tenured and wishes he could be fired at will just like any other worker. Oh hopefully someday Don's dream will come true! Or even better maybe Don will be fired and then a Chinese or Indian professor can come and do his job for 1/4 the pay, and without benefits! Imagine how much tuition would plummnet if all tenure was done away with and all spoiled American professors replaced. Oh someone catch me, I'm fainting….

Indiana jim & DoctorTruth,

Now this is getting interesting! Which prevails, protectionism or free market…….stay tuned.

vidyohs,

Aside from cheering from the sidelines, what say you DoctorTruth's suggestion that 9/11 shouldn't matter to anyone who didn't have skin in it directly? Do you have no interest, like DocTruth, in what befell the twin towers? Does the deaths of innocent women and children leave you as indifferent at it seems to have left DocTruth? Do you agree with DocTruth that "until global terrorisn show up" at your door you are not interested in talking about it? I surely am willing to talk and take action way before it gets to MY door, what say you? Do you believe, as Doc seems to, that your liberty can best defended on an ad hoc case by case basis when terror "shows up at your door." I'm impressed by much of what the US founders crafted, what say you?

I'll stay tuned.

DoctorTruth (with a capital T, of course),

Tenure appears enhances the long run survival chances of non-profit institutions; see: see:

http://00prcoelho.iweb.bsu.edu/TENURE%20AND%20NON-PROFIT%20FIRMS.pdf

Evidence for this hypothesis has been developed by another colleague, William O. Brown, but I don't have the reference at hand easily at the moment.

Bye!

vids,

There are no barrier's to entry at the Cafe; I just called you on some of Doc-capital-T-Truth's more outrageous statements. That you don't wish to drink from his cup, or even touch it is understandable, albeit lame given that you stirred the pot. (I wanted to put more analogies in this, but I ran out of gas.)

This entire debate over tenure is a red-herring.

Yes, I'm tenured. But I also oppose tenure. I would give it up in a minute if I could do so and still retain a college-teaching position at a respectable university.

In fact, I once DID give up tenure (at Clemson University) to become president of the Foundation for Economic Education. When GMU recruited me back, I was offered tenure. I took it because it is, practically, required if a professor is to enjoy status as a full-time participant on the faculty whose term is not arbitrarily limited to six or seven years.

More to the point, though, arguments should be judged on their merits. I grant that the circumstances of those who make and champion arguments are often reliable short-cuts or clues to the underlying merits of the argument. But in the case of free trade, the case for it has been made for so long, and by such a wide variety of people, that to allege that the tenured status of modern academic economists is a special 'driver' of their support for free trade is a cheap shot.

I do support free trade, and I grant that my job is more secure than are the jobs of many other persons. But I also support cutting taxes, even on the very rich. Being a college professor (from a working-class family – so no inheritance) means that I am not now, and I have no reasonable prospect ever of being, very rich by modern U.S. standards. And yet I believe that the very rich should be taxed less.

I also support gay marriage — and I'm completely straight.

I also support legalization of all drugs and gambling — and yet the only drug I indulge in, or hope to indulge in, is alcohol. And gambling disgusts me.

I also support legalizing prostitution — although I've never been with a prostitute or have any interest in being with one.

I also oppose Social Security — although SS now provides the bulk of my father's income and, if it were abolished completely, the chief burden of caring for my father financially would fall on me.

In short, to assume that my (or any economist's) support for free trade is driven by my (or his or her) being tenured is ridiculously shallow.

DoctorTrooth,

All contractual employment is "anti-competitive" in the broad sense. All contracts are binding for some relationship. The cost of breaking one is "anti-competitive". But such thinking betrays great ignorance of basic economics. What we call 'tenure' is a strongly binding agreement that may be desirable under particular circumstances. It is merely a point along a spectrum and not intrinsically contrary to a free market order.

IJ,

Okay, I have no problem with putting my own personal beliefs out here, you're very new or you'd be well aware of that.

Ask and yee shall receive:
———————
vidyohs,

Aside from cheering from the sidelines,//curiosity from the sidelines, no cheering.//

what say you DoctorTruth's suggestion that 9/11 shouldn't matter to anyone who didn't have skin in it directly?//Perhaps he phrased it provactively, perhaps he phrased it exactly as intended, but while I can utilize my very rich, fertile, vivid, and active imgaination to feel the horror of being above that strike line on the twin towers, knowing that jumping, dieing in the fire, or being crushed were my only options, I had no close personal relationship with anyone who died in that tragedy. I can feel anger over the strikes, I can feel disgust at the callous animals that did the deed, I can't feel sorrow.////What I can feel as well is disgust at a government that will give out an average of a $1,000,000 gift to the relatives of those who died in that tragedy, people who survied a civilian non- combatant who simply went to work; and, in turn a government that will fight giving an extra nickle to the survivors of those who actually die in the sands of Iraq, Vietnam, Lebanon, or even those servicemen who die in stateside training exercises. I am horrified by a government that will do that.//

Do you have no interest, like DocTruth, in what befell the twin towers? Does the deaths of innocent women and children leave you as indifferent at it seems to have left DocTruth?//See above//

Do you agree with DocTruth that "until global terrorisn show up" at your door you are not interested in talking about it? I surely am willing to talk and take action way before it gets to MY door, what say you?//I a 21 year military Vet, IJ, my work put me in some places you don't want to know about, and it put friends of mine in even worse places. Many of them didn't make it home. I am an astute student of politics, government, and fraud; and, I'm telling you that nothing on the face of this Earth is a bigger fraud than government. I do not and will not support sending any non-volunteer outside the borders of the 50 states on any military expedition, for any reason. If there is proper and ample evidence that the need to send an expedition exists then government should be able to make the case and get the volunteers, if not then the troops stay within the borders and defend the country. I've been there, IJ, and I am telling you that volunteering to defend the country is not the same thing as volunteering to go to another place for a nebulous concept poorly presented and poorly evidenced; and, to make that worse sending our troops into harm's way with no real committment in using them to win. It is unconsciencible to send men and women to die with no clear cut plan and committment to see that sacrifice accomplish something. It is easy to be a rah rah guy on the sideline, but I say put on the uniform, pick up the gun, and go to fight, risk, and maybe die in the service of people who have no idea of what victory actually means. Furthermore, IJ, I support no expeditionary force voted on by Congress that leaves these borders without every single congresscritter that voted for the action in unform, packing a gun, and in a frontline combat position, either as a rifleman or a Squad Leader, or as a frontline medic…..let the bastards suffer the horror they unleash on others. Got me, IJ?//

Do you believe, as Doc seems to, that your liberty can best defended on an ad hoc case by case basis when terror "shows up at your door."//Or we talking about the terror that showed up on Randy Weaver's door, David Koresh's door, or perhaps on the WTC. When we talk about terror we should know what terror, the cause, and the results, eh?//

I'm impressed by much of what the US founders crafted, what say you?//Even though the Constitution is the corporate charter for the corporation, THE UNITED STATES OF AMERICA, incorporated in Washington D.C., I am impressed with it in general, outside of one very definite flaw that nullifies everything else. Fix the flaw and run the government strictly in accordance with the Constitution and I could agree to it and contract with it. As it is, it's a fraud.//

I'll stay tuned.//Tomorrow's program will be brought to you by the letter R, and the number 9.//:-)

Posted by: indiana jim | Apr 5, 2009 7:17:50 PM

Now, back to the match!

I'm not going to read all the comments with a fine-tooth comb, but to believe passionately that tenure is a bad thing then to accept a position that requires you to be tenured is plainly hypocritical. That's is why you are attacked on it over and over again. You can attempt to rationalize your hypocrisy away, but who do you think you are kidding? Of course you can argue that tenure is only a mildly bad thing, but then where do we go with that. Perhaps the minimum wage is only "mildly bad" but from your constant diatribes on the matter, I don't think you believe that for one second. So it seems you pick and choose what's good in general by deciding what is good for you at the moment like accepting a tenured position to improve your lot in life with the least discomfiture for yourself without serious regard to your principles. If what I said is even partially true, then not only are you a hypocrite but you are opportunistic and thus lack integrity as well. (A struggling prostitute with waning looks has more if she believes in what she's doing.) That is worse than being a hypocrite according to my late father. One must endeavour to learn from one's elders was another of his frequent pronouncements. Okay dad, I'll try harder in the future.

"…In short, to assume that my (or any economist's) support for free trade is driven by my (or his or her) being tenured is ridiculously shallow."

My argument is that your acceptance of tenure is contrary to your claimed principles. Do your ideas have cash value in the free market place or not? If so, why do you demand such job protectionalism? If your ideas lack cash value, why do you continue to burden your students–who pay your salary–with your presence?

"What we call 'tenure' is a strongly binding agreement that may be desirable under particular circumstances."

I assume that you consider tenure to be most particularly desireable when it protects your job and least desireable when it protects someone else's job, especially a job to which you aspire.

Truth,

I think you, like TrUmPit, have forgotten your Emerson (see above)

There is no inconsistency of tenure with advocacy of market views. Tenure, as such, is a contractual agreement. It is no more inconsistent with the free market than is A's signing a non-compete clause as a condition of working for B — or any other contractual term you name.

Do you suppose that, say, a professional athlete's signing a ten-year contract with a sports team is at odds with market principles? (If so, you're mistaken.)

I personally wish that the norm in academia were not near-universal tenure for full-time faculty members. That way, talented and productive professors would receive higher take-home pay. This higher pay would off-set the lower job security.

I'd prefer the higher pay to the contractually stipulated job security. But there is nothing in the contractual term called "tenure" that even remotely violates free-market principles.

IJ,

"Only a fool" is, I assume, measured by your standards, eh? Are your standards known to be "the" standards of mankind?

I'll allow you the temporary "foolishness".

"Only a fool would make no advance provision against barbarians at the gate."
//Isn't that what the gate was for? Are we assuming that the gate is insufficient? How much of our time and wealth do we spend in provisioning before the provisioning becomes the sole reason for existing?//

"Only a fool would be happy with the reductions in constitutional liberties that have occurred as the "living constitution" "scholars" have had their way more frequently in Supreme Court rulings (especially since the Great Depression).
//I could point out that, only a fool would be so foolish as to assume that the rape of that constitution began in the last 85 years. Study your history a little closer and you find that the constitution was under attack from the moment the signers walked out the door. It took only a short few years before the federal government under president Washington called out 3 state national guards and sent them to supress the whiskey rebellion in western America, and it's been downhill from there.//

"Only a fool would disagree with the observation that government is full of fraud and inefficiency. I grew up on the grounds of a VA hospital that treated WWII vets, so while I don't know it from being in the military (as you do), I know it too.
//I will take it that you are using the VA Hosp. merely as a convenient illustration of all government fraud and waste, at least I hope so, because the waste outside of the military makes the uniformed waste pale in comparison.//

Only a fool would be ungrateful to the service of a military that keeps barbarians at the gate.//Ambigious statement. Military men are no different from your average civilian because that is where they come from. If one had polled the entire military forces during the Vietnam conflict as they rotated out and back to the USA, as I had the ability to poll a large number, which was but a tiny bit in reality, I believe you would find that only a tiny minority of those sent to fight, and possibly die, did so willingly and with the belief that they were keeping the "barbarians from the gate" You'd find even fewer who voluntarily requested to return to that combat zone. They went in the first place because our enculturation in this nation had them boxed in intellectually and emotionally and the feared being seen as cowards, and treated like pariahs, if they exercised good judgment and said no. Don't bother trying to reply to this portion, I am familiar with all the arguments from really really sharp people on both sides, and my own personal belief I stated above. If a military expedition leaves the borders of the USA than it should have the congresscritters who voted for it in front line positions. If said policy were in place, IJ, you would see a sharply contested debated on what "national defense" really was, I guarantee you that.//

Posted by: indiana jim | Apr 6, 2009 00:00:19 PM

To tenure Vs protectionism, it is easy for Dr. Truth to rationalize the arguement to favor his case, and it is just as easy for Prof. Boudreaux to rationalize his position vis-a-vis the debate; however, in this country boy's mind as the result of hard nosed private intellectual examination, I side with Dr. Truth in that tenure is the same degree of bad that protectionism is. Tenure is protectionism demanded, by those who have it and those who want it, from what is considered a for profit private firm (institution of higher learning).

I know of no other for profit firm that offers anything similiar to tenure. Do any of us know a major manufacturing firm that has tenured supervisors or foremen? Those positions would be roughly equivilant to that of a professor, yet there are no guarantees to those outside the academic world.

If tenure guaranteed good professors, who added to their hiring institutions value by pushing and doing research in the physical world as well as the theoretical, why would not the commercial world follow the lead and tenure good supervisors and foremen?

Competition is good, except in positions of teaching? Sounds contra-intuitive to me, doesn't it to you?

The world has been changing faster and faster since 1776, and it gets faster everyday, perhaps professors (like bed sheets) are best changed regularly to keep the teaching relative and clean.

Hasta Luego, from Hooooston!

IJ,

I can't speak for anyone else, but for myself, regarding the work you reference, I haven't read it and probably will not as I need to remain alert and awake, and as sure as God made little green apples I'd be asleep before the end of the first chapter.

Evidently you aren't considering my words either, anyone can rationalize and do so very convincingly, but take it to the street where people get sore feet and scraped elbows and see how much agreement you get for protectionism from people who understand what it is.

Rational lize = Rational lies, more often than not when used in the context of this little debate.

T'ain't worth fighting about, IJ.

Vids,

My comparative advantage is not in fighting, so yes I agree "T'ain't worth fighting about."

But I think that if you take a look at the articles I recommended, you might be surprised to find that you remain awake from start to finish; these guys write well (and they are articles, not books with multiple chapters). You can assert your correctness in ignorance of these readings, of course, if you like, but perhaps with my encouragement you will entertain the matter at greater depth.

vids,

With the Lo, . . . stuff you sound like the poem out of the movie 13th Warrior.

Lo there do I see my father,
Lo there do I see my mother and my sister
and my brothers,
Lo there do I see the line of my people
back to the beginning,
Lo do I hear them bid me join them,
In the halls of Valhalla,
Where the brave may live forever!

Good movie, in my view.