Ms. Ashworth’s Bizarre Argument

by Don Boudreaux on January 13, 2010

in Great Depression, Standard of Living, The Crisis, The Economy, Trade

Here’s a letter that I just sent to USA Today:

Helen Ashworth writes that “Our current economic crisis is worse than the Great Depression” (Letters, Jan. 13).  She’s wrong.  By no measure – rate of unemployment; decline in GDP; length of the downturn; extent of human suffering – is Ms. Ashworth’s claim even remotely true.

Ms. Ashworth is mistaken also when she blames our current troubles on globalization.  Contrary to her assertion that freer trade destroys jobs in America, the very period that she seems to long for – the decades immediately following the Great Depression – saw steady liberalization of trade.  The ever-increasing freedom to trade that began in the immediate aftermath of WWII coincided with substantial growth in both the number of jobs and in the real value of worker compensation in the U.S.

If freer trade and globalization cause widespread hardship in America, our current economic troubles would have begun, not in 2007, but in 1945.

Sincerely,
Donald J. Boudreaux

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  • helen
    Professor Boudreaux, My letter made an observation not an argument supporting dirigisme
  • ClayBarham
    THE SOURCE OF NEW JOBS!
    New jobs begin with pebble droppers, people making waves and wakes, the entrepreneurs who start business ventures. The “soil” must nurture them, not discourage them. Pebble droppers must be saved and admired for the service they provide. Instead, they are envied by the few, taxed and punished by government whose only purpose is to protect all people against injustice. SAVE PEBBLE DROPPERS & PROSPERITY defines a pebble dropper and the environment that is best to encourage their success. Today’s politicians are dismantling the American ideal of a prosperous, free nation. The 2008 election did seek “change,” but made community interests superior to individual interests. What has happened to the voices who believe in the importance of the individual? That is why America differs from the rest of the world. If “change” is inevitable, will we lose that which sets us apart from the Old World. Claysamerica.com
  • I see now, and agree. It is not functioning that way. However, it could function that way in principle and the result would be greater wealth for all. Not that I am holding my breath...

    Thanks for clarifying.
  • Point well-made, Don. Globalization is just laissez-faire capitalism writ large. When another can make something cheaper and better, the business rightly goes to him/her. It makes no difference whether that company or person lives outside U.S. borders. The consumer ultimately benefits. Those who wish to restrict trade with other countries are either unwilling or unable to provide the best value.
  • muirgeo
    "Those who wish to restrict trade with other countries are either unwilling or unable to provide the best value."


    Yes we should get rid of all environmental and labors stands so our workers can compete with communist Chinese laborers.

    Interestingly we are seeing a lot of adopted Chinese baby girls with brain damage from lead toxicity.

    Yes.. we need to lower our standards. But the long term picture for American workers will be more of the same. Stagnant wages and decreasing standards of living as the billion persons world wide labor pool is forced to compete in a race to the bottom while a small minority of corporate rules gain ever more concentrated wealth and power that knows no political boundries.
  • muirgeo,

    Nothing you have implied follows from my advocacy of free trade. Clear thinking dictates that you separate someone's true position from the positions you believe (in this case, erroneously) follow from it. Lead toxicity problems are not inevitably the result of free trade and there are numerous mechanisms to prevent it.

    Further, the availability of cheaper goods due to capitalism has helped workers immeasurably. Socialist economies leave everyone in grinding poverty except political leaders and well-connected thugs.

    If the well-being of humanity is the goal, capitalism is the means.
  • brotio
    Yasafi was asked, on another thread, how many of his household goods are made in China. If he ever answered that question, I missed it. Since he's fond of ducking inconvenient questions, I presume it was another quack... quack... quack... moment.
  • Randy
    Well said.
  • Thank you, Randy.
  • vidyohs
    Capitalism to be sure, sir; but, laissez-faire capitalism.....no not really.
  • Thanks for your comment, vidyohs. I am not sure I quite understand your point. Would you mind elaborating on why you think free trade among people of different nations is not laissez-faire capitalism?

    Thanks.
  • vidyohs
    Because laissez-faire means "leave it alone", and clearly trade among nations, trade in general in this world is definitely not functioning in a "leave it alone" environment. You'd break your back trying to tote all at once the regulations on trade from our nation alone.

    For instance find an international freight forwarding business, phone them and ask about the regulations on shipping any particular item from your home town to say, Djakarta, Indonesia. Have fun.

    P.S. Been a long long time (think centuries) since laissez-faire has been seen in any markets except for a rare few localized areas. Which seem to be stamped out, if they can, as soon as governments can identify them. The "if they can" I just referred to is because there are areas of very successful business being done outside of government control and if not laissez-faire it is closer than anything else going, and I am speaking of the drug trade in particular. From the Golden Triangle in Southeast Asia to the jungles of South America, the drug trade is extremely profitable and is able to defend itself from government successfully enough to be close to laissez-faire if not so indeed.
  • danielkuehn
    Her argument for why it's as bad or worse is bizarre, but from a global perspective she's right (although it looks like she probably won't be right for much longer). Globally this has been as bad or worse than the Depression. For the U.S. it hasn't been nearly as bad.
  • Brett_McS
    In addition, the advent of WWII swept away most of the New Deal regulatory apparatus.
  • ArrowSmith
    Libtards have zero knowledge of real history. They only go by the "approved" reading list of Howard Zinn and Noam Chomsky. No wonder they're totally fucked up.
  • tw
    I tend to view comments like Ms. Ashworth's as yet another proof point of how woefully lacking we as a society are when it comes to knowledge of history. Most people lack any kind of frame of reference except the time that they're living in.

    The mindless comment that I tend to hear a lot is that "kids today have it harder than ever before." Yeah, right. Tell that to the kids who grew up in Europe during The Plague. Or those who grew up on the American Frontier, where they might go months without ever seeing another child. Or even those who grew up a couple of decades ago when you actually had to go to the library (gasp) to do a research paper instead of Googling from your laptop while lying in bed.

    It's probably also an illustration of the lack of any critical thinking skills as well, but I think you get my main point.
  • vidyohs
    Sir,
    You are dead on.

    What the people, particularly the looney left, can't understand is that when a young man left the farm and moved to the city for a job in factory which meant a six day work week, 10 hours a day, with Sunday off, it was a vast improvement over what he had grown up living on the farm.

    Good job, sir!
  • Gil
    How do you know that? Stories of life for children in the factories sounds worse than what you described. Chances are such children weren't choosing between farm work and factory work but factory work and starving.
  • vidyohs
    I know because I met every single one of them and they told me personally that they were happier. BTW, Gil, I am not speaking of, or concerned with, what happened in backwards ignorant nations like Australia or Britain, so what they did with their kids is not the subject here.

    BTW, just what stories about children did I describe? I think I used the term "young man".

    The proof, Gil, is that they were in a position of free will in what they did and where they did it. If, having moved to the cities and towns, and finding they had a made a mistake, they could have went back to the farm, but they didn't. They voted with their feet and butts.

    Lastly, I suspect that you have never worked on a farm so know little of the routine. Go back to a farm in the year 1895 and your day began with rolling out of bed at 0330AM, most days. You did chores, including milk the cow(s), getting ready for the work day. Then before sun-up you ate some breakfast so that you could be in the fields when it became light. You worked your ass off until noon, then generally ate from a lunch packed by the lady of the farm, got a little rest and then worked until sundown. You hit the farm yard around dark and then cleaned and stored the tools, took care of the stock, ate some supper and fell into bed about 0800PM. You did all of that, but the field work. on Sunday as well. And, you did it from the time you were big enough to perform a useful task, meaning around age 3 or 4. By the time you were 12 or 13 you were no longer looked at as a child, but you were truly a young man. They were responsible and trustworthy and could produce well enough to be considered a man.

    People were still living like that in my area of Texas during the 1940s.

    What the PC brought by the socialists has done is turn the character building aspect of the earlier America into one that turns out 19 year-olds that are today called children and worse behave like children.
  • Gil
    Yes I could believe you were a child in the 1890s.
  • vidyohs
    I'll retain my childlike demeanor in the year 2090 as well. LOL
  • That's freedom of speech I might say and as I observe it. Unemployment rate becomes higher this year.
  • Curious
    Government employment is a form of welfare. Thus every government employee is, in effect, an unemployed individual.

    Thus, it is entirely possible, that the rate of unemployment is higher than during the Great Depression.
  • johndewey
    "Government employment is a form of welfare. Thus every government employee is, in effect, an unemployed individual."

    Not sure I can agree with that. Our soldiers, firefighters, police officers, food inspectors, librarians, and many other government employees are performing functions which we, the people, have decided should be performed. They exchange their services for pay, just as every other worker does.

    While it is true that some of those jobs could have been private sector jobs, the fact is that voters, through elected representatives, have decided that they should not.

    You can make the case that some of the work being done by government employees is not necessary. But anyone who has worked for large corporations knows that much of the work being done in the private sector is likewise not necessary.
  • Curious
    John,

    government employees don't create wealth, they destroy it. If they could create wealth (make a profit), they wouldn't be "working" for the government in the first place.

    This includes soldiers and police, who are a necessary evil, yet that doesn't change the fact, that they do not create any wealth.
  • johndewey
    curious: "government employees don't create wealth"

    I disagree. The "necessary evil" of which you refer could be performed by a private sector employee or by a public sector employee. The economic value provided by that employee does not vanish when it is the latter. In many cases the private sector employee may do so more efficiently. But that's a case of $x value and $x-y value, not a case of $x and $0.

    curious: "they destroy it"

    Actually, police, firefighters, and soldiers preserve wealth.

    Which economics professor taught you that government employees are unemployed?
  • Curious
    If it cost you $x to create $x-y, you destroyed wealth = $y.

    Whether x = y or not, is irrelevant, the important thing is that you gave away $y. Giving something away for free is welfare.

    Police/military sit around doing nothing, how is that wealth preservation?
  • johndewey
    No, curious. You are mistaken. Y is not "wealth given away". It is the difference in efficiency between two producers. Y exists in the private sector just as it does in government. Not every worker can be equally efficient.

    Police/military do not "sit around doing nothing". Their presence deters those who would destroy wealth. So they are providing value even when they are not chasing criminals or conducting war.
  • Curious
    If gov't pays $1 to its employee to create service worth $0.70, then $0.30 was destroyed in the process.

    Because truly employed people are people creating wealth, gov't employees are in effect unemployed.

    Police catch a thief and then turn around and rob you themselves (taxes). They are no different than the thief they caught, they are only the strongest thief around.
  • Randy
    Good point. The growth of government during and after the Great Depression has much to do with a social plan, finding something "useful" to do for those that the free markets don't need. There's a reason that so much propaganda is aimed at convincing the population that whatever government does has infinite value. They doubt it themselves, but they know that they can't afford to have that doubt spread to the general population. Their entire system depends on that belief.
  • vidyohs
    In support of my last post I offer a post I put on a discussion link I belong to that is constituted by radical people like me, people who want to be free of the smothering control of a federal government and who long ago grew tired of financing idiots and idiot projects.

    USING THE COURTS TO CREATE
    PROPAGANDA


    The socialists are masters at using the court system to create lasting propaganda and it is a real tragedy that conservatives/capitalists just can’t seem to comprehend and counter the tactics of the left by preempting them by using the courts as well or better than the socialist opponents.

    Using the court system as a propaganda tool is made more effective if one has support of the media, and the socialist have the main stream media in their pockets so admitedly their use of the court system is hard to compete against.

    How are courts used as propaganda tools? It really is quite simple. I will illustrate using an example local to Houston, Texas/Harris County, Texas.

    In 1998, Paul Bettencourt, republican, was elected as Harris Co. Tax Assessor, the first republican to hold that office in many decades. The county Tax Assessor is responsible for maintenance of the voter registration rolls of the county.

    One of his missions was to clean the voter registration rolls of ineligible voters. His task force found thousands of ineligible voters. Death was the most frequent cause of ineligibility, it seems that thousands of dead democrats were voting decades after their deaths, not only voting, but voting in more than one precinct. Illegal aliens were also expunged from the rolls, again virtually all those voting the democrat ticket. Folks who had moved from Harris county, some decades past, were also still casting votes in current elections. By the time Bettencourt was through with his cleaning of the voter’s registration rolls, enough phantom democrat voters had been expunged to make elections somewhat more risky for democrats.

    Bear in mind that the Houston Chronicle reported his actions buried in the back pages.

    The democrat yowls of protest had to have been heard nationwide. How dare a republican expunge dead democrats! The outrage!

    Now we all know that only infrequent readers of a newspaper ever follow the story beyond page one to read the actual details, and even more rarely look in successive papers for follow-up stories to learn of the outcome of the seeming controversy.

    With much press supported ballyhoo, the democrat party filed suit in court to have Bettencourt’s task force efforts overturned and the voters restored. This filing of the lawsuit story was page one of the Houston Chronicle and its prominence ensured that any reader was aware that the efforts of Bettencourt were being challenged in court.

    The democrat party knew full well as they filed their pleading that they had a baseless case and that it would eventually be thrown out or ruled against. However, they also knew full well that it would get front page coverage, details didn’t count, and the final results were irrelevant. They got what they wanted with their pleading and the coverage, that was the casting in the public mind that there was republican underhandedness going on and that voters were possibly being expunged undeservedly, even though they knew better. The perception was all they were after and that they got.

    Courts as propaganda machines, whoda thunk it? Perception, now who has talked about that here on this Cafe? Politics = perception.

    Until conservatives learn that one never brings karate to a gunfight they will always lose the battle for public perception. You have to fight with at least the weapons equal to what your enemy brings to the battle.

    Apologies to the hosts for taking up the space.
  • ArrowSmith
    The Republicans can never play as down and dirty as the Democrats. So it's up to them to take the high road and try for hearts and minds through intellectual discourse.
  • vidyohs
    Unfortunately, sir, when you're trying to sway people who have demonstrated a capacity for rationalization and contentment of the privilege of theft and the enjoyment of the fruits of that theft, taking the high and moral road to sway intellects is an exercise in futility.

    Even making the effort to understand your presentments or arguments is work to them and if they were willing to work in the first place, you wouldn't have to be persuading them.
  • Randy
    I don't see the split as being between Republicans and Democrats. As far as I can see, these are just different factions of the ruling class of Progressives. That is, they all believe in exploiting the human beings living in the territories they control, they just have different ideas about who gets what share of the loot. The split is between those who produce and those who exploit, and here your point is applicable. Those who produce will never have power. First, because it is not their way, they are too busy producing, and second, because they don't study the arts of exploitation as their opponents do.
  • Randy
    P.S. Is it possible that the Republican party could at some point truly represent the interests of producers? Possible, but not probable. In a democracy, there simply aren't enough producers to make it pay.
  • danielkuehn
    Dude - stop writing things like that. I spit my coffee out when I read this and almost hit my laptop.
  • vidyohs
    You're allowed stimulants youngling? Lord God, we need to speak to your parents.
  • Gil
    Or should that read "Socialists and lefties are masters at getting results"? Socialists took control over most of the world in a relatively short time. Anarcho-Communists had a go at hippie communes whereas anarcho-Capitalists write their woes over the Internet hoping Guvmint will go belly-up overnight for no reason. The masses have been willing to gang up en masse to fight and die for Communist revolutionaries and overthrow the ruling elite yet Libertarians hardly get any attention and get labelled " those who wanting to legalise bestiality". Even worse many of the outspoken and richest people in the world are Lefties, e.g. Bill Gates, Warren Buffett, James Cameron, Steven Spielberg, Al Gore, etc.
  • danphillips
    "The masses have been willing to gang up en masse to fight and die for Communist revolutionaries and overthrow the ruling elite yet Libertarians hardly get any attention..."

    Gil: Your point is unarguable, spot on. I have never been able to understand why the masses have been that way. Why would anyone follow a philosophy based on coercion, resulting in murder, tyranny, oppression, which all forms of statism represent, rather than follow a philosophy which advocates individual liberty which, when meagerly attempted results in progress and peace, as represented by libertarianism? Do you have the answer? If you do, please tell me. It is one of the most confusing questions I know.
  • vidyohs
    As myself, dsylexic, and Randy all pointed out, the answer is in human nature to be attracted to the easy road of something for nothing, always obtained from "those others" who actually produced it.
  • vidyohs
    There is a certain amount of truth to your comments and it lies in the fact that yes, a large percentage of the human race are much more willing to die for the privilege to steal from the productive. It seems strange but so many appear to believe that stealing, dying for the privilege to steal, or take stolen goods, is so much easier and less requiring of sustained effort than actual labor and independence.

    However, those lefties you mention, discount Gore because he was born and raised a liberal, but the others....how much you want to bet that they didn't become lefties until they had amassed a pile of money, so much so that they became convinced that they were special and no one else could do it so they need to help people by giving government more power to steal.

    I believe that the subject of successful people becoming socialist and buying government power to ensure that they aren't challenged in any meaningful way in their market niche is something that has been discussed here many times.

    And, I agree that libertarians, conservative, and republicans all spend way to much time on symptoms when they should be strapping on their armor and going out to do battle about the disease.
  • Randy
    "It seems strange but so many appear to believe that stealing, dying for the privilege to steal, or take stolen goods, is so much easier and less requiring of sustained effort than actual labor and independence."

    Not so strange. It is human nature to exploit. We exploit our own attributes, we exploit natural resources, and some of us exploit other human beings. Is it "better" to produce and trade than to exploit? Not necessarily. For those with little or no ability to produce, exploitation is their only hope. I produce because I can, and because the rewards for production are still pretty good. Of course, I do resent the exploiters because it is people like me that they exploit. What I think the exploiters and their supporters fail to understand is that there is a tipping point. A point at which the rewards to productive behavior are subjected to so much exploitation that productive behavior no longer has value. A point at which the producers will either quit, or turn to exploitation themselves. The exploiters of human beings have been studying and practicing the art for so long that they have come to believe that their system of exploitation is foolproof. It isn't. They should know better. History has many examples from which they could learn - but they don't learn. They are blinded by greed.
  • dsylexic
    thats very easy to explain. any system -socialism or crony capitalism that advocates a larger role for the govt while making empty nice sounding promises to the hoi polloi is bound to find power seekers and simpletons queueing to sign up.only in socialism can empty rights be conjured out of thing air "right to health, freedom from poverty, right to education, right to broadband -true story- etc". all this sounds more appealing than telling people that they have the right to their labour and the freedom to succeed or fail (who wants that?).
  • vidyohs
    Truly the answer lies in ignorance spawned by the federally controlled Foolsystem, and loss of contact with the natural world where common sense and rational thought brought progress.

    Common sense is not common, never was; but the situation has accelerated the farther we get from living in the natural world.

    We could go on and on and it will make no difference to some people. View the progress of muirduck who has been exposed to intelligent reasoning here on this Cafe for years now, and is still mired in the same stupidity and blindness that Ms Ashworth is.

    You have to laugh, but it is a laugh of pain and sorrow.
  • ArrowSmith
    It's human nature to hang on doggedly to beliefs to the bitter end. It's part of our survival mechanism.
  • There's a difference between common sense and good sense.
    Common sense is what many believe, and there is often good sense mixed in.

    When it comes to politics and economics, the common sense is usually wrong.
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