More Scientific Than Thou

by Don Boudreaux on January 15, 2013

in Economics, Energy, Environment, Man of System, Science, Scientism

Here’s a letter to an increasingly hostile correspondent:

“Aaron the Aaron”

Dear Mr. Aaron:

You write that I “flout objective science” when I question the “need for government to attend to” the issue of global warming “with taxes or regulation.”  You continue: “Your [Boudreaux's] unwillingness to accept objective guidance of established welfare economics demonstrates your dangerous ideology and your obliviousness and disdain of science.”

I’ll not comment on your suggestion that I improve my “commitment to science” by reading more attentively Paul Krugman.  But I will say that a strong case can be made that persons such as yourself who leap immediately from your observation of a plausibly real negative externality (such as carbon emissions) to the conclusion that government must be given more power to “attend to” the problem are the ones who behave unscientifically.

What science is it that assures you that government officials will, in such situations, act impartially and for the public good rather than politically and for special-interest groups?  What objective and established proof, or even plausible hypothesis, have you that the very same knowledge, free-rider, and transaction-cost problems that promote the negative externality to begin with do not also operate – or operate with even greater force – to distort decision-making by government officials?  I believe that history and science reveal that the answer to both questions in typical situations is “none.”

I leave you with this scientific observation from my colleague Richard Wagner:

“Expositions of welfare economics typically assume that the analyst possesses knowledge that is in no one’s capacity to possess.  A well-intentioned administrator of a corrective state would face a vexing problem because the knowledge he would need to act responsibly and effectively does not exist in any one place, but rather is divided and dispersed among market participants.  Such an administrator would seek to achieve patterns of resource utilization that would reflect trades that people would have made had they been able to do so, but by assumption were prevented from making because transaction costs were too high in various ways.  A corrective state that would be guided by the principles and formulations of welfare economics would be a state whose duties would exceed its cognitive capacities.”*  And, I add, exceed also its ethical capacities.

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

* Richard E. Wagner, Economic Policy in a Liberal Democracy (Cheltenham, UK: Edward Elgar, 1996), p. 20.

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