As Deirdre McCloskey Puts It, Real Economists Stay Past the First Act

by Don Boudreaux on July 26, 2016

in Economics, FDA, Seen and Unseen

In my current column in the Pittsburgh Tribune-Review, I explain – from a McCloskeyan perspective – an insight justly associated with the great Frederic Bastiat: sound economics supplies a lens that makes visible much that is otherwise invisible.  (I add that sound politics – that is, politics that maximizes candidates’ prospects of winning office – involves not only keeping invisible that which is, without economics, invisible, but also masking much that would otherwise be plainly seen.)

Here’s a slice from my column:

Consider, for example, the occupational licensing of electricians. In the first scene we see consumers protected from electricians deemed by bureaucrats to be unqualified. Consumer safety appears to be enhanced. But keep on watching. The licensing requirement reduces the supply of electricians, which raises the fees charged by licensed electricians. These higher fees prompt many homeowners to perform do-it-yourself electrical wiring and socket replacements. The result of the licensing requirement might well be an increase in the chances that homeowners will be killed both as a result of doing their own electrical work and from the faultiness of their own projects.

Or consider the Food and Drug Administration. In the first scene we see citizens protected by the FDA from dangerous drugs. As we continue watching, however, we see the FDA’s bureaucratic inertia and webs of red tape slow the approval of lifesaving drugs. These delays, in turn, inflict upon many people unnecessary suffering and death — tragedies for which no FDA bureaucrat is held accountable.

To understand economic reality requires us to keep watching past the first few scenes.

Comments

Add a Comment    Share Share    Print    Email

Previous post:

Next post: