[Adam] Smith continues: “A trade which is forced by means of bounties and monopolies may be and commonly is disadvantageous to the country in whose favour it is meant to be established.”
As reported by the Wall Street Journal, and others, the Russian-made jeep carrying dictator Fidel Castro’s ashes to their final resting place broke down en route. (HT Morgan Frank) The symbolism cannot have been more suitable!
He [Pres. Kennedy, who jawboned steel producers to keep prices down] may have “thought” he was right. His Keynesian advisers had also forgotten lessons of two thousand years of history and thought jawboning an excellent idea. But this is precisely why we have a rule of law — so that leaders who “think” they are right about the proper level of steel prices cannot wreck the economy.
Just as Trump’s action is abjectly wrong on policy. For just as many thousands of years, leaders have been cutting Carrier-like deals, to just as contrary effect. It is our duty to say that, to undercut the political popularity that presidents can gain by counterproductive policies, especially when the means trample the rule of law.
Yet we have been automating work for two centuries and so far the effect is to create more jobs, not fewer. Farming once employed more than 90% of people, and without them we would have starved. Today, it’s just a few percent. The followers of the mysterious “Captain Swing” who destroyed threshing machines in 1830 were convinced that machines stole work. Instead of which, farm labourers became factory workers; factory workers later became call-centre workers. In both transitions, pay rose and work became safer, less physically demanding and less exposed to the elements.
In 1949, the cybernetics pioneer Norbert Wiener warned that computers in factories could usher in “an industrial revolution of unmitigated cruelty”. In 1964, a panel of the great and the good, including the Nobel prize winners Linus Pauling and Gunnar Myrdal, warned that automation would mean “potentially unlimited output by systems of machines which will require little cooperation from human beings”. This hoary old myth just keeps coming round again and again.
Randy Holcombe’s new book is an advanced introduction to public-choice theory. To say that I’m eager to read it is a magnificent understatement!