is from Roger Meiners’s October 2012 review of Pierre Desrochers and Hiroko Shimizu’s 2012 book, The Locovore’s Dilemma:

Locavore restaurants are sprinkled around the country.  Adherents worry about how far it is to go to get acceptable food; is 100 miles fair?  This hobby may voluntarily generate a bit of income for high-cost banana growers in Montana rather than greedy low-cost Guatemalan banana farmers, but what does it do for food efficiency and the environment as a whole?

The agricultural market is already shot through with subsidies, such as the one for uncompetitive American sugar growers in a few states who make campaign contributions in each and every election.  Don’t be surprised if locavores manage to get in on the act, tying together misguided economic and environmental beliefs that Desrochers and Shimizu dissect in scholarly, but readable fashion.

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In my latest column in the Pittsburgh Tribune-Review I explore the mistaken notion, held by many locavores, that eating greater amounts of locally grown foods is good for the environment (link added):

Consider a favorite cause of the sustainability movement: locavorism. Champions of “sustainability” assert that, because local foods don’t have to be shipped very far to their final consumers, such foods are more “sustainable” than are foods grown and raised at great distances from where they are consumed.

This analysis appears sound to people who are blind to all but the resources used to transport foods from farms to dining tables. Yet transportation consumes only a small portion of the resources required to feed us. Labor, fuel, water, irrigation equipment, tractors and other farm tools, fertilizers, pesticides, packaging and (of course) land must also be used.

What effect would eating only locally grown foods have on the use of these other resources? Locavores seldom ask this question.

Fortunately, this question has been asked by sensible economists. In their splendid 2012 book, “The Locavore’s Dilemma,” Pierre Desrochers and Hiroko Shimizu conclude that the ecologically and economically best diet is one with foods from all across the globe. Among the most important reasons is that the amount of resources required to eat only locally grown foods would be stupendous.

UPDATE: To make explicit a point that I assumed was obvious if only implicit in the above passage, I would amend the last-quoted sentence to read:

Among the most important reasons is that the amount of resources required to eat locally grown foods rises to ever greater and more wasteful levels the more people eat locally grown foods simply because those foods are locally grown and, hence, the consumption of which is believed to be better for the environment than eating non-locally grown foods.

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Quotation of the Day…

by Don Boudreaux on August 27, 2014

in Competition, Complexity & Emergence, Growth, Innovation

… is from page 86 of Frank Knight‘s 1951 primer, The Economic Organization​ (which was initially privately published in 1933):

[T]he competition of producers for productive power tends to guide or force productive power [that is, inputs, including labor] into the most important use, and to force the employment of the most efficient available productive technique – and incidentally, to encourage the development of constantly more effective techniques as well.

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Teach the Timeless Verities

by Don Boudreaux on August 26, 2014

in Economics, Education, Seen and Unseen

In just over three hours I will meet for the first time my Fall 2014 ECON 103 students.  These are the 288 students – mostly 18-year-old freshmen who have, as of this moment, no earthly idea what economics is – who’ll file into room 80 (an auditorium) of Enterprise Hall at George Mason University to take from me the all-important Principles of Microeconomics course.

I’m biased, of course.  (Who’s not?)  But I sincerely believe – believe to the point that I can say that I know – that principles of microeconomics is the most important economics course any student can ever take.  Ever.  By far.  If taught properly, and learned with an open and critical and attentive mind, a principles of microeconomics course will impart to the student more understanding of the operation of economies than will all other economics courses combined – and I include here even well-taught PhD econ courses.

Too many academic economists, in my experience, are bored with microeconomic principles.  Such principles are so basic.  No genius is required to understand them or to teach them well.  Teaching microeconomic principles provides no opportunity to showcase great cleverness or to push out the frontiers of understanding.  It is, instead, to repeat timeless verities – and verities the majority of which have been known and understood by wise economists for nearly 250 years, and nearly all of which have been known and understood by wise economists for the past 50 years.

As I said above, most of my ECON 103 students will have had zero exposure to formal economic reasoning – to what is properly called “the economic way of thinking.”  A tiny handful of them, however, will have had a truly great econ teacher (such as my dear friend Alice Temnick) in high school; sadly, another tiny handful of these students will have had a truly bad econ teacher in high school.

But no matter: there is absolutely nothing that I enjoy more than teaching principles of microeconomics.  I live to do it.  And I always, in the hours leading up to the first meeting of each such introductory class every semester, feel the surge of excitement that I felt (and still recall as if it were yesterday) when I first encountered the power of supply-and-demand reasoning in my first economics course as a student (back in early 1977).

My goal in teaching Principles of Microeconomics is not to launch my students on a path to earn a doctorate in the subject, or even for them to become econ majors.  While I’m always pleased when a student, after taking my class, switches his or her major to economics, I teach the course as if it is the only economics course these students will ever take.  (Empirically, this assumption of mine is true.)  So unlike many other intro-econ courses, I do absolutely no mathematics; I even draw no cost curves.  I define a handful of esoteric terms (such as the “law of diminishing marginal utility”) but never mention many others (such as “perfect competition” or “marginal rates of substitution”) that are typical fare in many other principles-of-microecon courses.  I wouldn’t even dream of doing indifference-curve analysis in such a course.

I open the course with some economic history.  (“Have you any idea how materially prosperous you are compared to the vast majority of your ancestors?!”)  I spend a lot of time on supply and demand.  I devote two whole sections to international trade, another to public choice, and one to public goods and taxation.  (Each section is two-and-a-half-hours long.  And I cover some other topics in addition; I mention these only to give a flavor of my course.)

My goal – by teaching basic, foundational, principles of microeconomics – is to inoculate students against the bulk of the common economic myths that they’ll encounter throughout their lives – myths such as that the great abundance of goods and services available to us denizens of modernity is the result of a process that can be easily mimicked or understood in detail by smart people or planners – that the market value of goods or services can be raised by price floors (such as a legislated minimum wage) or lowered by price ceilings (such as rent control) – that benefits can be created without costs – that government is an institution capable of rising above the realities that ensure that private institutions never perform ‘perfectly’ – that intentions are results – that destruction of property is a source of prosperity – that exchange across political boundaries differs in economically meaningful ways from exchange that takes place within political boundaries – that the only consequences that occur or that matter are those that are easily anticipated and seen.

If I have a calling in life, that calling is to teach principles of microeconomics.

….

My colleague Pete Boettke, inspired by the great Frank Knight, reflects here on the role of principles in economics.  (HT Alice Temnick)

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Minimum Car Price

by Don Boudreaux on August 26, 2014

in Seen and Unseen, Work

Here’s an e-mail sent to me by Cafe patron Regan Taylor:

Minimum wage logic: raising the minimum wage to (at least) $10.10/hr will be good for minimum wage workers. It will put more money in their pockets spurring economic growth.

A few years ago, the federal govt bailed out General Motors. Instead of engaging in such a gross display of corporate welfare, why didn’t we just apply the same logic to help the auto giant? If raising the MW from $7.25 to $10.10 (a 39% increase) helps those who sell their labor at that price, why didn’t the govt pass a law that mandated that all auto firms raise the price of every car, van, SUV, and truck they sell by 39% also – or at least raise by 39% the price of their lowest-priced models? Is there a fundamental distinction between the applications of this logic that says it will help one group but harm another? If the mandated increase benefits those who sell labor at that price why wouldn’t it be beneficial to do the same for those who sell automobiles? Or tennis shoes? Or computers? Or any other industry?

Why do so many people believe that the laws of supply and demand apply to everything that is bought and sold EXCEPT labor?!

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Here’s a letter to Sen. Sherrod Brown:

Sen. Sherrod Brown (D-OH)
Capitol Hill
Washington, DC

Sen. Brown:

You call on consumers to boycott Burger King for taking steps to keep its shareholders’ taxes as low as possible by moving its headquarters to Canada - that is, for responding predictably to incentives that you yourself, as a legislator, helped to create.

First, you err in asserting that Burger King will “abandon” its American customers.  A company headquartered in Canada is no more likely to “abandon” paying customers in America than is a company headquartered in Kansas likely to abandon paying customers in Arkansas.  Indeed, with fewer of its profits siphoned off to fund the boondoggles that you and other members of the political class are fond of supporting, Burger King’s attention to, and ability to serve, its American customers will only improve.

More fundamentally, because you believe that people have a duty to operate businesses in ways that generate tax revenue for government regardless of the effects that such operations have on their owners’ net wealth, can we conclude, because you haven’t resigned from the senate to launch and operate full-time your own maximal tax-paying business, that you are derelict in your duty?  In fact, it’s fair to ask how many businesses have you founded that earn profits for the government to tax?  Because you’ve been in politics your entire adult life, I’m pretty sure that the answer is none - which means that you’ve created far less wealth for the government to confiscate than have the professional investors and business executives who you publicly and so pompously smear.

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​

Cato’s Dan Ikenson has more on tax inversions.

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Quotation of the Day…

by Don Boudreaux on August 26, 2014

in Hubris and humility, Myths and Fallacies, Politics

… is from Kevin Williamson’s August 24th essay “Vacations and Vocations“:

At a DNC fundraising dinner in 2010, President Obama boasted: “We provided health care to 4 million children.” Of course he did nothing of the sort, but there is an entire cracked political philosophy in the president’s error: Who provided health care?

Politicians do not provide health care. Doctors, nurses, technicians, orderlies, pharmaceutical researchers, medical-device manufacturers, and junior senators from Kentucky volunteering in Guatemala provide health care. Politicians do not feed the hungry — farmers, grocers, long-haul truckers, and Monsanto feed the hungry. They neither sow nor reap. Barack Obama gives the impression of being a man who probably couldn’t change a tire, but we have persuaded ourselves — allowed ourselves to be persuaded — that such men must be central to our lives. The wheat farmer in Kansas or the contractor in Pittsburgh? All they do is keep the world fed and housed.

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Kevin Williamson points out … well, let him tell it:

President Barack Obama is spending his vacation golfing on Martha’s Vineyard. Hillary Rodham Clinton is spending her vacation in the habitual Clintonian mode, making a vulgar spectacle of herself in the Hamptons. Joe Biden, not that anybody cares, is off to Grand Teton.

Senator Rand Paul, on the other hand, is spending his vacation in Guatemala, performing eye surgeries on poor children who need care. (Eliana Johnson wrote about the trip here.) As the Washington Post points out, this is not a new thing for the senator-surgeon; on this trip, he saw two patients he’d first treated 15 years ago.

For once, the Washingtonian term “optics” is entirely apt.

Senator Paul will come out of his vacation looking pretty good. Given the political class’s endless appetite for self-serving theater, I found myself wondering why President Obama, Mrs. Clinton, or Vice President Biden did not choose to spend their vacations in a similar way, offering to put their skills and abilities to use on behalf of others. And then I realized that this was a deeply stupid question on my part.

What the hell would they do?

Unlike Senator Paul, neither the president nor the vice president nor the former secretary of state has anything that one might describe as a useful skill. That’s not quite right: They have skills that are useful . . . to themselves. As for skills that are useful to other people — you’d be hard pressed to think of one. If you were a poor family in Guatemala, which would you rather have: the services of a pretty good ophthalmologist, or those of an excellent orator?

Because humans can imagine unicorns – and because so many humans (including humans who fancy themselves to be reality-based) actually enjoy imagining unicorns and assuming that those creatures are real – many humans imagine that orations and fine, expressed intentions, in combination with twitches in voting booths and ceremonies beneath domes in capital cities, can alter reality for the better.  How fun!

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Russ’s EconTalk podcast with economist and environmentalist Terry Anderson is superb….

…. and, on which, see this related EconLog post by David Henderson.

Daniel McCarthy reviews, in the New York Times Book Review, David Bromwich’s new biography of Edmund Burke.  (I’ve always liked Burke, but haven’t read as much of him as I ought to have read.  After reading McCarthy’s review, not only have I ordered Bromwich’s book, but my affection for Burke has increased.  Burke certainly seemed not to possess many of the dubious prejudices and presuppositions that modern American conservatives boast of possessing.)

Guess what?  States in which medical marijuana is legal have lower rates of opioid overdose rates.

Bart Hinkle reflects on the modern “liberals’” fetish for power.

Christopher Conover asks if smoking is irrational.

John Tamny explains that Hillary Clinton is wrong to disparage the warning “Don’t do stupid stuff” as a guide for government officials.

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In this short video, my Mercatus Center colleague (and GMU Econ PhD) Matt Mitchell clearly explains that the Ex-Im Bank and its supporters export myths when they insist that the Ex-Im Bank is a “win-win” for all Americans.

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