Some Links

by Don Boudreaux on November 16, 2017

in Books, Politics, Reality Is Not Optional, Seen and Unseen, Taxes

Nancy MacLean’s calamity of book Democracy in Chains did not win the 2017 National Book Award, despite the travesty of it being a finalist in that competition.  Here’s a slice from an essay on this matter by Jibran Khan:

Democracy in Chains, which has been thoroughly debunked by left, right, libertarian, and center, is no good-faith critique. It features fabricated quotes, ellipses to flip the meaning of actual quotes, and invents ‘facts’ out of whole cloth.

George Will is correct: Roy Moore is an embarrassment.

Here are Steve Moore’s thoughts on tax reform.

And here’s my intrepid Mercatus Center colleague Veronique de Rugy on corporate taxes.

My colleague Pete Boettke explains why populists love big government.

Tim Worstall notes the reality of trade-offs.

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Quotation of the Day…

by Don Boudreaux on November 16, 2017

in Growth, Standard of Living

… is from page 209 of David Boaz’s 2015 book, The Libertarian Mind:

Enthusiasts for the market process sometimes refer to “the magic of the marketplace.”  But there’s no magic involved, just the spontaneous order of peaceful, productive people freely interacting, each seeking his own gain but led to cooperate with others in order to achieve it.  It doesn’t happen overnight, but through years and centuries the market process has brought us from a society characterized by backbreaking labor to achieve bare subsistence and an average life expectancy of twenty-five years to today’s truly amazing level of abundance, health, and technology.

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Here’s a hot-off-the-press new paper by Phil Magness, Art Carden, and Vincent Geloso – a paper that further exposes the egregious errors in Nancy MacLean’s absurd and fabulist tale, Democracy in Chains.   The title of the paper is “James M. Buchanan, Public Choice, and the Political Economy of Desgregation.”  Here’s the abstract:

Recent historical works, most notably Democracy in Chains, advance the claim that 1986 Nobel Laureate James M. Buchanan developed his formative contributions to political economy amidst the segregationist response to the Brown v. Board of Education decision. This argument accordingly holds that the research agenda of public choice economics emerged from an opportunistic alliance with Virginia’s “Massive Resistance” to school integration, and should be situated within the racially tinged tradition of southern conservatism. While Buchanan wrote very little on the economics of race, an extensive review of archival evidence as well as his published works conclusively refutes this claimed association. Buchanan’s intellectual associations with Frank Knight, W.H. Hutt, and other economists who worked within anti-racist frameworks suggest that Buchanan did not see anything of value in segregation, even as a political vehicle for advancing his agenda. To the contrary, we show that Buchanan held an antipathetic view of segregation and believed that the competitive processes of an educational voucher system would undermine the “Massive Resistance” status quo. We accordingly reject the primary thesis of Democracy in Chains as the product of unsound and grossly misinformed research, and offer an alternative assessment of the position of race in the origins of public choice theory.

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Quotation of the Day…

by Don Boudreaux on November 15, 2017

in Economics

… is from page 236 of my late Nobel-laureate colleague Jim Buchanan‘s 1985 paper “Political Economy and Social Philosophy,” as this paper is reprinted in Moral Science and Moral Order (2001), Vol. 17 of The Collected Works of James M. Buchanan:

Markets should never have been evaluated primarily and instrumentally for their ability as institutions to maximize pleasure over pain, or indeed to maximize anything else that is interpersonally comparable.

DBx: Yes.  Markets are what emerge when individuals voluntarily exchange with each other.  Markets succeed or not depending upon how well or how poorly they allow individuals to discover and to take advantage of mutually advantageous opportunities for exchange.  Markets are not about money, greed, materialism, or “maximizing social welfare” or “maximizing utility.”  Markets are about exchange, with each opportunity for exchange evaluated by each party, and with each party having the right to refuse to exchange and the right to offer alternative proposals.

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Paid to?

by Don Boudreaux on November 14, 2017

in Media, Myths and Fallacies, Self-deception

Here’s a screenshot of part of an e-mail that I received today from the Niskanen Center.  (And here’s the link that you see there.)

My post here is not about climate science or about Jerry Taylor and the Niskanen Center.  Instead, my post is about this line in this Mother Jones report about Jerry Taylor: “He [Taylor] got paid to go on television to decry the science behind global warming ….”  Later in the Mother Jones story that is there linked, we read that “Taylor is the only known paid skeptic to change his tune.”

Mother Jones‘s writer Nathalie Baptiste here is highly misleading.  She gives the false impression that Jerry Taylor was a mercenary – that he expressed skepticism about climate science simply because he got paid to do so – that his appearances in the media were the results of arrangements in which someone paid him to express skepticism of climate science.

Yet elsewhere in her report, Baptiste acknowledges that Jerry Taylor really was a skeptic of climate science.  Taylor has since changed his mind, and of course there’s absolutely nothing wrong with doing so.  But the less-than-meticulous reader can easily and understandably come away from this report with the impression that Jerry Taylor once expressed skepticism of climate science only because he was paid to do so.  Indeed, it isn’t clear that Baptiste herself really grasps the fact that Tayler changed his mind and that he once really did believe what he said.

Obviously, during his ‘skeptic’ days Jerry Taylor had an income: he worked for, and was paid by, the Cato Institute.  But Cato did not pay him to express opinions that he did not hold.  Cato paid him to research and to share with the public his research and his summaries of that research.  (Leftists don’t understand that paying people to express opinions that those people really don’t hold is a bad investment; a much better investment is to support people who already hold opinions of the sort that you wish to see more widely prevail in society.)

I complain about this style of reporting by Mother Jones because it both reflects and furthers the juvenile narrative on the political left that people who fundamentally disagree with those on the political left are moronic, malevolent, or mercenary – with mercenary being the main go-to explanation for the stated positions of people who, like Jerry Taylor, are obviously not moronic.

With her wording, Baptiste reveals her childish assumption that Taylor said what he said (prior to his change of opinion) only because he was paid to do so.  She inadvertently and unjustly impugns Taylor’s character.

This leftist twitch to assume that eloquent people who disagree with leftists are likely venal mercenaries saying what they say is just that: a thoughtless intellectual twitch with no basis in reality.  (Notice also in her story Baptiste’s reference to the Heartland Institute as “Koch-funded.”)  It’s ironic that those who pride themselves on being especially objective, deep, and profound thinkers simply cannot fathom that the world has no shortage of smart, informed, and well-meaning people who actually and sincerely do disagree with many of the tenets of “Progressivism.”

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Quotation of the Day…

by Don Boudreaux on November 14, 2017

in Reality Is Not Optional

… is from page 14 of Herbert Spencer’s 1891 “Introduction” to A Plea for Liberty (Thomas Mackay, editor, 1891); the page number is to Liberty Fund’s 1981 edition of this collection:

For as fast as the régime of contract is discarded the régime of status is of necessity adopted.  As fast as voluntary co-operation is abandoned compulsory co-operation must be substituted.  Some kind of organization labour must have; and if it is not that which arises by agreement under free competition, it must be that which is imposed by authority.

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Yet More Deficient Analysis

by Don Boudreaux on November 14, 2017

in Balance of Payments, Myths and Fallacies, Trade

Here’s a letter to the Weekly Standard:

Irwin Stelzer’s November 13th essay “There Is Nothing ‘Free’ About Our Trade With China” is chockablock with faulty analysis.  His most egregious error is to imply that something is amiss because the U.S. has with China (quoting Mr. Stelzer) a “$347 billion-and-growing goods trade deficit.”

First, a deficit in the trade of goods is completely insignificant.  Only 20 percent of U.S. private-sector output is goods (as distinct from services) while nearly 50 percent of China’s output is goods.  Therefore, to insinuate that the Chinese are playing some nefarious game by selling to Americans more goods than Americans sell to the Chinese makes no more sense than to insinuate that, say, tailors are playing some nefarious game by selling more goods to cardiologists than cardiologists sell to tailors.

Second, also completely insignificant is any bilateral trade (or current-account) deficit, such as America’s deficit with China.  Nothing in economic theory or logic suggests that economic entity A should sell to economic entity B the same amount that economic entity B sells to economic entity A.  Do you sell to your grocer the same amount that your grocer sells to you?  Do you buy an amount of goods or services from your employer equal in value to the labor services that your employer buys from you?  Of course not.  Such ‘balanced’ economic outcomes would, to say the least, be bizarre.  For the same reason, there is simply no reason to expect that in this world of ours of 195 countries that any pair of them will have ‘balanced’ trade with each other.

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

…..

It’s understandable for a non-economist to suffer from the confusion that Stelzer suffers from here.  But Stelzer is an economist.  He should know better.

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Quotation of the Day…

by Don Boudreaux on November 13, 2017

in Education

… is from page 232 of Randy Simmons’s 2011 Revised Edition of his and the late William Mitchell’s excellent 1994 volume, Beyond Politics:

Creating government schools violates basic principles of economics.  First, it violates the notion of consumer sovereignty.  Parents are told where their children are to go to school, what the curriculum will be, how many days the child must attend school each year, and which holidays will be observed.  The unit of society patronized by government is the school, not the consumers of education.  Schooling may be “free” but parents are not free to choose.

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Some Links

by Don Boudreaux on November 13, 2017

in Balance of Payments, Crony Capitalism, Inequality, Politics, Regulation, Trade

GMU Econ doctoral candidate Jon Murphy expands nicely upon one of my criticisms of Ian Fletcher’s stated reasons for denying the reality that trade deficits can be – and typically are – good for Americans.

Sheldon Richman explains that free markets reduce consumption inequality.

Also from Sheldon Richman is this gem of a warning against government efforts to protect us from misinformation.  A slice:

To grow up is to cultivate methods of separating the wheat from the chaff in what we see and hear. Early on we learn to discount—if not disbelieve—the claims we hear in television commercials because we understand the role interest plays in describing goods and services. We also learn (one hopes) to treat the claims of politicians, the traditional targets of American ridicule, the same way.

There is no substitute for this sort of skepticism; it’s is a sign of maturity. A government effort to protect us from misinformation in the name of preserving “our democratic institutions” would be a contradiction, not to mention a “cure” far worse than the alleged disease. The best protection against one-sided, erroneous, even dishonest assertions is competition, the universal solvent.

My Mercatus Center colleagues Patrick McLaughlin, Matt Mitchell, and Anne Philpot investigate the anticompetitive consequences of occupational-licensing requirements.  A slice:

Occupational licensing is ostensibly intended to protect the public from unsafe and low-quality service, but there is little evidence this intention is realized. Rather, there is a growing consensus among economists that these rules serve to protect incumbent providers from competition by creating barriers for new entrants that lead to higher prices for consumers.

Mark Perry reveals the cronyist nature of Delta Airlines’s pleas for protection from foreign competition.

Bob Higgs gets to the bottom of political corruption.

Also from Bob Higgs is this insight that he shared on his Facebook page:

Many Americans insist on “reciprocity” — that U.S. tariffs and other import restrictions and export subsidies should be removed only if other governments remove theirs. Why stop at trade? The same logic can be extended indefinitely. For example, U.S. cops should not stop murdering residents of the USA until cops in other countries stop murdering people there.

Tom Firey tells a Trumpian trade parable.

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Mark Perry used data to construct this revealing graph that makes a point very much like one of the points that I made in my debate last week at Hillsdale College with Ian Fletcher – namely, a rising U.S. trade deficit U.S. capital-inflow surplus does not mean that Americans are losing net wealth.  Quite the opposite, as reality turns out.

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