… is from page 132 of my late Nobel-laureate colleague James Buchanan’s 1991 paper (co-authored with Viktor Vanberg) “Constitutional Choice, Rational Ignorance and the Limits of Reason,” as this paper is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan (footnote deleted):

One of the most familiar principles in Public Choice is the rational ignorance hypothesis, which states that in large electoral constituencies it is privately rational for a single voter to remain ignorant about the alternatives of collective choice because of the negligible influence of his or her own vote on the outcome.

DBx: It is a ceaseless source of mystery to me why so many mainstream economists bend over backwards to find alleged instances of market failure – often when no such failure really exists – but remain completely oblivious to sources of very real political failure, such as the one described above by Vanberg and Buchanan.

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Heres a very, very brief case – by David Friedman – against relying upon the state to make “law”:

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In the October 17th, 2006, edition of the Christian Science Monitor, I had an op-ed – reproduced here below the fold – on why declaring health-care to be a human right will backfire for those who want high-quality health-care to be more abundant and affordable.

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… is from page 132 of my colleague Bryan Caplan’s remarkable 2007 volume, The Myth of the Rational Voter (original emphasis):

Since delusional political beliefs are free, the voter consumes until he reaches his “satiation point,” believing whatever makes him feel best. When a person puts on his voting hat, he does not have to give up practical efficacy in exchange for self-image, because he has no practical efficacy to give up in the first place.

DBx: Holding a political belief generally has no material cost for the individual who holds it. His or her own actions, alone, will never determine the outcome of any political election and will exert an effect on society’s norms that is imperceptible to him or her. So the assistant professor who feels good about himself because he supports minimum-wage legislation as a means of reducing inequality, or the retiree who is convinced that a greater abundance of imports means less prosperity for the people of his country, can continue to cling to such a belief without ever personally paying any real price for holding and clinging to it. This reality, of course, is true for all beliefs, be they ones that you judge to be sound or ones that you judge to be utterly wacky.

Politics – by so thoroughly uncoupling the holding of particular beliefs from the actual consequences of putting those beliefs into action – is a source of what Bryan Caplan correctly calls “rational irrationality.”

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Bonus Quotation of the Day…

by Don Boudreaux on May 16, 2018

in Trade

… is from page 75 of Richard Epstein’s monumental 1985 volume, Takings (footnote excluded):

Any restriction that in form restricts only disposition by the owner perforce limits the rights of others to acquire property in exchange for their cash, property, and perhaps labor.

DBx: Exchange – trade – is by nature two-sided. Governments typically peddle their trade obstructions to the general public as obstructions imposed only on some demonized party, such as “foreigners.” But in fact any obstruction on a seller to sell is necessarily also an obstruction on a buyer to buy.

Americans who cheer – or who even tolerate – Uncle Sam obstructing non-Americans’ abilities to sell goods and services to Americans are unwittingly cheering (or at least tolerating) Uncle Sam’s obstructions on Americans’ abilities to buy goods and services.

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My intrepid Mercatus Center colleague Veronique de Rugy rightly fears the administrative state.

Speaking of the administrative state, Russ Roberts’s latest EconTalk podcast is with my colleague Pete Boettke.

Nick Gillespie explains that Trump’s restrictionist policies hurt immigrants and Americans.

Pierre Lemieux celebrates the beauty of trade. Here’s his conclusion:

The reason for the beauty of trade lies in its bringing utility to the individuals involved and, in the long run, to most if not all individuals in society. Even monks benefit from trade. At any rate, there is no way to know if a poor of today would have been happier in a pre-modern economy; he might as well have been a serf. As [John] Hicks says, “So long as the trade is voluntary, it must confer an All-round Advantage.” This applies to trade over political borders as much as within them–if not more, for international trade also reduces the power of national leviathans.

John Cochrane is rightly grumpy with those who want the same institution that runs the California DMV to run health care.

In this excellent video produced by Maxim Lott, John Stossel exposes the toxic mix of arrogance and economic ignorance of Seattle’s government officials.

Jeff Tucker distinguishes wisely society from state.

Aeon Skoble argues persuasively that ride-sharing services diminish rather than enhance problems.

It’s too bad that the Washington Post did not run this superb letter by Walter Olson.

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In the November 2nd, 2007, edition of the Christian Science Monitor I got uncharacteristically consultant-like. My op-ed is below the fold.

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… is from page 139 of the original edition of Robert Schuettinger’s 1979 book, Forty Centuries of Wage & Price Controls:

When prices are manipulated [by government diktats], however, these “signals” indicating relative scarcity cannot be detected. It becomes impossible to distinguish real signals from artificial, manipulated one. Shortages become common because firms are not induced by higher profitability to expand their supply. Black markets emerge to meet the demands of customers who would otherwise have to suffer long delays on the delivery of commodities at the controlled price. Firms that would be fully profitable under a freely-adjusting price mechanism are squeezed out of production or are not induced to enter artificially depressed prices.

DBx: Economic reality is not optional. Government-imposed price ceilings and price floors – although believed by those who view prices as arbitrary results of bargaining or of “power” relationships as merely changing the distribution of economic gain or pain – distort people’s view of economic reality. Price controls prevent people as consumers (including as employers of workers) and as producers (including as workers) from seeing economic reality as clearly as possible. Blinded by minimum-wage commands and other price controls, people act in ways that are the opposite of the ways that those who support the price controls ostensibly want people to act. Rent control, for example, prompts landlords and potential landlords to offer fewer rental units on the market. Minimum-wage commands lead employers to employ fewer low-skilled workers.

Non- (and poor) economists, seeing only that which is in front of their noses, observe the government-controlled prices and conclude that the results of these controls must be just what the government publicly proclaims it wishes these results to be. “Look! Rents are lower with rent controls! Wages are higher with minimum wages! We have helped the poor!

Those who fall for such superficial appearances, of course, do not grasp the nature of market forces and the role of prices. But the naiveté of such people runs much deeper: they are the sort of people who believe that if the messenger is forced to lie, the underlying reality changes, with the lie thereby converted into truth.  Such people, in other words, believe in miracles. They believe that state officials performing incantations can miraculously change economic reality.

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… is from pages 52-53 of historian William Manchester’s gripping 1992 book, A World Lit Only by Fire; here, Manchester describes the home of a typical “prosperous peasant” in 16th-century Europe (ellipses original to Manchester):

Lying at the end of a narrow, muddy lane, his rambling edifice of thatch, wattles, mud, and dirty brown wood was almost obscured by a towering dung heap in what, without it, would have been the front yard. The building was large, for it was more than a dwelling. Beneath its sagging roof were a pigpen, a henhouse, cattle sheds, corncribs, straw and hay, and, last and least, the family’s apartment, actually a single room whose walls and timbers were coated with soot. According to Erasmus, who examined such huts, “almost all the floors are of clay and rushes from the marshes, so carelessly renewed that the foundation sometimes remains for twenty years, harboring, there below, spittle and vomit and wine of dogs and men, beer … remnants of fishes, and other filth unnameable. Hence, with the change of weather, a vapor exhales which in my judgment is far from wholesome.”

The centerpiece of the room was a gigantic bedstead, piled high with straw pallets, all seething with vermin. Everyone slept there, regardless of age or gender – grandparents, parents, children, grandchildren, and hens and pigs – and if a couple chose to enjoy intimacy, the others were aware of every movement. In summer they could even watch. If a stranger was staying the night, hospitality required that he be invited to make “one more” on the familial mattress.

DBx: Remember the above when you next read a tweet from a 20-year-old undergraduate – or hear a diatribe from an octogenarian socialist – asserting that “capitalism isn’t working.”

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Quotation of the Day…

by Don Boudreaux on May 15, 2018

in Politics

… is from pages 283-284 of the 1997 Johns Hopkins University Press edition of H.L. Mencken’s indispensable 1956 collection, Minority Report:

According to American theory, all power is in the hands of the plain people, and according to American legend they always exercise it wisely. The theory, of course, is almost as absurd as the legend. The plain people, in fact, can only exert their power through agents, and in the election of those agents they seldom face a clear choice between a good candidate and a bad one, or a wise idea and a foolish one. In the normal case both candidates are frauds and both ideas are idiotic.

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