Quotation of the Day…

by Don Boudreaux on July 18, 2014

in Adam Smith, Crony Capitalism, Seen and Unseen

… is from page 135 of my GMU Econ and Mercatus Center colleague Pete Boettke’s excellent 2012 book, Living Economics:

Adam Smith detailed the power of invisible hand processes to channel self-interest into public benefits.  But he also recognized that the hidden hand of the sophistry of the merchants can, in concert with government officials, result in special privileges for a few that undermine the prosperity of the general population.

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Protectionism

by Don Boudreaux on July 17, 2014

in Crony Capitalism, Myths and Fallacies, Trade

Here’s a letter to the Wall Street Journal:

You rightly criticize the U.S. government’s imposition of punitive taxes on Americans who buy steel made outside of America (“Protectionists Steel Washington,” July 17).  Economic arguments of the sort that you make against protectionism are powerful and necessary.  I myself make these arguments repeatedly.  I’ll continue to do so and hope that you will too.

Yet occasionally it’s important to step away from these economic arguments in order to expose protectionism’s immorality.

Protectionism is government intimidation unleashed against consumers to oblige them to buy products that they prefer not to buy.  Protectionism is force that enriches the politically powerful at the expense of the politically impotent.  Protectionism is business people capturing rents from receiving special favors from the state rather than earning profits from giving good service to the public.  Protectionism is the myth that money belongs not to consumers who earned it peacefully but to suppliers who steal it coercively.  Protectionism is the corrupting lie that absurdly and insult​ingly insists that mass flourishing results from monopoly and dearth rather than from competition and abundance.

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

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Bitcoin Girl

by Don Boudreaux on July 17, 2014

in Competition, Complexity & Emergence, Monetary Policy, Video

Naomi Brockwell is Bitcoin Girl:

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Quotation of the Day…

by Don Boudreaux on July 17, 2014

in Civil Society, Inequality

… is from page 5 of the 1987 Liberty Fund edition of Helmut Schoeck’s excellent 1966 volume, Envy:

Most of the achievements which distinguish members of modern, highly developed and diversified societies from members of primitive societies – the development of civilization, in short – are the result of innumerable defeats inflicted on envy, i.e., on man as an envious being.

Yes.  It is, therefore, especially ironic that people who today call themselves “progressives” are especially active in stoking feelings of envy – in elevating this primitive, dangerous, excessively individualistic, and intensely greedy emotion into a basis for public policy.

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Some Links

by Don Boudreaux on July 17, 2014

in Adam Smith, Immigration, Inequality, Myths and Fallacies

Here’s some additional perspective on the ‘burden’ that we Americans would suffer (poor us) if we were, as any civilized people would, to welcome into our country the desperate children on our southern border.  A slice:

Accepting 60,000 children in a population of 317.2 million — less than two hundred-tenths of 1 percent (.02 percent) of our population — would hardly be straining our resources.

Jim Manzi reviews Thomas Piketty’s Capital in the Twenty-First Century.

(I thank Tyler Cowen for pointers to each of the above two links.)

Speaking of Piketty, what would Ludwig von Mises have said in response?  Andrew Wilson explores.  (HT Ross Kaminsky)

John Stossel ponders government’s role in building roads.

Adam Smith’s home – Panmure House – in Edinburgh is being refurbished and preserved.  (My former FEE colleague Nicole Gray Conchar played an instrumental role in ensuring this happy outcome.)

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I Agree: The Horror Is Caused by Government

by Don Boudreaux on July 16, 2014

in Immigration

A reader writes to me:

You appear to be sanguine about the loss of life engendered by the effort to immigrate to the US.  South Texas has become a dying field, as a direct result of the actions or inactions of our federal government (along with the Mexican government, the Honduran government, the Guatemalan govt., etc,. etc.). In my view, the atrocity created by our political leaders is of a piece with the killing fields of Cambodia under the Khmer Rouge, though the numbers might not be quite as great.  You also seem sanguine about the political process necessary to achieve a different result at the border, and appear to verge on a desire for autocracy in place of Constitutional Republican efforts to address the issue.  You seem to avoid assigning responsibility for both (I for one would place most blame on Barack Obama for both his incitement of illegal immigration, and his poisoning of the well politically to ensure that Congress will not be able to work with him to ameliorate the immigration problems and revise the system, although both parties have colluded to produce the current disaster and we the people have elected them–we have no one to blame but ourselves; I tend to agree with your position, but am rather appalled at the seeming political naivety and human indifference you evince).

I emphatically am neither indifferent to, nor sanguine about, the horrors taking place today along the southern U.S. border.  They disgust and sadden me.  These horrors, though, are an artifact of the very political process that anti-immgrationists turn to as the means through which immigration into America is kept restricted.  I assumed that this much is obvious.

The solution to this horrible problem is easy: open the U.S. borders, or at least return to the immigration regime we used until 90 years ago (the one symbolized by Ellis Island).  No quotas; no numerical restrictions of any kind on immigration.

Tourists to America aren’t sneaking north in their quests to spend a few days at Disneyland or to visit cousins in Missouri or Maryland.  Therefore, tourists are not dying in the desert southwest.  Tourists arrive here openly and safely and in relative comfort.  (I say “relative” because the annoyance at passport control adds discomfort to any trip into the U.S. these days.)  The reason is that there are no numerical restrictions or quotas on tourists coming to the U.S.  And so it should be for immigrants.  Get rid of immigration quotas and immigrants would not be suffering and dying as they are today when immigrating to America.  That problem is easy to solve.

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Here’s a letter to U.S. senator Tim Kaine:

Sen. Tim Kaine (D-VA)
Capitol Hill
Washington, DC

Senator Kaine:

In your interview this morning on WTOP Radio you made two claims that must be challenged.

First, the Hobby Lobby decision does not “allow employers to deny women access to certain kinds of contraception.”  Instead, that decision prevents government from forcing employers to pay for employees’ access to certain kinds of contraception.  Hobby Lobby no more gives employers power to deny women access to certain kinds of contraception than would a court decision that prevents government from forcing you to buy me beer give you power to deny me access to certain kinds of libations.

Second, you justify government forcing employers to pay for all manner of contraception by asserting that contraception “is expensive.”  Let’s overlook your neglect of the fact that when employers are forced to pay for fringe benefits they reduce their employees’ non-fringe wages and salaries - and the more expensive the fringes, the greater this reduction in these wages and salaries.  Focus instead on the evidence that you cite for the importance of contraception - namely, the “substantial” (your word) reduction in unwanted pregnancies over the past two decades.  You plausibly attribute this reduction to contraception.  But if contraception for at least two decades now has substantially reduced unwanted pregnancies, how can you say with a straight face that contraception is so expensive that government must force employers to subsidize employees’ access to it?

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

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Quotation of the Day…

by Don Boudreaux on July 16, 2014

in Immigration

… is from pages 152-153 of Philippe Legrain’s excellent 2007 book, Immigrants: Your Country Needs Them (footnotes excluded; link added):

Studies that follow immigrants over time generally conclude that while they might receive a little more than they pay in, their descendants are significant net contributors.  The US national Academy of Sciences found that the average foreign-born resident was a net recipient of $3,000 from government over their lifetime, while their kids were net contributors to the tune of $80,000 each.

And almost certainly the size of the first figure would fall, and that of the latter would rise, if the U.S. government abandoned its many efforts to prevent undocumented immigrants from working, as well as, in many cases, to restrict the range of jobs open even to documented (“legal”) immigrants.

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No Limit on Immigration

by Don Boudreaux on July 15, 2014

in Immigration, Myths and Fallacies

Commenting on this recent Cafe post, John Cunningham asks:

Prof Boudreaux, would you set any upper limit on the number of illegal immigrants to be welcomed in? about 60-70% of this year’s entrants on the southern borders are adults, of 300K or so. as Steve Sailer points out, there are 5 billion people in the world living in countries poorer than Mexico. would you be OK with 30 million immigrants yearly? what about 60 million? do you have an upper limit?

I can’t tell if the question is asked sarcastically or not.  I will assume not.  Either way, though, my answer is that I oppose any upper limit.  None.  I am for open borders.

Many people (I think) imagine that if the U.S. had open borders – or even if we returned only to the immigration regime that we had in, say, 1881 – that the great majority of non-Americans who are poorer than Americans would flood into the U.S. indiscriminately.  Concerns about where to live and whether or not a job was likely to be found would be, apparently, ignored by almost every one of the poor immigrants.  But that’s not how the world works.  (If it were, then the places those poor people would be fleeing from would be so utterly miserable and inhumane that we Americans should be especially eager to help such people by allowing them to live in the U.S.)  Market and social forces – such as relative wages and prices, and job availability – govern immigration patterns just as they govern other economic and social phenomena.

There are no legal limits on the number of people who are allowed to seek residence in Manhattan.  And the U.S. is full of people who are poorer than is the typical resident of Manhattan.  Yet we don’t witness New York City being deluged to the point of inability to cope with immigrants from poor states such as Mississippi, Louisiana, Arkansas, and West Virginia flooding indiscriminately into that city.  Why should we expect to see a different outcome when the borders in question happen to be national as opposed to state or local?

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Bonus Quotation of the Day…

by Don Boudreaux on July 15, 2014

in Civil Society, Nanny State

… is from a July 11th post by Walter Olson at Cato@Liberty:

[W]hen people show contempt for your liberty, it can be a sign that they have contempt for you, too.

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