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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Thomas Piketty famously references works of fiction to make serious, factual, and revealing points about living standards (in Piketty’s case, the living standards of the upper classes in England and France of 200 years ago).  And while such uses of fictional works can be done well or poorly, I agree with Piketty that these uses are a legitimate means of revealing relevant information and of enhancing our understanding of reality.

Jon Murphy – in this e-mail to me (shared here with his kind permission) – also references a work of fiction to make a serious, factual, and revealing point about living standards (in Jon’s case, the living standards of working-class Americans over the past 25 years):

Hi Don,

FXX has been doing a marathon of every Simpsons episode ever (a 12 day affair).  I’ve been watching it off and on and just thought I’d share with you an observation:

According to the Simpsons, there sure isn’t any stagnation.  The Simpsons, as you know, are a lower middle-class family (they often describe how much they are paycheck to paycheck, sometimes avoiding foods like steak because they can’t afford it).  So, much of what the family owns would be placed in that category.  As I am watching, it is amazing how much the family’s standard of living rises.  In the early 90’s, for example, there is just one car, a big ol’ TV set, etc.  By 2000, the family has 2 cars, and a “regular” TV.  By 2013, they now have a big-screen flat panel TV.  Homer still has the same job (mostly).  Marge is a housewife.  Bart and Lisa and Maggie are still kids, but the Simpsons’ lives are so much better.

But that’s not the only observation:

In one episode that takes place in the late 1990’s (or perhaps early 2000’s.  Not totally sure), Bart gets a girlfriend who is the daughter of a movie star.  She invites him over to watch TV because “You have never seen Itchy and Scratchy until you’ve seen it on DVD!”  Not 14 years ago, DVDs were the exclusive domain of the rich, and yet now they are ubiquitous!

Of course, this is hardly scientific and all kinds of legitimate arguments can be made against these observations, but I just thought I’d share that a family that represents “the average American” sure as shoot aren’t stagnating.

Best,
Jon

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Quotation of the Day…

by Don Boudreaux on August 25, 2014

in Health, Other People's Money

… is from page 299 of Arnold Kling‘s superb 2004 book, Learning Economics:

The fundamental problem is that we believe that health insurance is something that only should be received as a gift – never obtained for oneself.  Thus, we immediately assume that when a family does not have health insurance, they are to be pitied for not having received the gift, rather than being blamed for not having taken responsibility.

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David Henderson, over at EconLog, points us to a new interview with the great monetary and banking economist and historian Dick Timberlake.

Here are Greg Mankiw’s thoughts on tax inversions.  (I agree with much of what he says, but I strongly disagree that “we all have a responsibility to pay what we owe in taxes.”  I pay what I “owe” in taxes not because I have a “responsibility” to do so but, instead, only because government threatens to use violence against me if I don’t pay what it demands.  I stand in the same relation to the tax-gatherer as I stand in relation to any common thug who points a gun, knife, or fist at me demanding my money.  [I actually prefer the common thug, for he neither insults my intelligence by telling me that his predation is for my own good nor spends the money he takes from me to fund schemes to further interfere in my life.]  See on this matter Dwight Lee.)

My Mercatus Center colleague Veronique de Rugy exposes Sen. Elizabeth Warren as a supporter of crony capitalism.

Steven Hayward is not impressed by Amartya Sen’s pious plea for “sustainability.”  (HT Matt Ridley; and I thank Bill Workman for first alerting me to Sen’s essay.)

Here’s a timely reminder from Reason’s Nick Gillespie.

Shameless self-promotion: Open Culture plugs Everyday Economics (which would not be possible without the expert guidance of my former student, Roman Hardgrave).

James Pethokoukis explains why Uber’s hiring of David Plouffe is evidence of a cancer at the heart of the American economy.

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Quotation of the Day…

by Don Boudreaux on August 24, 2014

in Hubris and humility, Reality Is Not Optional

… is from pages 238-239 of Gertrude Himmelfarb’s excellent 1952 biography of Lord Acton, Lord Acton: A Study in Conscience and Politics:​

The great temptation of history to which most men succumbed, it was apparent to many of Acton’s contemporaries, was power.  It had taken the shattering experiences of the French Revolution, the Napoleonic wars and the nationalist revolutions to explode the illusion of the Enlightenment that power itself was ethically neutral, that its potential for good was as great as for bad, that a benevolent despot was the best of all possible rulers.  Henry Adams, Jacob Burckhardt, Francois Guizot, Alexis de Tocqueville, Thomas Carlyle, Henry Maine and Herbert Spencer are the more familiar names chosen from the roster of philosophers, historians and even statesmen who warned that the will to power is insensibly transformed into a will to evil.

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A sure sign that someone is making an argument for a policy that will unjustly pick the pockets of consumers in order to artificially and unjustly inflate the revenues of some producers is that person’s use of the term “level playing field.”  This phrase is almost always a smiley-face mask for a plea for special privileges for certain producers.  (I say “almost always,” although I honestly cannot recall a single instance of the phrase “level playing field” being used in any way other than the way I describe here.  I could easily and truthfully drop the “almost.”)

There are many good arguments against this prevalent protectionist excuse.  (I made some of them in this October 2011 article in Economic Affairs.)  Here, though, I ask some questions while granting, arguendo, the dubious assumption that company B in country X deserves protection against the subsidized competition of companies A and C in country Y: Who, exactly, is morally obliged to supply or to pay for this protection?  Why are consumers or taxpayers in country A obliged to pay to protect company B from the “unfair” competition inflicted on company B by government Y‘s subsidies or other privileges dispensed to companies A and C?

Put differently, even if we unanimously agree that B is unjustly harmed by the actions of Y, it does not at all follow that the parties responsible for paying to protect B from Y‘s predations, or to compensate B for losses suffered as a result of Y‘s predations, are B’s fellow citizens.

For example, let’s grant – again, arguendo – that Boeing is unjustly harmed by special privileges dispensed by foreign governments to Boeing’s foreign competitors.  What theory of morality dictates that an ethical responsibility for rescuing Boeing from this injustice resides with American consumers and taxpayers?  I can think of no such theory.

Let’s say that we are Smith’s neighbors.  If Jones steals Smith’s car, we would all agree that Smith has been unjustly harmed.  But presumably we would all also agree that Smith would inflict unjust harm on us if Smith then hired an armed gang to force us, his neighbors, to recompense him for his loss.  Smith’s protestations that he is forcing us, because we are his neighbors, to give him some of our money only because another wrongdoer – someone from another neighborhood – robbed him of some of his wealth would hardly begin to rise to an ethically acceptable reason for Smith’s aggression against us.  We wouldn’t tolerate such aggression by Smith, and any sympathies we might have had for Smith’s misfortune would immediately turn into justified antipathy toward Smith for his presuming that we, innocent people who happen to be his neighbors, have an obligation – one enforceable by threats of coercion – to protect him from the ill consequences of someone else’s wrongdoing.

….

Again, I do not believe that European-government subsidies to Airbus violate any moral rights of Boeing’s shareholders, workers, or suppliers.  (Such subsidies do violate the moral rights of European citizens, but that’s a different story.)  But even if I were to change my mind and come to regard subsidies to Airbus as a violation of Boeing’s moral rights, it would not at all follow that forcing American citizens to compensate Boeing for its misfortune would itself be moral.  Quite the contrary

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Here are wise words from Sheldon Richman on the tragedy in Ferguson, MO.  A slice:

People rightly decry the obnoxious militarization of even small-town police departments, but the problem is deeper than that. Police forces abused people — particularly black people — long before the Pentagon started giving cities and towns war materiel. Remember those scenes of dogs and firehoses being turned on peaceful civil-rights marchers? A billy club is low-tech, but it can do — and did — much damage. The system has long cultivated an us-versus-them attitude in the police. It’s nothing new, even if the “them” has come to include more people. Police don’t even regard themselves as civilians, as I believe they once did. We are the civilians. They are our watchers keeping us in line. Who doesn’t do a quick self-survey when a police officer approaches? As Steppenwolf sang in its 1969 hit “Monster”: “The police force is watching the people, and the people just can’t understand.”

My Mercatus Center colleagues Veronique de Rugy and Jason Fichtner argue that Uncle Sam still faces a debt crisis.

Chris Preble discusses the deeply lamentable military-interventionist bias of both the Left and the Right.  A slice:

Ironically, many of the same people who are skeptical of government intervention to deal with domestic problems seem to believe that that same government can somehow cure the ills of other nations. This cognitive dissonance reflects what Michael Munger calls a “unicorn” government: “a State that has the properties, motivations, knowledge, and abilities that they can imagine for it.”

Even if the advocates for U.S. military intervention—on both the left and the right—find that magical, mystical state, they must also show that the problem in question can’t be handled by others, or by nonmilitary means. Just because we have the ability to do something doesn’t mean that we should, or must, do it, nor does it mean that military intervention would improve the situation.

Ed Lazear isn’t impressed by today’s job market.

Government restrictions on new local transportation services – services such as Uber and Lyft – are perhaps hazardous to your health – so reports the Washington Post.  (I discovered this report only just now, over at Reason.com.)

Here’s Megan McArdle’s take on ending the so-called ‘war on drugs.

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… is from page 299 of Indur Goklany’s indispensable 2007 volume, The Improving State of the World (footnote excluded):

In addition, the [climate-change] models should allow for society’s adaptive capacity to increase with both the level of economic development and the secular advances in technology.  However, … among the shortcomings of most present-day impacts studies is that although they use emissions scenarios that assume relatively rapid economic growth (and technological change) in the future, their impact estimates frequently do not fully consider increases in society’s adaptive capacity that should occur because of the same increases in economic and technological development.  Consequently, such impact assessments tend to systematically overestimate the net damages (or negative impacts) of climate change.

Goks supplies here yet another reminder of at least two important truths.  First, questions about the economic and environmental effects of climate change are not exclusively (perhaps not even primarily) matters of physical changes in the ‘natural’ environment.  Second, by ignoring economic responses and other realities, climate scientists can and often do concoct, without intending to mislead, objective-seeming but in fact bogus quantitative estimates and dubious qualitative predictions of the effects of climate change.

If a very smart and well-intentioned scientist in, say, 1700 (when the world’s population was about 610 million) predicted that world population in 2014 would be 7.18 billion, I imagine that that scientist, along with most thoughtful people back then, would have also predicted human and environmental calamity.  They likely would have been quite convinced that nearly all of the 7.18 billion people in 2014 would live in poverty unimaginable even to their 1700 minds – that human beings would be crowded by the dozens into each earthen hut – that the earth would be far filthier and more disease-ridden than it was in 1700 – that violence would be far greater and more cruel than on the eve of the 18th century.  Of course, every one of these (admittedly hypothetical) predictions would not only have been wrong; each would have been wildly wrong. Life in the early 21st century is quite the opposite of what would have been predicted just 300 years ago by ‘population-change’ scientists.

We – we ordinary people – are astonishingly richer today; our environments are cleaner; the world is far more peaceful.  These realities are the consequence of the productive creativity of the human mind operating in free societies whose denizens are largely infused with bourgeois ethics.

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Here’s a letter to a new and very active e-mail correspondent who does not at all like the recent Wall Street Journal article by George Mason Econ’s Liya Palagashvili and Rachel Mace on minimum-wage fallacies:

Mr. Peter Willis

Mr. Willis:

Thanks for your series of e-mails.  In the last one you write that you “can’t conceive it possible [that] businesses can’t spare some amount of their profit to pay underpaid workers living wages.”

I disagree.  Firms that employ large numbers of low-skilled workers generally operate in highly competitive industries.  This competition ensures that there are no pools of excess profits lying about to be given gratis to workers.  If you dispute my empirical claim, you should stop reading this letter now and rush out to start your own firm in an industry that you believe enjoys a consistent stream of excess profits.  If you’re correct, you’ll profit handsomely even as you pay your low-skilled workers above-market wages.  (That you’ll not in fact put your money where your mouth is tells me that you can indeed conceive it possible that businesses have no such excess profits.)

Of course, you might mean instead that firm owners and investors should settle for below-market profit rates in order to pay their workers higher wages.  Perhaps.  Economics says nothing about how people should spend their money.  But before you criticize owners of businesses and other investors for what effectively amounts to their not giving some of their earnings as charity to low-skilled workers in their firms, you should start to give some of your earnings as charity to low-skilled workers in your community.  Nothing will stop you from doing so.  Nothing prevents you from practicing what you preach so passionately to business owners and investors.

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

I know that some people object to the argument that tells such minimum-wage proponents to put their own money where their mouths are by starting their own businesses.  I’ve never understood this objection.  We have in such cases people who volunteer that they possess enough detailed knowledge about the current state of business to know that at least some types of businesses are consistently earning excess profits, and that they know this fact with such certainty that they are comfortable in endorsing the use of government coercion based upon their asserted knowledge of business conditions.   Such people cannot then legitimately excuse themselves from actually putting their money on the line to start a business; such people cannot, by refusing to start their own firms, be allowed to get away with this cop-out by pleading that they are innocent of the knowledge, skills, and experience that it takes to successfully start and operate a business.

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