Quotation of the Day…

by Don Boudreaux on September 18, 2016

in Complexity & Emergence, Hubris and humility, War

… is from pages 215-216 of the 2016 re-issue of my late colleague Don Lavoie’s superb 1985 volume National Economic Planning: What Is Left?:

The libertarian Left was opposed to the intervention by any government into the lives of anyone, domestic or foreign.  Thus, it combined an adamant opposition to international interventionism with an equally adamant aversion to domestic economic intervention into the market process.  Unrestrained trade and migration, domestically and internationally, are, they understood, perfectly compatible with economic and cultural development.  Noninterventionism at home and abroad was the consistent principle of the radical liberals.  Any ambition to plan society’s development was rejected as nothing more than a return to the society of status, power, and privilege.

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Here’s a passage from pages 84-85 of Arnold Kling’s hot-off-the-press – and superb – new book, Specialization and Trade: A Re-introduction to Economics:

Many people believe intuitively that it saves resources to “buy local.”  Surely, we think, cheese and vegetables from a local farm must save on the energy required for transportation.  However, if the grocery store sells cheaper produce that comes from hundreds of miles away, some factor must offset the higher transportation costs.  Chances are, the land elsewhere is more suited to growing crops, so that fewer acres are used to produce a given amount of output.  The local land might be better used for housing or as wilderness.

Water or other resources may be used more heavily locally than on distant farms.  Whenever produce from distant farms is cheaper than locally grown produce, the price system is telling us that “buying local” wastes resources.

Some of my friends respond to the above argument by insisting that the case for buying local rests on the fact that locally grown and locally butchered foods taste better than, or are more nutritious than, ‘distantly’ grown and slaughtered foods.  This fact might well be true; indeed, I’m sure that it’s true in some cases.  And when it is true, it makes economic sense for someone to pay the higher prices for these tastier and more nutritious local foods if that someone values the better taste or higher nutrition by more than he or she values whatever it is that he or she gives up by spending more money on these local foods.

I myself, for example, typically pay a premium for better tasting foods and wines.

But this case for buying local is misleading, for at least two reasons.

First, this case is not really one for “buying local”; instead, it’s a case for “buying tastier” or “buying healthier.”  Why conflate one’s understandable desire for better taste and better nutrition with a desire to buy local?  “Buy tastier” or “buy healthier” fully capture the goal of the consumer.  Calling it “buy local” only confuses the issue.

It won’t do to respond that “buy local” is nevertheless a good goal and guide because the taste and nutritional quality of locally grown and slaughtered foods are so generally superior to ‘distantly’ grown and slaughtered foods that “buy local” suffices to describe an economically sensible action.  This response would be true only if its premise were true.  But the premise – namely, that locally grown and slaughtered foods typically taste better than, or are more nutritious than, ‘distantly’ grown and slaughtered food – strikes me as false.  Locally grown corn, tomatoes, eggplant, and strawberries are, to my taste, often better than ones bought from supermarkets.  But are locally grown bell peppers, chili peppers, pineapples, apples, oranges, ornamental pumpkins, cherries, peaches, cranberries, cauliflower, broccoli, and onions better than ‘distantly’ grown ones?  If so, my taste buds are too incompetent to detect this difference when they’ve tried.  (In some cases, they’ve never tried: living all my life east of the Mississippi,* but never in Florida, I’ve never tasted a locally grown – as in, for example, a Louisiana or Virginia grown – orange or pineapple.)

Likewise, my taste buds detect no difference between high-quality ‘distant’ meats and fish bought at supermarkets and ‘local’ meats and fish bought at farmers’ markets.

Second, and according to the logic of the environmentalist creed that often is inextricably intertwined with the buy-local movement, to buy local because locally produced foods taste better is to selfishly damage the environment.  The lower prices of ‘distantly’ grown foods sold in supermarkets mean that their production and distribution consumes fewer resources than do their locally grown alternatives.  That is, supplying these lower-priced ‘distantly’ grown foods is better for the environment than is supplying their locally grown alternatives.  Because of this fact, environmentalists should condemn as greedy, thoughtless, and environmentally careless anyone who pays a premium for foods simply because such foods taste better!

Please understand that I don’t share this typical environmentalist arrogance: if you so value the better taste of some locally grown kumquat or a locally slaughtered pig over the tastes of their ‘distantly’ supplied alternatives, the fact that more resources are required to produce these tastier local foods does not mean that such resource use is wasteful or otherwise to be condemned.  But the (il)logic and arrogance that is at the heart of the typical modern environmentalist’s assessment of food production and distribution should lead these environmentalists to be in the front lines of those who criticize people who, simply for taste reasons, buy higher-priced local foods.

….

I remind readers that the single best book on the many myths and illogical turns of reasoning of the ‘buy local’ movement is Pierre Desrochers and Hiroko Shimizu 2012 volume, The Locavore’s Dilemma.

…..

* Well, technically, from the ages of 4 to 22 I lived practically on the western bank of the Mississippi – in Jefferson Parish, immediately across the river from New Orleans.  It was only about about three miles from being east of the Mississippi.  So close enough.

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My GMU Econ colleague Bryan Caplan rightly sings the praises of my GMU Econ colleague Dan Klein.

Here’s George Selgin again on the great Richard Timberlake’s book Constitutional Money: A Review of the Supreme Court’s Monetary Decisions.

My Mercatus Center colleague Dan Griswold reports on one of many instances of costly cronyism buoyed by widespread ignorance of the nature of international trade.

Bryan Riley explains how Americans benefit from trade.  A slice:

We know how to increase farm jobs—just outlaw tractors. And we know how to increase manufacturing jobs—just require everyone to work with one hand tied behind his back.

Alan Reynolds corrects David Autor, et al.’s, finding on the number of jobs allegedly lost in America due to trade with China.

Paul Rahe helps to deflate the overinflated myth of Woodrow Wilson’s goodness.

Kevin Grier pleads for divided government.

Ron Bailey – with insights from Leda Cosmides, John Tooby, and Jonathan Haidt – concludes that

Our evolved psychological programs may more readily succumb to romantic socialism, but as Cosmides, Tooby, and Haidt remind us, there are other brain apps that can turn humanity toward liberty and prosperity. Let’s figure out how to activate them more frequently and to use them better.

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Quotation of the Day…

by Don Boudreaux on September 17, 2016

in History, Legal Issues

is from Randy Barnett’s interview earlier this year with Nick Gillespie; here’s Randy:

Well, the Declaration was the founding document of the country.  Then we had the Articles of Confederation and then we had the Constitution.  We had two different forms of government here since we separated from Great Britain, but the reason why I appeal to the Declaration [in my new book] is because I’m trying to show that this individual conception of We the People has as long a heritage as the democratic or majoritarian one, the one that We the People as a group and you see it in the Declaration.  It is to secure these pre-existing rights that governments are instituted among men.

If you take that view, then it’s not so much that We the People govern.  That’s not what popular sovereignty means.  Popular sovereignty means that it’s the rights of the individual person that needs to be protected by government and then the people control or they limit government, but government is not the same as us.  They’re a small subset of us.  They’re the governors and the reason we have a Constitution is to provide the law that governs them.

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… is from pages vii-viii of Arnold Kling’s hot-off-the-press new book, Specialization and Trade: A Re-introduction to Economics (footnotes deleted; link added; original emphasis):

Early in 2015, I came across a volume of essays edited by E. Roy Weintraub titled MIT and the Transformation of American Economics.  After digesting the essays, I thought to myself, “So that’s how it all went wrong.”

Let me hasten to mention that my own doctorate in economics, which I obtained in 1980, comes from MIT.  Also, the writers of Weintraub’s book are generally laudatory toward MIT and its influence.

Yet I have come to believe in the wake of the MIT transformation, which began soon after World War II, that economists have lost the art of critical thinking.  The critical thinker always asks, “How do you know that?”  The MIT approach suppresses that question and instead presumes that economic researchers and policymakers are capable of obtaining knowledge that in reality is beyond their grasp.  That is particularly the case in the field known as macroeconomics, whose practitioners claim to know how to manage the overall levels of output and employment in the economy.

Arnold goes on, in the Acknowledgements, to say that he has “been influenced at a distance by several members of the faculty at George Mason University” – including Pete Boettke, Tyler Cowen, and Garett Jones.

And we at GMU Econ have been – and continue to be – influenced by Arnold’s writings.

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Quotation of the Day…

by Don Boudreaux on September 16, 2016

in Balance of Payments, Seen and Unseen

… is from page 93 of the 1990 Transaction Publishers reprint of W.H. Hutt‘s 1936 book, Economists and the Public:

The  terms ‘safeguarding’, ‘bounties’, ‘favourable trade balance’, ‘rationalization’, ‘co-operation’, ‘planning’, ‘co-ordination’, are examples of the expression of power-thought in the form of euphemisms, of the attempt to convince the popular mind that protection is  not protection and monopoly not monopoly.

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Politicians and Nigerian Princes

by Don Boudreaux on September 15, 2016

in Myths and Fallacies

In 2016 it is, of course, common knowledge that anyone who trusts e-mail messages promising wealth from Nigerian princes is a complete fool.  So why in 2016 is it not knowledge equally as common that anyone who trusts political messages promising wealth from politicians is no less a fool?  After all, the public pronouncements and prognostications of politicians are just as absurd and unbelievable as are the e-mail pronouncements and prognostications of the alleged representatives of Nigerian princes.

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Commenting on this post – in reply to an earlier comment (at the same post) by GMU Econ student Jon Murphy – Ronald Warrick writes:

Jon Murphy: Relying solely on market operations and incentives would appear to reduce poverty by killing off poor people. I think that is cheating a bit, don’t you?

Mr. Warrick’s comment (assuming that it is not offered in jest) displays deep ignorance of history.  Forget, here, the fact that no force in history has done as much for the poor as have market operations and incentives.  Nothing comes close.  Read McCloskey.  Read Hartwell.  Read Ashton.  Read Mokyr.  Read Deaton.  Read Phelps.  Read even Braudel or Marx & Engels.

Instead – and because the Cafe Hayek post that spawned Mr. Warrick’s comment is on minimum wages – focus on the reality that the original impetus for minimum wages in the United States and Great Britain came from late-19th and early 20th century “Progressives” who proposed minimum wages as means of pricing ‘undesirables’ out of the labor market and, hence, from working and, in turn, surviving independently to have and to rear children.  Read Leonard.

The same racist and anti-‘undesirable’ attitude sparked South Africa’s minimum wage.

As pointed out often by those of us who are familiar with the history of minimum wages and who know the economics of this policy, these “Progressive” (and pro-apartheid) scoundrels got their economics right: they correctly understood that the ability to compete for jobs on the basis of wages was, for ‘undesirable’ workers, a key means of getting into the workforce and then being able to move up through its ranks.  It is precisely because competitive market forces were understood to befriend ‘undesirables’ – who were, overwhelmingly, also poor – that “Progressive” (and pro-apartheid) scoundrels supported minimum wages.

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Quotation of the Day…

by Don Boudreaux on September 15, 2016

in Myths and Fallacies, Reality Is Not Optional, War

… is from page 4 of chapter 3 of the manuscript of Perfecting Tyranny: Foreign Intervention and the Loss of Liberty at Home – a superb and important forthcoming book by my colleague Chris Coyne and University of Tampa economist (and GMU Econ alum) Abby Hall-Blanco:

It is naïve and simplistic to assume that the national-security state is comprised of passive personnel who sit idly by waiting to respond in a public-spirited manner to only genuine external threats to domestic citizens.  Instead, those who work for the security state have an incentive to intentionally create and exploit fear to secure the associated benefits.

Of course.

I will never understand the typical modern American conservative: he or she maturely grasps the reality that bureaucrats who work for agencies such as the Department of Agriculture and the Department of Education are prone to greedily expand their powers in ways that undermine the public interest, but this same conservative has a childlike faith that bureaucrats who work for agencies such as the Department of Defense and the NSA are faithful, self-sacrificing, and trustworthy public servants.  It’s a downright inexplicable contradiction.

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I just discovered that I likely have never posted (until now) this 2011 video, produced by The Fund for American Studies, and featuring SMU economist Mike Cox – who is, and has long been, an effective scholar and eloquent voice at debunking the myth of middle-class stagnation.  Enjoy!

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