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Quotation of the Day…

… is from paragraph 3, Book 1 of Aristotle’s Nicomachean Ethics:

[I]t is the mark of an educated man to look for precision in each class of things just so far as the nature of the subject admits; it is evidently equally foolish to accept probable reasoning from a mathematician and to demand from a rhetorician scientific proofs.

DBx: It is likewise foolish to demand of an economist involved in public-policy discussions – or, indeed, of anyone who analyzes and proposes government policies – absolute assurance of any specific outcome. Society is simply too complex to permit any such assurances.

I welcome the freshmen and sophomores who challenge me in class with “What ifs?”. “What if this?” “What if that?” Testing the range of the possible is part of what sound thinking and good education do. But a far more important role of sound thinking and of education is to instill and cultivate the good sense to know the difference between possible and plausible, and between plausible and probable. Almost everything that is possible will never occur. As a practical matter, then, when discussing the operation of markets and of government interventions, pointing out that which merely possible is, at best, pointless.

Jim Buchanan (among others) emphasized throughout his life’s work the fact that social processes and government policies are best governed by rules rather than by moment-to-moment and instance-to-instance decision-making. Armed robbery is proscribed by a rule because, as a rule (!), the benefits that it yields to those who commit it are less than the costs to others. This rule – all agree – is sound and is not made less sound when a clever graduate student describes a theoretically possible set of circumstances under which armed robbery yields net benefits to society.

The same wisdom that nearly everyone has about the need for rules to proscribe coercive aggressions such as armed robbery, arson, and rape is largely absent when it comes to government policies. The rule that protective tariffs make most affected citizens of the government imposing such tariffs worse off is a rule as firmly established in theory and in historical fact as any in all of economics. As a rule it is rock-solid. Yet let some arid pedagogue or some politician or pundit carrying water for a special-interest group describe a bizarre scenario under which a protective tariff set just right will yield net benefits, and lots of people become enchanted by this sophistry.

The case for free trade is not that theoretical exceptions to it do not exist or cannot be imagined. Of course such exceptions exist; indeed, they are too many to count. But none of them is remotely plausible in reality and, much less, probable.