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Writing about Joe Biden, Bruce Yandle explains that “no amount of experience can solve the ‘knowledge problem.'” [2] A slice:
We all recognize that a person who’s lived 80 years will have had more life experiences than one who has trod the planet for 70, 60 or 50 years. And it’s easy to see that Mr. Biden, who has devoted his entire adult life to politics, is armed with countless stories and lessons learned about the nation’s political economy. But granting this does not support the idea that Biden knows more than the vast majority of us, all topics considered. Nor does any of this matter much if his administration consistently fails to account for the vast majority of the people’s knowledge taken together.
As one who will turn 90 in a few months, I’m more inclined to think that life’s experiences make us realize how little we really know about the way the world works. Yes, we may excel at Trivial Pursuit over time, but I sympathize more with the character Ernest in J. M. Barrie’s comic play [3] The Admirable Crichton. When asked to explain why he’s unaware of some important events, Ernest responds: “I am not young enough to know everything.” Anyone calling on a great grandson to help set up a new smartphone can relate.
Biden’s comment raises fundamental questions about what type of knowledge we need from a president. Writing in the 1940s, Friedrich Hayek penned what became a classic article [4]: “The Use of Knowledge in Society.” Hayek, who later received the Nobel Prize in economics, explained that human communities face a severe knowledge problem; knowledge is dispersed across countless individuals, each of whom knows more about his particular circumstances than can anyone else.
The point is simple, but profound: Neither Biden nor any other person has sufficient knowledge of material extraction, refining, manufacturing, transport, and on and on, to make an automobile tire, ballpoint pen, or even a paperclip from scratch. I emphasize “from scratch,” a point made famous by Leonard Read in his 1958 essay [5], “I, Pencil.” Anyone creating even so simple a product must find ways to tap into humanity’s collective knowledge. Cooperation, interaction, and trade across a vast number of people is required. Not even a presidential administration can duplicate the efforts of so many involved players, or even know who every player is.
My intrepid Mercatus Center colleague Veronique de Rugy wonders why so many conservatives are infatuated with “common good capitalism.” [6] Three slices:
“Common-good capitalism” is all the rage these days with national conservatives. But what exactly is it, you may ask? That’s a good question. As far as I can tell, it’s a lovely sounding name for imposing one’s preferred economic and social policies on Americans while pretending to be “improving” capitalism. If common-good capitalism’s criticisms of the free-market and prescriptions for its improvement were ice cream, it would be identical in all but its serving container to what much of the Left has been dishing up for decades.
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For instance, common-good advocates’ complaints about no-prefix capitalism often include excessive income inequality caused by greedy, cosmopolitan capitalists who heartlessly offshore jobs to low-wage foreign countries, or gripes about corporations somehow simultaneously charging monopolistically high prices that hurt consumers and low prices that threaten small firms and damage local communities. I wouldn’t blame you if you thought these complaints were coming from the likes of Sens. Bernie Sanders and Elizabeth Warren.
While I don’t dismiss some of their complaints about the underperformance of the economy — specifically the hardships suffered by some workers and families — common-good capitalists make the same mistakes as their counterparts on the Left. They start by mistaking problems caused by government intervention for problems inherent in the free market. They end by offering up even more government interventions as supposed solutions.
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At every turn, common-good capitalism implies a greater role for government in regulating and directing the market to achieve the fancies of common-good capitalists. Who truly believes that such interventions won’t result in more inefficiency, corruption and political capture by special interests? I don’t. I also worry that common-good capitalists won’t be interested in balancing the rights and the freedoms of those persons who disagree with their economic and social designs.
Kevin Corcoran aptly summarizes a main theme of Randy Holcombe’s new book, Following Their Leaders [7]. A slice:
Holcombe argues that voters have both instrumental preferences, which are about the outcomes they prefer, and expressive preferences, which are about what voters prefer to express. But expressive preferences and instrumental preferences are not always the same. Since casting a vote does not create an outcome, voters will tend to act expressively, not instrumentally [8], when casting their vote. Because elections aggregate expressive preferences, not instrumental preferences, we cannot make valid inferences about the outcomes voters actually prefer by referencing election results. Additionally, voter preferences tend to be anchored on a key point [9] – a single issue, a political identity, party loyalty, a particular leader – and the vast majority of a given voter’s preference on political issues will be derived from that anchor. Someone may anchor on the identity of being a patriotic American, decide that the Republican party values patriotism more, and will then tend to adopt whatever the Republican party line is for most political issues – and if the official party line changes, they will change their opinion right along with it.
Gary Galles is not impressed with arguments made in favor of legislation to shorten the work week [10]. A slice:
[Rep. Mark] Takano starts, however, from an often-repeated false premise [11]: “For decades, workers have been working longer hours while productivity has skyrocketed — yet, in that same period, wages have remained stagnant.” Craig Duddy, after a useful discussion [12] of several of the reasons why, summarized it very differently: “Thus, after accounting for as many relevant factors as possible, there exists little to no gap between total compensation and productivity.” And a false premise cannot logically justify what might follow if it were true.
That doesn’t stop the proposal’s supporters, however. They simply echo the false premise, then conclude, as did Rep. Pramila Jayapal [13] (D-WA), a co-sponsor who is Chair of the Congressional Progressive Caucus, that it conclusively demonstrates that “For too long, our country has prioritized corporate profits over working people and Americans have been forced to work longer hours, sacrificing time with loved ones.”
Such a conclusion, however, ignores the fact that compensation for increased productivity can be taken as either higher income or increased leisure, and workers are already free to seek whichever combination of hours and pay they value more. No legal coercion is necessary. All that is necessary is mutual agreement between employer and employee.
Some companies have tested a four-day workweek and have decided to switch, which supporters overgeneralize to imply that all workers would gain from mandating it. But those firms which have chosen to try it were not a random sample. They were those that faced circumstances where it was most likely to work well. So the generalization does not follow, because if employers and employees thought they would benefit from a 32-hour work week, there is no law preventing them from advancing their interests by doing so. If they do not choose that option, they reveal that they believe it would worsen their circumstances.
Here’s John Stossel on Vivek Ramaswamy [14].
George Will rightly criticizes the U.S. Supreme Court’s recent National Pork Producers Council ruling [15]. Here’s his conclusion:
Last week, the court ratified California’s itch to export the progressivism — the moralistic micromanaging of life — that partly explains the state’s accelerating export of residents. Eventually, the court should acknowledge that James Madison was, as usual, right: The practice of states restricting commerce with other states is “adverse to the spirit of the Union, and tends to beget retaliatory regulations [16].” And it violates Madison’s Constitution [17], which was written in part to prevent this.
In response to someone – someone obviously still suffering from Covid Derangement Syndrome – who claims to have “lockdown nostalgia,” Allison Pearson tweets [18]: (HT Jay Bhattacharya [19])
Nostalgia? What a thoughtless, idiotic view.
Lockdown caused immense harm, especially to children.
A million kids on waiting list for mental health services.
Children were murdered by psycho parents because of lockdown.
Nostalgia that.