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On the Relevance of Economics

Here’s a letter to a frequent but unsympathetic correspondent:

Mr. S__:

Thanks for your e-mail triggered by the post in which I argue that job satisfaction and other non-monetary aspects of employment are scarce and, hence, must be economized upon.

Identifying yourself as “supportive of common good capitalism,” you write: “The emotional connections which many workers have to jobs they held for years, like the spiritual connections ordinary people have to their local communities and culture, are not things which can be valued economically. These things are above and outside of the narrow calculations that economists busy themselves with…. Protecting workers and communities from the wreckage caused by globalization is not about economics, it’s about human values which economics is blind to.”

With respect, I couldn’t disagree more.

The post of mine to which you object simply points out that if something is scarce, economics has something to say about it. If something is scarce, that something is not available without the sacrifice of something else of value. It follows that the value of what’s sacrificed might well be greater than is the value of what’s gained through the sacrifice. The sacrifice, thus, might not be worthwhile.

By your own admission the non-monetary aspects of employment are scarce, otherwise they would not be, as you assert, under threat from globalization. Being scarce, therefore, means that if government protects particular workers from suffering losses of non-monetary aspects of particular jobs, something else of value is sacrificed. Someone must pay. This reality, although perhaps unwelcome, is one that economics reveals – and reveals to be inescapable. The jobs that you and other “common good capitalists” wish the government to protect will be paid for by forcibly extracting resources from these workers’ fellow citizens.

It will not do simply to assume that the value of the non-monetary aspects of jobs that are protected from import competition is necessarily always greater than is the cost of achieving this protection. Any such assumption must be supported with argument and evidence. But as I read the works of Oren Cass and other “common good capitalists” who make the argument that you here endorse, I find no such arguments or evidence. Instead, I find only the marvelously convenient dismissal of the relevance of economics to the case.

Economics is dismissed as inapposite, it appears, because if it were to be taken seriously the case for protecting particular jobs because of these jobs’ non-monetary benefits could no longer be offered, as it is typically offered by protectionists, as a religious dogma. Instead, such a case would have to be made with logic and evidence. Because protectionists have neither of these things on their side, they resort to asserting the irrelevance of logic and evidence by asserting the inapplicability of economics.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030