In my latest column for AIER I ponder lost possibilities. Two slices:
Many people understandably wonder what spectacular music humanity was denied by the premature death of Mozart at the age of 35. What symphonies, operas, and concertos would today be part of the regular repertoire of orchestras and other musical ensembles had that sublime composer lived even for another ten years? Imagine had he lived to be 80! Even accounting for creativity’s possible decline with aging, to ponder this loss is heartbreaking. Glorious music that would have been will never be. Never. All we know is that, had Mozart lived longer, we would today have more of his music to enjoy. But we cannot possibly know what that music would have been – what the finale of Mozart’s 42nd Symphony would sound like, what notes would open his 69th Symphony, or what would be the highlights of the clarinet concerto that he might have composed in his 38th year.
It’s all forever lost, for it was never created.
A similar heartbreak overcomes me when I ponder the burning, at his deathbed request in 1790, of most of Adam Smith’s unpublished manuscripts. The wisdom and insightfulness that marked his works are precious because they are so rare. We know those works existed, but they too – like Mozart’s uncomposed music – are forever lost, never again to exist.
Artificial Intelligence might well one day justify the fear that it will destroy or enslave humanity. Or perhaps, instead, AI will peacefully liberate humanity from the necessity of toil. Whatever. AI will never compose the music that would have been composed by a 36- or 43-year-old Mozart. AI will never write what Adam Smith wrote but burned.
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Consider the taxation of capital gains. This tax discourages some investment. Which new businesses would have been, but because of this tax weren’t, created? Which new goods or services might we enjoy today had this tax been lower? We’ll never know because all of the enterprise and production discouraged in the past by this tax is forever non-existent. Most of the resources that, because of this tax, were not used as they would have been used absent the tax did, of course, find alternative, lower-taxed uses. But these alternative uses are likely to be less productive and valuable than the tax-discouraged uses would have been. We are thus poorer, but cannot know by how much or, exactly, in what manner.
Add to this the new products and businesses that were never created because of regulatory barriers. What are the pharmaceutical products we would treasure today but don’t because the Food and Drug Administration artificially raises the costs of healthcare innovation? What are the medical devices that, because of FDA regulation, we don’t now have and might never have?
Let’s not overlook the employment opportunities destroyed by minimum-wage legislation. By pricing some workers out of jobs, minimum wages slow the entry into the workforce of many young people. We have a pretty good idea of the costs to the unemployed workers; they lose current income and the opportunity today to gain job skills. These costs alone are sufficient reason to end all minimum wages. But there are also ‘costs’ to society – costs unseen and unnoticed. Because minimum wages idle some workers, even people who think themselves to be unaffected by the minimum wage suffer, as a result of that intervention, reduced access to goods and services. These people pay higher prices. What would they have done with the money they would have saved had the prices they paid been lower? Some of this money would surely have been invested. What are the entrepreneurial dreams that would have been funded with the help of those invested funds but, because of the minimum wage, will forever remain unfunded?
