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Ron Bailey argues that “AI regulators are more likely to run amok than is AI.” A slice:

With his own considerable foresight, the brilliant political scientist Aaron Wildavsky anticipated how the precautionary principle would actually end up doing more harm than good. “The direct implication of trial without error is obvious: If you can do nothing without knowing first how it will turn out, you cannot do anything at all,” he wrote in his brilliant 1988 book Searching for Safety. “An indirect implication of trial without error is that if trying new things is made more costly, there will be fewer departures from past practice; this very lack of change may itself be dangerous in forgoing chances to reduce existing hazards….Existing hazards will continue to cause harm if we fail to reduce them by taking advantage of the opportunity to benefit from repeated trials.”

John Masko applauds push-back against California’s nanny state. A slice:

A Proposition 65 warning can be required even if there is no scientific evidence that anyone has been sickened by consuming a given product—chocolate, for instance. While a Consumer Reports study in 2022 found that popular chocolate bars contained more than California’s recommended allowable doses of cadmium and lead, no research has linked eating chocolate to a higher risk of birth defects or metal toxicity.

Dandelion Chocolate started its warning by covering its legal bases, as all California businesses must. But then, in smaller print further down, things got cheeky: “Cadmium is a naturally-occurring component in soil, and many plants take it up as they absorb nutrients, which is how it gets into our cocoa beans. According to the CDC, cadmium is commonly found in vegetables, and in relatively high concentrations in leafy greens like spinach. The law won’t allow us to say much more about how the tiny trace amounts in our product will affect your health, but if you want to reduce your exposure to cadmium generally, you might consider eating fewer leafy greens.”

In this short paragraph, I saw something I had almost never seen before. During the two years I lived in San Francisco and on many visits since, I had often seen businesses—straining under the city and state’s regulatory and tax burdens—react with acceptance, a sigh or even an exasperated roll of the eyes. But with laughter and open ridicule? With the sarcastic suggestion that customers worried about chocolate bars should instead eat fewer vegetables? This was entirely new. This wasn’t mere frustration, but the anger of a San Francisco business tired of being asked to behave like an obedient child in the face of overbearing authority run amok.

Here’s the abstract of a new paper by Alessandro Caiumi and Giovanni Peri: (HT Clark Packard)

In this article we revive, extend and improve the approach used in a series of influential papers written in the 2000s to estimate how changes in the supply of immigrant workers affected natives’ wages in the US. We begin by extending the analysis to include the more recent years 2000-2022. Additionally, we introduce three important improvements. First, we introduce an IV that uses a new skill-based shift-share for immigrants and the demographic evolution for natives, which we show passes validity tests and has reasonably strong power. Second, we provide estimates of the impact of immigration on the employment-population ratio of natives to test for crowding out at the national level. Third, we analyze occupational upgrading of natives in response to immigrants. Using these estimates, we calculate that immigration, thanks to native-immigrant complementarity and college skill content of immigrants, had a positive and significant effect between +1.7 to +2.6\% on wages of less educated native workers, over the period 2000-2019 and no significant wage effect on college educated natives. We also calculate a positive employment rate effect for most native workers. Even simulations for the most recent 2019-2022 period suggest small positive effects on wages of non-college natives and no significant crowding out effects on employment.

Arnold Kling reflects on his book, written with Nick Schulz, Invisible Wealth. A slice:

The contrast between rich countries and poor countries also is striking. We cite a paper by David Henderson and Charley Cooper that in 28 high-income countries average annual income per person is at least $9000 but the majority of the world’s people live in countries where the average annual income per person is less than $800.

We include analysis by economists at the World Bank which says that 82 percent of the wealth in the United States is intangible, meaning wealth that does not consist of natural resources or capital equipment.

Meanwhile, in the United States, white-collar work rose from 22 percent of the labor force in 1910 to 76 percent in 2000. One hundred years ago, Americans worked mostly with things. Today, they work mostly with symbols and/or with people. To put it another way, over the course of the 20th century, we went from 3/4 of the labor force working in the [mainstream economics] textbook economy to 3/4 working in the intangible economy.

Joakim Book reminds us that, although we inhabit a reality of inescapable scarcity, there’s every reason to believe that people in markets reasonably free can and will continue to produce ever-greater abundance. A slice:

The basic rationale is thus simple: “Although we live in a world of a limited number of atoms,” as Marian Tupy and Gale Pooley say in their masterful creation Superabundance, “there are virtually infinite ways to arrange those atoms. The possibilities for creating new value are thus immense.”

Economic growth itself, said University of Mississippi economist Josh Hendrickson in an interchange with The Guardian’s George Monbiot a few years ago, is about “finding more efficient uses of resources.” It’s about observing how market prices and the profit motive urge entrepreneurs and businesses to economize on production while producing more value for consumers. We can visibly see this in the products that technology has merged into one (smartphones displacing a dozen or more physical appliances), or the thinner cans or more efficient engines that innovation routinely delivers.

Economists aren’t just playing word games when they say that growth can keep going forever. We can always make more stuff since the physical atoms under our command right now are far from all the physical atoms on our planet (or solar system). By growth, economists mean value-creation exchanged in the marketplace, a market that can change in the types of value we exchange, and the growing portion of our economies can involve fewer atoms than what came before.

“Resource” which the general public think of as physical collections of elements in the ground, economists define much more broadly. Nothing becomes a resource until the human mind makes it so, i.e., “there are no resources until we find them, identify their possible uses, and develop ways to obtain and process them” to quote Julian Simon, whose pioneering work in resource economics prompted Tupy and Pooley to launch their Superabundance project.

UCLA economist Lee Ohanian reports on the destruction, by California’s minimum-wage diktats, of employment opportunities open to low-skilled workers in that state. (HT George Leef) A slice:

It is nothing short of bizarre that California would choose to specify a substantially higher minimum wage for its fast-food industry, which tends to hire workers who are much younger than other industries, which have a minimum wage of about $16 per hour. About 30 percent of fast-food workers are teens, and another 30 percent are between twenty and twenty-four years old. With 60 percent of its workforce twenty-four or younger, the fast-food industry stands in sharp contrast to the other industries, in which only about 13 percent of workers are that young.

Young workers have less experience than older workers and are still in the process of building skills, both of which tend to limit the amount of value that young workers can create for an employer. Young workers are also expensive from a human resources standpoint, because they require significant training and because they tend to move in and out of employment frequently, reflecting school schedules. Annual worker turnover in the fast-food industry exceeds 100 percent, which raises employer recruiting and training costs significantly.

Fast-food employers have few alternatives to a $20 minimum wage other than cutting their workforces or raising prices, as fast-food profit margins are slim, averaging 5‒8 percent. Labor advocates typically argue for the need of a “living wage” when it comes to the pay of less-skilled workers. But this ignores the fact that many of those workers are part time, and it also ignores the fact that fast-food owners and their investors must receive adequate compensation for their time and capital. Living wages can mean no wages, which is what has happened for over 9,500 California fast-food workers since last September.

Pierre Lemieux is correct: “In my view, economists who take economics seriously can only tell policymakers what the latter don’t want to hear given their incentives and their selection.” A slice:

James Buchanan, one of the main artisans of public choice economics, was also a major political philosopher. He persuasively argued that the possibility of an auto-regulated order where government direction is not constantly required is central to modern economics (see notably his 1979 book What Should Economists Do?). This idea, Buchanan wrote, “is in no way ‘natural’ to the human mind which, in innocence, is biased toward simplistic collectivism.” Economists must thus teach “a vision of economic process that is not natural to man’s ordinary ways of thinking.” They should try to teach these ideas to the public much more urgently than consult with politicians and bureaucrats, who benefit from simplistic collectivism.

The economist who takes economics seriously cannot be a faithful adviser to a democratic Prince more than he can be coopted in the service of an authoritarian government.