These days it isn’t only the Democratic left that has harsh words for the free market. The Republican right has soured on it too. From Donald Trump’s across-the-board tariffs to Marco Rubio’s industrial policy, up goes the cry: Reaganomics is dead!
This is why the Bradley Foundation’s decision to award Samuel Gregg its annual prize is so counterrevolutionary. An Australian by birth and American by choice, Mr. Gregg is an Oxford-educated scholar at the American Institute for Economic Research. In articles, books and debates he makes the case that the invisible hand not only delivers better results than the populist alternatives, it’s also superior morally. On Tuesday night in Washington, he will be honored at a gala emceed by the Journal’s Kim Strassel.
“Popular understanding of capitalism today is driven by mythological narratives,” Mr. Gregg says. “Capitalism’s defenders also have to address the narratives.” One thing these narratives often miss is something economists from Adam Smith to F.A. Hayek acknowledged: The free market depends on virtues it rewards but can’t create itself.
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Feeding the Republican cry that free-market policies are passé is the idea that American workers today are worse off than they were before. Certainly many Americans are struggling in the Biden economy. But the idea that the market is to blame for their problems or that working class Americans have been left behind isn’t supported by the evidence.
“Blue-collar people today are economically much better off than they were in, say, the 1950s or 1970s,” Mr. Gregg says. “Their inflation-adjusted average overall income and benefits are considerably higher, their houses are bigger, and they have access to labor-saving technologies their grandparents couldn’t even envisage.”
“The paradox of markets,” Mr. Gregg adds, “is that people pursuing their rational self-interest unintentionally produce many benefits for others, while dirigiste policies intended to help people often hurt them. Minimum wages, to take one example, seek to help the poor but price them out of labor markets, often robbing them of entry-points into the workforce.”
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“Markets produce the growth that gets us out of poverty,” Mr. Gregg says. “But they also encourage virtues that make us better people while simultaneously working with, rather than against, human nature. All these things make markets morally superior to all the alternatives.”
And I am not commenting on her published economic work, some of which is no doubt decent. Instead, I want to highlight how outrageously naïve global elites, in this case within the economics profession, have become. There are three major examples of Progressive groupthink in this relatively short interview.
Example 1 – People advance the public good by paying taxes
I think we need to rely on taxation because that is the way in which traditionally we ensure that everyone in the economy, private companies and individuals, contributes to the public good.
Setting aside the dubious claim that all or even most government spending advances the “public good,” what a narrow view of the world!
Does this mean that farmers or doctors or mechanics only contribute to the public good when they pay taxes? The question (should) answer itself! This reasoning suggests that her taxes contribute to the public good, not her research. But perhaps if her work is funded by tax dollars…
[DBx: The above-quoted statement by Duflo is breathtakingly naive. That an economist would utter it is depressing; that an economist with a Nobel Prize to her name utters it is shocking. I do indeed weep for my profession and discipline.]
The polls say President Biden has lost support among black Americans, and the White House appears to have settled on a strategy to win them back: spread more racial division. That’s the main message from the President’s dishonorable commencement address Sunday at storied Morehouse College in Atlanta.
Also critical of Biden’s speech at Morehouse is Noah Rothman. A slice:
The bleakness of life in modern America is unrelenting, as the president explained. “Today in Georgia,” Biden continued, “they won’t allow water to be available to you while you wait in line to vote in an election. What in the hell is that all about?” Once again, Biden and his spectators should take heart — their dour outlook on the state of the nation is fueled by misapprehensions.
Georgia election law does not prohibit voters from consuming whatever they like while waiting to vote, and it doesn’t prohibit service providers from doing business with prospective voters. What it does do is block electioneering from within 150 feet of a polling place or 25 feet from voters queueing up at a polling place. Biden must be aware of this elementary distinction by now; he’s retailed this false attack on Georgia’s election laws for years now. We must assume the truth would inconvenience the president in his effort to dispirit Morehouse’s graduating class.
The dirigiste nanny state in California continues to spread its tentacles.
GMU Econ alum Jon Murphy pulls back the false mask often worn by protectionists. A slice:
National defense is a common justification for protectionist tariffs, and it has been driven to absurd extremes: clothespins, sugar, and baby food have all been described as vital to national defense and subject to tariffs.
In a particularly goofy example, Senator Rick Scott of Florida has called for a ban on Chinese-grown garlic on the grounds it threatens national security. Now, perhaps if we were a nation of vampires, this claim would make sense. But it’s hard to see how garlic, even garlic that is potentially tainted, is a threat to national security. Scott argues that the garlic poses a potential health threat, but that is not the same as a national security threat.
