… is from page 158 of the 1996 Liberty Fund collection of Frank Meyer’s essays, In Defense of Freedom (William C. Dennis, ed.); specifically, it’s from Meyer’s September 25, 1962, National Review article “Why Freedom”:
For men imbued with the certainty of their vision of reality it will always be difficult to restrain the temptation to enforce that vision upon others and thus to deprive them of the right freely to choose the good.
Yet nobody in Washington seems to care about this disease of chronic profligacy, and COVID-19 has only made things worse. As economist John Cochrane of Stanford University’s Hoover Institution rightly notes, the pandemic response “resembles a sequence of million-dollar bets by non-socially distanced drunks at a secretly reopened bar: I’ll spend a trillion dollars! No, I’ll spend two trillion dollars! That anyone has to pay for this is un-mentioned.”
Casey Mulligan isn’t falling for Keynesian fables.
Mark Perry conveys an important lesson about health-care costs.
GMU law professor Adam White review, in the Wall Street Journal, Cass Sunstein’s and Adrian Vermeule’s case for the lawfulness of administrative law. Here’s White’s conclusion:
When governance becomes a matter of administrative assertion rather than legislative deliberation, politics becomes a matter of power rather than persuasion. The administrative state demoralizes citizens, in both senses of the word.
Their shared goal of reducing trade in medical supplies by forcing more of them to be made domestically rests on a false assumption: that sourcing a significant share of those supplies from abroad somehow undermines our ability to secure what is necessary during public health emergencies. In fact, trade and an open US economy enhance our health security by expanding and diversifying our range of suppliers in a time of need.
Americans are not overly dependent on foreign medical supplies and PPE by any reasonable measure. Yes, we import billions of dollars’ worth of medical supplies, drugs, and active pharmaceutical ingredients each year, but we also export a lot and produce even more domestically. An April study by the St. Louis Federal Reserve found that the United States produces 70 percent of the kinds of medical equipment demanded domestically to combat COVID-19. Such equipment includes sterile gloves, medical protective clothing, protective goggles, and masks, as well as devices used to treat infected patients, such as ventilators, oxygen masks, and breathing masks.
… is from page 286 of Kristian Niemietz’s excellent 2019 book, Socialism: The Failed Idea That Never Dies:
[O]ur economic intuitions are a legacy of the tribal age. Most anti-capitalist arguments, then, no matter how much complex-sounding sociological jargon they may use, are really just sophisticated rationalisations of primitive urges.
DBx: ’tis true.
While the motives of those who plead for improving the economy consciously through the use of coercion exercised by an authority are often laudable – and while they sometimes couch their arguments in mathematics downright rococo in their complexity – all of these people assume that the modern economy is simply a scaled up tribal economy. They do not understand that modernity differs from the tribe categorically. The complexity of the modern economy is far too vast for primitive-brained humans – for that’s what we all are – to begin to comprehend and much less to consciously arrange to suit any of our fancies.
… is from page xiv of the Mercatus Center’s hot-off-the-press 2020 reissue of the late Ludwig Lachmann’s 1986 book, The Market as an Economic Process:
The central idea of this book is the market regarded as an economic process, that is, an ongoing process, impelled by the diversity of aims and resources and the divergence of expectations, ever changing, in a world of unexpected change.
DBx: Lachmann here describes well a central feature of real-world markets.
Nothing is more uninformed and off-base than are the many allegations that those of us who propose to “let the market handle it” are lazy simpletons who are enchanted by a false nostrum. In reality, we advocates of the market process and opponents of industrial policy and other forms of interventionism endorse the market precisely because we appreciate, far more than do most other people, the astonishing complexity, and importance of detail, of real-world economic challenges, possibilities, and limitations.
The true simpletons are those many persons – left and right – who suppose that government officials are capable of gathering and processing enough knowledge to ensure that their commands will result in economic outcomes that are superior to the outcomes that emerge from decentralized competitive market processes.
In my column for the September 15th, 2010, edition of the Pittsburgh Tribune-Review I wrote about Cuba and intellectuals’ gullibility for brutes promising to bring paradise. You can read my column beneath the fold.
… is from page 128 of the late Hans Rosling’s 2018 book, Factfulness; it’s from a chapter titled “The Size Instinct”:
You tend to get things out of proportion. I do not mean to sound rude. Getting things out of proportion, or misjudging the size of things, is something that we humans do naturally. It is instinctive to look at a lonely number and misjudge its importance. It is also instinctive … to misjudge the importance of a single instance or identifiable victim. These two tendencies are the two key aspects of the size instinct.
The media is this instinct’s friend. It is pretty much a journalist’s professional duty to make any given event, fact, or number sound more important than it is. And journalists know that it feels almost inhuman to look away from an individual in pain.
DBx: In this book, Rosling doesn’t mention Bastiat. But Rosling here describes the distortions in people’s perceptions that many of us classify under the heading “what is seen and what is not seen.” Anyone blind to the unseen focuses only on what is seen. It is what is seen that is addressed. Action is taken on the basis only of what is seen.
But that which is seen is often only a tiny feature of a much larger group, the bulk of which is invisible. And so actions that appear to be admirable and compassionate – because these are aimed at changing for the better that which is seen – are in fact often harmful because these actions are taken without knowledge of the larger group.
Home-country workers who lose their jobs to imports are seen; so tariffs help them. Protectionists are applauded for their intentional humanity. Home-country workers (and foreign workers) who lose jobs because of these tariffs, and consumers whose real incomes are reduced because of higher prices, are unseen. Protectionists are not derided for their unintentional cruelty.
Paid leave required by government is seen; the resulting reductions in other forms of compensation, and the greater difficulty of many workers to get jobs as goods as possible for them, are unseen.
Workers whose wages are pushed up by minimum-wage statutes are seen. Workers rendered unemployed or who suffer worse employment conditions are unseen.
People suffering and dying from covid-19 are seen and easily filmed. And while some of the damage done by the hysteria and lockdowns is seen – for example, shuttered stores and unemployed workers – much of the damage is unseen. The people who suffer and die from other ailments because access to medical care was made unnecessarily difficult by the lockdowns – the new businesses not created – the friendships in school not made – the stream of anti-social consequences that will long haunt us now that so many of us regard other human beings as carriers of death – the inevitable abuse into the future of the malignant eruption of arbitrary state power – all this and much more is unseen.
… is from page 79 of Pierre Lemieux’s excellent 2018 monograph, What’s Wrong With Protectionism?:
There is no reason to believe that more market failures occur in international trade than in domestic trade. But even if, in special circumstances, a convincing case could be made for market failure, there is no reason to believe that politicians and bureaucrats (who, in practice, run the government) could provide an efficient solution. Even if those individuals were perfectly well intentioned, they are not omniscient and cannot comprehend the detailed complexity of the economy. They lack local knowledge about consumer preferences and the costs and opportunities of producers…. Political failures are likely to be more damaging than any market failure, as shown by historical attempts to plan and control economies.
DBx: Yessir. And this same logic applies to government efforts to counteract real and imagined negative effects in the home country caused by foreign-government tariffs or subsidies or both. Government officials at home are not made more knowledgeable (or more saintly) simply by shifting the ostensible justifications for their actions from home-grown problems, or from problems not intentionally caused by humans, to problems allegedly caused at home by tariffs imposed, and subsidies dispensed, by foreign governments.
Yet scratch the surface of the arguments of all persons who insist that the home government must “retaliate” against foreign-governments’ tariffs and subsidies with tariffs and subsides of its own. You will find there, just beneath the surface, the implicit assumption that economic harassment by foreign-government officials of their citizens miraculously renders home-government officials sufficiently knowledgeable (and apolitical) to tax and subsidize in ways that are likely to improve the performance of the home-country economy.
This assumption, of course, is bizarre. But the case for home-country “retaliation” requires it.
Here’s the third and final installment in my and Lyle Albaugh’s series, for AIER, on Coase and covid. Here are our closing paragraphs:
Is it plausible that government officials have sufficiently accurate and detailed knowledge about how mandated restrictions on socializing will affect the economy, especially over time, such that these officials can be trusted to mandate only those restrictions that produce benefits greater than their costs? Is it plausible that, even if lockdowns in the specific case of Covid-19 pass some cost-benefit test today, the resulting expansion of governments’ powers will not be abused tomorrow? And is it plausible that a people bridled, broken in, and subjugated as never before by the Covid-19 lockdowns will retain enough of a sense of personal responsibility and desire for freedom that they will resist government overreach in the future?
We’re confident that the answer to each of these questions is an emphatic ‘No!’ We can find no plausible reason to believe that the same government officials who routinely refuse to look beyond the next election – who regularly display utter ignorance of the most basic economic realities – who habitually sacrifice the public welfare on the altar of special-interest groups – and who are known often to lie and dissemble are, in any real-world situation, likely to use the terrifying power to lock down in ways that pass a cost-benefit test. When we take account of the full costs of lockdowns and related mandates, including the pernicious precedents these inevitably set, it’s clear that the lowest-cost – the best – source of protection against disease such as Covid-19 is personal responsibility.
But why the dominant crisis-lockdown mindset at all? The foolishness of lockdowns has become all the more apparent as people think through and count up the injuries and tragedies that government coercion has inflicted. Cummins treats that too in his video. Lockdown was ill considered from the word “go,” and it was downright stupid as soon as the curve was flattened at the intensive wards, which quickly expanded anyway.
GMU Econ PhD candidate Jon Murphy decries the expert failure strewn throughout the covid calamity. A slice:
In other words, these experts fall into a problem that Roger Koppl calls “siloing.” These experts make decisions based upon their understanding, training, and knowledge. They do not necessarily know (or even know to consider) how their actions affect other elements of society.
GMU Econ alum Rosolino Candela explores the relevance of externalities.
Economic statists may cheer all this, but it sure looks to all the world like U.S. government meddling that rewarded political allies. Cfius was established to protect national security, not to be used as leverage to steer investment to certain companies.
Art Carden reports that “Free To Choose” holds up well even after 40 years.
A broad reduction in tariffs made possible by the Tariff Reform Commission would deliver immediate benefits to millions of American households, invigorate the nation’s productive capacity, and increase the supply of goods critical to the fight against the novel coronavirus. As has been the case with military base closures, a commission would help Congress overcome the special interest pressure that keeps tariffs in place despite their negative impact on the overall economy and the national interest.
… is from pages 154-155 of Frank Knight’s 1940 review essay titled “‘What Is Truth’ in Economics?” as this essay is reprinted in Knight’s 1956 collection, On the History and Method of Economics:
Economics and other social sciences deal with knowledge and truth of a different category from that of the natural sciences, truth which is related to sense observation – and ultimately even to logic – in a very different way from that arrived at by the methodology of natural science. But it is still knowledge about reality.
DBx: The fact that economists, with relatively rare exception, cannot conduct controlled laboratory experiments which allow a focus on the behavior of a small handful of variables does not render the knowledge arrived at by economic scholarship – observation, research, and reasoning – unscientific.
Key phenomena that economists must study are human plans formed to achieve ends the details of which are known ultimately only to the individuals who form the plans. These individual plans, in turn, are formed and modified in light of each person’s local knowledge, unique experience, subjective preferences, and expectations. All of these inputs into plan formation and modification are unobservable to outsiders and unquantifiable. And the details that constitute each of these inputs into plans are vast in number and bear complex connections to each other.
For this reason alone (although there are others), to fancy that one can gain an adequate understanding of the workings of the economy merely by carefully observing and measuring the relatively few objective pieces of quantified data that are typically available to economic researchers – “the” unemployment rate, “the” four-digit concentration ratio of this and that industry, “the” Gini coefficient for this and that country, “the” average wage for production and nonsupervisory employees, and the like – is foolish. All such observable empirical facts are the results of vast and complex plan formation and modification and human interactions. Observable facts about the economy have no meaning on their own, and they are not – or ought not to be – the subject-matter of economics. It’s much closer to the truth to say that the subject-matter of economics is – or ought to be – human plan formation and interaction, as well as the tracing out of the unintended consequences of this formation and interaction.
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