No society with any pretenses of being truly free can tolerate within its midst a state agency such as the Consumer Financial Protection Bureau.
… is from page 99 of my late Nobel-laureate colleague James Buchanan’s Fall 1975 Reason Papers article, “Boundaries on Social Contract,” as this article is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan (original emphasis):
[T]o the extent that existing rights are held to be subject to continuous redefinition by the State, no one has an incentive to organize and to initiate trades or agreements. This amounts to saying that once the body politic begins to get overly concerned about the distribution of the pie under existing property-rights arrangements and legal rules … we are necessarily precluding and forestalling the achievement of potential structural changes that might increase the size of the pie for all. Too much concern for “justice” acts to ensure that “growth” will not take place, and for reasons much more basic than the familiar economic incentives argument.
DBx: It’s a point that should be obvious, but given all too much economic-policy discussion today, it obviously isn’t. The state is nearly always regarded by “Progressives” (and often so also by conservatives) as a giant device that determines how an assumed-to-exist economic pie is sliced. Too little attention is paid to how rules might be altered in ways that enable everyone to have a good prospect of getting a larger slice (of what would then be necessarily) an expanding pie. Too much attention is paid to devising, justifying, and engaging in efforts by each of us to use the state to seize stuff from others of us.
And among the most dangerous myths is the widespread belief that as long as state officials are chosen democratically, a seizing of other people’s stuff that would be universally regarded as an atrocious injustice if done privately becomes ethically justified – or even “enlightened” – if done by the state.
… is from page 253 of my late Nobel-laureate colleague James Buchanan’s Fall 1991 Cato Journal paper, “The Minimal Politics of Market Order,” as this paper is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan:
A market economy is relatively more efficient for three reasons: It makes the incentives of participants compatible with the generation of economic value; it exploits fully the localized knowledge available only to participants in separated decentralized circumstances; and it allows maximal scope for the creative and imaginative talents of all participants who choose to act as potential entrepreneurs.
Nancy MacLean’s calamity of book Democracy in Chains did not win the 2017 National Book Award, despite the travesty of it being a finalist in that competition. Here’s a slice from an essay on this matter by Jibran Khan:
Democracy in Chains, which has been thoroughly debunked by left, right, libertarian, and center, is no good-faith critique. It features fabricated quotes, ellipses to flip the meaning of actual quotes, and invents ‘facts’ out of whole cloth.
George Will is correct: Roy Moore is an embarrassment.
Here are Steve Moore’s thoughts on tax reform.
And here’s my intrepid Mercatus Center colleague Veronique de Rugy on corporate taxes.
My colleague Pete Boettke explains why populists love big government.
… is from page 209 of David Boaz’s 2015 book, The Libertarian Mind:
Enthusiasts for the market process sometimes refer to “the magic of the marketplace.” But there’s no magic involved, just the spontaneous order of peaceful, productive people freely interacting, each seeking his own gain but led to cooperate with others in order to achieve it. It doesn’t happen overnight, but through years and centuries the market process has brought us from a society characterized by backbreaking labor to achieve bare subsistence and an average life expectancy of twenty-five years to today’s truly amazing level of abundance, health, and technology.
Here’s a hot-off-the-press new paper by Phil Magness, Art Carden, and Vincent Geloso – a paper that further exposes the egregious errors in Nancy MacLean’s absurd and fabulist tale, Democracy in Chains. The title of the paper is “James M. Buchanan, Public Choice, and the Political Economy of Desgregation.” Here’s the abstract:
Recent historical works, most notably Democracy in Chains, advance the claim that 1986 Nobel Laureate James M. Buchanan developed his formative contributions to political economy amidst the segregationist response to the Brown v. Board of Education decision. This argument accordingly holds that the research agenda of public choice economics emerged from an opportunistic alliance with Virginia’s “Massive Resistance” to school integration, and should be situated within the racially tinged tradition of southern conservatism. While Buchanan wrote very little on the economics of race, an extensive review of archival evidence as well as his published works conclusively refutes this claimed association. Buchanan’s intellectual associations with Frank Knight, W.H. Hutt, and other economists who worked within anti-racist frameworks suggest that Buchanan did not see anything of value in segregation, even as a political vehicle for advancing his agenda. To the contrary, we show that Buchanan held an antipathetic view of segregation and believed that the competitive processes of an educational voucher system would undermine the “Massive Resistance” status quo. We accordingly reject the primary thesis of Democracy in Chains as the product of unsound and grossly misinformed research, and offer an alternative assessment of the position of race in the origins of public choice theory.
… is from page 236 of my late Nobel-laureate colleague Jim Buchanan‘s 1985 paper “Political Economy and Social Philosophy,” as this paper is reprinted in Moral Science and Moral Order (2001), Vol. 17 of The Collected Works of James M. Buchanan:
Markets should never have been evaluated primarily and instrumentally for their ability as institutions to maximize pleasure over pain, or indeed to maximize anything else that is interpersonally comparable.
DBx: Yes. Markets are what emerge when individuals voluntarily exchange with each other. Markets succeed or not depending upon how well or how poorly they allow individuals to discover and to take advantage of mutually advantageous opportunities for exchange. Markets are not about money, greed, materialism, or “maximizing social welfare” or “maximizing utility.” Markets are about exchange, with each opportunity for exchange evaluated by each party, and with each party having the right to refuse to exchange and the right to offer alternative proposals.
Here’s a screenshot of part of an e-mail that I received today from the Niskanen Center. (And here’s the link that you see there.)
My post here is not about climate science or about Jerry Taylor and the Niskanen Center. Instead, my post is about this line in this Mother Jones report about Jerry Taylor: “He [Taylor] got paid to go on television to decry the science behind global warming ….” Later in the Mother Jones story that is there linked, we read that “Taylor is the only known paid skeptic to change his tune.”
Mother Jones‘s writer Nathalie Baptiste here is highly misleading. She gives the false impression that Jerry Taylor was a mercenary – that he expressed skepticism about climate science simply because he got paid to do so – that his appearances in the media were the results of arrangements in which someone paid him to express skepticism of climate science.
Yet elsewhere in her report, Baptiste acknowledges that Jerry Taylor really was a skeptic of climate science. Taylor has since changed his mind, and of course there’s absolutely nothing wrong with doing so. But the less-than-meticulous reader can easily and understandably come away from this report with the impression that Jerry Taylor once expressed skepticism of climate science only because he was paid to do so. Indeed, it isn’t clear that Baptiste herself really grasps the fact that Tayler changed his mind and that he once really did believe what he said.
Obviously, during his ‘skeptic’ days Jerry Taylor had an income: he worked for, and was paid by, the Cato Institute. But Cato did not pay him to express opinions that he did not hold. Cato paid him to research and to share with the public his research and his summaries of that research. (Leftists don’t understand that paying people to express opinions that those people really don’t hold is a bad investment; a much better investment is to support people who already hold opinions of the sort that you wish to see more widely prevail in society.)
I complain about this style of reporting by Mother Jones because it both reflects and furthers the juvenile narrative on the political left that people who fundamentally disagree with those on the political left are moronic, malevolent, or mercenary – with mercenary being the main go-to explanation for the stated positions of people who, like Jerry Taylor, are obviously not moronic.
With her wording, Baptiste reveals her childish assumption that Taylor said what he said (prior to his change of opinion) only because he was paid to do so. She inadvertently and unjustly impugns Taylor’s character.
This leftist twitch to assume that eloquent people who disagree with leftists are likely venal mercenaries saying what they say is just that: a thoughtless intellectual twitch with no basis in reality. (Notice also in her story Baptiste’s reference to the Heartland Institute as “Koch-funded.”) It’s ironic that those who pride themselves on being especially objective, deep, and profound thinkers simply cannot fathom that the world has no shortage of smart, informed, and well-meaning people who actually and sincerely do disagree with many of the tenets of “Progressivism.”
… is from page 14 of Herbert Spencer’s 1891 “Introduction” to A Plea for Liberty (Thomas Mackay, editor, 1891); the page number is to Liberty Fund’s 1981 edition of this collection:
For as fast as the régime of contract is discarded the régime of status is of necessity adopted. As fast as voluntary co-operation is abandoned compulsory co-operation must be substituted. Some kind of organization labour must have; and if it is not that which arises by agreement under free competition, it must be that which is imposed by authority.
Here’s a letter to the Weekly Standard:
Irwin Stelzer’s November 13th essay “There Is Nothing ‘Free’ About Our Trade With China” is chockablock with faulty analysis. His most egregious error is to imply that something is amiss because the U.S. has with China (quoting Mr. Stelzer) a “$347 billion-and-growing goods trade deficit.”
First, a deficit in the trade of goods is completely insignificant. Only 20 percent of U.S. private-sector output is goods (as distinct from services) while nearly 50 percent of China’s output is goods. Therefore, to insinuate that the Chinese are playing some nefarious game by selling to Americans more goods than Americans sell to the Chinese makes no more sense than to insinuate that, say, tailors are playing some nefarious game by selling more goods to cardiologists than cardiologists sell to tailors.
Second, also completely insignificant is any bilateral trade (or current-account) deficit, such as America’s deficit with China. Nothing in economic theory or logic suggests that economic entity A should sell to economic entity B the same amount that economic entity B sells to economic entity A. Do you sell to your grocer the same amount that your grocer sells to you? Do you buy an amount of goods or services from your employer equal in value to the labor services that your employer buys from you? Of course not. Such ‘balanced’ economic outcomes would, to say the least, be bizarre. For the same reason, there is simply no reason to expect that in this world of ours of 195 countries that any pair of them will have ‘balanced’ trade with each other.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
…..
It’s understandable for a non-economist to suffer from the confusion that Stelzer suffers from here. But Stelzer is an economist. He should know better.
