Last week, Rochelle Walensky, director of the Centers for Disease Control, tweeted. This year marks the 50th anniversary of the end of the Tuskegee syphilis study. Tomorrow, I will be joined by colleagues & #PublicHealth leaders as we honor the 623 African American men, their suffering & sacrifice, and our commitment to ethical research and practice. But, as one person, LawyerLady, pointed out on Twitter, they didn’t sacrifice; rather they were sacrificed. In other words they had no agency, no choice. Recall what the Tuskegee experiment was. Actually, and at least a little ironically, the CDC itself does a nice job of laying out the horrific experiment. The CDC writes: In 1932, the USPHS [United States Public Health Service], working with the Tuskegee Institute, began a study to record the natural history of syphilis. It was originally called the “Tuskegee Study of Untreated Syphilis in the Negro Male” (now referred to as the “USPHS Syphilis Study at Tuskegee”). The study initially involved 600 Black men – 399 with syphilis, 201 who did not have the disease. Participants’ informed consent was not collected. Researchers told the men they were being treated for “bad blood,” a local term used to describe several ailments, including syphilis, anemia, and fatigue. In exchange for taking part in the study, the men received free medical exams, free meals, and burial insurance. The CDC continues: By 1943, penicillin was the treatment of choice for syphilis and becoming widely available, but the participants in the study were not offered treatment. (bold added.) Then: In 1972, an Associated Press story about the study was published. As a result, the Assistant Secretary for Health and Scientific Affairs appointed an Ad Hoc Advisory Panel to review the study. The advisory panel concluded that the study was “ethically unjustified”; that is, the “results [were] disproportionately meager compared with known risks to human subjects involved.” Good for them for concluding that it was ethically unjustified. Their reasoning about why, though, was seriously deficient. You need only read the above quotes to see 2 reasons why. First, the participants were told they were being treated for “bad blood,” which includes, but is not the same as, what they were being treated for: syphilis. Second, in 1943, once penicillin had become the treatment of choice. they were not offered it. It might well be that the “results [were] disproportionately meager compared with known risks to human subjects involved.” But that wasn’t the key problem. The key problem is that the U.S. Public Health Service lied to the subjects and then withheld effective treatment. The pic above is of ethically deficient Walensky.   (0 COMMENTS)

Almost everyone I meet is unhappy with the way that Twitter moderates content.  But they are unhappy in different ways.  Why isn’t there a generally accepted approach to content moderation?  What makes it so difficult? I suspect that many people have an overly optimistic view of how easy it is to moderate content.  I get the impression that many people have the following view: 1. They see lots of cases where Twitter makes the wrong decision. 2. They think that if they owned Twitter, they’d stop making those wrong decisions. I’d like to argue that this is much more difficult than it looks, with one exception.  If you believe there should be no content moderation at all, then content moderation is easy.  But what if you agree both Elon Musk and the former management of Twitter that there should be some content moderation.  What then? In that case, you “draw a line” and don’t allow content so objectionable that it falls over the line.  This approach is almost inevitable, as advertisers won’t become involved in a company that allows highly objectionable content such as child pornography. Unfortunately, while line drawing is almost inevitable, the difficulty in doing so makes it almost inevitable that most people will be unhappy with the result.  Line drawing creates two problems: 1. The content moderator must decide the degree to which objectionable content will be allowed.  Thus if you imagine a scale of 0 to 100, where 100 is the most objectionable, you could imagine a moderator saying that anything above 80 is banned.  One way of thinking about Elon Musk’s recent decisions is that he is trying to raise the cutoff point, relative to the relatively strict moderation of the previous management.  Say from 75 to 90. 2. The content moderator must determine whether specific content crosses the line, and thus is too objectionable to be allowed.  Thus it’s not only a question of whether to ban the 10% worst tweets or the 25% worst tweets, you also have to determine which tweets are above the line and which tweets are below the line. The first decision has to do with tolerance for bad tweets.  A progressive friend of mine supports Elon Musk because he’s an old school liberal with a high tolerance for offensive speech.  The second decision has to do with various forms of bias.  People on the left tend to be more offended by fascism, anti-black racism, and denial of the efficacy of vaccines.  People on the right tend to be more offended by communism, anti-white racism (or bigotry if you prefer), and the denial of the science of innate differences between genders. Elon Musk seems to be more right wing than the previous Twitter management, so he’s less likely to put right wing tweets into the “highly offensive” category.  He favors less strict standards and less bias against conservative tweets. So why do I believe that people underestimate the difficulty of content moderation?  Here an analogy might be useful.  The Twitter debate reminds me of debates over basic ideas in epistemology.  Richard Rorty has argued that it is not possible to draw a clear line between different types of knowledge such as subjective/objective, fact/opinion, or belief/truth. Many people find Rorty’s view to be counterintuitive.  There is a common sense view that it is possible to draw a line between things we believe and things that are actually true.  In debates, people will often cite obvious examples that fall on each side of the line, to make this point.  But those obvious examples don’t prove the utility of the line itself. With content moderation, people can easily find examples of tweets that they are confident should be allowed, and they can easily find examples of content that should not be allowed.  But when you get close to the line, things get much more difficult.  And this is partly because offensiveness is a matter of degree, but content decisions are all or nothing.  Thus for tweets that are right near the line, decisions will inevitably look arbitrary and unjust.   And that’s true even if the world contained no political bias, and people merely differed in their toleration for controversy. Go back to the hypothetical scale of offensiveness, from 0 to 100.  Imagine Elon Musk decides that anything above 90 is too offensive, and thus gets banned.  In that case, a tweet with an offensiveness of 90.1 will be banned and a tweet with an offensiveness of 89.9 will be allowed.  Most people won’t be able to spot the difference, and thus at least one of the two decisions will seem arbitrary and unfair.  “If you banned Joe for saying X, why did you allow Fred to say Y?” And that’s assuming everyone holds the exact same political views.  Now imagine a world where people also disagree about what is objectionable, and they strongly believe that their political views are correct and the other side is wrong.  Now the perception of unfairness in content moderation will look far worse, an order of magnitude worse.  It will become a thankless task. I’ve been doing blogging for 13 years, and I discovered early on that there is no simple way to moderate comments.  Wherever you draw the line, there will be complaints.   The decisions made by big companies such as Twitter usually tend to reflect market forces, at least to some extent.  But these companies often have a semi-monopoly position in their market niche (due to network effects), which gives them some ability to override market forces.  The next few years will provide a test of how much market power Elon Musk possesses. My own preference is for a relatively high tolerance of objectionable tweets, and as little political bias as possible in content moderation.  So I wish him well.  On the other hand, I’d encourage Musk to delegate this responsibility to others.  While his strategic vision may be correct, he doesn’t seem to possess the judicial temperament that you’d like to see in a content moderator.   (0 COMMENTS)

Those who believe that industrial policy, which is an attenuated form of government economic planning, helps produce more goods and services might learn something from a report in today’s Wall Street Journal (Georgi Kantchev, Yuliya Chernova, and Stephen Fidler, “Putin Grips Economy Tighter to Supply Russian War Machine,” December 6, 2022). It explains the Russian government’s problems in boosting production of military supplies for the war in Ukraine, the “special military operation” in Putin’s terms: Russia’s defense industry was shattered after the collapse of the Soviet Union in 1991. Mr. Putin has tried to rebuild it since the mid-2000s. He renationalized enterprises and brought the industry under the control of a major holding company called Rostec, which controls more than 800 companies. A 2021 report from the Swedish Defence Research Agency describes the industry as “top-down controlled and primarily government funded.” Some people believe that central control of the economy is more efficient than economic freedom and competition, despite historical evidence to the contrary. One aspect of the problem is corruption, but this is an effect more than a cause. Interference with prices and incentives is more important. More to the point, corruption is not absent from industrial policy in our own countries: it just takes the legal form of special interests and crony capitalism through protectionism and subsidies. The situation in Russia is akin to advanced crony capitalism (if we an call this “capitalism”): Russia’s defense industry, meanwhile, struggles with corruption and inefficiencies. In October, the head of the anticorruption committee and the chairman of the defense committee in Russia’s Duma sent a request to the country’s prosecutor general to investigate why the Defense Department couldn’t properly outfit the mobilized troops given it was fully financed to do so, according to state media. As if it were sufficient for a government to “fully finance” something on a stack of paper called “budget” for the stuff in question to be produced in the required volume and at an acceptable quality! The difficulty of a government to milk its subjects is of course as true in civilian as in military matters. The objection that war, as any major shift in economic production, explains the difficulty of the Russian government to produce more guns and less butter is not valid. In economic terms, a move along the production possibility frontier (PPF) still leads to less new production than if the PPF had not been pushed inwards by the inefficiency of government planning or, in its soft-socialist version, industrial policy. (0 COMMENTS)

At the Irish Free State’s birth in 1922, hopes were high that independence from Britain – what the 18th century nationalist Theobald Wolfe Tone called “the unfailing source of all our ills” – would lead to greater prosperity. Free State leader Michael Collins said the Irish “were so crushed during the British occupation that they were described as being ‘without the comforts of an English sow’” but “What we hope for in the new Ireland is to have such material welfare as will give the Irish spirit that freedom” to “once more to reach out to the higher things in which the spirit finds its satisfaction.” But for several decades after independence such hopes went unfulfilled. In 1922, Irish per capita GDP was 56% that of the United Kingdom. By 1943, this had fallen to just 39%, not regaining that relative level until 1969. In 1988, with the ratio 64%, The Economist ran an article on Ireland titled ‘The poorest of the rich’. Why did Ireland stay so poor for so long?   Economic conservatism Independence came during a civil war between supporters and opponents of the treaty with Britain, but Ireland avoided the kind of economic collapse that occurred in many of the other countries which emerged after World War One, such as Hungary. This was largely due to the economic conservatism of the new government, composed of the treaty’s supporters, victors in the Civil War (and a powerful, formerly colonizing neighbor anxious for the country to succeed). The economic historian Cormac Ó Gráda wrote: In what even some of their own supporters deemed a series of U-turns for economic nationalists, the Cumann na nGaedheal government led by Willian T. Cosgrave (1880-1965) rejected industrialization through import substitution and monetary experimentation, and placed its main hopes on a dynamic agricultural sector specializing in livestock and dairying. Partly because of its determination to minimize the debt burden of repairing the physical damage done by the civil war, it ran a very tight fiscal ship. The result, historian David Fitzpatrick wrote, was that: Under Cosgrave the Free State had achieved marked improvement in real income per capita despite its unadventurous strategy of balancing the budget, avoiding heavy borrowing, limiting state intervention, and merely dabbling in protective measures against British imports. Despite or because of?   Economic nationalism The global depression after 1929 hit Ireland and in 1932’s election Cumann na nGaedheal was defeated by Éamon de Valera’s Fianna Fáil, descendants of the Civil War’s anti-treaty side. Importantly, they handed power over peacefully. Ó Gráda writes: In economic policy Fianna Fáil aimed at greater self-sufficiency through the creation of an indigenous manufacturing sector and the switch of agricultural output from livestock towards tillage. For the followers of ‘Dev’ there was no conflict between economic nationalism and job creation: tariff protection would generate much-needed factory jobs and encouraging tilling would tilt the balance away from the ‘grazier’ and towards the smaller farmer and the farm laborer. Such policies were widespread in the 1930s, but Ireland also launched an ‘economic war’ with Britain when de Valera’s government withheld payments due under the 1922 treaty. The British government retaliated with duties of 20% on Irish agricultural imports, which constituted 90% of all Ireland’s exports, and the Irish economy suffered badly. However, with war looming, the British concluded an agreement ending the ‘war’ in 1938 which permitted de Valera to claim victory. Though neutral, Ireland’s economy was badly affected by World War Two. A post-war boom was short lived and, Ó Gráda notes, “Real national income virtually stagnated between 1950 and 1958.” “A corrosive pessimism took over,” he writes: The July 1956 issue of the satirical monthly, Dublin Opinion, bore a cartoon on its cover showing a map of Ireland, with the caption ‘Shortly Available Underdeveloped Country…Owners Going Abroad’…There was an awareness that Irish economic growth was slower than anywhere else in Western Europe.   The primacy of domestic policy Ireland’s first decade of independence gave it a firmer foundation for prosperity than almost any other country born in the 20th century. True, depression and world war presented a difficult environment for any country, but domestic Irish policy choices after 1932 motivated by what Ó Gráda calls “a nationalist and radical populism” exacerbated this. Compare Fitzpatrick’s description of policy under Cumann na nGaedheal above with economist Brendan Walsh’s of the subsequent period: If an index of the state’s ‘capacity’ based on its use of [protectionist] instruments as well as on the share of GDP it controlled were developed, there is little doubt that Ireland would come out near the top of the international league table (non-socialist division). Yet the hopes of the country’s founders went unfulfilled and Ireland’s economy stagnated despite this: or because of?   John Phelan is an Economist at Center of the American Experiment. (0 COMMENTS)

In the last several months, growing attention has been paid both in print and social media to what has become known as “The Great Resignation,” a term referring to the increase in job openings and corresponding increase in employment turnover rate since 2021. To place this phenomenon in context, according to a November 2022 news release by the Bureau of Labor Statistics (BLS), the number of job openings has steadily increased from January 2012 to the December 2020, during which time the number of job openings rose from 3.9 million to 6.9 million.1 From January 2021 to September 2022, however, that figure has jumped from 7.2 million to approximately 10.7 million job openings. In the wake of the reopening and recovery of the United States economy following COVID-19, such an increase in the number of job openings is to be expected. However, during this same period, the reported rate of job quits reported monthly by BLS has also increased. From January 2012 to December 2020, the rate of employees who have quit increased from 1.5 percent to 2.4 percent, while from January 2021 to September 2022, the “job quits rate” increased to 2.7 percent (peaking at 3 percent in December 2021). Placing this Great Resignation in longer-term perspective will draw attention to and particularly focus on a corresponding labor market trend, recently dubbed “quiet quitting.” My purpose here will neither be to dismiss nor lend credence to whether quiet quitting is something new, per se. Rather, by taking stock of past trends, my goal will be to suggest, not predict, what we can expect in the future by explicating an economic rationale to “quiet quitting.” My argument is that what is known today as “quiet quitting” is simply a new manifestation of labor market turnover, and therefore a difference of degree, rather than of kind, in labor market trends. According to a Wall Street Journal article, quiet quitting “isn’t about getting off the company payroll.” Rather, “the idea is to stay on it—but focus your time on the things you do outside of the office.”2 Quiet quitting, unlike quitting in the traditional sense of the term3, suggests that employees continue to work, but become less invested in their current employment, doing enough not to get fired, but not enough to accrue the human capital investments necessary for advancement, such as learning additional job skills specific to one’s current employment. While the term “quiet quitting” is new, and therefore continues to evolve, what it implies is that more time on the job is spent, as Ellis and Yang state, “on the things you do outside of the office.” Much of the attention that has been drawn to quiet quitting has been based on a poll conducted by Gallup since 2000, measuring “the percentage of U.S. employees who are engaged at work.”4 “Employee Engagement,” according to Gallup, is defined as “the involvement and enthusiasm of employees in both their work and workplace.” According to an article entitled “Is Quiet Quitting Real?” by Jim Harter, Chief Scientist for Gallup’s workplace management practice, these data imply half of the U.S. work force currently employed is quietly quitting. Only 32 percent of employees reported to be “engaged”, while 50 percent were “not engaged” and 18 percent are “actively disengaged” (or “loudly quitting”) at work. However, according to Derek Thompson at The Atlantic, quiet quitting is a “fake trend” and therefore unreflective of anything new in the labor market. Rather, “quit quitting” is but a reversion to the mean in labor market trends from the standpoint of Gallup’s data. Although indeed Thompson concedes the fact that worker engagement has decreased 36 percent in January 2020 to 32 percent in September 2022, both figures are still above the reported figure of 26 percent of workers being “engaged” at work reported in 2000.5 This is much is admitted in another article by Jim Harter, who states that, with the exception of 2020, “[e]mployee engagement has been a steady metric without sharp ups and downs since Gallup began tracking it in 2000.” “Describing a particular phenomenon by appealing to psychological reasons is not the same as providing an economic explanation.” My point in providing this summary has not been to give an exhaustive account of what appear (or do not appear?) to be opposing arguments regarding whether quiet quitting is “real” or “fake” by appealing to working polls that “measure” a worker’s psychological attachment to their work. I do not wish to discount claims that “quiet quitting” can be attributed to psychological reasons, nor do I suggest that COVID-19 has not affected worker attitudes toward their employment. But claiming that workers are “quietly quitting” by describing them as “detached”, “burned out”, or “lazy” gives too myopic a rationale centered on COVID-19 that misdirects attention to explaining “quiet quitting” as a phenomenon that has been recently accelerated, but not caused by COVID-19. Describing a particular phenomenon by appealing to psychological reasons is not the same as providing an economic explanation. As F.A. Hayek best states this point: It is a mistake, to which careless expressions by social scientists often give countenance, to believe that their aim is to explain conscious action. This, if it can be done at all, is a different task, the task of psychology. For the social sciences the types of conscious action are data and all they have to do with regard to these data is to arrange them in such orderly fashion that they can be effectively used for their task (emphasis original, [1952] 1979: 68). To be fair, I am not suggesting that economic explanations have not been provided. In fact, Greg Rosalsky and Alina Selyukh have argued that “quiet quitting” should be understood as a principal-agent problem. As they argue: “In this model, the principal (the boss) enlists an agent (the worker) to do a specific job for them. The problem: the principal doesn’t have complete information on exactly what their agent is doing. Is their agent being productive on the job? Or are they slacking? In order to make sure the agent is doing their bidding, the principal must figure out ways to incentivize and monitor them. The model has implications for the dramatic changes in office life—or lack thereof—we’ve seen in recent years. With the mass adoption of remote work, many managers seem to be struggling with how to effectively monitor and motivate their employees.”6 It is on this basis, they argue, that what is known as “The Great Resignation” should be relabeled “The Great Renegotiation.” While I do not disagree with the economic basis of Rosalsky and Selyukh’s conclusions, the implications of their argument are incomplete. They suggest that “The Great Resignation” shows “a large chunk of our labor force was always phoning it in, but now they have a loud social-media presence and better branding.” Indeed remote work presents a principle-agent problem between employers and employees. Yet this claim misdirects attention to the fact that, whether “quiet quitting” is “real” or “fake”, to imply that “quiet quitting” is simply consumption of on-the-job leisure overlooks that what can also be understood as an “idle labor resource” that is employed seeking information about alternative job opportunities. My reframing suggested here is not new but based on the work of economists William H. Hutt ([1939] 1977) and Armen A. Alchian (1969) and is consistent with the observations made earlier by Jim Harter and Derek Thompson. As Harter states: “Most employees who are not engaged or actively disengaged are already looking for another job” (emphasis added); and according to Thompson: “most people weren’t quitting to retire; they were quitting to take a new job” (emphasis original). Returning to my introduction, and consistent with BLS data, increased turnover along with a corresponding increase in job openings was not caused by COVID-19, per se, but accelerated by government responses to the pandemic. What COVID-19 lockdowns accelerated was the use of already-available computer technology and other platforms, such as Zoom, that could not only transfer work to remote locations. More importantly, these same uses decreased the relative costs of employees seeking information about alternative job opportunities from other employers virtually. Whereas in the past, as suggested by Hutt and Alchian, workers would actively quit their job in order to become actively “employed” in discovering information about alternative employment opportunities,” the relative decline in the cost of discovering information about alternative job opportunities has allowed workers, more than ever, to seek new employment elsewhere while remaining currently employed, although in a passive or “quiet” manner. For more on these topics, see Edward Glaeser on Joblessness and the War on Work. EconTalk. Erik Hurst on Work, Play, and the Dynamics of U.S. Labor Markets. EconTalk. Human Capital, by Gary Becker. Concise Encyclopedia of Economics. Rather than taking a temporary wage cut by becoming unemployed to seek information specific to other jobs, the wage cut incurred through “quietly quitting” comes in the form of foregone human capital investments specific to their current employment that would have allowed workers to command higher wages from their current employer. Hence, if we are to seek an economic rationale for “quietly quitting” which fits with longer-term labor market phenomena and gives us some reliable expectations about continued labor-market trends, it must be understood not as a change in preferences in employees, but due to primarily to a decline in information costs for employees seeking alternative employers while remaining currently employed. References Alchian, Armen A. 1969. “Information Costs, Pricing, and Resource Unemployment.” Western Economic Journal, vol.7, no. 2: 109-128 Hayek, F.A. [1952] 1979. The Counter-Revolution of Science: Studies on the Abuse of Reason. Indianapolis: Liberty Press. Hutt, William H. [1939] 1977. The Theory of Idle Resources, 2nd Edition. Indianapolis: Liberty Press. Mulligan, Casey B. 2012. The Redistribution Recession: How Labor Market Distortions Contracted the Economy. New York: Oxford University Press. Footnotes [1] Bureau of Labor Statistics’ Job Opening and Labor Turnover Survey, accessed 11/29/2022. [2] Lindsay Ellis and Angela Yang, “If Your Co-Workers Are ‘Quiet Quitting,’ Here’s What That Means.” The Wall Street Journal, August 12, 2022. [3] Also of importance, though not the focus here, are labor market policies that have led to labor market distortions that had accelerated a fall in the labor force participation rate, which has steadily declined in the United States since 2000. See Mulligan (2012) and EconTalk podcast episode Edward Glaeser on Joblessness and the War on Work, March 26, 2018. [4] Gallup, Employee Engagement. Accessed 11/29/2022. [5] Derek Thompson, “Quiet Quitting Is a Fake Trend.” The Atlantic, September 16, 2022. [6] Greg Rosalsky and Alina Selyuch, “The economics behind ‘quiet quitting’—and what it should be called instead.” Planet Money, September 13, 2022. * I wish to thank Peter Boettke, Thea Burress, Christopher Coyne, and Amy Willis for their comments and feedback. Special thanks are due to Andreea Candela for improving an earlier draft of this essay. Any remaining errors are entirely my own. Rosolino Candela is a Senior Fellow in the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics, and Program Director of Academic and Student Programs at the Mercatus Center at George Mason University. (0 COMMENTS)

A book review of The Wealth of Refugees: How Displaced People Can Build Economies by Alexander Betts (Oxford University Press, 2021)1 A key idea in Adam Smith’s The Wealth of Nations is that people have a persistent and ever-present drive to “better their own conditions”. Leave people alone, and prosperity and other improvements of life follow, despite “a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations.”2 In nearly 400 pages, Alexander Betts from the University of Oxford makes essentially the same point in his new book, The Wealth of Refugees: let refugees make their own choices and pursue their own interests, and the outcome is likely to be good for both the refugees and the host country. But just like in Smith’s time, different “obstructions” get in the way, and refugees all over the world today are often hindered from making full use of their potential. Based on evidence from extensive surveys and case studies, Betts is inclined towards a refugee system under which the neighboring countries of the refugees’ origin provide the territory for settlement, while rich and far-away countries provide the funds. Refugees should be allowed to work as much as political constraints allow, and that freedom will not only improve their quality of life but also benefit the host economies. How Much Does the Evidence Tell Us? Betts is laudable for supporting his claims with lots of data and facts collected on the ground, but as an empiricist from another field I cannot resist asking: how much does the evidence help in making better refugee policies? The Refugee Economies Dataset, of which Betts is a co-creator, comes from surveys done across several countries in Africa for over 9,000 refugees and nearly 8,000 people from the nearby regions of the host country. We learn about the interviewees’ income and employment status and views on their own wellbeing, mental health, and physical health. We also get a glimpse at how welcome the refugees feel in their host country and whether the refugees would rather move to Europe or return home (if there is one). Case studies for Uganda, Kenya, Ethiopia, and other locations dig deeper into the evolution of policies and the interactions between economics and politics. We certainly get a lot of facts, some expected and some surprising, through the evidence-based approach taken by Betts. He is eager to derive clear policy suggestions from them. For example, after a long discussion of the dataset, he claims that “our analysis suggests that enhancing socio-economic entitlements —and particularly the right to work —for refugees may lead to improved welfare outcomes for refugees and host communities, improved social cohesion, and reduced onward migration.” (Pages 100 and 101) Does it? While becoming a refugee is often not much of a choice, the destination, job type, and the number of hours to work are all decisions made by refugees. Refugees try to “better their own conditions” subject to the political, cultural, and economic constraints they face. A different set of constraints will lead to different behavior, and varying constraints can change the composition of refugees as well. A host country with a booming economy tends to attract younger, more productive, and better-educated refugees; a community that is already in distress is likely to be matched with refugees that may well make the problem worse. Policies also are not randomly assigned but are the results of complex political deliberation and bargaining subject to other constraints. “… why are the kind of refugee economies that the author prefers possible in some places and not others?” Yes, it is the old “correlation is not causation” critique that probably only economists are obsessed with. The patterns described by Betts cannot reliably predict what will happen if certain policies are transplanted to another region. While I appreciate the author’s effort to combine advocacy and evidence, I think the research question should be asked in a slightly different but much less ambitious way: why are the kind of refugee economies that the author prefers possible in some places and not others? The Limits of Sympathy Despite the homage in the title, it is Adam Smith’s other major work, The Theory of Moral Sentiments, that better fits the main theme of Betts’ book. For most of us in developed countries, refugees are a distant problem. Indeed, as pointed out by Betts, some 85 percent of refugees in the world are in low and middle-income countries, and only a small proportion are in Europe or North America. We rarely meet them in person and mainly read about them in the news or see them on television, and we are likely to know little about the political background that created the displacement problem in the first place. Smith imagined a similar and horrendous example: “Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity.”3 According to Smith, that man of humanity in Europe will feel bad about the calamity, but only for a short while; and it would not take long for his focus to go back to all the trivial things inside his little world. It is not that the man is selfish and heartless. “When the happiness or misery of others, indeed, in no respect depends upon our conduct, when our interests are altogether separated and detached from theirs, so that there is neither connexion nor competition between them, we do not always think it so necessary to restrain, either our natural and, perhaps, improper anxiety about our own affairs, or our natural and, perhaps, equally improper indifference about those of other men.” If we are actively choosing between the calamity and some personal benefit, we cringe at that choice. But if the calamity does not depend on us, and it is not up to us to prevent it, we naturally care less. Compassion is a scarce resource and does not travel far. Perhaps this is just an unpleasant fact we need to acknowledge. Smith’s concept of sympathy also applies to the question of where refugees ought to go. When people speak the same language, have close cultural backgrounds, or share similar experiences, it is much easier for them to project themselves into each other’s situations and empathize. The further apart people are culturally, the more difficult it is for them to help others and the easier it is for them to mistrust others. This helps explain why refugees are such a fraught issue in Europe, but it also supports the idea that neighboring countries have a comparative advantage in hosting them. Being closer physically, historically, and culturally, people in the host countries are more able to understand the problems refugees face, and they are also less likely to be suspicious and antagonistic towards their unfortunate guests. Or as Betts puts it more carefully: “cultural proximity may support positive attitudes.” (page 89) Knowing better what the refugees need and how they can contribute to the community, neighboring countries may well be in a better position to come up with more sensible policies and approaches. But again, this can be an unpleasant point to make. It is not easy to acknowledge that people are different, and that rich countries are not good at hosting refugees due to cultural distance. Neither does it sound good to suggest they should keep footing the bill, which is what they are relatively good at, leaving the job of hosting to the (usually poor) neighboring countries that are closer in both geographical and cultural distance. Much as we see with Smith’s “invisible hand,” the host countries that end up adopting better policies towards refugees may not have the noblest intentions. Indeed, leaders with “illiberal motives” may have their own incentives to support a more progressive model under which refugees have more freedom to work. Betts brings up a surprising example: “It was in fact (Idi) Amin who was the architect of many of Uganda’s now-celebrated refugee settlements, and he did so both because they offered opportunities to nurture loyalty and recruitment and also because he received high international praise—and money—from UNHCR and others for doing so.” (pages 222 and 223) In a related discussion, Betts points out that the right to work for refugees “is more likely in semi-authoritarian regimes”, the reason being that “the political costs of creating legislation on the right to work are likely to be lower at central government level with lower levels of electoral accountability.” (page 219) Bluntly put, when people and interest groups in the host countries have less say in policies, they are less able to prevent refugees from getting work. Such an unpleasant thought. A Political Persuasion Whether you agree with it or not, Bett’s message is simple, pragmatic—while sometimes unpleasant—and he has expended a tremendous amount of effort to support it with evidence. But I must warn you that getting the message from the book is no easy task. Perhaps as an effort to make it more palatable, the message is carefully hidden behind a large amount of dry and sometimes repetitive discussion of data, case studies, and historical events. Some sections of the book remind me of browsing a tedious article from some academic journal, and other pages read like an uninspiring press release from some non-governmental organization. Occasionally you see the author getting out from behind that façade and speaking directly to the reader, but those are rare moments that are quickly replaced by yet another exhaustive and exhausting exposition. Chapter Three of the book provides many such examples. “The more years of education a refugee has, the higher their earnings. The better their health score, the higher their earnings. In other words, public services matter. Identity also matters: men and older refugees tend to earn more… Finally, geography matters: living in a city or in a country that allows refugees to work, for example, are associated with higher incomes.” (pages 84 and 85) Such findings are obvious even for non-economists, and the bland writing style does not help to make them more interesting. A few pages later, I come across a passage that truly tests the reader’s patience: “Business owners who employ or sell to refugees appear to have positive perceptions, while people of lower socio-economic status felt more threatened by competition for informal sector work. Put simply, the economic ‘winners’ of refugees’ presence appear to have more positive attitudes; the economic ‘losers’ appear to have more negative attitudes.” (page 92) I think you see my point. For more on these topics, see Ran Abramitzky and Leah Boustan on Immigration Then and Now. EconTalk. Richard Davies on Extreme Economies. EconTalk. “The Double Life of Adam Smith,” by Kwok Ping Tsang. AdamSmithWorks, September 8, 2021. Now we know why it takes the author almost 400 pages to make a simple point; and that brings me to my own unpleasant thought: maybe the book is not written for a common reader like me after all. Says Betts, “… the politics of refugee rights are messy and ambivalent, they involve a series of linked interests only tangentially related to refugee assistance”, and “if countries are to adopt the right to work for refugees, policy-makers need to understand and engage with those politics.” (page 363) To be an active and effective advisor to governments and organizations (which I believe the author is), the tone, choice of words, and style of argument must all be carefully crafted and packaged so that none of the political interests involved are displeased or disturbed—a daunting task. The book is an exemplary effort of persuasion, but it is the political leaders, donors, policy-makers, technocrats, researchers, and NGOs that Betts is trying to inform and convince. The general audience is not welcome here, and they must go elsewhere for a more approachable treatment of the issue. Footnotes [1] Alexander Betts, The Wealth of Refugees: How Displaced People Can Build Economies. Oxford University Press, 2021. [2] Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Book IV, Chapter V, “Of Bounties.” Library of Economics and Liberty. [3] Adam Smith, The Theory of Moral Sentiments, “Of the Foundation of our Judgments concerning our own Sentiments and Conduct, and of the Sense of Duty.” Library of Economics and Liberty. *Kwok Ping (Byron) Tsang is an Associate Professor of Economics, Virginia Tech. He is also Affiliated Faculty at the Kellogg Center for Philosophy, Politics, and Economics at Virginia Tech and a member of the Economic Research Centre at the Hong Kong Institute of Asia-Pacific Studies, and is a Co-editor of Contemporary Economic Policy. As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

Going through my files last week, I found an excellent essay, “East-West Trade,” by the late Benjamin A. Rogge. He was a long-time economics professor at Wabash College in Crawfordsville, Indiana. I joined the Libertarian Club in my second year at the University of Winnipeg, 1968-69; he was the first speaker the club invited after I joined. He impressed me as both a very good economist and a really nice man. The essay in Cato Essay No. 4, published by the Cato Institute when it was in San Francisco. I was a senior policy analyst there from August 1979 to April 1980, and coming up with Cato essays was part of my job. But I have a vague recollection that this came out shortly after I resigned. The essay is based on a talk he gave at a meeting of the Intercollegiate Studies Institute in Indianapolis in December 1967. That was 14 months before I met him in Winnipeg. Unfortunately, I can’t find it on the Cato website. So I’ll settle for quoting some of the best lines. Economists behind the Iron Curtain I would like to cite a recent experience of my own. In September of 1967, at a conference in Rapallo, there was a meeting between economists from behind the Iron Curtain and economists from this country. At the end of the conference, Milton Friedman, who had participated in it, came over to the Mt. Pelerin Society meeting and gave us a report. He said the Rapallo meeting was one of the most exciting things he had ever seen. He found more good words being said about the market economy by the economists from behind the Iron Curtain than he had ever heard in America. Democratic Senator Warren Magnuson on Trade with Communist Countries I read a statement recently by Senator Warren Magnuson (D-WA), who is a strong advocate of free trade, who said in essence: If you are a Communist state in Eastern Europe, and have an unquenchable thirst for the products and know-how of the West, some interesting things will happen. For one thing, in selecting managers, you become less concerned with party loyalty and become more concerned with ability and ambition, that is, you become more concerned with profits, a word which begins to gain respectability. Then, you will turn to marketing incentives. Labor and management will be rewarded not solely for producing the quota, but for producing quality. The export executives must learn English. They must travel in the West. In sum, Magnuson concluded, we will have a stake in a new breed of Communist traders, because they will have a stake in us. DRH note: I’m not sure Magnuson was right. I simply found this statement interesting. Kosygin the Economist I think we have to recognize that the present generation of Soviet leadership is not going to last forever. Someone is going to take its place. That “someone” is going to rise from the middle echelon of the Soviet bureaucracy, just as Kosygin and Brezhnev rose from the ranks. Increasingly, successful generations of leadership are going to be bred in the economic system (Kosygin himself was a textile economist), and if we can get through to the economic structure by way of infusing our new technology, I think we are going to impose some “liberalizing” influence on the future Soviet leadership. It may be the only possible way  that there can come a breaking down of the monolithic structure. Two things about the quote above. First, I had no idea that Alexei Kosygin was an economist. Second and more important, did Rogge, in 1967, anticipate someone like Gorbachev coming after Brezhnev and Kosygin? Rogge’s Implicit Foreign Policy Non-Interventionism It has always seemed to me that conservatives (as well as modern liberals) tend to take a somewhat romantic view of the human drama, seeing it as essentially a contest between the forces of unlimited good and unlimited evil, acted out by men who can be classified as either heroes or devils. I offer as evidence of this a statement by my colleague Richard V. Allen: “In the past, our [United States] exercise of national power has been for the interests of mankind, and not for selfish and ‘imperialistic’ interests dominated by any one group.” This is a curious reading of American history and one that some Mexicans, Filipinos, Hawaiians, Nicaraguans, and Cubans might be prepared to challenge. More Non-Interventionism from Rogge I could never be interested in a holy crusade to free South Africa from its Afrikaner leadership. In the same way, I am not interested in a holy crusade to save the South Vietnamese from the N.L.F. or the Cubans from Castro. We have fought too many holy wars in the history of this world, and each has itself produced the new fanatics against whom the next crusade must be launched. Lenin, Stalin, Hitler, and Mussolini were uniquely products of World War I. There is so much else good in this essay. I hope Cato puts it on its website. Or maybe it’s there and I can’t find it. The picture above is of Ben Rogge.   (0 COMMENTS)

How does the mind work? What makes us sad? What makes us laugh? Despite advances in neuroscience, the answers to these questions remain elusive. Neuroscientist Patrick House talks about these mysteries and about his book Nineteen Ways of Looking at Consciousness with EconTalk host Russ Roberts. House’s insights illuminate not just what we know and don’t […] The post Patrick House on Consciousness appeared first on Econlib.