In a recent post, Sarah Skwire argued, quite rightly, that one of the great features of the market is that it makes a lot of stuff she doesn’t like. It also, of course, makes a lot of stuff that she does, including the very specific kinds of weird things that individuals like Sarah might wish to consume. For Sarah, the fact that markets produce things like olives and death metal, neither of which she wishes to consume, is great because it means that other people can get their wants satisfied even if she wants no part of them. All that markets require is a commitment to tolerance. If we want the weird stuff that we like, we have to accept the fact that the very same processes that will produce that stuff will also produce things we can’t stand.  I can assure you from first-hand knowledge that Sarah finds olives highly objectionable. This works to my benefit sometimes, because when they are served at a meal or I buy some at the store, I know they’re all for me, and I really like them. In the market, Sarah is not forced to either buy or consume what she sees as revolting little fruits.  However, this isn’t true of the political process. What Sarah didn’t address is how her examples might play out under a different set of institutions than those of the market. The nature of collective choice in markets, especially the voting process, which most closely mimics choice in the marketplace, is such that we choose among “package deals” and that everyone must accept the choice of the majority. Electoral politics, by its very nature, cannot abide the tolerance of minority tastes the way that markets do. In the most simple case, the candidate getting the most votes (or the amount otherwise dictated by the rules) wins, and he or she is everyone’s president/governor/mayor etc. Those who preferred a different candidate don’t get an opportunity to “consume” their political preference, as there can only be one winner. We are all stuck with that person. When we look at policies, the same sort of story applies. Particular candidates or parties will offer a platform full of a variety of policy proposals. Individual voters might like some of those proposals but also dislike some of them. Some voters might dislike nearly all of a candidate’s positions. Whichever candidate wins, or whichever party wins a majority, everyone will be subject to their attempts to put their preferred policies in place, regardless of whether we liked those policies or not.  Imagine going to the grocery store and rather than picking out the individual items you wish to buy, each store offered a pre-selected bundle of groceries that were available for purchase. Kroger might offer a different bundle than Whole Foods or Aldi, but each store offers only one bundle and you have to buy everything that’s in it. If we push this analogy to its limit, imagine further that you are required to eat everything that’s in the bundle. Similarly, we could imagine restaurants working in this sort of way.  You can easily see the problems. First, the stores would cater to the median shopper and diner, in a pretty good replica of the median voter theorem. Minority tastes would be largely shut out. Second, very few people would be anywhere close to fully happy with their bundle of groceries or their meal. And if you’re required to eat what you buy, some folks are going to be very unhappy about their meals. I would not look forward to watching Sarah try to choke down some olives. (Though she would be looking forward to it even less!) The overall level of preference satisfaction in politics will be far less than in the market because there’s no way to either satisfy minority tastes or offer specialized versions of common goods that better match people’s preferences. This is the problem with the institutions of collective choice: in politics, everyone has to eat the olives. The collective choice processes of politics, by definition, don’t allow for the possibility of the tolerance of others’ preferences that is the foundation of the marketplace. This is why so many political battles, especially recently, seem so high-stakes. It’s a winner-take-all game, so those who perceive themselves in the minority have every reason to fight hard, if not cheat. The more goods and services that are provided through political allocation, the more we will deal with this sort of problem. One need only think about extending the grocery analogy to health care, for example. If we think it’s important that no one is forced to eat the olives, and if we think it’s important that people are able to acquire the particular goods and services they want, we need to rely on markets to the largest extent possible. And doing so requires that we extend a degree of tolerance to the preferences of minorities that politics does not require. As more of our lives are centered around those winner-take-all political choices, the tolerance necessary for markets might become increasingly hard to come by.    (0 COMMENTS)

Or, more accurately, a customs union. With all the proposals for hundreds of billions of dollars in new government spending and new taxes in the United States in recent days, there hasn’t been much good economic news. Alexander C. R. Hammond, of the Institute of Economic Affairs (IEA) and of African Liberty, writes about it in “Africa Tries Free Trade,” Reason, April 2021. He writes: On January 1, the long-awaited African Continental Free Trade Area (AfCFTA) came into effect. Aside from the economic benefits that the arrangement will bring to the continent, Africa’s newfound support for free trade and liberalization marks a clear rejection of the socialist ideology that has tormented African politics for decades. In recent decades Africa has been the sick puppy of the six heavily populated continents. A glance at the Economic Freedom of the World map of economic freedom shows why. Over half of the 50+ African countries are in the least-economically-free quartile of the world’s 190+ countries. Not a single African country is in the top quartile. Hammond calls Nigeria, South Africa, and Egypt “regional economic powerhouses,” but of the three, only Nigeria is in the second-from-the-top quartile, South African is in the second-from-the-bottom quartile, and Egypt is in the bottom quartile. One of the five measures of economic freedom is freedom to trade internationally. With AfCFTA, this will increase for many African countries. This agreement is like NAFTA and its successor, USMCA: it’s a customs union. The idea is to have low or zero tariffs between and among members of the group, but a common tariff rate on imports from outside. Nevertheless it’s a big, if slow, step toward freer trade. Hammond writes: Within 5–10 years, the AfCFTA will ensure that 90 percent of tariffs on goods traded between member states will be abolished. Within 13 years, 97 percent of all tariffs will be removed. By 2035, the World Bank has predicted, this enormous liberalization effort will boost Africa’s gross domestic product by $450 billion, increase wages for both skilled and unskilled workers by 10 percent, and lift more than 30 million people out of extreme poverty, defined as living on less than $1.90 per day. According to the same estimates, by 2035, the AfCFTA will see more than 68 million people rise out of moderate poverty, defined as living on $1.90–$5.50 per day. The “countries with the highest initial poverty rates,” the World Bank says, will see the “biggest improvements.” Given Africa’s flirtation with socialism and protectionism from the 1960s through at least the 1980s, this is a welcome development. For more on Customs Unions, see Douglas A. Irwin, “International Trade Agreements,” in David R. Henderson, ed., The Concise Encyclopedia of Economics. (0 COMMENTS)

EconJournalWatch and Dan Klein asked its contributors “What 21st-century works will merit a close reading in 2050?”. You can find the responses, including mine, here and here. I particularly enjoyed Evan W. Osborne’s, Slaviša Tasić’s, Kurt Schuler’s and Scott Sumner’s picks. I have interpreted this “question from the future” as coming from somebody who “already came to an outlook like my own: “a 40 year old classical liberal in 2050. But I also assumed that she had a special interest in works that helped in shaping the nuances of classical liberal arguments in the 21st century. Besides the books I mentioned, I pondered adding others but had to leave them out because the limit was ten. Here are those that missed the list, but that I nonetheless believe will be significant and still read in 2050.   Martin Amis, Koba the Dread: Laughter and the Twenty Million (Vintage, 2003) A splendid meditation on the blindness towards communist terror shown by many Western intellectuals. Many similar works may fade in memory from now to 2050, when hopefully the dangers and horror of communism will be understood for what they were by most people, but Amis’s literary powers will allow this to survive and enlighten new generations.   Luigi Marco Bassani, Liberty, State, & Union: The Political Theory of Thomas Jefferson (Mercer University Press, 2010) The years 2000-2020 will be remembered as years of “revisionist” history, particularly in the United States, that put the “cult” of the framers in perspective. Yet at a certain point, people will accept again that we cannot read with 20th century lenses the personal behaviour of 18th century gentlemen, and people will search again for works investigating their ideas and why they matter. Bassani’s book will then come in handy, as the best account of Jeffersonian liberalism.   Anthony de Jasay, Justice and Its Surroundings (LibertyFund, 2002) This is a collection of some of Anthony de Jasay’s (1925-2019) philosophical papers. Its shorter chapter (“Empirical Evidence”) is a little classic in its own right. De Jasay was a brilliant mind and should be known more widely. Perhaps by 2050 he will be.   Antonio Escohotado, Los enemigos del comercio: una historia moral de la propiedad (Espasa, published in three volumes between 2008 and 2018) This is a tremendous trilogy on the intellectual origins of the “enemies of commerce,” explaining the intellectual prevalence of the anti-market thinkers. These are long, exhausting books, but filled with insights and written by a non-academic philosopher who brings together an astonishing erudition with a splendid wit.   Biancamaria Fontana, Germaine de Staël: A Political Portrait (Princeton University Press, 2016) Madame de Staël (1766-1817) is a powerful liberal thinker who has not been forgotten and whose main works are sadly not available in the English language. Fontana’s book is a splendid introduction and would also work liberals in making sense of the circumstances of the French Revolution, which we typically tend either to worship or caricature.   Chandran Kukathas, The Liberal Archipelago: A Theory of Diversity and Freedom (Oxford University Press, 2003) Government and the “good life”: the second is not a responsibility of the first. This is a thoughtful manifesto for freedom of conscience and tolerance, which does not take shortcuts in answering the question “Should we tolerate the intolerant?” The problems it deals with are not going to disappear, its answers are and will be unpopular, but hopefully, with time, they may enlighten more people.   Jonathan Littell, The Kindly Ones (HarperCollins, 2006) An American writer writes in French the definitive novel over the mad slaughters of the 20th century. This book will impact the way in which future generations understand Nazism and totalitarianism.   Joel Mokyr, The Enlightened Economy: An Economic History of Britain 1700-1850 (Yale University Press, 2012) This is and will be considered for generations an essential work on the Industrial Revolution, and why it started in England.   Charles Moore, Margaret Thatcher: The Authorized Biography (Allen Lane, published in three volumes between 2015 and 2019) Few politicians have been so associated with free market reforms as Margaret Thatcher. If The Anatomy of Thatcherism by Shirley Robin Letwin (1924-1993) is still unparalleled as an analysis of Thatcherism, Charles Moore’s wonderful biography acquaints us with the circumstances of Thatcher’s life and makes us understand better her motives as well as the challenges of governing and reforming. For those in the future who will try to make sense of the very few political experiences in which the state was actually rolled back, Moore’s book will be a must read.   Nicholas Phillipson, Adam Smith: An Enlightened Life (Penguin, 2010) The early 21st century will certainly be remembered as a happy period, in terms of Smithian studies. This work will stand out, as a splendid intellectual biography written by a great scholar.   Amity Shlaes, The Forgotten Man: A New History of the Great Depression (Harper Collins, 2009) The health of classical liberalism in 2050 will depend largely on the interpretation of the past which dominates academia and the public debate. The Great Depression is a pillar of the narrative that justifies more statism. In this book, Amity Shlaes explains why it shouldn’t be, providing us a detailed account of what happened and with a sound interpretation of it.   Vernon L. Smith, Rationality in Economics: Constructivist and Ecological Forms (Cambridge University Press, 2007) Vernon Smith’s distinction between different forms of rationality is bound to be more fortunate, with the passing of time, as it is truly enlightening. This book is a methodological tour de force and an exploration of the fundamentals of our social and economic life. Smith is a giant on the shoulders of giants.   Tom Stoppard, Rock ‘n’ Roll (Faber, 2006) Great insights on communism and how Western intellectuals saw it in this marvelous play by one of the greatest playwrights of his generation.   Mario Vargas Llosa, La llamada de la tribu (Alfaguara, 2018) A gallery of portraits of classical liberal political thinkers written by a great novelist, who since the 1980s has been a leading voice for liberalism all over the world. Vargas Llosa not only presents lucidly and elegantly a brilliant selection of champions of this tradition of thought, he also provides the readers with some unique insights into how they became what they were.   As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

Yesterday self-described “mid-level manager” Ben White sent me this reaction to “Businesspeople Deserve Every Penny.”  Reprinted with his permission. Bryan, I read your post about the 12 Labors you’ve been subjected to shortly after I wrapped up a call with the VP in Supply Chain at the company where I work.  We spent most of the call basically reflecting on the idea that everything is a mess in the world right now and this mess is replicating across multiple industries at the same time and there isn’t an easy solution. Supply chains are interwoven and when problems occur they can feel linear at the time but each break in the chain creates multiple more outcomes so you have to get comfortable with small problems having exponential impacts. As a mid-level manager I thought your below questions were funny if you were asking them of me.  However – if the “they” you’re referring to is an executive leader, I think you’re mostly headed in the right direction of understanding them. Are they stoic?  Do they realize that hardly anyone will sympathize with their plight?  Or are they just too busy making the trains run on time to stop and reflect?   Added a few thoughts below – mostly from my mid-level perspective – along with any insights I’ve been afforded from the bosses. Stoics: Maybe some business people are – it depends what sort of crucible they’ve been subjected to.  In The Case Against Education you discuss how employers are looking for conformity in employees; these eventually become the mid-level managers (and some become executives).  I see the folks who’ve always taken the high status jobs (strategy/marketing) really crack when stuff hits the fan.  These are the students who seem to check every box and pursue jobs which look good on a resume. The leaders who’ve spent more time in the unattractive roles (operations management for example) are much more comfortable with things breaking – and living with a “control what you can control” mindset.  Some of these leaders haven’t been to college. Too busy to reflect:  I have yet to find a good leader who doesn’t advocate spending time to reflect on your actions and outcomes.  Leading people is a constant process of reflecting on your own actions to make sure you understand how to get more out of your team.  It also requires you to have your team reflect on their actions and then report back to you on how well they’re doing at executing the tasks you’ve assigned them – where they’re succeeding, where they need help, etc…It’s pretty simple “line manager” stuff – but the little stuff can be hard to do. Sympathy: Finding someone to sympathize with likely goes against a few factors leaders face.  If you’re the CEO you don’t get to cry down and you don’t have peers – it is truly lonely at the top.  If you’re mid-level then you’re in a pretty significant political battle – at least internally.  Careering is a competitive sport – if you’re looking for sympathy it’s easy to be seen as someone who can’t hack it.  If you’re commiserating over beers with a peer you have to be careful that they don’t sabotage you later.  You can talk to friends in other companies – but do they want to listen to you whine – probably not.  So it’s easier to just move on.  I guess you could post it on LinkedIn – but not sure what a signalling theory would say about a business person going onto LinkedIn to say work is hard.  Like this doesn’t really seem like something you’d want to signal to future employers (or employees). Anyway – great stuff – the Labors made me laugh today.  Was good to hit the pause button for a bit and step away from work-work.   Thanks, Ben (0 COMMENTS)

The reason why things don’t work properly is that the right people are not in politics. Of course, what you think are the right people is not necessarily what your neighbor thinks, so ultimately the problem is a lack of national unity. What is needed is that we share the same values under democratic political leadership. And even this is not enough. Every voter must spend at least as much time studying every major political issue as he spends buying a new car. Add inclusivity to all this, and the proliferation of externalities would become solvable. If we are one, there cannot be anything external to us (reminder: the main characteristic of externalities is that they are external to the market). With more Alexandria Occasio-Cortezs and more Sidney Powells in politics, with more knowledgeable and devoted bureaucrats, we could hope that greedy consumers would stop gouging businesses, that rational policies would prevail, and that people with good union jobs would work selflessly for our children. My readers will understand that the model of the state adumbrated above is poles apart from any defensible political and social theory. We may say it’s balderdash. It’s an excuse to playfully mark the 2021 April Fools’ Day (check this link to the Encyclopedia Britannica and you will see what the fish has to do with all that). (0 COMMENTS)

I don’t know how to answer this question. But recent posts by Tyler Cowen, Ross Douthat and Robin Hanson all suggest that the answer is “more”. Here’s the headline of Tyler’s recent article: What Does the World Need? More Humans Global depopulation is the looming existential threat that no one is talking about. The world current has 7.8 billion people, and that total is expected to rise to 10.9 billion by 2100.  The population may begin falling in the 22nd century, but I wonder if it’s a bit early to begin planning for something so far out in the future, which is so hard to predict.  Back in 1970, most experts were worried about overpopulation, at a time when the world had less than half as many people as today. What is the optimal global population?  I just completed Schopenauer’s 1200 page magnum opus on philosophy, which argues that the correct answer is zero.  At the other extreme, some argue that all human life is wonderful, pointing to the fact that even people living in horrible conditions—say North Korean concentration camps—typically do not commit suicide.  Both claims are plausible, but I’m not entirely convinced by either extreme.  I remain agnostic on the question. We could apply the utilitarian criterion that the optimal number of humans is the one that maximizes aggregate global utility (perhaps including animal utility in the calculation.)  I have no principled objection to that approach, but I don’t see how to implement it. People often criticize utilitarianism by pointing to the fact that utility cannot be measured.  I accept their point, but still find it to be a useful policy guide for real world public policy decisions.  While we cannot measure utility exactly, we can have well informed views that one situation has a higher utility level than another.  Thus is seems very plausible that South Korean public policies produce higher utility than North Korean public policies.  But when I use utilitarian reasoning I always implicitly hold the population fixed.  I find it almost infinitely more difficult to think about utility in an absolute sense.  How many Swiss people does it take to have the same total utility as 100 residents of rural Pakistan?  I wouldn’t even hazard a guess, and thus would be extremely reluctant to advance any public policy agenda on that basis. Some population boosters point to polls suggesting that Americans would prefer to have more children. OK, but why don’t they?  Presumably there are some barriers related to the resources (time, money, etc.) required to raise children.  But then what are the public policy implications?  People would also prefer to have more money, bigger houses, more vacations, and lots of other good things.  Should public policies subsidize those goods?  For children the answer might be yes, as there’s a sort of “positive externality” aspect to raising kids.  But that just pushes us back to the optimal population question in the title of this post.  What is the answer? Another possibility is that we should keep population roughly where it is, as change can cause problems.  Thus keep Japan’s population at roughly 125 million, Britain at roughly 68 million, and New Zealand at roughly 5 million, even though these three island groups have roughly equal ability to support human life.  But I’m not convinced that the disruption caused by Japan gradually declining in population and New Zealand gradually growing in population is all that bad.  Yes, you can point to downsides from population aging, but also some upsides (less crime, less traffic congestion, less pollution, more living space.)  So I’m not convinced by the claim that while we don’t know the optimal population, surely we know that population decline is bad. People worry that Europe will turn into a sort of museum.  I love museums! PS.  Suppose it turned out that the “correct” utilitarian answer to the question in the post title was that the world should become populated until living standards fell to those of a North Korean concentration camp, because all life is basically wonderful.  At that point I suspect Cowen and Douthat would jump ship, but Hanson would stick with the utilitarian logic of the analysis. PPS.  I had always assumed that the Christian religion had a sort of “be fruitful and multiply” ethic, but Schopenauer points out that this is the Old Testament, and argues that the New Testament has a very different perspective.  Can anyone confirm? PPPS.  Schopenauer’s The World as Will and Representation is highly recommended for disillusioned people.  Optimists might like his book on how to be happy, which is perhaps just as impressive, but in a radically different way. (0 COMMENTS)

The other day I told my Facebook friends that my current favorite thing is when the Spring collections from fashion designers come out and they’re full of edgy, wild, often gender bending designs (especially this year in the men’s collections–because Billy Porter) and dads everywhere repost the runway images and declare with outrage that they won’t be buying any of THIS nonsense. Do they really mean to suggest that if the clothing had been more traditionally styled they’d have laid out $800 for a t-shirt? Sometimes, you–whoever you are–just aren’t the target audience for a product. I’m Jewish, so I’m not buying any Christian rock anytime soon, but you don’t see me getting all outraged over that trinitarian stuff they keep trying to foist on me. It’s not FOR me. If I liked it, the Christian rockers would be doing their job wrong. If my crew of Facebook dads liked the current collections from cutting edge fashion houses, those fashion houses would be doing their jobs wrong. I don’t like olives. I also don’t like horror movies. I don’t like death metal, or rice pudding, or perfumes that smell like food. I don’t like self help books, white wine, spray air fresheners, acrylic yarn, spider plants, flip flops, or golf. I’m not an exceptionally disagreeable person–at least I don’t think I am. But I’m a person, and that means there are things that I don’t like. I have, in other words, what economists would call preferences. Free markets mean I can satisfy my preferences for things that I do like–dark chocolate, movies about superheroes, lyrics-driven angsty guitar folk/roots/punk music, clotted cream, perfumes that smell like incense, books about magic and alternate universes, Cabernet, herbal wreaths, cashmere yarn, rose bushes, block heeled boots, and taekwondo.  The market doesn’t deliver everything I want to me, of course. Sometimes this is because the technologies to make the things I want don’t exist yet. (Apparently this includes a chocolate yogurt that actually tastes like both chocolate and yogurt). Sometimes it’s because I’m weird enough that not enough people want the things that I want (Cars with all the bells and whistles BUT that still have windows that roll down manually). Sometimes it’s because I want stuff I can’t afford (diamond necklaces, houses by the ocean, a Shakespeare First Folio). But most of the stuff I want is out there, and if I choose to spend some of my money on it, I can get it. That’s how functional markets work. And people who make stuff to satisfy my effective demands (that means my demands for things I can afford) are getting better and better at knowing what we want and providing it. Targeted advertising sometimes feels a little creepy, but it’s also how I found out there’s a Canadian bookshop that curates boxes of books and goodies for kids exactly the ages that mine are. It’s how I found my favorite pair of shoes. And it’s how I discovered the wonders of Japanese office supplies.  But sellers’ increased ability to cater to my weirdo wants and desires isn’t limited to me. (As my parents always told me, the world isn’t here to make me happy.) This increased ability to fulfill wants and desires serves all of us. It means my husband can find t-shirts with jokes about his favorite band’s lead singer’s dogs. It means my older daughter can find enamel pins for a web series I’ve never heard of, and my younger daughter can find socks decorated with the faces of her favorite K-pop idols. It means that people who like olives and horror movies and death metal and all the other stuff I don’t like can find those things too. A free market is going to make a lot of stuff I don’t like, don’t want, and don’t need. If the market offers something illegal, I can bring legal action. If it offers something I think is immoral, I can protest or boycott. That’s cool. I don’t have to buy everything the market offers. If I don’t like olives, no one’s going to make me buy them. But I can rest perfectly content knowing that people who do like the revolting salty ovoids can buy them. In exchange for providing me with the stuff that I do want, the free market asks only that I tolerate the wants of others even if I don’t share them. In nearly every case my preference for a particular good or service is just that–a preference. It’s not a referendum on my character, or yours, if we disagree about olives, or white wine, or superheroes.  That’s what makes it great. Even if it does mean that olives, somehow, persist. If it presents me with things that are tacky, or irritating, or taste bad, I can complain to my friends on Facebook if I want, or I can just realize that not everything the market puts out is for everyone.  (0 COMMENTS)

Last month, I posed the following challenge on Twitter: The last 25 years have delivered amazing economic and technological progress for humanity. *Political* progress, in contrast, is hard even to detect during this period. What political change on Earth since 1996 has been even 2% as wonderful as the collapse of Communism? — Bryan Caplan (@bryan_caplan) February 10, 2021 The responses mostly confirmed my political pessimism.  After all, the collapse of Communism did not merely greatly increase the freedom and prosperity of the subjects of the former Soviet bloc; it also drastically reduced the risk of World War III, along with Soviet-backed and Soviet-inspired military strife across the Third World.  What political changes since then remotely compare? 1. As the author of The Myth of the Rational Voter, I’m a “one cheer for democracy” kind of guy.  Still, the best responses to my challenge pointed to the continuing rise of democracy.  Arthur Baker pointed to the modest rise in the number of democracies (and corresponding modest fall in the number of autocracies).  Jeremy Horpedahl pointed to the rise in the share of people worldwide living under democracy.  But Our World In Data also shows an absolute fall in the number of liberal democracies.  The number of closed autocracies fell, but by most counts China’s has grown markedly more despotic during this quarter century.  So while I wouldn’t dismiss the democracy answer out of hand, I’d say that if these gains exceeds my 2% threshold, they doesn’t exceed it by much. 2. A few other respondents pointed to immigration liberalization: the Schengen zone, EU expansion, and rising immigration to the U.S. and Western Europe.  While I consider these steps in the right direction, the magnitudes arevery modest.  Generously speaking, global borders moved from 98% closed to 97% closed.  I’m open to the idea that moving to 0% closed borders would be as good as the Soviet collapse, so perhaps the immigration changes we’ve experienced are roughly 1% are good as the Soviet bloc.  But it takes some effort to believe that open borders would be twice as good as the Soviet collapse.  To repeat, the Soviet collapse did much more than merely free the victims of Soviet tyranny; it lifted the specter of World War III for the whole planet.  So again, I doubt actually-existing immigration liberalization exceeds my 2% value cutoff. 3. A few respondents hailed the fall in world poverty and so on.  All this would of course fall under the heading of amazing “economic and technological progress.”  The same goes for Bitcoin, another popular answer, though it’s hard to see that it noticeably improved the quality of life for even 1% of the global population.  Humanity can and does enjoy economic and technological progress despite political stagnation. 4. Finally, respondents named a grab bag of newspaper headlines: Brexit, Tunisian democracy, increasing gay rights, multi-party democracy in Mexico, higher transparency, and so on.  None of these strike me as plausible candidates.  Remember: Almost everything is small from a global perspective.  The Soviet collapse dramatically improved the lives of billions, though most of them probably never realized what they gained.  To be in the running, then, your change would have to dramatically improve the lives of tens of millions.  Increasing gay rights is the most credible contender, but how much of the improvement there comes from actual political reform rather than cultural evolution? Overall, then, the responses to my query strengthened my conviction that global politics has been basically stagnant for a quarter century.  The world keeps getting better.  We have more stuff.  We know more stuff.  We even treat each other better.  But since the burst of progress in my youth, the quality of global politics has been, like Han Solo, frozen in carbonite.   (0 COMMENTS)

I’ve been working with Steve Globerman on a short book on the UCLA School of Economics. It will be published by the Fraser Institute in Canada. Of course we highlight the work of Armen Alchian, Harold Demsetz, Sam Peltzman, and a few others. I was thinking today of someone we don’t highlight because he didn’t make a large contribution to the academic literature. But he was, and is, a first-rate economist and a master teacher. Thinking back to my first quarter at UCLA, I realize that he was second only to Armen Alchian in teaching me economics. It’s a kind of a funny story, so I’ll tell it here. I arrived at UCLA, coming down from Canada, in September 1972. I did a courtesy call to various members of the economics faculty. One person I had to get a signature from was Axel Leijonhufvud. I got an unexpected compliment. He said that when he and his colleagues were looking over the incoming class, I was one of the ones they were excited about. And his body language supported his statement: he rubbed his hands together with glee. I was being paid $440 a month for 9 months for 2 years to be a teaching assistant and my in-state and out-of-state tuition were covered for the first two years also. I had learned to stretch a small amount of money over many months and so, in my view, I had hit the jackpot. In return, I was a teaching assistant. I had to show up for a few hours a week to teach/tutor breakout sessions for the large classes and I also had to grade for the professors for 40 hours a quarter. Because of Axel’s reaction to me, I started thinking, far too early, that I was hot you-know-what. So when I made the courtesy call to Chuck Baird, the professor whose intro macro class I would be TAing for, I told him that I would drop in from time to time to his class to see what he was doing. In my view, I already knew basic macro and so didn’t need to attend his class regularly. Wrong strategy. Chuck made it clear in no uncertain terms that I would attend every class. I went away disappointed but not angry. By the end of his first hour of class the next week, I was no longer disappointed but, instead, eagerly looking forward to future classes. What happened to cause this? One main thing. Chuck told his class of about 150 to 200 students that he spoke fast and covered lots of ground, as many of them knew if they had taken him for the introductory micro course. So, he said, your best strategy is to plug in a cassette recorder at the front of the room and record the lecture so that in revising your notes, you can fill in any gaps. Some of you, he said, might not yet have a tape recorder. They’re priced at about $30 and some of you might say that you can’t afford to spend $30. What’s the answer to that objection? “What is the answer?” I asked myself, not having a clue. About 20 hands went up. He called on one of them, apparently randomly. The student said: Learning economics well raises your human capital, your future earning power. Thirty dollars is rounding error on the increment in the present value of future earnings that you will get from this course. Holy cow, I thought. That’s right. And I think I can say, though my memory is hazy, that I never missed a class. I learned a fair amount of micro and a ton of macro.     (0 COMMENTS)

According to the Republican National Committee in a letter they sent to me: “On his very first day in office, Joe Biden destroyed 11,000 American jobs and $1.6 BILLION in wages when he halted construction of the Keystone XL Pipeline.” This was coupled with a plea to “Please contribute $45 IMMEDIATELY to help your Party win back the House and Senate.” I reject both messages. Ok, ok, if you want to say that this decision of President Biden’s destroyed jobs, fine. But, then, if you want to be logical, you also have to opine that: * The horseless carriage destroyed jobs in saddle making, horse training, blacksmithing, whip manufacture, and cleaning up manure. * The cell phone demolished employment opportunities at Kodak in film-making, camera production. * The computer eviscerated occupations in typewriters, carbon-paper, white-outs (for typing errors), forestry (less paper now needed) * Automatic elevators devastated careers for manually operated elevator attendants. * Air conditioning put paid to the fan industry. * 78 records gave way to 45s, which were supplanted by tapes and then discs the streaming; jobs were “lost” every step of the way. * Air travel to a great degree supplanted alternative means of transportation (well, not right now, to be sure, but, hopefully, soon again). * Changes in taste have eliminated numerous careers in manufacturing hula hoops, pet rocks, men’s hats and women’s too This list could go on and on. The RNC should take it as a homework assignment to add to it. Yes, it cannot be denied, in all of these cases job slots were eliminated, including in the present administration’s decision that construction be halted in pipeline construction. But to put matters in such a way is an exercise in economic illiteracy. A more accurate description is that occupations are/were/will be shifted from one avenue to another. Unemployment did not rise when the automobile, the cell phone, the computer, automatic elevators were introduced. Rather, people were transferred from working on items no longer needed to others in greater demand. Instead, they were allocated in the direction of new goods and services more greatly desired by consumers. In all these examples it is clear from the position of the Monday morning quarterback that these were economic improvements. Whether reducing fossil fuels and oil, which are complementary goods to pipelines, and embracing alternative energy sources will be an improvement to our economic welfare is an entirely different matter. All that can be said about this decision is that it will not destroy jobs; it will rather rearrange the labor market in the direction favored by the new administration. The natural tendency of the market system is in the direction of full employment. When industries collapse, due to progress, new technology, changes in taste, etc., this releases workers to seek alternative employment. Such phenomena do not “destroy jobs”; rather, they move them elsewhere. True, Mr. Biden’s pipeline decision did not stem from changing consumer tastes, new technology, etc. But in our system, he is now the representative of the people, all the people, those who voted for him and those who did not. Was this a wise move on his part on our behalf? Save that question for another day. For now, we must see through the foolishness of declaring he has “destroyed jobs.” (0 COMMENTS)