Jeffrey Miron discusses two basic types of libertarianism -- rights-based libertarianism and a more utilitarian form. As an economist who is good at using cost-benefit analysis, Miron seems to fall more into the latter camp.
But neither rights-based utilitarianism or the utilitarian form works well as a starting point. That is, there are problems starting with rights as a fundamental principle. And there are problems starting with the "greatest social good" as a fundamental principle.
Warning: we're going a little deep today, so hang on...
In this Big Think video, Tama Gendler explains the basics of Nozick's entitlement theory, then makes a critical point near the end -- one that seems reasonable on its face. She suggests that without "theft" (taxation and redistribution), rich people will be able to buy the system that is meant to protect everyone's rights equally. It appears she is willing to accept the paradox of rights violation to prevent corruption and unequal access to justice. But there is a lot that is problematic about Gendler's point. Allow me to enumerate some of those problems below the fold:
Readers of this blog know that Matt Ridley is one of the few people for whom I'll break my five minute length rule. This talk is worth it, I think. It has tons of good stuff: trade and specialization; anti-Malthusian optimism and an evolutionary lens through which to see a world that is getting better all the time.
I was talking to my aunt the other night. She's a bright woman, but she lives in a rural area with relatively high unemployment. I made a passing comment about how importing more talent from abroad is a good thing. She replied: "But what does that do for our country? What about people still without jobs here?" My first response to what I saw as the protectionist instinct was: "That's not my problem." My less tribal, somewhat more cosmopolitan instincts don't see borders when it comes to goods, services, capital and people (with some exceptions).
The correlation between economic freedom and standard of living is so strong you'd think, by now, no one would want to deny it anymore. But they do. In fact, a ruling elite thinks it can improve upon the relative economic freedom we have with a few tweaks and nudges. What they fail to realize (or refuse to acknowledge) is that these tweaks and nudges take us back down the road to serfdom.
Ben Powell explains that sweatshops are a natural feature of developing economies. That has certainly been true for the U.S. My grandparents and great grandparents worked in the American equivalent (textile mills and furniture factories) in the Old South. Conditions weren't great. But without a foundation of prosperity, costly safety regs and the rest are simply unaffordable.
We cannot hope to export those kinds of regulatory standards until third-worlders are rich enough. If we do, we consign a lot of people to worse alternatives. As Professor Powell reminds us, they choose these jobs. And they will continue to choose them over prostitution and scavenging in landfills.
Seeing Adedayo Thomas's work in Africa should give us hope. He is one of the few who has not succumbed to the temptations of Marxism, European socialism, Western foreign aid dependency, autarky or tribalism. Thomas is a diamond in the rough. But is he just a teardrop in the ocean?
Our editor is on vacation for the rest of the week. But I’d hate to let that stop ideas from flowing, so I’m taking a guest spot today to help fill in the void. While this may not be our typical video, I thought everyone could use a little humor after paying taxes.
Full disclosure: I've never read Tim Ferriss's book. I know, I know. I'm one of the only 15 people who hasn't bought The Four-Hour Work Week. So my response here will be just to the video. And what I found interesting about this idea is it's another example of applying economics inside your organization.
Our friends at ReasonTV have a new video featuring Senator Bernie Sanders (D-VT), who recently beat up on the Smithsonian Institution for selling products made in China. Senator B.S. would have us all spend much more money on trinkets purportedly to "create American jobs." The man-on-the-street footage suggests how deeply embedded this fallacy has become. (An attractive Australian woman from the Cato Institute explains why mercantilism is dumb policy. Very clever indeed. I guess we'll let her stay and take one of our 'merican jobs -- along with Sergey Brin and Pierre Omidyar.)
Like the zero-sum fallacy, the make-work fallacy is a tough one to explain to the man on the street. Of course, if I had my druthers, the Smithsonian Institution would be auctioned off to the highest bidder. So when the lady on the street says "it is our tax dollars," she is not being totally unprincipled. But the basic idea of gains from trade eludes most people. So also does the make-work fallacy... How many times have we heard the allegory of the broken windows? About digging ditches with spoons? Or -- on protectionism -- how many times have we heard someone point out that if such policies are so prosperity-enhancing, perhaps we should buy only products from our own states? What about our own counties? (Great idea! reply the locovores.) Evidently, it's not been enough. We have to repeat and repeat and repeat...
How do you neutralize the zero-sum fallacy? How do you explain to people that prosperity comes from people working and often cooperating to serve others? You have two award-winning economists - one with a Nobel Prize - and neither can figure out how to communicate effectively to the layman that wealth must be created through productive activity and exchange. Well, it's not so much that they can't communicate it effectively, it's that the message doesn't seem to get very far.
This is an uphill battle, one requiring constant attention. And in many respects it's is the sort of thing that is supposed to be our job here at Free To Choose Network. But dispelling the zero-sum fallacy is not easy. Not only are you going against people's intuitions on the matter, but against pervasive campaigns to perpetuate the fallacy. And while each new generation must learn it anew, they're getting very little of the truth. So the job is Sisyphean.
Williams, for example points to the horrible slogan "give back," often employed by CEOs and corporate types in public relations campaigns. Such slogans feed into the notion that something had been taken in the first place. Of course, Buchanan -- as a father of public choice theory -- knows that wealth is sometimes taken in the form of rent-seeking. But, by and large, entrepreneurs are people who became wealthy by producing something, and then improving the situation of others via exchange. Indeed that is how wealth is created.
So back to the drawing board. We'll have to tell stories, make analogies, use metaphors and appeal to people's reason. And we'll have to do it over and over again. It may be one of the most important lessons civilization has to learn and very few people are teaching it -- much less teaching it effectively.
