Economic and political rights first

I just finished readingThe Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly.

Russ Roberts interviewed Easterly in this EconTalk podcast.

I recommend reading the book and listening to the podcast.

Easterly’s key and powerful point is that the economic and political rights of humans in third world countries are often not considered by experts looking to prove out their prescribed solutions for alleviating poverty and often do so by working with the very leaders of those countries who suppress those rights.

Easterly made the excellent observation that Martin Luther King Jr. didn’t seek to alleviate poverty among African-Americans first. He understood that ensuring that they had economic and political rights came first.

The last half of the book provides a nice description of how the incentives work in a free market (or when people have economic and political rights) to be the most effective pill against poverty. Easterly, though, steers away from using terms that carry baggage in today’s political clime, like markets and capitalism, and keeps the focus on the individuals. Instead of calling it capitalism, he refers it to a people trying to solve other people’s problems.

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“Your Teacher Said What!?” Review

I’ve been looking forward to reading Joe and Blake Kernan’s book, Your Teacher Said What?! Defending Our Kids from the Liberal Assault on Capitalism.

I highly recommend it. It exceeded my expectations.  I found it well-written, easy-to-read, entertaining, critical, well researched and fair.

In the book, Kernan describes how he handled presenting ideas of about liberty, free markets, business and the government to his daughter.  We can all benefit from it.

For those unfamiliar, Joe Kernan is the morning host of CNBC’s market and business program Squawk Box and an unabashed capitalist.  His daughter is (or was) ten-years-old and attends public schools.

Despite the title, the book doesn’t focus a great deal on what Blake’s teachers say.  Though, in the book he gives credit to her teachers for doing a fine job of teaching everything other than liberty, markets and business (an example of where he is fair).

Here’s another example of his fairness (p. 3).

When Barack Hussein Obama took the oath of office, I admit I understood the proud cheers of the hundreds of thousands of people lining the parade route in Washington that day.  I didn’t vote for the guy, but I’m not a complete dolt, and I could see how his election said something pretty positive about America.

The hangover didn’t take long coming.  My hangover isn’t the result of concerns about the president’s birth certificate. Or worries that he is some kind of Manchurian candidate in the pay of a foreign power.  I don’t think he’s Muslim, or racist, or anticolonialist, or un-American.

No, my problems with the president are on an entirely different plane: I hate what he’s doing to my children’s future, and I don’t have to think that Barack Obama is the devil to know that he has a very different idea than I do about what America should look like when Blake and Scott are adults.

It’s a belief thing.  Penelope (Kernan’s wife) and I believe in free markets–that the best economic decisions are made by the largest number of individuals acting in what they believe to be their own interests.  President Obama and most of his administration believe in an economy that depends on the cleverest people acting in what they believe to be the interests of everyone else.  We believe in voluntary associations.  They prefer compulsory ones, at least when it comes to health insurance or union organizing.

This sets the stage.  Kernan is not out to make unsubstantiated personal attacks.  Rather, he presents why he thinks his beliefs are right.

In one chapter, Kernan dives into anti-business portrayals and caricatured markets in movies like WALL-E and Avatar.   He concludes:

…I still don’t understand the reflexive hostility of the entertainment business to free markets and capitalism.  Maybe the best explanation is that the writers, directors, and actors who produce our filmed entertainment are allowed (maybe even encouraged) to retain a child’s view of the world.  Like ten-year-olds, they retain a belief in obvious heroes and villians, in perfection as a place where things don’t change (especially as the result of human action), and in happy endings.

A little later, Kernan defines Progressivism (p. 127):

The desire to regulate economic life might be the defining characteristic of Pregressive philosophy.  It combines a mistrust of the free market in allocating resources; an appeal to a vague and indefinable virtue (“fairness”); a desire to achieve perfection in economic outcomes; a deference to experts over the judgement of ordinary folks; and, best of all, a chance to tell other people what to do.  Oh, heck, let’s just say it: Regulation is progressivism.

It is also the perfect way to illustrate just how much Progessive thinking depends on treating adults like kids.  Because kids love regulation.

“Blake?”

“Yes, Dad?”

“You know cigarettes are bad for you, right?”

Eyes roll upward.

“And you know that people aren’t allowed to smoke in restaurants or lots of other places, right?”

“They shouldn’t be allowed to smoke anywhere.”

“Why not?”

“Because it’s bad.”

These two previous passages spurred the idea that many people form their sense of how government, business, markets and the economy work when they are about 10-years-old.  And, they don’t reconcile these views with the real world often, even against compelling evidence.

This brings to mind folks I know who haven’t realized that markets have made available, even to folks with modest income, a standard of living unmatched on this planet, ever.

Or folks who haven’t yet realized that all politicians should be considered narcissists only interested in their own political gain.  I admit, this one took me some time.  I spent too many of my younger days defending “my” politicians for their disappointing behavior before I realized that was a waste.  Assuming all politicians are in it for themselves dispels with the vacuous “I really like that guy” vote and helps you focus on whether or not you agree with the politician’s positions.

If it’s true that many folks think of government using their 10-year-old logic, this may make Kernan’s book one of the most important of the year because it provides nice advice on how to deal with this.

Six Consequences of Action

I have an idea for a new game.  It’s modeled on the Six Degrees from Kevin Bacon game, which is based on the theory that we’re connected through six or fewer people to just about anyone.

In my game, the idea is to think about a change in our lives or economy and to think about at least six consequences of those changes – good or bad. This is based on a theory by economist Thomas Sowell that there are no solutions, only trade-offs.  The idea to identify as many potential trade-offs as possible so we can all begin to get a better overall perspective of how it all works together.

Sowell provides a great example in his 1995 book, The Vision of the Anointed.

When a baby was killed in a tragic plane crash in 1989 by being ripped out of its mother’s arms by the force of the impact and being sent hurtling through the cabin, a political “solution” was proposed by having a federal law requiring babies to be strapped into their own seats on airplanes.  But a study by economists indicated that such a law, requiring parents to purchase an extra seat, would divert a portion of the traffic to cheaper alternative modes of transportation on the ground–most of which have higher mortality rates than airplanes.  Over a period of a decade, there would be an estimated saving of one baby’s life in airplane crashes, a loss of nine lives in alternative ground transportation, and an additional cost of $3 billion.

Now, to put this example in the context of my new game.

The change: Federal law requiring babies to be strapped into their own seat on airplanes.

Consequences

  1. Babies safer on planes.  Estimated lives saved over a decade: 1 (intended).
  2. Parents have to purchase additional ticket for baby, or other passengers pay more to make up for lost revenue for “free” baby seats (unintended).
  3. Higher cost of plane travel causes a portion of potential plane travelers into cheaper and more dangerous modes of ground transportation (unintended).
  4. Additional cost to people purchasing plane tickets over the course of a decade: $3 billion (unintended)
  5. Incremental fatalities from diverted ground traffic: 9 (unintended)

Unfortunately, Sowell only identifies 5 consequences for this change.  But you get the picture.  There may be more.

The idea of the game is to try to identify consequences and see if the change presents a reasonable trade-off.  As Sowell says about this law, “Few people would regard this as a reasonable trade-off.”

But, the law sounds very good and the first consequence is typically the only one that is considered and if that’s the only consideration, it appears to be a beneficial law.  But, to only consider the first consequence assumes we live in a world without constraints, alternatives and incentives.

Please give the game a try.