Market Correction

26 March 2006

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Orlando Patterson is correct - both that culture affects economic outcomes and that too many scholars ignore this fact ("A Poverty of the Mind," March 26). But he mistakenly says that "nothing could have been more cultural" than Jim Crow.

In his book Competition and Coercion, economic historian Robert Higgs presents much evidence that in the post-bellum south "individual attempts to extract discriminatory gains foundered on the rock of individual wealth-seeking behavior. Really effective discrimination, even by groups, required legal sanction or support."* These awful sanctions and supports were provided by Jim Crow legislation.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* Robert Higgs, Competition and Coercion: Blacks in the American Economy, 1865-1914 (Chicago: University of Chicago Press, 1980), p. 134.

25 March 2006

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Katharine Weber blames American outsourcing for the deaths of children working in third-world factories that catch fire ("The Factories of Lost Children," March 25). These deaths are heartrending. But Ms. Weber should ask how these children would live - and die - without globalization.

How many children would starve to death? How many would be killed by diseases or animals encountered while toiling on subsistence farms or hunting in the wild? How many would die in house fires (whose frequencies are now reduced because income from factory work enables these children and their families to live in better houses)? Not trading with such people will only make them poorer and their lives even more precarious.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

24 March 2006

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

To the Editor:

Paul Krugman is correct that an increase in average income doesn't mean that typical workers are earning more ("Letter to the Secretary," March 24). But his logic cuts both ways. Just as Bill Gates' entry into a room raises average income without necessarily raising the incomes earned by others in that room, entry into the workforce of low-skilled workers reduces average income without necessarily lowering the incomes earned by others.

Krugman blithely assumes that measured average income is biased upward by the incomes of rich Americans. He overlooks the possibility that it is biased downward by entry into the workforce of low-skilled workers, especially immigrants.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

23 March 2006

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

Dear Editor:

National Wheat Grower's Association's V-P John Thaemert predictably makes excuses for government subsidies to farmers (Letters, March 23). Equally predictably, all of his claims are phony - well, almost all. He's correct that agriculture increasingly provides "energy for our citizens." The Energy Policy Act of 2005, along with many state regulations, effectively requires refiners to mix ethanol into their gasoline. Because ethanol and its handling are quite expensive, these government policies raise prices at the pump.

Gee thanks, farmers.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

22 March 2006

Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071

Dear Editor:

Global investment patterns belie Harold Meyerson's allegation that too many jobs in America are at risk of being outsourced ("Will Your Job Survive?" March 22).

If employers truly were fleeing the U.S. for low-wage countries, these countries would enjoy higher per-capita foreign direct investment (FDI) than we receive in America. But between 2000 and 2003 (the last year for which reliable data are available), the two countries now most feared by the likes of Mr. Meyerson - India and China - had per-capita FDI, respectively, of $13 and $142. During this same time, U.S. per-capita FDI was $2,031.*

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* Calculated from data at http://devdata.worldbank.org/, World Development Indicators database.

21 March 2006

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

Dear Editor:

You're right: were he still alive, de Tocqueville would be appalled by the modern French deification of centralization ("The Decline of France," March 21). As this passage from The Old Regime and the Revolution makes clear, he would also warn the French that their willingness to trade freedom for economic security will inevitably strip them of both:

"It is certainly true that in the long run, freedom always brings, to those who know how to keep it, ease, well-being, and often riches; but there are times when it briefly hinders the enjoyment of such goods; there are others when only despotism can temporarily afford their enjoyment. Men who prize only these kinds of goods have never enjoyed freedom for long."*

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

* Quotation in Book Three, Chapter Three of Alexis de Tocqueville, The Old Regime and the Revolution.

18 March 2006

The Editor, New York Times
229 West 43rd St.
New York, NY 10036

Dear Editor:

Elizabeth Rose wants to outlaw lobbying ("Make Lobbying Illegal," March 18). I share her disgust with the countless pigs gorging themselves on Capitol Hill. But making it illegal to petition government will only worsen matters by driving lobbying underground.

Pigs pack Washington because Congress openhandedly slops them. This problem won't be solved by quixotic commands that pigs stop squealing for the slop that Congress eagerly dispenses; the only solution is to prevent Congress from dispensing so much slop.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

17 March 2006

Editor, The New Orleans Times-Picayune

Dear Editor:

Liz Ary is upset that insurers in areas devastated by Katrina are raising premiums and, in some cases, canceling coverage. And she wants the insurance commissioner "to address these issues" ("Insurance is an obstacle to rebuilding," March 17). While understandable, her dismay is misguided.

Higher premiums, as well as lack of coverage, reflect the reality that certain locations are especially dangerous for homes and businesses. These changes in insurance availability are the market's way of directing people to rebuild in places less prone to destruction by natural disasters. They reflect, rather than determine, reality - a reality that must be faced squarely.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University

16 March 2006

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

Dear Editor:

The data offered by Drug Czar John Walters to show that the drug war is worthwhile are so complex and nuanced that reasonable people can, and do, disagree on their proper interpretation (Letters, March 16). But one of Mr. Walter's non-empirical claims is patently absurd - namely, that illegal drugs are incompatible with freedom.

No one can be free if the state denies to him the freedom to act foolishly. If Mr. Walters truly wants to eradicate things that are incompatible with freedom, he should end the drug war ASAP.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University