Market Correction

28 October 2006

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

Dear Editor:

Senegal's president, Abdoulaye Wade, mistakenly blames much of sub-Saharan Africa's woes on high oil prices ("Africa Over a Barrel," Oct. 28). He then asks oil companies "to chip in from recent windfall profits to reduce the increase in oil prices that has taken place since 2003."

The real problem in these countries isn't oil prices that are too high; it's economic freedom that is too low. In the latest Cato Institute Economic Freedom of the World index, Mr. Wade's own country is ranked 90th. (For comparison, Hong Kong is ranked first, the United States third, and Zimbabwe last at 130.) Property rights in Senegal are insecure. Also, Senegalese citizens enjoy little freedom to trade and are forced to endure especially burdensome regulations and unsound money. The same sad story holds throughout most of sub-Saharan Africa.

Africans don't need oil-company subsidies and more foreign aid. They need economic freedom.

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

27 October 2006

Editor, The New York Review of Books

To the Editor:

I've read few passages in your pages that are as mistaken as Bill McKibben's assertion that that "The technology we need most badly is the technology of community - the knowledge about how to cooperate to get things done.... We Americans haven't needed our neighbors for anything important" ("How Close to Catastrophe?" Nov. 16).

Each of us cooperates daily with countless others - neighbors, fellow citizens, foreigners - to ensure not only our prosperity but our very existence. My mind boggles at the number of people who cooperated to make available to me, for example, the shirt on my back. Cotton-growers in Egypt; fashion designers in Italy; textile workers in Malaysia; merchant marines from around the globe; investment bankers in Manhattan; insurers in Hartford; truck drivers along the east coast; department-store executives in Seattle; security guards and retail clerks in Virginia - these people and millions of others cooperated so that I might wear an ordinary shirt. Ditto for my house, my food, my subscription to The New York Review of Books.

For McKibben to say that "cheap fossil fuel has allowed us all to be come extremely individualized, even hyperindividualized" is to be blind to the amazing and vast system of cooperation that today spans the globe. Clearly, we have, in spades, "knowledge about how to cooperate to get things done."

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

26 October 2006

Editor, USA Today

To the Editor:

You report that "consumer advocates and student groups worry that the growth" of private student loans "could prove disastrous for borrowers who don't understand the risks" ("Private student loans pose greater risk," Oct. 26).

Well, yes. Any contractual agreement can prove disastrous for a contracting party who doesn't understand it. But presumably people smart enough to attend college are smart enough to grasp the terms and implications of a loan agreement. Those few persons who aren't capable of such understanding should not apply for these loans, much less for admission to college.

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

25 October 2006

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

Dear Editor:

To show their commitment to the war on drugs, school children now dress like combat soldiers ("Clad in Camouflage for a Cause," October 25). How obscene.

The only legitimate use of military force is to protect citizens from violent aggressors - not to interfere with peaceful persons' choices of intoxicants. Celebrating militarized combat against personal liberty is both ugly and dangerous.

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

24 October 2006

Editor, Marketplace Morning Report
American Public Media

Dear Editor:

Of all the arguments for Social Security, Jim Carrier's is the worst ("Let's up the Social Security tax," October 24). He asks "if Social Security hadn't existed ... would I have set aside hundreds of thousands to provide for myself?" And he answers: "Not likely. I proved that 10 years ago when I cashed an annuity and bought a sailboat. I sailed to Spain and had lots of fun. But as an investment it was worse than Enron."

No doubt.

But it's galling that Mr. Carrier presumes the rest of us to be as irresponsible as he is - and that we welcome public-policy advice offered by someone so financially reckless.

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

22 October 2006

Editor, The Washington Times

Dear Editor:

Reading Sarah Longwell's warning of the arrogance of those who would have government force the rest of us to change our diets ("Nervous-Nelly Nation," Oct. 22), I was struck by the name of the group that is suing California restaurants for serving grilled chicken: Physicians Committee for Responsible Medicine.

The American Heritage Dictionary (4th edition, 2000) defines 'responsible' as "Involving personal accountability or ability to act without guidance or superior authority." So this litigious group of MDs is misnamed. It OPPOSES responsibility by seeking to impede personal accountability and to oblige people to act according to the commands of a superior authority.

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

21 October 2006

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

Dear Editor:

Alys Cohen wants to ban "'no doc' loans where a borrower simply pays a higher interest rate in exchange for not documenting income. These loans are often used to push unaffordable mortgages on borrowers who have fixed incomes" (Letters, Oct. 21). She calls such loans "predatory."

A different interpretation is that these loans are an innovative way - driven by competition among lenders - to enable persons who otherwise would not qualify for a mortgage to do so. Banning such loans would indeed result in fewer low-income persons suffering mortgage foreclosures, but it would also result in fewer low-income persons owning homes.

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

20 October 2006

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

To the Editor:

Andrew Grossman writes that "It has been widely reported that workers abroad in Wal-Mart's suppliers' factories routinely experience forced labor" (Letters, October 20). Like space-aliens in Roswell, NM, this claim might well be widely reported but it is also wildly implausible.

The only marketable goods that slave labor can reliably produce are ones whose production requires mostly low-skill, easy-to-monitor manual tasks and whose quality cannot readily be degraded by uninspired workers. Examples of such products are sugar cane and cotton. Manufactured goods, in contrast, are too costly to produce with slaves. The quality of slave-produced manufactured outputs will be too low. Moreover, business owners have no desire to entrust slaves with the operation of expensive, complex, and easily sabotaged factory machinery.

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

19 October 2006

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

To the Editor:

Proposing to tax convenient means of ordering fast-food, Martin Schmidt inappropriately anthropomorphizes the country by writing that “we face a crisis of obesity and its concomitant health problems” ("Supertax Me," October 19).

Regardless of how many Americans are grossly overweight, obesity is an individual condition rather than a collective condition. As such, solutions to obesity should be individual rather than collective. If my neighbor is obese, it's none of my business to force him to lose weight - or, more generally, arrogantly to presume that I know better than he does what’s best for him.

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

18 October 2006

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

To the Editor:

Public understanding of trade is sufficiently poor without you deepening the problem ("Not Coming Soon to a Lot Near You: Chinese Cars," Oct. 18). Contrary to your words, imports are not an "invasion," and foreign merchants who sell things to us neither "conquer" industries nor "flood markets." Invasion and conquest are done by armies using violence to force foreign populations to do the bidding of the conquerors. Floods are similarly unwelcome as they destroy people's lives and properties.

Trade is the opposite. It's peaceful: no one is forced to buy imports. It's productive: consumers get more goods and services at lower prices. Ask New Orleanians today if they regard a Circuit City stocked with Chinese electronic goods to be a calamity on par with Katrina's floodwaters.

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

16 October 2006

Editor, Scientific American

To the Editor:

Jeffrey Sachs writes that the late "Friedrich Von Hayek was Wrong" ("Welfare States, beyond Ideology," November 2006). This Nobel laureate's error allegedly was to argue that the welfare state paves - as the title of Hayek's 1944 book expressed it - "the road to serfdom."

Sachs misreads Hayek. Although he was no fan of the welfare state, Hayek never argued that it leads to tyranny. In The Road to Serfdom, Hayek distinguished between government efforts to ensure "limited security" and government efforts to achieve "absolute security." Hayek warned only against efforts to achieve the latter, which he described as "the security of a given standard of life, or of the relative position which one person or group enjoys compared with others." Hayek was correct that such "security" is achievable only by tyranny.

But as for limited security, Hayek wrote that "There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security [that is, limited security] should not be guaranteed to all without endangering general freedom…. Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision."*

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

* F.A. Hayek, The Road to Serfdom (University of Chicago Press, 1944), pp. 133-134.