Market Correction

23 May 2008

Editor, Baltimore Sun

Dear Editor:

George Wedgworth makes several erroneous claims in his letter defending Uncle Sam's sugar policy (Letters, May 23). Here's just one: he asserts that the cost to taxpayers of this sugar policy is insignificant "because sugar farmers don't get crop subsidies."

True, they get no subsidies. But these farmers do get substantial protection from foreign competitors - protection that artificially raises the prices they charge and, hence, the prices that every American pays for sugar, sweeteners, and for products containing sugar or sweeteners. (The Cato Institute’s Chris Edwards estimates that these restrictions cost American consumers about $2 billion annually.*) Mr. Wedgworth’s allegation that the program is practically costless is special-interest sophistry that leaves a sour taste in my mouth.

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

* http://www.freetrade.org/node/694

µ22 May 2008

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

To the Editor:

Bjorn Lomborg clearly details how efforts to "solve" the problem of global warming deny us numerous opportunities to deal with other problems in ways that would yield far greater benefit than we're getting from today's single-minded attempts to reduce carbon emissions ("How to Think About the World's Problems," May 22).

Thomas Sowell summarized the general point when he wrote that "there are no 'solutions'... but only trade-offs."* He's correct. Math problems have solutions; resource-use problems present us only with trade-offs. For example, turning crops into fuel means a greater scarcity of food. If voters would start thinking realistically in terms of trade-offs rather than romantically in terms of solutions, many of the harmful choices that governments are making today might be avoided.

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

* Thomas Sowell, The Vision of the Anointed (Basic Books, 1995), p. 113.

21 May 2008

Editor, USA Today

Dear Editor:

Alan Webber applauds the idea of the so-called "social business" - one that "has a social cause, not just a financial goal" ("Giving the poor the business," May 21). Webber tells us to "Think of it as capitalism with a human face."

I don't here question Mr. Webber's uncritical assumption that "social businesses" will work. I do, however, question his hackneyed suggestion that the face of for-profit capitalism is inhuman. No other economic system but capitalism has lifted billions of people so decisively out of poverty. The great economist Joseph Schumpeter noted this fact in 1942: "Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."*

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

* Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Row, 1942), p. 67.

20 May 2008

Editor, WashingtonPost.com

Dear Editor:

Let's get this straight. Hillary Clinton now complains that she's a victim of sexism ("Sen. Clinton Discusses 'Sexist' Treatment," video at Washingtonpost.com, May 20). Forget that she graduated from Wellesley and Yale – that she handily won two terms to the U.S. Senate – that she earned millions of dollars during her adult lifetime – that she gathered many more Democratic primary votes than did John Edwards, Joe Biden, and other middle-aged white guys running for this year's Democratic nomination.

Instead, focus on this fact: If Mrs. Clinton's failure to win her party's nomination is due to sexism, surely her claim that she's the strongest candidate to run against John McCain is mistaken on its face - unless it's the case that many Republicans and independent voters are less prone to sexism than are committed Democrats.

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

20 May 2008

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

To the Editor:

I'm flabbergasted by the faith that people - left, right, and center - put in politics and in the candidates du jour. Millions of Americans today famously believe that a President Obama will fundamentally "change" America (into what, though, is unclear). And today, David Brooks suggests that a President McCain might well quash special-interest-group politics and turn Uncle Sam's attention chiefly to the general interest ("Talking Versus Doing," May 20).

These are delusions. I'll bet $100 that, regardless of which candidate wins the White House, in 2013 the federal budget will still contain agricultural subsidies and tariffs that take billions of dollars from the many to give to the few - that a majority of Members of Congress will continue to successfully sponsor earmarks - that the unfunded liabilities of Social Security and Medicare will be no smaller than they are today - and that partisan bickering will be every bit as much a part of the daily news as it is now.

Politics delivers Svengalis, not salvation.

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

20 May 2008

Editor, Baltimore Sun

Dear Editor:

You applaud the prospect of Congress giving the FDA control over tobacco products, and wish only that this control were more complete ("Discomforting compromise," May 20). Be careful what you wish for. As government moves ever-closer to outlawing tobacco, consumer demands for tobacco will be met more and more by black-marketeers - suppliers against whom consumers will have virtually no legal recourse. Even worse, black-market suppliers will minimize their risks of detection by packing greater nicotine punch into each centimeter of cigarette. The unintended result of this steady move to toward tighter government control of the tobacco market will be less consumer information, weaker legal protections for consumers, and more potent and much more dangerous tobacco products.

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

19 May 2008

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

Dear Editor:

Sebastian Mallaby rightly excoriates western governments for their agricultural policies, many of which artificially drive up the cost of food for people in developing countries ("Rice and Baloney," May 19).

And while he also (and also rightly) criticizes poor-country governments for their recent imposition of export restrictions on food, Mr. Mallaby ignores one of the worst and longest-standing policy offenses that keeps food artificially costly for citizens of poor countries: their own governments' restrictions on IMPORTS.

Barriers on agricultural imports average 33.6 percent throughout sub-Saharan Africa, the highest of any region in the world. In addition, as explained by Nigeria's Thompson Ayodele, "import tariffs have put fertilizer out of many people's reach - leading to low yields and hard manual labour."* More reliable and less-costly food supplies will never become a reality for peoples in developing countries as long as their governments restrict trade so aggressively.

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

* http://www.thisdayonline.com/nview.php?id=111893

19 May 2008

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

To the Editor:

Jeremy Haft finds a silver lining around the deathly dark cloud of China's earthquake: more American exports ("Another China Trade Opportunity," May 19).

While opportunities to integrate economically with greater numbers of people should always be welcomed - for such integration increases total output by deepening the division of labor - the benefit to Americans is never America's exports. The benefits are the larger numbers of imports that our exports enable us to buy. In an ideal world, useful goods and services would, like sunshine and gravity, be supplied to us free of charge. Alas, our world is no paradise; we must produce and give in order to prosper and get. The value to us of foreign trade is found not in how much we export, but in how much we import.

So insofar as the earthquake diminished China's capacity to produce, not only are the Chinese made poorer by this catastrophe, so, too, are all people who trade with the Chinese, including us.

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

18 May 2008

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

To the Editor:

Reviewer Daniel Gross shares Jeffrey Sachs's concern that today, unlike in times past, the world really and truly IS running up against resource constraints that spell doom unless we follow the advice of experts such as Professor Sachs ("Costs of Living," May 18). Why is today's concern justified? Because of four trends that Sachs identifies, as summarized here by Gross: "human pressure on the earth, a dangerous rise in population, extreme poverty and a political climate characterized by 'cynicism, defeatism and outdated institutions.'"

These reasons are unpersuasive.

First, identifying "human pressure on the earth" as a reason for worrying about human pressure on resources is circular. Second, today population is growing more slowly than it grew during its peak growth-rate years of the 1980s. Third, a smaller portion of the world's population lives in poverty today than lived in poverty during the 1970s, the last time such Malthusian hysteria was unleashed. (In the late 1970s, 16 percent of the world's population lived on $1 per day or less; today this figure is 6 percent.) Fourth, "cynicism, defeatism and outdated institutions" are hardly unique to the early 21st century.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

18 May 2008

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

To the Editor:

Reviewer Scott Stossel highlights the following theme from Bill Bishop's and Robert G. Cushing's "The Big Sort": "Americans have always moved around restlessly. But whereas in earlier times large flows of people ... were motivated primarily by the quest for economic opportunity, American migration is now inspired at least as much by 'lifestyle' choices as by economics" ("Subdivided We Fall," May 18).

It is an article of faith at your newspaper, repeated ad nauseam, that ordinary Americans have stagnated economically since the mid-1970s. Bishop's and Cushing's evidence, however, seriously undermines this faith. People stagnating economically cannot easily afford, when deciding where to live, to ignore economic opportunity. The fact that Americans increasingly put aside considerations of economic opportunity in order to consume their chosen lifestyles means that even ordinary Americans are more prosperous today than they were in the allegedly golden days of the 1960s and early '70s.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA 22030

17 May 2008

Editor, Baltimore Sun

Dear Editor:

Julie Waldren eloquently explains the difficulties of "being green" ("It's not easy being green," May 17). For example, consumers cannot possibly know how the environmental impact of disposable cups compares with that of ceramic cups whose production consumes lots of energy.

Contrary to a profusion of naive punditry, the economy is far too complex for any person or even a committee of geniuses to trace out the full environmental consequences of any of the hundreds of ordinary decisions that consumers and producers make on a daily basis. Economists since Adam Smith have taught that the best we can do is to have well-defined property rights that owners use and exchange as each judges best. The unplanned result isn't an earthly paradise, but it's vastly superior to what emerges when people consciously aim to bring about a specific outcome in the overall pattern of economic activities. To reject this truth is to suffer what the great economist F.A. Hayek called "the pretense of knowledge."

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

16 May 2008

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

To the Editor:

You accurately describe the $307 farm bill passed by the Senate as "an inglorious piece of work tailored to the needs of big agriculture" ("A Disgraceful Farm Bill," May 16). So the question arises: why do Senators Clinton and Obama loudly praise it?

One possibility is that these Senators truly believe that distorting agricultural markets with gargantuan subsidies - including paying some farmers to not grow crops - is good for the country. Another possibility is that Mrs. Clinton and Mr. Obama are pandering, expressing support for the bill only because doing so enhances their prospects with certain voters.

If the first possibility holds, it raises serious doubts about these candidates' intelligence. If the second possibility holds, it raises serious doubts about these candidates' ethics. Because there is no plausible third possibility, you'll pardon me if I have serious doubts about these candidates.

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