Market Correction

8 February 2009

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

Dear Editor:

Masterfully explaining the power of Charles Darwin's ideas, George will says that "As a practical matter, we cannot expel government from our understanding of society as Darwin expelled God from the understanding of nature. But Darwinism opens the mind to the fecundity of undirected, spontaneous, organic social arrangements - to Edmund Burke and Friedrich Hayek" ("How Congress Trumps Darwin," February 8).

Perhaps, practically, we indeed cannot expel government from our understanding of society. But Hayek takes us surprisingly far in that direction. He helps us to comprehend that law itself (as opposed to legislation) is largely spontaneous and undesigned. Not all legislation is law - consider the fact that highway drivers routinely exceed posted speed limits by five or ten miles per hour. And not all law is created by legislation (or even by court proceedings) - consider the "first come, first served" rule that nearly all drivers obey for determining which of the many drivers in search of parking places in a crowded parking lot gets a particular space that is about to be vacated.

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

7 February 2009

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

To the Editor:

Floyd Norris takes a shot at explaining "The Upside of Resisting Globalization" (February 6). His shot, alas, is a blank.

While it's true that economies not integrated into the global economy do not decline when the global economy declines, this fact is poor consolation for the peoples in those economies. Their fortunes are not now falling simply because their fortunes never rose much to begin with. These people are today, as they have been for years, far poorer than even the hardest hit victims of the global downturn living in countries such as the U.S., Ireland, and South Korea.

Mr. Norris's alleged "upside" of resisting globalization amounts to nothing more than the empty solace of permanent poverty.

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

6 February 2009

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

To the Editor:

Like you, I hope that President Obama finally appreciates the benefits of freer trade ("Obama's Trade Deflection," Feb. 6). If he has truly seen the light on trade, this fact would signal a significant change (!) of his mind since the recent campaign.

But beware. This remarkably sudden change of mind warns us always to be leery of what Adam Smith called "that insidious and crafty animal otherwise known as a statesman or legislator, whose councils are directed by the momentary fluctuations of affairs."*

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

* Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (1776), Book IV, Chapter 2, paragraph 39.

6 February 2009

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

To the Editor:

A headline on your website's home page yesterday read: "The WTO called a meeting to discuss a fast-rising wave of barriers to commerce, as governments scramble to safeguard key industries, often at their neighbors' expense" (Feb. 5).

That headline misses the point. Whenever governments "safeguard" domestic industries from competition, they make their own economies less productive and, thereby, raise the cost of living at home. Their own citizens become poorer. The chief expense of protectionism falls not on foreign "neighbors" but on domestic citizens.

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

5 February 2009

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

To the Editor:

Ed Glaeser wisely argues that it's a bad deal to copy ideas from the New Deal - including that of subsidizing mortgages ("The GOP Has a Dumb Mortgage Idea," Feb. 5). As one of the most astute Americans ever to live, H.L. Mencken, observed about the New Deal, "It is a puerile amalgam of exploded imbecilities, many of them in flat contradiction of the rest." And among the imbecilities that Mencken highlighted was the very one that Mr. Glaeser warns against. Mencken described it as a proposal "to lift the burden of debt by encouraging fools to incur more debt."*

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

* H.L. Mencken, On Politics : A Carnival of Buncombe (Baltimore: The Johns Hopkins Press, 1996 [1956]), p. 311.

4 February 2009

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

To the Editor:

Thomas Frank again alleges that persons who resist having the economy manipulated by government regard the market as "god" ("Wall Street Bonuses Are an Outrage," Feb. 4). Not so.

The true believers in a secular god are the likes of Mr. Frank who are moved by an unshakable faith in the supernatural powers of government and a stubborn refusal to see how vibrant economic order evolves undesigned from decentralized property rights and the rule of law. Holding that government transcends mortals in wisdom, ability, and goodness, these 'state fundamentalists' see a Personal Government as society's creator and protector. Mr. Frank and his ilk are forever praying to government for this or that intercession. In contrast, we market types accept the fact that the market is unconscious and impersonal - and, hence, nothing to be prayed to or pleaded with.

Also in contrast to us market types, state fundamentalists believe in miracles - such as the fantasy that prosperity can be increased by blocking access to low-priced foreign goods, or that politicians can divine the 'right' price of oil.

If you seek a dogmatist who stupidly worships a false god, look no further than Mr. Frank.

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

4 February 2009

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

To the Editor:

Dick Armey splendidly argues that we would all (save for the political class) be better off if the economics of F.A. Hayek were to prevail over that of J.M. Keynes ("Washington Could Use Less Keynes and More Hayek," Feb. 4). As Hayek himself observed in his final book, The Fatal Conceit, Keynes's economics is the product of an impatience with long-run processes - an obsession with today and a disregard of tomorrow. This childishness makes Keynes's doctrines not only economically confused but also morally suspect. Here's Hayek:

"The [Keynesian] slogan that 'in the long run we are all dead' is also a characteristic manifestation of an unwillingness to recognize that morals are concerned with effects in the long run - effects beyond our possible perception - and of a tendency to spurn the learnt discipline of the long view."*

Unfortunately, each elected official's time horizon extends no further than the next election -- a fact that, as my colleagues James Buchanan and Richard Wagner argue, makes Keynesian economics ideal for politicians.

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

* F.A. Hayek, The Fatal Conceit (University of Chicago Pres, 1988), p. 57.

3 February 2009

Editor, USA Today

Dear Editor:

Concerned not that infrastructure be built efficiently but that lots of American workers be used to build it, Sen. Byron Dorgan (D-ND) wants to severely restrict the use of imports in the construction of this infrastructure ("Spend money on U.S. goods," Feb. 2).

If Mr. Dorgan's logic is correct - that is, if the U.S. economy really is strengthened by building infrastructure at higher-than-necessary costs simply to employ more American workers - the "Buy American" provisions that he proposes for the stimulus bill are too modest. He should instead propose a "Use No Machines" provision. Indeed, let's build new highways and ports using for tools only teaspoons, stones, and pocketknives. Just imagine the benefits! Such construction projects will require enormous amounts of stimulating government expenditures and employ armies of workers for centuries!

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