Cafe HayekCafe Hayek - where orders emerge - Article Feed

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"Is" Never Implies "Ought"

Posted: 16 Sep 2020 03:24 AM PDT
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(Don Boudreaux)




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Here’s a letter that I sent on September 10th to the New York Times:

Editor:

National Institutes of Health director Francis Collins testified yesterday
that the decision to approve a covid-19 vaccine will be determined by
“science and science alone” (“N.I.H. Director Has ‘Cautious Optimism’ for
Covid-19 Vaccine by End of 2020,” Sept. 10). This claim, alas, is
unscientific.

Science of course should play a major role. Only it can determine a
vaccine’s likely medical effectiveness and side effects. But science cannot
possibly determine what is the acceptable amount of risk to be traded off
against reward. Should approval be given to a vaccine that’s 98 percent
effective but which carries a 0.05 percent chance of causing serious and
possibly fatal illness? What about a vaccine that’s 90 percent effective
but which carries a 0.002 percent chance of causing seriously illness or
death?

The need to answer such questions is unavoidable. And so given government’s
role in the drug-approval process, any and all decisions to approve or
disapprove must, inevitably, be made politically.

Sincerely,

Donald J. Boudreaux

Professor of Economics

and

Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at
the Mercatus Center

George Mason University

Fairfax, VA 22030




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Quotation of the Day

Posted: 16 Sep 2020 02:00 AM PDT
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(Don Boudreaux)




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is from page 130 of the 1985 (3rd) edition of the late Ralph Raico’s
translation of Ludwig von Mises’s great 1927 book, Liberalism:

The theoretical demonstration of the consequences of the protective tariff
and of free trade is the keystone of classical economics. It is so clear,
so obvious, so indisputable, that its opponents were unable to advance any
arguments against it that could not be immediately refuted as completely
mistaken and absurd.

DBx: And so the matter remains to this day. There is no argument not one
that purports to show that protectionism promotes economic prosperity for
ordinary people better than does free trade that a competent economist
cannot squash as easily as someone with a fly-swatter can squash an obese
housefly.

The difference, sadly, is that the will to believe in the efficacy of
protectionism is so potent that many people will gaze upon the motionless,
flattened insect and insist that it remains not only alive and vibrant, but
also is as beautiful as a butterfly, as powerful as an eagle, and as
majestic as Pegasus.




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Bonus Quotation of the Day

Posted: 15 Sep 2020 05:17 PM PDT
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(Don Boudreaux)




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is from page 279 of Kristian Niemietz’s marvelous 2019 book, Socialism:
The Failed Idea That Never Dies:

We take it for granted that living standards rise over time. For most of
history, they did not. This trend only really began with the advent of
industrial capitalism, which was a game changer in world history.




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Making the Case for a Policy of Unilateral Free Trade

Posted: 15 Sep 2020 11:10 AM PDT
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(Don Boudreaux)




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Heres Dan Griswolds and my hot-off-the-press paper, A Fresh Start for US
Trade Policy: Unilateral Trade Liberalization through a Tariff Reform
Commission.

Its a darn good paper. I can offer this assessment truthfully yet without
immodesty because the great bulk of the paper was written by Dan.

Heres the papers abstract:

The US tariff code stands as a barrier to reviving the US economy as it
begins to recover from the coronavirus shutdown. Mounting evidence shows
that statutory tariffs and the tariffs imposed by the Trump administration
since 2018 are compounding the economic damage caused by the COVID-19 virus
and are complicating the efforts of consumers and healthcare providers to
access medical supplies. Executive action can mitigate some of the harm,
but the US Constitution and the scope of the problem require congressional
action. Such action should be taken unilaterally by the US government in
its own national interest regardless of what actions other nations pursue.
This paper recommends the establishment of a Tariff Reform Commission to
enable Congress to overcome special-interest opposition to trade
liberalization. The commission would be patterned after the successful Base
Realignment and Closure process and Miscellaneous Tariff Bill process. It
would follow the proven path taken by other nations that have unilaterally
liberalized their trade policies.

..

A sole-authored paper by me on the analytics of unilateral free is
forthcoming from Mercatus (likely in a month or so).




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Some Links

Posted: 15 Sep 2020 06:12 AM PDT
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(Don Boudreaux)




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In the pages of the Wall Street Journal, Phil Gramm and GMU Econ alum Jerry
Ellig rightly bemoan the misguided antitrust attack on successful tech
companies. A slice:

Progressives want to use the antitrust laws to break up big tech companies
because they believe that bigness is bad and leads to a host of other
evils, including malign political influence. Conservatives want to use
antitrust as a club to get social-media companies to curb their alleged
political bias.

While there is a long and rich history of using antitrust laws to try to
implement policies that proponents can’t enact into law, both parties would
be wise to focus on consumer welfare, which has defined recent antitrust
jurisprudence. No one can seriously challenge the hard evidence that big
tech companies have delivered enormous consumer benefits. You don’t have to
look any further than online shopping, smartphones and social networking.

Announcing the end of his long-running column for the Washington Post,
Robert Samuelson decries the fiscal imprudence unleashed by majoritarian
politics. A slice (original emphasis):

One of the pleasures of journalism is that you get to learn lots of new
“stuff.” I have learned much from economists. With some exceptions, most
are intelligent, informed, engaged and decent. In my experience, this truth
spans the political spectrum. But it’s not the only truth.

Another is this: Economists consistently overstate how much they know about
the economy and how easily they can influence it. They maintain their
political and corporate relevance by postulating pleasant policies.
Presidents claim the good and repudiate the bad. There are practical limits
to how much economic growth and living standards can be accelerated and
sustained.

Pierre Lemieux notes the reality of rational ignorance.

Jeffrey Tucker reports on the continuing scare-bias of the media.

Arnold Kling details the flaws that he sees in critical theory.

Christian Britschgi reports on a U.S. District Court in Pennsylvania ruling
that Pennsylvanias lockdown order is unconstitutional. And heres Stacey
Rudin on the same. A slice from Rudins piece:

Thank you, Judge Stickman, for recognizing our predicament, and for taking
the first step towards restoring our freedom today by reminding those with
authoritarian leanings that “governors cannot be given carte blanche to
disregard the Constitution for as long as the medical problem persists.”
The response to an emergency cannot undermine our system of constitutional
liberties, or the system of checks and balances protecting those liberties.
Liberty before “governor-guaranteed safety” — this is the American way,
famously stated by Benjamin Franklin: “Those who would give up essential
liberty, to purchase a little temporary safety, deserve neither liberty nor
safety.”




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