The Latest from Cafe Hayek

(Don Boudreaux)

Tweet

(Don Boudreaux)

Tweet

I’m very happy to have discovered Shane Chalke’s research on Covid-19.

Ivan Jankovic explores the political economy of mass panic. A slice:

The recent Covid-19 epidemic in the USA is a tragic cautionary tale. The respiratory disease, for everything we know, is similar to a severe, pandemic flu. The symptoms are similar, and the death rate according to the initial estimate of the Centers for Disease Control is between 0.16% and 0.33% (later estimates don’t provide a unique IFR, but a range of different IFR for different age groups show an extremely strong age gradient after 70 and an exceedingly low death rate for those younger than 40). A comprehensive review of all antibody studies done so far by world-renowned epidemiologist John Ioannidis found that the average death rate of Covid-19 is about 0.27%, with some regional variations.

This is certainly higher than the seasonal flu, but very close to a severe pandemic flu, like the one the world experienced in 1957 and 1968 (without doing anything to “tackle” them). Indeed Dr. Anthony Fauci himself, the President’s principal scientific adviser for epidemics, in co-authorship with Dr. Robert Redfield, director of the Centers for Disease Control, published a paper in the New England Journal of Medicine on March 26^th of 2020, saying: “If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases the case fatality rate may be considerably less than 1. This suggests that the overall clinical consequences of COVID-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to Spanish flu, SARS or MERS, which have had case fatality rates of 9% to 10% and 36%, respectively.”

An overwhelming majority of people who died of Covid were older than 70 and already had other significant ailments like heart disease, diabetes or obesity. Among children and young people the disease is much less severe than seasonal flu. Additionally, children are far less likely to transmit the virus than older people, which is in stark contrast to the flu, where children are the main spreaders and sufferers.

Through February 1st, 2021, how are the U.S. states least affected by Covid Derangement Syndrome doing relative to U.S. states more affected by this grotesque mental disorder?

“The European countries with the strictest lockdowns have come out no better“.

Rob Slane is correct: Covid lockdowns are cruel experiments using human beings as guinea pigs. Here’s his opening:

WHICH of the following is the more reasonable approach a society might take in the outbreak of an epidemic?

· To quarantine the sick and take reasonable precautions to stop those who are identified as vulnerable from contracting the illness.

· To attempt to ‘control the virus’ by preventing millions of healthy people from having contact with other healthy people.

To any society before 2020, it would have been obvious that the first approach is not only logical and proportionate, but the one least likely to have other unintended and highly destructive consequences. However, to my continued astonishment, many in our society not only believe that the answer is the second, but they somehow believe it to be based on established science.

GMU Econ PhD candidate Jon Murphy calls, as we grapple with Covid, for a better understanding of the work of the late Nobel-laureate economist Ronald Coase. A slice:

With the Covid-19 pandemic, we have seen the problem Coase discussed unfurl at rapid speed. Lockdowns, business closures, and even deaths were justified by politicians as necessary to contain the pandemic. Enterprising economists jumped at the opportunity to use the market failure model to justify said lockdowns: governmental actions were necessary to bring social costs in line with social benefits.

But these justifications contained the very problem Coase discussed 60 years ago: they ignored the steps people were already taking to limit the spread. Indeed, as my AIER colleague Phil Magness has documented numerous times, many of the models (such as the Imperial College model) explicitly refused to take people’s behavior into context. In a new working paper, Abigail Devereaux, Nathan Goodman, Roger Koppl, and I document other such failures of expert advisors. Thus, the predictable result occurred: policy was too onerous even by its own standards and has failed to achieve its goals.

(Don Boudreaux)

Tweet

… is from pages 79-80 of Pierre Lemieux’s excellent 2018 monograph, What’s Wrong With Protectionism? (footnote deleted):

For individuals, the benefits of exchange cut across political borders – they are not confined within a country. If free trade between the United States and Mexico is detrimental, it should also be detrimental between California and Mississippi. Average wages are 40 percent lower in Mississippi than in California….

The typical protectionist will retort that free trade among countries is different. But why would that be the case? Protectionism against foreigners amounts to a coercive redistribution among the citizens allegedly “protected” – a coercive redistribution analogous to what would be the consequences of forbidding California consumers to buy from Mississippi producers, thereby redistributing income from California consumers to California producers.

DBx: Protectionism artificially increases consumer demand for the outputs of protected producers by intentionally intensifying scarcity in the home country. Protectionism thus reduces overall material wealth in the home country. The typical protectionist, though, misses this reality because he or she mistakes protectionisms’ happy impact on protected producers for its impact on the entire country. (Protectionists are fonts of many fallacies, but the chief one in which they truck is the fallacy of composition.)

Thus, as Pierre above points out, the benefits that protectionism yields for its clients come from its clients’ – its proponents’ – fellow citizens. But these fellow citizens are out of sight of those not fitted with proper ‘economic’ lenses. These fellow citizens and their suffering are thus out of protectionists’ minds. It’s easy to plunder unseen victims and heartwarming to witness the joy that is experienced by those who receive the resulting booty.

(Don Boudreaux)

Tweet

… is from page 215 of George Will’s magnificent 2019 book, The Conservative Sensibility (footnote deleted):

Conservatism has no more urgent task than that of convincing the country that judicial deference often is dereliction of duty, and that an energetically engaged judiciary is necessary lest, in Justice Robert Jackson’s words, “the lights go out.”

DBx: Indeed (although what George Will calls “conservatism” is what I call “liberalism”).

…..

Pictured above is U.S. Supreme Court Associate Justice Stephen J. Field. Nominated in 1863 for the Supreme Court by President Abraham Lincoln, Field was one of the finest jurists ever to serve in that body.

(Don Boudreaux)

Tweet

Here’s a letter to someone in California who apparently believes that economic reality is optional:

Mr. Víctor Sánchez, Director
Long Beach Coalition for Good Jobs and a Healthy Community

Mr. Sánchez:

You call “shameful” the decision by Kroger to close stores in Long Beach after the City Council there ordered certain supermarkets to raise the hourly pay of some workers by $4 (“Kroger to close 2 California stores instead of giving $4 hourly ‘hero pay’”). This decision by Kroger, you allege, will “deny their workers the compensation they deserve.”

Put your money and action where your mouth is. If these workers really are worth employing at the wage mandated by the City Council, you should have no trouble convincing investors to back you in efforts to buy Kroger’s Long Beach facilities in order for you to keep these operating as supermarkets that pay wages as high as those ordered by the City Council.

If, however, you’re unwilling to make this effort, then your talk is cheap. No one has any reason to trust that you actually believe that the workers who you pose as championing really deserve a $4 per hour raise.

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

For alerting me to this story I thank J. Nellis.

(Don Boudreaux)

Tweet

The tyranny tightens. (But we’re assured that it’s for our own good. And our government would never so assure us if that assurance weren’t based in fact. So there’s nothing to worry about, right? Right?)

Jordan Davidson reports on recent remarks by Stanford professor Dr. Jay Bhattacharya. A slice:

“I’ve come to think of it as trickle-down epidemiology. We’ve used the lockdowns to protect the rich, whereas we essentially expose the — like in California for instance, it’s the poor areas that have had the high death rates from COVID. The lockdowns haven’t protected people living in places where there’s high poverty,” Bhattacharya said on “The Megyn Kelly Show.” “Minority populations, especially Hispanics, have been hard hit. Fifty percent of people who have had COVID deaths are Hispanic in California.”

Julius Ruechel exposes the immorality of Covid-19 lockdowns. A slice:

Lockdowns during COVID pose the exact same question as the Bystander at the Switch. But it’s not a game; once again there are real lives at stake. Yet in direct violation of the principles of universal human rights, governments around the world are choosing to pull the switch by imposing lockdowns “for our safety.” In doing so they have given themselves the authority to play God with our lives.

Are you essential or non-essential? Each category now has different rights and freedoms and different levels of individual autonomy. Some have the right to earn a living. Others do not. Some have the right to choose how to balance the risks and priorities in their lives. Others do not. How can any job that feeds a family not be essential?

What about the collateral damage caused by lockdowns? Mandatory lockdowns are leading to the deaths of countless individuals through cancelled/delayed medical operations, suicides, drug overdoses, loneliness and isolation in nursing homes, and more. None of these deaths would happen without lockdowns. Government is throwing one group of people onto the tracks with the goal of saving another.

How much misery and suffering is government allowed to impose on other people “for your safety”? How many jobs is the government allowed to destroy “for your safety”? How many people will lose their homes “for your safety”? How many people will lose their life savings, have their marriages broken, suffer bankruptcy, lose their careers, have their children’s education irreparably damaged, or have their mental health destroyed because of actions taken by the government “for your safety”?

Amelia Janaskie, Jenin Younes, and Taleed Brown show us more faces of lockdown.

“COVID-19 rarely spreads through surfaces. So why are we still deep cleaning?”

Here’s more from Noah Carl on excess deaths in the U.K.

Mark Ellse exposes appallingly misleading reporting on Covid. A slice:

Yes, indeed. Every time comparison figures are given to us by the media or the government they use raw comparison figures, not Age Standardised Figures. This makes increases in death rate seem bigger than they actually are. As for the rise from 2019 to 2020, it is significant. But before deciding how significant, we need first to consider what death rate for 2020 we should have expected.

Hector Drummond argues that Sweden’s Covid numbers show that lockdowns are indeed criminal. A slice:

You will see that April 2020, supposedly the worst month for the world in hundred years outside wartime, in fact had lower deaths than about twenty other months in Sweden in just the last thirty years.

Most governments, scientists, and media outlets have inexcusably ignored these facts for over half a year, and when forced to look at Sweden they have continued to spin the line that Sweden is a charnel house.

Now, ten months since the Western world went mad, the overall figures for Sweden’s all-cause mortality for 2020 are available. And it is time we had a proper look at these figures and stopped taking this lunatic mania for lockdowns seriously.

I thank Lyle Albaugh for alerting me to this interview with Knut Wittkowski:

(Don Boudreaux)

Tweet

… is from page 30 of the late, great UCLA economists Armen A. Alchian’s and William R. Allen’s Universal Economics (2018; Jerry L. Jordan, ed.); this volume is an updated version of Alchian’s and Allen’s pioneering earlier textbook, University Economics; at the end of each chapter, Alchian and Allen offered a list of brilliant questions, each with an answer; this quotation is from the “Questions and Meditations” section of Chapter 2:

What is nonsensical about the proposition, “A good economic system maximizes the welfare of the maximum number of people”?

Answer:

Only one quantity can be maximized subject to all others being held at specified levels. You can maximize the welfare of one person provided that the welfare of each of the other people is unchanged.

DBx: Yep.

The moment we admit into consideration the welfare of a second person who potentially interacts, directly or indirectly, with the first person, the literal maximization of the first person’s welfare is no longer ethically desirable. If maximizing the first person’s welfare were truly the goal, then the second person must disregard his or her own welfare and act exclusively as a means of assisting the first person to achieve maximum welfare. The second person, in effect, would be the first person’s slave.

Once the welfare of the second person is admitted to be desirable, we encounter the necessity of making trade-offs. Although very often cooperation of person one with person two enables both persons to increase their welfare, neither person gets all the gains from the cooperation. The gains are shared.

More generally, whenever there are multiple goals, to speak of maximization masks the necessity of trade-offs among these goals. Goal B can be achieved more fully only if we accept a less-full achievement of goal A, or of goals A and C.

If society were a single, sentient entity in the way that you are a single, sentient entity, it would be meaningful to speak of society making these trade-offs among all the many different goals in a way that results in maximum possible satisfaction (“maximum utility”) for society.

But despite much loose language and bad theorizing, society isn’t a single, sentient entity. Society, as such, has no mind, no preferences, no purposes. These are all had only by each member of society – a reality that isn’t altered one bit by the fact that cooperation among members of society enriches everyone. Nor is this reality altered by the fact that the preferences of each of us are heavily influenced by the details of the society in which we live. And nor is this reality altered by the fact that each of us cares what other people think about us and typically act accordingly.

This reality remains: Society, as such, has no mind, no preferences, no purposes. Talk of “maximizing social welfare” or “utility” thus misleads more than it enlightens. Such talk too easily leads to the conception of society as confronting challenges all of which can be “solved” in an engineering – in a scientific – manner.

Consider the current hysteria over Covid-19. Many people talk as if the goal is to maximize our protection from Covid. If this goal were real, then every action inconsistent with reducing anyone’s risk of suffering from Covid would be inappropriate. All action and all resources would be turned toward reducing humanity’s encounter with Covid. There would be no trading-off the benefit of any potential reduced risk of encountering Covid against the benefit from action that raises that risk.

But of course even those persons who are most fearful of Covid don’t fully act in this manner. I doubt that anyone sleeps in a Hazmat suit and refuses to remove the suit even to bathe. Each person makes trade-offs. And just as it is officious and illiberal for Jones to sit in judgment of the manner in which Smith trade-offs the benefits that he gets from exercising against those that he gets from lounging lazily, it is officious and illiberal for Smith to sit in judgment of the manner in which Jones trades-off the benefits she gets from taking steps to reduce her exposure to Covid against the benefits she gets from pursuing activities that raise her Covid risk.

Yes, yes, yes – I understand that whenever Jones takes actions that increase her risk of encountering Covid – or even refuses to take actions that reduce such risk – she thereby increases the risk that she will expose unwilling others to Covid. But while there has been some adult talk of the ability and responsibility of these others to protect themselves, such talk hasn’t featured prominently in the public debate over Covid. The overwhelming assumption – as revealed by the ignorant hostility to the Great Barrington Declaration – has been that the importance of having every person reduce his or her exposure to Covid, even on very small margins, is so great that government is entitled to force all of us to remain separated indefinitely from each other.

Maximizing the risk reduction from Covid-19 is now regarded by many people to be humanity’s chief goal, one that takes precedence over almost any other.

It’s madness. It’s a lethal obsession. It’s inhuman and inhumane. It’s contrary to the way that each of us lives our daily life. It’s Covid Derangement Syndrome.

(Don Boudreaux)

Tweet

In my latest column for AIER, inspired by Henry Manne, I call for peaceful resistance to the misinformation being spread about Covid-19, and to the tyranny being unleashed in the name of ‘protecting’ us.

In late 1973 and early 1974 Henry decried the biased and uninformed reporting on the fuel shortages that then plagued America, and he called on people to resist the demands for the strict government controls that were then said by many in elite circles to be necessary to best deal with these shortages.

Today’s Covid-19 pandemic isn’t identical to the 1970s’ fuel shortages, but the two crises share with each other many parallels. In both, media reporting consistently missed important points and, in doing so, fueled (!) unwarranted panic. Worse-case scenarios were presented as likely outcomes. Elite opinion very quickly settled on the conclusion that key human liberties must be sacrificed indefinitely to government ‘leaders’ wielding discretionary powers in order to deal with an almost-existential scourge. Talk of society being at war against an insidious enemy was widespread. Unfathomably complex arrangements of human engagement were treated as if they are as simple as Lego structures that children build, can disassemble, and can easily rebuild. And evil-doers were said to be afoot whose misbehaviors – from negligence to intentional malfeasance – were making a bad situation worse. These evid-doers, thus, were accused of being threats to innocent other people.

In both instances, governments’ heavy-handed attempts to deal with each crisis made each crisis worse.

Yet there is at least one important difference separating these two crises from each other. Compared to the energy crisis of the 1970s, today very few prominent voices in the media and in high political circles are speaking out forcefully against the misinformation and the tyranny that this misinformation is believed to justify. Are people today more cowardly than they were nearly 50 years ago? Are people today more easily frightened by misinformation and misperception than they were back then? Are people today less willing than they were back then to speak out against the dominant narrative?

I remember well the cocksure predictions made by many elite voices of the horrors that would befall us Americans if energy price controls were abolished and we refused to alter our way of life. Fuel prices would skyrocket. Ordinary families would suffer grievously as they impoverished themselves simply to fuel their automobiles and to keep their homes warm during winter. We were even warned that if we refuse to adopt rationing and other strict controls and lifestyle changes that we’d soon find ourselves unable to get any affordable energy whatsoever. Failure to follow our leaders’ advice would spell doom for us all.

To this day I thank the memory of Ronald Reagan for eliminating, almost immediately after he assumed office at 1600 Pennsylvania Ave., all federal price controls on energy.

Here’s a slice from my AIER column:

Then as now, reality threw humanity a curveball. But instead of dealing with war-disrupted oil supplies intelligently and calmly, fear mongering by the media became de rigueur. For our own benefit and that of society, we little people must be reminded of the calamity that awaits us if we resist being regimented by our superiors.

(Don Boudreaux)

Tweet

As Art Carden notes, today is the 77th birthday of the great economic historian Robert Higgs. One of Bob’s many pioneering books is his 1977 Competition and Coercion: Blacks in the American Economy, 1865-1914.

I thought of Bob’s research and scholarship yesterday as I watched 42, the 2013 movie, starring Chadwick Boseman, about the baseball career of the great Jackie Robinson – who would yesterday have turned 102.

I don’t know if the scene depicted here is historically accurate or not. (This scene isn’t, at the link above at “42,” listed as being among the movie’s historical inaccuracies.) Either way, this scene does capture much of the manner in which market competition actually works to impose on bigots the costs of exercising their irrational prejudices. It depicts also the fact that many bigots, unwilling to pay those costs, change their behavior for the better.

It’s beautiful to behold!

Contrary to popular belief, such competition was at work in America during the late 19th and early 20th centuries, as Bob Higgs documents in his book. Indeed, the reality of such competition is what drove state and local governments during the Jim Crow era to forcibly impose racial discrimination by enacting Jim Crow legislation.

(Don Boudreaux)

Tweet

Art Carden celebrates Robert Higgs’s birthday. (Happy Birthday, Bob!) A slice:

This year is also the fiftieth anniversary of Higgs’s first book, The Transformation of the American Economy 1865-1914, a remarkable achievement for any scholar but made all the more impressive by the fact that it was published as Higgs was entering his late twenties. As he would spend his career doing, he took what “everybody” knew about exploitation, inequality, and Robber Barons during the late nineteenth and early twentieth centuries and showed that it was wrong. The book stands up well even five decades later.

In 1977, Higgs published a pathbreaking book on the economic history of race, Competition and Coercion: Blacks in the American Economy 1865-1914. Competition, Higgs argued, helped explain black economic advancement while coercion held them back.

In the Wall Street Journal, Barton Swaim reviews a few books about markets and morals – including a new edition of Milton Friedman’s 1962 classic, Capitalism and Freedom (reissued by the University of Chicago Press with a Foreword by someone who could not be more inappropriate, Binyamin Appelbaum). A slice:

I had never read “Capitalism and Freedom” and was renewed in my admiration for midcentury American reading audiences. The book, full of tightly reasoned arguments about the principles of economic freedom in various spheres of life, sold 400,000 copies in its first 18 years. The University of Chicago Press, which first published the book six decades ago, evidently would rather it stop selling. The new edition’s foreword is written by Binyamin Appelbaum, a member of the New York Times editorial board, who treats Friedman’s classic text as mildly interesting artifact. “Friedman’s claim that ‘widespread use of the market reduces the strain on the social fabric,’ ” Mr. Appelbaum assures us, “misapprehended the nature of society, which is more like a muscle than a fabric.” I await Chicago’s edition of J.K. Galbraith’s “The Affluent Society,” with a foreword by Larry Kudlow.

Arnold Kling reviews Kevin Vallier’s book, Trust in a Polarized Age.

Claude Barfield is understandably unimpressed with the Biden administration’s early moves on the trade-policy front.

J.D. Tuccille warns of the consequences of abandoning free speech. A slice:

Protections for free speech, it’s worth pointing out, aren’t some perfect counter to false and extreme ideas. Instead, they’re a recognition of core individual rights. But they’re also a pragmatic acknowledgment that putting government agencies in charge of suppressing misinformation just gives one team of bullshit artists an advantage over their less-powerful competitors.

Inspired by Ludwig von Mises’s 1944 book, Bureaucracy, Stefanie Haeffele and Anne Hobson warn against the false allure of top-down ‘solutions.’ A slice:

However, it is important to note that the lack of standards of determining bureaucratic success creates impassible problems for monitoring and managing the size of bureaucracy. For example, it is likely impossible to calculate whether an agency should have 500 employees or 50,000 and it is difficult to know whether agency services are too costly, and by how much. Because bureaucrats are not limited by considerations of financial success, superiors have to provide limitations in the form of rules and regulations. The mission of the bureaucrat is to serve the public, but the incentives point toward serving one’s supervisor and their preferences for implementing the agency’s goals.

My colleague Tyler Cowen warns against raising the minimum wage. A slice:

Or consider Treasury Secretary Janet Yellen. She supports the proposed hike, as she noted in her confirmation hearing last week, yet in 2014 she endorsed the view that a minimum wage hike would lead to significant job loss. Maybe now she knows better, but if the 2014 Janet Yellen could have been so fooled, then perhaps this debate is not so settled.

“You can’t count on governments to either ‘follow the economics’ or ‘follow the science,’ because their job is to follow the politics” – so writes Steve Horwitz.