A Thinking Reed

"Man is but a reed, the most feeble thing in nature, but he is a thinking reed" – Blaise Pascal

Clueless economist watch

Steven Landsburg writes in the NYT:

All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?

Um, no. Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

Got that? Those plebs ought to be grateful to their betters that they can buy more cheap imported junk from Wal-Mart and not complain about the fact that their new job (assuming they’re lucky enough to have one) pays minimum wage and doesn’t have benefits or health care.

I guess I take this sort of thing a bit personally since the town I grew up in has been on the receiving end of the “creative destruction” of NAFTA and other “free” trade deals. I wonder if it ever occurs to Landsburg that people might find a certain sense of satisfaction and self-worth in having a good job even if it means they pay a bit more for consumer goods. Not to mention a lot of people might prefer health care for their kids to $30 DVD players.

UPDATE: See also Patrick Deneen:

Note that it is unquestioned that what constitutes “winning” is cheap prices and more cheaply produced stuff, not the dignity that comes from work and production or the contributions we might make to our own communities, even at greater cost. Also, the only economic options are either “subsistence” or excess. Not exactly an easy choice, to be honest, but more importantly, not really the only choice.

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8 responses to “Clueless economist watch”

  1. Jeremy

    I had the same reaction, Lee. I can’t help but think that if we listened to everything the economists tell us to do we’d be heartless machines. I was interested in The Myth of the Rational Voter until I saw that it was written by one of those poor, dismal souls.

    Reply
  2. gaius sempronius gracchus

    This is exactly the myth the free traders of Wall Street need to appeal to in order to get the rubes to buy their policy.

    Of course, “compensation packages” (as they say) fall faster than prices, in net, in the economy as a whole.

    And profits rise accordingly for those doing the oversears producing for sale in America.

    And so we get two ro three decades of stagnant to falling wages, loss of benefits, and dropping working class well-being accompanied by skyrocketing profits and much better pay for the guys at the top.

    Trickle-up economics.

    So, is this guy a mouthpiece for some conservative think tank? Or just looking for a job at one?

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  3. gaius sempronius gracchus

    Jeremy,

    This is Brian Caplan.

    So is this.

    You are certainly right to recall his name when reading this post of Lee’s on What to Expect When You’re Free Trading, by Steven Landsburg, self-described “hardcore libertarian.”

    Caplan is one of those economists who make Milton Friedman seem like a liberal softy.

    Many decades have passed since the urbane Canadian, J. K. Galbraith, was America’s leading public economist.

    Those were, of course, decades of the rise of conservatism, the core of which was, in fact, the growing respectability and influence of the bare-knuckle capitalist ideology produced by a growing tribe of professional economists, backed by an increasingly influential group of libertarian philosophers like John Hospers, Robert Nozick, Jan Narveson, and Tibor Machan.

    But there have been and are professional economists of another bent, who, understanding perfectly well that capitalism, left unregulated and as free as the owning classes could desire, will ruin and enslave everyone but them, were and are willing to denounce it and support extensive government interference with those forms of liberty so much insisted on by libertarian ideologues, backed by public philosophers committed to progressive views like John Dewey, John Rawls, Ronald Dworkin, and Tom Nagel.

    So it isn’t really true that all professional practitioners of the dismal science are demented right-wing boobies or suborned propagandists.

    It just often looks that way.

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  4. Christopher

    I say we outsource Landsburg’s job and have him get back to us about that.

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  5. Rick Ritchie

    Are the decades of the rise of conservatism the decades of the rise of the neoconservatism of, say, National Review? If so, then lumping this in with libertarian philosophers does not give a very good idea of what either group is really about. In 1952, Buckley said “…we have to accept Big Government for the duration – for neither an offensive nor defensive war can be waged given our present government skills, except through the instrument of a totalitarian bureaucracy within our shores…” That’s hardly a libertarian vision. When the libertarians are quoted only on rolling back certain business regulations, as if that is all they were calling for, they are being misrepresented.

    And when you give government the power to intervene, the only thing you know is that it has a new power at its disposal. You don’t know what it really intends to do with it. Large corporations will tend to figure out ways to make the case that their competition is harmful to the public. Battering each other through the state will become the new form of competition. (Except that they already do this.)

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  6. Lee

    Rick, that’s a fair point. I don’t dismiss libertarians entirely: I used to think of myself as one and still have a strong libertarian streak.

    But I think genuine libertarianism needs to be distinguished from what Kevin Carson calls “vulgar” libertarianism, which is often just a knee-jerk defense of the economic status quo under the guise of the free market. Kevin has written some very thought-provoking stuff about this as his mutualist.blogspot.com (also linked on the left).

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  7. Lynn Gazis-Sax

    “If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?”

    Um, I pay into the system when I enjoy the upside, and get to benefit from the retraining if my job gets shipped to India? What’s so hard about that? It works a whole lot better than me trying to save enough to live off for a year and hoping I succeed at that before my job gets shipped to India (and that, if my job does get shipped to India, my savings are enough to cover me and my husband’s insurance and medical bills until I get a new job).

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  8. Rick Ritchie

    Hey Lee,

    I was replying more to gracchus. And in either case, I know what is being attacked is not a straw man. It really is out there. (And I hate it, too.) I just think it needs another name.

    Reply

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