J9 - The Danger Of "We Have To Fix Nature" As Justification For Government Intervention

While I was at the Mises Institute earlier this month, I engaged in a discussion with some other scholars in an effort to answer the question of whether the sciences of human action truly applied to all men and women, or whether there were different sorts of people who could possibly think differently. Karl, who is a brilliant doctoral student at the University of Angers, in France, noted that Mises allowed that human beings evolved from pre-logical creatures into the logical creatures we are now. Would it not be possible, then, for there to have existed some creature that had some of man’s logical features and not others? Would it not be possible for some creatures to evolve from man into super-logical beings? If so, are the findings of economics applicable to these sub- and super-human beings? 

This conversation, like every conversation at the Mises Institute, was more interesting and exhibited more wide-ranging knowledge than an entire month of an average history class. We eventually got around to talking about eugenics, and the dangers of classifying human beings. Now, I do believe that lower-class people tend to be more present-minded, while higher-class people tend to be more future-oriented, and that this mindset keeps them in their respective classes (see Rothbard). As far as explaining this phenomenon, I do not know whether to believe that it is caused by an ideological superstructure (see Marx), genetics (see Hoppe), isolation (see Sowell), or scarcity itself (see Mullainathan). This is an interesting topic, worthy of exposition in a much more formal setting than this humble blog post. But the point is not so much what the truth is, but what people believe the truth is, and what to do about it. You see, whatever causes the lower classes to be present-minded, the belief that it was caused by genetics, and the further belief that these genes could be weeded out by the State, is what led to the sterilization of tens of thousands of American prisoners, the infanticide of millions of fetuses, and the attempted extermination of inferior races by the Nazis and other totalitarian regimes. 

In bringing a problem to light, you are always inviting people to solve the problem, or at least attempt to. Unfortunately, many people automatically turn to government to solve the problem. This is very dangerous, and always unwise. My project is an attempt to demonstrate that the free market can make our world a better place. However, I must be careful to not present the problem in such a way that people would feel justified in calling upon the government to “fix nature,” as they did in the eugenics movement. That is why it is so important that I ground my project so firmly in general economics. This problem must be presented in the proper light; a light that leaves no doubt about the government’s ability to solve it. Government cannot begin to “fix nature” as well as the market can, and this must be made clear.

Advocates of government intervention sometimes point to the British health care system as an example of the success that comes from adopting solutions on a nationwide level (something that can be accomplished only by government decree, apparently). People argue similarly that solutions to climate change can only be effective if instituted at a nationwide level, and therefore this problem requires a government solution. According to the apologists, Great Britain’s healthcare system, which is not designed to make profits, saves more lives per pound spent as a proportion of national wealth than almost any other country. Okay. So Great Britain is very efficient with its healthcare budget; it’s achieved an economy of scale that American has not. However, any industry can be insanely effective if all of the economy’s resources are devoted to it. The fact is, we cannot tell how successful the British healthcare system is precisely because it produces no profits. Because its revenues are obtained through compulsory taxation and not voluntary payment, we do not know how much people actually value the services they receive, and we cannot know whether the resources that have been devoted to healthcare should have been used in some other industry. Without profit and loss, without economic calculation, the government cannot determine whether its programs are economical or wasteful. It therefore cannot be said that a government program is making us better off than we would be without it.

Can we fix nature? I believe that we can. How can we fix nature? That is a question for the entrepreneurs. Should we fix nature? That’s is not a decision for me alone to make. But should this decision be left to the government? Absolutely not. The government has no rational way of making such a decision. This process of changing the world, of improving the environment, must be left to the market. And my project must be sure to communicate that, or I run the risk of providing a justification for widespread government intervention, something that could cost many more lives than any amount of climate change.

J8 - Thinking About Assignment #1

I’m writing this to record my apprehension about my upcoming “Self-Designed Assignment.” 

Originally, I wanted to complete this “model project” by the end of the summer, so that students would be able to reference it while doing their own work. However, I didn’t quite realize how little time I’d have this summer: I leave my house for my first job at 8 o’clock in the morning, return home from second job around 10 o’clock at night. Then I go for my run, which sometimes takes two or more hours. So...very little time to get work done. I think that I’ll certainly be able to maintain an accelerated pace, and therefore continue to provide a model for the students, but my end date has been pushed.

Anyway, no matter how the overall schedule works out, I’ve been working on this project for three weeks now, which means that very soon I’m going to have to do a “Self-Designed Assignment.” Now, I have no doubt that I could produce something substantial to mark my progress. However, I don’t want to produce just anything. I want this to be a model project, something that the students will be able to draw inspiration from. So, I feel like this needs to be something grand. Unfortunately, I’m not very creative. 

These assignments are supposed to be “wrapped in the 5Cs.” I fancy myself to be very strong in the areas of critical thinking and communication. I’m less strong in the areas of curiosity and collaboration. And I’m weakest in the area of creativity. Now, some people might be tempted to use this project to work on their weaknesses (or at least say so). I think that this approach is unwise. If you’re good at one thing, and bad at another thing, I believe that there’s more to be gained by honing the skill you’re good at than trying to improve at the thing you’re bad at. If you’re horrible at something, then you could probably spend a considerable amount of time practicing that skill before you get to a point where you’re merely bad at that thing. Whereas if you dedicated that considerable amount of time to practicing the skill that you’re already good at, there’s a potential to move into an upper echelon of people with that skill. It’s more valuable to be an expert at piano and unable to play the violin than to be mediocre at both instruments. This is a mutated form of the law of comparative advantage. Productivity is increased through specialization. Therefore, I don’t think that I’m going to stress much about my lack of creativity. 

So, my assignments will likely focus on the other four Cs. This doesn’t mean that my assignments are going to lack creativity entirely. After all, I have a very loose definition of creativity, closer to what someone else would call originality. So everything I produce could be labelled creative. I’m just not going to consciously become more creative in the colloquial sense of artistic. I feel that this is an entirely appropriate course of action. I just wonder how impressive my assignment can be without some artistic creativity. Even the most captivating essays are just words on paper.

My other concern is deciding what content to include in this first assignment. During the past month I’ve read almost 900 pages of an economics treatise. I obviously can’t include everything I’ve learned in this one assignment. How does one embody “economic theory” in one paper (if that’s what I produce)?

In short, I’m stressing a little bit about this assignment.

J7 - How The Dismal Science Makes Me A Better Person

“The characteristic feature of this age of destructive wars and social disintegration is the revolt against economics.” 

Part of the war on economic science, especially in recent years, has been the presentation of information that is meant to paint economists as “bad” people. Studies have been published which show that economics students tend to be more individualistic, less charitable, less concerned with equality, and less supportive of government action, whether regulatory or distributary. Of course, while this campaign on the character of economists probably has its intended effect on the minds of the public, it does nothing to cast doubt on the teachings of economics itself. Unable to refute the truths given by the sciences of human action, the proponents of collectivism instead smear those who relay such truths.

Of course, there’s nothing wrong with being less concerned with equality or less supportive of government intervention. From a different viewpoint than that of the Leftist writers of these character-attacks, these traits might even be considered virtues. But, rather than meet these Leftists on their own ground, I will make an even stronger claim: the study of economics has actually made me a better person, even from a Leftist point of view.

The study of economics is the study of people. An understanding of economics is an understanding of how others act. And through this understanding comes peace, acceptance, appreciation, and hope for the future. 

Economics teaches that every action is undertaken in an effort to remove some felt uneasiness. In other words, everything that people do is an attempt to be happier. Observing the actions of others, I know that they are driven by the same motive as I am; the pursuit of happiness. Understanding their motive allows me to empathize, and to forgive. Moreover, the economists have demonstrably proven that value is subjective, existing only in the minds of acting human beings. Therefore, there is nothing inherently better about reading the Wall Street Journal than reading People Magazine. Understanding that value is subjective encourages humility. I cannot judge the choices of others, for I know that they’re just doing what they think is best for themselves.

A proper study of economics leads to the realization that only the individual acts. Understanding this allows the economist to see through the words of a politician, always employing the royal “we,” and realize that not everyone who the politician claims to represent actually agrees with his views. Not every NRA member shares the sentiments of Wayne LaPierre. Not every African American agrees with Al Sharpton. A knowledge of economics reduces the tendency to stereotype people. When I meet a new person, I view them as an individual with certain characteristics, not as a faceless member of a certain group. 

Economics provides an understanding of scarcity, and an understanding teaches us that everyone faces choices. There are not enough resources to accomplish everything we desire; we must choose between alternative ends, selecting the most important desires for satisfaction, and leaving all other desires unsatisfied. This helps in the political scene, as I’ve stressed before. Conservatives don’t oppose government health care because they want people to be without health care; they oppose government health care because they value other uses of that trillion dollars more than universal health care. However, this knowledge can help in your personal life, too. For example, imagine that you call a friend and ask them to go out with you tonight. They say no; they’re going to the gym instead. The sense of rejection sets in. But the economist realizes that your friend did want to go out with you; it’s the scarcity of time that forced him to decline your invitation. He wants to go out with you, but he also wants to go to the gym. He can’t do both. Choosing the gym because he’s training for a marathon is not the same as rejecting you because he doesn’t want to see you. He values you; but, tonight, he values his fitness goals just a little bit more. Understanding this necessity to choose between valued ends helps the economist avoid feelings of offense or rejection.

An understanding of economic growth provides hope for the future, by revealing that there is a way for humanity to reduce the burden of scarcity and to raise standards of living for everyone. It also provides appreciation for our forbears who left behind the enormous capital stocks we employ today. An understanding of the division of labor provides a sense of peace because I know that each day, despite the rhetoric in the news, people choose to continue cooperating with each other. It also provides a desire for peace because that is the condition most conducive to cooperation and economic progress. 

For the past year I have been studying law. Now, the study of law is, in a word, all-consuming. Therefore, I have not engaged in much economic thinking this year. Moreover, the overwhelming volume of information thrust upon beginner law students had the effect of pushing a lot of old information out of my mind. Use it or lose it, as they say. Fortunately, I’ve been rather forcefully reimmersed in economic theory over the past two weeks through my preparation for and participation in an economics seminar at the Mises Institute. The experience has been rigorous, but satisfying. Reacquainting myself with economic theory has allowed me to regain a proper view of the world, one I had not realized that I had lost until I found it again. Therefore, I am grateful for the opportunity this project is providing me to continue using economics and improving myself.