Tag: poverty

COVID-19: What Would Rosie The Riveter Do?

Thomas L. Knapp

Half the readers I hear from accuse me of Trump Derangement Syndrome. The other half accuse me of rabid Trump fandom. In truth, I think of US President Donald J. Trump in exactly the same way I think of most other politicians: He’s usually wrong and often dangerous. But when he’s right he’s right.

He’s right when he says that America needs to “open up” soon.

If anything, his target date of Easter is too distant.

The longer we wait to get moving again, the longer it will take to recover.

The longer we wait, the more Americans will descend into, or fall deeper into, poverty.

The longer we wait, the more Americans will die of causes other than coronavirus.

If we wait TOO long, starvation and malnutrition will be among those causes.

We don’t have to like it. That’s how it is whether we like it or not.

One of the oddest assertions I’ve heard from American politicians is that the COVID-19 outbreak is “our generation’s World War 2.”

I’m far too young to remember World War 2, but I’ve listened to veterans talk about it, read its history, and love the era’s propaganda posters. Rosie the Riveter in “We Can Do it!” “Lay-Offs Cost Lives!” “Work To Win.”

I’m trying to imagine a propaganda poster for “our World War 2,” and all that comes to mind is a hand reaching out from under a bed to grab a government check.

That image isn’t nearly as inspiring, is it? Nor is the sentiment nearly as practical.

America won World War 2 by working and fighting. It isn’t going to beat COVID-19 by shutting down and cowering.

Our politicians are thoroughly enjoying their extended Mussolini cosplay holiday, but their “lockdown” orders and such are merely feeding their egos, not starving the virus. The longer we continue to put up with that authoritarian nonsense, the harder it’s going to get to reclaim our rights and put them back in their places. Once they get used to filthy serfs like you and me taking a knee when they pass by, they’re not going to want to give it up.

The more quickly we seize back control of our lives — from the virus and from the politicians — the more quickly our lives will start getting better again.

Call me a Trump fanboy if it makes you feel better, but I’m with the president on this one.

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Don’t Need Rescue from Everything

Kent McManigal

I’m surprised at how seriously people are taking the coronavirus. I’m even more surprised at how many believe government can save them from it, or that it’s even government’s job to do so.

This is the same sort of thinking that has led to the recent plague of “red flag” legislation.

If you believe you need politicians to save you from a virus or from someone’s gun, then you’ll keep handing control of your life over to anyone who promises to rescue you. Whether they actually can or not.

It’s not only diseases and guns. It seems almost everyone wants to be saved from something. Maybe they fear immigrants who don’t comply with unconstitutional anti-immigration legislation. Or maybe they want to be rescued from “inequality,” whatever they imagine it to be.

Others may want to be saved from weather, poverty, different political ideologies or other religions they don’t follow, or from rich people. Some beg to be rescued from their student loan debt or their own bad choices.

Drugs, other drivers, people who might appear to be smoking but aren’t, messy yards, backyard chickens, loud parties, tall grass, and more are all things someone out there wants government to save them from.

If this seems like a long list, you are right. Yet it barely scratches the surface. There appears to be no end to the number of things you could list that some people, somewhere at some time, have begged government to save them from.

Government encourages this pandemic of cowardice.

H. L. Mencken, a favorite writer of mine from early in the 20th Century, noticed this and called it out. He wrote: “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

He’s right, and it’s working.

Were your hobgoblins listed above or are yours something else entirely?

It’s not that these things don’t exist, but making them into hobgoblins you fear irrationally is a path to slavery. You become so desperate to be saved you’ll accept those fanning the flames of fear as your self-proclaimed saviors.

Fear is the reaction to feeling you won’t be able to cope; of suspecting you aren’t enough. It’s a lie. You are enough.

You don’t need to be rescued from every little thing. I know you can do it without depending on government or its legislation. To conquer fear, get busy doing what needs to be done.

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The Leiter-Caplan Socialism Debate

Bryan Caplan

Last night, I debated the University of Chicago’s Brian Leiter on “Capitalism, Social Democracy, and Socialism” at the University of Wisconsin. Leiter wrote the precise resolution:

“Social democracy is preferable to market capitalism, but ultimately America will need to move towards a socialist system.”

Here’s my opening statement; I’ve debated Elizabeth Bruenig and John Marsh this general topic before.

All First World countries are already social democracies.  Their governments continue to allow markets to provide most goods and services, but they heavily regulate these markets, heavily subsidize favored sectors like education and health, and heavily redistribute income.  The U.S. is moderately less social democratic than France or Sweden, but the idea that we have “market capitalism” while they have “social democracy” is hyperbole.  If you favor social democracy, you should be happy because your side won long ago: free-market rhetoric notwithstanding, the U.S. has Social Security, Medicare, Medicare, and public education, and strict regulation of labor markets, construction, and other major industry.  My view, however, is that social democracy is a awful mistake.  Despite its bad press, market capitalism would be much better than what we have now.

Advocates of social democracy typically claim credit for three major improvements over market capitalism.  First, they’ve used redistribution to greatly reduce poverty.  Second, they’ve used regulation to make markets work better.  Third, they’ve used government funding to provide wonderful services that markets neglect.  I say they’ve greatly overstated their success on all three counts – while conveniently neglecting heavy collateral damage.

Let’s start with redistribution.  The rhetoric of redistribution revolves around “helping the poor.”  When you look at redistribution in the real world, however, this is grossly misleading.  The U.S. government spends far more on the elderly – most of whom aren’t poor – than it spends on actual poverty programs.  Programs like Social Security and Medicare are popular because they “help everyone.”  But “helping everyone” is extremely wasteful because most of the people government helps would have been quite able to take care of themselves.  Instead, we absurdly tax everyone to help everyone.

This humanitarian rhetoric rings even more hollow when you examine the most important forms of government regulation.  Domestically, nothing does more harm than our draconian regulation of the construction industry.  This regulation, primarily state and local, makes it very hard to build new housing, especially in high-wage places like New York City and the Bay Area.  It’s hard to build tall buildings.  It’s hard to build multi-family housing.  You have to waste a lot of valuable land; builders put houses on an acre of land because zoning laws force them to do so.  The connection between this regulation and exorbitant housing prices is almost undeniable.  In lightly-regulated areas of the country like Texas, business supplies ample cheap housing.  Anytime someone tells you regulation makes markets work better, just look at San Francisco’s housing market for a reality check.  And this hardly one tiny failure of regulation; housing absorbs about 40% of the average Americans’ budget.

Immigration regulation is an even more egregious failure.  The single best way for people around the world to escape poverty is to move to high-productivity countries like the U.S. and get a job.  This benefits not only immigrants, but us, because we’re their customers; the more they sell us, the better-off we are.  A hundred years ago, immigration to the U.S. was almost unregulated, giving people all over the world a viable way to work their way out of poverty.  Now, in contrast, immigration is very tightly regulated – especially for those most in need.  Economists’ estimates of the global harm of these regulations sum to tens of trillions of dollars a year, because each immigrant worker vastly enriches the world, and hundreds of millions of workers wish to come.  Again, this is the opposite of one tiny failure of regulation.

Finally, what about education, health care, and other sectors that government subsidizes?  I say these policies are crowd-pleasing but terribly wasteful.  Yes, more educated workers make more money, but the main reason is not that you’re learning useful skills.  Most of what you study in school is irrelevant in the real world.  Degrees mostly pay by convincing employers that you’re smarter, harder-working, and more conformist than the competition.  That’s why there’s been severe credential inflation since World War II: the more degrees workers have, the more degrees you need to convince employers not to throw your application in the trash.  Pouring money on education is an exercise in futility.

The same goes for health care.  Almost every researcher who measures the effect of health care on health agrees that this effect is much smaller than the public imagines.  Diet, exercise, substance abuse, and other lifestyle choices are much more important for health than access to medicine.  But these facts notwithstanding, the government lavishes funding on health care that barely improves our health.  If this seems implausible, just compare American life expectancy to Mexico’s.  Medicare plus Medicaid cost well over a trillion dollars a year, let we only live a year-and-a-half longer.

A reasonable social democrat could object: Fine, actual social democracies cause great harm and waste insane amounts of money.  But we can imagine a social democracy that limits itself to helping hungry kids and refugees, fighting infectious disease, and other well-targeted programs for the betterment of humanity.  Frankly, abolishing everything except these few programs sounds really close to market capitalism to me… and it also sounds like wishful thinking.  In the real world, governments with lots of power and a vague mandate to “help people” reliably do great harm.  This is true in the U.S., and it’s true in Sweden.  Yes, the Swedes strangle their housing industry too.

Given all this, I predictably deny that “ultimately America will need to move towards a socialist system.”  Full-blown socialist systems make social democracy look great by comparison.  Indeed, once you draw the distinction between social democracy and socialism, it’s very hard to find to find any socialist regime that isn’t a tragic, despotic disaster.  If Sweden is the jewel of social democracy, what’s the jewel of socialism?  Cuba?  Nor is there any sign that socialism somehow becomes “more necessary” as countries progress.  The main reason governments have gotten bigger over the last thirty years is just the aging of the population.

Finally, let me underscore what I’m not saying.  I’m not saying that life in the U.S. or Sweden is terrible.  In fact, human beings in both countries enjoy close to the highest quality of life than human beings have ever achieved.  My claim, rather, is that even the most successful countries in history could do far better.  I know that social democratic policies are emotionally appealing.  That’s why they’ve won.  Yet objectively speaking, market capitalism should have won because market capitalism offers much better results.

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Reflections on Guatemala

Bryan Caplan

I first journeyed to Guatemala 20 years ago, hosted by Universidad Francisco Marroquín.  Two weeks ago, I returned for a delightful extended visit, accompanied by my Spanish-speaking elder sons and former EconLog blogger Jim Schneider.  I spent over a week doing guest lectures at UFM, then gave Friday’s keynote talk for the Reason Foundation’s “Reason in Guatemala” conference.  During our trip, we were also able to visit the awesome Mayan ruins of Tikal and Yaxha.  Here are my reflections on the experience.

1. Guatemala has dramatically improved over the last two decades.  Multinational businesses are now all over Guatemala City.  Restaurants and luxury products are all over, but so are businesses that cater to average Guatemalans.  Local grocery stores are packed with familiar international brands and products.  There are multiple Walmarts.  Even Costco is there, doing business as Pricesmart.  We argued about whether the Oakland Mall was more impressive than Tyson’s I, but it was definitely a tough call.  Smartphones are naturally ubiquitous.  Whenever we strayed from the tourist areas, we saw ordinary citizens enjoying simple material pleasures like Pollo Campero.

2. When I last visited Guatemala, the high-end businesses seemed grossly overbuilt; the shiny malls were almost empty.  Now, however, Guatemalans actually seem to be consuming the fruits of progress.  The cavernous Oakland Mall was packed at lunchtime on a weekday – and the pedestrianized streets near the National Palace were full of locals.  La Aurora Zoo was world-class, but we saw no other foreign tourists.

3. Our sponsors at UFM strove to keep us perfectly safe.  For the first few days, they drove us everywhere.  Yet almost every local assured us that four guys walking around Zone 10 in broad daylight were extremely safe.  By the end, we were walking comfortably through a wide range of neighborhoods, though only by day.  Crime is clearly down, thanks in no small part to massive private security.  Even small stores often have heavily-armed guards, and razor wire is almost always in your field of vision.

5. The greatest danger to pedestrians is probably the poor sidewalks; there are many dangerous pits even in elite neighborhoods.  The problem is so dire and the cost of fixing it is so small that I’m surprised that local businesses haven’t raised money to solve it.  I know Latin America’s philanthropic tradition is weak.  Yet good publicity aside, wouldn’t the Oakland Mall soon recoup a $50-100k investment in the surrounding sidewalks?  Would local government really block this public-spirited initiative?

6. We didn’t have to walk far to see absolute poverty.  No one looked malnourished, and even kids living in shacks and huts usually wore new, store-bought clothes.  Still, we saw families living in shacks (in Guatemala City, especially near the airport) and huts (especially on the drive to Yaxha).  During one severe traffic jam, we saw kids under ten washing car windows.  We also witnessed several families of clowns busking in the streets.

7. By official measures, Guatemala is dramatically poorer than any of the Caribbean islands we recently toured, with per capita GDP of $3200 nominal and $7600 PPP.  Yet this is mightily difficult to reconcile with what we saw with our own eyes.  Overall, the Caribbean islands looked a lot like the road from Flores to Yaxha – a mixture of modest modern houses and primitive shacks and huts.  Everything else in Guatemala looked vastly better than St. Maarten or St. Kitts.  While this partly reflects higher population, the biggest contrast is that almost every Guatemalan looks like he has useful work to do.  The Caribbean islanders, in contrast, have high levels of desperate peddling and outright idleness.

8. Guatemalan prices confused not only us, but local economists as well.  Grocery prices are very high.  Guatemala’s Pricesmart and my local Costco sell many identical goods, so I can confidently say that the former’s prices were roughly twice as high as I normally pay.  Local chains were even pricier.  One prominent local businessman blamed Guatemala’s low port capacity – and impishly shared his thrilling plans to build a big new port in the near future.  Restaurant meals aren’t cheap either; everything from fast food to premium steaks costs about the same as it would in Virginia.  The only product that was blatantly cheaper than usual was Uber – about one-third of the U.S. rate.  (Since gas prices were a bit higher than in Virginia, drivers’ take-home pay must be low indeed).  Other services, such as tour guides, were also big bargains.

9. As I toured Guatemala, I couldn’t help but notice how happy the people looked, especially the women.  I wondered if my impression could just be confirmation bias, but now that I’m back home I’m confident that the contrast is stark.  Guatemalan men look at least marginally happier than American men.  Guatemalan women look much happier than American women.  You could say that this merely reflects cultural differences in expressiveness, but that strikes me as sheer stubborn denial.

10. UFM was the jewel of our visit.  UFM could well be the most beautiful of the hundred-odd universities I’ve toured in my life.   Built in a ravine, it elegantly blends distinctive architecture with gorgeous tropical flora.  UFM also hosts two stunning museums – Popol Vuh (archaeology) and Ixchel (textiles).  Best of all, UFM is an academic libertarian paradise.  The ideas and imagery of my intellectual heroes adorn the whole campus – Milton Friedman, Ayn Rand, and Ludwig von Mises are only the beginning.  Yet there is no sign of dogmatic orthodoxy.  Good manners prevail; faculty and students are eager to hear new ideas and debate old ones.   Unlike most other institutions, UFM administrators are especially intellectually engaged.  UFM President Gabriel Calzada Alvarez was overjoyed to talk ideas with my sons for hours.

11.  The students of UFM look even happier than the rest of their countrymen.  You could say this is because they’re drawn from Guatemala’s richest families, but so are Americans in the Ivy League – and those kids are hardly pictures of good cheer.  The gender gap was so big that I wouldn’t have believed it if I hadn’t seen it with my own ideas; female UFM students appear extraordinarily happy.  UFM econ’s male/female ratio is also strangely low; several of the classes I taught were virtually all-female.

12. My Guatemalan audiences took to Open Borders like fish to water.  The cultural and political threat of Muslim immigration was the sole recurring objection.  In Guatemalan eyes, Latin America and the U.S. share a common Judeo-Christian culture, so many were surprised to hear how many U.S. citizens view Latin Americans as culturally alien or even unassimilable.

13. On the latter issue, the Guatemalans are plainly correct.  Pre-assimilation to the North American way of life is prevalent and intense.  Virtually everyone at UFM speaks and understands English well.  About a fifth of the public signs in Guatemala City are entirely in English, and an additional third are in Spanglish.  The Guatemalan elite already lives the American dream, más o menos.  The average Guatemalan struggles to do the same.  A dozen different people emphatically described Guatemalans as “deeply conservative,” but Tarantino was on t.v. every time I flipped the channels.

14. Even Guatemalan libertarians rarely complained about specific domestic government policies, but if you look at their Economic Freedom of the World ranking, there is plenty to decry.  Guatemala gets great scores on Size on Government and Sound Money, and a good score on Freedom to Trade Internationally.  Yet it gets an awful score for Legal System & Property Rights, and an even worse score for Regulation.  New construction projects are all over Guatemala City, but one of the locals told me it takes 2-3 years to obtain permission to build.  Imagine how much construction there’d be if you cut the delay down to 2-3 months or 2-3 weeks!

15. So what do Guatemalans complain about?  I asked one of my classes to tell me what most bothered the average Guatemalan; then I proposed workable policy responses for each problem.  Their first answer was “corruption.”  I suggested hiring a team of Swiss or Singaporeans to take over Guatemala’s internal affairs department.  They saw the logic of importing trustworthiness, but told me that Guatemalans wouldn’t accept it.  Their next answer was “traffic.”  I proposed electronic road pricing.  They again saw the logic, and again told me that Guatemalans wouldn’t accept it – even if the gas tax were abolished at the same time.  My students also saw crime – especially kidnapping – as a grave problem.  They were almost dumbstruck when I suggested a big switch from incarceration to flogging, even though Guatemala’s indigenous peoples already heavily rely on corporal punishment.  In a poor country with heavy corruption and high crime, the case for flogging is mighty indeed.  Just ask criminal-justice reformer Jason Brennan!

16. If I had to move to another country, Guatemala would be high on my list.  First and foremost, I love the UFM community.  American liberalism and conservatism are intellectual dead-ends, and I would enjoy forever escaping from both.  I also prefer to be around very happy people, and on that score Guatemala handily beats the U.S.A.  Guatemala does have some scary features, but the longer I stayed, the more I relaxed.  Yet for now, I continue to prefer the U.S.  Wages are obviously much higher here, and PPP measures notwithstanding, a dollar goes further in the U.S. than in Guatemala.

17. The Mayan archaeological sites we visited deserve all the hyperbolic adjectives people apply to them.  The contrast between the pyramids and the palaces, however, is vast.  The pyramids you leave thinking, “Human beings made these?!  Without wheels?!”  (As well as, “They performed human sacrifices here?!  What the hell was wrong with these Mayans?!”)  The “palaces” of the Mayan leaders, in contrast, look smaller than many apartments in Fairfax.  To reverse Galbraith, the Mayan elite lived lives of public affluence and private squalor.

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Caplans of the Caribbean

Bryan Caplan

I just returned from cruising the Caribbean on Anthem of the Seas.  Maybe you’ve heard of it? Fortunately, no coronavirus panic marred our vacation, and the concluding scare at the dock turned out to be a false alarm.  Though I’d seen a little of the Caribbean before, this trip was a heavy dose: after a stop at San Juan, Puerto Rico, we sailed on to St. Maarten, Antigua, St. Lucia, and St. Kitts.  My social science reflections:

1. I’ve been writing about Puerto Rico for years.  Its great open borders experiment doesn’t just put an upper bound on the dangers of “brain drain”; it also shows that liberalization makes migration serenely “snowball” rather than frighteningly “flood.” I was excited, then, to finally see Puerto Rico with my own eyes.  San Juan, at least, met my high expectations.  It’s a rich and beautiful city – and I didn’t merely visit the tourist areas.  The country is packed with Walmarts and other big-box retail.  Uber works well.  I saw near-zero remnants of Hurricane Maria, and – through my bilingual sons – had two fun chats with jovial Uber drivers.  Next time, I’d really like to drive the Ruta Panorámica.  No doubt I’d witness some serious poverty, but I doubt it’s more disturbing than driving around rural Mississippi or West Virginia.

When I invoke Puerto Rico, immigration skeptics often scoff.  Hurricane Maria aside, they deem Puerto Rico a disaster zone.  After all, if it were a U.S. state, Puerto Rico (with a per-capita GDP of just $32,000) would be even poorer than Mississippi, right?

I call this a willfully misanthropic comparison.  To grasp the effects of open borders on Puerto Rico, you have to ask, “How would Puerto Ricans be doing if they didn’t enjoy free migration to the U.S.?”  To answer that question, you’ve got to look not as Mississippi, but at other Caribbean islands.  Which I then proceeded to do.

2. Our next stop was St. Maarten (the Dutch side).  Official estimates of its per-capita GDP vary very widely.  While the CIA absurdly sets it at $66,800 (PPP), Wikipedia provides only a 2008 estimate of $15,400 (nominal).  Compared to Puerto Rico, in any case, the island looks quite poor.  A good chunk of this admittedly stems from low population; 42,000 people plus tourists aren’t enough to sustain more than a few restaurants or entertainment venues.  Even taking population into account, however, living standards look low.  Desperate peddling of tourist wares is a common job.  Roads are bumpy.  The shiniest business we saw was a KFC.  The biggest grocery store we found wasn’t bad, but about a third of the refrigerated shelves were empty.  There’s no Uber, but since there are plenty of taxis, I blame regulation.  After SNUBA diving (awesome), we taxied to the local tropical zoo, which sadly turned out to be shuttered since Maria.

What explains the gap between the official economic statistics and what we saw?  The simplest story is that a few super-rich expats drive up the average, but it’s hard to believe that’s close to the whole story.  The next explanation is that I’m such a spoiled American that almost everywhere on Earth looks impoverished to me.  Another is that the statistics are fake; but wouldn’t countries want to overstate their poverty to get extra foreign aid?  Last, CPI bias is plausibly astronomically unfavorable in small islands where there’s not much to spend your money on.  (As I told Tyler, there are odd parallels between small Swiss towns and these Caribbean islands; in both places, even the rich have little to buy).

While we’re on the subject of CPI bias, the Internet has clearly been a nearly unmeasured godsend for the whole region.  In 1990, islanders would have been cut off from 99% of humanity’s cultural bounty.  Today, the curious can sample and savor this bounty for modest connection fees.

3. Then we sailed on to Antigua (a subset of Antigua and Barbuda), with recent per capita GDP estimates of $17,500 nominal and $28,000 PPP.  It did indeed look a little richer than St. Maarten, though that too could be confounded with higher population.  The downtown was fun to see, but the roads were bumpy and even the main sidewalks poorly maintained.  While shuttling to snorkeling, we saw a huge sports stadium (10,000 seats!) largely funded by the government of mainland China.  (Other islands, in contrast, seemed oriented toward Taiwan).  There were fewer desperate peddlers, but almost no businesses even in the historic downtown.  As Richard Scarry famously inquired, “What do people do all day?”

4. Next, we saw St. Lucia.  Geographically, it was the most beautiful of the islands.  The Pitons are splendid, and we passed some scenic harbors and resorts.  Economically, though, St. Lucia looked the worst.  This fits with official statistics, which put its per-capita GDP at $10,000 nominal and $15,000 PPP.  Even though it has roughly twice the population of Antigua and Barbuda, the KFC was again the shiniest business we saw.  The main downtown church was closed, and the nearby park contained about a dozen apparently homeless men, though perhaps they were just relaxing and drinking alone.  Desperate peddling was intense.  The local police seemed to be one of the main employers.

5. Our last stop was on St. Kitts (a subset of St. Kitts and Nevis), whose per capital GDP of $19,000 nominal and $31,000 PPP make it the richest island we saw after Puerto Rico.  Since we spent six hours hiking Mount Liamuiga, the local volcano, we never walked the town.  Yet we did get to see a long stretch of one of the main coastal highways, and the country did indeed look marginally richer than Antigua.

My hiking guide described himself as “fascinated by economics,” and we had a good amount of time to chat.  He suffered from severe pessimistic bias; I tried in vain to calm his fears that U.S. agro-business faced imminent crisis.  When he playfully accused me of having naive faith in mankind, I told him, “No, I just believe in business.”  He mentioned his Netflix subscription, but I didn’t have time to rhetorically build on that foundation.

My guide knew a handful of islanders who worked in the UK, but viewed his countrymen as deeply provincial.  Cruise ships dock all the time in St. Kitts, but when I asked him if he knew anyone who worked on such a ship, he insisted, “It’s not something they would ever think about as a possibility.”  This surprised me, because workers of Caribbean origin were fairly common on my ship, especially relative to their countries’ populations.

6. Are the latter four islands the ideal comparison group for Puerto Rico?  Not really.  Antigua, St. Lucia, and St. Kitts are all former British colonies, and St. Maarten’s is so anglophone that it might as well be.  A better approach is to compare Puerto Rico with other former Spanish colonies; the Dominican Republic is the most obvious counterpart.  Since the latter’s per-capita GDP is only $9000, Puerto Rico’s open borders experiment look even better.

7. I’ve repeatedly heard people claim that open borders would turn the U.S. into Haiti.  On this journey, I was struck by the fact that almost nowhere in the Caribbean is remotely as awful as Haiti.  St. Maarten, Antigua, St. Lucia, and St. Kitts all have roughly the same demographics has Haiti – all are 90%+ black.   They all have roughly the same history of hellish slave plantations.  Furthermore, according to the least-bad estimates, their national average IQs are all extremely low.  St. Lucia comes in second-to-last on Earth, with an average national IQ of 62 (versus Haiti’s 67).  Despite these parallels, St. Lucia roughly matches average global per-capita income, and St. Maarten, Antigua, and and St. Kitts are comfortably above this average.

8. With the able assistance of Nathaniel Bechhofer, I’ve pointed out that “Deep Roots” theories of national development are highly sensitive to population-weighting.  If you count China and India as two data points, the empirics say that national ancestry matters a lot.  When you weigh countries by their populations, however, national ancestry barely matters at all, because the two most-populous countries on Earth have done poorly in modern times despite their illustrious histories.  Critics have pushed back; each country should count as a separate “experiment,” so we should base our worldviews on the unweighted results.

Yet in that case, each and every tiny upper-middle-income Caribbean country should statistically count as much as China and India.  I just checked Putterman and Weil‘s data, and found that none of my last four islands is actually in their sample.  (Haiti and Jamaica are, but even the Bahamas fell through the cracks).  If we re-did Deep Roots estimates with ten more Caribbean data points, I predict that their results would markedly attenuate.  So would Garett’s main findings in Hive Mind.

Personally, I continue to think that population-weighting is the way to go in cross-country regressions.  If you disagree, though, you’d really better add the island nations of the Caribbean to your sample and watch what happens.

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If the Only Way You Can Get Your Great Idea Implemented…

Bryan Caplan

Economics textbooks are full of clever-and-appealing policy proposals.  Proposals like: “Let’s redistribute money to the desperately poor” and “Let’s tax goods with negative externalities.”  They’re so clever and so appealing that it’s hard to understand how any smart, well-meaning person could demur.  When critics appeal to “public choice problems,” it’s tempting to tell the critics that they’re the problem.  The political system isn’t that dysfunctional, is it?  In any case, reflexively whining, “The political system will muck up your clever, appealing policy proposal,” hardly makes that system work better.  The naysayers should become part of the solution: Endorse the clever-and-appealing policy proposals – and strive to bring them to life.

When you look at the real world, though, you see something strange: Almost no one actually pushes for the textbooks’ clever-and-appealing policy proposals.  Instead, the people inspired by the textbooks routinely attach themselves to trendy-but-awful policy proposals.  If you point out the discrepancy, they’re often too annoyed to respond.  When they do, reformers shrug and say: “The clever-and-appealing policy never has – and probably never will – have much political support.  So we have to do this instead.”

Examples?  You start off by advocating high-impact redistribution to help poor children and the severely disabled… and end defending the ludicrously expensive and wasteful Social Security program.  “Unfortunately, the only politically viable way to help the poor is to help everyone.”  Or you start off advocating Pigovian taxes to clean the air, and end up defending phone books of picayune environmental regulations.  “Unfortunately, this is the way pollution policy actual works.”

Don’t believe me?  Here’s a brand-new example courtesy of Paul Krugman:

But if a nation in flames isn’t enough to produce a consensus for action — if it isn’t even enough to produce some moderation in the anti-environmentalist position — what will? The Australia experience suggests that climate denial will persist come hell or high water — that is, through devastating heat waves and catastrophic storm surges alike…

[…]

But if climate denial and opposition to action are immovable even in the face of obvious catastrophe, what hope is there for avoiding the apocalypse? Let’s be honest with ourselves: Things are looking pretty grim. However, giving up is not an option. What’s the path forward?

The answer, pretty clearly, is that scientific persuasion is running into sharply diminishing returns. Very few of the people still denying the reality of climate change or at least opposing doing anything about it will be moved by further accumulation of evidence, or even by a proliferation of new disasters. Any action that does take place will have to do so in the face of intractable right-wing opposition.

This means, in turn, that climate action will have to offer immediate benefits to large numbers of voters, because policies that seem to require widespread sacrifice — such as policies that rely mainly on carbon taxes — would be viable only with the kind of political consensus we clearly aren’t going to get.

What might an effective political strategy look like? … [O]ne way to get past the political impasse on climate might be via “an emphasis on huge infrastructural projects that created jobs” — in other words, a Green New Deal. Such a strategy could give birth to a “large climate-industrial complex,” which would actually be a good thing in terms of political sustainability.

Notice the pattern.

Step 1: Economics textbooks offer a clever-and-appealing policy proposal: Let’s tax carbon emissions to curtail the serious negative externalities of fossil fuels.  It’s cheap, it’s effective, it provides great static and dynamic incentives.  Public choice problems?  Don’t listen to those naysayers.

Step 2: Argh, Pigovian taxes are going nowhere.

Step 3: Let’s have a trendy-but-awful populist infrastructure program to get the masses on board.

So what?  For starters, any smart activist who reaches Step 3 tacitly concedes that public choice problems are dire.  You offer the public a clever-and-appealing remedy for a serious social ill, and democracy yawns.  To get action, you have to forget about cost or cost-effectiveness – and just try to drug the public with demagoguery.

Note: I’m not attacking Krugman for having little faith in democracy.  His underlying lack of faith in democracy is fully justified.  I only wish that Krugman would loudly embrace the public choice framework that intellectually justifies his lack of faith.  (Or better yet, Krugman could loudly embraced my psychologically-enriched public choice expansion pack).

Once you pay proper respect to public choice theory, however, you cannot simply continue on your merry way.  You have to ponder its central normative lesson: Don’t advocate government action merely because a clever-and-appealing policy proposal passes a cost-benefit test.  Instead, look at the trendy-but-awful policies that will actually be adopted – and see if they pass a cost-benefit test.  If they don’t, you should advocate laissez-faire despite all those shiny ideas in the textbook.

Krugman could naturally reply, “I’ve done the math.  Global warming is so terrible that trendy-but-awful policies are our least-bad bet.”  To the best of my knowledge, though, this contradicts mainstream estimates of the costs of warming.  That aside, why back a Green New Deal instead of deregulation of nuclear power or geoengineering?  If recalcitrant public opinion thwarts your clever-and-appealing remedy, maybe you started out on the wrong path in the first place.

Unfair?  Well, this is hardly the first time that Krugman has rationalized destructive populism when he really should have reconsidered.  Krugman knows that immigration is the world’s fastest way to escape absolute poverty.  He knows that standard complaints about immigration are, at best, exaggerated.  But he’s still an immigration skeptic, because:

The New Deal made America a vastly better place, yet it probably wouldn’t have been possible without the immigration restrictions that went into effect after World War I. For one thing, absent those restrictions, there would have been many claims, justified or not, about people flocking to America to take advantage of welfare programs.

Notice the pattern.

Step 1: You start with the textbook case for a welfare state to alleviate domestic poverty.  Public choice problems?  Bah.

Step 2: Next, you decide that you can’t get that welfare state without horrible collateral damage.

Step 3: So you casually embrace the status quo, without seriously engaging obvious questions, like: “Given political constraints, perhaps its actually better not to have the New Deal?” or even “How close can we get to the New Deal without limiting immigration?”

The moral: If the only way you can get your great idea implemented is to mutilate it and/or package it with a pile of expensive junk, you really should wonder, “Is it still worth it?”

Well, is it?

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