– June 23, 2020
Share:
outdoor market, croatia

I spend much of my time wondering. I wonder about many matters. But the kind of wondering that I typically do isn’t the kind that finds me marveling wide-eyed at some amazing feature of reality (although I do sometimes marvel in this way). Most of my wondering results from me being mystified that so many people fail to ask questions of the sort that strike me as obvious, relevant, and important.

Wonderful Trade

I wonder a great deal about people’s misunderstanding of trade. For example, I wonder…

… why, on certain occasions, support for protectionist policies in the United States can be easily drummed up by asserting that some foreign government is intent on artificially restricting Americans’ ability to import goods and services, such as medical supplies. Why do Americans turn for a ‘solution’ to this problem to their own government – a government that has done, and continues to do, far more than has any foreign government to artificially restrict Americans’ ability to import goods and services?

… why, on other occasions, support for protectionist policies in the U.S. can be easily drummed up by asserting that some foreign government is intent on artificially enhancing Americans’ ability to import goods and services, such as commercial aircraft. Why is there no understanding that this complaint is inconsistent with the complaint just above? And more generally, why does anyone believe that we Americans are harmed by foreigners arranging for us to have access to a greater abundance of goods and services?

… why so many Americans believe that they will be made poorer if people in poor countries, through trade, become richer. Why do so many of my fellow Americans believe that the increased ability of foreigners to produce and offer to sell to us high-quality goods and services threatens our prosperity? Do these same Americans believe that their prosperity is threatened if greater numbers of other Americans, say, get better education that enables them – these other Americans – to produce and offer to sell to their fellow Americans high-quality goods and services? Why should we believe that we are benefitted through trade by the enrichment of human beings across town, but that we are harmed through trade by the enrichment of human beings across the ocean?

… why so many Americans fail to understand that international trade cannot make Americans more dependent upon foreigners without making foreigners more dependent upon Americans. Why don’t more people realize that foreigners engage in commerce with Americans in order to get goods and services in exchange from Americans? Asked differently, why do so many people presume that foreigners are stubbornly intent on giving to Americans gifts?

Wonderful Capital

But trade is not the only policy matter that causes me to wonder. I wonder also about many non-trade matters. I wonder, for instance, …

… why Jones’s call to forcibly transfer some of Smith’s wealth to Johnson is widely regarded as evidence of Jones’s enlightened altruism, while Smith’s call to keep the wealth that he has earned from being forcibly transferred to Johnson is widely regarded as evidence of Smith’s benighted greed. Why is the desire to keep what one earns regarded as evidence of greed? And why is the desire to grab what others have earned not regarded as evidence of greed?

… why Marxist-sympathetic academics such as economists Thomas Piketty and Gabriel Zucman write as if capital typically grows in value automatically, independently of human institutions and actions, and that capital that grows in value helps only the owners of capital but not consumers and workers. Why don’t Piketty, Zucman, et al., understand that the value of capital – the value of the likes of a factory, of a bulldozer, of a plot of farmland, of a pharmaceutical-company research lab – is tied tightly to its productivity? And why don’t these people understand that to be productive capital must be creatively designed and directed to satisfy consumer desires that would otherwise remain unsatisfied? What goes on in the heads of people such as Piketty and Zucman to blind them to the reality that designing and deploying capital to make it productive requires human creativity, effort, and risk-taking?

… why, if the likes of Piketty and Zucman truly believe that capital typically grows automatically, the likes of Piketty and Zucman don’t advise middle- and low-income people simply to acquire more capital – that is, to become capitalists. Because acquiring capital is today quite easy – hey, E*TRADE has a mobile app!– why must governments coercively transfer capital from those who’ve created or otherwise peacefully acquired it to those who’ve exerted no effort to acquire capital for themselves?

… how the likes of Piketty, Zucman, and others who believe that capitalists possess a sinister power that can be thwarted only by a muscular state that actively “redistributes” wealth explain the fact that bankruptcy of privately-owned businesses in market economies is commonplace. Isn’t the reality of business bankruptcies – including bankruptcies of many businesses once large and “dominant” – alone sufficient to discredit the notion that capital grows in value automatically?

Not-so-wonderful Lack of Context

And lately I’ve wondered also about our reaction to coronavirus. I wonder mostly…

… how much of the public’s reaction to coronavirus is driven by media and political hysteria. I wonder what would happen if the news media and government officials were to pick some cause of death or illness other than coronavirus and report on it in isolation of other causes of death or illness. What would be the public reaction if the headlines daily announced, say, the number of people who died within the past 24 hours from some virus other than COVID, and reported these daily deaths with vivid bar charts? How would the public react to increased testing of some virus other than COVID and to breathless reports of rising numbers of people testing positive for this other virus?

This last bit of my wondering is more open-ended than most of my other wonderings. I honestly don’t know the answers to the questions posed in the previous paragraph. But in my now-long lifetime I’ve seen enough media and political bias to cause me to seriously suspect that a great deal of the public’s reaction to COVID-19 was and is driven by a failure to put this disease in proper perspective. I wonder what would happen if a better and fuller perspective were given.

Regardless of the answer, it’s always good to wonder.

Donald J. Boudreaux

boudreaux

Donald J. Boudreaux is a senior fellow with American Institute for Economic Research and with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.

Get notified of new articles from Donald J. Boudreaux and AIER. SUBSCRIBE *AIER is a 501(c)(3) Nonprofit registered in the US under EIN: 04-2121305