John Tomasi is guest-blogging for Bleeding-Heart Libertarians on a research agenda for bleeding-heart libertarians. His latest entry continues his “frozen waters” metaphor and describes “Ships of the BHL Line.” He points out that a lot of bleeding-heart libertarians and 20th century liberals share many of the same values–a commitment to the betterment of the lives of the poor, for example. Tomasi points out (properly) that libertarians and liberals part ways on a number of important conceptual and theoretical dimensions even if we share some of the same goals.
One of the most fundamental sources of disagreement between bleeding-heart libertarians and left-liberals is the question “who gets to decide what benefits the poor?” I’m unwilling to cede this prerogative to elites for a whole host of reasons I want to explore later both in my Mises blog posts and my Forbes columns. For now, though, let me turn you to BHL blogger and philosopher Matt Zwolinski’s take on sweatshops in which he argues that the choice to accept a sweatshop job is an exercise of morally-significant agency on the part of the sweatshop worker.
As an economist, I think the fundamental rhetorical issue is as basic as it gets: most critics of free-market capitalism simply don’t understand how competitive markets work. And, as far as I can tell, many have never bothered to try. It is not that the average commentator or critic arguing passionately in favor of minimum wages or price controls thinks that disemployment effects and shortages are sacrifices worth making in the pursuit of a larger social goal. Again as far as I can tell, the average commentator or critic denies that such a trade-off exists.
In this article, I made the case for why economic analysis is crucial for ethical reflection. To engage in passionate activism while ignoring what economics has to say about international trade, wage determination, etc. is, I think, not merely unwise. It’s morally irresponsible. The Foundation for Economic Education’s Sheldon Richman calls it “the intellectual equivalent of drunk driving.” Murray Rothbard makes this point with characteristic verve in a passage that many Mises.org readers can likely recite from memory:
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
One of my favorite essays on this point is Paul Krugman’s “Ricardo’s Difficult Idea.” In it, Krugman makes the point that the critics of international trade are not dismissing the law of comparative advantage because they think the world is better described by some of the technical theoretical exceptions to the law of comparative advantage. The problem is that the critics don’t understand comparative advantage to begin with.
I suspect this is true for most of the other issues on which people regularly opine. I was going to write something about minimum wages again, but that’s a topic I’ve beaten to death. Consider instead agricultural subsidies, which are probably the least-defensible policy currently in place (though I will admit that the competition is fierce). In his book The Myth of the Rational Voter, Bryan Caplan points out that farm subsidies are just as popular in non-farm states as they are in farm states, and he provides evidence that this is because people don’t understand how prices are determined in competitive markets. It isn’t because they have a sophisticated model of a market failure in mind when they support farm subsidies. It’s because they don’t understand how the market works in the first place.
To the non-economist this probably seems harsh and perhaps arrogant. To paraphrase Thomas Sowell, though, economists’ convictions on issues like these are not the product of an unreasoned faith in free market magick. They are the product of carefully-reasoned theory and carefully-collected, carefully-analyzed evidence. I look forward to observing (and contributing to) a research agenda and a public rhetoric about a libertarianism that takes the left’s concerns seriously because the lives, fortunes, and sacred honor of billions of people are at stake. Basic economics shows us that one of the most effective things we can do for the poor is to quit “helping” them with economically illiterate policy-making.