Here are some basic principles of bizarro economics in the 21st century:
1. Actual human beings do not matter. Spaces bounded by latitude, longitude, and natural barriers do.
2. Actual human beings do not matter. Political abstractions like nation-states do.
3. The country with the biggest GDP wins.
4. Societies exist so they can fight wars.
5. Trade is a kind of war.
6. Their wealth will cause our poverty. They can only get richer if we get poorer.
7. The laws of supply and demand are optional.
8. The only reason people want to move to the US is so that they can sell us drugs, commit crimes, and collect welfare payments.
9. The only reason foreigners want to sell us things is so that they can use their export earnings to buy guns and bombs that they will use to destroy us.
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I chuckled.
This ought to be a useful list.
Sounds awfully like economics in the 18th century. And the 20th century.
And that’s the problem….
I’ve seen more balanced discussion of the immigration issue by La Raza than by Art Carden.
to be fair, lot’s of people come to the US for graduate school too.
#10. Economics can be separated from ethics and ethics can be separated from economics.
To think, Rome fell apart once they let floodgates open to immigrants.
It’s that easy to dissolve Mordor?! Dang dude, to think you were witholding this info!
I was talking of Ancient (Western) Rome. I don’t know what you’re talking about.
Actually, no, Gil. That would be debasement of the currency and the consequent attempt at repairing the economy by price-fixing that destroyed Rome. And Ross made a joke at the fact that if it were true that “floodgates open to immigrants” destroyed Rome, it would be that easy to end, let’s say, D.C., using the same method.
Who’s say it isn’t that easy? Why do suppose the closed borders people way outnumber the open borders people? Suppose if the U.S. did drop the border policy and let anyone from any part of the world enter? I would imagine the U.S. population swelling up to 1 billion in no time as many people rush in to see if they could get a piece of the pie. Whilst some immigrants may be of the hardworking types, how many more would have no problems leaning on the welfare system until it toppled over? Plenty of people live rather poorly in many parts of the world and if they all entered and wrecked the U.S. it would be no skin off their noses.
*facepalm*
To be consistent, a believer in free markets would believe in a free labor market. That is, anyone on earth with labor to sell should be able to cross the borders of petty states unrestricted, to wherever the money seeking labor lies.
We already have free trade in those other two legs of the trade stool. Investment capital can freely move across borders, as can finished goods for sale. The only remaining element whose movement is tightly restricted is labor.
Why is it that interventionists always assume people are stupid?
Setting aside welfare. Do you really think people would come to this country and stay if there where no opportunity. Moving has a cost. Even if it is just leaving family and friends. So once the word was out that there are few jobs available then people would stop coming. Move back where they started if they knew that they cold try again in the future.
I live in a state that has extremely generous welfare benefits which attracts large numbers of people. No shock that it also has several million “undocumented” people living here. No shock either that it’s ranked 49th or 50th in business friendliness!! End that enticement, and you’ll see much immigration drop.
The other side of the the coin is supply and demand of labor. Yes, there’s a demand for lower wage labor, and yes, I deplore trade restrictions. But, any large influx of workers would put downward pressure on wages (as has already happened, not that that’s a bad thing either) and would offer less incentive. I believe it’s the old “markets clear” axiom.
As for Rome, you have to understand that the large scale immigration came from several factors: one, hunnic invasions across central asia/eastern europe. two, Roman empire expanding into their lands and the increased economic interactions. Third, and most importantly, the Romans ASKED them to enter as they needed large numbers of recruits to fill the ranks of soldiers and replace farmers who were in the armies. So, war is again a destructive force, not an economic stimulus!! And it was the wars which caused the currency debasement and price controls…
Being a beggar in the U.S. would be better than being poor in a poor country hence the immigration to the U.S. wouldn’t stop until it had the population density of a Third World country with shantytowns to boot. After all, many here like to gloat that being “poor” in the U.S. is “well-to-do” in the poorest parts of the world. Besides saying “when the welfare state is gone and the available jobs are gone then immigration will stop” is a zero-sum assertion.
It was clearly a half-joke only, and at any rate the premise of the “joke” is clearly that the political system that would be instituted by, say, Mexican migrants would be superior to the one that currently exists. The US govt is abominable, no doubt about it, but who in their right mind believes that the Mexican govt (a version of which would be instituted if migrants from Mexican had the political ability to do so) is better in any way?
Hmm… who exactly is advocating 1) 2) and 4) exactly as stated? Are those people hypocrites in that they are for it in the case of their race/nation but against it for others or are they consistent? Does recognition that nations have boundaries the same exact thing as believing that human beings don’t matter? There is a lot to be criticized in this list. It’s too simplistic.
What I’m wondering is who is advocating ANY of those ideas? They’re all crazy. And I say this as the apparent poster child of someone who’s for everything the Austrians are against.
The only points I have even a partial agreement with are these:
3. The country with the biggest GDP wins.
The traditional view of an economy based on volume of goods and services sold is that the entity (whether a company or a nation) with the highest volume wins. However the USA has been operating at a loss for many years and is still ahead of whomever’s in second place. I doubt this will continue indefinitely. Eventually we’re going to have to start selling more stuff than we buy. Or hold a huge going out of business sale, where everyone holding dollars buys up all our assets.
5. Trade is a kind of war.
Trade, as it has been conducted, has been pretty much a zero-sum game. Nations are so eager for market share they’ll bankrupt one another, just to find they then have no partners able to buy their goods. It may not be very bright, but that’s the way so many of us do business.
I think you’re guilty of applying Rule #2. You’re talking about nation-states, not the people who are subject to their rule.
At present we are organized into nation-states. So our fortunes are subject to their fortunes. The one liberty we do possess against the designs of the nations whose passports we hold is that we can emigrate.
A subject who can move is no longer subject. He’s there, wherever he chooses to be, of his own free will.
Re: Michael,
Not for long. Have some patience.
Ok now I know my sarcasm detection circuitry needs recalibration.
Thanks for sharing good things.
I think 8. and 9. are waaay off.
Oh, wait, these are partially ironic.
I get it.
Revision to #9. The only reason foreigners want to sell us things is that they are so poor that they can’t buy their own produce.
I will address only #6: “Their wealth will cause our poverty. They can only get richer if we get poorer.”
We can both agree that this is a false statement. But just because a statement is false does not make its opposite true. This is a tactic of extremists. They set up a straw man, knock it down, then draw the conclusion that the statement’s opposite must be true.
The intent seems to be to convice us that “Their wealth cannot cause our poverty and that they will never get rich by making us poorer.” This is also a false statement.
Sometimes rich speculators do indeed cause poverty. I could offer examples from the recent past, but you market fundalmentalists would say that government caused the debacle. You will offer several instances where government distorted the market and you will conclude that government “caused” the problem. Since we live in a society that has a government that is an actor in the economy, you will always be able to make this argument.
The question then would be if there were no government involvement (the hayekian ideal) in the economy would collapses still happen. The problem is that there has never been a government that has not been involved in the economy and there never will be.
Laissez-faire capitalism is a utopian dream that will never happen. It will never happen because people do not want it. People want to be protected from the ups and downs of the business cycle primarily because their kids need to eat on a regular basis. If their kids are hungry they will want government, they will want it now, and they will want lots of it.
The only way that we will get to a hayekian utopia is if there were some authoritarian government to enforce it. To force people to endure what they do not want to. But then this is kind of against the basic hayekian philosophy. Ergo, it will never happen.
Marko
Re: Marko,
Which means that either they are not good examples or that you cannot defend your argument. If they are clear examples, then why not offer them?
That’s not the question, Marko. Nobody asks that very question. It would be like asking if bullies were taken out of schools, would weaklings still lose their lunch money. The objection against government action is because it is inherently non-voluntary, aggression-based, whereas trade is voluntary, agreement-based.
Such assertions are normally made to end a discussion. I don’t understand why would you even bother.
I am attaching some links regarding the 2008 food crisis that is said to have been (at least) worsened by food speculators. You may think that financial dealings are always beneficial but they may not be.
You may say that there were other causes. There likely were several causes to this problem as there always are to all problems, but speculation made this problem much worse.
I suppose that you take food for granted and that food is something that “real” people do not need to worry about any more. But believe it or not some people in the world still worry about it.
The Links:
http://www.bloomberg.com/news/2010-07-19/food-commodity-price-speculation-by-banks-caused-2008-hunger-group-says.html
http://www.wfp.org/stories/dr-timmer
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080428/un_food_080428/20080428?hub=World
Here is a link where the author says that the speculation is not conclusively the “cause” of the 2008 crisis. If you look at his figure 2 you will see the spike in prices in 2008. Prices then drop sharply after that. It may be true that there were some underlying reasons for the price rises, but the sharpness of the curve, both up and down. Is this proof with the rigour of a mathematical proof? I suppose not but what in economics has such certainty. But it smells of speculation to me.
http://ufm2009.over-blog.com/article-the-food-crisis-of-2008-fundamentals-vs-speculation-40844013.html
I even saw an article on the vonMises site (which I have been unable to find again) that says that speculation will cure itself via the efficient market hypothesis. You could say that the market did fix the problem. But in the mean time, for those several months where the price of food doubled it caused misery for a lot of people in the world. It led to riots, etc.
Marko.
“I even saw an article on the vonMises site (which I have been unable to find again) that says that speculation will cure itself via the efficient market hypothesis.”
I’d be surprised. Austrian economists make no such hypothesis.
#11 the only reason people would leave the US is to evade taxes
People can’t leave the US to evade taxes. After you make so much money, and it isn’t much, the IRS will come knocking. It’s not like the UK, where if you stay in the country a certain number of days and no more, you don’t have to pay.
Strawmen!!! Yaaaay!!
Ah, so this is what Paul Krugman believes.
That’s kind of a dumb comment, Jeff. Maybe you should read some of Krugman’s essays. Not one of those nine dumb ideas, other than 3 and 5, is anything like what he’s saying. It may be that you were just shooting from the hip on this one.
For those of you who have difficulty with reading comprehension or don’t understand sarcasm here is a clearer version of this list.
Some people believe:
1.) …artificial lines in the ground (borders) are very important.
2.) …economics as being primarily about the country’s management policies instead of about millions of individuals making economic decisions.
3.) …there are always winner countries and loser countries in trade relationships, ignoring the existence of mutual benefits of trade.
4.) …perpetual military conflict is the natural state of competing societies seeking limited resources.
5.) …trade is merely an assault by wealthy countries against the resources, labor and sovereignty of poor countries. Reciprocally, that poor countries are stealing labor belonging to wealthy countries. Free trade is thus the ultimate injustice.
6.) …the amount of resources are fixed and finite, thus the entire economy is a zero sum game.
7.) …policies can transcend or improve the market – for instance, propping up prices in a recession – without negative proportional consequences.
8.) …immigrants come here primarily for reasons other than finding jobs and bettering their lives.
9.) …we should embargo nations that are potentially hostile to our national security – instead of developing trade relationships that would make war mutually detrimental.
I know I’m risking the “Wrath of Polzkill” (Khan Noonian Singh, look out!) by posting this, but here goes:
“8. The only reason people want to move to the US is so that they can sell us drugs, commit crimes, and collect welfare payments.
9. The only reason foreigners want to sell us things is so that they can use their export earnings to buy guns and bombs that they will use to destroy us.”
Let’s rewrite these two points to match the way that real people, as opposed to caricatures, might actually believe in them:
8. One reason people might want to move to the US is so that they can sell us drugs, commit crimes, and collect welfare payments.
9. One reason foreigners might want to sell us things is so that they can use their export earnings to buy guns and bombs that they could use to destroy some of us.
When you rewrite them this way, they don’t seem nearly so hysterical. Well, they don’t to me, anyway. They seem rather obvious, actually. All they say is that policies that might be good if the world were a perfect place (with no cultural value conflicts, no warfare, no welfare system, etc.), are not necessarily so good in the real world, where there are non-economic factors to be taken into consideration.
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