Bryan Caplan  

Who Loves Bastiat and Who Loves Him Not

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Thanks to everyone who responded to my query about Bastiat's "What Is Seen and What Is Not Seen."  For me, his essay is the pinnacle of economic profundity.  You can call it obvious.  But when I first started learning economics at the age of 17, none of Bastiat was obvious.  I was an honors student at a well-regarded California high school.  Yet as far as I can remember, I had never heard any argument against the minimum wage, Social Security, or the FDA in my entire life. 

Every teacher and book I ever encountered treated naive populism like the Law of Gravitation.  Evil businesses aren't paying workers enough?  Raise the minimum wage; problem solved.  The elderly are poor?  Increase Social Security payments; problem solved.  Evil businesses are selling people bad drugs?  Impose more government regulation; problem solved. 

If you favor these programs, you can call these arguments straw men.  But I assure you: These "straw men" were never presented by opponents of these policies.  On the contrary, these "straw men" were invariably presented by people who favored these policies.  How is that possible?  Because during my first 17 years of life, I never encountered an opponent of any of these policies!  You might assume I was grew up in a weird Berkeley-esque leftist enclave, but bland Northridge, California hardly qualifies. 

What was going on?  The best explanation is pretty simple: I only heard straw man arguments in favor of populist policies because virtually everyone finds these straw man arguments pleasantly convincing.  Regardless of the merits of the minimum wage, Social Security, and the FDA, economic illiteracy is the reason for their popularity.  If someone like Bastiat convinced people that the pleasantly convincing arguments are inane, proponents would have to fall back on arguments that are intellectually better yet rhetorically inferior.

Take the minimum wage.  Normal people like it because the government waves a magic wand and makes mean employers give helpless workers extra money, with zero blowback.  So inane, yet so convincing to a psychologically normal human.  An intellectually serious argument, in contrast, begins by conceding the theoretical possibility of a disemployment effect, then defends low estimates of labor demand elasticity.  This is a huge improvement in intellectual substance, yet persuades only wonks.

This is the real root of Bastiat's differential ideological appeal.  Friends of the free market love him because Bastiat destroys the inane arguments that make the modern welfare state popular.  Once you deprive the median voter of these inane arguments, friends of the modern welfare state have to resort to intellectually serious arguments to make their case.  Alas, these arguments are utterly beyond the median voter's comprehension.  Most college students can't even grasp them.

So what are friends of the modern welfare state to do when confronted with Bastiat?  They can't really argue with him.  They know what he says is largely true.  Yet if they make a big deal out of Bastiat, they risk destroying popular support for the policies they favor.  Sure, they could run a big economic education campaign to explain, "Stop making terrible arguments for great policies.  The intellectually serious arguments are as follows... Blah blah blah."  But what's the point?  It's far easier to trivialize Bastiat - to pretend that everyone (or "everyone who counts") already knows what Bastiat's trying to teach.  If you only discuss policy with your fellow wonks, this pretense might even convince you.

My thesis, however uncharitable, is entirely consistent with friends of the welfare state being correct.  Maybe trivializing Bastiat is the Noble Lie that has to be told to keep the welfare state alive.  Maybe.  But ponder this: Suppose I'm right that almost everyone initially supports populist policies for inane reasons.  If some of these people grow up to be sophisticated intellectuals, what do you think they're going to do when they realize that the arguments that originally convinced them are just plain stupid?  Are they going to dispassionately put aside the worldview that inspired them to become intellectuals in the first place, then calmly weigh the intellectually serious arguments for and against every feel-good policy on the books?  Or are they going to act like defense attorneys - to use their powerful intellects to zealously defend the populist policies they've always loved?



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The author at Samizdata.net in a related article titled Watching an American "liberal" get annoyed at Bastiat references writes:
    There is something grimly amusing at reading Matt Yglesias, purveyor of conventional (ie, wrong) thinking on matters economic, getting a bit sniffy about the way in which certain commentators, such as Bryan Caplan, cite the great insights of the 19th C... [Tracked on August 20, 2012 12:19 PM]
COMMENTS (46 to date)
jc writes:

Bravo, Bryan. Nice post.

Alexei Sadeski writes:

Bryan, would it be fair to characterize your opinion thusly?

"The lowbrow arguments in favor of nativist populism are incorrect and simple. The lowbrow arguments in opposition to nativist populism, as presented by Bastiat, are correct and simple."

I do not intend to summarize the content of your entire post here, solely your opinion on this one narrow subject. Am I correct in this characterization?

Inspector Fu writes:

Reading your posts (and this post) is like sitting by the gentle glow of a fireplace in the dead of winter. Always a treat, sir.

Eli writes:

One of my favorites

Jonathan Bechtel writes:

I hate to sound repetitive, but this was an eggcellent post sir.

Justin writes:

Your story about growing up hearing superficial arguments for policies everyone supported seems like a good rebuttal to Robin Hanson's recent post here http://www.overcomingbias.com/2012/08/shoo-freethinkers.html

Sure, people who don't understand the arguments behind a good idea can turn off a disciplined thinker from considering the idea, but they sure can appeal to impressionable young people (and probably even the public at large).

Peter St. Onge writes:

On the silver lining, you and I both started life as good progressives. Somewhere we came across a sophisticated argument, and it wasn't a single hop from NYTimes to Human Action.

Julien Couvreur writes:

I agree. Bastiat pointing the difference between visible benefits and more difficult net benefits raises the level of the discussion.
The burden of proof becomes a lot more difficult once the discussion becomes about trade-offs.

Chris writes:

Similar to the poster above, Bastiat noting the pros and cons does increase the level of discussion and becoming more aware of the trade offs illustrates the difficulty of deciding what would actually help this economy.

Eric Evans writes:

The problem with your notion of depriving the median voter of their inane arguments is that, in the end, it doesn't matter. The incentives for the median voter to accept inane arguments are rooted in the fact of voting itself (and the mathematics behind it).

There is no option for the median voter to not vote and have that opinion count for something, so it becomes pointless to try to intellectually formulate theories and reasons why something should not (and possibly should never be) voted on.

Furthermore, the plurality method of voting that dominates the highest elections is mathematically one of the worst voting methods, if not the worst voting method. It is certainly one of the few voting methods that could create a result that is the exact opposite of the preferences of the majority of voters. This fact has been well established amongst mathematicians and voting theorists for a long time, and even if the median voter doesn't realize it they certainly seem to sense it.

If you have a sense that the means by which you vote does not fairly represent your opinion, what good does it do to invest more time into being more informed on issues?

Otherwise a very good post.

Nicholas Weininger writes:

To be fair, it is not only welfare statists who behave this way. As a teenager interested in libertarianism, I heard a lot of similarly dumb libertarian arguments, mostly based on overstrong assumptions about market efficiency-- the sort that welfare statists still like to point and laugh at when criticizing libertarianism. I might have gotten soured on it if David Friedman's _Machinery of Freedom_ hadn't put me on a path to the better stuff.

Daniel Kuehn writes:

"So what are friends of the modern welfare state to do when confronted with Bastiat? They can't really argue with him. They know what he says is largely true. Yet if they make a big deal out of Bastiat, they risk destroying popular support for the policies they favor."

Did you just jump to assuming this or did you expend any effort trying to think about why a rational person with economics training (i.e. - already familiar with Bastiat's more obvious arguments) might be pro-Bastiat and pro-the welfare state?

zur writes:

And therefor Plato was right that a democracy automatically becomes tyranny. People will eventually get the idea that they can vote for themselves all the money of the wealthy and thus the state disintegrates and a tyrant takes over; ==like the situation in America today.

Peter St. Onge writes:

@Daniel Kuehn,

I read Bryan's operative phrase as "make a big deal out of."

As in the more you stress hidden costs, the more you'd expect support to drain.

Nothing inconsistent with your point that an informed person might decide the trade-offs are worthwhile.

Ken B writes:

Ten years ago I was discussing something with a bunch of grad students, some doing PhDs, (various disciplines) and raised a simple free market argument about product safety. Several were stunned, they had never even *heard* such an argument before. This is much later than Bryan's 17.

It's like they lived in a bubble :)

Excellent post.

Daniel Kuehn writes:

I get that that is his point Peter St. Onge, I'm just not sure I agree with the premise.

The normal voter understands that the minimum wage raises labor costs which - all else equal - reduces the ability of the employer to hire workers. I simply don't believe that a high schooler that managed to get into Princeton had not encountered this simple point before. I think Bryan is probably subconsciously inventing memories to bolster his current views of things. This is the criticism that gets raised in every dinner table/campaign stump speech/high school civics class discussion of the minimum wage. And it gets brought up because it's (1.) very easy to understand, and (2.) an important point!

So I reject the whole premise that this point would drain support for the minimum wage. No person that's taken the time to take a position on the minimum wage isn't in some way aware of this.

This is not an uncommon approach for Bryan - to assume ignorance or irrationality as the basis for disagreement - and I think it's unfortunate.

Anyway, I get what he's trying to say - I just reject the premise.

Sonic Charmer writes:

The normal voter understands that the minimum wage raises labor costs which - all else equal - reduces the ability of the employer to hire workers.

Citation needed.

Steve Cronk writes:
No person that's taken the time to take a position on the minimum wage isn't in some way aware of this.

This just isn't true. I've discussed the topic with many otherwise-informed people (including a policy journalist and a labor activist) who'd truly never heard the suggestion that raising the minimum wage might have a disemployment effect.

Personally, I was never exposed to the idea until my first microeconomics class in college. In my high school civics class, it was simply stated that the minimum wage protects workers from being exploited. I suggest you visit a high school classroom or a barbershop and ask them what they think an argument against the minimum wage is. If you did this, I think you'd realize that you've vastly overestimated the amount of thought that normal voters have put into their positions.

Anecdotally writes:

Daniel Kuehn,

I disagree with you. Bryan's story is entirely believable to me. I never encountered the "standard" argument about minimum wage until I learned it from Milton Friedman around age 16 or 17. Yet, it is a topic I'd previously seen debated in high school Civics (and other) classes. Friends I spoke to around the time made very similar observations about the prevalence of these arguments.

I was also a newshound as a kid. Discovering arguments like those of Bastiat and Milton Friedman turned me off of my old news habits, as well as some other previously beloved sources of information, because I was initially flabbergasted that these important ideas hadn't appeared in those sources.

I would be really interested to see a poll of American adults to see how many are aware of the argument that raising MW raises unemployment. I wouldn't be surprised if it turned out to be a minority. I also wouldn't be surprised to learn that some of those who say they're AGAINST raising the MW cite wrong arguments that are unrelated to unemployment.

Useless anecdote: When we debated MW in my high school civics class, the only student who was against raising it was an arch-conservative. He said that, as Rush Limbaugh had said (I don't know if Rush actually said this), raising the minimum wage would cause inflation. That was the only argument he could come up with. He was definitely sincere, though, and also one of the better performing students in the class.

Max writes:

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David P writes:

Bryan,

Can you name a piece of work that you think similarly inspires passion in liberals in the economics field, but inspires a "meh" in libertarians and conservatives? Would you say that it's the same case, where the "meh" is a brush-off in an attempt at not taking it seriously as well?

Thiago Oliveira writes:

Anecdotally: "I never encountered the "standard" argument about minimum wage until I learned it from Milton Friedman around age 16 or 17."

Oh, yeah: it was the great Milton that brought these news for me too. But I'm a Brazilian: didn't know you had such a severe "PINKO monopoly" in your high schools, too.

A.West writes:

Bryan,
Bastiat (and most economists) ultimately depend upon a utilitarian argument for why various policies are counterproductive. Ultimately, liberals, and most people, are driven by ethics, namely altruism. Leftist economic policy doesn't maximize economic utility, but I don't think that's really their top priority. Leftists support government intervention because it fulfills their ethical imperitives.

Bastiat is unnerving to them because in their subconscious, they glimpse that the conflict between their claimed objectives and their real objectives.

Ayn Rand, you know, believed that governments ultimately deploy policies that are consistent with popular ethical codes. Since free markets and altruism clash, an altruist-leaning country will inevitably effect a welfare state, regardless of the number or rational, utilitarian based arguments against it. Thus, the only way to really fight for capitalism is to challenge the dominant code of morality, and make a moral case for capitalism and against interventionism.

Collin writes:

Bryan,

Bastist parables are excellent and best written about society outside of the Bible. However, you should be using the parable against conservative pundits as well. The biggest problem of captialism is it grew up in the colonial European countries that were not afraid to use force to protect their 'land rights.' (ie UK was constantly fighting in India while the US citizens were pushing the original 'land owners' off their land.) My guess is if you were preaching capitalism is long term peaceful more often, the libertarian movement would win a lot of Democratic support. (I would avoid the communist violence that is past history. Also you not arguing against communism but the welfare states which outside the US have been fairly peaceful.)

Frankly, I think the biggest issue in 2012 is the willingness to start war with Iran. David and you should be preaching that the growth rates of Latin and South America have been strong because of no US invasions since Panama 1989.

CR

William writes:

Daniel Kuehn,

I agree with others that never hearing basic counterarguments on the minimum wage is quite plausible. If you were exposed to economics at a young age, you're lucky, but in my own memory the first time I ever heard an argument against the minimum wage was in AP economics, as a high school senior.

I honestly am impressed that the economic way of thinking was your default position, but I think I can say that my own naive view, namely, "Labor regulations mean workers are better off and corporations make less profits," is the default for almost everybody.

KevinC writes:

Daniel,

It seems to me that your objection switches categories. You are defending the possibility that "a rational person with economics training (i.e. - already familiar with Bastiat's more obvious arguments) might be pro-Bastiat and pro-the welfare state" But Bryan states in his post more than once that there are intellectually rigorous arguments for the welfare state one could make that take Bastiat's points into account. Like when he says "An intellectually serious argument, in contrast, begins by conceding the theoretical possibility of a disemployment effect, then defends low estimates of labor demand elasticity." So he explicitly concedes in this very post what you're asking him if he's considered.

His larger point is contained in the segment you quoted, which is about "destroying popular support for the policies they favor." That is, the popular basis for the public's support of these policies is a different animal entirely from the support that might be given by a rational person with economics training.

You suggest later that it's possible that Bryan is "subconsciously inventing memories to bolster his current views of things." Could be - I have no way to know. But do you think it's also possible when Bryan describes how some people convince themselves "everyone (or 'everyone who counts') already knows what Bastiat's trying to teach [and] If you only discuss policy with your fellow wonks, this pretense might even convince you," he's making a real point? Specifically, do you think it's maybe possible that you are vastly overestimating how well known and accepted these points are, because you tend to have far more discussions on these subjects with a much higher proportion of highly educated and economically literate people than you would find in a representative sample of the U.S. population? As Deirdre McCloskey loves to say - consider that you may be mistaken.

I have nothing to offer but anecdote here, but my life experience jibes perfectly with what Bryan is saying. The idea that raising the minimum wage could raise unemployment was literally never mentioned in any of my high school classes. My teachers had exactly the attitude Bryan is suggesting. I've been discussing economics with people for years, and when I raise the possibility that increasing the minimum wage might raise unemployment, the response is almost universally to angrily deny that that would or could happen, even in principle. I humbly submit to you that the discussions I've had with people on this may be more representative of average opinion in America than what your experience has been.

Daublin writes:

Anecdotally, my personal experience matches Bryan's in essence. For me personally, I read the Bastiat article around age 30, not 17, but like him I had not encountered the argument until reading Bastiat. In my circle of friends--who are mostly college graduates--almost all of them buy the naive arguments and, indeed, seem unaware that there is even a credible counterargument at all.

This speculation explains another phenomenon, too. If you really haven't even encountered Bastiat's argument, then you will tend to believe that anyone disagreeing with socialist policies is evil and uncaring.

Hunter writes:

Somewhat tangentially but more in line with the paper Bryan linked to I've been kicking around the idea that the problems of democracy are due to the tragedy of the commons. I can make the case for tax money. Once the money goes into a pot everyone tries to take as much as they can through their representatives creating a deficit. I'm having problems applying this to the creation of laws and regulations in general. Any ideas?

Jeff writes:
Are they going to dispassionately put aside the worldview that inspired them to become intellectuals in the first place, then calmly weigh the intellectually serious arguments for and against every feel-good policy on the books? Or are they going to act like defense attorneys - to use their powerful intellects to zealously defend the populist policies they've always loved?

Mostly the latter, of course, but I don't think the former is too terribly rare. Young people are usually pretty left wing, and they migrate to the right a bit as they age. Granted, some of these people probably get smacked in the face by events, rather than reasoning their way to the right. Nonetheless, I think the works of someone like Bastiat can certainly help someone who feels a bit disillusioned with the typically emotive, leftist magical thinking to start moving/thinking in the right direction.

Daniel Kuehn writes:

KevinC - I don't consider Bastiat to be particularly advanced economics. You also are misunderstanding my disagreement. I know Bryan acknowledges more sophisticated arguments. I'm saying there are unsophisticated arguments that work well enough and are fully aware of Bastiat's point.

As for all the other anecdotes that have been added here, obviously I expect you all are doing about the same thing that Bryan is. A libertarian blog's comment thread isn't exactly the best way to test this.

I'd echo KevinC's advice to all of you: consider the possibility that you are wrong.

The idea that MW raises unemployment is parroted by the most economically ignorant conservative politicians. As was pointed out by someone above, it's on conservative talk radio. These arguments are not complicated. I remember labor supply related arguments against welfare and labor demand related arguments against MW for as long as I knew what welfare and the minimum wage was. I'm really not some kind of special protege. These have been the relevant counterarguments since man first dreamed up these sorts of programs. Let's not pretend that this is fancy economics we're talking about. My uncle who never got an education past high school makes exactly these arguments to me at family gatherings, and he didn't attend the liberal school district that I did.

Anyway - I genuinely don't believe any of you who share these anecdotes, and ultimately no one in this comment thread is in a position to resolve the matter or convince me one way or another.

KevinC writes:

Daniel,

The reference above to conservative talk radio was an argument that raising the minimum wage would raise inflation, not unemployment. (I don't listen to talk radio, so I have no idea what talk show hosts say about it.)

And for what it's worth, not all of what everyone is saying here can be attributed to subconsciously invented memories from high school. More recently, toward the end of a macro class I was taking, we were going through an exercise of identifying the difference between normative and positive statements. For the statement "All else being equal, an increase in the minimum wage decreases the quantity demanded for labor," better than three fourths of the class raised their hand for normative instead of positive.

Anyway, I'm happy to consider the possibility I'm wrong. This is a subject on which I really, desperately want to be wrong too. But will you do the same? Because I'm curious if you would even consider the possibility that I raised, that you overestimate how well this is understood by the general public? Or are you ruling that possibility out a priori?

Daniel Kuehn writes:

KevinC:

I know that was your reference to talk radio. Presumably the issue has come up more times than the one time this guy heard Rush say that.

re: "And for what it's worth, not all of what everyone is saying here can be attributed to subconsciously invented memories from high school."

Well it could be.

re: "But will you do the same?"

It's what I generally assume. I'm sure I'm wrong on a lot. The trouble is I don't know which thing I'm wrong about... if I did it would make things considerably easier.

re: "Because I'm curious if you would even consider the possibility that I raised, that you overestimate how well this is understood by the general public? Or are you ruling that possibility out a priori?"

Why would I rule it out a priori.

I do consider it to be one of the least plausible suggestions I've heard recently. It's surprisingly absolutist and presumptuous about other people's capabilities. It requires one to assume that the wider world is a lot different from everyone in this comment section. Whenever you start with an assumption like that I get wary.

It's also very different from my experience, and given how liberal the community I grew up in is, that sends up red flags for me. If anyone should have the experiences you guys describe it should be me. And I distinctly remember not having those experiences. So something is strange here. Add to that the inherent implausibility of a lot of the anecdotes here, and I'm fairly confident on this, although of course I can always be wrong. That goes without saying.

Daniel Kuehn writes:

Think of it this way too, KevinC:

It's very natural for people to assume that they have a grip on things and that it's everyone else that's being irrational/ignorant/simplistic.

It's even more natural to assume that if someone disagrees with you it's because they don't understand or accept a particular argument.

It's also very natural to omit inconvenient memories and generalize the past in a negative way, like "I never heard X".

It's much less natural for people to assume that the average person is about on the same level as themselves.

It's also much less natural to fabricate specific cases, like "I didn't always hear X but I remember hearing it on several occasions".

All of these biases support the idea that your anecdotes may be suspect.

Daniel Kuehn writes:

I don't even have all that strong of an opinion on the minimum wage. It's certainly a blunt policy and we could come up with much better. But I'm not convinced it's the populist disaster it's often made out to be. In an imperfect world, it does OK but it's critical that it's paired with labor demand policies - which is what we really lack in this country (although we don't actively reduce labor demand to the extent that a lot of other places do).

KevinC writes:

Daniel,

I fully agree with you on human frailty. In that spirit, I ask that when you say things like "If anyone should have the experiences you guys describe it should be me. And I distinctly remember not having those experiences" that you also keep in mind your valid point that "It's also very natural to omit inconvenient memories and generalize the past in a negative way, like 'I never heard X'" Which is to say, yes, we could both be wrong and/or biased about this. Human frailty, and all that jazz.

re: It's surprisingly absolutist and presumptuous about other people's capabilities. It requires one to assume that the wider world is a lot different from everyone in this comment section.

I disagree entirely. It says nothing about people's capabilities generally speaking to suggest that most people don't know much about a specific subject. After all, American high school students study biology and learn about evolution. But the fact remains that most Americans are horribly misinformed about evolutionary science - to the point that more Americans currently believe in Satan than accept evolution. Nearly half of Americans believe in that the Earth is less than 10,000 years old. Is it presumptuous of people's capabilities to suggest that most American's just don't understand evolution very well?

Paul Krugman's book Pop Internationalism argues that even the most simple and basic points of trade (things covered in school, no doubt) are completely misunderstood not just by the average American, but also by most intellectuals as well. Would you say that Krugman is being "absolutist and presumptuous about other people's capabilities?" Or do you think he has a real case here? Because it seems to me that Caplan and Krugman are making the same case - that most Americans have a poor understanding of even basic economics. And is it really that much of a leap to think that the average American's grasp of the relationship between wages and labor demand is as bad as their grasp of other basic ideas, like trade being mutually advantageous?

Ted Levy writes:

I just want to state for the record that I, too, have invented memories that highly resemble Bryan's...

Just yesterday, for example, I imagined my younger brother, a very intelligent middle aged engineer, told me I opposed raising the minimum wage because I've never really cared about the poor.

I further imagined he reminded me that he and all my other highly educated relatives--a large, extended liberal family of very successful Jewish professionals--have pointed out my lack of concern for the poor, evidenced by my opposition to minimum wage and other protective labor legislation, for many years now.

Frankly, my borderline psychotic "memory," these crazed voices in my head, recalls catcalls and gaffaws at my apparently fictitious questioning of them about disemployment effects...

Can Daniel K recommend a good shrink? These shared delusions are highly troublesome...

Tony writes:

This is certainly an interesting perspective, but I'm still left wondering what makes Bastiat special.

There are probably silly and untrue arguments on all sides of any particular issue. And there are powerful and systematic rebuttals for those silly and untrue arguments. So what's the big deal with this particular subset of silly and untrue arguments and this particular rebuttal of those arguments?

I suppose you might show that these arguments are some of the worst offenders in terms of getting people to make errors and support bad policies. But I'm not sure if that's true (aren't people deeply foolish and mistaken in many different ways?), or what evidence you would muster to support such a claim.

Costard writes:
So I reject the whole premise that this point would drain support for the minimum wage. No person that's taken the time to take a position on the minimum wage isn't in some way aware of this.

Perhaps it's natural to assume that those who agree with you are rational/smart/knowledgeable. Your premise doesn't seem any better to me than Bryan's, but running with it:

Certainly many people know about the trade-off between minimum wage and labor demand. But how many understand the different effects on skilled and unskilled labor? How many have an idea of the costs associated with regime uncertainty? Does every person who's taken the time to take a position on the minimum wage consider the distortion in industries labor-intensive vs. -non-intensive, or the very real consequences of lower production as higher costs render resources uneconomical? The dollar effects are uncountable; other effects cannot even be measured.

The unseen is indeed trivial when you assume that everyone can see it. Bastiat's point isn't that every action has unintended consequences, but that in a state of ignorance, all consequences are unintended. Our knowledge of the economy - the individuals that drive it, their specific transactions and their thought processes in transacting - is almost completely nonexistent.

Anecdotally writes:

I think everybody but Daniel Kuehn grew up in an environment devoid of knowledge about the broken window fallacy, and also devoid of exposure to the standard economic arguments about the minimum wage.

I propose that all children of the world be sent to wherever Daniel grew up. It will improve the quality of debate on both sides. The down side is that these kids will grow up to find these insights a lot more boring, and they'll later act credulous that everyone else didn't encounter these ideas much earlier in life.

hanmeng writes:

The friends of the modern welfare state I know often say things like "The rich have too much money." They say this even though typically their income is at least twice the American median, not to mention how far above the global median it is. They favor redistribution from the rich to the the poor, but by "the rich" apparently only mean people with more money than they have. I'm afraid nothing Bastiat says is going to change their minds.

Peter writes:

@Anecdotally,

+1

Mark Michael writes:

Jonathan Haidt's latest book, "Righteous Mind: Why good people disagree over religion and politics," which came out in March 2012, helped me a lot in understanding why "homo sapiens" is so, so comfortable with these kind of populist ideas. Why they seem so right. I won't try to give his theories in any detail, but will list the 6 moral "foundation" traits he cites, just to wet your curiosity.

Haidt is a social psychologist who's studied the connection between man's moral intuition and his day-to-day decision-making. He's been at it for over 20 years. He is a Democrat and has advised D Party prez campaigns going back to Bill Clinton in 1992. (Informally, an unpaid advisor I gather from the book.) One startling (counterintuitive) finding he stresses is that if man tries to make decisions strictly on a non-emotional, purely logical basis, he'll make bad decisions rather often.

Our brains are wired up to integrate our moral intuition (mostly subconscious) with our conscious (frontal lobe) thinking. The 6 "moral foundation" factors that our our subconscious uses to evaluate situations and help make decisions are (hopefully, I've recalled them accurately!):

1. Care/compassion - humans have an empathetic trait; we feel a strong need to take care of the needy, those disadvantaged by no fault of their own, etc.;
2. Fairness/proportionality - treat people in proportion to their contribution, their merit - we abhor "free riders" for any communal activity;
3. Loyalty - intuitively we value people who are team players, who are patriotic; we downgrade "traitors" to the tribe instinctively;
4. Authority - intuitively, we "know" that most citizens must abide by the rules/laws/regulations or society breaks down; but a certain number of people will be rebels, antiestablishment types;
5. Freedom/oppression - intuitively, we long to be free, but we also "know" that we need to obey society's rules - at least most of the time; mankind learned early on to gang up and "dethrone" the tribe's alpha males who try to tyrannize the tribe;
6. Sanctity/desecration - every tribe has sacred symbols that they revere, that they use to rally the tribe around; they are used to promote sacrificial effort in times of great trial - war against a neighboring tribe, a project from which all will benefit, but can't be done unless a great, communal effort is undertaken. The problem of free riders is handled by invoking the sacred symbols. In a nation state, a flag is a "sacred symbol" - so burning it, etc. is viewed as defying the groups chosen communal efforts. Religious symbols fill the role for many tribes.

Haidt claims that a healthy, happy society needs to have most citizens valuing all 6 of these traits with at least an average intensity.

The book had extensive research on just 5 of these 6 traits. He initially left out "5. Freedom/Oppression" trait. (He's a liberal after all! A Libertarian would consider that inexcusable!)

He had people self-identify in one of 7 categories, from very left (Progressives), center-left,..., centrist, center-right,.., very conservative (&Libertarian). (He does distinguish between Libertarian and "very conservative" with some discussion. There are very few Libertarians in America, although they're growing in number.)

A huge number filled out the survey online - 132,000 according to the book.

He plotted graphs of their responses. The results were striking. The more progressive you are, the more you valued traits 1 and 2, and the less you valued the other traits. It was almost a smooth curve across the 7 categories, with traits 1 and 2 slowly dropping and the other 4 (only 3 in the plots in the book) categories slowly rising.

When you got to the "very conservative" category, those responders tended to rate all 5 traits with similar scores. (Compassion was a little below the others.)

Haidt then claims that the D Party has lots of people who strongly believe in the first two - compassion, fairness, and tend to downplay the importance of the other four. In fact, they value people who rebel against social norms! They often are artistic, intellectual types.

Very conservative Americans tend to value all 5 (6 eventually) moral traits about equally. Tea Party members are the most balanced in this regard.

Implications for macroeconomics and politics: If you want the voters to accept your public policy proscriptions, they need to line up with their intuitive "moral foundation" beliefs, or they'll (intuitively) be turned off by them. "There's something wrong with them. I can't put my finger on it, but I don't like them!"

Test them against hot button political issues like (1) immigration - open borders vs. controlled borders, (2) SS & Medicare, entitlements into which workers paid 15.3% of their income in payroll taxes since 1984 (Greenspan Commission), vs. Medicaid, welfare benefits, ObamaCare, etc. (3) going overseas and telling foreigners that America isn't an exceptional nation, (4) trashing religious symbols - burning flags, 10 Commandments removed from public squares, etc.

Well, this is too long, so I'll stop. It's a very enlightening book IMO.

Daniel Kuehn writes:

Anecdotally -
I'm guessing there was nothing special about where I grew up, although it was a great place to grow up.

I've been continuing this conversation on my blog, and I've just been googling popular discussion of the minimum wage.

All sorts of general interest news articles by non-economists highlight these relatively simple Bastiat points. I really think you guys are dumbing down your past in an effort to elevate your current views.

prasad writes:

"The normal voter understands that the minimum wage raises labor costs which - all else equal - reduces the ability of the employer to hire workers. I simply don't believe that a high schooler that managed to get into Princeton had not encountered this simple point before."

I'll pipe up as a high schooler who managed to get into Princeton without encountering the point that there might be a tradeoff between minimum wage and employment, or between it and the size of the unorganized sector. Then in college I learned not to know what the net effect of a minimum wage is :/

I don't attribute it to any evil conspiracy among elites to teach convenient junk to children either. Economics in general is counterintuitive before training. Consider how obvious a notion tax incidence seems. And yet would you have figured it out yourself? [And where were such geniuses before the 19th century]. Most such things (evolution is the only obvious counterexample that comes to mind, and it's not taught particularly well) aren't imparted in school. Who learns bayesian statistics in school? Relativity?

prasad writes:

@Daniel Kuehn
I just saw:
"Anyway - I genuinely don't believe any of you who share these anecdotes, and ultimately no one in this comment thread is in a position to resolve the matter or convince me one way or another."

As nearly as I can tell, this means there's nothing whatsoever I could do to satisfy you that my self report of what I learned in econ 102 isn't delusional. I'm probably not as familiar with the literature on cognitive biases and such as you, but from here this sounds a lot like motivated reasoning, and the selective setting of unusually high standards of proof.

SkepticalLibertarian writes:

Economic literacy study:

" the National Council on Economic Education will kick off a major economic literacy campaign early next year with the release of an extensive national survey; this follows the Council's 1992 survey which indicated that only 39 percent of the general public gave the correct answers to several questions about economic fundamentals. The Minneapolis Fed's own national survey, conducted in fall 1998 and reported in these pages, shows similar results, with 45 percent responding correctly overall."

From that survey:
What would happen to employment if the government mandated a minimum wage above what employers currently pay? Employment would go up. Employment would go down. Employment would stay the same... 46 % Answered Correctly

More Info
"October 2009
Many studies show that most people are not financially literate and are unfamiliar with even the most basic economic concepts.. we rely on the IMD Word Competitiveness Yearbook (WCY), which compiles summary indicators of economic literacy for 1995 to 2008."

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