Bryan Caplan  

How Yglesias Channels Bastiat

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I want to persuade Matt Yglesias to give Frederic Bastiat the respect he deserves.  On some level, though, Matt already reveals remarkable respect for my favorite 19th-century French economist.  Imitation is the sincerest form of flattery - and Matt has repeatedly channeled Bastiat on some issues that Matt takes very seriously.

Absurd?  Consider: What does it mean to "channel Bastiat"?  There are three key components:

1. Ridiculing simplistic economic misconceptions.

2. Lamenting the popularity of these misconceptions.

3. Blaming bad economic policies on the popularity of these misconceptions.

This is basically what Yglesias does in my favorite posts of his.  Most notably:

1. Yglesias on licensing (here, here, and here for starters).  Normal people favor occupational licensing.  Matt doesn't merely disagree; he paints popular arguments for licensing as absurd.  Matt:
I see breaking up the barber cartel and increasing competition for barbering services as a progressive measure, because if you reduce the cost of things that poor people buy, you increase their real living standards...

...We need to ask ourselves if it's actually true that barber licensing is an egalitarian measure. I'm almost certain that it's not. Clearly, if we restrict entry into the barbering industry what we do is redistribute real income away from the customers of barber shops and to the incumbent barbers. In effect, you're setting a kind of price floor. But the important thing to note about this is that haircuts are already sold at a wide range of price points...The people impacted by the haircut price floor are going to be the people shopping for the cheapest haircuts. That, by and large, is going to be relatively low-income people.
Like Bastiat, Matt doesn't dwell on subtleties.  Instead, he points to grandfathering with scorn:
This is the bad faith that gives away the game. If licensing is primarily about ensuring quality in the face of market failure, then obviously you need to regulate existing practitioners. But if licensing is primarily about restricting competition to advance the interests of incumbents, then regulating existing practitioners is counterproductive.
2. Yglesias on workers' freedom of contract:

At the end of the day, GMU professors wouldn't react to a lower-quality work experience with "sputtering, semi-coherent outrage." What they'd do is quit and go work elsewhere because they have skills that are in demand in the labor market.

After all, it's not just working conditions. Economics professors are paid much higher wages than low-skill workers. If you tried to pay your economics professors $8 an hour with no health benefits or matching contribution to your 401(k), you'd only be "saving money" in the sense that your staff would all leave...

But if you're debating the question of whether it should be illegal to subject workers to mandatory searches, it doesn't get anywhere to point to the fact that some people are better off in general than others. Maybe there are two companies in town running roughly similar businesses that require the use of some unskilled labor... At one firm, they're offering the federal minimum wage of $7.25 an hour, and they're losing some product. At another firm, they're offering $8.25 an hour but searching employees and experiencing less loss to theft. Sometimes people get so fed up with that b******t that they quit and go across town to the lower-paid, less pleasant job. Other times people get fed up with trying to make ends meet on a minimum wage job, so they quit and go across town and subject themselves to humiliating searches in exchange for more money. Sad stories all around, but telling the higher-paying firm that its business model is illegal and it has to switch to the lower-paying one isn't going to make the stories any less sad.

3. Yglesias on land use regulation (here and here for starters).  Why is the rent so damn high?  Popular but misguided land use policies.  When David Leonhardt asks, "So how we did end up with these policies?," Matt answers:

The mistakes came in two big tranches. One is that in the wake of World War II there was a widespread recognition that the automobile was destined to alter the built environment. Virtually every city in America wound up overreacting to that reality by adopting widespread regulations mandating the provision of large amounts of parking with all new construction. The result is that lots of classic prewar American urban neighborhoods -- places that people love, like Dupont Circle in Washington and the brownstone neighborhoods in Brooklyn -- would be illegal to build under today's standards. This is folly.

Simultaneously, we've failed to think through the implications of small-scale decisions. In any given metro area, everyone might be better off if a bit more building was allowed throughout the region. But the decisions aren't made on a regionwide level. They're made hyper-locally, and each neighborhood may have reason to fear that more development will mean more noise or more traffic. It's like a tragedy of the commons in reverse -- each small unit is a bit too stingy with what it allows, and it all adds up to a big problem.

"This is folly."  Bastiat would be so proud.

My point, of course, isn't that Matt channels Bastiat all the time.  He clearly doesn't.  My point is that Matt has far more in common with Bastiat that he admits.  When Matt underrates Bastiat, he underrates himself.

Matt could quite reasonably object that Bastiat isn't very relevant for subtle policy issues that baffle the wisest wonks.  Fair enough, but so what?  As Matt clearly realizes, many policy issues aren't subtle.  Bad policies often endure simply because the public has inane economic beliefs and votes accordingly.  When this is the problem, channeling Bastiat is the best remedy we've got.

P.S. If you know of other cases where Matt channels Bastiat, kindly share them in the comments.  Please be gracious.



COMMENTS (15 to date)
Eli writes:

Recent posts of Bryans have been the best he's ever done.

Bryan should go on Econtalk and talk about Julian Simon. I think we would all like to hear that.

Daniel Kuehn writes:

These three points are pretty much why we thought Krugman was the "modern Bastiat".

William writes:

Matt points out the fundamental flaw in the claim that "Hospitals pass on the cost of care for the uninsured to everybody else":

http://www.slate.com/blogs/moneybox/2012/07/05/does_uncompensated_care_raise_prices_for_the_insured_.html

Charlie writes:

Your post works against your argument. The fact that Yglesias (and so many economics bloggers) can channel Bastiat like qualities means that our estimation should go down, not up. If Bastiat's qualities are less scarce and unique, then they are also less valuable. I, like many students, was exposed to Bastiat in my first econ class, but if I were teaching a first course in econ, I might well find better material from a well written blog post.

Beyond that, the whole premise is wrong. Just because Matt is like Bastiat, doesn't imply Matt should like Bastiat more. You really need to prove that the people Matt really likes are like Bastiat (and that the posts he really likes are most Bastiat-like). Even then, choice of topic will be important. A well-written Bastiat-like post covering protectionism or the Luddite fallacy isn't nearly as useful or interesting as the posts you cite above. The contexts have changed. Bastiat covers areas that the modern economist and wonk cover ad nauseum in their education. While it was novel at the time, it is now trite. Thus, Bastiat's value added is decreasing over time and possibly has decreased so much to "meh" status.

Charlie writes:

Bryan,

Are you sure you don't think Bastiat is "meh"?

Revealed preference test:

How much time do you spend reading Bastiat as compared to blogs? How much time do you spend reading Bastiat compared to bloggers you think are just ok? Did you read more Matt or Bastiat in the last year?

If you had to give up reading either Bastiat or GMU econ blogger X, how many would make the cut?

I won't speak for Matt, but I like you better than Bastiat. If Matt feels the same way, how does it fit your story about lefties not fawning over Bastiat? Do we like you more, because your arguments are weaker and your prose less stirring?

(I think I like you more, because your posts are relevant, backed by interesting factual knowledge, argued concisely and persuasively, and often stimulate me to think in more interesting ways, but I'm potentially a self-deluded lefty, so what do I know?)

Charlie writes:

Hat tip to Daniel Kuehn, for reminding me of the debate about the modern Bastiat. The list of candidates generated by David Henderson and Don Boudreaux was Russ Roberts, Walter Williams, Steve Horowitz, Thomas Sowell and Don Boudreax. When several comments suggested Krugman, the response was fierce denial. Look at the list, which Don eventually narrowed to Russ and Steve on purely political grounds. There's no one even close to the center.

I think this puzzle is no puzzle at all. It seems very clear that the Occam's razor explanation is that right leaning economists (especially libertarians) overrate Bastiat, because they like his policy prescriptions. After all we are all biased to like people who agree with us and make us feel smarter (even better if they make fools out of our foes). Both David and Don see Bastiat as being on the same team in an us versus them conflict.

Maybe Bryan is immune, maybe not...

Mike Hammock writes:

This Yglesias post also reminded me of Bastiat (and Bryan Caplan). Specifically, this section:

Amidst the current recession, the short-term issues may be the most important ones. Perry, in particular, is ideally situated to talk about how Texas shows that rapid population growth can fuel job growth even amidst a bleak nationwide economic climate. Texas, after all, is full of "immigrants" both from Mexico and also from other American states. People know that people are migrating to Texas, which means that people know that nominal spending flows in Texas will increase at a healthy clip. Since that confidence in growth exists, people keep building homes and shopping malls to capture that spending. Hospitals keep expanding. Schools add new facilities rather than closing existing ones. And Texas, famously, has led the nation in job growth. Nothing magical happens when the people moving to a place turn out to be moving there from a foreign country rather than a foreign state.

What makes Yglesias even more impressive is that he doesn't seem to have formal economics training, but he pretty clearly thinks like an economist.

Floccina writes:

"Difficult simplicity is the highest form of art."
But some people do not appreciate it they see it as just simple. It is like comparative advantage, it is simple but you would not have thought of it on your own.

Andrew writes:

Never engage in a land war in Asia.

Never engage in a battle of wits with Bryan Caplan.

Yancey Ward writes:

Sounds like Matt's rent is too high, and he would like to get a haircut on a Wednesday or a Sunday.

Alan Cole writes:

I liked Yglesias here.

A New York Times op-ed argued for a civilian draft into public service. One of its arguments is that it would save money.

Yglesias shredded it.

"Of course an even better way for the government to improve its bottom line would be to conscript teenagers and then lease them out to private firms. McDonald's could pay the government for the right to employ a chain gang of recent high-school graduates ... Point being that the coercive authority of the modern state is chock-a-block with money-saving and profit-making opportunities, but it's rarely the case that trampling over human freedom in an arbitrary manner is a better way to take advantage of that fact than collecting taxes."

Trespassers W writes:
It seems very clear that the Occam's razor explanation is that right leaning economists (especially libertarians) overrate Bastiat, because they like his policy prescriptions.

That's not clear at all. Although that may be true in some individual cases, it's just as plausible, and perhaps much more common, that Bastiat, or writers repeating his arguments, such as Hazlitt, caused people to become right leaning economists, especially libertarians.

Charlie writes:

"That's not clear at all. Although that may be true in some individual cases, it's just as plausible, and perhaps much more common, that Bastiat, or writers repeating his arguments, such as Hazlitt, caused people to become right leaning economists, especially libertarians."

That fits my theory just fine. You are just adding "I liked him when I was 17" bias to the "he's on our team" bias. We are bound to overrate authors who were formative for us.

Silas Barta writes:

@Daniel_Kuehn:

These three points are pretty much why we thought Krugman was the "modern Bastiat".

Wow, Krugman gets to be the modern Bastiat because of arguments he never made?

John Fast writes:

"What Daenerys Targaryen Needs To Know About Occupational Licensing"
By Matthew Yglesias
Posted Tuesday, Aug. 21, 2012, at 2:44 PM ET

So now he's channeling Bastiat *and* reading George R. R. Martin's "War of the Roses fanfic." Matt Yglesias is one of us! One of us!

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