Bryan Caplan  

Labor Econ Versus the World: Ecumenical Edition

NeoFisherian recessions, with ... Anthony de Jasay awarded the E...
Most courses in labor economic don't strive to undermine our society's secular religion.  Mine does.  I suspect that most labor econ professors would object to my efforts.  Shouldn't a college class provide a balanced discussion of the issues, instead of trying to change the way students see the world?

Yes and no.  Of course college class should provide a balanced discussion of the issues.  But if students arrive with a bunch of silly preconceptions, changing the way students see the world is a precondition for balanced discussion.  Take evolution.  Of course, a good class in evolution provides a balanced discussion of the issues.  But if students arrive as committed creationists, the professor can't teach them until creationism has been thoroughly critiqued.

But are there really any popular preconceptions in labor economics as ludicrous as creationism?  I say there are, starting with what I called Tenet #1 of our secular religion: "The main reason today's workers have a decent standard of living is that government passed a bunch of laws protecting them."  How do we know it's false?  Most obviously, because even if you assume zero disincentive effects, equally dividing premodern incomes still yields absolute poverty.  More subtly, because employers treat most workers far better than the law requires; competition's the only credibly explanation.  How do we know Tenet #1 is popular?  Because it's ubiquitous; until you study economics, it's virtually the only story you hear. 

I'm well-aware that many - perhaps most - labor economists - consider labor regulation on balance helpful for workers.  Not critical, just helpful.  Even if they're right, they should still spend ample time dissecting Tenet #1.  Why?  Because you can't have a reasonable discussion of the costs and benefits of labor regulation until you root out all the silly hyperbole students bring to the table

Think about how few successful politicians of either party openly favor the abolition of the minimum wage.  A few support the minimum wage because they're convinced labor demand is highly inelastic.  All the rest just rely on our secular religion: passing "pro-worker" laws is a clear-cut way to dramatically help the common man. 

My fellow labor economists' mistake: Since they weigh the merits of labor regulation for a living, they forget that non-economists can't even imagine what the downsides might be.  If professors fail to spell them out in gory detail, students will remain oblivious to the downsides for the rest of their lives. 

COMMENTS (12 to date)
Levi Russell writes:

"But are they really any popular preconceptions in labor economics as ludicrous as creationism?"

Someday, somewhere, an atheist will develop an accurate understanding of that term. I doubt I'll live to see that day.

3rdMoment writes:

I don't think that's the only story you hear.

You also hear the one about how the only reason workers have a decent standard of living is that they organized into *unions* to demand better pay and conditions.

Max Marty writes:
I'm well-aware that many - perhaps most - labor economists - consider labor regulation on balance helpful for workers. Not critical, just helpful.

Would you extend this grim view of econ professors to other fields of economics? Healthcare econ, international trade, econometrics, etc? In my sample size of about 12 econ professors throughout my high school and college career:

- About half "just" taught the course material (of these, half were probably Keynesians, the other half were just boring), whatever it was, in a relatively neutral way. i.e. they presented a "balanced" view.

- The other half let their pro free-market bias come through in subtle or less than subtle ways throughout the semester. My course on labor econ was definitely in this camp.

If my experience is representative, things aren't quite so bad!

Nathan W writes:

Most employers are decent people. Doesn't mean we don't need legal protections so scum won't get away with screwing and abusing people.

If most employers exceed the minimum, then one might argue that the only people who face any costs due to the laws are the ones who would otherwise be unscrupulous. I assume that the rules bring up standards for the vast majority, but if that's untrue and markets prevail are rules are irrelevant, then your point that employers exceed regulations imply that the cost of regulation is essentially zero.

In short, I don't think way of arguing the point stands up to scrutiny.

A key labour law I'm aware of, at least in Ontario, which is surely useful, is that if you think it's dangerous, you can refuse to do it and not get fired. In earlier years, you be called names and then fired if you refused to do something dangerous. People had to fight for laws like that.

ThomasH writes:

"The main reason today's workers have a decent standard of living is that government passed a bunch of laws protecting them."

This is a tenant of a religion I have never heard of.

I guess that lots of students come to university with the vague idea that the status quo (and the way we got to it) of labor legislation (and zoning and the corporate income tax and farm subsidies and no carbon tax and no user fees for road and street use, and immigration restrictions and ....) is OK. And a good economics course will question all of these. If there is a single area of economic policy in which everything is exactly right, I have not heard about it. I don't know why labor regulation is singled out -- and made into a straw man -- for debunking.

casey writes:

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Kitty writes:

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Ben Kennedy writes:

"But I doubt you can come up with a counterexample."

A counterexample is a country like Bangladesh, where child labor under 14 is illegal, but still prevalent. In the US, child labor is much rarer, maybe a few hundred complaints a year. Why? Well, it's not child labor laws, it's just as illegal in Bangladesh. A better explanation is that adults are so much more productive in this country so that child labor simply isn't necessary for families to sustain themselves. The lack of child labor in this country has virtually nothing to do with child labor regulation.

I am not saying workplace safety laws and such should be repealed, I am just nothing that those laws are only enforceable in the first place because society is rich enough to provide low-cost safety. The reason I have a safe and clutter-free office that so I make it from my cubicle to the bathroom has nothing to do with OSHA. Such laws are better thought of as moral expressions (children ought not to work, offices ought to be safe, etc) than things that motivate change

Tom West writes:

Of course, one thing that most people understand on some basic level, but aren't always capable of expressing it that the strict separation of economic force and physical force is something that exists only in the Libertarian imagination.

Most human being see the application of power as a continuum, regardless of it being physical or economic.

Failing to protect economically weak people from economic power is thus understood as implied societal permission to use physical power against the same group as well. If society says that beatings are acceptable, you can probably bet shootings and stabbings will go up as well, even if they're as illegal as before.

I think most students (and most people in general) conflate the protections that are afforded against economic power and the protections that are afforded against physical power because they're seen only as differences in degree, not differences in kind.

(I also think Libertarians come in for a lot of unjustified hate because its inconceivable to a lot of people that *anyone* could not understand this, which means Libertarians must secretly be *for* the physical oppression of the less powerful.)

The usual suspect writes:

You don't need to teach a "balanced discussion of the issues," but you probably need to actually teach labor economics in a labor economics class, and not your political views.

TMC writes:

Max Marty re:"pro free-market bias".

Wouldn't this be necessary as it is an Econ class?

AS writes:

TMC re:"Wouldn't this be necessary as it is an Econ class?"

Yes. Economics is the study of markets.

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