Ive been intrigued by the Occupy movement and have written a number of articles and posts on it for Forbes and the Mises Blog. I see this as a teachable moment: a lot of people are angry, but their anger is misdirected. The problems that have them so exercised are the faults not of free markets, but of the rent-seeking society that, if I may be perfectly frank, they helped establish (Jason Brennan has more).
I learned earlier that yesterday was Occupy the Ports day, with the goal of throwing a wrench in the gears of the 1% and disrupt(ing) the economic machine that benefits the wealthiest individuals and corporations at the expense of the vast majority of the people of this planet. After a quick scan of their website, my sense is that they arent offering a highly nuanced and sophisticated critique of the systematic distortions of international trade by special interests and their political allies. my sense is that they are opposed to international trade as such. My sense is that people are not as upset about the way incentives are distorted as they are about the fact that people respond to them.
If youre rejecting a set of political institutions that have distorted the incentives to which people respond, thats one thing. If youre rejecting economics as a way of understanding the world, thats something else entirely. As I wrote in this piece, There are a lot of opinion leaders out there who are marketing very dangerous ideasnot dangerous in the cool people speaking truth to power and threatening the establishment way, but dangerous in the people will die if this vision is realized way. Pretending that you can repeal the law of comparative advantage falls in the latter category.
Fortunately, this is a teachable moment. I just skimmed Manuel Ayaus Not A Zero-Sum Game: The Paradox of Exchange, which can be downloaded for $0. Ive done a handful of videos for the IHS LearnLiberty project. Three are on the basics of trade; the first one goes through an example of how trade creates wealth. One of my favorite pieces of popular economics is and always will be Paul Krugmans Ricardos Difficult Idea. The chapter on international trade in Cowen and Tabarroks Modern Principles of Economics is excellent. Finally, two quotes are appropriate. Murray Rothbard writes for a lot of us:
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.
The second quote is from Ludwig von Mises, who writes with characteristic passion in chapter six of Epistemological Problems of Economics, titled The Psychological Basis of the Opposition to Economic Theory:
Scarcely anyone interests himself in social problems without being led to do so by the desire to see reforms enacted. In almost all cases, before anyone begins to study the science, he has already decided on definite reforms that he wants to put through. Only a few have the strength to accept the knowledge that these reforms are impracticable and to draw all the inferences from it. Most men endure the sacrifice of the intellect more easily than the sacrifice of their daydreams. They cannot bear that their utopias should run aground on the unalterable necessities of human existence. What they yearn for is another reality different from the one given in this world. They long for the leap of humanity out of the realm of necessity and into the realm of freedom. They wish to be free of a universe of whose order they do not approve.
|Art Carden is a Research Fellow at the Independent Institute and an Associate Professor of Economics at Samford Universitys Brock School of Business.|