Economics is the Dismal Science. Scarcity is the usual reason given for it being so. Personally, I find the most dismal aspect of it to be how many people don’t understand economics. It’s enough to make a man take off his hat, throw it on the ground, and stomp on it.
Does Winnie the Flu kill people? Yes. It does. However, you know what else kills people? A faltering, let alone crashed, economy. The thing is this is exactly the kind of thing you get with Bastiat’s “seen and unseen”. Those directly (or slightly indirectly through opportunistic infections) killed by Winnie are seen. Those who die because a treatment was delayed, or their heat was turned off because they were laid off and couldn’t afford it, or any of a host of other little things of people “at the margins” where the difference between “good economy” and “economy in the toilet” made the difference. Those are the “unseen.” Oh, sure, individually someone sees folk dying but mostly they’re the kind of folk who might well have died anyway. We just get more of the “might” turning into “did”.
They go unnoticed in the general scheme of things. There isn’t a single cause that people can point to saying “see, that’s killing people.” It’s a thousand little things where if things had been just a bit better they would not have died. People don’t make the connection to the the faltering economy, not until it gets truly awful (as in third-world poverty levels). But the connection remains. Hurt the economy and people die who would not have died otherwise.
However, attempt to raise this issue, to explain it to people, and sure as taxes, someone will tell you what a horrible person you are for putting money above people’s lives. They can’t seem to grasp that the money (or rather, the goods and services, and the economy that produces those goods and services) is people’s lives.
And that is pretty damn dismal.
The Writer in Black 
I have this identical conversation CONSTANTLY. It gets tiresome. Exact quote: “Stopping everyone for a few months is the only intelligent choice. The economy will fare far worse if not dealt with in a quick fashion. China already demonstrated that…”
LikeLike
(Rolleyes). Since China lies constantly it’s hard to use China to demonstrate anything.
LikeLike
You aren’t wrong. But looking at all this objectively, I see a few useful outcomes to all this insane panic. On the one hand, westerners who’ve been living in a sort of bubble of artificial prosperity for decades, may finally he forced to realise just how little they are actually able to provide for themselves, as a collective whole. I grew up in the South on a farm. Many of the people connected to my family were hunters or farmers as well. I learned early on about self reliance, something my grandparents valued, having lived through the great depression and grown up poor farmers. Well, they never went hungry, for one thing. And that’s just it. During the great depression, farmers, which so many of the southerners were, were among the people who always had enough to eat. Sure, their kids were often clothed in burlap sacks and they couldn’t afford any luxuries, but they would survive. Those in the urban areas were hit the hardest, as they depended the most on goods provided from outside their own communities.
Right now, where I’m living in Germany, many are calling for folk to shop local, but food from local sources. A lot of folk in the organic movement already do this anyway. The less we have to buy from the outside, the fewer resources needed, such as fuel to transport goods, etc.
Self sufficiency and cutting back on unnecessary consuming has benefits on multiple levels.
Then let’s consider overpopulation. I see this as a wake up call. Sure, I also think people are seriously overreacting. This isn’t small pox or the bubonic plague. It’s a cold. A new strain, but it’s not likely to claim more lives than influenza— except for, as you pointed out, the result of human stupidity. But look on the bright side— a smaller population is more sustainable. Of course no one wishes to lose loved ones, and no one wants it to be them. I sure don’t. As a human, I feel sorry for those who will and have died. Objectively, I see a bigger picture and find the silver lining.
LikeLike
Oh, lord. There’s nothing artificial about that prosperity. That folk don’t locally produce everything they use does not make it “artificial”. Trade has been the life blood of prosperity since prehistoric times. The flint trade across Europe being but one example of stone age commerce.
Trade, whether with the neighbor down the lane, the city some dozens of miles away, or the nation on the other side of the world, makes more goods and services available at lest cost. And as Adam Smith realized in “The Wealth of Nations” it is the goods and services available that define the wealth of a society. More goods and services available, more wealth. Trade increases the goods and services available.
In the early days of the Great Depression, politicians in Washington thought that tariffs on imports, restricting imports, would encourage people to “produce locally” and put Americans back to work. A petition signed by 1028 economists at the time warned that instead it would lead to increased unemployment because other nations would retaliate and the retaliate with tariffs of their own, stifling trade and worsening the depression. And that’s exactly what happened. (Hoover, far from being a “do nothing” President, actually started many of the policies that FDR would later double-down on.)
As for things like “fuel to transport resources” container ships he most efficient, ton for ton, ways to transport goods and services. And finished goods are almost always more efficient to ship than raw materials. The cost of shipping, and the resources used to ship, is already figured into the cost. If it were truly more efficient to produce locally, then it would be cheaper to produce locally and simple competition would lead people to make that choice.
As for overpopulation, sorry but you’ve bought into a “big lie” worthy of Goebbels. Simple consider this: find a country, any country, that was better off economically when its population was half the size it is now. It can’t be done. Of course, it’s hard to tell what the population actually is because, get this, countries lie. There are incentives to overstate the population but none to understate it. And population figures rely on self reporting by various countries as to what their own population is. People have been predicting imminent disaster from overpopulation since Malthus. And they’ve been wrong since Malthus. Yes, there are final absolute upper limits to what can be supported on the Earth. That does not mean, however, that we’re actually approaching those limits. The things cited as evidence: poverty in the 3rd world, regional famines, and the like, are things that have always been endemic. Indeed, if anything, conditions have gotten better since then. We, as a species, have pulled more people out of absolute poverty (as defined by the UN) than ever before. Overpopulation is not the problem it’s made out to be.
I strongly recommend reading Thomas Sowell’s Basic Economics. It provides a good foundation without going into math and graphs, using real-world examples to demonstrate the principles: https://amzn.to/3bDzp51
Follow that with Applied Economics: https://amzn.to/2JtBjco
And then round out with Economic Facts and Fallacies: https://amzn.to/3dK2ldF
Those three books provide a solid grounding that does a far better job of predicting the actual outcome of public policy than the wishful thinking that passes for economic thought for most people.
Mind you, most people won’t go to the effort and instead rely on their wishful thinking, usually with disastrous results. And so we’re back to “the dismal science.”
LikeLike
You’re making the big mistake of seeing things purely in economic terms. As for population, you don’t factor into the equation the destruction of habitat, deforestation, pollution, etc that results from overly large populations. I’ve watched the wildlife and nature of my home state diminish rapidly in my relatively short life. Each time I go home, sometimes after only a year, it comes as a shock to see how much nature has been destroyed in those last safe havens the animals have.
Artificial wealth, in the sense that just because we have excess doesn’t mean there is no scarcity of resources. Sooner or later the hens will come home to roost. Large portions of the earth’s populations are living in extreme poverty, and many of these places are where so much of our goods are made or grown. These people are extorted and forced to seek off the products of their labour at far lower prices than they’re worth and are not even paid a living wage. If you level the playing field, I guarantee you there will not be enough resources to go around without westerners having to tighten the belt a little, or a lot. But if every community did it’s part to produce more of their own food, for example, everyone benefits. I’m not advocating tariffs and import export restrictions. Nor am I saying we have to produce every single thing we use or eat ourselves. Try growing oranges in Norway. Not possible. But we can reconnect with nature and adjust our priorities. Every habitable part of the world has it’s native foods, plants that grow well in that place. If you want to know what should make up the bulk of your diet, then look to what grows in your region. Everything else is luxury. Enjoy those little luxuries, but don’t delude yourself into believing that excess has no negative impacts.
And before you try to fit me in a box, don’t bother. You’ll never find one big enough. Just because I love nature and am health conscious doesn’t make me a leftist. Just because I believe in self reliance doesn’t make me a paranoid prepper, though being prepared for any eventuality is not in and of itself a foolish idea. Just because I’m pro gun rights and personal liberty doesn’t make me right wing. Nor am I an anarchist for being opposed to government.
You often come across very intelligent, and in many ways I agree with your logic. But you also tend to be too heavily focused only on economics, like far too many republicans, and totally in denial of any other consequences our way of life has on the world around us.
You suggest books for me to read about economics. Well, I would suggest to you to spend half an hour a day in a quiet place in nature in silent contemplation. Find a permaculture farm or organic community garden and spend time learning and getting your hands dirty. Go out in the woods and observe. Learn about indigenous people who are still alive and fighting for their way of life to this day. Maybe even visit some. Learn from their elders and shamans. Spend a year at least immersing yourself into this other way of life, living it, connecting to the earth, challenging your world views. Then come back and see where you’re at after all that. If it doesn’t have a profound impact on you, I’d be amazed.
Life can be so much simpler than you and all these alleged experts make out it out to be.
LikeLike
Jessica, If you advocate for government coercion to prevent other from using their land in ways they choose that do not infringe on the rights of others then you are a statist. Regardless of how many other labels you want to give yourself you are a statist. Capitalism is when people are free to use their money as they see fit (barring acts that infringe others rights) without coercion. If you love nature pony up the dough to buy it and protect it. If you pursue a path where government regulates land use to “protect” it or buys land and nationalizes it then you are a statist. It is a big box and lots of other little boxes fit neatly inside it.
LikeLike
Oh god damnit! When did I ever say I’m for government telling people what to do?! F*ck government. Everyone has a brain and everyone who isnt mentally handicapped has the ability to think about what consequences their actions will have in the long run, weigh the pros and cons, and try to make the best choices available to them, not because some government is forcing them to, but because they have a conscience and enough common sense to just do the right thing. Too much government involvement just turns people into a bunch of overgrown babies whining for someone else to fix all the world’s problems, instead of just rolling up their sleeves and getting something done themselves.
I already am doing what I can and always searching for how I can do better. What are you doing? What mark will you leave on this world when you’re gone?
LikeLike
Well, I would suggest to you to spend half an hour a day in a quiet place in nature in silent contemplation.
You do understand that it’s the prosperity you called “artificial” that allows you to do this? Rather than struggling to keep yourself fed and clothed and housed and healthy enough to keep going.
While contemplative acts are necessary to our inner lives, they must be accompanied by the actual fact of living our lives. Economics is a large part of what makes that possible above the level of subsistence living (also known as “hand to mouth”). Above-subsistence living is what gives you indoor plumbing and hospitals. It’s also what allows things like “organic community gardens” and “permaculture farms”.
LikeLike
That’s a bit simplistic. People can live more conscientiously and still enjoy some of the conveniences of modern life. And to say that the alternative is to live hand to mouth is also inaccurate. Tribes still living off the land in parts of the world where conditions are still favourable, know how to preserve and save food for the months where fresh foods are scarce. They think ahead and prepare themselves for all eventualities. What makes such people so impressive is they are completely self reliant. Everything they need they make themselves. To have those kinds of skills is a treasure. I’ve also known quite a few people out west living off grid or partially off grid, and I admire that in them. They are so much happier than most of the rest of the community who works 9 to 5 jobs that feel meaningless. A simpler life, even if it is a lot of work, is less stressful.
Earlier this month my boyfriend and I took our 11 month old baby with us for a camping trip in Sweden. We found an amazing camp ground which is all off grid, spread out, and in a really natural setting in the woods surrounded by lakes. We were the only ones there, since not many people want to go camping in winter in Scandinavia. We had to get up early every morning, my boyfriend gathering and splitting firewood for the day. I had to haul the baby with me all the way to the outdoor kitchen, then climb a hill to the only water pump and pump the water needed to wash dishes from the night before, wash the cloth diapers by hand, make breakfast. Each day had its necessary routines, leaving only a couple hours a day to relax or explore, maybe go out on the canoe. It was tiring, but there was almost no stress, especially once I fell into the rhythm of things. By the end, we didn’t want to leave. It’s exactly the kind of life we crave and have been trying to build for ourselves and our children. Two adults alone would struggle if they had to provide everything they needed themselves. But a whole community, a whole village doing that changes things big time. Everyone has their task, has their jobs to do. Everyone gathers back together when the work is done, shares meals and stories. Look up Eight Shields and see what kind of work they are doing through their experience with indigenous peoples. They aren’t the only organisation doing this, but they have a lot of connections to many other organizations as well as indigenous peoples. Everything you think you know, all this dogma that there is no other way, is a lie. Imagine blending the best of both worlds. What might our lives be like? Don’t knock it until you try it.
LikeLike
I really need to set more levels of nesting on this blog.
“What causes poverty, nothing, it is the natural state. What should be asked is what causes wealth.” Anything beyond a Hobbesian life in the state of nature “Solitary, poor, nasty, brutish, and short” is “artificial wealth.” It doesn’t exist until somebody makes it exist.
Also, the problem with these “people can…” arguments is that, yes, people can. In anything close to a free economy by and large they choose not to but they can if they wish. But the folk advocating those kinds of lifestyles continue to argue. Clearly that people can is not enough (else why the need to argue?). Nope. It’s not “people can” but “people must” that is the motivation. What the advocates want is to be substituted for the people making the decisions about their own lives. It’s not their choice that they’re interested in, but denying the rest of us ours
As Mencken said, the urge to “save” humanity is almost always a false face for the urge to rule. And as another put it they mean to govern well but they mean to govern. They mean to be good masters, but they mean to be masters.
LikeLike
Life and human existence is about a lot more than “economics,” just as it is about a lot more than physics and chemistry and aerodynamics. But humans ignore the inescapable realities of economics and physics and chemistry and aerodynamics at their severe peril. Just as Kobe Bryant, may he rest in peace, significantly misunderestimated the risks involved in helicopter flight, so do liberal chowderheads misunderestimate the fatal consequences of ignoring the consequences of economic reality.
I think liberals are not really chowderheads, I think liberals are deliberately dishonest about what they believe and that they know they are lying to the poor when they promise them free lunch in exchange for their political support.
LikeLiked by 1 person
Ya, I think you’re right about the so called liberals. Some are maybe naïve enough to believe that everything in life can be free, but the rest are just liars.
LikeLike
And you’re making the mistake of thinking that “economic terms” is anything other than “human terms”. In the end people make economic transactions because it’s what they value. Problems arise when people (like you) try to impose their own values on other people’s decisions.
I do factor it in. The US has more land in forest today than it did a hundred years ago when the population was a third of what it is today.
OTOH, folk like the Yanomamo (to use just one example) living a stone-age existence, burn a hell of a lot of rainforest with their slash and burn horticultural lifestyle. And the Plains Indians used to hunt buffalo by stampeding herds over cliffs. That part doesn’t get told by those who buy into Rousseau’s “noble savage” nonsense. The primitive “back to nature” type lifestyle can be every bit as destructive as modern industry.
This is what’s called “non-representative sample.” It’s also what Thomas Sowell calles “‘Ah-hah!’ statistics”. Out of a bunch of information that’s out there focus on one or two things that fit your “theory” and go from there.
Of course there is. There always is. Wants are unlimited while resources are limited. However, “scarcity” doesn’t mean what you think it means (as demonstrated by your use of it here). Consider this. I don’t know you. In particular I don’t know how old you are. I lived through the 70’s “energy crisis” where we were doomed, doomed I tell you, because we were running out of oil. Except we weren’t, and aren’t. They looked at “known reserves” of oil and projected usage and, well, we are supposed to be completely out by now. Only now we have “known reserves” even larger than they were then.
Today, things are resources that weren’t back when Malthus made the argument you are repeating here (which has failed every time it’s been made). Back then, nobody had much use for pitchblende. Back then, coal tar was a worthless by-product of making coke for iron and steel making. Then someone took a look at it and created what would become the petrochemical industry. John D. Rockefeller became the richest man in the world by figuring out that the gasoline, produced as a by-product of refining oil to produce kerosene for lamps, could be used to power the refining process instead of being dumped in rivers as waste. (Yes, that’s what they used to do.) In doing so he reduced the price of kerosene dramatically making evening lighting far more available to the average household. Oh, and as a side effect the major competitor for kerosene in that application was whale oil. Cheap kerosene meant less demand for whale oil leading to less whaling and very likely the survival of several species of whale long enough for Greenpeace to even be an idea.
What constitutes resources change both with technology and economic situation. Aluminum is made from bauxite. However, we have the technology to extract aluminum from common feldspars. Nobody does because the bauxite is still readily available. But should we “run out” of bauxite, the price of adding to the total amount of aluminum in use goes up and at some point using feldspars or other sources containing aluminum becomes viable.
This “fixed pie” nonsense has never worked that way. Ever. But people keep clinging to it.
I ask again, can you name any country that was better off when when its population was half what it is today?
And once again, you’ve bought into the lie. In most of these, nobody’s “forced”, certainly not by the West (in those where they are it’s their own govenrments that do the forcing). There are no press gangs, dragging people kicking and screaming to the sweatshops. There are no chains holding them at their work stations. There are no barbed wire and armed guards to prevent escapes. No. They simply offer a better wage and better salary than is available elsewhere to those people in those locations. And, frankly, it’s a necessary first step toward economic growth. The Industrial Revolution in England, in the US, and elsewhere in Europe went through the same thing as it started. A century to a century and a half ago it was Japan going through it. More recently it was South Korea. Read those books I recommended. Sowell goes into it in depth. Or you could at least start where I address them:
https://thewriterinblack.com/2019/11/01/if-you-give-a-man-a-fish-a-blast-from-the-past/
https://thewriterinblack.com/2017/05/16/if-you-give-a-man-a-fish-part-2-sweatshops-and-bootstraps/
Strictly speaking, everything but the bare minimum food to sustain life and the bare minimum clothing and shelter to prevent immediate death by exposure is a luxury. For most of human existence that was really all that people could be counted on. You can, of course, if you wish, go back to living that stone-age lifestyle. Anyone can, really. Few people do.
Of course there are. That’s one of the lessons of economics, “the study of cause and effect relationships in the allocation of scarce resources that have alternative uses.” Scarcity means that there is never enough of anything to satisfy everyone who wants it. People like to talk about “solutions” to “problems” but there are no solutions. There are only tradeoffs. The question is what is the most efficient way to allocate those resources so as to maximize being able to produce what people want. You can either let people make those decisions for themselves in voluntary exchanges with prices determined by a free market, or you can have some system where to some extent a third party imposes his or her own will by force on the individuals involved. I submit that the necessity of use of force pretty much demonstrates that it’s less than optimal from the point of view of the people involved.
And, as I point out above, just because
Physician, heal thyself. Maybe you should be a little less quick with the box, hmm?
What you fail to realize is that I have quite a bit of time in nature. I grew up out in the country. I’ve spent time where you had 360 degrees, all the way to the horizon without a single sign of human habitation. I’ve spoken to and read accounts of tribal shamans and such. Indeed, writing research often calls for it. If you can’t imagine that in someone who disagrees with you so vociferously, well, that’s on you.
“Simpler” does not mean “better.” Indeed Hobbes was far closer to the mark with his “life in the state of nature” than Rousseau was with his “noble savage.” This romanticization of primitive lifestyles would be amusing if people didn’t keep trying to impose it on me.
LikeLike
I’m not saying we all have to live primitive lifestyles, nor am I trying to impose it on you. Here you say I’m imposing, but that’s exactly how your words come across. I don’t even disagree with everything you are saying. Just some things, and those are mostly the little things everyone can choose to do of they really wanted to. You talk about trade and the value of it. Well, wouldn’t being self-sufficient give people something of value to trade? I don’t mean people who already work in professions which are valuable, like medical, or creating the goods most necessary for a moderate quality of life. That’s a given. But there’s also a lot of nonessential jobs. There’s a lot of people who feel no value in the work they do. A lot of people who feel lost and struggling at the bottom, and why? Maybe because they have no valuable skills? Then again there are plenty of people who technically live in poverty, if you look at their monetary value, but they actually live a very good life because they can provide for a lot of their own needs without needing more money to get those things, or they have something to trade, some skill. Not all people trade for money all the time. It’s not always necessary. When I advocate making good choices, or buying locally grown food when possible, or gardening, and such, I’m not advocating for third parties to force you or anyone else. I’m not advocating for laws and coercive tactics to make people do what I think is right. I’m presenting you with alternatives I believe in because I’ve seen the benefits. What you do with that is up to you and no one else. Ok?
But I do want to respond to your remarks that my point about the destruction of natural habitats is non-representative. How do you figure? Living in a place most of my life, seeing the steady progression of urban sprawl absolutely devastating the wildlife? There may very well be forests in the States, sure. I’ve seen a lot of them. But Florida, my home state, is home to a wide range of wildlife, plant and animal alike, that exist nowhere else that I know of. There are a lot of endangered species in Florida as a result of overpopulation in that part of the US. There will be species of animals lost forever as a result of lost habitat. Also, the introduction of various invasive species by foolish humans takes its toll on places like the Everglades, for example. Sinkholes are becoming a bigger and very real problem because the aquafers aren’t able to sustain such large numbers of people. Ground water pollution due to chemical use and unsustainable agricultural practices is also very real over large swathes of the land.
Here in Germany the ground water is also heavily contaminated, nitrates being the biggest culprit as a result of dumping excessive amounts of animal waste over all but the organic fields. The only reason our drinking water where I live is safe is because it comes from the Harz mountains, but that’s not true for all municipalities in northern Germany. These are the kinds of things we can and should work to change. This is one of the reasons I encourage people to buy organic. Sure, I can’t make anyone do it, but I can make my case, or? Is it wrong to point out that places like Florida are overpopulated? Snowbirds and tourists don’t understand or care what impact their actions have on that fragile ecosystem. Are you aware that all sea salt now is contaminated with microplastic? And the problem is only getting worse. Is it so wrong to suggest and even urge people to please do what they can to reduce plastic waste? A few grocery stores in the States have started proactive practices to reduce packaging waste by letting people bring in reusable containers to fill with however much they want of various products, suck as rice, sugar, honey, beans, etc. Using reusable cloth bags rather than plastic disposable shopping bags. In Germany, you have to pay for shopping bags, which is the only effective way to get shoppers to bring their own bags. Only a small percentage of people would make these choices voluntarily, which is sad and pretty pathetic. And even though I want to reduce plastic waste, all too often the grocery stores provide little opportunity, since they pack even fresh produce in plastic! FFS! We can do better than this! Maybe some people are just too lazy, or don’t care, or whatever. But these aren’t radical things I’m suggesting. These are just the little things everyone can do to make this world a better place.
LikeLike
So, what’s your argument? Want to do things that way? Do it. Nobody’s stopping you.
Since I am pretty much constantly an advocate of individual freedom, explicitly and fairly consistently, that’s a remarkable takeaway. I want to impose freedom? I want to impose not having the government (that entity granted license to implement force) impose on individuals? How does “get government out of the way of people and let them order their own lives in the vast, vast majority of cases” “come across” as “imposing” exactly?
The problem isn’t self-reliance (quite a different thing from “self-sufficient”–words have meanings and “sufficient” implies complete unto itself with, thus, no “need” for trade). The problem is when it’s intertwined with that whole “buy local” thing which imagines that trade stops being good when it crosses an imaginary line on the ground.
However, if it’s good to trade with your neighbor across the street, it’s good to trade with the one in the next county over, or the next nation over, or clear on the other side of the world. There’s no line that says “trade on this side of the line is good, on that side is bad.” There are many reasons I might prefer to deal with a local provider of something, which can all be summed up as value in return for price. But it’s the value, not some “buy local” incentive that brings me to them. Sure, produce, even “locally sourced” costs more at the local supermarket than if I went out to a “you pick” farm and got it myself except that my time not to mention gas and wear and tear on the car also has a value and becomes part of the “cost” that’s not reflected in the price. (As I learned in Intro to Microeconomics, middle men actually reduce cost–cost, as opposed to price.) If you want to promote local businesses, articulate the value they provide over others. Don’t try the game so many do of trying to “guilt” me into it. (Yes, the owner of the mom and pop store may be trying to afford his daughter’s braces–but then I’m trying to afford my daughter’s braces and spending more at said “mom and pop” than I would at a big box store means I have less to put toward said braces. Why is their daughter more important than mine?)
Frankly, I think much of the “buy local” movement is based on people afraid that they don’t have something of value to trade. Competition from low cost overseas labor? Sowell, once again, went into that. Case in India. The workers in the factories over there were only 15% as productive as Western factories. One could pay the Western workers five times as much and it would still be more economic to have the Western workers do it. Once they become more productive, competition tends to bid the price up and they are no longer the “cheap labor” that worries people.
So learn some. One of the most valuable skills out there is a work ethic. Be the person who arrives early, stays late, volunteers for the more unpleasant parts of the job (and any job will have those). That requires no formal education or training. It’s available to even the poorest. It requires only committment. And it’s one of the most employable assets one could have. And once working, there’s rarely a good reason to turn down an opportunity to learn a new skill.
Wonderful for them. And the beauty of freedom is that they’re perfectly at liberty to do so. And if one of them has an injury or illness that requires an MRI to properly diagnose, and modern medicine to treat, well, that we have a wealthy society that can produce and maintain such things benefits them even if they don’t, personally, have a lot of money. That’s one of the reasons why folk benefit from living in a wealthy society even if they, themselves are not wealthy. The society produces (and trades for) goods and services that just cannot be done on a small/local level. And it’s the goods and services available to society that define wealth, not money.
The thing is, you seem to be thinking that because “money” isn’t involved economics doesn’t apply. Nothing could be further from the truth. Again, the goods and services available to the society. That’s the wealth of that society.
And now, of course, they’re forbidding that because of the potential for cross-contamination of infectious disease. That was always a problem, it’s just that Winnie the Flu has brought it to light. That’s a downside to the “reusable cloth bags” that has long been ignored. In most cases nothing will happen. And nobody will notice the few extra people who will pick up food-borne illnesses because of cross-contamination from the use of such bags. That there’s more spoilage and more spread of pests who “catch a ride” in such bags doesn’t happen often on a “per thousand bags used” basis, but it does happen and over an economy of 330 million people it adds up. It’s just dispersed so nobody notices. See, once gain, Bastiat’s “Seen and Unseen.”
People who want to, can. And if enough people make that choice, the stores, wanting to earn their business, will start to conform more closely. But that’s not good enough for you. No, you want to impose your will, your preferences on the rest of the populace.
My time has value. My effort has value. Both are scarce resources that have alternative uses. To use them for what you want me to use them for means that they are no longer available to do other things that have value to me. You see economics isn’t about money. It’s about cause and effect relationships in the allocation of scarce resources that have alternative uses. And that includes my time and effort. Save a bit in one place, and it’s available elsewhere.
Also, those “conveniences” for lazy people? They’re a gods’ send for people with disabilities. That lazy people create enough of a market for them to be out there, common, and cheap means that folk like my daughter (“female athlete triad” culminating in osteoporosis with mobility issues) have them.
So, once again, I recommend freedom.
LikeLike
I think your mistake is misunderstanding economics. Economics isn’t all about the money, that would be finance. Economics is all about trade-offs, and all things involve trade-offs because, ultimately, the only resource that matters is time. We all have a limited amount of time and we’re all required to spend our time at an ineluctable rate of one second per second until our supply is exhausted – and nobody knows what our supply may be. Dinner with the wife or a couple of beers with the boys? Mowing the lawn or taking a nap? A trip to the lake or a trip to the mountains? Meatloaf or pork chops for dinner? Blue tie or red tie? Replying to a random commenter or moving on to the next post? It’s all economics, it’s all a matter of making choices that necessarily exclude alternative choices, you don’t get resets or do-overs for past choices, the past is gone and there’s no rewind button no matter how much you might regret the choices you made. The view of Man as an economic animal is correct, but ultimately the coin of the realm is happiness – we’re all trying to make the optimal choices for maximizing our happiness.
LikeLiked by 1 person
This.
Or more graphically: triage. When you have a lot of wounded coming in to an aid station of MASH unit, you’ve got some people who will survive on their own. Some will require immediate are to survive. And some won’t survive. It’s an economic problem, how to allocate the scarce resources of the aid unit (doctors time and skill, beds, medicines, operating tables, units of blood, and so on) to maximize recoveries. Any time you have to worry about the scarce resources with alternative uses the decisions about how to allocate them and consideration of the consequences thereof is an economic problem.
LikeLike
WARNING: What follows is not trying to say you don’t know what you’re talking about, or that you are “naive”, “ignorant” or anything else. I think your answer might be too pat, or need a little fleshing out, is all. And I think it’s worth further discussion.
other nations would … retaliate with tariffs of their own
Yes, that’s what happens. That doesn’t mean the tariffs are necessarily bad. There is no such thing as “free trade” globally. Each nation will seek its own advantage – in market-distorting ways – and where tariffs might be viewed negatively nations often enact reverse tariffs: subsidization of their exports.
None of that is necessarily bad, unless you naively think “free trade” is some beautiful thing like “democracy” that will somehow make everything butterflies and rainbows. (Like some of the ‘conservatives’ of the last few decades.)
As to local production, it certainly can be cheaper to transport goods locally. But economies of scale often overwhelm the local producer. The key is understanding* that dollar costs aren’t the only costs. We often overlook this in a society rich enough to buy their way out of those other costs.
(* I think you do understand this, btw. Others might not. “You” is rhetorical throughout.)
One of the non-dollar costs is reliability. As we can see from our supply-chain impacts with Winnie The Flu, the further away your source (either raw goods OR finished products, or in-betweens), the more vulnerable it is to disruption. If you can get your gasoline from Texas, out of wells in Colorado, that’s going to be less vulnerable to lots of risks than getting it from Saudi Arabia. (And, look at Iran – lots of raw petroleum, but they have to ship it all off to be refined elsewhere, to be shipped back to power things. That’s just dumb.)
All of this involves trade-offs, of course – which is … economics. 🙂
BTW, a potential risk to “going local” is some local disaster. A hurricane devastates the local manufacturing. An e. coli outbreak hammers the local farms. A fruit blight hits the local orchards. One of the huge advantages to distance trade is the ability to flex when that happens locally.
I think Jessica has some definite weaknesses in her position, but there’s also some wisdom buried in some of her remarks. Local can be very good. Global reach can be very good. There are risks to both, as well.
LikeLike
Actually, economically speaking they pretty much are. People play “but what if the other guy…” thinking that if they institute a tariff in response they are “leveling the playing field.” they’re not. A tariff doesn’t hurt the other guy and help yours. It hurts both sides. It raises prices on the receiving and and reduces markets on the selling end. A retaliatory tariff simply increases the damage done to both sides.
The same principle applies to other market distortions. They tend to harm the folk imposing them as well as the folk against whom they are imposed. Returning the favor doesn’t alleviate the harm, it increases it.
It is, simply put, economically better to engage in free trade even if the other guy does not. It’s true often enough for the exceptions to be “black swan” events.
Now, there are valid reasons for tariffs and other trade restrictions, but they are not economic reasons. In some cases the threat of tariffs can get the other guy to lift his own. That requires a good judge of how vulnerable the other guy is to the threat and a good poker face. That, for instance, appears to have been how Trump has been using it with considerable success. National defense is another–retaining critical industries against war or other crisis (as we’re seeing with health care supplies now). That one, however, needs a pretty jaded eye because people stretch it to cover whatever industry they’re personally interested in.
If people want to make the case for such restrictions, I really wish they’d be honest about it. “Yes, it will cause harm, including the harm to lives and livelihoods that economic harm causes, but the matter is important enough to justify that.” Don’t blow smoke up my ass about how it will be good economically.
LikeLike
Overpopulation is another manufactured “crisis” along with climate change. There is no “bright side” to the death of thousands, if not millions of people from any cause. The entire population of the world would fit in Texas with the same population density of New York City.
LikeLiked by 1 person
I’ve heard that before, but I’m not so sure I believe it. If there weren’t so many idiots doing stupid shit, and if people didn’t crowd together in overpacked cities and urban area, and if everyone minimised waste and so on, then theoretically, you’d probably be right and this planet could indeed sustain our global population and then some. But not if we continue on as we have. I don’t know how much oil there is or how long it will last, but I’m sure someone will always come along to find an alternative to any possible energy shortages, or other resource shortages, but that won’t solve the problem of pollution and habitat destruction, for example.
LikeLike
The thing is, people crowding together in urban areas is not a problem of “overpopulation.” People crowded together in urban areas since at least Roman times, when the total population of the world was only about 300 million (less than 1/20 of today’s claimed population). It’s a variation on the fallacy of composition–that which applies to the part is presumed to apply to the whole.
The question you should ask yourself, however, is why people choose to live in such situations. LIke with the sweat shops, nobody’s rounding them up at gunpoint and forcing them to live in squalid conditions. I know it’s convenient, and generally very self-justifying, to simply assume they’re stupid, but try to get beyond that. Figure out why it’s a rational decision (not necessarily a “smart” or “well-informed” decision, but rational given the knowledge and experience available to them) for them to choose so.
LikeLike
In fact, moving a majority of people into high density urban areas has been a long standing goal of the environmental types for generations.
Just think of all the scorn leveled against ‘Lockstep Levittown” or “Little Pink Houses” or “McMansions”, et al.
Look at all the decades of praise that the architectural establishment & city planners have had for ‘communal living spaces’.
LikeLike
It isn’t a cold.
It’s much more along the lines of malaria, pertussis, or mumps.
At best available current information (which admittedly isn’t very good) it’ll kill about 1% outright, permanently harm another 5%, knock >50% out of the workforce for a month, and overwhelm the medical system–leaving inadequate care available for others who will face death, permanent harm, and lost man-hours as a result.
.
At some point, the treatment may well become worse than the disease.
But we’re not there yet.
And with Trump making the call, I doubt we’ll reach that point at a national level.
LikeLike
“Isn’t very good” is remarkable understatement for “wildly and horribly inaccurate.”
If it were anywhere near the level it’s touted as there are questions that come to mind:
Why aren’t the homeless dying in droves?
Why, out of 290 people tested in the Grand Princess liner, with “isolation” that was a joke (crew eating together and continuing to interact with passengers–bluntly everyone on that ship was exposed) did only 21 people become ill? And when I figured less than 10% of those exposed got sick I only counted those who are tested and yet, it was 21 out of the entire passengers and crew so, more like 3%.
Why did mortality for “flu like illnesses” start dropping before all the “social distancing”, “shutdowns”, and “shelter in place” restrictions went into place?
On that note, since it looks very much like this was actually out in November, if not October, before any travel restrictions went into place (and, indeed, before Trump even made the suggestion of restricting travel from China, which suggestion was ridiculed), for that matter before China even admitted it was out there, why wasn’t there a spike in increased deaths from “flu-like illnesses”. See above: deaths from flu-like-illnesses were falling, and have continued to fall. (Fewer people dying from pneumonia–the primary killer in both the flu and CV19–and fewer people dying from “all cause” starting in about mid February. https://accordingtohoyt.com/2020/03/27/covid-19-and-us-mortality-by-i-ratel/ )
How many of the folk listed as “coronavirus deaths” had co-morbidities and likely would have died anyway? There’s a tendency (the Italians are guilty of it) of attributing any death, no matter the cause, to Winnie the Flu if the person tested positive for it.
Some things to consider about that so-called “best available current information.”
See that above about “the Italians are guilty of it” There’s a tendency to conflate anything, no matter what the co-morbidities, as a “coronavirus death” if the person tested positive. And China? China lies. China lies for political purposes. China lies to save face. China lies because they can. China lies when the truth would serve. Whatever China says, the way to bet is that reality is something different. And if it’s in their interest, you can lay pretty long odds on that bet.
The thing is, it has been out for months and we didn’t even notice, just a lingering cough that was going around (my doctor commented on it when when my daughter and I came down sequentially with it back in January, before the first reported case (i.e. the first case where it was present and someone thought to look for it).
LikeLiked by 1 person
The interesting thing will be when the antibody test become available, and if they start testing on a wide scale.
LikeLike
Well, that pretty much sums up my thoughts as well. Actually, a lot of people around here, my family included have had persistent coughs that set in around January. We’re better now, but it was a long, hard cold season.
LikeLike
It’s enough to make a man take off his hat, throw it on the ground, and stomp on it.
Damn, that’s mad. (Never, ever abuse your hat.)
People don’t make the connection to the the faltering economy
I disagree. Some people see that connection and constantly harp on it. They talk about how poverty kills all the time.
Until something like this comes along, and they suddenly pivot to some other, more immediate reason to redistribute everything or control the lives of producers.
money … is people’s lives
I would say rather it is an indicator of the success of their lives (one aspect, anyway).
But, yes, the people who are so willing to SHUT IT ALL DOWN! are those for whom there is no insecurity when it’s all shut down. They’re either gov’t workers (who are still being paid! – unlike a gov’t budget shutdown), “knowledge workers” who can work from home (and are likely middle class and have comfortable homes with decent internet), or celebrities (rich). For all the people who struggle to pay their bills or are on the edge of debt or work multiple small jobs to keep it all together, they’re a bit more aware of just how fragile our civilization is.
LikeLike
Yes, some people do. Or rather persons do. “A person is smart. People are dumb, panicky animals and you know it.” People, in general, do not.
LikeLike
How’s this for dismal?
What brought us out of the Great Depression was WWII. Not for the reasons usually given in middle school history class.
It’s because the war imposed two things that aided the financial recovery:
Strict austerity – low wages (GIs) and insistence on living on them
and
Significant reduction of the young work force due to the deaths of the war.
We’re getting austerity. Are we forced to cheer for more deaths from the virus?
LikeLike
Actually, the big one was the rest of the world was bombed into oblivion leaving the US pretty much the only industrial power left. Of course our economy boomed in those circumstances. The world economy, OTOH, would likely have been better off without the wary.
The thing is, we’ve been told we need to “do something” for every big recession/financial panic since 1907. However it is far from clear that the “somethings” generally done actually help matters. Indeed, when Reagan, despite strong pressure to “do something” basically sat on his hands after a “black monday” that was comparable to the “Black Thursday” crash of 1929. The result was one of the swifter recoveries we’ve had.
There’s very little bad that can happen in a market economy that government can’t (and usually will) make worse.
LikeLike
One often overlooked and untaught thing about the WWII US is that the USA alone did NOT become a centrally planned, centrally organized economy.
Truth is, the free market was allowed (in spite of the best efforts of New Deal Democrats & military bureaucracy) to function, and even make a profit.
A lot of essential war winning items- Higgins boats, Kaiser’s Liberty ships and the yards to build them, the P-51 Mustang, even the idea of welding the hulls of tanks- all originated from private industry.
And this meant that the post-WWII US was not crippled and hamstrung in the same way as the Brits.
LikeLike
There’s so much truth in your article, and I really enjoyed your clarifications about when a tariff might be useful (even though it will never NOT raise the price of goods and services). I’m definitely going to look up the books you recommended.
I believe that my wife has been getting irritated with me because the past several years now, when the media is whipping up the latest end-of-the-world crisis or people are acting in their usual patently stupid fashion, my typical reply has become, “Well, when enough people die, maybe the rest of society will learn something about [INSERT CRISIS-DU-JOUR HERE].” After having an argument with a relative years ago in which he actually asserted that the ACA would outlaw preexisting conditions; tie the coverage of cadillac plans to the coverage of the cheapest plans; lower the workweek hours at which point employer healthcare was mandated; and increase the amount of regulations that employers, insurers, and healthcare workers would have to comply with; ALL WITHOUT INCREASING OVERHEAD FOR BUSINESSES, I quit trying to argue economics with people. The vast majority are too damned stupid if they fall for that kind of propaganda. I understand your frustration, if only a little.
LikeLike
I freely confess myself to reflexively shrinking from the complexities of the “dismal science.” Does anyone truly, completely understand it? I have grave doubts.
Still, it should be possible to successfully explain simple ideas to most people. I’ll dash off a quick example: “If this man doesn’t go to work, he produces no rope. Without rope, old fishing nets cannot be repaired as they wear out. No new fishing nets can be manufactured either. Fewer fish arrive at supermarkets, restaurants, and other places. Eventually, the people who want to eat fish will start offering the fishermen more than than you for the same fish. They want it worse than you. If you offer more money in turn, then you’ll get into a bidding war. Whoever has the most money will get the fish. If you have less money than others, well, sucks to be you. How do you feel now about shutting down rope factories? What about the people who produce engines for fishing boats? What about the people who produce all the little parts that go into those engines for building new engines or keeping the old engines working? Should their companies be shut down as well?”
I really want to see a raft of mini-movies produced that visually show these and related ideas. Sad-faced men and women sitting at home with empty wallets and purses because they have no work. No matter how many times they look, their wallets and purses are still empty. Fishermen cursing as fish escape their tattered nets and their engines sputter into silence. Red-faced shoppers frantically bidding against each other for a shrinking pool of fish, possibly trampling granny to the floor in a near-riot of desperation. You know.
LikeLike
Of course not. But then, name the science, any science, that anyone truly, completely understands.
I am a big, big fan of Sowell’s books Basic Economics, Applied Economics, and Economic Facts and Fallacies. They’re substantial volumes but they go into the fundamentals in some depth (while avoiding math and graphs, relying instead on real-world examples) and provide a good grounding to be able to discuss the issue as issues come up.
As for mini-movies, they’re out there. One example (which I like because so many bad policies come form the bad economics it refutes):
LikeLike
And while it’s possible to have a vague idea of how the whole thing works, it’s just too big to be controlled.
Especially for those who’s idea of how it works is based on a 19th century pseudoscientific cargo cult.
LikeLike
While still thinking that the mini-movie you linked could have been done better — in a considerably longer form, I think, with production techniques common to modern dramas — it’s nonetheless nicely done within its limitations. It clearly made the central point that spending money on one good or service necessarily means not spending it on something else that might have been of more objective or even subjective value. And when the government steps in with all its gross inefficiencies and hidden overhead, then you’ve got widespread, subtle destruction of potential wealth that relentlessly compounds itself over the years and centuries. Thinking too hard on that last bit might lead to dark thoughts about other uses for rope. -_-
Honestly, the thought that some people actually believe that killing people and breaking things on a massive scale somehow adds to real wealth makes me throw up in my mouth a bit. While some wars may be necessary and unavoidable, they’re still horrible, utterly sorrowful affairs that approach Hell on earth. o_o
Furthermore, the equipment itself for waging war is inherently non-wealth — mind you, not anti-wealth because it presumably helps preserves actual wealth against thugs who might otherwise get ideas. Every guided missile, every main battle tank, every fragmentation grenade in the arsenal represents that much less available wealth for curing patients or building bridges and hospitals. Do we have an optimal balance between deterring foreign thugs and taking care of the national non-military needs that legitimately fall within the purview of the federal government? My admittedly enormous ego isn’t quite so puffed up that I feel myself qualified to answer that question.
In any case, thank you for the referrals to the books you mentioned. I’ve put them on my list of essential reading. The last economics book I bothered to read in its entirety was Freakonomics. Boy, was that ever an eye-opener. Roofs on passenger train cars, indeed. O_O
LikeLike