In this post by David Henderson on Samuelson’s passing, a commenter, gnat, says:

In “Animal Spirits” Akeroff quotes Samuelson as saying that Friedman had a point but often overstated it like a boy who learned how to spell the word banana but did not know where to stop.

I remember a similar quote attributed to Solow, referring to Friedman’s obsession with the money supply, that he (Solow) liked sex but he didn’t talk about it all the time. Or something like that.

I think Samuelson and Solow doth joke too much. There is a jeering, disdainful, immature element in both of those “jokes.” I wonder if Friedman was deeply discomfiting to them. He was a relentless critic of what underpinned their worldviews. He remade the profession in his own image and helped make “use markets” the default, at least for a while. He created what Dan Klein calls the “presumption of liberty.” Their lack of respect for someone who had been in the intellectual wilderness and who triumphed by virtue of his scholarship and his passion speaks volumes.

UPDATE: Pingry points out in the comments the correct Solow story:

Milton Friedman presented a paper at a conference, after which Robert Solow commented: “Another difference between Milton and myself is that everything reminds Milton of the money supply; well, everything reminds me of sex, but I try to keep it out of my papers.”

My friend Greg Rehmke just alerted me to this mid-November report appearing in the New York Times on ‘green energy.’  Note especially this passage:

The low sign-up rate [for 'green energy' programs] raises a question: If large majorities of Americans favor increased government support for clean energy, as polls suggest, why are so many people reluctant to back such programs when it comes to paying extra themselves?

There is, of course, absolutely no mystery here.  Words are cheap.  Fantasizing is free.  Proclamations are abundant because proclaiming can be done at virtually no cost.

Polls permit each polled person to express his or her “wants” free of charge.

And what is an election if not a poll?  No one voter bears any personal, material consequence of voting one way rather than another (or rather than not voting at all).

Note that I am not saying that the results of each election do not impact each voter (and each non-voter) materially.  Clearly, elections do have material impacts on voters and non-voters alike.  But at the relevant moment of decision — in the voting booth, when deciding whether to vote for candidate Jones or candidate Smith, or choosing whether to vote for or against that proposed new tax or that proposal to legalize medical marijuana — each voter gets to express his or her “want” or opinion without material consequence.

This important point bears repeating: Because no one voter’s vote will determine the outcome of the election, what will happen to any given voter as a result of the election will happen to that voter regardless of how, or whether or not, that voter votes.  So from the perspective of each voter — the decision-maker in the voting booth — he or she gets to express his or her desires and opinions free of charge, utterly without material consequence.

When we get to act without material consequences, there is no need to think clearly or to behave prudently.  We can each be, as Bryan Caplan puts it, “rationally irrational.”  That is, it’s rational to be irrational if the costs of behaving irrationally are near-zero and if we get some personal benefit from behaving in that way.  (The benefit could be in the form of feeling good about having expressed a certain viewpoint, or in the form of simply avoiding the cost — the requisite mental burden and time — of thinking seriously about the issues at hand.)

The above few paragraphs explain one of the several reasons for rejecting the myth that elections reveal in any sufficiently meaningful way “the will of the people.”

This essay of mine from the mid-1990s takes another stab at this explanation; it’s entitled “The Market: The Only Trustworthy Pollster.”

Bryan Caplan dismisses Hayek’s contributions as flabby:

I’ve long since lost all patience with Hayek.  His original, true ideas could have been five good blog posts, his errors and bizarre obsessions are numerous, and his writing style insults every person who ever tried to write a decent sentence.

Five blog posts, huh? I guess that’s something like saying Coase only wrote a few good articles. Or only had a few good ideas.

Over the last six years or so, since coming to George Mason and in the last three years since conducting a weekly podcast, I’ve been thinking a great deal about the following ideas:

1. Some orderly things are not intended by anyone.

2. The division of labor is limited by the extent of the market.

3. It is easy to fall prey to confirmation bias.

4. Politicians respond to incentives.

These are pretty simple ideas. When you give people the one sentence version or paragraph version they nod and tell you they agree with the essence of the idea. But I find these ideas to be quite deep. They are easy to understand but very difficult to absorb. The more I think about them, the deeper is my understanding. I give Hayek credit for number 1 on the list. He didn’t invent the idea. But he made me think about it the most.

My advice for Bryan is to have more patience.

Dan Klein’s view is here.

Dear Mr. Schieffer:

Interviewed on Friday by WTOP radio, you observed that “none of the senators really knows what’s in the health-care bill they’re debating.”  You then excused this ignorance by noting that “the problem they’re tackling is very complicated.”

While you’re correct that trying to engineer an industry that’s one-sixth the size of the U.S. economy is indeed very complicated, such complexity – far from excusing Congress’s ignorance – should be Exhibit A in a criminal indictment of Congress and the White House.  Our world is full of complexities that defy human engineering.  Can Congress engineer winter snow away from Minnesota or summer hurricanes away from the Gulf Coast?  Of course not, and any attempts Congress might make to do so would be seen immediately to be hubris of the highest and most hazardous sort.

Attempts to consciously re-design the health-care industry are equally hubristic and hazardous.  That industry is one of billions of unique, often personal, relationships, each of which is part of countless long chains of efforts to transform raw materials and human effort into life-improving and life-saving drugs and treatments.  Like weather, these long chains of human relationships weren’t designed by anyone.  Like weather, they change and evolve.  And like weather, their all-important details are beyond the comprehension of would-be re-designers.  These long chains of human relationships cannot be undone and reassembled at will by politicians and ‘experts’ without risking enormous unintended catastrophe.

Want proof?  Look no further than your own lament that the very ‘engineers’ – the members of Congress – who are now attempting to redesign the details of the health-care industry cannot as much as read and grasp all of the words on the bill that they’re debating.

If an engineer can’t read and understand even his own blueprint, why should we trust him to understand the vastly more complex reality that his blueprint allegedly represents?  And, more importantly, why should we trust that engineer with the task of redesigning that reality?

Sincerely,
Donald J. Boudreaux

I would love to be able to spin some morality tale from this story of the success (so far!) during the 2009 season of the New Orleans Saints.  I would love to be able to write a poem, or a pedestrian blog-post, or a newspaper column, about how the (so far!) 13-0 2009 Saints epitomize [fill in the blank].

But I can’t.  The Saints are a professional football team, period.

They are, however, a football team whose colors and symbol — the fleur de lis — I have followed faithfully since, as a nine-year-old native New Orleanian, the expansion 1967 Saints first professionally kicked the pigskin in Tulane Stadium.

My father (who died this past April) took my brother Ryan and me to the very first Saints’ regular-season game — against the Los Angeles Rams.  Tulane Stadium, Sept. 1967.  I vividly remember sitting in the south end-zone of Tulane Stadium watching, cheering, as the Saints’ John Gilliam returned the opening kick-off for a touchdown.  I remember also that the Saints lost that game.  And lost so, so many others in the 42 years since.

Yet I continued to follow the Saints.  (How irrational, how inexplicable, is that?!)  And this year finds the Saints, for the first time in their history, finally among the elite teams in the N.F.L.!

Embarrassingly I confess that I’m obsessed.  Every Sunday, I can do nothing — no work, nothing — during the Saints’ game, because I’m glued to either the t.v. or to the Internet as I follow the Saints’ every play.

None of the above means anything.  53 incredibly wealthy athletes are playing for more wealth and more fame than I can even conceive of.  They don’t know me; I don’t know them….. And yet, I am deliriously happy that, finally, my beloved New Orleans Saints are a force to be reckoned with in the N.F.L.!!!

Geaux Saints!!

Paul Samuelson has died.  (HT Chris Meisenzahl)

The 2010 meetings of the Association of Private Enterprise Education (APEE) will be held April 11-13 in Las Vegas.  And the following announcement was sent to me by e-mail:

APEE has received a grant to help young faculty and graduate students attend our annual meeting April 11-13, 2010 in Las Vegas, Nevada. These funds are designed to encourage younger scholars to consider the advantages of APEE membership.

Successful applicants will have their registration fees reduced to $75 (normally $390) and be eligible for a stipend of up to $595 toward travel expenses. To apply applicants must supply us with the following: (1) a short essay (250-300 words) explaining why the applicant wishes to attend the meeting; (2) a short letter of reference, preferably from an APEE member or someone known to APEE, indicating why support should be provided to the nominee, and (3) a brief letter from the applicant’s department chair or graduate director indicating the level of departmental support that the applicant can expect for this trip. Some of the applicants may be on the program and preference will be given to these applications. The deadline for applying is January 30, 2010. Those selected will be notified within two weeks of that date. Successful applicants will be required to register for the conference (at the reduced rate of $75) by February 28, 2010.

Please send applications to Dr. E.F. Stephenson at efstephenson@berry.edu.  If you have questions, you may e-mail Dr. Stephenson or call him at (706) 238-7878.

This great letter in today’s Wall Street Journal makes an important point:

Reducing the Fed’s role to just guaranteeing the convertibility of dollars into some preset collateral is a step in the right direction as it eliminates the Fed’s discretion, effectively ending its disastrous role as the monetary central planner. Even better would be to end any government involvement in setting the standard for what money should be.

Money is just another good, and as such it can and should be provided by the market. Like any other product, only the free market, with producers vigorously competing and absent any government monopoly, can best discover what form a monetary standard should be and improve on it for the future.

Bob Gelfond

New York

Here’s a letter that I sent this morning to the St. Petersburg Times:

Former Miami Herald employee Robert Steinback, pleading for greater government control of health-care markets, writes: “I don’t understand people who fear government bureaucrats – who have no profit motive and ultimately must answer to the people – yet feel fully at ease with corporate bureaucrats whose sole interest is the bottom line and answer only to shareholders” (”Matter of life, death,” Dec. 9).

I wonder how Mr. Steinback would reply to a proposal that newspapers be run, not by profit-seeking owners, but by government bureaucrats.  If he means what he says in your pages, then his reply would go something like this: “Wonderful idea!  Privately owned and operated newspapers are run solely to maximize the bottom line, so the public gets screwed.  But with government bureaucrats running newspapers, reporting and all other newspaper operations will surely improve.  Because government bureaucrats are unconcerned with profits and ultimately must answer to the people, we can be confident that newspaper operations will be efficient and unfailing serve the public.”

Now, if Mr. Steinback would reply differently – that is, if he would object to government operation of newspapers – I then wonder what has become of his inability to understand those of us who distrust government bureaucrats.

Sincerely,
Donald J. Boudreaux

Here’s my most-recent column in the Pittsburgh Tribune-Review.  In it, I expand on the idea that people want, not opportunities to toil, but opportunities to earn income for themselves — and that, in a prosperous economy, nearly all such opportunities entail producing value for others.

I close my column this way:

Substituting “value-producing opportunity” [for "job"] would also help expose the flaws in policies such as protectionism and government make-work programs. Such policies can indeed transfer wealth from society at large to people whose jobs exist only because government relieves them of the need to participate fairly in the market process. But such “jobs” clearly are not “value-producing opportunities” — for the amount of value that such workers produce is less than they are paid.

And no society can long survive by institutionalizing such unproductive policies on a widespread scale.

Norris (a self-described “regular patron of Cafe Hayek”) asked me to repost an entry that I did back in October of 2004 on magic.  Here it is:

Magic
by DON BOUDREAUX on OCTOBER 12, 2004
in MYTHS AND FALLACIES
My son, Thomas, loves Halloween so much that he launches his spooky celebrations in August. And just this past week, he and his mother and I watched a series of made-for-the-Disney-Channel-movies, all boasting the name Halloweentown. The main characters are friendly witches from magical Halloweentown living in the mortal world. These flicks are sort of a combination of Bewitched and Harry Potter. (If you’re above the age of nine, I don’t recommend watching these movies unless you have a young child; watching your child watch these movies is wonderful.)

The friendly witches perform a good deal of magic in the mortal world, such as flying and snapping fingers to summon tea kettles.

What struck me as I watched these movies was that a good deal of the Hollywood magic these Halloweentown witches perform is surprisingly part of ordinary Americans’ everyday world. Not truly magically, of course – it’s due to science and markets – but it’s nevertheless marvelous and amazing and wonderful.

We gently press a button and the sound of a Bach concerto recorded a decade or a half-century ago fills our room as if it were being performed live, then and there. We turn a knob and out comes a jet of clean water for us to shower in, at whatever temperature we choose. We crawl into giant hunks of metal and plastic, filled with highly explosive liquids, press a few pedals and we’re traveling down highways at superhuman — even super-equine — speeds. We hold tiny devices in our palms, press some more buttons, and we’re talking to other human beings who are miles, maybe thousands of miles, away from us. We flick switches and lights turn on or off at our whim. I could go on and on and on…… (For more, see my 1999 essay “Countless Wonders.”)

There’s an irony in this fact: the more deeply and widely that people believe in magic, the less magical are their lives, while the more fully people untangle themselves from belief in myths and magic, the more magical their lives become.

That is, the many marvels of our world – proximately the consequence of technology, ultimately the consequence of free markets and rational thought – are possible only insofar as we no longer really believe in magic. We don’t pray to, or dance for, rain gods; we use our minds and machines to irrigate fields. Most of us don’t depend upon unseen, other-worldly forces to maintain our health and extend our life spans; we rely upon medical science. If we want to extend our knowledge, we read books or watch educational television programs; we don’t study tea leaves or gopher entrails.

But one serious species of belief in magic continues to haunt us: politics. Many of us – indeed, most of us – believe that high priests who utter or write certain words according to treasured ceremonial prescriptions and done in certain temples (usually made of marble and topped with domes) can perform magic.

They can’t. But they try and try – and too many of us simply have faith that their rituals are effective.

Here’s a letter that I sent yesterday to the New York Times:

Thomas Friedman writes: “If we prepare for climate change by building a clean-power economy, but climate change turns out to be a hoax, what would be the result? … [G]radually we would be driving battery-powered electric cars and powering more and more of our homes and factories with wind, solar, nuclear and second-generation biofuels.  We would be much less dependent on oil dictators who have drawn a bull’s-eye on our backs; our trade deficit would improve; the dollar would strengthen; and the air we breathe would be cleaner.  In short, as a country, we would be stronger, more innovative and more energy independent” (”Going Cheney on Climate,” Dec. 9).

Lovely.

Lovely, that is, until one asks: compared to what?  From where do all the resources come that produce these wonderful benefits that Mr. Friedman foresees?  How can Mr. Friedman be so sure that the benefits of windmills, solar panels, and battery-powered electric cars will exceed the costs of making – will exceed in value that which must be foregone to make – these green fetishes a reality?

Of course, he cannot be sure.  Not even close.  Like so many other pundits, Mr. Friedman simply ignores, or arbitrarily discounts, the costs of turning his oh-so-lovely daydreams into quotidian actuality.

Sincerely,
Donald J. Boudreaux

Here’s a letter that I sent yesterday to Judy Woodruff at PBS:

Ms. Judy Woodruff
PBS Newshour

Dear Ms. Woodruff:

I enjoyed your interview yesterday with Bruce Bartlett and Paul Krugman.  But I wonder if you’re as baffled by Prof. Krugman as I am.

On one hand, Krugman’s voice is America’s most prestigious, loud, and insistent one for concentrating greater power in Washington.  On the other hand, he is forever complaining that Uncle Sam is a tool of destructive special-interest groups or is under the influence of stupid ideas (or both).  Of course, his distrust of Republicans is as well-known as it is justified.  But from your interview we learn that Krugman believes also that today’s overwhelmingly Democratic Congress is, in his words, “extremely dysfunctional.”

I’d like to ask Prof. Krugman why he’s so keen to entrust vastly more resources and power to an agency that, even when controlled by the political party that shares his values and worldview, is “extremely dysfunctional.”  Why is he optimistic that an entity that can, and does, so easily malfunction will nevertheless – when vested with greater power – work selflessly and smartly to improve the lives of ordinary Americans?

Sincerely,
Donald J. Boudreaux

I’ll be testifying before the Joint Economic Committee tomorrow (Thursday) at 10 am eastern time. I’ll be alongside Joseph Stiglitz talking about job creation in the recession. Should be fun. You can watch it live here, starting at 10 am.

This evening while shopping at Target I noticed that, in a single trip out to the parking lot, one (teenage) employee manages to round up and return to the entry-way of the store a quantity of shopping carts that, when I was working such jobs 30-plus years ago, required the concerted efforts of at least two employees.

Today’s employee is assisted in his or her efforts by this nifty piece of capital equipment.

This mechanical device — the name of which I do not know — pushes the shopping carts from behind as the employee effortlessly guides them into place within the store.

It’s especially important for those persons who support minimum-wage legislation to realize that employers can almost always, at the margin, substitute away from human labor and toward mechanized or electronic “labor” — that is, capital.  Mythical indeed is the notion that employers must hire a given, or minimum, number of low-skilled workers.  As the cost of hiring such workers rises, employers have greater incentives to substitute away from employing such workers.

This machine whose operation I witnessed today at Target testifies to the futility of minimum-wage legislation to improve the lot of most low-skilled workers.

Is there no aspect of our lives that Congress will not nose in to?  (HT Reuvain Borchardt)

Words fail me when trying to describe the disgust I feel for the obnoxious, officious, opportunistic, unprincipled, lying (Do they really mean their oaths to uphold the U.S. Constitution?), arrogant, imperious, and duplicitous creeps who are in Congress.

They are utterly and without question worthy only of ridicule and disrespect.

Here’s a letter that I sent today to the Wall Street Journal:

Andrew Roberts’s review of Robert Sullivan’s biography of Thomas Babington Macaulay splendidly exposes the blinding biases that Sullivan brings to Lord Macaulay and his times (”An Eminent Victorian on Trial,” Dec. 7).  Persons interested in Macaulay should avoid Sullivan’s screed and instead study John Clive’s masterful 1973 biography, Macaulay: The Shaping of the Historian.  Although Clive, like Sullivan, indulges in too much psychoanalysis for my taste, he paints a rich and compelling portrait of Macaulay.  This portrait reveals Macaulay to have been, if flawed, a truly great and good man – a man whose realism and genuine liberalism would serve us well today.

Macaulay was also prescient.  Writing in the 1840s, he refused to romanticize past times when (as he described matters) “to have a clean shirt once a week was a privilege reserved for the higher class of gentry” and when “men died faster in the purest country air than now die in the most pestilential lanes.”  Macaulay foresaw that “It may well be, in the twentieth century … that numerous comforts and luxuries which are now unknown, or confined to a few, may be within the reach of every diligent and thrifty workingman.  And yet it may then be the mode to assert that the increase of wealth and the progress of science have benefited the few at the expense of the many.”*

Sincerely,
Donald J. Boudreaux

* From the chapter entitled “The Delusion of Overrating the Happiness of Our Ancestors,” in T. B. Macaulay, The History of England (1847).

Full Disclosure: my son’s name is Thomas Macaulay Boudreaux

Rob Bradley, Jr., offers some instructive history of the ubiquitous itch of many people to scare up fears about the environment.

This video shows the carbon-concerned saviors arriving at the Copenhagen meetings.  (HT Frayda Levy)

Here’s an e-mail that John Stossel sent to lots of folks.  It’s self-explanatory — and contains great news!

It’s finally here – my new Fox Business show!  Fox fittingly has titled it, Stossel.  It premieres Thursday at 8 p.m.  It will repeat Fridays at 10 p.m., where I’ll be up against my old program, 20/20.

FBN has given me an opportunity to do 44 TV shows on what I am passionate about: economic liberty.  For my first shows, at least, I will experiment with a studio audience. I’m inviting both friends, and people who will scream at me and tell me free markets are evil.  If you are in the New York area and you’d like to join an audience on 48th and 6th Avenue, please e-mail me at stosseltix@foxnews.com.

My first show, Thursday Dec. 10, will be on Ayn Rand’s novel Atlas Shrugged or on Global Warming.  Then I’ll do one on health care.

I hope you will watch and tell me what I’m doing wrong.  Or right.

Unfortunately, some of you don’t get Fox Business News on your Cable system.  Please call your cable company and tell them you won’t pay your bill until they offer FBN!

Best,

John Stossel