Posts tagged with: Don Boudreaux

Blog author: ehilton
posted by on Friday, August 30, 2013

global handsAs we approach Labor Day here in the U.S., it’s good to ponder “work”, that most ordinary feat nearly all of us perform every day. We get up, get dressed, and do our jobs. It’s quite simple…and quite amazing. There is a lovely reflection on this from Don Boudreaux at Cafe Hayek:

Ponder this astonishing fact: Each and every thing that we consume today in market societies is something that requires the coordinated efforts of millions of people, yet each of us is able to command possession and use of these things in exchange for only a small fraction of our work time.

Why aren’t more people blown away with the pure splendor and marvelousness of it all?!


oil-field-workerIf the PowerBlog has a favorite atheist libertarian economist, it’s probably George Mason professor Don Boudreaux. Although he isn’t a believer, he sometimes stumbles upon what I would consider to be Christian insights. Consider, for instance, his take on the term “natural resources”:

In nearly all contexts, words and phrases inevitably convey not only information (such as, as Deirdre would say, “telephone numbers”), but also ideas – notions – interpretations – perspectives – biases – prejudices – spins -approval or disapproval – informal theories – attitudes and judgments – unconscious conclusions. And much of all this that is conveyed by our words and phrases goes unnoticed. This fact is neither good nor bad; it’s simply part of the human condition.

Take the term “natural resources” … This phrase suggests that some things of value to human beings occur naturally – without any human effort or creativity. But that suggestion is wrong. Nothing is naturally a resource; nature alone invests nothing with resourcefulness; ultimately, resources – all resources – are created by human beings. Nature creates raw materials, but never creates resources. Raw materials and human artifacts are made into resources only if, and only when, and only insofar as, human creativity figures out a way (or ways) to employ those materials and artifacts in ways that satisfy genuine human desires.

The point, here, is that the term “natural resources” can be misleading about the role of nature in creating human bounty. Nature exists, to be sure; but human bounty is created by human creativity; nature in matters economic is not the prime mover. Nature’s role in determining who is and who isn’t materially wealthy is much smaller than we are sometimes led to believe when focusing on “natural resources.”

Here’s why I think this is a biblical insight.

Don Boudreaux  and Mark J. Perry at Cafe Hayek are here to tell you: life in the 1950s for America’s middle class is not the wonderland we might like to think.

A favorite “progressive” trope is that America’s middle class has stagnated economically since the 1970s. One version of this claim, made by Robert Reich, President Clinton’s labor secretary, is typical: “After three decades of flat wages during which almost all the gains of growth have gone to the very top,” he wrote in 2010, “the middle class no longer has the buying power to keep the economy going.”

This trope is spectacularly wrong.

They point out that 60 years ago, the average middle-class home spent over 50% of its disposable income on food, utilities, rent/mortgage, etc. Today, that figure is closer to 30%. To prove the point that we don’t have a stagnant middle class stuck in some sort of economic time warp, Boudreaux has started a fun series, using commercials from the ’50s, ’60s, and ’70s to remind us where we were and where our memories may be leading us astray. Like many of us, Boudreaux learned to type on an electric typewriter. It was state-of-art, the best of the best. Do you want to swap your iPad for it?

You can check out the second of this series here.

Hurricanes almost always leave two things in their aftermath: broken windows and articles advocating the broken window fallacy.

As economist Don Boudreaux wrote earlier today, “Americans will soon be flooded by commentary that assures us that the silver lining around the destruction caused by hurricane Sandy is a stronger economy. Such nonsense always follows natural disasters.” The only detail Boudreaux gets wrong is that such nonsense has preceded the actual disaster. The Atlantic, wanting to get a jump on being wrong, published an article today at noon arguing that Hurricane Sandy will “stimulate the economy” in two ways:

First, the threat of a dangerous event pulls economic activity forward. Families stock up on extra food and supplies to prepare for a disaster. Second, and much more significantly, the aftermath of storms requires “replacement costs” that raise economic activity by forcing business and government to rebuild after a destructive event.

Frederic Bastiat provided the ultimate rebuttal to this spurious thinking 162 years ago in his essay ‘That Which is Seen, and That Which is Not Seen.’ So why do we people make the same claim that destruction is economically beneficial? Could it be that people are simply unaware of Bastiat’s “parable of the broken window”?

Back in August economist Bryan Caplan asked why the one group that should be familiar with Bastiat’s essay—economists—don’t universally love it: