An explanation, an experiment, and a parable about Milton Friedman's Four Ways To Spend Money

Here's a chart showing Milton Friedman's famous Four Ways To Spend Money. 

Here's a 2004 interview with Friedman, in which he explains the famous Four Ways To Spend Money.  (All government spending is in that nasty bottom right quadrant, BTW.  Any project that is advertised in terms of number of "jobs created" is a waste.  I'm just sayin'....)

There are four ways to spend money. You can spend your own money on yourself. When you do that, why you really watch out for what you're doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well then, I'm not so careful about the content of the present, but I'm very careful about the cost. Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm going to have a good lunch! Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it costs, and I'm not concerned about what I get. And that's government. And that's close to 40 percent of our national income.

Here's something from MSN Money, posted about a month ago.  It's an experiment that confirms Friedman's hypothesis about the top right and bottom left quadrants of the chart.  If you're helping someone else spend their money, or they're helping you spend yours, more money will be spent, often on silliness....

You and your friends are eating out and you plan to divide the tab evenly. Now you're faced with a dilemma. Do you splurge at the expense of your friend's pocketbook, or do you eat light, knowing you're going to end up paying for your friend's lavish meal? 

This seemingly innocuous event has caused enough consternation that a group of three scientists actually performed field experiments to see how unscrupulous people really are. 

According to io9.com, the experiment went a little like this: A group of strangers gather to eat at a restaurant. The participants are each told how they will pay for their meal. Some will pay individually, some are told they will split the check, and the remaining people are told that the meal will be free. 

The diners then ordered their meals without anyone else seeing what they had chosen.

The results of the dining experience are described by io9.com:

To no one's surprise, the people who paid individually were the most frugal, the people getting the free lunch were most extravagant, and the people who split the bill were in the middle, and therefore slightly unscrupulous.

Some diners were then told that they would have to pay just one-sixth of the cost of their individual meal. There was no difference between what those diners ate compared to those who were told they had to split the bill evenly, according to io9.com.

But what happens when you're in a large group of anonymous people?  Here's something from the immortal Russ Roberts, writing waaaaay back in 1995.  This essay, called "If you're paying, I'll have Top Sirloin", has already made it into the Libertarian Literary Canon.  The entire parable is scraped and reposted here, just to make my point....

As Congress prepares to try to cut spending, I am reminded of an evening last fall at the St. Louis Repertory Theater, our local company. Before the curtain rose, the company's director appeared and encouraged us to vote against a ballot proposition to limit state taxes. He feared it would lead to reduced funding for the company.

I turned to the woman sitting next to me and asked her if she felt guilty knowing that her ticket was subsidized by some farmer in the "boot-heel" of Missouri. No, she answered, he's probably getting something, too. She seemed to be implying that somehow, it all evened out.

I left her alone, but I wanted to say, no it doesn't even out. If it "evened out" for everybody, then government spending would really be depressing: all that money shuffled around, all those people working at the IRS, all those marginal tax rates discouraging work effort just to get everybody to get the same deal.

Here in St. Louis we recently completed Metrolink, a light rail system. It cost $380 million to build. We locals contributed zero out of pocket. It was paid for by the rest of the country. Shouldn't we feel guilty making people in Kentucky, Mississippi and Maine pay for our trips to the hockey arena downtown? No, say the beneficiaries. After all, we paid for BART in San Francisco and MARTA in Atlanta and all the other extraordinarily expensive, underutilized public transportation systems whose benefits fall far short of their costs. It's only fair we get our turn at the trough.

This destructive justification reminds me of a very strange restaurant.

When you eat there, you usually spend about $6—you have a sandwich, some fries and a drink. Of course you'd also enjoy dessert and a second drink, but that costs an additional $4. The extra food isn't worth $4 to you, so you stick with the $6 meal.

Sometimes, you go to the same restaurant with three friends. The four of you are in the habit of splitting the check evenly. You realize after a while that the $4 drink and dessert will end up costing you only $1, because the total tab is split four ways. Should you order the drink and dessert? If you're a nice person, you might want to spare your friends from having to subsidize your extravagance.

Then it dawns on you that they may be ordering extras financed out of your pocket. But they're your friends. They wouldn't do that to you and you wouldn't do that to them. And if anyone tries it among the group, social pressure will keep things under control.

But now suppose the tab is split not at each table but across the 100 diners that evening across all the tables. Now adding the $4 drink and dessert costs only 4¢. Splurging is easy to justify now. In fact you won't just add a drink and dessert; you'll upgrade to the steak and add a bottle of wine. Suppose you and everyone else each orders $40 worth of food. The tab for the entire restaurant will be $4000. Divided by the 100 diners, your bill comes to $40. Here is the irony. Like my neighbor at the theater, you'll get your "fair share." The stranger at the restaurant a few tables over pays for your meal, but you also help subsidize his. It all "evens out."

But this outcome is a disaster. When you dine alone, you spend $6. The extra $34 of steak and other treats are not worth it. But in competition with the others, you've chosen a meal far out of your price range whose enjoyment falls far short of its cost.

Self-restraint goes unrewarded. If you go back to ordering your $6 meal in hopes of saving money, your tab will be close to $40 anyway unless the other 99 diners cut back also. The good citizen feels like a chump.

And so we read of the freshman Congressman who comes to Congress eager to cut pork out of the budget but in trouble back home because local projects will also come under the knife. Instead of being proud to lead the way, he is forced to fight for those projects to make sure his district gets its "fair share."

Matters get much worse when there are gluttons and drunkards at the restaurant mixing with dieters and teetotalers. The average tab might be $40, but some are eating $80 worth of food while others are stuck with a salad and an iced tea.

Those with modest appetites would like to flee the smorgasbord, but suppose it's the only restaurant in town and you are forced to eat there every night. Resentment and anger come naturally. And being the only restaurant in town, you can imagine the quality of the service.

Such a restaurant can be a happy place if the light eaters enjoy watching the gluttony of those who eat and drink with gusto. Many government programs generate a comparable wide range of support. But many do not. How many Americans other than farmers benefit from the farm subsidy programs? How many Americans other than train riders derive benefit from the Amtrak subsidy?

People who are overeating at the expense of others should be ashamed. That shame will return when others are forced to cut back too. This requires deep cuts and an end to the government smorgasbord where the few benefit at the expense of the many.

There you have it.  The original Milton Friedman theory, a real-life experiment, and a Russ Roberts parable, all illustrating why government spending is generally a disaster. 
If you want someone to do a better job of pulling all this together, go elsewhere.  This is the best I can do. 
Here are some more charts, extravagantly posted on my site for your benefit, because I downloaded them from elsewhere at no expense to myself (ahem). 

Whose picture should be on our currency?

Our currency in the U.S. (often known in the black community as "Dead Presidents") honors people who won wars.  Andrew Jackson killed a lot of Indians.  General Grant killed a lot of Confederates.  Franklin Roosevelt killed the economy. 

We should commemorate people who spread liberty and freedom. 

Don Boudreaux (who should be on a commemorative penny, at least) has come up with a list of people who we should honor on our Federal Reserve Notes and our debased coinage. 

Here's his list.  It's greatness.... !

$1 bill: George Washington.  For all of his flaws, Washington was not as mad for power as is the typical politician.  That character trait was enormously beneficial to the early American republic.

Ok.  Agreed.  They wanted him to be king, and he declined.  Although I sometimes think we would be better off with some hereditary despots who relied on promoting freed, as opposed to the current system of beauty contests. 

$2 bill: Henry Ford, for being such a pioneering and innovative producer.

I dunno.  Towards the end of his life, he became increasingly anti-immigrant, anti-Semitic, and anti-liquor, 3 concepts that I like a lot. 

$5 bill: John D. Rockefeller, Sr., for being such a pioneering and innovative producer.

He added hundreds of hours of light (via kerosene) at increasingly lower prices to the common man.  You could make the argument that Rockefeller saved the whales !!

$10 bill: Gustavus Swift, for being such a pioneering and innovative producer.

Ok.  Good choice. 

$20 bill: Norman Borlaug, for saving countless millions of people from starvation.

Excellent choice.  He developed new strains of wheat (and was harshly criticized by many on the left, because it would increase population!) and probably saved a billion (with a "b") lives. 

$50 bill: Sam Walton, for being such a pioneering and innovative retailer.

Wouldn't that make the Statists go just absolutely batshit crazy?  Sam Walton helped bring one million people per month out of bone-grinding poverty in China.  He did more than anyone in history to hold down inflation in the era of the Fed.  He's the reason the jeans I'm wearing now cost less than they did in 1977.  Here's why he deserved a Nobel !!

$100 bill: Benjamin Franklin, for his scientific achievements and his bourgeois wisdom.

Meh.  Interesting guy, but I'd rather see Calvin Coolidge (greatest president) get a spot. 

One-cent coin: Richard Sears, for being such a pioneering and innovative retailer.

Ok.  He changed the world. 

Five-cent coin: Steve Jobs, for being such a pioneering and innovative producer.

Well, he did more good than Roosevelt. 

10-cent coin: John Bogle, for inventing the indexed mutual fund.

Ok. 

25-cent coin: Milton Friedman, for teaching not only the general public, but fellow economists, economics.

HELL TO THE YES.  YES, YES, YES!!

50-cent coin: Gail Borden, for being such a pioneering and innovative producer.

Ok. 

$1 coin: Andrew Mellon, a productive financial genius

And the opposite side of the Andrew Mellon coin should show Franklin Roosevelt burning in hell.  Read Amity Shlaes great account of The Roosevelt-induced Depression "The Forgotten Man" for details of how FDR persecuted this great man. 

That's Don Boudreaux's list.  You probably have your own. 

The difference in Bill Gates and me - not much

Take George Washington's parents and put them in a time machine.  Let them hang out with Bill Gates for a week.  This is what would impress them.....

Do a mental experiment. Imagine resurrecting an ancestor from the year 1700 and showing him a typical day in the life of Bill Gates. The opulence would obviously astonish your ancestor, but a good guess is that the features of Gates’s life that would make the deepest impression are the fact that he and his family never worry about starving to death; that they bathe daily; that they have several changes of clean clothes; that they have clean and healthy teeth; that diseases such as smallpox, polio, diphtheria, tuberculosis, tetanus, and pertusis present no substantial risks; that Melinda Gates’s chances of dying during childbirth are about one-sixtieth what they would have been in 1700; that each child born to the Gateses is about 40 times more likely than a pre-industrial child to survive infancy; that the Gateses have a household refrigerator and freezer (not to mention microwave ovens, dishwashers, and televisions); that the Gateses’s work week is only five days and that the family takes several weeks of vacation each year; that the Gates children will receive well over a decade of formal schooling; that the Gateses routinely travel through the air to distant lands in a matter of hours; that they effortlessly converse with people miles or oceans away; that they can, whenever and wherever they please, listen to a Mozart string quartet, a Verdi opera, or Frank Sinatra singing of romance.
In short, what would likely most impress a visitor from the past about Bill Gates’s life are precisely those modern advantages that are not unique to Bill Gates – advantages now enjoyed by nearly all Americans.

This kind of life is America's gift to the world.  How we did it, how we grew it, seems obvious to us when we think about it.  Hell there's not that much difference, climate-wise, between the U.S. and Haiti, right? 

And we are now burdened with a political class in Washington that is doing everything possible to screw it up, counting on your jealousy of Bill Gates to give them more and more power and control. 

 

In Praise Of Planet-Warming, Highway-Congesting, Port-Clogging Shipping And Freight !!

I might stop putting original content on this site, and start scraping Don Boudreaux's and Russ Roberts' Café Hayek posts every day.  Just out of awe.  And maybe laziness. 
As long as those two are alive, I really don't have much to say about anything but dachshunds. 

Here's a recent post that Boudreaux put together about shipping and freight:

The Quotation Of The Day is from page 2 of Rose George’s 2013 Ninety Percent of Everything: Inside Shipping, The Invisible Industry That Puts Clothes On Your Back, Gas In Your Car, and Food On Your Plate:

But who looks behind a television now and sees the ship that brought it?  Who cares about the man who steered your breakfast cereal through winter storms?  How ironic that the more ships have grown in size, the less space they now take up in our imagination.

It is one of the most historically unique and amazing features of life in modern market economies: almost everything that each of us daily consumes – stuff mundane to us, such as toothpaste, laundry detergent, underwear, houses with solid floors, walls, and roofs, motor transportation, blueberries and pineapple year-round in Boston and Berlin – is stuff that no one person knows how to make.  It’s not just that you didn’t make and don’t know how to make, say, the drip-coffee maker that you used this morning to brew your cup of coffee.  No one knows how to make that coffee maker.  And nor is all of the knowledge necessary to make that coffee maker, and to get it at reasonably cost into your kitchen, available in any one place or to any one self-consciously cooperating group of minds.

Of course, there is an organization of people – working, say, for a company called Krups – in which there exists the knowledge of how to assemble various component parts – wires, metal, glass carafes, heating elements, and so on – into a coffee maker.  But Krups (as is the case with the likes of Braun, and Cuisinart, and Black & Decker) only does the final assembly (and, perhaps, had a creative idea or two for just how to assemble component parts together into an unusually good coffee maker).

But tap into all of the knowledge in all of the brains of all of the people who have ever worked for Krups and you’ll not get one one-billionth of all the knowledge that is necessary to transforms all of the materials that are ‘in’ your coffee maker from their raw stage and into the machine that now sits patiently on your kitchen counter, ready to allow you to brew more delicious coffee within minutes, with no sweat or danger, and with just a few small and minor muscle movements on your part.

     ****************************************

One day I'm going to write an illustrated post about how my employer makes products as fundamentally ridiculous as fruitstands, but showing how the process now involves people in four continents. 

I've been wanting to write this "I, Fruitstand" post for years. 

But, to Dr. Boudreaux's point, I'm around them every day. 

It doesn't fascinate me that the metal comes from Mexico just how we want it, and that the wood comes from the Appalachians and the casters from China and the plastic bumper from the Philippines, or wherever.  We take this process for granted, simply because it works. 

 

Laissez Faire - by Don Boudreaux

I have struggled, and failed, for the last 5 years to express what Don Boudreaux says here in just three paragraphs. 
Why in the hell would anyone opposed to The Religious Right or The Ultra-Secular Left want a larger, more intrusive government? 

If you are a modern “Progressive” and cannot abide the notion of conservatives, Christian or otherwise, having a say in who you sleep with and who you may marry, when and why you may get an abortion, what sorts of scientific research and artistic projects should be funded, what school curricula should and shouldn’t include, or when and why Uncle Sam goes on world-policing ventures, then why do you wish to expand the scope of government authority? Doing so in a society with a wide franchise, such as the U.S., inevitably invites those rubes to intrude their antediluvian superstitions and dogmas onto you and onto all that you hold dear and sacred.


If you are a modern conservative, Christian or otherwise, and cannot abide the notion of “Progressives” having a say in how you school your children, what your tax rates are, what size Big Gulps you may buy, or whether or not you may fill in ditches and water puddles on your land, then why do you tolerate – indeed, frequently applaud – activities such as government’s ‘war on drugs,’ Uncle Sam’s interventionist foreign policies, strict immigration restrictions, and tariffs on imports? Doing so – by creating a large and discretionary state – only encourages those obnoxious know-it-alls to use government against you and against all that you hold dear and sacred.

Here’s why I ask the above questions: every time I’m in a supermarket check-out lane and catch the headlines of the reading materials on sale there – soap-opera digests, magazines featuring Oprah and other entertainment celebrities, and the like – I literally get a bit of a queazy feeling in the pit of my stomach. It somewhat sickens me that people care who Jennifer Anniston is dating, what Oprah is eating, or why male hunk du jour just ditched female sex-goddess du jour for some other equally vacuous if va-va-va-voom!-inducing babe. I don’t wish to prevent anyone from reading about or caring deeply about these matters about which I truly couldn’t care less. But it scares me that people who read that nonsense – because they care about that nonsense - have a say in how my life is conducted. I resent the fact that such people, if only through the ballot box, have influence how government orders me about.

The more expansive is the scope of government authority, the more my life is subject to commands issued in part under the influence of people who read Us magazine.

Scary.

Not just scary.  Terrifying.  But people vote for more of it every 2 years. 

It wasn't the Rotary Club that segregated the public schools

Here are some goodies from Don Boudreaux on what would happen to Civil Rights and Civil Liberties without the heavy hand of government making us behave.

Remember: Jim Crow was legislation, not custom. PLEASE read the whole thing....

Letter to editor: Reacting to Rand Paul’s remarks about the 1964 Civil Rights Act, you say that his libertarian philosophy “is a theory of liberty with roots in America’s creation, but the succeeding centuries have shown how ineffective it was in promoting a civil society….  It was only government power that … abolished Jim Crow” (“Limits of Libertarianism,” May 22).

Don Boudreaux: You’ve got it backwards.  Jim Crow itself was government power.  Jim Crow was legislation that forced the segregation of blacks from whites.  Research shows that people acting in the free market that you apparently believe is prone to racial discrimination were remarkably reluctant to discriminate along racial lines.  It was this very reluctance – this capacity of free markets to make people colorblind – that obliged racists in the late 19th century to use government to achieve their loathsome goals.*
Had Mr. Paul’s libertarian philosophy been followed more consistently throughout American history, there would have been no need for one government statute (the Civil Rights Act) to upend earlier government statutes (Jim Crow) and the business practices that they facilitated.

Once again, hit the link up top to read the whole thing....

The ULTIMATE Chain Letter and The Invisible Hand

I found this old Russ Roberts essay while looking for something else.  It's pure, undiluted greatness. 
It's about who you trust with your stuff.....

To read more old Russ Roberts stuff, hit the Cafe Hayek and Russ Roberts labels at the bottom of this post.  And if my favorite current Troll, Mr. Invisible Backhand, shows up, I'm sure he can tell us all about the virtues of the U.S. Postal Service. 

Here's Mr. Roberts:

 The other day I had to get some important tax receipts to my accountant. He’s in St. Louis, it was getting close to April 15, and it was very important that the papers didn’t get lost. To give my accountant plenty of time, I wanted the papers to arrive the next morning.


So what did I do? My first choice was to get on a plane and deliver the letter myself. Too expensive. Too much time.

So I did the next best thing. I went down to the airport and found someone headed to St. Louis. I told her how important it was for my accountant to have my receipts by the next day. Fortunately, she seemed really nice. She said she’d be happy to help me out. I sealed up the envelope, and she promised not to open it after I left.

I guess I’m naive. I know it was foolish to trust a stranger with something so important, but she seemed very honest. She smiled a lot, but I suppose a good thief could learn to do that.

I got a little nervous when she confessed she wouldn’t be able to actually deliver the letter herself. She had a business commitment that kept her tied up the next morning. But she promised to find some other people to make the delivery. I may be naive, but I’m not a fool. That scared me. I wouldn’t be able to meet the other people who’d be helping me out. How would I know whether they were as honest as she seemed to be? Maybe I could at least talk to them on the phone?

No dice, she said, but not to worry. She’d make sure they were good people like her—people who wouldn’t open my envelope. People who wouldn’t steal my credit card numbers off the receipts. People who wouldn’t throw the package away just to avoid the hassle of delivering it. Really, it would turn out fine. Besides, she wasn’t sure in advance who would be available to help so I would just have to hope for the best.

It seemed nuts, but by now it was getting late. I had to trust her. There was no other way to get the job done. I didn’t have any other options.

I gave her some money. She didn’t object. Maybe she had done this before.

I slept like a rock that night. I’ve always thought people are basically good.

How about you? How would you have felt that night, knowing that your crucial package was in the hands of strangers, strangers you would never see and whose honesty and unreliability were unknowable?

Maybe I should have worried more. How much did I give her? A lot less than it would have cost to get the package there myself—19 bucks. That’s all she asked for. Besides, if she pulled it off and got the package to my accountant, I’d have a story I could tell for the rest of my life.

Truth is, I never gave it a second thought. I trusted that strange woman at the airport. I’d never seen her before in my life, and I’d never see her again. But I felt somehow she’d come through for me.

And she did. I called my accountant the next day, and sure enough, he had received my letter a few minutes before 10 o’clock.

A miracle? A lucky break for me? Or maybe a dangerous lesson that might cause me to rely naively on strangers in the future?

None of the above. My trust wasn’t a miracle or a lucky break. And I’m a little less naive than you might think.

That stranger I entrusted with my financial secrets was standing behind a FedEx counter wearing a FedEx uniform.

It changes everything doesn’t it? You go into a FedEx, give a stranger $19, and you can walk out without a worry in the world, knowing that your package is going to get there by 10 the next morning.

I never worried that the woman behind the counter might open the package after I left the office to see what I was sending or enjoy its contents. I didn’t worry that the man or woman who would touch the package next might open the package to see what was in it. I didn’t worry that the myriad of people who might come into contact with my package would check it out to see if there was anything in it worth stealing.

I also never worried for an instant that one of the people who would come into contact with my package might just decide it was too much trouble to deal with and throw it away.

Total strangers I would never see. What word best describes my lack of worry? Was it trust? Faith? Confidence? And what was the source of my contentment as I left my package behind?

It wasn’t trust. The chain of people who interacted with my package was long, and there was no way to interview each of them to explore if they were reliable. So how could I trust them? Never saw them. Never would. The woman behind the counter seemed like a decent enough soul. I trusted her in some sense. But it’s certainly the wrong word to describe her coworkers who brought my package safely to St. Louis. I can’t say I trusted them. I knew nothing about them.

Faith? Seems too open-ended. Faith comes from having used FedEx before and knowing that it always gets the job done. There’s a little of that. But I wasn’t even worried the first time I used FedEx.

Confidence seems like the right word. Confidence born of an understanding of how the division of labor works in a modern economy. What Hayek called the extended order of human cooperation.

You can see the miracle of the modern economy if you contrast FedEx with a different system, one where I actually find a real stranger, who seems honest, down at the gate at the airport on the way to St. Louis. Here, I say. Take this money and this package. And don’t worry if you need some help taking the package the last few miles. Take it part of the way, and give the package and some of the money to the next person on the promise that each person will keep the chain unbroken.

Who could be confident that such a gambit would succeed?

So what’s different about FedEx? On the surface, there’s no difference. I’m expecting somehow that a lot of strangers are going to come through for me and keep their promises. Yet everything is different.

When I use FedEx there are consequences of failure if the strangers let me down. There are feedback loops that reward excellence and punish dishonesty or failure. These feedback loops create accountability.

FedEx tries to hire honest, pleasant people who smile when you talk to them. They fire rude people who consistently lose packages or steal them. It honors and rewards people who do their job well. And why does FedEx try so hard? Part of the answer is reputation. But why does FedEx try so hard to keep its reputation intact? Competition is part of the answer. But there is more to it as well.

Even those feedback loops that keep the FedEx employees honest work best when people feel guilty about being thieves and slugs. Does capitalism work best when people are basically honest, or does capitalism help create the virtues that make it work well? Probably both.

The system works so well that we hardly notice it or appreciate the marvel of it. The smiling FedEx employee is always behind the desk waiting to take my package onto St. Louis. A stranger delivers my paper every morning to my driveway. I don’t even know what he or she looks like. Strangers built my car, wove my clothes, and filled the prescription for the antibiotic that cured my wife’s pneumonia this past winter. A myriad of strangers working together in some research lab in a location unknown to me discovered that antibiotic.

We think nothing of it. It has become natural to us to rely on those we do not see and cannot examine for their honesty, reliability, or excellence. Yet, most of the time, this extended order of human cooperation fulfills our expectations that the products and services we want will be waiting for us when we want them.

We understand the role of competition in sustaining this system. Having alternatives helps create accountability and raises the costs of failing to meet our expectations. But we often fail to understand or notice the resulting cooperation among strangers whose coordinated actions within and across companies serve us.

Surprisingly, relying on strangers beats relying on friends. We don’t have enough of the latter if we want to enjoy the standard of living with all of its material and nonmaterial satisfactions. Relying on friends or relying only on our family would lower our standard of living back to the level of subsistence. Self-sufficiency is the road to poverty.

Relying on strangers also frees up our friends to specialize in being friends and do what friends do best. I don’t want to buy a shoulder to cry on from the low-cost seller behind a counter. I want friends and families to give that out of love. But my friends and family have more time for comfort and delight because the extended order of human cooperation out in the marketplace means I’m not expecting them to sew my clothes or forge a car for me.

Relying on strangers creates the extraordinary web of cooperation that is the modern economy. A world where the division of labor and specialization—the fruits of trade and trust enforced by the feedback loops of price, profit, and competition—can let me send a package from Washington to St. Louis for about an hour’s worth of work for the average American worker.

What a lot of confidence can be bought for only $19. And this marvel of cooperation works even though most of us are oblivious to it and know not how it works. But appreciating the marvel may help us remember the value of the system of prices and profits that holds it together.

A Modest Proposal to end long gasoline lines

Because of Hurricane Sandy, many New Yorkers and New Jerseyites are having to wait in long, long lines for gasoline. 

If your license plate has an odd number, you can only purchase gasoline on odd numbered calendar days.  Ditto for even.  Anyone thinking about this for more than two minutes can see that it's nothing but "Performance Art" from government.  Demand is demand, regardless of which arbitrary day the demand is called for.  People with time to do so are waiting in line to buy gas whether they really need it or not.  Sheesh....

Here's the biggest obstacle.  New York and New Jersey both have "anti-gouging" laws.  If there's a disaster of some sort, merchants can only increase prices by 10%, unless they can prove that an even higher markup is required to turn a minimal profit.  That should make it more fair for everyone, right? 

But because of infrastructure problems, there's not enough fuel coming into New York and New Jersey.  The world that those old prices were based upon doesn't exist any more.  Every load of dinosaur juice coming into NY/NJ is worth 3 times its former value.  People are purchasing tanks of gas that they don't need, siphoning it from their cars into 5-gallon cans, and selling it for 3-4 times what they paid for it (which is exactly what its worth, BTW.)   They're illegally selling generators on Craigslist.  This Republican idiot is hauling 65 New Jersey business owners into court for "price gouging" - i.e., selling things for what they're worth. 

So how is the government determining the best use for this fuel?  Odd day/Even day purchasing. 

That's bullshit. 

According to Russ Roberts' book "The Price Of Everything", here's the best way to restore fuel supplies to NY/NJ. 

Let merchants sell gasoline for whatever price they want.  If you really need gasoline, you'll buy it.  If you just wanted gasoline for running out for lunch or road trips, or because you're paranoid, you won't buy it.  This is the only reason that Texans and Floridians and Californians have gasoline today.  The price is allowed to fluctuate, all day every day, based on demand. 

But that's not fair.....

Bullshit.  This is why you can buy lettuce in the wintertime.  It's why there are always shoes for sale at the mall, and you don't have to wait in line for them the way they did in Commie Eastern Europe.  It's why the U.S. has a higher standard of living than Cuba.  Companies are waiting in line to sell us lettuce and shoes, at whatever price we're willing to pay, and not vice-versa. 

But how would this help lower fuel prices???

Someone might make a fortune selling gasoline for $20.00 per gallon for a few days.  If other gas stations see this guy cleaning up on gasoline, they will move heaven and earth to re-open their stores.  They'll risk life and limb to serve you.   A couple of days later, gasoline would probably be selling for $16.00 per gallon.  More and more businesses would want in on it.  Gasoline would drop to $12.00 per gallon.  And on and on, until there were enough people selling gasoline to get it down to the ridiculously high prices that NY/NJ residents were already willing to pay before the hurricane.  Competition doesn't cure everything, but it's way ahead of whatever solution is in 2nd place. 

But how much hassle would YOU go through to sell gasoline today, in NY/NJ for only 10% more than it sold for before the hurricane? 

You might just stay home and watch "Dancing With The Stars" and wait on someone else to clean up the mess.  (That's what's going on now, BTW.)   

Here's something from an old post I wrote about Russ Roberts' "The Price Of Everything".  The book deals with a Big Box store that was marking up generators and flashlights after an emergency, BTW. 

Do you every wonder why the shelves in our supermarkets are full? Ever wonder why countries afflicted with the blessings of communism had supermarket shelves that were mostly empty? Ever wonder why we don't have to wait in long lines for gasoline, or endure rationing like we did in the early 1970's? Ever wonder why the minimum wage in Cuba is somewhere near $14.00 (PER MONTH !!) ??


Do you want to know how to ensure that more people will die during a famine? Legislate artificially low prices. Want to keep people from delivering water to drought stricken areas? Put anti-gouging laws into place.

Do you ever wonder why we can simply go out and buy our basic necessities?

It's because our (somewhat) Free Market Economy allows prices to go up when there's a shortage, and decline when there's a glut. We don't have an idiotic Flashlight Czar (yet), setting flashlight prices all over the country based on hours of darkness, hurricanes, or electrical problems. People can charge whatever they want to for flashlights. Therefore, when you really, really need see in the dark, somebody out there is probably willing to sell you a flashlight.

So, according to Professor Roberts, not only was the Big Store doing the right thing economically when it doubled its prices after the hurricane, it was doing the right thing logically, socially, and morally.

Yeah, Chris Christie can put anti-gouging laws into place, and this will help guarantee that merchants won't be able to rip off people who want to purchase a generator.  It also guarantees that there won't be any generators on the shelves. 

Which store selling power generators would you want to shop in?  The one that has 'em, or the one that doesn't? 

How Mitt Romney will really harm the middle class

Almost every day of his life, George Mason University Economics professor Don Boudreaux writes a letter to the editor.  He's been doing this for years in a vain attempt to correct economic misinformation. 

Here's a recent corrective that Boudreaux sent to The Wall Street Journal, explaining that the John The Baptist Of ObamaCare is just as goofy as the founder of ObamaCare:

John Taylor is correct that Mitt Romney’s economic policies are less likely to thwart growth than are those of Pres. Obama (“The Romney Cure for Obama-Induced Economic Ills,” Oct. 4). The bar, alas, is low. Because entrepreneurs and investors aren’t keen to produce and take risks when the president threatens them with higher tax rates, saddles them with crushing regulations, and scolds them for allegedly being selfish, ungrateful, predatory, and (to boot!) not especially important to economic growth anyway, entrepreneurs and investors respond by producing less and taking fewer risks.

Mitt Romney does seem to be less hostile than is Barack Obama to entrepreneurship, commerce, and private investment.

Get ready people.... Get ready.  Here comes the patented Don Boudreaux Karate Kid Crane Kick !  THIS IS GONNA HURT !!!

But contrary to Mr. Taylor’s claim, Mr. Romney’s trade proposals are not clearly better than are the president’s. Mr. Taylor writes that “Mr. Romney intends to move ahead on trade agreements and create global enterprise zones to remove barriers to trade.” That would be grand. Yet what we hear most loudly about trade from Mr. Romney isn’t about freeing trade; it’s about restricting it. Mr. Romney repeatedly boasts that he’ll raise taxes on Americans who buy imports from China.

So rather than making a principled case for removing barriers, Mr. Romney’s singular trade obsession seems to be to raise barriers and thereby make trade less free.

Sincerely,

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

John Taylor, consider yourself bitch-slapped.  Please offend us no more in that way.  Boudreaux WILL come back. 
The Mason Nation logo at the top came from the George Mason University bookstore site.  My arch-nemesis, Dr. Ralph, was good enough to get me one of the shirts, which I wear often.  You know you're a political geek when you wear your favorite university shirt because of the economics department, not the football or basketball team !! 

On who makes our lives better

This morning I went to Jack-In-The-Box and got a sausage biscuit and some hash browns.  This particular location never closes.  They're open for me, 24 hours a day, 7 days a week. 

I'm not particularly fond of their coffee, though, so I hit my Starbucks at Western Center Boulevard and I-35.  Had a double-espresso.  (Hit that link.  It's a good one.)  The Starbucks doesn't open until 5:30, but the workers had probably been there since 4:00 a.m. 

When I got to work, I looked at all the stuff we're doing for Kroger.  They love it.

I looked at what we're doing for Wal-Mart.  They love us, too.  We're busting our asses for those folks. 

Then I reviewed some stuff we're doing for another company, a company that will remain nameless.  (Don't want to call 'em out by name.  It's not going too well right now.)  If we don't get our shit together soon, they're going to replace us with someone that can keep them happy.  It's all up to us.

I walked through the big project we're doing for Radio Shack.  So far, they love us.

Then I broke open a China shipping container and pulled out a random box.  It's from my buddy Mr. Chen in Xiamen, China.  He provides us with all sorts of metal hardware and display fixtures.  The display dump bin that I pulled out of the container once took 30 minutes to assemble with a drill, a tap and die set, a pop-rivet gun, a rubber mallet and a screwdriver.  After a year's worth of emails, drawing revisions, hardware changes and, well, cussing, Mr. Chen has sent us a display bin that can be assembled in five minutes with nothing but a screwdriver.  I love Mr. Chen like a brother.   

Work, work, work, work. 

Here's something I found at the Cafe Hayek blog today, something on the same subject.  Every day of his life, Don Boudreaux of George Mason University fires off a letter to the editor of some Statist Rag, trying to correct misinformation about how the world really works.  This one was a beauty:

Edward Sage ridicules Charles Koch’s claim – from Mr. Koch’s essay ”Corporate Cronyism Harms America” (Sept. 10) - that “the role of business is to provide products and services that make people’s lives better.” Mr. Sage asks in response: “Since when? This sounds much more like a liberal take on the role of government. As a liberal I’d be over the moon if companies cared primarily about making lives better. Instead, this only happens if it’s the best way to make money” (Letters, Sept. 13).

Mr. Sage uses the word “only” to imply that it’s a mere occasional happenstance that the best way for businesses to make money is to supply goods and services that improve people’s lives. But because no private business (without special privileges granted by government) can force any consumer to buy its products – and because no private business (without special privileges granted by government) can prevent other businesses from competing for consumers’ dollars – no private business (without special privileges granted by government) can survive unless it supplies “products and services that make people’s lives better” (as judged by consumers themselves, of course, rather than by Mr. Sage and his fellow “liberals”).

Businesses do sometimes err. Consumers do sometimes err. But for Mr. Sage not to see that in private markets the profit motive generally drives businesses to seek ceaselessly and frantically for ways to supply outputs that improve people’s lives is for him to be blind to one of the most remarkable and transformative facts of the past two centuries.
Sincerely,

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Well said, sir.  Well said. 
If I ever make a ton of money, and the only honest way I can do this is by keeping a lot of people happy in exchange for their money, I'm going to go to Virginia and take classes from Don Boudreaux. 
It will happen. 

On Olympics uniforms made in China

Here's Don Boudreaux of the Cafe Hayek blog, on purchasing Olympics uniforms from China:

Sen. Harry Reid (D-NV) – a leader of a party whose members publicly preen themselves on their alleged devotion to science and realism – throws a conniption fit because the uniforms to be worn by U.S. athletes at the 2012 Olympics were stitched together in China rather than in America (“Burn US Olympic uniforms because they’re made in China,” July 12).

Mr. Reid’s outburst reveals his ignorance of a foundational conclusion of economic science, namely, that people are enriched when they’re free to purchase from whomever they choose regardless of political boundaries. Yes, there are economists who emphasize (mostly purely theoretical) exceptions to the case for free trade – none of which are relevant here – and even a few fringe economists who reject that case altogether. But economists’ overwhelming, non-partisan, and research-based consensus today is, as it has been for years, that free trade (even when unilateral) is beneficial. Mr. Reid’s temper tantrum proves that he is either inexcusably dimwitted about matters on which he legislates, or interested, not in science and realism and truth, but in scoring political points by appealing to the uninformed emotions of constituents.

If Mr. Reid had announced that locating water in the Mojave is easily done with divining rods, that cancer is best cured with crystals, or that the Senate chamber is haunted by Daniel Webster’s ghost, he’d be laughed out of office. But let him make a similarly laughable remark about trade and he continues to be treated as if he and his opinions deserve respect.

Sad.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Is it remotely possible that shortages are caused by price controls?

Don Boudreaux has read an article in the New York Holy Times, an article that speculates that maybe, perhaps, possibly, there is a potential theoretical smidgen of a chance that Bolivia's shortages are caused by price controls. You know, kinda like our current high minority unemployment rate is caused by price controls. Here's what Boudreaux wrote to the Times....

Regarding your report on the chronic shortages of consumer goods in Venezuela (“With Venezuelan Cupboards Bare, Some Blame Price Controls,” April 21): of course these shortages are caused by price controls. By preventing prices from telling the truth about underlying conditions of supply and demand, such controls spread economic lies. Producers and consumers are thus misled into acting destructively rather than productively.


Price controls, though, are only the most ham-fisted maneuver used by politicians to distort prices in order to mislead the public about market realities. Another favorite ploy is to condemn and threaten “speculators.” Consider Chavez himself. He irresponsibly increases the supply of the Venezuelan bolivar and then, when the inevitable inflation begins, combines overt price controls with a bellicose vow to punish what he sneeringly calls “bourgeoisie speculation.”

Such blame-shifting is very near a constant with politicians.

It’s worth noting that, although the President of the United States hasn’t the power of Generalisimo Chavez, Pres. Obama’s attacks on speculators are just as politically opportunistic and economically ignorant – and potentially as destructive – as are any such attacks issued by Latin American dictators.

Sincerely,

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Ouch.  And his attempt at reducing the price of healthcare hasn't even kicked in yet. 

The Obamabanana poster came from The People's Cube.    The George Mason University coffee mug shwon below was a gift from Dr. Ralph. 

Don Boudreaux rant coming in 5...4...3....

Go here. 

Get your giggles in. 

Then go here and wait.  This one will be good. 

On gasoline speculators driving up prices

This is BRILLIANT.  Don Boudreaux at his best:

Here’s a letter to the Programming Director at Washington, DC’s, WTOP Radio:

During this morning’s 8 o’clock hour I heard one of the most ironic lines that I’ve heard in some time. That this irony was unintentional makes it all the more telling.

Asked by your “pump patrol” reporter about rising gasoline prices, a motorist at a gasoline station noted that “My tank is actually way more than half full now. I’m topping it off because I’m sure the price will be even higher this weekend.” When your reporter then asked her “What do you think explains these rising prices?” she replied “Speculators.” Your reporter followed up with “Do you think they should be stopped?” The motorist responded immediately: “Of course! They’re criminal.”

Speculating that the price of gasoline will rise, this motorist took action today – buying gasoline that she otherwise wouldn’t have bought today – that puts upward pressure on the price of gasoline today.

Had your reporter pointed out that this motorist herself is speculating in gasoline, I wonder if this motorist would have persisted in regarding speculation as being criminal. I wonder, too, how she would react if government – heeding her advice to stop speculation – were to forcibly prevent motorists from topping off their tanks.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

And that is why I want to somehow make a lot of money and retire and go study economics at George Mason University with Don Boudreaux, Russ Roberts, Tyler Cowen and Walter Williams while they all still live and breathe and walk among us. 

The "Make The Speculators Pay" logo came from this unrelated article about the European Union trying to blame their troubles on people other than themselves.

Why Obama would be preferable to Gingrich

From Don Boudreaux at Cafe Hayek:

Four more years of Obama in the Oval Office would be better, in my view, than four years of Gingrich there: each man is mad for power; each man’s Promethean opinion of himself is quite the opposite of what a realistic self-opinion would be; each man is a font of economic idiocy; and each man’s principles are such that each would – recalling Mencken’s description of FDR – fatten up a crew of missionaries on the White House lawn for slaughter if he thought that endorsing cannibalism would get him more votes. Yet the countless nutty and destructive policies that Pres. Gingrich would likely implement would inevitably be described by our crack mainstream press as “laissez faire” – thus creating more public misunderstanding. (Of course, four more years of Obama in the White House might also be better than four years of Romney there….)

Of course when Mencken made his crack about presidents trying to get the cannibal vote, he had no idea what would happen to the national mindset in another 75 years....  See below. 

From The Occupy Wall Street Protests. 

Quotation of the day

Our quotation of the day is from The Gospel According To Saint Thomas Sowell, via a commentary from Cafe Hayek.

One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.


Yep.  That nails it. 

Let's assign each neighborhood a grocery store. One grocery store.

Don Boudreaux has produced another great parable:

Suppose that we were supplied with groceries in same way that we are supplied with K-12 education.


Residents of each county would pay taxes on their properties. A huge chunk of these tax receipts would then be spent by government officials on building and operating supermarkets. County residents, depending upon their specific residential addresses, would be assigned to a particular supermarket. Each family could then get its weekly allotment of groceries for “free.” (Department of Supermarket officials would no doubt be charged with the responsibility for determining the proper amounts and kinds of groceries that families of different kinds and sizes are entitled to receive.)

Except in rare circumstances, no family would be allowed to patronize a “public” supermarket outside of its district.

Residents of wealthier counties – such as Fairfax County, VA and Somerset County, NJ – would obviously have better-stocked and more attractive supermarkets than would residents of poorer counties. And, thanks to a long-ago U.S. Supreme Court decision, families would be free to shop at private supermarkets that charge directly for the groceries they offer; such private-supermarket families, though, would get no discount on their property-tax bills.

When the quality of supermarkets is recognized by nearly everyone to be dismal, calls for “supermarket choice” would be rejected by a coalition of greedy government-supermarket workers and ideologically benighted collectivists as attempts to cheat supermarket customers from out of good supermarket service – indeed, as attempts to deny ordinary families the food that they need for their very survival. Such ‘choice,’ it would be alleged, will drain precious resources from the public supermarkets whose (admittedly) poor performance testifies to the fact that these supermarkets are underfunded.

And the small handful of people who call for total separation between supermarket and state would be criticized by nearly everyone as being, at best, delusional and – it would be thought more realistically – more likely misanthropic devils who are indifferent to the malnutrion and starvation that would sweep the land if only private market forces governed the provision and patronizing of supermarket. (Some indignant observers would even wonder aloud at the insensitivity of referring to grocery shoppers as “customers”; surely the relationship between suppliers of life-giving foods and the people who need these foods is not so crass as to be properly discussed as being ‘commercial.’)

************

Does anyone believe that such a system for supplying groceries would work well, or even one-tenth as well as the current private, competitive system that we currently rely upon for supplying grocery-retailing services? To those of you who might think so, pardon me but you’re nuts.


To those of you who understand that such a system for supplying grocery-retailing services would be a catastrophe, why might you continue to count yourself in the ranks of those who believe that government schooling (especially the way it is currently funded and supplied) is the system that we should continue to use?

I apologize for scraping the entire post.  Save a link to the Cafe Hayek website.  Worth reading daily.  Hourly.  Or more. 

Another Don Boudreaux Karate Kid Crane Kick

Of all the anti-protectionist slapdowns Don Boudreaux has ever issued, this is my favorite:

9 March 2011

Mr. Ian Fletcher

Dear Ian:

In your latest essay at the Huffington Post you state that sensible protectionists, like you, want to use tariffs to protect, not “dying” industries, but, rather, only industries of “the future” (“Protectionism of the Past vs. Protectionism of the Future,” March 9).

Who but a backwoods bumpkin doesn’t cheer for the industries of “the future”? But I’ve some questions.

- How do we identify such industries? Who’ll be charged with determining which industries are of “the future” and which industries are sufficiently passé as to be left unshielded from being slain by foreign competition – slayings that you suppose are the inevitable fate of all U.S. industries not protected by high U.S. tariffs?

- What criteria will be used to distinguished industries of “the future” from what I suppose we ought to call “industries of the past”? Rates of return on capital? Total volume of employment? Productivity per worker? Rates of annual productivity growth? Rates of export growth? Total amount of corporate taxes paid? The technological ‘wow-ness’ of the industries’ outputs – as determined, perhaps, by the amount of positive attention such outputs receive from nightly network news reporters? The age of the industry?
Oh! I know the answer: total dollar amount of contributions to the political campaigns of incumbent members of Congress and the U.S. presidency.

Ok, here comes the Don Boudreaux Karate Kid Crane Kick, the takedown, the crushing blow:

- In those inescapable instances when dispassionate minds, such as yours, discover that protection was mistakenly given to industries of the past that were for a time wrongly thought to be industries of the future, will the shareholders and workers in those industries, whose prosperity has for a long time been made possible only by the tariff protections that their industries received, gracefully accept the revised determination that they have all along been investing in, and working for, industries of the past and, therefore, must now lose their assets and jobs for the greater good? What will you tell these poor workers, shareholders, and bondholders?

- Finally, if an industry really does have such a promising future that even government bureaucrats recognize this promise, why wouldn’t this same promise be recognized by private investors? Seems as though it would. And private investors, then, will pour sufficient amounts of private financing into this industry. Isn’t it one of the central functions of private capital markets to identify – and to shower with liquidity – upstart firms that are likely to be parts of industries of “the future”?

I’m eager to receive your replies.

Sincerely,

Donald J. Boudreaux

Hit the link at the top to read his readers' comments, involving Godzilla, Bambi, priests, and some discussion about failed "Industries Of The Future". 

My Christmas gift to you....3 letters by Don Boudreaux

Don Boudreaux of the Cafe Hayek blog has been typing a lot.  Think of this collection as my Christmas gift to you.    Sorry it is late. 

Here's a letter he wrote to The Boston Globe on your "right" to the services of doctors and nurses and pharmaceutical companies and hospitals....

Ronald Pies, MD, asserts that every individual has a “right” to “basic health care” – meaning, a right to receive such care without paying for it (Letters, Dec. 26).
The rights that Americans wisely cherish as being essential for a free society require only the refraining from action. Your right to speak freely requires me simply not to stop you from speaking; it does not require me to supply your megaphone.
Not so with a “right” to “basic health care.” Elevating free access to a scarce good into a “right” imposes on strangers all manner of ill-defined positive obligations – obligations that necessarily violate other, proper rights. For example, perhaps my “right” to basic health care means that I can force Dr. Pies away from his worship service in order that he attend (free of charge!) to my ruptured spleen. Or perhaps it means that I have the “right” to pay for my health care by confiscating part of his income. If so, how much of his income does my “right” entitle me to confiscate? Who knows?
And if Dr. Pies is planning to retire, do I have the “right” to force him to continue to work so that the supply of basic health care doesn’t shrink? If Dr. Pies should die, am I entitled – again, to keep the supply of basic health care from shrinking – to force his children to study and practice medicine?
Does my right to basic health care imply that I can force my neighbor to pay for my cross-country skiing vacation on grounds that keeping fit is part of basic health care?
Talking about “rights” to scarce goods and services sounds right only to persons who are economically illiterate, politically naive, and suffering the juvenile delusion that reality is optional.
Sincerely,

Donald J. Boudreaux

Here's one written to the L.A. Times, on jury nullification in relation to the marijuana wars:

Reporting on the increasing number of jurors who refuse to return guilty verdicts against defendants charged with possessing marijuana, you quote a government prosecutor who tells jurors “We’re not here to debate the laws. We’re here to decide whether or not somebody broke the law” (“Juries are giving pot defendants a pass,” Dec. 25).
This prosecutor is mistaken to assume that the law is simply that which the state declares it to be. A great advantage of trial by jury – an advantage applauded by the likes of John Adams, Thomas Jefferson, and James Madison – is to enable the community’s evolved sense of law and justice to moderate, or even to nullify, government’s criminal statutes. As Edward Gibbon observed, “Whenever the offense inspires less horror than the punishment, the rigor of penal law is obliged to give way to the common feelings of mankind.”
Fortunately, more and more people understand that punishing a peaceful person simply for smoking pot is horrible.
Sincerely,

Donald J. Boudreaux

And finally, here's an open letter/bitchslap to the president of the Sodexo Foundation:

Mr. Stephen J. Brady, President
Sodexo Foundation
Gaithersburg, MD

Dear Mr. Brady: 

Your foundation’s website says that “Forty-nine million people in the United States are at risk of hunger.” While this statement’s meaning is vague, I assume that you intend to suggest that 49 million people in America are so poor that they are at serious risk of suffering malnutrition.
Yet today’s New York Times reports on a recent poll by the Pew Research Center that finds that the number of Americans who consider themselves to be middle-class is nine in ten (“So You Think You’re Middle Class?” Dec. 23). That’s 277 million (out of a total of 308 million) Americans who don’t think of themselves as being poor. Even if we assume that every one of the 31 million other Americans thinks of himself or herself as being, not rich, but poor – and even if we further assume that every last one of those 31 million people is “at risk of hunger” – your figure of 49 million ‘at-risk-of-hunger’ Americans seems impossible to square with the Pew survey results.
Are there really 18 million people in America who are so unaware of their own circumstances that, even though you classify them as being “at risk of hunger,” they classify themselves, not as poor, but as middle-class? Seems dubious, to say the least.
While I applaud your efforts to extend a helping hand to needy Americans, you should do so honestly. In fact, hunger is not a problem in America – not for 49 million people; not even for 31 million people. In fact, no modern American this side of mental insanity or criminal captivity comes close to starving to death.
Our society’s elimination of one of history’s most consistent killers – starvation and malnutrition from too little food – is complete. This victory should be celebrated rather than obscured by claims, such as that which adorns your website, that are somewhere between inexcusably obscure and blatantly false.

Sincerely,

Donald J. Boudreaux

Why does Dr. Boudreaux go to the trouble of writing all of these letters?  Why should he bother?  He has tenure.  He's got it made.  
He probably does it because he knows that we have a great system, and he doesn't want Messiahs, Nannies, Busybodies, Saviors, Prohibitionists and other pests to start jacking around with it.
He knows the cause of health, wealth, and having time to enjoy them.    
Is Free Market Capitalism perfect?  No. 
But Utopia is not an option.  Never has been, never will be.   

Teachers and writers like Don Boudreaux, Thomas Sowell, Milton Friedman and F.A. Hayek have done more for the good of humanity than all the government programs that have ever burdened the world.  

Absurditopia is about to declare war on Stupidia, and you are going to lose

Since our Commander-In-Chief and some of his Republican enablers seem determined to start a trade war with China, here's an excerpt from Don Boudreaux's fantasy about what it would be like if real wars were like trade wars. 

Leader of Absurditoptia (A): I say, leader of Stupidia – we demand that you stop occupying that contested strip of land. If you refuse, we’ll have no choice but to shoot our own citizens.

Leader of Stupidia (S): You don’t scare us! That land is ours. And if you do kill some of your own people, make no mistake that we will immediately – and just as cruelly – commence to killing our own people. Courage is our national motto!

(A): Ha! You’re bluffing. But I’m not. I’ve just courageously ordered my troops to mow down in cold blood ten percent of my fellow countrymen. Take that!

(S): How dare you attack you like that! You leave us no choice but to attack us. I am ordering the Stupidian army to slaughter 15 percent of innocent Stupidians here in Stupidia. How do you like them apples?!

(A): You are cruel and inhuman to damage us by killing your people. I hereby instruct all of my fellow Absurditopians to commit suicide! Only then will you nasty Stupidians get your proper comeuppance and we Absurditopians the justice that we are due!

(S): You can’t beat us, you Absurditopian you! Listen up. I’m ordering all of my fellow citizens – Stupidians all! – to commit suicide. We’ll see who emerges victorious!
….

Then a long, long silence.

Try looking at it this way.  If the top executives at Neiman Marcus could pass laws to discourage you from shopping at Target, they would do so.  If the top executives at Target could pass laws to discourage you from shopping at Neiman Marcus, they would do so.  And if you learned that those executives had written those laws, you would have them tarred and feathered.  You would be outraged. 

But when U.S. companies pass laws making Chinese tires or Canadian lumber more expensive, we roll over and take it.  Go figure that one out. 

The picture of the Trade War came from here.