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Saturday, December 10, 2016

 

Theory and Practice

Megan says about rules based principles: “one that we classical liberal, market-loving folks are going to have to contend with in the years ahead.” Perhaps she’s younger than her picture because it sounds as if she was born last night.

We have not lived with neutral principles for well over a century and neutral rules have been nothing but an afterthought during the Obama administration. Being concerned about “the years ahead” makes it sound as if the Carrier deal is a sharp departure from government non-interference in the lives of people and companies. When the EPA controls what you can do with a puddle in your back year because they define it as a navigable waterway you are way beyond classical liberal market based principles.

A second point about principles: they should benefit people rather than the other way around. Once abstract theory causes enough harm to enough people it’s worth evaluating whether the theory is working for the people. If not, theory needs to be re-examined. 

An example is the theory of man-made global warming. It looks great on paper and in computer models but the Manhattan is not under water and snow is falling in Hawaii. Global warming alarmists have been predicting the end of the habitable world since the 1980s, with “the end” always being 10 years off. So far none of the cities that were supposed to be under water have drowned, the glaciers have not melted and the Arctic and Antarctic ice caps are intact. Yet we continue to be told that the end is nigh. With each passing decade Global Warmists have ratcheted up the decibel level and today if question their projections you are accused of crimes against humanity.

One principle that seems to be animating the classical liberal market-loving folks is that tariffs and trade wars are inextricably linked. Recall that tariffs funded the federal budget for most of American history until the 20th Century and the 16th Amendment was passed.

Would you be surprised to learn that China imposes a tariff of at least 25% on imported cars. Then there’s a 25% consumption tax on cars with bigger engines than 3 liters and a 9% vehicle purchase tax. But for some reason there has been no threat of American or European retaliation.

Finally, people who are the strongest advocates of the “invisible hand” being allowed to do its job are never the ones who suffer the consequences. They don’t work in factories that are being closed and their jobs are not being outsourced to India, Mexico or China. Perhaps the market-clearing wage for factory assembly jobs worldwide is $1 per hour and the free market may lead to that wage for unskilled labor in every country. But would people who write for a living hew as closely to their principles if we determine that the average free-market wage for writers, worldwide, is really $2 per hour. The American educational system is so far behind the rest of the world that India, China and Cambodia can certainly produce a glut of replacement writers who can use the internet at least as well as Americans, replacing the “principled free market” enthusiasts that currently pull down salaries that make foreign writers green with envy.

And the transportation costs of the written word are zero.

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