Topic: General

Ezra Klein, Libertarian?

Since I’ve disagreed with Ezra Klein in the past, I am pleased to report that we agree on what to do about the 7,000 Americans who die every year while waiting for transplantable organs. In a recent post, Klein notes that the shortage of organs is due to a ban on payments to organ providers. Klein advocates lifting that ban.  My favorite line:

We’ve stupidly disallowed payment for organs (if money can’t buy you life, why keep it around?)…

Klein brought to mind an observation made by Prof. Richard Epstein last week in the Wall Street Journal:

Only a bioethicist could prefer a world in which we have 1,000 altruists per annum and over 6,500 excess deaths [to] one in which we have no altruists and no excess deaths.

In Healthy Competition, Mike Tanner and I argue for repeal of Sen. Orrin Hatch’s 1984 National Organ Transplant Act, which prohibits payments to organ providers. 

In a recent issue of Cato’s Regulation magazine, Prof. Lloyd Cohen throws up his hands and issues a challenge to those opposed to such payments. Cohen has re-written his will to ensure that when he dies, his organs cannot be harvested unless his estate is paid $864.27 per organ. Why? Because that requirement will create a real-life situation where paying up will generate more transplantable organs. That will force the bioethicists to explain to four, maybe five families who have their checkbooks in hand, We’re sorry, but your loved one must die for our principles. Cohen urges others to insert similar clauses into their wills, just to get the message through the bioethicists’ heads.

Cohen and other powerful presenters will speak at a June 12 conference on organ markets at the American Enterprise Institute.

Enron Execs Go Down

The jury returned guilty verdicts against Ken Lay and Jeff Skilling today. I didn’t follow the case closely, but businesspeople who engage in fraud should obviously be punished. I do fear that the publicity surrounding this case will reinforce the misguided notion that federal prosecutors should be policing the business world. Cato’s new book, Trapped, shows that federal intervention will result in far more harm than good.

For those who would rather listen, than read, Prof. John Hasnas, author of Trapped, delivered an address here at Cato last month.

For still more background, go here.

Boxes, Foreheads, and Price Signals

Russ Roberts at Cafe Hayek has an illuminating post about how to think about jobs:

Some say that a nation should strive to acquire high-paying jobs if it wants a high standard of living. In this view of the world, jobs are boxes that workers jump in and out of. Each box has a bar code that determines how much the job pays. The goal is to get a good box with a high wage attached to it.An alternative view of the world is that the bar code is on the worker’s forehead. The worker gets scanned not the job.The wage depends not on the job title but on the skills of the worker.

Russ goes on to explain why the jobs-as-boxes view leads to error and confusion.

I’d like to add that one of the reasons unions and other forms of subsidy often hurt workers more than they help is because of certain implications of the box view. Unions generally try to get the wages and benefits attached to union boxes as high as feasibly possible.

The first effect is often to limit the number of boxes available for workers to jump into. But a perhaps deeper problem is that heavily subsidized wage and benefit packages can insulate workers from labor market price signals that are trying to tell workers to invest in other forms of human capital – to acquire a more highly valued forehead bar code.

When subsidized boxes disappear, due to mechanization, outsourcing, or plain old business failure, workers are usually dismayed to find that there is a big mismatch between their forehead and their old box, i.e., that the real market value of their skill set is surprisingly and disappointingly small. It can be a harsh blow to your self-esteem to find that the best job you can get pays only half as well as your old one. And you’ll sometimes hear laid-off low-skill workers say, “Why didn’t anybody tell me that I should be learning to do something else?” The answer is that prices were telling them – the signal was out there – but you can’t hear it from inside an insulated box.

If you’ve got to subsidize something, subsidize people’s ability to respond effectively to price signals (e.g., provide them vouchers for job training). Don’t create subsidies, like wage supports, that cut people off from the information they need so that they can invest in themselves wisely and find a good fit in a dynamic market.

Sense and Sensenbrenner

Congressional whining over the FBI raid of Rep. William Jefferson’s office has reached the point of self-parody. Rep. James Sensenbrenner has now called for rare out-of-session hearings on the raid, titled, “Reckless Justice: Did the Saturday Night Raid of Congress Trample the Constitution?”

This would be the same James Sensenbrenner who wants to give federal law enforcement the power to snoop in on your Internet browsing, and who recently introduced a bill that would send parents to prison if they learn of drug activity near their children and fail to report it to authorities within 24 hours.

“Trampling the Constitution,” indeed. Amazing how reverent politicians get for the Constitution and the rights of the accused when one of their own is under the gun.

Little Victories

…in the fight against the Nanny State: in Massachusetts, the state legislature just narrowly rejected ”primary seat belt legislation.”  In English, that’s a law that gives police the power to pull you over simply because someone in your car isn’t wearing their seatbelt (“secondary seat belt laws” allow them to ticket you for not wearing a seatbelt only if they’ve stopped you for some other infraction). 

Last summer, using night-vision equipment on loan from the National Guard, Maryland state troopers scanned passing cars, then swept out and nabbed 111 offenders for the crime of driving without a seatbelt. Scores of people who were driving along, minding their own business, had their evening ruined by an unpleasant encounter with the business end of the law. Law enforcement overreaching caused an outcry in that case, and citizen pressure in Massachusetts seems to have led several lawmakers to back away from the primary seatbelt bill.

It’s good to know that even in Massachusetts there’s still some resistance to the growing crusade to ensure healthy living through coercion. But it’s not coming from the Governor’s office. Mitt Romney, GOP presidential hopeful for 2008, had promised to sign the bill.

Mulling the Big Idea

A few comments on Brink’s post on the discussion I’ll be missing at the Hudson Institute.

1. I think that the background paper for the discussion is more interesting than Brink makes it out to be. I recommend it as a worthwhile read.

2. Having said that, I disagree with the characterization of the left as purely nihilistic. I think that the left is less reverent of intellectual history because, well, its intellectual antecedents are embarrassing. Was Communism really a great hope for mankind? Was the Vietnam war really an imperialist undertaking carried out because of the desperate desires of corporations for markets? Was it a good idea for Britain, India, and other countries in the 1950s to place “strategic” industries under national control? Were wage and price controls the solution to inflation? etc.

But, undaunted, the Left does have its big ideas. I still think that folk Marxism, the idea that certain oppressed classes and those who claim to speak for them have inherent moral authority, is a “foundational” idea in Leftist thought.

I also see an emerging Leftist doctrine of Individual Helplessness. That is, individuals are too ignorant and irrational to make their own decisions. “Happiness research” fits in well with that doctrine.

Finally, there is what I call absolute environmentalism, which is the doctrine that all other considerations pale in comparison to Global Warming. As Deirdre McCloskey pointed out, this is a transcendental philosophy that becomes the Left’s substitute for religion.

3. I do not agree with Brink’s characterization of those who are neither ardent Democrats nor ardent Republicans as a sort of “center.” Consider instead the hypothesis that we are a long tail.

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It Doesn’t Take a Rocket Scientist to See the Problem Here

Yesterday, the latest science scores on the National Assessment of Educational Progress (NAEP) came out, and the same sad pattern we’ve seen for years repeated itself. Between 1996 and 2005 scores rose in 4th grade, remained stagnant in 8th grade, and dropped for high school seniors. In other words, it’s still the case that the longer children stay in American schools, the worse they do.

Unfortunately, something else also remained the same: the shameless compulsion among people in Washington, despite decades of failure, to claim credit for good news and to have the solutions for bad. Case in point, Secretary of Education Margaret Spellings’s reaction to the NAEP report, in which she not only dubbed the federal No Child Left Behind Act a cure for failure in subjects the law directly addresses, but even those it doesn’t:

The Science 2005 Report….provides further evidence that accountability and assessments are working to raise achievement levels, even in subjects not directly tested under the No Child Left Behind Act [NCLB]. Fourth-graders made significant improvements in science over 1996 and 2000 levels, with the lowest-performing students making the largest gains and achievement gaps narrowing. However, eighth-graders showed no significant gains. And among 12th-graders, scores declined….The results illustrate the need to introduce NCLB’s accountability principles to our nation’s high schools.

So when the same sorry pattern repeats itself, the adults in charge of American education proclaim that they must be doing something right. In light of this, is it any wonder that our children do worse and worse the longer they stay in school?