Most people think that exports are good, and imports are bad. Exports create jobs, imports destroy them. Don Boudreaux, in one of his inimitable letters to the editor, quotes the economist Frank Knight on what this actually means:
“The man from Mars reading the typical pronouncements of our best financial writers or statesmen could hardly avoid the conclusion that a nation’s prosperity depends upon getting rid of the greatest possible amount of goods and avoiding the receipt of anything tangible in payment for them.”
Yes, people really do think that way. We call many of them politicians. Read Don’s entire letter here.
Have a listen here.
In a recent NBC interview, President Obama blamed ATMs for taking away bank tellers’ jobs, and computerized airline check-in kiosks for eliminating aviation jobs. Communications Coordinator Lee Doren points out that innovation doesn’t affect the number of jobs so much as the types of jobs. Accomplishing more while using less labor is actually the key to prosperity. People looking for an explanation for today’s high unemployment need to look elsewhere.
Posted in CEI Podcast, Economics
Tagged atms, basic economics, cafe hayek, causes of unemployment, Don Boudreaux, econ 101, economic fallacies, Economics, jobs, jonah goldberg, lee doren, luddites, obama, obama atm, president obama, unemployment
Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations was published 235 years ago today.
Over at Cafe Hayek, Russ Roberts links to a few short resources about that long, long book (which I nonetheless recommend reading). Worth checking out.
Don Boudreaux makes good sense on why country of origin labels only tell part of the story of where a product comes from:
Yes, Mr. Hoch’s socks say “Made in Swaziland,” but who developed the computer software to operate the loom that wove the cloth used to make his socks? Who designed the loom itself? Who figured out how to transform crude oil into the elastic in the socks? Who devised the method for pooling risks so that the Swaziland factory is profitably insured against fire and that the cargo ship carrying his socks to America is profitably insured against sinking?
In fact, Mr. Hoch’s socks – and nearly everything else that he consumes – should be labeled “Made on earth,” for they truly are global phenomena.
Read the whole thing. Keep it in mind the next time someone grouses –falsely — that America doesn’t make anything anymore, or that Americans buy too many goods from foreigners.
Posted in Economics, International, Trade
Tagged america, basic economics, cafe hayek, country of origin labels, dan ikenson, Don Boudreaux, international trade, no labels, swaziland, Trade
Via Russ Roberts, this is an amazing video. I’m always impressed with creative, compelling ways to use data to tell a story. And this story is one of the most important in human history: how most of humanity went from being poor and sick to healthy and rich in just 200 years.
There is still a ways to go. But if past is prologue, I’m optimistic about the future.
Posted in Development Economics, Economics, Fun with Statistics, The Market Process
Tagged bbc, bbc 4, cafe hayek, data, hans rosling, optimism, russ roberts, storytelling
Russ Roberts nails it over at Cafe Hayek:
Please remember that the cost of the TARP isn’t the cost to taxpayers. Even if banks paid back every single penny, the cost of the TARP is that it reduces current and future prudence.