Links - The Battle Against a Reliable Truth Teller

With apologies to Colonel Jessup

Here are just two links that both directly and indirectly tie into the forever-war on prices. It is sad how people just cannot bring themselves to accept the truth that prices reveal.

As I’ve said before, I will keep linking to these to-the-rooftops posts until we finally turn the corner reversing the incredibly misguided and harmful conventional wisdom. Get ready because these have got me on a rant.

Anti-price-gouging laws (APGLs) are ignorance at best masquerading as thoughtful policy. They are flat-out stupid. Full stop. Those who espouse them when they should know better are demagogues who deserve complete derision.

If I told you the solution to the temperature being extremely, uncomfortably high was to break all the thermometers, you would rightfully dismiss me as a charlatan or moron.

Ryan Bourne posts this excerpt from his recent book, The War on Prices. This particular piece is indicative of the entire work’s quality here honing in on anti-price-gouging. In discussing the morality of APGLs, he writes:

As economist Dwight R. Lee concludes, it’s as if we collectively demand a “magnanimous morality” of business during crises—an active sacrifice for the greater good, just as we hope someone jumps into a frozen lake to save a drowning child.

This sort of small group moral instinct is not invoked consistently, of course. During the spring of 2020, few accused traveling nurses earning $10,000 per week in New York, with free accommodation, car rentals, and covered travel, of “wage gouging.” Companies are treated differently.

More importantly, this instinct fails a consequentialist morality test. The disaster, and its effects on demand and supply, cannot be wished away. The question is how best to deal with it. Yes, donations of money, goods, or services, such as help providing water and tools, are welcome. But if such relief efforts were sufficient to overcome the destruction, firms wouldn’t even be able to raise prices significantly and we’d see no shortages, black markets, or rationing with APGLs.

That we do shows charity is insufficient. What’s more, only a freely operating price system, not relief agencies or charities, can coordinate action across large populations and sectors, including resolving tradeoffs over how much victims value the supply of, say, bottled water compared with plywood or medicines.

APGLs substitute emotional, absurd hope in place of rational, scientific solutions. They make problems worse hitting the most vulnerable hardest. It is the epitome of pleasantry over honesty.

And if you think I was fired up about that post, hold my beer . . .

Alex Tabarrok exploded himself in response to the UK’s new Equality Act 2010. As in all cases, read the whole thing—in this case to grasp the full extent of the insanity.

The short version is the new law demands equal pay for equal work where these are defined in a vague, catch-all way allowing a labor board to determine what it wishes.

Today, the UK would convene a labor board to rule that the tailor and the weaver must be paid equally because they DO WORK OF EQUAL VALUE. Case closed.

Labor boards will inevitably lead to the misallocation of labor, diminishing both wealth and fairness. Severe misallocation may lead to further intervention, in the worst scenario, even to the allocation of labor by fiat. Politicization breeds division, rent-seeking, and a stagnant, unpleasant society.

More generally, it pains me that there is no recognition that the market is a discovery procedure, including the discovery of the value of different skills and people’s preferences over different jobs. No recognition that the market harnesses tacit knowledge and knowledge of particular circumstances of time and place–knowledge that is difficult to quantify, communicate, or communicate in a timely manner–and that “society’s economic problems are primarily related to adapting quickly to changes in these circumstances.” No recognition that a price is a signal wrapped up in an incentive.

I despair when I consider that these fundamental ideas are the foundation of our liberal, global, and prosperous civilization. On economics, as on free speech, the UK has entered the great forgetting.

The utter, sheer ignorance on display by the imbeciles who support, defend, or advance this circus staggers the mind. Fueled by envy and powered by self-righteous anger at a world they cannot understand, the progress of our society is held stagnant before inevitable decline.

But for those of us who fight against this illogic bravely risking near-certain ostracism, our everyone’s wellbeing is constantly under siege. As if from Orwell and Rand combined, could there be a clearer real-world example of why Atlas shrugged?