Update!

Sorry so quiet! I’ve been busy doing things. You know how it is. Here is the latest Free Will, in which I talk with Jesse Prinz, whose book The Emotional Construction of Morals is awesome. Here is today’s Marketplace commentary, in which I note that T. Boone Pickens is trying to use the public’s anti-foreign bias and bottomless ignorance to help rig the regulatory structure in his favor. I think of it as the Swift Boat Veterans for windmills project. (Some of the commenters seem not to realize that this kind of mixed environmentalist/energy independence play is exactly how we got the now locked-in subsidies for ethanol they so vigorously decry. Also, I am an idiot for thinking that people will buy things, and producers will produce them, when the price is right.)

I’ll be off next week to Michigan for a Liberty Fund conference on Adam Smith. And then I’m moving to Iowa City with Kerry, where she will start work on her MFA in creative nonfiction while I will do exactly the same thing [as I am doing now, i.e., working for Cato], but from a different place. We will be so far from the Orange Line. Expect puppy-blogging.

Oh, You Didn't Want to Decrease Inequality That Way?

Judging from the comments, Marketplace listeners do not seem all that receptive to the standard explanation of growing wage inequality, nor to the idea that limits on H1-B visas constitute a subsidy to domestic skilled workers that exacerbates the wage gap. Anyway, that’s what I argued today. Here’s my conclusion:

These days, almost everybody but their beneficiaries think agricultural subsidies are a lousy idea. They benefit a few already relatively wealthy American farmers and agribusiness firms to the detriment of poor farmers around the world. But H-1B visa restrictions are subsidies that benefit relatively rich domestic workers over their poorer foreign peers, and so it turns out many of us liberal-minded college grads are enjoying our own protectionist boost.

In this case, it seems the moral outrage is… well, we seem to be keeping it to ourselves.

And not only are we keeping the moral outrage to ourselves, it is apparently morally outrageous to address inequality by actually addressing the mechanisms that cause it — the relation between the supply and demand of skill — if that involves making some foreigners a lot wealthier.

By the way, I do not endorse the headline, “U.S. should import more skilled workers,” which of course I did not choose. If you dammed up a river, then found you had too little water downstream, and so released a bit of water from the dam, you could think of it as “importing more water.” Or you could think of it, more accurately, as removing the artificial barrier to supply.

All Disaster, Only Part Natural

In this morning’s Marketplace commentary, I argued nature needed a helping hand to wreak as much human damage as it did recently in Burma and China. The upshot:

Economic growth creates roofs that don’t blow away, walls that don’t crumble, hospitals to tend the sick, and generators to keep to the ventilators on. The self-dealing thugs that botch the institutions of growth don’t just keep their people poor. They keep them vulnerable, exposed.

Marketplace now has a space for listener comments on the website. I thought I’d reply to a couple of them here. At the beginning of the commentary I say:

Back in the early 1950’s, Burma was the wealthiest nation in Southeast Asia. But today, after a half-century of socialism and authoritarian rule, it’s one of the poorest countries in the world.

Mention of socialism elicited this response from Ken Germanson of Milwaukee:

To blame these awful disasters on socialism is truly a stretch. Wilkinson, of course, is correct to say that corruption and dictatorial policies may have exacerbated these the tragic results. Corruption and dictatorships are not restricted to socialistic societies. You’d hardly see the traditionally socialistic nation of Sweden falling into such a disaster. Why indeed would Wilkinson even mention socialism as an issue other than to further the Cato Institute’s goals of permitting unfettered capitalism? And, why even use Cato materials without a disclaimer as to its ongoing bias?

To not blame a good deal of the poverty in Myanmar and China in particular on socialism would be to a monstrous denial of reality. In the early 1960s the regime implemented an economic program called the “Burmese Way to Socialism,” which successfully transformed Burma from an emerging regional economic power into an economic basket case. If you can’t pin the the failure of avowedly socialist economic schemes on the failure of avowedly socialist countries on socialism, then what can you pin it on? And, of course, Chinese communism — history’s largest experiment in actually existing socialism — was responsible for the deaths of tens of millions through famine alone. China has begun to develop economically precisely by relaxing their adherence to socialist economic policy. For its part, Sweden is a liberal capitalist welfare state, much like the United States, and is wealthy precisely because of its relatively free-market policies. It is among the most economically free countries in the world. It is a common mistake to confuse a country’s level of redistribution with its system of economic organization, but it is a mistake.

Dan Ness of Leucadia, CA writes:

Mr. Wilkinson makes his point clear that natural disasters are made worse by poor human planning, especially in corrupt self-dealing economies. It’s tragic what’s happened in China and Burma/Myanmar. However, I’m surprised Mr. Wilkinson didn’t cite Hurricane Katrina in New Orleans. After all, in that tragedy roofs did blow away, hospitals were unprepared, and generators failed. We don’t need to point afar to find examples of botched institutions or systemically vulnerable people.

I thought about this, but thought the American audience would be distracted by the domestic politics surrounding Katrina. That’s why I compared the Sichuan earthquake to the 1995 Kobe earthquake. But Katrina strongly supports my general contention. The loss of life from Katrina is estimated at about 1800. But, if I understand the system for rating the intensity of hurricanes and cyclones correctly, Katrina was a more powerful storm than Nargis, which is now responsible for about over 80,000 fatalities. That’s an enormous difference.

That said, I think Dan’s comment raises a great point. Americans have been intensely critical of the American government’s response to Hurricane Katrina, implying that government actors may be held responsible for the consequences of natural disasters. And this is true, though the policies that really matter are the policies that affect the growth of wealth, not the policies of emergency response (which are themselves largely determined by the society’s wealth). But when it comes to less developed countries, the media seems far less willing to ascribe agency and responsibility to government policy, even though in these cases the ruling elites bear even more responsibility for the tragedy. I consider this a kind of ugly, morally blind condescension.

Me Me Media

Oh no! I’ve fallen behind in self-promotional blogging! If you missed last week’s episode of Free Will, I talked with Jeremy Lott about his new book The Warm Bucket Brigade: The Story of the American Vice-Presidency. This week, I chat with the estimable Kerry Howley about Obama, patriotism, and prostitution, among other things.

This morning on Marketplace, I argued that it’s misguided to blame the last Fed chief, or this one, for our woes:

The problem here isn’t that the guy in charge isn’t smart enough. The problem is that there’s a guy in charge at all. We’ve put a central planner at the beating heart of our market system, but we’ve known for decades that central planners rarely have the information they need, or the incentive to use it correctly.

If it all goes wrong for Bernanke, just remember: the problem isn’t the quarterback. It’s the rules of the game.

I’m off to the heart of the heartland for a few days, so blogging may or may not be light.

Too Much Consumption? Let Me Decide.

This morning’s Marketplace commentary takes on the idea that we’re consuming tons of crap we don’t need.

Update: For those skeptical of the claim that people tend to be happier, healthier, better-educated and longer-lived in countries that consume the most, please see the UN Human Development Index. The top of the list is basically the group of wealthy, liberal, capitalist societies. The Nordic countries, please note, are extremely wealthy market societies with very high levels of consumption. Also note that an ethos of consumerism is different from the level of consumption, although there is no good evidence that consumerism is in any sense harmful. Look at gadget-obsessed Japan at #8 or the arch-capitalist U.S. at #12. And bear in mind that the difference among the top 20 are so small as to be nearly meaningless. Also, see Ruut Veenhoven’s overview of his recent work, which finds no decline in happiness in rich countries and a steady increase in years of life lived happily. There is also Angus Deaton’s recent paper [pdf], which finds the positive relationship between happiness and per capita income to be very robust. And there is also my paper on the policy implications of happiness research. For those especially worried about sustainable development, Ron Bailey’s article from a few days ago is a great briefer.

Update 2: Maybe a picture will help. The black line at the top represents the OECD countries — i.e., the countries where people consume the most:

OECD Central and eastern Europe, and the CIS Latin America and the Caribbean East Asia Arab States South Asia Sub-Saharan Africa

You will also notice that this is not a zero-sum game.