Posted on 08/24/2011 4:02:43 AM PDT by Kaslin
We grow up learning that some things are just bad: child labor, ticket scalping, price gouging, kidney selling, blackmail, etc. But maybe they're not.
What I love about economics is that it can show that what seems harmful is actually good for society. It illuminates what common sense overlooks.
This is all covered in the eye-opening book "Defending the Undefendable" by economist Walter Block.
Most people call child labor an unmitigated evil. David Boaz of the Cato Institute and Nick Gillespie of Reason.tv say that's wrong.
"If we say that the United States should abolish child labor in very poor countries," Boaz said, "then what will happen to these children? ... They're not suddenly going to go to the country day school. ... They may be out selling their bodies on the street. That is not an improvement over working in a t-shirt factory."
In fact, studies show that in at least one country where child labor was suddenly banned, prostitution increased. Good economics teaches that as poor countries get richer and freer, capital investment raises the productivity of labor and child labor diminishes. There's no shortcut through government prohibition -- unless you like starvation and child prostitution.
What about price-gouging? State laws attempt to prevent people from charging "unconscionable" prices during emergencies.
"If I'm in the neighborhood of Hurricane Katrina," Boaz said, "what I want is water and ice and generators. ... If you are in Kentucky (and) you've got 10 generators in your store, are you getting up at 4 a.m. to drive all day to get to Louisiana to sell these generators if you can only sell them for the same price you can sell them for in Kentucky? No, you're going to go down because ... you can sell them for more."
Also, if prices rise during an emergency, that's a signal for people to buy only what they most need. That leaves more for everyone else. If the price remains low, an incentive to conserve is lost.
Ticket scalpers are seen as sleazy guys who cheat you by marking up the price of tickets. Profits go to middlemen instead of the performers. What good could they possibly do?
"I like to think of ticket scalpers as the guy who stands in line so that I don't have to," Gillespie said.
Time spent in line is part of the ticket cost. Scalpers let you pay entirely in money, rather than partly in valuable time.
Most people say that selling body parts is wrong.
"It also seems wrong to have people dying because they can't get a kidney," Boaz said.
Some 400,000 Americans are on a waiting list now for a new kidney, and they are not allowed to pay for one.
"We sell hair. We sell sperm. We sell eggs these days." Boaz added.
Gillespie added, "The best way to grow the supply and allow more people to live is to allow the market to price those organs."
Maybe the most counterintuitive position argued on my show was that blackmail should not be a crime. Blackmail (unlike extortion) is the demand for money in return for withholding information. Robin Hanson, a George Mason University economist, defends blackmail.
"The thing you're threatening when you're threatening blackmail (is) gossip," Hanson said. "If it should be all right to tell people, it should be all right to threaten to tell people."
What we don't like, however, is the blackmailer saying, "Pay me to keep quiet."
"But the effect of that is to make people behave," Hanson said. "If we (allow) blackmail, people behave even more because they are even more afraid of what might happen if they don't."
Maybe Ponzi-schemer Bernie Madoff would have been caught earlier?
"That's right. ... Blackmail is actually a form of private law enforcement."
Also, since gossip is free speech, blackmail is simply selling the service of not engaging in free speech. Why should that be outlawed?
I subtitled my last book, "Everything You Know Is Wrong." I was exaggerating, of course, but many things we're taught are fallacies. That's why I like economics. It explodes fallacies.
Thanks for the article. It has some good points. Child labor was legal for most of the history of the U.S. Children were expected to work. They learned valuable lessons with that.
Because it allows wealthy people to pay to cover up their illegal crimes.
I include myself, my daughter and grandchildren in that population. Most of my high school teachers were grossly incompetent and crashing bores. Almost anything I ever learned worth knowing I taught myself.
why is forced education for all Americans the law of the land.
Is there a constitutional imperative somewhere that calls for it???
My kids, once they could walk, were crawling under my car with me, or helping me put up sheet rock, painting and fixing the plumbing...
now one is an engineer who is called upon before other engineers because he can physically do things...along with the theory.
The American people believe in paying pedagogues with tax money even if they don’t know what one is.
The problem with Libertarianism is that the neglect to take morality into consideration. It is a fatal flaw in their “logic”.
Why is this our business and what gives us the authority to do this?
The kids here are way to much pampered. Take for instance if a juvenile commits a crime his or her name should be released. A juvenile from the age of 8 should know right from wrong. If not then parents and schools are failing to teach it
Not necessarily. If the blackmailer has any marketing skills he will charge according to the target's ability to pay. A wealthy person will be hurt by inflating the cost of silence. Qny good used car salesman knows that discerning the customer's income is the first step in determining price.
No, Libertarians don't neglect morality. They believe that the state should neither define nor enforce it.
It’s certainly a US prerogative to choose not to patronize such operations. Whether US should attempt to exercise political influence abroad to have such operations literally banned, is another question.
I may be older than you, I graduated from high school in small town Missouri in 1963, while my teachers weren't perfect, I would not have rated a single one of them, "grossly incompetent". Some were certainly better than others but they all knew the subjects they taught.
Part of the problem is that punishment or the right to kick butt has been greatly diminished or abolished. Getting up in front of the class and having the Board of Education laid across your rear had in many cases, the desired effect. Same thing at home.
Another way to look at child labor is to view it as servitude. As an adult I can make my own choice between spending my time preparing for the future (as in going to school) and exploiting my present talents (working). It’s my choice and I get the reward of either choice. But with children it is someone else who either gets the present rewards or chooses to allow the child to prepare himself for the future.
So long as the parent has the best interest of the child at heart, they have a fair chance of making a good decision (which might be to choose work in some cases). If the parent does not have the child’s best interest at heart then the child is an involuntary laborer working on the behalf of others.
Who guards the guardians? Shall there be societies of meta-blackmailers, who blackmail the blackmailers? And meta-meta-blackmailers and so on, until all public discourse is well chilled and tinged in fear? God, who made the creation, surely cannot be denigrated as a fool when making statements about how to run it, such as calling for well defined systems of justice that can’t be bribed.
There has yet to be any law, any principle applying to kings, which was not based in some “ought to” type of proposition.
Hmmm, so if we allow bullying (or really teasing) in grade school, perhaps less kids will grow up gay. It’s probably not a bad trade - some stress during the early years, in exchange for a chance at a happy, normal life.
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