How Yglesias Channels Bastiat
I want to persuade Matt Yglesias to give Frederic Bastiat the respect he deserves. On some level, though, Matt already reveals remarkable respect for my favorite 19th-century French economist. Imitation is the sincerest form of flattery – and Matt has repeatedly channeled Bastiat on some issues that Matt takes very seriously.
Absurd? Consider: What does it mean to “channel Bastiat”? There are three key components:
1. Ridiculing simplistic economic misconceptions.
2. Lamenting the popularity of these misconceptions.
3. Blaming bad economic policies on the popularity of these misconceptions.
This is basically what Yglesias does in my favorite posts of his. Most notably:
I see breaking up the barber cartel and increasing competition for
barbering services as a progressive measure, because if you reduce the
cost of things that poor people buy, you increase their real living
…We need to
ask ourselves if it’s actually true that barber licensing is an
egalitarian measure. I’m almost certain that it’s not. Clearly, if we
restrict entry into the barbering industry what we do is redistribute
real income away from the customers of barber shops and to the incumbent
barbers. In effect, you’re setting a kind of price floor. But the
important thing to note about this is that haircuts are already sold at a
wide range of price points…The people impacted by the haircut price floor are going to be the people shopping for the cheapest haircuts. That, by and large, is going to be relatively low-income people.
Like Bastiat, Matt doesn’t dwell on subtleties. Instead, he points to grandfathering with scorn:
This is the bad faith that gives away the game. If licensing is
primarily about ensuring quality in the face of market failure, then
obviously you need to regulate existing practitioners. But if licensing
is primarily about restricting competition to advance the interests of
incumbents, then regulating existing practitioners is counterproductive.
2. Yglesias on workers’ freedom of contract:
At the end of the day, GMU professors wouldn’t react to a
lower-quality work experience with “sputtering, semi-coherent outrage.”
What they’d do is quit and go work elsewhere because they have skills
that are in demand in the labor market.
After all, it’s not just working conditions. Economics professors are
paid much higher wages than low-skill workers. If you tried to pay your
economics professors $8 an hour with no health benefits or matching
contribution to your 401(k), you’d only be “saving money” in the sense
that your staff would all leave…
But if you’re debating the question of whether it should be illegal
to subject workers to mandatory searches, it doesn’t get anywhere to
point to the fact that some people are better off in general than
others. Maybe there are two companies in town running roughly similar
businesses that require the use of some unskilled labor… At one firm,
they’re offering the federal minimum wage of $7.25 an hour, and they’re
losing some product. At another firm, they’re offering $8.25 an hour but
searching employees and experiencing less loss to theft. Sometimes
people get so fed up with that b******t that they quit and go across
town to the lower-paid, less pleasant job. Other times people get fed up
with trying to make ends meet on a minimum wage job, so they quit and
go across town and subject themselves to humiliating searches in
exchange for more money. Sad stories all around, but telling the
higher-paying firm that its business model is illegal and it has to
switch to the lower-paying one isn’t going to make the stories any less
3. Yglesias on land use regulation (here and here for starters). Why is the rent so damn high? Popular but misguided land use policies. When David Leonhardt asks, “So how we did end up with these policies?,” Matt answers:
The mistakes came in two big tranches. One is that in the wake of
World War II there was a widespread recognition that the automobile was
destined to alter the built environment. Virtually every city in America
wound up overreacting to that reality by adopting widespread
regulations mandating the provision of large amounts of parking with all
new construction. The result is that lots of classic prewar American
urban neighborhoods — places that people love, like Dupont Circle in
Washington and the brownstone neighborhoods in Brooklyn — would be
illegal to build under today’s standards. This is folly.
Simultaneously, we’ve failed to think through the implications of
small-scale decisions. In any given metro area, everyone might be better
off if a bit more building was allowed throughout the region. But the
decisions aren’t made on a regionwide level. They’re made hyper-locally,
and each neighborhood may have reason to fear that more development
will mean more noise or more traffic. It’s like a tragedy of the commons
in reverse — each small unit is a bit too stingy with what it allows,
and it all adds up to a big problem.
“This is folly.” Bastiat would be so proud.
My point, of course, isn’t that Matt channels Bastiat all the time. He clearly doesn’t. My point is that Matt has far more in common with Bastiat that he admits. When Matt underrates Bastiat, he underrates himself.
Matt could quite reasonably object that Bastiat isn’t very relevant for subtle policy issues that baffle the wisest wonks. Fair enough, but so what? As Matt clearly realizes, many policy issues aren’t subtle. Bad policies often endure simply because the public has inane economic beliefs and votes accordingly. When this is the problem, channeling Bastiat is the best remedy we’ve got.
P.S. If you know of other cases where Matt channels Bastiat, kindly share them in the comments. Please be gracious.