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*Labor Econ Versus the World*

Summary:
The author is Bryan Caplan and the subtitle is Essays on the World’s Greatest Market.  It is a collection of his best blog posts on labor markets over the last fifteen years or so.  A Bryan blog post from 2015 gives a good overview of much of the book, which you can read as pushback against a lot of doctrines held by other people, including the mainstream: What are these “central tenets of our secular religion” and what’s wrong with them? Tenet #1: The main reason today’s workers have a decent standard of living is that government passed a bunch of laws protecting them. Critique: High worker productivity plus competition between employers is the real reason today’s workers have a decent standard of living.  In fact, “pro-worker” laws have dire negative side effects for workers,

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The author is Bryan Caplan and the subtitle is Essays on the World’s Greatest Market.  It is a collection of his best blog posts on labor markets over the last fifteen years or so.  A Bryan blog post from 2015 gives a good overview of much of the book, which you can read as pushback against a lot of doctrines held by other people, including the mainstream:

What are these “central tenets of our secular religion” and what’s wrong with them?

Tenet #1: The main reason today’s workers have a decent standard of living is that government passed a bunch of laws protecting them.

Critique: High worker productivity plus competition between employers is the real reason today’s workers have a decent standard of living.  In fact, “pro-worker” laws have dire negative side effects for workers, especially unemployment.

Tenet #2: Strict regulation of immigration, especially low-skilled immigration, prevents poverty and inequality.

Critique: Immigration restrictions massively increase the poverty and inequality of the world – and make the average American poorer in the process.  Specialization and trade are fountains of wealth, and immigration is just specialization and trade in labor.

Tenet #3: In the modern economy, nothing is more important than education.

Critique: After making obvious corrections for pre-existing ability, completion probability, and such, the return to education is pretty good for strong students, but mediocre or worse for weak students.

Tenet #4: The modern welfare state strikes a wise balance between compassion and efficiency.

Critique: The welfare state primarily helps the old, not the poor – and 19th-century open immigration did far more for the absolutely poor than the welfare state ever has.

Tenet #5: Increasing education levels is good for society.

Critique: Education is mostly signaling; increasing education is a recipe for credential inflation, not prosperity.

Tenet #6: Racial and gender discrimination remains a serious problem, and without government regulation, would still be rampant.

Critique: Unless government requires discrimination, market forces make it a marginal issue at most.  Large group differences persist because groups differ largely in productivity.

Tenet #7: Men have treated women poorly throughout history, and it’s only thanks to feminism that anything’s improved.

Critique: While women in the pre-modern era lived hard lives, so did men.  The mating market led to poor outcomes for women because men had very little to offer.   Economic growth plus competition in labor and mating markets, not feminism, is the main reason women’s lives improved.

Tenet #8: Overpopulation is a terrible social problem.

Critique: The positive externalities of population – especially idea externalities – far outweigh the negative.  Reducing population to help the environment is using a sword to kill a mosquito.

Yes, I’m well-aware that most labor economics classes either neglect these points, or strive for “balance.”  But as far as I’m concerned, most labor economists just aren’t doing their job.  Their lingering faith in our society’s secular religion clouds their judgment – and prevents them from enlightening their students and laying the groundwork for a better future.

I will say this: Labor Econ Versus the World, while not written as a book per se, still is the best free market book on labor economics I know of.  And it is very reasonably priced.  I agree with much of what is in this book, but by no means all of it.  I’ll consider my differences with it in a separate blog post, to come tomorrow.

The post *Labor Econ Versus the World* appeared first on Marginal REVOLUTION.

Tyler Cowen
Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. Cowen and Tabarrok have also ventured into online education by starting Marginal Revolution University. He currently writes the "Economic Scene" column for the New York Times, and he also writes for such publications as The New Republic, the Wall Street Journal, Forbes, Newsweek, and the Wilson Quarterly.

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