Thursday, August 15, 2013


Economic Ignorance and Political Opportunism: Bipartisan Failures
Posted: 14 Aug 2013 04:17 PM PDT
Here’s a letter to the Republican Governors Association (sponsor of the television ad to which the letter below is a response):
Members, Republican Governors Association
Dear Republican Governors:
At my home in Fairfax, Virginia, this evening I saw your tv commercial criticizing Democratic Virginia gubernatorial candidate Terry McAuliffe.  The torrent of economic stupidity that is your commercial, while insufficient to convince me to support Mr. McAuliffe, is more than sufficient to convince me not to support Ken Cuccinelli, his GOP rival.
The commercial accuses Mr. McAuliffe of hypocrisy because, while he brags about creating jobs as an American businessman, he also once proposed to outsource some jobs for his business to China.
Your criticism of Mr. McAuliffe’s off-shoring of some jobs to China is rank economic idiocy.  Do Republicans not understand that nations gain from foreign trade?  Are you as oblivious as are Democrats to the dangers inherent in unleashing government to protect firms and workers from the forces of global competition?  Is your grasp of economics really so weak that you do not comprehend that a firm that saves money by buying some services from lower-cost foreign suppliers is able not only to supply domestic consumers with lower-priced products but also able to expand its domestic operations on other fronts?
Establishment Republicans boast of being economically informed champions of free markets.  Your commercial, however, is evidence that such a boast is nothing more than a farcical pretense.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

Jonathan Haidt, of course, would agree.
Social ‘facts’ – including economic reality – are extraordinarily complex phenomena.  There is no such thing as simply observing “the” facts and then coming to some understanding of reality.  All observations, even the simplest, must be filtered through our mental categories in order for us to make sense of them.  And the role of mental categories – priors and implicit burdens of intellectual proof; hypotheses; theories – in deciphering social reality is especially great.
Needless to say (but I’ll say it anyway), everyone is under the strong influence of priors and theories.  Stalinists, Hayekians, Randians, Georgists, market monetarists, Keynesians, “Progressives” – you name it, none of us derives our understanding of reality simply by observing reality.  Therefore, it is especially important in the social sciences to get the theory right


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