Free Markets

The new QJAE asks: in what ways are they alike?

After hundreds of years of attacks on Christmas, economists have finally gotten into the act. Yale University's Joel Waldfogel, writing in the American Economic Review, condemns what he calls "The Deadweight Loss of Christmas." Once you cut through the calculus and graphs, his conclusion is clear: though Christmas generates a $50 billion gift-giving industry, a tenth to a third of that is sheer loss. Why? Because the recipient doesn't always get what he wants. Given the chance, the recipient would have purchased something else.

Scott Adams, creator of the comic strip Dilbert, emerged a few years back as one of the cleverest cartoonists in the long history of that art. His eponymous protagonist, by now familiar to everyone, is a software engineer with vaguely defined duties at a large technology firm. Dilbert's closest companion is Dogbert, a philosophical pooch with the self-professed aim of world conquest.

Employees at the Environmental Protection Agency presume to protect us from all sorts of supposed evils. But in doing so, no bureaucrats, save the tax collectors, are more vicious in their trampling of property rights. For example, they have made life miserable for people who own auto salvage and parts companies, and the drivers who depend on them.

For ages, man's right to exploit the living world—to use it for his purposes—went unquestioned. Trees were for lumber, crops for harvesting, animals for eating and skinning as well, of course, as for companionship. When not consumed directly, the products into which human labor transformed living things found their way to the market. Nothing seemed more, well, natural.

Our domestic automakers produce fine cars and trucks that people freely choose to buy. They make lots of money doing this. So why is the federal government shoveling hundred of millions of dollars annually in corporate welfare their way?

The 5th Street Theater in Seattle, Washington, is one of a dwindling number of houses of its kind. It receives no government money whatsoever. Its revenues come from a permanent endowment and ticket sales to its popular, if small-scale shows. Its charter prevents it from raising money from other private sources. It keeps a low profile in the arts community, but its staff is as loyal and dedicated as its steady stream of patrons.

The World Trade Organization has a fantastic but undeserved reputation in international circles as the world's premier institution of free trade. Despite all of the WTO's pretensions to greatness, this glorified trade-management bureaucracy exists only to promote the interests of well-heeled trade lobbyists and political power brokers.

The glories of private enterprise are most evident in the marvels we take for granted. For example, free enterprise created the marvelous, if much derided, institution of fast food. If there were a bureau of hamburger production, they'd be as scarce as budget cuts. As it is, citizens of every social and economic standing have daily access—in minutes—to a balanced meal denied to kings only two centuries ago.

If one passage in Robert Barro's excellent book attracts notice in the wrong quarters, he is liable to find himself in serious trouble.