Posts Tagged ‘American Institute for Economic Research’
Alcohol to the Rescue!
In Economics, Humane Economy, Libertarianism on April 8, 2020 at 6:45 am
This article originally appeared here at the American Institute for Economic Research on March 21, 2020.
The world, it seems, is full of bad news.
The disorienting coronavirus pandemic has occasioned an upsetting parade of horribles: Government-imposed shutdowns of business. Bans on public gatherings. A national lockdown. Restricted travel. Shortages of testing kits and hospital beds. Mass layoffs. Social distancing. Martial law. Strained supply chains.
There’s even talk of recession and depression.
Should we panic? Should we despair?
Of course not! How would that help?
This unusual moment, however stressful it may be, teaches us about the wonderful workings of spontaneous order in society, and of the innovative ability of ordinary people—not of presidents, dictators, chancellors, generals, or prime ministers—to improve lives and institutions in disparate communities across the globe.
Take the example of craft distilleries, which, of course, make liquors and spirits. Today they’re distilling a different concoction: hand sanitizer!
One estimate is that 75% of craft distilleries in the United States have considered producing hand sanitizer, which, because of panic purchasing, has been difficult to find in grocery stores and pharmacies. Bottles of hand sanitizer can sell for hundreds of dollars. Yet many distilleries are now giving them away!
Right down the road from AIER, where I’ve spent the last week as a visiting scholar, Berkshire Mountain Distillers is selling hand sanitizer for a mere $6 per bottle. And, folks, these aren’t little bottles.
Back home, where my family anxiously awaits my return, John Emerald Distilling Company is converting its facility into a “disinfectant depot.” It’s providing hand sanitizer in large spray bottles.
Wait, you might ask, what about those pesky regulations that prohibit distilleries from generating hand sanitizer? Well, the federal government has waived them. Makes you wonder: were these regulations even necessary?
It’s fascinating that distillers found a simple solution to a pervasive problem before the bureaucrats did. While governments investigated and arrested alleged price gougers who “stockpiled” hand sanitizer, industrious individuals invented practical substitutes.
Hubris and arrogance deceive government leaders into believing that only the most qualified experts among us can centrally design and maintain a mass, uniform plan to mitigate if not contain coronavirus. Meanwhile, despite government red tape, entrepreneurial forces quietly operate to supply consumers with the products they need during trying times.
Come to think of it, I don’t remember owning or using hand sanitizer when I was a kid. Presently, though, it seems so essential to quotidian experience that stores can’t keep it on the shelves. How quickly and innocently we grow accustomed to everyday possessions that would have amazed us just decades ago.
The current crisis, if that is the right word, affirms F. A. Hayek’s proposition that a spontaneous order constitutes “an adaptation to the multitude of circumstances which are known to all the members of that society taken together but which are not known as a whole to any one person.” Each of us, despite government action or inaction, as the case may be, has changed our lives to respond to this rapidly evolving situation. We’ve made sacrifices and compromises, adjusted our habits and routines, and imaginatively resolved unforeseeable challenges.
That’s what the market is: the free, aggregated actions and decisions of innumerable buyers and sellers within their unique settings and particular contexts. The market isn’t some monolithic evil bent on elevating certain classes of people at the expense of others. It isn’t the embodiment of a single, undifferentiated intent or an unvarying scheme to enrich some homogenous group.
Perhaps the invisible hand metaphor, though well meaning, is misleading. We human beings are not wooden chess pieces that a deific Mr. Market moves from square to square on his playing board. We’re complex, conflicted, loving, and curious agents exercising our reason and judgment to help our families, friends, and neighbors—and to discover needed goods and services as well as the viable means for delivering them.
People are, sadly, suffering and dying because of coronavirus, the harms from which are planetary in scale. We should remember, all of us, amid hardships and confusion, isolation and loss, disruption and sorrow, to appreciate the small, entrepreneurial miracles that have widespread and salubrious effects—like turning vodka into pocket-sized, germ-killing gel!
To distillers everywhere, let’s raise a glass. Cheers! Salud! Yamas! Kanpai! Prost! Saúde! Chin chin! Noroc! Skål! Ganbei! Geonbae! Gesondheid! Santé!
Thank you, and here’s to your health.
What Coronavirus Teaches Us About Human Connection
In Arts & Letters, E.M. Forster, Economics, Humane Economy, Humanities on April 1, 2020 at 6:45 am
This post originally appeared here at the American Institute for Economic Research on March 19, 2020.
Only connect!” reads the epigraph to E.M. Forster’s novel Howards End. That phrase possibly encapsulates Forster’s entire philosophy.
It is also contrary to the current commands of our authorities and the mass media: Stay home! Keep inside! Close down! Quarantine! Be afraid! Socially distance! Don’t gather in groups!
However prudent they may be under the circumstances, these imperatives seem strange, confusing, and unnatural. Most of us don’t like alienating ourselves from others for lengthy periods. In times of trouble, we want to help others. We want to do something. If the coronavirus has harmed our psychology, if it has bothered or disturbed us, it is probably because we feel so helpless and vulnerable in the face of its transmittable power. The only thing we can do is….nothing.
Perhaps there is a silver lining. Absent tangible contact with others, we find communities online and via information technologies. Can’t visit your elderly parent or grandparent in the nursing home? Here’s a web camera. Can’t make that meeting in Boston or Atlanta? No problem: chat on Skype or Zoom or Google. Can’t visit the Met? Happily, that opera is livestreamed!
None of this would have been possible, let alone conceivable, a century ago. Free markets and the innumerable innovations of countless entrepreneurs have improved our lives and institutions in ways we take for granted. As bad as circumstances seem, they could be much worse.
It is popular in some circles to caricature those who celebrate free markets as cold, utilitarian ideologues promoting a radically technocratic vision of society that is characterized by atomized individuals ruthlessly committed to wealth maximization at the expense of the less fortunate. Nothing could be further from the truth. Markets are about freedom, coordination, cooperation, collaboration, association, peace, commerce, prosperity, and exchange. They bring people together. They incentivize trade and honest dealing over violence and war, and voluntary consent over coercion and compulsion.
As the stock market tumbles and businesses shut down, as we quit spending money on everyday goods and pleasures, as we restrict travel and shutter restaurants and bars, perhaps we will begin to more fully appreciate the beauty and joy that a free economy enables.
I have spent the last week as a visiting scholar at AIER, enjoying the company of kind, hospitable colleagues while living in the grand and elegant Edgewood Estate. In sharp contrast to the coronavirus hysteria and panic I’ve seen in popular media, life here has been calm, friendly, warm, and studious. We dine together for each meal, maintaining the appropriate distance of course. We help each other clean rooms and wash dishes. We meet for cocktail hour each evening after a long day of rigorous research and writing. On these occasions we discuss our work, seek advice and feedback, exchange information and data, and test our theories and arguments. The ideas we bandy about don’t end right then and there. They form the basis of articles and of interviews for television and radio. They find their way onto AIER’s website, the traffic for which, this week alone, has hit unprecedented levels.
I have noticed during my time here, gradually and by slow degrees, something far more infectious than coronavirus: ideas. Even in self-imposed isolation, the keen intellects at AIER have managed to reach people across the globe, providing unique perspectives and key economic insights to those who most want and need it. A communicable virus has nothing on communicable ideas. AIER has met a negative force with a positive one that is stronger and more lasting.
As governments close borders and impose curfews, as militaries take to the streets to enforce martial law, as universities cancel in-person classes and companies send their employees home, it is important to remember how formidable, vigorous, and enduring ideas can be. Deirdre McCloskey’s seminal trilogy—Bourgeois Virtues, Bourgeois Dignity, and Bourgeois Equality—surveys the places and periods in which culture, shaped by ideas, facilitated human flourishing to an astonishing extent. Rhetoric and the concepts it conveys are, in her account, the vital factors that explain economic growth in the modern era.
Imagine what could be accomplished if we proliferated ideas about freedom and liberty more widely and quickly than any contagious virus could ever spread. One person comes into contact with another, transmitting an idea, which is passed on to yet another, who shares it with friends and family. Before long the idea has captured the minds of hundreds, then thousands, then millions, then billions. The contagion is academic, not pandemic. It is good, not bad. It is transmissible through any communicative network and doesn’t require face-to-face proximity for its rapid diffusion.
Only connect!
This morning, over coffee, I watched the sun rise above the rolling hillsides and heard exuberant birds chirping in the trees. I realized, sitting there, taking in the sights and smells and sounds of the coming spring, that this pandemic, like all upheavals, will pass. Exhilarated, I sensed with growing intensity a feeling not unlike what William Wordsworth must have felt when he wrote that “in this moment there is life and food / For future years.”
For many, this is undeniably a dark, sad, and scary hour of sorrow and hardship, loss and pain. You may be mourning or suffering. You may be comforting a sick loved one. You may be locked away in your room. But take solace: light always drives out the darkness, and hope springs eternal.
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