Tracing consequences both seen and unseen.
Sarah BrodskyDo Markets Need Fairness?
Posted at 5:11 pm on June 19, 2011, by Sarah Brodsky

I was surprised by this post on Common Sense Concept, a blog published by the American Enterprise Institute. Although the author has written in support of private charity, in this post he argues that fairness in terms of material outcomes is not desirable. He supports this argument with quotations from various Christian texts and concludes by saying, “Let us be content with managing our own affairs”.

I won’t address the religious justification for this position, but I’d like to point out that the author is overlooking several ways in which fairness matters for the free market. First, unfair outcomes such as poverty and economic immobility can be an indication that the market is not working so well as it should. This may be caused by government intervention or incompetence, as when centralized education policies trap poor children in schools that don’t prepare them to enter the workforce. Or it may be a sign of untapped opportunities, like the lack of access to banking services by residents of the central Amazon. Whether the solution is the curtailment of government power or entrepreneurial innovation, we should heed these instances of unfairness so that we can make the market better.

Second, economic conditions change and the people who are privileged today could be needy tomorrow. We’ve all heard stories of people who lost their life savings in the latest recession; even in calmer economic times, giant corporations and once-profitable-looking investments can vanish as technology evolves. The existence of a safety net, possibly based on private charity, could give people the confidence to start new ventures and to take the risks necessary for innovation, knowing that their basic needs will be met if they fail. Charities should also ensure that the poorest people can survive without resorting to theft and crime, which can cripple a market system. The post’s author might counter that we should give charity without regard to fairness, but I don’t see how that’s possible. Do you give charity to the first wealthy person who walks by your door? Of course not. You look for the people who need charity the most–in short, the people in the least fair situations.

Finally, I’d like to remind the author that we don’t have a free market with perfect efficiency. While based on the econ textbooks, one might think that demand for innovations will lead to an increase in the number and quality of innovators, in real life that doesn’t always happen. If the person who could have cured cancer or revolutionized communications was born into unfair circumstances, he might not obtain the necessary human capital investments through no fault of his own. That’s not just a tragedy for him. It makes the rest of us poorer too because we don’t get to benefit from his potential contribution to the economy. So while we shouldn’t count on government to smooth every inequity, we should give serious thought to fairness if we want a successful market.


Filed under: Efficiency, Market Efficiency
Comments: 2 Comments
 

Sarah BrodskyHow the FCC Encourages Religious Discrimination
Posted at 1:15 pm on November 1, 2010, by Sarah Brodsky

Radio Station

A friend of mine recently applied for an off-air position at a radio station. The interview went well–until they asked if he were a Christian. When he said he wasn’t, they responded that they were sorry, but they were running a Christian talk station and they could only hire Christians. They said that they had to have this policy in order to comply with FCC regulations.

That seemed pretty bizarre. I could understand a Christian station wanting to hire people with similar beliefs, but what did the FCC have to do with it? Then I looked up the FCC’s Equal Employment Opportunities regulations. The FCC requires stations to do a lot of things to avoid discrimination in recruitment. They have to participate in job fairs, sponsor job fairs, host job fairs, offer internships, or take other actions that have been approved by the FCC. All of those measures impose some costs on stations. However, a religious station need not take these steps to recruit for an open position if it makes religious belief a qualification for the position. So to keep their recruitment costs down, Christian stations bar non-Christians from employment. Rules that were supposed to prevent discrimination are actually causing stations to discriminate.

The religious discrimination might even out, so to speak, if there were equal numbers of stations affiliated with many different creeds. But of course, the vast majority of religious radio stations are Christian. There are very few Muslim stations or Jewish stations; I’ve come across online Buddhist broadcasts, but no brick-and-mortar Buddhist stations. And I haven’t found any atheist radio stations, although there are individual shows dedicated to atheist ideas. A Christian who wants to work in radio likely won’t miss out on any opportunities, but a Muslim or an atheist will be passed over when religious stations are hiring.

Would that happen even if the FCC didn’t impose these regulations? Not necessarily. I’d expect Christian stations to exclusively hire Christian for on-air positions. And probably they would want only Christians to write content for religious shows. But there are other jobs, like board operator or call screener, that people with different beliefs could still perform competently. Religious stations might hire people of other faiths for those roles, if the FCC didn’t give them an incentive to discriminate.


Filed under: Regulation, Religious Freedom, Technology, Unintended Consequences
Comments: None
 

Sarah BrodskyBodies
Posted at 1:39 pm on September 14, 2010, by Sarah Brodsky

The company behind “Bodies… The Exhibition,” which is coming to Missouri in October, has received a lot of criticism for displaying cadavers it obtained from the Chinese Bureau of Police. At least one Missouri congressman has tried to prevent the exhibit from appearing at a mall in his district. But the St. Louis Post-Dispatch reports that “Bodies” will take place as planned, because Missouri’s Attorney General is letting the company get away with a wimpy disclaimer:

“Premier cannot independently verify the complete provenance of the human remains in this exhibition,” reads the disclaimer, which must be displayed at the mall and on the exhibit’s Web page.

It can’t verify the provenance? Are we talking about oil paintings and wine bottles here, or human bodies? The disclaimer would be clearer if it read, “We have no clue whether anyone would have wanted their body parts to be displayed here, but since they can’t speak for themselves, we’re happy to cash in.”

It seems particularly jarring that this company is allowed to blithely collect admissions fees when you think of all the people who would like to purchase human organs from consenting donors, but are forbidden by law. There are people who would sign and notarize all the consent forms, and who are not Chinese political prisoners, and who would receive some personal benefit from the transaction. So why don’t we let them go ahead and sell their organs, with a disclaimer that they can’t verify… what? Their own free will?

No, that’s illegal, because the government has decreed such a transaction so morally hazardous that even saving a life doesn’t outweigh the danger. But when someone wants to tack human remains up on a wall and sell tickets, they can do that if they just mouth the right words. After all, the show must go on.


Filed under: Culture, Health Care
Comments: None
 

Sarah BrodskyPark 51
Posted at 3:03 pm on August 20, 2010, by Sarah Brodsky

Park 51, also known as the “Ground Zero Mosque,” may be the latest victim of zoning tyranny. Zoning takes building decisions that should be made by property owners and turns them into neighborhood popularity contents–or in this case, a national referendum.

Some of the debate around Park 51 deals with the people planning the community center. Opponents are combing through speeches, statements, and previous affiliations, looking for evidence of  radicalism. To which I say: Do you really want to do that kind of research before any group erects a structure?  Even the Westboro Baptist Church has a building. If you’re going to research every edifice that could harbor radicals, you should start with the all bus shelters where neo-Nazis gather before cleaning up highways.

Opponents will counter that Park 51 deserves special scrutiny. The proposed building would go up only a few blocks away from Ground Zero, so, they claim, we need to make sure terrorist sympathizers don’t congregate nearby. The thing is, that kind of reasoning can be used to stop any community center, anywhere in the country. This isn’t just a slippery slope of my imagination; it’s already happened. A proposed Hindu education center in Missouri has been caught up in a zoning fight for years, with some people objecting to it because they think it’s connected to 9/11. That incident shows that zoning disputes like the one threatening Park 51 aren’t about preserving the sacredness of any particular location. They’re about preventing members of minority religions from building swimming pools and chapels. When the memory of 9/11 can be used to stop a proposed Hindu community center one thousand miles from Manhattan, nobody’s safe.


Filed under: Politics, Religious Freedom, Zoning
Comments: 1 Comment
 

Sarah BrodskySubsidizing a Dinosaur
Posted at 9:00 am on June 22, 2010, by Sarah Brodsky

Most drive-in movie theaters closed decades ago. This Illinois theater has been around since 1949; it recently was on the brink of shutting down, but the recession drove more families to patronize cheap, old-fashioned entertainment venues and it got a reprieve. Now city taxpayers will help the theater expand. From the Post-Dispatch article:

On Monday night, the council unanimously agreed to split the estimated cost to demolish a nearby abandoned movie theater to make more room for the Skyview.

In return, the Skyview’s owner will take over the property and expand to include a third screen and commit to remain at the site for 10 years.

I love that last provision. The theater has been there since 1949. It’s good at hanging on when everybody else leaves the industry. Is it really doing city residents a favor by promising to stick around a bit longer? Such a promise would make more sense when dealing with a business that could be lured away by other municipalities, but it’s doubtful that will happen in this case. After all, we’re talking about a drive-in theater, not a baseball team.

Ever persistent, the theater continues to seek subsidies. It needs to repair its sign, and it’s hoping for an historic preservation grant from the federal government.


Filed under: Local Government
Comments: 1 Comment
 

Sarah BrodskySubsidies for Grocery Stores
Posted at 7:41 am on April 25, 2010, by Sarah Brodsky

I love Schnucks, but I can’t agree with this:

Robert Buchanan, assistant professor of finance at St. Louis University, gives the Schnucks credit for trying something bold and innovative — and for not jacking up the prices at the downtown store.

As for the businesses who are struggling as a result, that’s a fact of competitive life, he said.

“Retail is very much a Darwinian struggle, and the best operators are going to win,” Buchanan said.

The competition for lunch customers in downtown St. Louis isn’t simply a matter of the best food establishment winning out. Schnucks received state and federal “incentives” and tax increment financing from the city–subsidies that allow it to keep prices low and put smaller eateries out of business.

The story of the Schnucks Culinaria in St. Louis illustrates how government efforts to subsidize grocery stores can effect neighborhoods. Small stores and diners are hurt. The people who gain the most are the office workers who get access to cheap, convenient salads and sandwiches. But it’s not like those salaried employees wouldn’t have been able to eat any other way. They could have packed lunches from home just as cheaply if they had cared to take the trouble.

We should keep in mind the unintended consequences of grocery store subsidies the next time activists like Michelle Obama call for eradicating food deserts. To politicians, any place without a fancy deli that suburbanites would find attractive is a food desert–and all the small cafeterias that are already there had better get out of the way.


Filed under: Food Policy, Taxes, Unintended Consequences
Comments: None
 

Sarah BrodskyLessons From the Parents as Teachers Cuts
Posted at 8:25 am on April 23, 2010, by Sarah Brodsky

The State of Missouri has cut funding to its Parents as Teachers program. I hope the drop in funding will redirect Parents as Teachers to focus on people who need the most help.

Maybe I’m not a pure libertarian, but I’m actually not opposed to government programs that give poor people free stuff or try to improve the odds for children in bad situations. I’m even okay with limited home-visiting programs, as long as they’re voluntary (and Parents as Teachers is) and as long as there’s no better way to provide the services.

But Parents as Teachers, as it’s currently run here in Missouri, goes way beyond intervening with at-risk children. The program accepts children from wealthy homes; in some participating families, the parents are pediatricians. Parents as Teachers provides the same costly home-visiting services to people who own two cars and drive their kids to gymnastics every day as it does to people who don’t have transportation and really do need someone to come to their house.

Parents as Teachers also conducts research activities that do nothing to help the kids now enrolled in the program. For example, this blog post written by a participant mentions the questions Parents as Teachers asked her for a study about autism. Of course, there’s a need for research, but it’s not clear that it should be conducted by this publicly-funded program. For one thing, there are benefits to specialization; some programs concentrate on research, while others teach parents and distribute children’s books. Most programs can’t do both well. It’s also questionable whether research should be tied to programs that ostensibly support vulnerable people, opening up the possibility that participants will feel pressured to go along with the research because they want to continue receiving services.

Parents as Teachers should learn from the funding cuts that taxpayers won’t help it do everything for everyone. The program should target people who most need help–either through geographic boundaries, like the Harlem Children’s Zone or Kansas City’s Zone 27, or through income limits. It could also seek out more private donations, or charge wealthy participants for some services.


Filed under: Child Policy, Government Spending, Nanny State
Comments: None
 

Sarah BrodskyAnti-Immigration “Libertarians”
Posted at 11:20 am on April 11, 2010, by Sarah Brodsky

I’m disappointed whenever political candidates who call themselves libertarians turn out to oppose open immigration. Some of these candidates are satisfied with the current immigration system and don’t plan to reform it; others decry “illegal aliens” and vow to restrict immigration even further.

Libertarians need to get immigration right. People matter more to the economy than any inanimate goods, which don’t have brains and can’t invent things or solve problems. So the unfettered movement of people is more important than the free exchange of material goods. But for some reason, many so-called libertarians who support the latter won’t make the former a priority.

This is especially puzzling given the humanitarian case for open immigration. A shipment of electronics doesn’t care where the government allows it to go. But immigration restrictions can mean, for people, the difference between being destitute or having a happy life.

I’m suspicious of anyone who supports free exchange for material commodities but won’t extend the same courtesy to his fellow human beings. And it makes me question such candidates’ libertarian credentials on other issues, too. Are they really trying to apply free-market principles across the board? Or are they making decisions based on their inclinations and prejudices, and adopting the label “libertarian” only when it suits them?


Filed under: Immigration
Comments: 11 Comments
 

Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson
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