Statistics show, 3/4 of the time authorities get it right
Economists and Geonomists overlap on five key issues
We trim and append this 2008 op-ed from The New York Times of July 13. The author, professor of economics at Harvard, was chief adviser to President Bush and polite enough to both correspond and dialog with your editor.
By N. Gregory MankiwIn every election season, we economists expect to be largely ignored, and, unlike many of our other forecasts, that one often turns out to be right.
But if candidates listened, what would most economists say?
On many issues -- from universal health insurance to increased taxes on the rich -- economists do not speak with a single voice. But on some issues we do.
Economists like free markets.
JS: Geonomists note that to free markets, government must defend not just property rights but also environmental rights and quit tormenting prices by replacing taxes with user fees and subsidies with dividends to the citizenry.
Now on to eight key issues:
Drug policy: Many economists marry their support of economic freedom with a similar support of personal freedom. Drug policy is a case in point. A 2006 poll of professional economists asked whether the United States should legalize marijuana. Those in favor outnumbered those opposed more than three to one.
JS: Good on them!
Farm Subsidies: The recent $300 billion farm bill, ethanol subsidies, and opposition to imported sugar may bring votes from farmers, but they’re a burden on taxpayers and consumers.
JS: Hear, hear!
Free Trade: Economists are nearly unanimous in their support of an unfettered system of world trade. Many would even repeal antidumping laws. The ostensible purpose of these laws is to prevent foreign companies from selling in the United States at prices below fair value, but in practice these laws let special interests shield themselves from competition.
JS: Trade works between individuals and regions, and nations too, so everyone can exchange their surpluses.
Skilled immigrants: As part of their embrace of globalization, economists are more open to immigration than is the general public. Admittedly, unskilled immigrants raise some potential problems: They may depress wages for Americans at the bottom of the economic ladder, exacerbating the rise in inequality, and they may overburden the social safety net. By contrast, skilled immigrants promote economic growth, especially among poorer Americans, and pay more in taxes than they get in government benefits. The more, the merrier.
JS: Free trade and free travel sans visas both make sense, especially if we were to reform our foreign policy into something that foreigners did not try to flee. That is, quit selling and giving away weapons and undercutting foreign farmers with our domestic subsidies.
Consumption of energy: A summer gas tax holiday? Economists greeted that with derision. Most advocate increased taxes on energy products. Consumers have responded to higher gas prices by turning to mass transit and purchasing small cars, scooters, and even bicycles.
JS: OK, levy “sin taxes” on nuisances like congestion and assaults like pollution. But don’t let producers off the hook. The earlier in the economic process, the more effective the levy. So be sure to get the full rental value of fossil fuels in the ground, too.
Oil companies and speculators: With the stunning rise in oil prices, candidates have demonized these major players. By contrast, most economists see nothing more sinister than the forces of global supply and demand at work.
JS: Whoa. Also at work are tax breaks and subsidies. For the market to keep oil prices reasonable and find energy alternatives, government must quit subsidizing fossil fuels and start charging full value for pollution and depletion. It must also shift the property tax off buildings, onto land, which would concentrate cities and drastically cut the demand for vehicle fuels.
Retirement age: Social Security faces a long-term problem. So increase the age of eligibility for benefits. As Americans live longer, we need to redefine old age.
JS: ”We”? If your “work” is pontificating and wielding the power to fail students who disagree, whoop-tee-doo. Who wouldn’t want to keep “working” until senility sets in and beyond? Yet people performing backbreaking labor might feel differently. Rather than curbing Social Security, we could pay ourselves a “social salary” from society’s surplus. We members of society spend many trillions each year to a few who do not create value but merely hold privileges granted by government. Charge full market value for pieces of paper like land titles, resource leases, broadcast licenses, emission permits, utility franchises, corporate charters, banking charters, etc, and we’d have trillions of public revenue for Social Security or a Citizens Dividend.
Fund economic research: You might view this as nothing more than a way to buy a few votes.
JS: Actually, economics does not need subsidies to become scientific; in fact, subsidies might prevent that from ever happening. All economists need is the scientific attitude that ignores convention and keeps an open mind, following reason and results wherever they lead. Upon arriving there, the discipline would no longer be economics but would have evolved into geonomics.
Jeffery J. Smith runs the Forum on Geonomics.
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