Wednesday, June 11, 2014

Faux Free Marketeer

Today's big news is last night's upset in Virginia. David Brat, a Tea Party econ professor, stunningly defeated House Majority Leader Eric Cantor in the Virginia primary. Congrats to Mr. Brat!

Other than touching on it in this morning's audio commentary, I doubt that I would have devoted much time here on the blog to this particular topic. That was, however, until I listened to Mr. Brat this morning in a CNBC interview.

I swear, the man said "free markets" at least a dozen times. He even quoted Adam Smith once or twice. He lambasted cronyism on Capitol Hill. I say Great!, Great!, and Great!. He then, however, and alas, began humming the Tea Party tune on immigration. Dang! I have to tell you, almost nothing frustrates me more than politicians and political organizations (or anyone else for that matter) who claim allegiance to free markets, then turn around and entirely exclude labor (to put it in market terms) as a component.

Please! Don't tell me you believe that folks should be free to transact their affairs unhindered by government, then tell me that government should hinder the movement of foreign workers into our "free" marketplace. 

Speaking of Adam Smith, here's an excerpt from the December 2013 Adam Smith Institute article titled Immigration controls are the New Corn Laws. Why don't more free marketeers care?:
What puzzles me is that my fellow free marketeers are often very indifferent (if not openly hostile) to policies that make it easier for foreign people to work in Britain. They cannot believe the economic claims that immigrants 'steal jobs' in an overall harmful way unless they also think that free trade does. There are many keyhole solutions to prevent immigrants from sponging off the welfare state. The cultural arguments, if they can be classed as such, are worth considering but certainly not so powerful that they invalidate the economic arguments. And free marketeers are usually pretty happy to let society adjust itself rather than try to engineer it to become or remain the way they like it.

And here's one from a Friesian School article titled Smith's Law, Free Trade, and Free Immigration:
Another hot public and political issue, not just in the United States but elsewhere, as in France, is immigration. Apart from a simple xenophobic dislike of foreigners, hostility of immigrants is often based on economic ideas that immigrants, like "cheap" foreign labor, drive down wages and take jobs away from natives. Again, however, workers qua workers are producers and labor costs are production costs. Driving down labor costs drives down production costs, which will benefit consumers, either by the reduction of prices in a competitive market or by an increase in profits which will attract competition that will also drive down prices.

I'm thinking Mr. Bratt, being an admirer of Adam Smith, should---as have the members of the above referenced organizations---study a bit more of the great Scottish philosopher before rambling on further about free markets!

12 comments:

  1. How can we give jobs to droves of uneducated people coming in when we have such a high unemployment number?
    I believe in a free market but without letting so many people in whom we
    end up having to support with our taxes.
    Our administration encourages people to come in, (votes) but then they
    choke the business climate - go figure

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  2. Martin L. MazorraJune 11, 2014 at 9:00 AM

    Actually Vicki, your concerns are understandable, but economic history doesn't support that thinking. Please click the following link and watch the video attached to that blog post (the last bit touches on immigration) http://www.betweenthelines.us/protectionist-you-either-are-or-you-aint/. Here's a link to another post on immigration that I think is worth your time: http://www.betweenthelines.us/we-demand-our-freedom-not-yours/

    If you're interested in digging deeper into why a much freer immigration policy would be much better for the economy, not to mention the American thing to do, just shoot me a comment...

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  3. Yes, a politician who believes in free markets is a wonderful thing. I disagree with your assessment that his stand on illegal immigration makes him a "faux" free market guy. We are a sovereign nation and have the right and the obligation to enforce our borders. The southwestern US is being overrun with essentially illiterate poor people with limited skills who place disproportionate demands on public services, emergency health care, etc. Based on the reality that we do not have "free" markets in this country and probably never will given the policies of both parties it is is disingenuous to label him a "faux" free marketer when he and we have to do with the reality of a Leviathan. If we would build a 30 foot wall along the southern border and can actually control the surge of central americans and frankly people from all over the world we would be much better off. We need more highly educated and solvent/entrepeneurial people not unskilled laborers, our mediocre public school systems have already done an excellent job of producing a surplus of low skilled, low information workers/voters. If you want more "progressive" [i.e. anti Free market] voters open the borders - latin american values are completely in sync with the Democrats.

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  4. […] Marty Mazorra is also unhappy that a self-described champion of free markets disgraces that heritage…. […]

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  5. […] Marty Mazorra is also unhappy that a self-described champion of free markets disgraces that heritage…. […]

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  6. Marty,

    I enjoy your blog very much.

    If we were to have truly open borders and allow all comers to enter wouldn't we be "over run" with immigrants who would see that even the lowest socio economic group in the US enjoys an infinitely better life style than they currently do?

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  7. William

    Gee, like the way we were "over run" back around 1900? Seems to have done the country a lot of good. The great thing about immigrants is that they are motivated to move up the ladder and many of them do, to the benefit of all of us.

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  8. Gerry,

    In 1900 taxpayers were not obligated to pay for housing, healthcare, education, Obamaphones, food stamps and so on.

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  9. Gerry,

    In 1900 taxpayers were not obligated to pay for other peoples housing, healthcare, food, education, phones and so on. Big difference. If you came to this country back then it was largely sink or swim.

    As such it is not contradictory, to be in favor of free markets but, in recognition of the fact that we do not have a market free of government distortions, be against open borders.

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  10. He probably wouldn't have gotten elected if he was for open borders. The Republican base is incredibly antagonistic to it. Even Tom Sowell, who most would agree has a deep understanding of economics and advocates free markets, changes his tune when it comes to immigration. Would that it were not so.

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  11. Martin L. MazorraJune 13, 2014 at 11:42 AM

    Thanks William!

    While they may make the observation you suggest, I don't believe immigrants, by and large, come here to sit with our lowest socio-economic group, regardless of how that compares to where they came from. I think they look at those on the bottom rung with pity, and utter disbelief that they haven't worked their way to a better position on the ladder in this land of opportunity.

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