This morning had a great time watching Pete Boettke wander around at APEE, complaining that all the breakfast (advertised on the program as "continental breakfast", btw) foods were breads and sugar. He wanted "protein."
If ONLY there were a system where one could go to some establishment, order exactly what one wanted, and then exchange some valuable tokens for that meal. We could call it... markets. And restaurants (there are at least six full service restaurants in this hotel complex...)
But I have to admit that I was with Pete. Wouldn't it be great if there were just free food, as much as I want, and it had bacon and eggs (the Angus special) and cheese and ham and steak and.... Wouldn't that be great?
It's so tempting to want that, and to want someone else to provide it. The difference is that Pete was actually just joking and having a good time. Many people really think there "should" be free stuff for everyone. But when they/we try to provide free stuff for everyone, you get people standing in long lines for stuff like toilet paper. Forget protein...we're talking about toilet paper. That's not right. Markets are the best we can do, and they are actually pretty good.
"Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys. If I set up a shop on Etsy selling photographs, my private returns may be defined as the revenue I generate. The social returns are the pleasure that my photographs provide to my customers."
People, private returns are the returns enjoyed by market participants both producers AND consumers. Consumer surplus is not a "social return". It flows to the buyer alone.
Social returns are returns that accrue to people outside the market. People other than the buyers and sellers.
Let's try an example of our own.
If I paint people's houses, the private returns are the producer surplus (which is not my revenue) I enjoy AND the consumer surplus my customers enjoy. The social returns could be (A) zero, (B) positive because the newly painted house raises my neighbors' property values, or (C) negative because my customer had the house painted purple and it is causing disutility for the neighbors.
If that quote above was given as an answer to a question about the difference between private and social benefits in my principles class, it would fail.
The worst part of the whole thing is that, to introduce the offending quote, the columnist says, "As an economist, I look at it this way".
"It seemed like routine business for the student council at the University of California, Los Angeles: confirming the nomination of Rachel Beyda, a second-year economics major who wants to be a lawyer someday, to the council’s Judicial Board. Until it came time for questions. 'Given that you are a Jewish student and very active in the Jewish community,' Fabienne Roth, a member of the Undergraduate Students Association Council, began, looking at Ms. Beyda at the other end of the room, 'how do you see yourself being able to maintain an unbiased view?'
...The council, in a meeting that took place on Feb. 10, voted first to reject Ms. Beyda’s nomination, with four members against her. Then, at the prodding of a faculty adviser there who pointed out that belonging to Jewish organizations was not a conflict of interest, the students revisited the question and unanimously put her on the board...Reports of anti-Israeli or anti-Jewish sentiment have been on the rise across the country in recent years, especially directed at younger Jews, researchers said." [NYT]
Yikes! For some reason, many people have come to believe that disagreement is cause for shunning and economic boycott. If A dislikes the policies of country or state I, then A is justified in punishing people who sympathize with I. (Note that "I" could be Israel or Indiana).
Suppose some guy comes into your store wearing a "I heart Indiana" hoodie. You are gay, or have gay friends. Do you have to serve him? After all, you don't like what he stands for. And...and...well, it's YOUR STORE. Do you really have to validate this person? Kick 'em out; he's intolerant.
But the meaning of "tolerance" is respectful treatment of people you disagree with, or hate. And tolerance is required of citizens in a democracy.
The hard problem: How tolerant should we be of other people we perceive (and that we have good reason to perceive, at least in our perception) as intolerant? (Referring now to the Indiana law, of course). Is it legitimate for a corporation to refuse to sell to people from Indiana, given that Indiana is intolerant of same sex couples?
Here is an article from three years ago from Wake Forest Law Review. It gives quite a bit of detail, but comes out against the constitutionality of laws such as those in Indiana.
And here is an even better (IMHO) law review article (from almost 50 years ago, when we were having an analogous argument about black folks) about common carriers and public accomodations. It is quite detailed, and historically useful.
Excerpt from the latter:
Under English common law, it was the duty of common carriers to serve all persons without imposing unreasonable conditions.
The English courts considered that "a person [who] holds himself out to carry goods for everyone as a business . .. is a common carrier," ' and that any member of the public may create a contract with the carrier by accepting its general offer.