from Gene Epstein’s departing column at Barron’s- Keep Asking the Big Questions:
Compared to what? At what cost? Who pays? And, what happens next?
It’s the responsibility of economists to ask and answer questions like these—and the job of economics columnists to relate and explain the discussion. I’ve been doing that for a quarter-century as the proprietor of this column, and now have a what-next message of my own: I will soon be leaving Barron’s, with a plan to write long-form articles and books. But first, a few thoughts about the economics lessons I’ve learned.
Economists often shirk the big questions because the answers can bring unwelcome news. Since many economists yearn to sit at the tables of power, they avoid discouraging talk, the better to preserve their standing with politicians who can appoint them to powerful jobs.
When economist Milton Friedman told President Richard Nixon that Nixon’s price controls were a bad idea, Friedman was permanently banished from Nixon’s presence. Similarly, economist and outsider Thomas Sowell once wrote that, when it comes to society’s problems, “There are no solutions. There are only trade-offs.”
But once you face those trade-offs, a look at recent and distant economic history allows you to bring quite welcome news. Bred in the socialist tradition (my mother was a card-carrying Communist—I have her FBI file to prove it), I grew up to ask the most fundamental compared-to-what question: capitalism or socialism? I eventually learned that prosperity for the masses depends on free-market capitalism. Apart from the fundamentals of economic reasoning that support this claim, the evidence stares you in the face.
The stunning leap in general living standards from 1870 to 1920 took place in the U.S. despite two facts: Both labor unions and government intervention in the labor markets played a negligible role, and tens of millions of poor immigrants were flooding the markets in search of work. In the past few decades, the turn toward freer markets in the poor countries of the world has coincided with lifting more than a billion people out of grinding, one-dollar-a-day poverty.