Thursday, July 21, 2016

Free markets make people more virtuous, happier and richer

See Free, good and happy by Scott Sumner at EconLog.
"It's a common misconception that markets make people more selfish. Deirdre McCloskey wrote an entire book on the way that markets instill good values. Here are some other pieces of evidence:

1. Statist polices like rent controls and minimum wage laws encourage people to be evil. It becomes in one's self interest to treat renters poorly, or to treat employees poorly. Some of that occurs even under a free market, but at least under a market system people have some incentive to treat customers, tenants and employees well.

2. People who lived for decades under highly statist governments in Russia and China developed a society with low levels of civic virtue.

3. At least in the Chinese case, there is evidence of causation running from exogenous changes in economic structure to civic virtue. Mainland Chinese visitors to Taiwan tend to notice a higher level of civic virtue, a "better culture".

4. Back in 2008 I did a study that showed that countries that were more neoliberal also tended to be less corrupt, happier and richer.

Like David Brooks, I'm a bit worried about cultural decline (although much less worried than he is). My specific fear is that a $15 minimum wage and expanding rent controls will make people in California meaner. (I hope to retire in California someday.) In fairness, they may be about to legalize pot, which would reduce the footprint of the war on drugs, and thus make society a bit nicer. Ditto for their right to die law, which recently took effect. Indeed it's quite possible that by next year the entire West Coast will have both legal pot and a (limited) right to die law."

No comments:

Post a Comment