This just seems like another pointless overly literalist autistic take. ‘Everyone’ is taken to mean approximate everyone or all defined classes of people along some axis. It’s trivial to point out that nothing benefits everyone. Even a meteor that wipes out all of humanity benefits people who want to die but can’t muster the will to commit suicide.
I don’t know, this take seems like disputing the claim that blue whales are the largest mammals by pointing out that juvenile blue whales are smaller than adults of some mammalian species. You’re just positing a very specific sense of the claim for which the claim is false but that everyone is already aware of. No new information is being generated.
I invite you to try teaching college economics sometime. You will almost certainly get a student calling you out on "Everyone gains". They will be correct, no less; one shouldn't make such vague hand waving claims with such strong consequences.
Don't you have to distinguish between free market processes that aggregate the choices of consumers and create incentives for changes that have economic winners and losers and government policies that redistribute resources and/or pick the economic winners? There is a big difference between Schumpeter's creative destruction and government industrial policy.
Yes, there is, but to the point of this piece, it seems to me the two go hand in hand. Economic upheaval brought about by "progress" is often accompanied by, or generates new, terrible policy making processes.
This is the sort of post I'm here for. Here's ChatGPT's counterargument: "Everyone gains" can be interpreted not as literal but as a shorthand for widespread benefits. It's an oversimplification, but it effectively communicates the overall net positive impact without denying individual losses.
When I pressed ChatGPT as to whether "net positive impact" is also a pretty lie, it said it is not... I wonder what you think, Bryan!
Not to be unkind, but can you provide a bit of a window into what goes through a person's mind before posting a ChatGPT quotation? I'm genuinely curious.
Ultimately, how much do you want to carry the losers, especially as some of the things you mention are changed because of markets and people have an option to shift job.
Like a lot of people who were farriers would have seen income decline because of cars, at which point, they'd have gone off and become car mechanics. The people who stuck around until the end would have been the people in semi-retirement who didn't see the benefit of investment in switching industry, plus, the reduction in people doing it would have maintained a lot of the rewards for those that were left.
It’s not merely that economic changes have both winners and losers, it’s that often the winning is much more diffuse than the losing.
If ACME offshores production, I, as a consumer of their widgets, might save $1000 next year. This is good, though hardly life changing. But if the plant foreman loses his $100k per annum job with no other prospects in town, that’s hugely disruptive to the life of him and his family. Is that totally offset so long as at least 100 people save $1000 on widgets?
The 101 level calculus doesn’t really account for this and “everyone benefits on net” doesn’t really satisfy.
This is a problem around things like political lobbying because the $100K foreman is going to proportionately spend a lot more of his $100K gains to raise tariffs than you would spend of your $1K gain to reduce them. You could offer people $1/annum to pay for lobbying to get cheaper EVs and they wouldn't pay it. But people in car companies will pay their union a lot of money to buy politicians.
If only 100 people save $1,000, or even 102, then of course “everyone benefits on net” doesn’t satisfy.
If 100,000 people save $500 - which is usually the case when crony capitalism regulations are removed, or freer trade is enabled - then yeah, whether one is a utilitarian or not, the diffuse benefits to society are indeed worth the concentrated loss to the foreman.
Otherwise you are literally making the case for an activist crony government making everyone worse off so that a few can be better off.
E.g. as our massive sugar tariffs make a few sugar growers and many corn growers in the U.S. richer, while making all of the rest of us a little poorer (and with marginally less healthy diets to boot) as corn syrup replaces cane sugar in our consumption).
To say nothing about this being the same effectively as advocating for outlawing ATMs, as they eliminate bank teller jobs….
Bryan’s point is that we should be honest with our language and acknowledge the loss of the foreman’s job, NOT that we should say freer trade or fewer government interventions in the economy are bad ideas!
You misunderstand me - my point is not that we should completely discount a utilitarian analysis, nor that we should retard progress for the sake of a few “cronies” in obsolete jobs. I’m merely saying that “acknowledging that there are winners and losers” or adding “on net” to “everyone benefits” is not enough. We also need to grapple with the fact that at the individual level, losers may lose much more than winners gain, and this will have nontrivial impacts to the implementation of any new policy or technology.
Spreadsheets might react linearly to dollars lost and gained, but people don’t.
Because of course the concentrated benefits that come from protectionism and other crony regulation or deals almost always have massively concentrated benefits and diffuse smaller harms.
And yes of course I understand that marginal utility doesn’t map 1-1 with marginal income.
Trivially, a crony deal granting a no-show, no-work, nonsense federal contract paying $1M/year compensation to a supporter of a politician has MASSIVE benefits for the person getting it, but effectively zero impact on the taxpayers of the country. By the logic of your ”grappling” claim, this deal should remain - indeed, we should add a lot more of them! - because of the concentrated benefit (assume the crony has no other source of income) while no noticeable effective harm at all to the rest of us (what’s another $1M on the national debt?)
Your “grappling” is just another argument DEFENDING cronyism and protectionism.
I picked my example precisely to have it be much more than an order-of-magnitude societal economic benefit compared to the loss.
The principles of freedom, as well as making all of society - indeed, all of humankind - better off trump precise utilitarian calculations when the obvious gains are THAT large.
Do phase-ins to address your “grappling”, if you must. But for societal gains that are extremely large relative to concentrated “losses”, especially when the changes are ones that move from unprincipled to freedom, should not be denied because of your “‘grappling” argument.
I agree with everything you said here, but what you’ve said here is significantly more context/nuance than Caplan was able to put in the original article. Literally the point of my initial comment was to note that this sort of context is necessary.
The interesting cases are those where some people don't benefit even if they do survive into the long run.
Insofar as the slogan derives from confrontation with rigid zero-sum mindsets, its existence is understandable, but it's an ironic bit of imprecision from folks who prides themselves on appreciating "no solutions only trade-offs."
Society - meaning virtually everyone, and certainly everyone we should care about - in the long run benefits when there are rules enabling freer trade and fewer government interventions into the economy that pick winners and losers.
But Bryan’s point is that there are usually some losers in any change of policy, and so we should be honest about that.
“Everyone gained from the Industrial Revolution.” “Everyone gained from the Internet.”
“Everyone would gain from congestion pricing.” “Everyone gains from free trade.”
I would take strong issue with this claim. Nearly every economics class talks about distribution effects as well as allocative effects. For example, some of the most famous theorems in international economics explicitly talk about distributional effects. Other non-economists may make these claims, but I would like to see evidence that this is a systematic claim made by economists.
I guess it’s a good thing that Bryan thinks he is right and Milton Friedman is wrong about literally fully open borders being compatible with the welfare state, because otherwise I think I would agree with EVERYTHING. HE. SAYS. - and that’s probably a bit unhealthy…
Of course this is correct, to the point of being its own truism. Any disruption has costs. Any improvement I can think of has costs. Sometimes those costs might be so "light" as to be relatively inconsequential. Still, my question is in what context this matters? And how should it be assessed for policy purposes? Those craftsmen who passed away in the first lurches of the Industrial Revolution, or the many small shop owners swept aside in the Internet explosion who did not live long enough to reap its benefits, may have missed out, but to the extent that policy decisions needed to be made in those first years, to what extent should their inability to make good on the "everybody wins" be a factor in policy making? Do we simply retort "it's not true!"? And then do nothing anyway? Put another way: so ............ what?
My answer to so what is : So don't speak a dumb lie that any idiot communist can point to and cry "Aha! See the lie! Not everyone benefits, and that disproves free markets are good!" Or whatever. Over promising just leads you open to dumb counter arguments.
This just seems like another pointless overly literalist autistic take. ‘Everyone’ is taken to mean approximate everyone or all defined classes of people along some axis. It’s trivial to point out that nothing benefits everyone. Even a meteor that wipes out all of humanity benefits people who want to die but can’t muster the will to commit suicide.
I don’t know, this take seems like disputing the claim that blue whales are the largest mammals by pointing out that juvenile blue whales are smaller than adults of some mammalian species. You’re just positing a very specific sense of the claim for which the claim is false but that everyone is already aware of. No new information is being generated.
I invite you to try teaching college economics sometime. You will almost certainly get a student calling you out on "Everyone gains". They will be correct, no less; one shouldn't make such vague hand waving claims with such strong consequences.
Don't you have to distinguish between free market processes that aggregate the choices of consumers and create incentives for changes that have economic winners and losers and government policies that redistribute resources and/or pick the economic winners? There is a big difference between Schumpeter's creative destruction and government industrial policy.
Yes, there is, but to the point of this piece, it seems to me the two go hand in hand. Economic upheaval brought about by "progress" is often accompanied by, or generates new, terrible policy making processes.
This is the sort of post I'm here for. Here's ChatGPT's counterargument: "Everyone gains" can be interpreted not as literal but as a shorthand for widespread benefits. It's an oversimplification, but it effectively communicates the overall net positive impact without denying individual losses.
When I pressed ChatGPT as to whether "net positive impact" is also a pretty lie, it said it is not... I wonder what you think, Bryan!
"Everyone gains" isn't any shorter than "most gain", so it's not clear to me why that shorthand should be preferred, given that it is less accurate.
Not to be unkind, but can you provide a bit of a window into what goes through a person's mind before posting a ChatGPT quotation? I'm genuinely curious.
Everyone gained from reading this post
Ultimately, how much do you want to carry the losers, especially as some of the things you mention are changed because of markets and people have an option to shift job.
Like a lot of people who were farriers would have seen income decline because of cars, at which point, they'd have gone off and become car mechanics. The people who stuck around until the end would have been the people in semi-retirement who didn't see the benefit of investment in switching industry, plus, the reduction in people doing it would have maintained a lot of the rewards for those that were left.
It’s not merely that economic changes have both winners and losers, it’s that often the winning is much more diffuse than the losing.
If ACME offshores production, I, as a consumer of their widgets, might save $1000 next year. This is good, though hardly life changing. But if the plant foreman loses his $100k per annum job with no other prospects in town, that’s hugely disruptive to the life of him and his family. Is that totally offset so long as at least 100 people save $1000 on widgets?
The 101 level calculus doesn’t really account for this and “everyone benefits on net” doesn’t really satisfy.
This is a problem around things like political lobbying because the $100K foreman is going to proportionately spend a lot more of his $100K gains to raise tariffs than you would spend of your $1K gain to reduce them. You could offer people $1/annum to pay for lobbying to get cheaper EVs and they wouldn't pay it. But people in car companies will pay their union a lot of money to buy politicians.
If only 100 people save $1,000, or even 102, then of course “everyone benefits on net” doesn’t satisfy.
If 100,000 people save $500 - which is usually the case when crony capitalism regulations are removed, or freer trade is enabled - then yeah, whether one is a utilitarian or not, the diffuse benefits to society are indeed worth the concentrated loss to the foreman.
Otherwise you are literally making the case for an activist crony government making everyone worse off so that a few can be better off.
E.g. as our massive sugar tariffs make a few sugar growers and many corn growers in the U.S. richer, while making all of the rest of us a little poorer (and with marginally less healthy diets to boot) as corn syrup replaces cane sugar in our consumption).
To say nothing about this being the same effectively as advocating for outlawing ATMs, as they eliminate bank teller jobs….
Bryan’s point is that we should be honest with our language and acknowledge the loss of the foreman’s job, NOT that we should say freer trade or fewer government interventions in the economy are bad ideas!
You misunderstand me - my point is not that we should completely discount a utilitarian analysis, nor that we should retard progress for the sake of a few “cronies” in obsolete jobs. I’m merely saying that “acknowledging that there are winners and losers” or adding “on net” to “everyone benefits” is not enough. We also need to grapple with the fact that at the individual level, losers may lose much more than winners gain, and this will have nontrivial impacts to the implementation of any new policy or technology.
Spreadsheets might react linearly to dollars lost and gained, but people don’t.
You are not understanding MY example then.
Because of course the concentrated benefits that come from protectionism and other crony regulation or deals almost always have massively concentrated benefits and diffuse smaller harms.
And yes of course I understand that marginal utility doesn’t map 1-1 with marginal income.
Trivially, a crony deal granting a no-show, no-work, nonsense federal contract paying $1M/year compensation to a supporter of a politician has MASSIVE benefits for the person getting it, but effectively zero impact on the taxpayers of the country. By the logic of your ”grappling” claim, this deal should remain - indeed, we should add a lot more of them! - because of the concentrated benefit (assume the crony has no other source of income) while no noticeable effective harm at all to the rest of us (what’s another $1M on the national debt?)
Your “grappling” is just another argument DEFENDING cronyism and protectionism.
I picked my example precisely to have it be much more than an order-of-magnitude societal economic benefit compared to the loss.
The principles of freedom, as well as making all of society - indeed, all of humankind - better off trump precise utilitarian calculations when the obvious gains are THAT large.
Do phase-ins to address your “grappling”, if you must. But for societal gains that are extremely large relative to concentrated “losses”, especially when the changes are ones that move from unprincipled to freedom, should not be denied because of your “‘grappling” argument.
I agree with everything you said here, but what you’ve said here is significantly more context/nuance than Caplan was able to put in the original article. Literally the point of my initial comment was to note that this sort of context is necessary.
The interesting cases are those where some people don't benefit even if they do survive into the long run.
Insofar as the slogan derives from confrontation with rigid zero-sum mindsets, its existence is understandable, but it's an ironic bit of imprecision from folks who prides themselves on appreciating "no solutions only trade-offs."
My question would be “What did the craftsman end up doing during and after the Industrial Revolution?”
The Epic principle of what is seen vs what is not seen. You made a valid point.
SOMEONE'S ox is ALWAYS gored, however few or many. Problem is, they usually don't particularly deserve it. OR not.
What if you say everyone has the opportunity to gain? You created a straw dog to beat up. Very dishonest of you.
I think it’s mainly dependent on timeframes. Everyone gains from technological progress. And immigration is very useful for that.
Everyone as consumers gains.
Society - meaning virtually everyone, and certainly everyone we should care about - in the long run benefits when there are rules enabling freer trade and fewer government interventions into the economy that pick winners and losers.
But Bryan’s point is that there are usually some losers in any change of policy, and so we should be honest about that.
“Everyone gained from the Industrial Revolution.” “Everyone gained from the Internet.”
“Everyone would gain from congestion pricing.” “Everyone gains from free trade.”
I would take strong issue with this claim. Nearly every economics class talks about distribution effects as well as allocative effects. For example, some of the most famous theorems in international economics explicitly talk about distributional effects. Other non-economists may make these claims, but I would like to see evidence that this is a systematic claim made by economists.
Good strong finish.
“Your grandchildren will be better off.” would be another. Whether people have grandchildren or not is a separate issue.
Great post.
I guess it’s a good thing that Bryan thinks he is right and Milton Friedman is wrong about literally fully open borders being compatible with the welfare state, because otherwise I think I would agree with EVERYTHING. HE. SAYS. - and that’s probably a bit unhealthy…
The problem is in how one defines worse off without the context of delineated property rights.
Of course this is correct, to the point of being its own truism. Any disruption has costs. Any improvement I can think of has costs. Sometimes those costs might be so "light" as to be relatively inconsequential. Still, my question is in what context this matters? And how should it be assessed for policy purposes? Those craftsmen who passed away in the first lurches of the Industrial Revolution, or the many small shop owners swept aside in the Internet explosion who did not live long enough to reap its benefits, may have missed out, but to the extent that policy decisions needed to be made in those first years, to what extent should their inability to make good on the "everybody wins" be a factor in policy making? Do we simply retort "it's not true!"? And then do nothing anyway? Put another way: so ............ what?
My answer to so what is : So don't speak a dumb lie that any idiot communist can point to and cry "Aha! See the lie! Not everyone benefits, and that disproves free markets are good!" Or whatever. Over promising just leads you open to dumb counter arguments.