Monday, May 5, 2014

Walter Block on Gary Becker

The Economist as Detective: Reflections on Gary Becker's Nobel Prize
By Walter Block

Professor Gary S. Becker, the winner of the 1992 Nobel Prize in Economic Sciences, is like Professor Moriarty of Sherlock Holmes fame. Holmes said of Moriarty, "Again and again in cases of the most varying sorts — forgery cases, robberies, murders — I have felt the presence of this force."

In like manner, Dr. Becker has cast his hand into virtually every nook and cranny of not only economics, but also social science in its broadest definition. And just as the fictional victims in Arthur Conan Doyle's novels trembled when Professor Moriarty was about town, almost no scholar is safe in the fields of history, law, sociology, psychology, criminology, political science, or philosophy while Gary Becker's word processor is turned on.

Becker's career of blazing new paths for the "dismal science" began with  his 1957 book, The Economics of Discrimination. Before this work, the study of prejudice and discrimination had been the exclusive domain of sociologists and psychologists. Becker showed that demand and supply, cost and benefit, and profit and loss could shed profound light on the subject.

Thanks to his efforts, we know that people pay a price for discrimination, whether on the basis of race, sex, or any other criterion. Those who indulge in such preferences tend to lose out in the competitive struggle of the marketplace, as they must pay more for equally able factors of production. The market rewards people who are color blind. Capitalism, then, far from being the racist, sexist enterprise Marxists believe it to be, is actually a rather humane endeavor.

When the state takes over large parts of the economy, the liberating process of the market — that of penalizing bigots — is confined in scope. It cannot work in the public sector, due to the absence of profit and loss.

Nor will Becker's work on the family give aid or comfort to those who attempt to denigrate that traditional institution. He has applied the insights garnered from the study of international trade to marital relations.

Take absolute advantage, for example. This is the doctrine that shows how countries can benefit from worldwide specialization and the division of labor, as some can produce one item more cheaply, while others are more productive with another. This is why bananas are not produced in Canada, nor maple syrup in Costa Rica: each nation specializes in what it does best, and trades for the specialty of another.

Read the rest here.

No comments:

Post a Comment