Wednesday, 29 April 2009

Alex Tabarrok: How ideas trump economic crises -- a surprising lesson from 1929

Eric Crampton rightly congratulates Denis Dutton because he's scheduled for the 2010 TED conference. Well here is another man Eric will know talking at TED, Alex Tabarrok, co-blogger at Marginal Revolution.
The "dismal science" truly shines in this optimistic talk, as economist Alex Tabarrok argues free trade and globalization are shaping our once-divided world into a community of idea-sharing more healthy, happy and prosperous than anyone's predictions.

In addition here is an interview of Tabarrok by Matthew Trost. They talk about whether limited natural resources are a constraint on growth, the Lebensraum fallacy, The Wire, the tragedy of the commons and other topics. On natural resources and the Third World Tabarrok says
I utterly reject the view that the Third World is doomed to poverty and starvation. Not only is this wrong, I think this attitude verges on the immoral, like thinking that slavery is an unalterable facet of the human condition so why bother doing anything about it? Moreover, thinking of this kind -- I call it the Lebensraum point of view -- leads to war and destruction. The Lebensraum point of view, however, is rejected by evidence from the second half of the twentieth century. Peace and free trade are the routes to wealth -- not a grab for "limited" resources.
Tabarrok is also asked "Once you're in such a tragedy of the commons-type situation, how do you get yourself out?" His answer,
It's not easy. New Zealand has been quite successful at creating property rights in fish. That is, if you're a fisherman, you get an assigned quota: you're only allowed to fish so much. When this is enforced, everybody can be better off. Almost paradoxically, limiting how much each fisherman can catch can means that every fisherman catches more, because they allow the fish stock to grow.

It can be done, but it takes a lot of political will, especially when the problems are global, because then you need agreement of a bunch of different nations, and that's hard to get.
(HT: Marginal Revolution)

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