On Oct. 14, the Nobel Prize in Economic Sciences was awarded to three American professors. The academics are Daron Acemoglu from the Massachusetts Institute of Technology, Simon Johnson also from MIT, and James Robinson of the University of Chicago. The professors were recognized for their work on how institutions are formed and how institutions affect prosperity.
The Royal Swedish Academy of Sciences also explained that the men were selected for their work on income inequality both among countries and also within countries.
But what many do not know is that Acemoglu, Johnson and Robinson assert far-left views about the purpose of economics and democratic institutions. Traditionally, economics is the study of how finite resources are allocated to maximize the wealth of a country and the well-being of a country’s people. But these academics are more interested in redistribution and restraining economic dynamism. They do not understand that extreme redistribution and heavy-handed regulation reduce national welfare.
The data is clear. National wealth is maximized when principles of free market capitalism are married with strong institutions that promote the rule of law, respect for private property, and certainty about government policy. By far among large nations, the United States possesses the most productive and technologically innovative economy. The people of the U.S. enjoy unprecedented prosperity and the world’s highest standard of living among large, wealthy nations. Moreover, real poverty has largely been eradicated in the U.S. Capitalism increases the economic welfare of all Americans.
The majority of Americans believe in free market capitalism, smaller government, lower taxes, greater respect for private property, fewer burdensome regulations, and a political system that promotes political certainty. It is not chance that the U.S. economy grows much faster than the countries of Western Europe and Japan.
Arguably the U.S. economy is even beginning to outdistance the economy of China. The far-left media is overjoyed that the award winners believe strongly in European-style regulation. Still, the Nobel prize winning academics want to regulate and strangle artificial intelligence, an emerging technology that offers the promise of jump-starting productivity growth in the U.S.. What the Nobel laureates and the far-left media don’t tell us is that the policies espoused would slow economic growth in the U.S. and would cause the U.S. economy to become like the economies of Western Europe and Japan, moribund.
They also support higher minimum wages. They ignore the fact that the evidence is clear that higher minimum wages reduce aggregate employment and especially harm individuals with fewer employable skills. Further, the economists believe in powerful labor unions. They do so even though over the last 12 months, the people of the U.S have witnessed firsthand what happens when labor unions with monopoly power extract above market wage gains. Labor unions benefit the few and harm the many.
The academics believe in big government even though it is obvious that there is a negative correlation between the size of government and the dynamism of an economy. Government and bureaucracy strangle capitalism.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Put simply, the academics are wrong. Yet the men are cheered by academics because the world of academia skews left. It is no coincidence that Acemoglu and Johnson support the campaign of Vice President Kamala Harris. Acemoglu especially opposes former President Donald Trump. Acemoglu says Trump is an undemocratic authoritarian. But on close examination of their policies, the Nobel laureates are the authoritarians.
It is they, after all, who support big government over free market capitalism.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be reached at [email protected].
This article was originally published at www.washingtonexaminer.com
