Markets are by far the most powerful, rational, and generous mechanisms for solving economic problems and indeed most other politically relevant problems. If "generous" seems surprising, I will add this. If you believe that markets have to be regulated because they are often cruel, you might also notice that it is a lot less painful for everyone when you get to regulate a surplus rather than a deficit.
For one case in point, see immigration. Few issues have been as stubbornly resistant to political reform as this one. A large wave of immigrants from Mexico created a great deal of anxiety in the U.S., but it also split the parties against themselves. Many Democrats saw Mexican immigrants as a plus, since they tend to vote Democratic when they get to vote. Unions did not see a continuous supply of cheap labor as so wonderful a thing. Many Republicans saw that wave of immigration as a threat to national unity and a sign that the laws were being ignored. Business interests did see a continuous supply of cheap labor as a wonderful thing.
The market was too powerful to resist. In Mexico there was a large supply of labor chasing jobs and in the US there was a large demand for labor. The spice must flow. It did.
Now, however, the currents seem to have shifted, as Via Meadia points out.
There's a WRM piece in the Wall Street Journal out today about the likely impact of the latest big wave of immigrants to reach the United States. The main takeaway: immigration in this country is not what you think. Immigrants from Asia have now replaced immigrants from the Spanish speaking world as the largest source of new immigrants, and the Asians tend to be well educated, well skilled, and when they get here they do very well.
That is a case of population flow that reminds us of how uncertain projections and trends can be. A large wave of legal, English-speaking, skilled and educated immigrants may have a down side. They are going to be competing with someone. It is hard to argue that it is bad for the United States. At any rate, a relatively relaxed immigration policy, whether de jure or de facto, is more generous and humane than the alternative.
For another case in point from Via Meadia, consider the carbon emissions projections for the United States.
Much to the surprise (and, one suspects, the chagrin) of the deranged doomsaying wing of the environmental movement, new forecasts of US CO2 emission are out and they point to an even steeper drop than the last set of predictions.
No cap and trade, no huge new taxes on oil, no draconian driver restrictions, no air conditioning bans, no rationing — and the US is on track to cut its CO2 emissions 17 percent below the 2005 levels by 2020 — and to keep cutting our emissions levels beyond that…
So, to summarize, the United States of America basically blew the global greens off completely, trampling all over their carbon tax and cap and trade agendas, and earning wails and shrieks of hatred at the Rio+20 Summit — while making huge strides toward reducing CO2 emission levels.
It's almost as if there is no connection between the green policy agenda and environmental progress.
Mead points out that this owes a lot to environmental regulations. Fuel efficiency standards are a big part of the equation. All of the real work, however, has been done by private enterprises doing what they do best.
The lesson here is regulation is most effective when it cooperates with market forces as much as possible and least so when it attempts to massively redirect or resist those forces. The global green agenda was at least in part motivated by the dream of replacing market forces with something more humane. This just doesn't work.
And if the United States can achieve this while blowing off the panicky greens and their tiresome Malthusian agendas, so can China and India. That is a very good thing, because those countries have zero repeat zero interest in adopting any green measures that slow their growth.
The truth is that if CO2 emissions are going to come down, it's going to happen the American way rather than the Greenpeace way. Instead of flinging muck and howling curses at the most successful carbon cutting large economy in the world, maybe a few more greens here and there will start thinking about how to spread the magic around.
The only way out of our environmental challenges is through. Wealthy countries can afford to care about the environment. Poor countries and developing countries will not care, whether we want them to or not.