Labor Econ Versus the World - by Bryan Caplan
ISBN: 9798785872868Date read: 2025-07-02
How strongly I recommend it: 7/10
(See my list of 430+ books, for more.)
Go to the Amazon page for details and reviews.
Good collection of philosopical essays around governance of labor and jobs. I love the way he thinks so it’s fun to hear his thought process even though I’m not that interested in this subject.
my notes
Markets where people trade vaguely-defined products for cash tend to be acrimonious.
When products are vague, the side paying cash often feels ripped off, and the side receiving cash often feels insulted.
In most markets, sellers strive to standardize products to preempt this acrimony.
In labor markets, however, this is inherently difficult because every human is unique.
As a result, employers often lash out at workers because they feel cheated, and employees often resent employers because they feel mistreated.
These problems are amplified by the fact that our jobs are central to our identities.
So when we feel mistreated by a boss (or by co-workers the boss fails to control), we experience it as a serious affront.
An abusive horse trainer flees from the state fair, leaving his mistreated equine behind.
Man said, “Look. I just want the horse to have a good home or be food.” (!!what?!)
Minimum wage argument says, “Look. I just want the worker to make $15 an hour or be unemployed.”
Health insurance mandates say: “Look. I just want the worker to have free medical care or be unemployed.”
Firing restrictions say: “Look. I just want the worker to have complete job security or be unemployed.”
Urge governments to redouble their efforts to fight unemployment.
Every government imposes a vast array of employment-destroying regulations.
Minimum wages, Licensing laws, Pro-union laws, Mandated benefits – especially mandated health insurance.
Good managers rise to the challenge.
Managers manage their workers, forging them into effective teams despite their disparate abilities, personalities, and backgrounds.
It’s an uphill battle, and you have to keep running just to stay in place.
But good managers kindle the fire of teamwork, then keep the fire burning day in, day out.
Employers reward educational success because of what it shows (“signals”) about the student.
Good students tend to be smart, hard-working, and conformist – three crucial traits for almost any job.
When a student excels in school, employers correctly infer that he’s likely to be a good worker.
What precisely did he study? What did he learn how to do? Mere details.
As long as you were a good student, employers surmise that you’ll quickly learn what you need to know on the job.
Credentials pay more in the developing world than they pay in the developed world.
Most of what we teach in college is so otherworldly that you’re only likely to use it on the job if you become a college professor yourself.
Which would you choose? Princeton education without the diploma, or a Princeton diploma without the education?
If you have to ponder, you already believe in the power of signaling.
By contrast, if you were stranded on an island and had to choose between knowledge of boat-building and a boat-building degree, you wouldn’t ponder.
When you face the labor market, it’s important to be impressive.
When you face the ocean, all that matters is skill.
You need a college degree to convince today’s employers to give you the same jobs your parents or grandparents got right out of high school.
The more degrees proliferate, the more you need to stand out.
Higher education receives hundreds of billions of dollars of taxpayer support every year – a classic sign that it fails the market test.
There’s one libertarian view per libertarian.
If people think your group is bad in some way, the marginal benefit of counter-stereotypical behavior is probably unusually big.
If taxis are reluctant to pick up young, black males, then young, black males probably have an unusually large marginal benefit of wearing a suit.
Discrimination is a reason to try harder, not a reason to give up.
When you prepare for an uncertain future, it’s prudent to:
1. Try to make a reasonable forecast using available information
2. Focus more on broadly useful skills instead of narrow specialties
3. Have back-up plans
4. Expect to periodically retrain to adjust to changing circumstances.
But yet people say a college degree helps prepare you for the future?
A traditional academic education focused on literature, history, science, and foreign languages?
Yes, it’s hard to figure out which occupation students will have in the future.
How is that a reason to prepare students for occupations they almost certainly won’t have?
If you live in the First World, there is a simple and highly effective formula for avoiding poverty:
1. Finish high school.
2. Get a full-time job once you finish school.
3. Get married before you have children.
Researchers call this formula the “success sequence.”
97% of Millennials who follow what has been called the “success sequence” — that is, who get at least a high school degree, work, and then marry before having any children, in that order — are not poor by the time they reach their prime young adult years (ages 28-34).
Though in poor countries, even able-bodied adults often find that the success sequence falls short.
Underlying moral principle:
You shouldn’t blame people for problems they have no reasonable way to avoid.
Nor should you blame them if they can only avoid the problem by enduring years of abject misery.
The flip side, though, is that you should blame people for problems they do have a reasonable way to avoid.
No one buys attempts to shift blame for individual misdeeds to “society.”
Suppose, for example, that your spouse cheats on you.
When caught, he objects, “I come from a broken home, so I didn’t have a good role model for fidelity, so you shouldn’t blame me.”
Not very morally convincing, is it?
Similarly, suppose you hire a worker, and he steals from you.
When you catch him, he protests, “Don’t blame me. Blame racism.” How do you react?
The greater the risk your behavior will lead to dire consequences for yourself, your dependents, or bystanders, the more irresponsible your behavior.
The richer you are, the easier it is to avoid or remedy such consequences – and the less likely a given action qualifies as irresponsible.
When a childless single courts danger, he risks his future.
When a married parent courts danger, he risks not only his own future, but the future of his spouse and his kids.
Cutting subsidies for imprudent behavior makes the behavior’s unpleasant consequences happen sooner, potentially deterring even the highly impulsive.
The First Law of Wing-Walking: Never let hold of what you’ve got until you’ve got hold of something else.
In practical terms: Happily settle for your first tolerable job offer… but only temporarily.
Once you’re secure in your new position, at least keep your eyes open for a better opportunity.
Something’s bound to come along eventually – and when it does, you can bargain with confidence.
Virtually any job yields valuable experience and career connections.
As a result, you have more than happenstance on your side.
Month after month, year after year, the odds tilt more and more in your favor – especially if you strive to impress your whole social network with your professionalism.
The Second Law of Wing-Walking:
Once you’ve got something better within your grasp, grab it and move forward.
Good workers get stuck in bad jobs because they’re too complacent to search for a better job.
Almost everyone would be better off if students in the bottom half of their class began full-time apprenticeships after elementary school.
If you hate sitting still and you’re old enough to work, you should probably leave school and learn a trade.
If C, D, and F students started apprenticeships right after elementary school, they would spend their teenage years in a peer group where hard work and a can-do attitude are the path to high status.
This would work wonders for underachievers, especially macho teen males, who currently gravitate to idleness and crime.