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… is from pages 34-35 of Tom Palmer’s 2013 essay “The History and Structure of Libertarian Thought,” which is chapter 4 of Why Liberty, an excellent 2013 collection edited by Tom:

Complex orders cannot simply be commanded. Language, the market economy, common law, and many other complex forms of coordination among persons unknown to each other emerge, not through coercive imposition of a plan that emerges from the mind of a great leader (or the minds of a committee of them), but as by-products of the interaction of people following relatively simple rules, much as flocks of birds, schools of fish, and hives of bees exhibit complex forms of order without a directing mind.

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… is from page 716 of the late, great Paul Heyne’s excellent Winter 1983/84 Cato Journal article, “Do Trade Deficits Matter?” (ellipses original to Heyne; footnote deleted):

I think Adam Smith was right. “Nothing … can be more absurd than this whole doctrine of the balance of trade.” It is a concept originally devised and promulgated by merchants in order to promote their special interests under the pretense of protecting the national interest, And a government that tries to watch over the balance of trade has embarked upon a task that is intricate, embarrassing, and fruitless.

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Writing in the Wall Street Journal, Glenn Hubbard calls for putting economic growth back on the policy agenda. Two slices:

In a campaign season dominated by the past, a central economic topic is missing: growth. Rapid productivity growth raises living standards and incomes. Resources from those higher incomes can boost support for public goods such as national defense and education, or can reconfigure supply chains or shore up social insurance programs. A society without growth requires someone to be worse off for you to be better off. Growth breaks that zero-sum link, making it a political big deal.

So why is the emphasis on growth fading? More than economics is at play. While progress from technological advances and trade generally is popular, the disruption that inevitably accompanies growth and hits individuals, firms and communities has many politicians wary. Such concerns can lead to excessive meddling via industrial policy.

…..

The wrongly focused hyperattention is supposedly grounded in putting American workers first. But it raises three problems. First, the interventions raise the cost of investments, and the jobs they are to create or protect, by using mandates and generating policy uncertainty. Second, they contradict the economic freedom in market economies of voluntary transactions. Absent a strong national-security foundation, why is public policy directing investment in or ownership of assets? Such policies threaten the nation’s long-term prosperity by discouraging investment and invite rent-seeking in a way that voluntary market transactions don’t. Both problems hamstring growth.

Charles Kenny ponders globalization and climate change. A slice:

Global trade has also played a huge role in driving down the cost of renewable energy. Between 2008 and 2013 alone, China’s solar panel industry reduced prices by 80 percent, helping to spark a global explosion in sales. Part of that was to do with tax breaks and subsidies, to be sure, but it was sustained by productivity advances linked to new manufacturing approaches and scale. The technology of fracking combined with global trade in liquid natural gas has already helped ween many countries off coal power, reducing greenhouse gas emissions per gigawatt by about 40 percent. And both solar‐​plus‐​storage solutions (needed to provide power when it is dark) or wind‐​plus‐​storage (for when it is calm) are rapidly becoming cost competitive with both gas and coal, thanks in part to a 97 percent reduction in the price of batteries over 30 years. With such advances, Africa will likely be the first region in the world to become wealthy without a significant coal‐​fired base of electricity supply.

David Henderson remembers Robert Hessen, who recently died at the age of 87.

My intrepid Mercatus Center colleague, Veronique de Rugy, reminds of some important realities of American taxes. A slice:

This progressivity is generally ignored by those who argue that taxing the rich is the solution to reducing the burgeoning U.S. national debt. Soaking the rich, while perhaps appealing in its simplicity, misses the scale of the problem. Brian Riedl, a Manhattan Institute senior fellow, noted that if we were to confiscate 100 percent of the income of everyone making over $500,000 per year, it would fund the government for less than a year. This puts into perspective the enormity of the $34 trillion national debt versus the income of the rich.

Taxing the rich is a convenient distraction hiding the reality that if spending isn’t cut, taxes will have to be raised on everyone, a lot. On this tax week, I suggest Congress starts cutting.

Ryan Bourne details five fiscal truths.

Megan McArdle has a better idea for ending road-closing protests. A slice:

There is no First Amendment right to halt the movement of other people, any more than there is a First Amendment right to burn down the White House, even if you sincerely believe that’s the only way to fully express your views on U.S. foreign policy.

These forms of expression are forbidden for good reason; both fires and road closures are dangerous and potentially deadly. A 2017 paper in the New England Journal of Medicine examining road closures for marathons found a small but significant increase in mortality among people with heart trouble on marathon days, apparently caused in part ambulance delays. November’s protest on the Bay Bridge delayed a transplant organ en route to the University of California at San Francisco, while Monday’s protests risked making at least two drivers late for major medical treatment. One of them told a local news reporter that he was on his way to colon surgery, and the other was worried about missing a stem cell infusion.

Lynne Kiesling writes about the knowledge problem and AI. A slice:

To riff off of [GMU’s Pete] Boettke and [Rosolino] Candela, economic calculation consists of the discovery of contextual knowledge, not the computation of data. Powerful computation machines are unable to discover contextual knowledge of opportunity costs without humans in the loop to distill their preferences into algorithms (which is itself a challenging epistemic question).

Jeffrey Blehar documents just how Babylon Bee-ish woke is NPR’s new chief.

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… is from Leslie Ford’s April 19th, 2011, essay “Paul Revere Sounded the Alarm and At Lexington They Stood”:

The colonists understood their obligation to defend their families, their homes, and their town. Fathers and sons, young and old, the men of Lexington were the first to pledge their lives, fortunes and sacred honor. They hoped to prevent a war, but they would not surrender their liberties. It was their duty and so they stood.

DBx: One year from today will be the 250th anniversary of the Battles of Lexington and Concord.

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Here’s a letter to the Wall Street Journal:

Editor:

You report that, in response to Google’s firing of 28 workers who protested that company’s affiliation with the Israeli government, a spokeswoman for the group that organized the protests said about the firings that “this flagrant act of retaliation is a clear indication that Google values its $1.2 billion contract with the genocidal Israeli government and military more than its own workers – the ones who create real value for executives and shareholders” (“Google Fires 28 Employees for Protesting Company’s Cloud Deal With Israel,” April 18).

If this spokeswoman is correct, Google has done the fired workers a favor: Because the value of Google’s output is created by that company’s workers, the fired ones will have no trouble persuading their former colleagues to quit Google, join them in a workers’ cooperative, and produce all the value that they once produced for Google but with none of this value filched from them by Google’s leeching executives and shareholders.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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George Will continues to warn of the dire consequences of the U.S. government’s worsening fiscal incontinence. Two slices:

This nation, tobogganing swiftly down a steep slope of fiscal irresponsibility, barely notices a blur of alarming milestones. Last week, we sped past this one: A $1.1 trillion deficit in the first six months of fiscal year 2024 that began Oct. 1 resulted in almost as many dollars spent on debt service ($429 billion) as on defense ($433 billion)

This, at the most menacing geopolitical moment since 1945, makes one hope that JPMorgan Chase CEO Jamie Dimon was radically wrong in saying recently that interest rates could reach 8 percent or more in coming years. If they do, deficits will explode even before the Social Security and Medicare trust funds are exhausted, within 10 years.

…..

It is counterintuitive to advocate more direct political control of the Fed amid accumulating evidence that politics is the problem. That the biggest threat to American democracy is American democracy. The fiscal incontinence propelling the nation toward an utterly predictable crisis reflects the majority’s preference: Let’s make unconsenting (because unborn) future taxpayers — debt is taxation, including the tax of inflation, deferred — pay for a significant portion of our consumption of government services. Institutional tinkering with the Fed is no substitute for mature politics.

The Editorial Board of the Wall Street Journal decries Biden’s Trumpian embrace of tariffs. A slice:

While Mr. Biden has scrapped nearly every Trump policy, he has maintained most of his predecessor’s tariffs despite their economic harm. The Detroit Free Press reported in 2019 that Ford worker profit-sharing checks would be 10% higher if not for Mr. Trump’s 25% tariffs on steel and 10% on aluminum.

An analysis by the Peterson Institute for International Economics found that each job “saved” by Mr. Trump’s steel tariffs cost consumers and businesses more than $900,000. Employment in iron and steel mills has fallen by about 3,000 since the Section 232 tariffs took effect in 2018.

Here’s Reason‘s Eric Boehm on Tariff Man Biden. A slice:

With the announcement, Biden has pulled off an impressive set of own goals. Not only does the call for higher tariffs undermine his own campaign’s attack on Trump’s plans to hike tariffs, but it also underscores Biden’s willingness to play favorites with economic policy, seemingly without regard for those who will face higher prices as a result. Remember, higher tariffs meant to protect one industry create higher costs down the supply chain. A promise to raise tariffs to protect steelworkers is a promise to raise prices for industries that use steel, and the past six years have provided a real-life experiment in how that works: the cost of Trump’s tariffs was nearly entirely paid by American consumers and downstream industries.

Indeed, if higher tariffs were the solution to anything, wouldn’t there be evidence of that by now? American steel and aluminum production has flatlined since Trump’s tariffs were imposed six years ago, and America’s biggest steelmaking company, U.S. Steel, is up for sale. Trump promised that protectionism was the path to a steelmaking renaissance, and that’s clearly not been true—but maybe it’ll work if Biden mashes the button a little harder? How does that make sense?

Also writing about Tariff Man Biden’s newly announced intention to raise tariffs on steel impose punitive fines on Americans who purchase steel are Clark Packard, Scott Lincicome, and Alfredo Carrillo Obregon. Two slices:

It is true that China subsidizes its domestic steel industry, but very little of that steel ends up in the United States due to our aggressive use of tariffs, i.e., more than five dozen trade remedies (antidumping and countervailing duties) measures, the Trump‐​Biden “national security” tariffs on most steel and aluminum imports, and the Section 301 tariffs on a wide range of Chinese imports. As Bloomberg notes, thanks to these measures China “accounted for just 600,000 metric tons of steel imports in 2023, […] out of a total US steel imports of 25.6 million tons”—or a mere 2.3 percent of all steel imported into the United States last year.

…..

Yet once in office, President Biden maintained (and defended in court) virtually all of the tariffs he inherited from the Trump administration. As [Erica] York noted on X (formerly Twitter), more trade war duties have been collected under the Biden administration than the Trump administration. As bad if not worse, Biden’s active defense of Trump‐​era tariffs has, as Scott Lincicome explained in a recent column, made it more likely that former President Trump will be able to impose the devastating 10 percent tariff on all imports and 60 percent tariff on all Chinese imports that he’s been promising on the campaign trail. Both are uncomfortable truths for a Biden campaign that intends to attack Trump’s tariff proposals as harming American consumers and the economy.

Erica York separates tariff fact from tariff fiction. Six slices:

A tariff is a form of tax. And like any other tax, tariffs impose economic costs that reduce our standard of living. But some talk of tariffs as though these taxes can magically raise revenue for the government while making trade fairer, citizens more prosperous, and business endeavors more productive. Do tariffs defy the laws of supply and demand and lift our standard of living?

…..

Recent empirical evidence, using a variety of methods, indicates near complete pass‐​through of the 2018–2019 tariffs to US consumers. Mary Amiti, Stephen J. Redding, and David Weinstein found that the full burden passed through, costing US consumers and the firms that import foreign goods an additional $3 billion per month in added tax costs and $1.4 billion in deadweight loss (or lost income).

…..

Exporters’ global competitiveness may be further eroded by tariff‐​induced currency changes. When the United States imposes a tariff on goods from China, for example, imports fall as does the sale of US dollars in exchange for Chinese yuan. A lower global supply of US dollars pushes up the value of the dollar, which makes US exports relatively more expensive on the world market. (To take an extreme and simple example, suppose a bushel of grain sells for $10, and a buyer in China who wishes to purchase it must exchange 10 yuan for $10. Now suppose the dollar doubles in value. The buyer would have to exchange 20 yuan for $10 to purchase the same bushel of grain, making it much more expensive. Or for the bushel of grain to stay the same price in yuan in China, the US exporter would have to cut its price in half to $5.) As a result of these dynamics, tariffs can cause exports to fall, with exporters thus bearing a portion of the tariff burden.

…..

Empirical research from David Furceri and others examined 151 countries from 1963 through 2014 and found that tariff increases lead to economically and statistically significant declines in domestic output and productivity, as well as increases in unemployment and inequality. Fajgelbaum and others estimated that US consumers and firms that buy imports lost $51 billion while US producers gained $9.4 billion, implying substantial redistribution from importers to the US government and protected industries.

…..

And perhaps worse, protectionism encourages rent seeking behavior and discourages innovation and research and development. Analyzing protectionist steel policies from the 1980s, economists Stefanie Lenway, Randall Morck, and Bernard Yeung found that steel protection boosted lobbying efforts for less innovative firms and discouraged productive firms from engaging in research and development. They concluded that protection “confers private benefits upon lobbyers’ shareholders, senior workers, and top managers … appears to reduce returns to true innovation and encourage innovative firms to exit. These dynamic costs of protection … are potentially much more serious than the distortions shown in standard trade theory diagrams.”

…..

As Daniel Griswold and Andreas Freytag documented in a 2023 Cato Institute paper and as Figure 6 shows, the 2018–2019 tariffs imposed by the Trump administration and since maintained by the Biden administration “had no discernible impact on the relative size of the trade deficit”; if anything, the deficit actually increased slightly versus where it was at the end of the Obama administration. Citing some of the aforementioned studies on the tariffs’ other effects, Griswold and Freytag thus conclude that “higher tariffs did exactly what the economics literature predicted they would do: impose net economic harm without changing the current account balance.”

Jacob Sullum argues that “SCOTUS missed a chance to protect peaceful protestors.”

Josh Hendrickson writes about “inflation we can feel but don’t measure.”

“More evidence that organized labor is progressivism, and progressivism is organized labor.”

Andrew Byers offers counsel worth hearing about U.S. government involvement in foreign affairs.

Jay Bhattacharya tweets:

By punishing media organizations that tell inconvenient truths, the ‘Global Disinformation Index’ is a key tool of modern propagandists. Media organizations that get a high rating are stooges of authoritarian power. #freeunherd

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… is from page 291 of GMU Econ alum Liya Palagashvili’s superb 2024 paper “Dynamic Pricing Can Benefit Consumers,” which is chapter 24 in The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy (Ryan A. Bourne, ed., 2024):

A counterintuitive point here is that sharp price increases associated with high-demand periods provide a signal to improve long-term supply too. Just as surge pricing for rideshares at the end of a baseball game encourages more drivers both now and after future sporting events, the price signal from a bowling alley being full on weekends despite prices being higher may encourage new entrants to the industry or capacity expansions from the provider. This is a crucial point with regard to the “fairness” of high prices, which are often judged on a very static basis.

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In my latest column for AIER, I argue that the all-volunteer nature of the U.S. military ensures that the burden of America’s military provision falls where it belongs – on taxpayers rather than on military personnel. (Well, by not falling on soldiers and sailors this burden falls closer to where it belongs; because today’s citizens-taxpayers use deficit financing to push off onto future citizens-taxpayers much of the cost of providing government outputs and services, some people – tomorrow’s citizens-taxpayers – are indeed unjustly burdened with a large chunk of the cost of providing for the military today. But this is an issue for another time.)

A slice:

By being part of a market economy in which each person specializes in that task for which he or she enjoys a comparative advantage, and then voluntarily exchanges the fruits of his or her efforts for the countless fruits of the efforts of hundreds of millions of other individuals who are also specialized as producers, each of us exchanges burdens with each other. And in the process, we greatly lighten each other’s burdens. It’s less of a burden for me to teach economics and then to exchange some of my income with handymen (and others) to perform tasks for me than it is for me to perform for myself all of the tasks that must be performed for me if I am to enjoy my current standard of living. Ditto for Ernesto. It is easier for him – a lighter burden for him – to perform handyman tasks and then exchange the fruits of his labors for the many things that he buys for his and his family’s consumption.

A person who voluntarily enlists in the military obviously believes that that employment option is the best one for him or her. In exchange for his or her performance of military duties, that soldier or sailor is paid an amount that fully compensates that person’s time and effort spent in the military. The payment received by the soldier or sailor comes from taxpayers, who are the ultimate beneficiaries of whatever services are supplied by the military. In an all-volunteer military, the soldier or sailor no more shoulders the burden of supplying military services than Ernesto the handyman shouldered the burden of hanging my tv on my wall.

This equitable and just reality would be undone if the US government conscripted individuals into its military. All of the many individuals forced into military service against their will would, unlike today’s servicemen and servicewomen, not be fully compensated for the time and effort they would be forced to exert on behalf of taxpayers. Conscription, in short, would enable taxpayers to steal the labor of conscripts – to impose a large portion of the burden of supplying military services on conscripts.

It would clearly be unfair and unjust for me to threaten Ernesto with violence unless he supplies the service of hanging my tv at a low wage that I arbitrarily dictate. My acting in this manner would shift the burden of hanging my tv from me (where it belongs) to him (where it does not belong). For the very same reason, it would be no less unfair and unjust for me and my fellow taxpayers to threaten violence against young men and women if they refuse to supply the service of military protection at low wages that we, through our Congressional representatives, arbitrarily dictate.

Conscription ensures injustice. The all-volunteer military promotes justice.

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Although I detest everything about the NatCon ‘philosophy,’ I’m proud to be among the signers of this letter denouncing the effort to prevent NatCons from speaking in Brussels.

Writing on this illiberal effort to silence the illiberal NatCons is the thankfully liberal Stephanie Slade.

Tom Palmer makes the moral case for globalization. Four slices:

To seriously consider globalization, it’s best to avoid definitions that contain the conclusions of complex arguments. A fruitful discussion of globalization requires a nonmoralized and operational use of the term. The definition is nonmoralized if it does not signal whether we should embrace or reject the term defined and is operational if it identifies uncontested, or at least verifiable, features of the world that people of different moral traditions and ideologies can agree are features of the world. So, this essay’s definition of globalization is the relatively free movement of people, things, money, and ideas across natural or political borders. Thus, increasing globalization means reducing or eliminating state‐​enforced restrictions on voluntary exchanges or interactions across political borders that would be permitted if the private (nonstate) parties were on the same side of a border. A consequence of increasing globalization is an increasingly integrated and complex global system of production and exchange.

Some critics of globalization include in their definition the existence of certain international organizations, such as the World Trade Organization (WTO), the International Monetary Fund, the International Labour Organization, the World Bank, and the World Health Organization. While there are arguments for and against those organizations, none of the organizations are essential to globalization, and some have hindered it. Moreover, none of them are world governments, and none have enforcement powers, armies, etc. They are created by treaties among sovereign states. James Bacchus addresses many myths about the WTO.

…..

Restricting the liberty of people to travel or exchange information, ideas, goods, or services requires justification. The burden of proof lies with the party that would restrict the liberty of another, just as the burden of proof in a criminal case lies with the one making the charge (the prosecutor). In contrast, the immoralityof arrogating to oneself the power to restrict the choices of others is more evident: it violates the presumption of equal liberty that is foundational to free, harmonious, and prosperous societies by presuming instead that some people be required to ask permission to act from some privileged class. At the very least, such assertions require more justification than is generally offered by advocates of restrictions on trade, travel, or the exchange of goods, services, and ideas.

There is evidence that our commonly accepted norms of morality emerge from trade, which established the importance of legitimate expectations and reputations, both of which are necessary for the emergence of law and morality. Morality itself is a product of exchange, and the more trade, generally the more humane a society is.

…..

In a deglobalized world in which only privileged people were free to travel and trade those few privileged people would experience tremendous diversity every time they traveled from one country to another. Most people, however, would experience far less diversity. In a world in which people are free to trade and travel, though, most of us experience far more diversity than we would in a world without such freedom. Wealthy visitors to poorer countries often identify the culture of those countries with their poverty and “quaintness.” That is a mistake. Icelanders, to take an example of a small nation with a distinct culture, maintain their language and way of life not by being isolated but by trading with foreigners and using their resulting wealth to sustain publishing houses, film production, education, and much more in their own language. Economist Tyler Cowen described the forms of variety on page 15 of his book Creative Destruction: How Globalization Is Changing the World’s Cultures.

….

Cultural exchange is foundational to living cultures. Pasta, for which Italian cuisine is famous, has origins in Asia, whether it was brought to Italy by Marco Polo, as folklore tells, or earlier, and the tomatoes that form the base of many Italian sauces are cultivated from plants brought from Meso‐​America by Spaniards. Food has been globalized for millennia, but somehow that has not stopped it from developing an amazing diversity of identifiable cuisines, styles, and dishes with many distinctive characteristics. The same can be said of architecture, traditions, mores, religions, and every other element of human culture.

Some local customs have dwindled or disappeared. Consider the virtual disappearance of human sacrifice and slavery, both of which had long traditions in many cultures. In that respect, all cultures have become more similar over time—and a good thing too. As a political example, if all the countries of the world were to adopt democracy and to throw off autocracies, tyrannies, colonial masters, and so on, there would be less diversity among systems of government, although a wide variety of forms (Westminster parliamentarism, federalism, presidential systems, constitutional monarchies, etc.) would remain. If genocide, ethnic cleansing, and colonialism were to be eliminated and replaced by some form of live‐​and‐​let‐​live mentality, another kind of diversity would be reduced.

GMU Econ alum Dominic Pino talks with Samuel Gregg about industrial policy.

Jim Bacchus is correct: “The globalization of ideas enriches the world.” A slice:

Facilitated by trade, the invention of critical discussion in Athens led, a century before Plato, to the conception of the new idea that became democracy. As the British classicist Peter Green wrote in The Greco‐​Persian Wars, what the feudalistic Persians despised most about the Greeks, as exemplified by the Athenians, was their “addiction to trade,” and especially, “the free exchange of opinions that went with it.” The same might be said of how trade has, in the 2,500 years since and in so many places throughout the world, promoted more openness to uncounted new ways of thinking and doing and living. In particular, this can be said about the idea of democracy.

Here’s more from the irrepressible Bruce Yandle.

GMU Econ doctoral candidate Giorgio Castiglia understands the unfortunate consequences for workers of minimum wages.

NPR does not like to be criticized…

… but Matt Taibbi is highly critical of new NPR chief Katherine Maher.

Tal Fortgang reports on progressive arrogance and illiberalism at (not shockingly) U.C.-Berkeley. A slice:

In other words, these students know that the ostensible adults in the room aren’t just with them on the issues; they encouraged the zealotry, assertion of moral superiority, and black-and-white thinking that allows students to disrespect anyone — even a dean and eminent scholar — whom they deem morally impure. It’s no wonder that these young activists, feeling no restraint and facing no consequences, behave like spoiled brats.

Who’d a-thunk it? (And here.)