… is from page 316 of Thomas Sowell’s 2002 collection, Controversial Essays:
Has anyone ever asked what a full professor is full of? In some trendy new fields, the title “empty professor” would be more appropriate.
Here’s a letter to the Wall Street Journal.
Editor:
Gerard Baker displays his usual impressive wisdom in decrying President Trump’s second-term pursuit of a misguided and extreme ideological agenda (“What Happened to the Pragmatic Trump of the First Term?” May 4). But Mr. Baker himself inadvertently grants the validity of one of the premises that fuels that extremism when he writes of “the elevation of international capital that ravaged communities at home.”
The correct name for “the elevation of international capital” is “free trade.” Why not use this term? It better reveals the innocent increased freedom of ordinary people to spend their incomes as they choose, while avoiding the mistaken suggestion that a lowering of trade barriers benefits Davos-vacationing capitalists at the expense of the masses.
And where are these “ravaged communities at home”? Politicians and pundits incessantly talk about these communities, but serious attempts to locate them encounter difficulties. The economist Jeremy Horpedahl studied the ten metropolitan statistical areas in the U.S. that suffered the largest negative hits during the infamous “China Shock” of a quarter-century ago. According to Horpedahl, “all of the MSAs hit hard by the China Shock still managed to have significant and positive real wage growth across the distribution since 2001…. Wage gains in several of these places, in fact, are better than the national trends.”
Whenever economic change occurs, some particular workers lose jobs, and some particular locations lose business and population. Economic growth requires economic change and adjustment. It always has and always will. But the story of America is that ordinary people not only recover over time, but become wealthier. It’s an error to single out the freer trade of the past few decades as a unique source of economic change that justifies greater skepticism of globalization.
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
Recall how Timothy Wu, Jonathan Kanter, Lina Khan and others on the left sought to revive long discredited theories of antitrust that view nearly all mergers as anti-competitive. Mr. Kanter tested that view on the airline industry, with disastrous results.
In 2021 the Biden Justice Department challenged a JetBlue Airways alliance in the Northeast with American Airlines. In 2022 JetBlue offered Spirit a $3.8 billion merger lifeline so the combined companies could offer more competition for the four U.S. airline giants. Mr. Kanter’s Antitrust Division sued to block the merger in 2023 and prevailed in court in January 2024 in one of the most bizarre opinions we’ve ever read.
Federal Judge William Young admitted Spirit’s financial troubles. He also agreed that “an expansion of all aspects of JetBlue’s business—including network, fleet and loyalty program—would allow for more vigorous competition with the Big Four, which carry most passengers in the country.”
He still ruled the merger an antitrust violation because it would eliminate one low-fare option on some routes. JetBlue ended its merger bid soon thereafter, and Spirit declared bankruptcy in November 2024, long before the Iran war fuel spike. Now it’s shutting down for good. As these columns warned after the judge’s ruling, “Justice has essentially set Spirit up for failure.”
Well, congratulations Judge Young. With Spirit’s demise, that low-fare option is gone. The big boys are likely to snap up Spirit’s planes, airport gates and other assets, and there will be less competition than if the merger had been allowed. JetBlue is also struggling these days. Judge Young owes those Spirit employees and the traveling public an apology, and so does Mr. Kanter.
Construction is already heavily dependent on immigrant labor, and the sector faces a serious worker shortage, exacerbated by the impact of the Trump administration’s tough immigration agenda. One possible solution would involve increasing the number of temporary worker visas that allow foreign workers to fill short-term labor needs. This would ease the labor shortage and relieve upward wage pressure. Streamlining occupational licensing across state lines would let workers follow demand rather than being trapped in a state by patchwork credentialing rules. And repealing prevailing wage laws, which mandate union-scale compensation on any project touching public funds, would directly bring down the cost of building the units most intended to help low-income renters.
Not surprisingly, there is a large overlap between the two groups’ views and priorities. A high proportion of what I saw and heard at LibertyCon Europe differed little from what I would expect to see at a comparable US event. For example, libertarians on both sides of the Atlantic are deeply concerned about excessive government spending and regulation, growing efforts to impose restrictions on access to various websites (often under the pretext of protecting children), protectionist restrictions on international trade, and more. American libertarians have greatly influenced their European counterparts, and vice versa. As the great Austrian libertarian economist F.A. Hayek put it, “[t]he growth of ideas is an international process.”
There are, however, several noteworthy differences. First and foremost, it is notable that European libertarians have an almost unanimously negative view of Donald Trump and his administration. Many, probably most, American libertarians are similarly negative. But there is a significant faction that is “anti-anti Trump” (holding that Trump is flawed, but still preferable to his opponents, or at least no worse than them), and a smaller but vocal group that is actively pro-Trump.
Laura Williams explains why beef prices in the U.S. are likely to remain high. A slice:
Capital equipment required to keep cattle ranches running is increasingly expensive, partly due to the high cost of importing steel and other metals. Tariffs of 50 percent apply to materials coming in from China and Canada, some of our most prolific trading partners.
Steven Spielberg, for example, denies the billionaire tax had anything to do with his entirely coincidental relocation to New York City at the start of the year, but the timing sure was convenient, since the initiative specifies that the billionaire tax will be retroactively assessed on anyone residing in California as of Jan. 1.
Memo to California voters: If it is possible for a citizen of your state to lower their tax bill by moving to Manhattan, something has gone seriously wrong.
Ironically, timing the tax to the start of the year was supposed to make it harder for billionaires to avoid paying. Instead, this too-clever-by-half design forced them to jump the gun, even though doing it this way was almost certainly illegal and retroactive taxation would be challenged in court.
In 1826, a ream of 500 sheets of paper cost about $5. With average wages near five cents an hour, the time price was 100 hours.
Paper was precious.
Today, 500 higher-quality sheets sell for $7.99 at Staples. With average wages around $36.86 an hour, the time price is just 13 minutes.
… is from page 81 of the late I.M.D. Little‘s 1999 book, Collection and Recollections, as shared by Douglas Irwin in Irwin’s December 2024 essay “Changing the Trade and Development Consensus“:
We were slow to realize that the most prevalent reason for market failure was government itself. Governments were driven by false economic ideology – heavy industry, protection, import substitution – and also became increasingly self-serving and corrupt.
This post by Oxford economist J. Zachary Mazlish is very good; I encourage you to read it. (HT David Levey)
Nevertheless, there are two points that I think to be worth making in response to Mazlish’s post.
I will here make one of these points. I’ll make the other of these points in a follow-up post at Cafe Hayek.
Mazlish writes:
These doomsayers are responding to what has been dubbed “China Shock 2.0.” China Shock 1.0 was the rise in Chinese exports of low value added goods that occurred in the early 2000s. Shock 2.0 is when China begins exporting the high value added goods that constitute what remains of the industrial bases in the US and Europe.
Critics of trade with China do indeed worry about what will happen outside of China when that country “begins exporting … high value added goods” – goods different from the low-value-added goods that China exported during the so-called “China Shock 1.0.”
But reality isn’t optional. President Xi and his many mandarins can escape neither the reality of scarcity nor the principle of comparative advantage. If China does indeed start producing more high-value-added goods, it will have to produce fewer of other goods. And the goods that in China will likely be produced in reduced quantities are the kinds of goods that China produced and exported during the “China Shock 1.0.”
And so shouldn’t Americans who decry the consequences of “China Shock 1.0” applaud rather than agonize over this so-called “China Shock 2.0”?
Data published today by the US Bureau of Economic Analysis show that domestic investment in artificial intelligence is currently acting as a massive tailwind for US economic growth (gross domestic product). The data also show that this American investment boom is being fueled by imports of the servers and other things that datacenters and related AI technologies need.
…..
Surely, the AI boom isn’t solely due to free trade, and we wouldn’t expect it to cause every other US industry to boom like AI is today. But one still must wonder how many other American industries might similarly benefit from the same “special” treatment that the AI industry enjoys today—i.e., the treatment almost every industry received before the Trump tariff wall was erected last year.
National Review‘s John Puri is correct:
As the leader of a bureaucracy constructed by progressives, President Trump is like a toddler in a toy store. The levers and pulleys of regulatory power all around him present endless opportunities to exert his will. These instruments were designed for supposedly dispassionate experts who falsely believed that they could rationalize society and properly organize the economy. Trump yanks on them to do what he pleases.
…..
In any case, the past year has demonstrated the danger of vesting merger-review power in one person. When the president exploits the law to bully the market, merger-review power becomes a tool of unilateral governance. An uninhibited executive can hold multibillion-dollar deals hostage until he receives a payoff or is handed effective control of a company. He can jawbone media companies into softening their coverage. He can pick the winners and losers of bidding wars.
Fast forward to this week, and the political left is again heralding the return of Jim Crow after the High Court ruled that carving up districts based on race is illegal (Louisiana v. Callais). Amid the overwrought reaction, let’s see what happened to minority voting and representation in Congress since the Court’s 2013 Shelby County landmark.
Justice Samuel Alito’s majority opinion this week highlighted America’s racial progress. He quoted Shelby County as saying that since the VRA’s enactment in 1965, “voting tests were abolished, disparities in voter registration and turnout due to race were erased, and African-Americans attained political office in record numbers.” He added that “black voters now participate in elections at similar rates as the rest of the electorate.”
The left ignores all this, but let’s look at the numbers. Barack Obama’s candidacy super-charged black turnout in the 2008 and 2012 presidential elections such that it matched that of whites. The share of blacks voting in presidential elections has since fallen somewhat from those record highs, though it has increased in midterm elections.
Some 45.1% of the black voting-age citizen population cast ballots in 2022 and 51.1% did in 2018, according to Census Bureau data. That’s significantly higher than the black turnouts in three midterms prior to Shelby County; 2010 (43.5%), 2006 (41%) and 2002 (42.3%).
Voting among Hispanics and Asians has also increased over the last two decades. About 40% of Asian citizens cast ballots in the 2018 and 2022 midterms, versus 30.8% in 2010. Hispanic turnout rose to 37.9% in 2022 and 40.4% in 2018 from 31.2% in 2010. In 2020 the share of eligible Hispanics (53.7%) and Asian voters (59.7%) who cast ballots hit records.
Also writing sensibly about election laws is Jason Willick. A slice:
Representative democracy isn’t about perfect fairness, which is impossible; it has various permutations, and all have benefits and drawbacks. In the decades leading up to this Supreme Court decision, American democracy was structured to increase the number of majority-minority districts, and therefore the number of racial minority members of the House of Representatives.
One trade-off was that Black politicians were steered toward Black constituencies, changing their political incentives and potentially making it harder to get elected to statewide or national offices requiring a multiracial support base. If Barack Obama had prevailed in his 2000 campaign for Congress in Illinois’ then-majority-Black 1st District, for example, it’s an open question whether he would have ascended to the Senate and the presidency. The Callais decision, by creating the conditions for more racially integrated political competition, could amplify rather than reduce Black political power over the long term.
Bob Graboyes offers further valuable reflections on Virginia’s recent gerrymandering escapade.
Phil Magness and Fabio Rojas discuss postliberalism.
I filed The tariff case together with the conservative @LJCenter. And I’m the kind of liberal who was involved in legal challenges to Obamacare, advocates for vastly expanded protection for constitutional property rights, opposed affirmative action, and would roll back most of the New Deal-era expansion of federal power.
… is from page 47 of philosopher Christopher Freiman’s excellent contribution, titled “Utilitarianism,” to the 2016 collection edited by Aaron Ross Powell and Grant Babcock, Arguments for Liberty [original emphasis]:
The great virtue of the market, from a utilitarian perspective, is that it leads us to promote the happiness of others without demanding that we prioritize their happiness or even know how to make them happy. No institution is perfect, but the market does the best job of extracting social benefits from people’s limited supply of impartiality and information.
George Will is no fan of the the “unitary executive theory.” A slice:
Presidents may unilaterally extend recognition to foreign governments, thereby establishing relations. Treaties, however, establish U.S. obligations. The president’s primacy in foreign policy does not entail the power to exclude Congress from involvement in implementing or renouncing these obligations.
Supporters of the unitary executive theory argue that the vesting of executive power in the president means a presidential monopoly of allpower connected in any way to executive duties. John Yoo, law professor at the University of California at Berkeley, brings to his advocacy of the unitary executive theory learning that is proportionate to his tenacity. He says:
“The Constitution only provides for the participation of the Senate in making the treaty; therefore, everything else regarding international agreements defaults to the president.” But his brassy “therefore” cannot disguise a non sequitur.
He says, “Unlike with legislation, where Congress can override a presidential veto, the Senate has no power to force the president to accept a treaty that he opposes.” But there is no such thing as a treaty the Senate opposes.
Yoo says leaving NATO “would certainly be a foreign-policy disaster.” But his theory insists that the Constitution relegates Congress to the role of spectator at the disaster. When a theory drags its adherents into such an intellectual cul-de-sac, the theory should be relegated to the ranks of ideas that need to be reconsidered.
For example, Trump’s Federal Trade Commission chairman, Andrew Ferguson, sent a “warning letter” to Apple CEO Tim Cook, threatening him over Apple News’ curation of news sources. “The FTC is not the speech police,” Ferguson proclaimed, saying he acted only because Apple News’ choice of sources violated its terms and conditions. Yet a close reading of those terms explicitly disclaims responsibility for content accuracy.
That’s an argument not too far removed from one made by Tim Wu, a major critic of Big Tech in the Biden White House, who recently penned a piece in the New York Times arguing that social media isn’t just speech but is instead “a defective, hazardous product.” As the Trump administration evolves, the arguments of Carr and Ferguson in favor of enforcing consumer protection standards against First Amendment activities dovetail with those of Wu. The right and the left are beginning to agree that speech is a product that should be regulated, not a fundamental right that must be protected.
The president has also attacked the First Amendment directly by leveling executive orders against law firms with former partners or associates who had worked against him. By threatening to cut off their access to security clearances and federal buildings, including possibly courthouses, the president has extracted promises of nearly a billion dollars’ worth of pro bono legal work for his favored causes.
In business, the administration is mixing public monies with private investment. Among other examples, the government obtained a minority stake in Intel and a so-called “golden share” of U.S. Steel, extracted cuts of international sales by Nvidia and AMD in return for relieving export controls, and crafted bespoke policies to guide the business strategies of corporations. The president has personally demanded the removal of the Intel CEO and a Netflix board member. At times, he has seemed to act as a sort of corporate director, laying the foundations for state capitalism. As we have seen from earlier incarnations of industrial policy — from U.S. Steel to Solyndra, and in China today — the politicization of capital always distorts markets and ends in tears.
The administration’s antitrust policy also seems to be taking a statist turn. For almost half a century, antitrust policy has been guided by the “consumer welfare standard,” which takes the politics out of regulatory enforcement by evaluating mergers and acquisitions based on their impact on consumer prices, choice, and innovation. Inexplicably, President Trump’s antitrust regulators failed to restore this modest standard. Instead, they retained the merger guidelines of the progressive antitrust regime of Biden’s progressive FTC chair, Lina Khan. The result is a hybrid “America First” antitrust policy that sounds conservative but, like the approach adopted in the Biden-Khan era, embraces the use of antitrust to direct the economy from Washington.
Donald Trump could have been the restorer of free markets. Instead, his administration is institutionalizing mechanisms that Washington can use to meddle in the operations of private business.
The Wall Street Journal talks with Manhattan Institute president Reihan Salam, the “anti-Mamdani.” A slice:
Another disdainful Salam phrase is “immaculate conception leftism”: Mr. Mamdani “will allow the private sector to do something if it’s immaculate,” which means conforming to a host of politically correct constraints. Instead, the government should get out of the way: New York “has a lot of people who want to do the perverse, insane thing of building private businesses here, of building housing here, if only you let them do it. A zero-sum narrative can win you an election, but it can’t win you the future.”
The Manhattan Institute was founded in 1978, making it a year older than its president. “It is the reason why I came to my views,” he says. “I watched the city’s transformation under Giuliani unfold in real time, and the Manhattan Institute was part of my intellectual formation.” He encountered its flagship quarterly, City Journal, in high school, and it was “rigorous, urbane, and unafraid of heterodox conclusions,” unlike anything else he was reading. “By college, the arguments of Manhattan Institute scholars on crime control, housing regulation, school choice, and much else had become a lasting influence on me.”
Nine days after winning Seattle’s November mayoral election, Katie Wilson joined Starbucks baristas on a picket line and pledged to boycott the coffee conglomerate until their union got its way. The socialist will need to wait a while longer for her caffeine fix.
In March, after Wilson took office, the chain said it would close five additional stores in Seattle, including four that had unionized. Starbucks said they were selected because of poor financial performance and bad customer experiences.
Then, last week, Starbucks announced it will establish a new corporate hub in Nashville, investing $100 million and bringing up to 2,000 jobs.
The 43-year-old Wilson, who received a $10,000 allowance from her parents last year, is defiant about the consequences of her antagonism toward successful people who create value for society.
Speaking recently at a Seattle University event, the mayor brushed off claims that taxpayers respond poorly to higher taxes. “I think the claims that millionaires are going to leave our state are, like, super overblown,” Wilson said. “And if — the ones that leave, like, bye.”
James Pethokoukis explains “why Europe produces Nobel laureates but not Elon Musks.”
Samuel Gregg reveals the statist heart of “abundance liberalism.” Two slices:
Despite these potential positives, I remain skeptical of the prospects for any long-term rapprochement between classical liberals and fiscal conservatives on the one hand, and supply-side progressives on the other. Tactical alliances in the name of realizing particular ambitions should never be off the table. Winning center-left politicians over to the cause of school choice is a good example of what can be achieved. Effecting a deeper and more strategic right-left realignment around an abundance agenda, however, is an entirely different exercise, not least because there is little alignment between the core principles of the abundance left and those of classical liberals and limited government types.
…..
It is exceedingly difficult to see limited government conservatives and classical liberals being willing to look past the difficulties with industrial policy. If anything, they have in recent decades become even more skeptical of industrial policy, along with the claims made by advocates of industrial policy. Smith suggests, for example, that “government-funded R&D that produces freely usable technology” produces great economic benefits, and argues that “the evidence Mariana Mazzucato assembles in The Entrepreneurial State—showing how late twentieth-century innovation often traces to government initiative—should dispel any complacent belief that government is too dumb to innovate.”
Alas, there is no shortage of scholars, such as Deirdre N. McCloskey and Alberto Mingardi in their book The Myth of the Entrepreneurial State, who have directly challenged Mazzucato’s thesis and, in doing so, have highlighted a long-standing critique of industrial policy: the sheer difficulty in establishing direct causality between industrial policy and the emergence of new technologies and industries. That puts into question the entire premise upon which the coherence of industrial policy relies. The apparent unwillingness of abundance liberals to acknowledge this point (including how it invalidates Mazzucato’s core arguments) demonstrates the depth of their attachment to 1) the use of state power in the economy and 2) a non-classical liberal conception of the nature of innovation and how economic change occurs.
… is from page 33 of my emeritus colleague Richard E. Wagner’s and the late James D. Gwartney’s excellent 1988 essay “Public Choice and Constitutional Order,” which appears as chapter 2 in Gwartney & Wagner, eds., Public Choice and Constitutional Economics:
In effect, constitutional order is a mutually advantageous treaty among what would otherwise be warring factions – a treaty which promotes the substitution of wealth-creating trade for wealth-reducing plunder.
DBx: Yes. Yet constitutional order requires a constitutional morality and not only ink on parchment.
The progress of artificial intelligence has been astonishing, and now we know it’s helping the overall U.S. economy much faster than most thought. That’s the main story from Thursday’s first quarter GDP report, with AI-related investment driving most of the 2% growth. Meantime, the personal consumption expenditures (PCE) price index rose at an annual rate of 4.5%. You don’t need ChatGPT to tell you that President Trump’s tariffs are hitting consumers.
…..
The AI investment boom and Mr. Trump’s tax cuts—especially the business expensing provisions—are helping to offset the damage from his tariffs. But tariffs are a tax, and taxes hurt growth. Mr. Trump’s willy-nilly imposition of border taxes has also fueled uncertainty, which makes it difficult for businesses to plan investments.
Tariff costs will vary by the particular business and individual, but most Americans are getting stung whether they know it or not. Our friends Michael Solon and Phil Gramm wrote in these pages this week that the $195 billion in new tariffs that were collected last year swamp the $188 billion that taxpayers will receive in lower federal tax liability for 2025 thanks to last summer’s tax cuts.
The Washington Post‘s Editorial Board wisely rejects Bernie Sanders’s ignorant fears of AI and his call for the governments of China and the United States to cooperate in stifling it. Here’s the Editorial Board’s conclusion:
The enormous economic upsides — in medicine, productivity, scientific research — are why neither side can afford to slow down. And the competition, between labs and nations, is not the catastrophe Sanders describes. It is the mechanism most likely to ensure the technology is developed fast and broadly diffused.
The widening gap between American and European prosperity is among the most important facts of the global economy. The clearest manifestation is the chasm in per capita gross domestic product: $94,400 in the U.S., according to the International Monetary Fund, compared with $65,300 in Germany, $61,000 in the U.K. and $52,000 in France.
While America’s prosperity advantage isn’t new, today’s scale is. From a fairly narrow edge throughout the 1980s, the gap widened a bit in the 1990s. Since 2007, however, European per capita incomes have more or less stagnated while the U.S. has enjoyed another growth spurt.
I know what you’re going to say, and it’s no excuse. The U.S. per capita figure is flattered by a small cohort of fabulously successful companies, which create a cohort of fabulously wealthy entrepreneurs. But those companies could just as easily plant their headquarters in Europe (some are even European by birth) and skew the per capita data there instead. Switzerland amps up its per-capita GDP to $126,000 by attracting finance and pharma.
This is another indictment of European shortcomings. The wealth skewing American per capita economic data is a result of innovation and entrepreneurship. Europe lacks America’s per capita output not because it lacks American tech companies and billionaires but because it lacks American-style productivity growth capable of creating tech companies and billionaires in Europe.
…..
A common refrain in Britain, for instance, is “But we have the National Health Service, and in America everyone has to pay huge sums for medical care.” The people who say it don’t understand how enlightening the observation is. The NHS launders money the indebted government doesn’t have into terrible health outcomes. This feels like a benefit because it conceals from patients the true cost of their care, while its shortcomings relative to other countries are noticeable only to policy nerds. That’s how most of Europe’s welfare states work.
Analyses that find a hollowed-out middle invariably rely on definitions of the middle class that peg thresholds to how the typical family is doing. In that case, even if everyone is better off over time in inflation-adjusted terms, if the middle’s gains are stronger than those of families lower down, more people can fall short of “the middle.” The Pew Research Center, for example, that the share of families that were “lower-income” rose between 1971 and 2023, even though the purchasing power of those lower-income families rose by 55 percent. The explanation for this seeming paradox is that “middle-income” families saw a 60 percent gain, making it harder to reach the middle-income threshold if income rose more slowly than that.
The point of my paper with [Stephen] Rose was that claims of a “hollowing out” of the middle class wrongly reinterpret widespread gains across the income distribution as rising insecurity and declining living standards. Unbeknownst to us, a perfect example of this misinterpretation appeared a week before we published our report in Chicago magazine. The offending article title that “Chicago’s Middle Class Is Disappearing.” My reanalysis of the data behind the piece indicates it would be difficult to articulate a more misleading conclusion. Fewer Chicagoans live in middle-class neighborhoods than in 1970—but only because more live in richer neighborhoods.
My intrepid Mercatus Center colleague, Veronique de Rugy, writes about the marriage gap. A slice:
I’m a libertarian. I don’t care whom, or if, you marry. Yet I’m reminded that there is a problem by a new report from the American Enterprise Institute. Edited by Kevin Corinth and Scott Winship, “Land of Opportunity: Advancing the American Dream” covers a broad range of challenges facing the country today, from the cost of living and workforce development to education, crime, and the erosion of community life.
The authors are not culture warriors. They are empirical economists. But among their most important findings are those dealing with the collapse of the American family and what the government has done to accelerate it.
From economist Robert VerBruggen’s chapter on the erosion of married parenthood, I learned that in the mid-20th century, only one in 20 children were born out of wedlock. Now it’s two in five. I also learned that America has the world’s highest rate of children living in single-parent households: 23 percent in the U.S. against an international norm of 7 percent.
Imagine someone who chooses to manufacture horse-drawn carriages in the modern United States. Outside of niche markets, like Jackson Square in New Orleans, demand for such a good is minimal. Call him James. He is producing something very few people want, and the economic value he is, therefore, generating is quite low. Accordingly, the wage that could be sustained by his line of work will also be low.
James, however, is not discouraged. He insists that he deserves a “living wage” simply by virtue of being employed.
The absurdity of the demand should be apparent. It is not a question of the dignity of the work. Let us assume his craftsmanship is top-notch, and he is obviously not engaged in the production of anything morally objectionable. Yet, the value James creates is limited relative to other uses of labor and capital. So much so that, economically speaking, James is not even engaged in production but consumption.
Paying him a high wage, then, would require diverting resources away from more valuable activities. In effect, this would mean asking others to subsidize James’s “production” that consumers have already overwhelmingly revealed to be of little value. If James wishes to continue this work for personal satisfaction, he is free to do so. But it does not follow that others are obligated to sustain it.
Perhaps the most contentious statement of Donald Trump’s career has been his assertion in August 2017 that there were “very fine people on both sides” of the agitation in Charlottesville, Va. Mr. Trump was right in more ways than he realized—at least one person was on both sides. Meet F-37, a figure in the indictment a federal grand jury in Montgomery, Ala., handed up last week against the self-styled antiracist nonprofit Southern Poverty Law Center.
“F-37 was a member of the online leadership chat group that planned the 2017 ‘Unite the Right’ event . . . and attended the event at the direction of the SPLC,” the grand jury alleges. “F-37 made racist postings under the supervision of the SPLC and helped coordinate transportation to the event for several attendees. Between 2015 and 2023, the SPLC secretly paid F-37 more than $270,000.00.”
F is for “field source,” the SPLC’s term for inside informants it paid to gather intelligence on white-supremacist groups. According to the indictment, “between 2014 and 2023, the SPLC secretly funneled more than $3 million in SPLC funds to Fs who were associated with various violent extremist groups.” Among these, the indictment says, were F-9, who got a cool million over a decade for activities that included stealing documents from the neo-Nazi National Alliance, and F-39, whom the SPLC paid $6,000 to take the rap for F-9’s theft.
The SPLC raises money and sustains its relevance by stoking the perception that white supremacy is pervasive and influential. I have argued since 2008 that this aligns the center’s interests with those of supremacist groups. My point received insider validation from a 2019 New Yorker article by journalist Bob Moser, whom the SPLC hired as a writer in 2001. “Though the center claimed to be effective in fighting extremism, ‘hate’ always continued to be on the rise, more dangerous than ever, with each year’s report on hate groups,” Mr. Moser wrote. He and his colleagues came up with a mordant slogan: “The SPLC—making hate pay.”
…..
To observe that the SPLC practices journalism isn’t to give it a seal of approval. To the contrary, it is to insist that the center’s work be judged by the ethical standards of journalism. In America at least, respectable journalists don’t pay sources for information—much less hire sources to obtain information illegally, as the SPLC allegedly did with F-9. We don’t deliberately deceive our readers, as the SPLC allegedly did by attributing F-9’s theft to F-39 and by publishing an exposé of F-42 that concealed the most interesting and pertinent fact about him—that he was on the SPLC payroll.
Journalists like Mr. Page don’t understand the SPLC because such clarity would reveal that this journalism scandal implicates their own organizations. Mr. Moser noted in 2019 that the SPLC’s hate-group list “remains a valuable resource for journalists.” News outlets frequently pass along other SPLC work with a gloss of expert authority. They couldn’t do that if they acknowledged the center for what it actually is—a competitor, and a particularly disreputable one.
