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… is from page 401 of The Thomas Sowell Reader (2011):

Much of what are called “social problems” consists of the fact that intellectuals have theories that do not fit the real world. From this they conclude that it is the real world which is wrong and needs changing.

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Although this TED Talk by Leslie Chang was delivered almost 14 years ago, it reveals a relevant reality about China’s industrialization, at least before the reign of Xi. Mistaken are the lazy protectionists’ tales of China’s economic growth being rooted in slave labor, as well as the lazy progressives’ tales of western corporations profiting at the expense of their workers in still-developing countries. (I thank Steve Hardy for alerting me to this TED Talk.)

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National Review‘s Andrew McCarthy points out that the executive branch of the U.S. government has no Constitutional authority, acting alone, to acquire more territory – including Greenland – for the United States, whether through purchase or conquest. A slice:

What got my antennae pinging was the fact that nowhere in the Times report is it mentioned that a president lacks constitutional authority to unilaterally add territory to the United States. It’s as if President Trump has now done this sort of thing enough times that we no longer need discuss legality — just audacity.

Still, whether it’s a topic of discussion or not, and whether what’s at issue is purchase or conquest, congressional approval — including any necessary funding — is required to add property to the United States.

For example, the Louisiana Purchase was carried out by treaty. Back in a time when presidents worried about such things, Thomas Jefferson had misgivings about whether the Constitution even permitted the acquisition of new territory. He briefly thought about (but decided against) seeking an amendment, concluding that a treaty in conjunction with congressional funding would suffice. The issue, though, was whether the law permitted the national government to acquire territory; it would not have dawned on President Jefferson that he could just take it or buy it with funds Congress had appropriated for other purposes. His administration made the agreement with France in 1803, the Senate approved it, and Congress appropriated the $15 million to complete the purchase — a gargantuan sum in today’s dollars, but still a bargain. (Napoleon needed the money for his wars in Europe and hoped to strengthen the United States vis-à-vis his rival, Britain.)

The Times report quotes two retiring senators — Jeanne Shaheen (D., N.H.) and Thom Tillis (R., S.C.) — expressing concerns that the president is paying insufficient respect to “treaty obligations” and the “territorial integrity of the Kingdom of Denmark.” Well sure . . . but how about respect for the constitutional authority of Congress?

The president of the United States is the chief executive in a government of divided powers. The president is not the sovereign, and he has no authority to confer American sovereignty on foreign territory.

Alan Dlugash decries Trump’s on-going efforts to displace free markets with state control.

Phil Magness rightly notes that the ranks of the supporters – which include the ridiculously illiberal Adrian Vermeule – of Trump’s newly announced proposal to cap interest rates on credit cards speaks volumes about the dirigiste nature of Trump’s proposal.

Megan McArdle explains what shouldn’t – but, alas, what today nevertheless does – need explaining: “Reflexively siding with or against law enforcement is folly.” A slice:

Trying to separate the “what” from the “who,” I confess I am struggling to see what conservatives believe is obvious: that officer Jonathan Ross had good reason to believe Good was trying to hurt him with her car.

I’ve watched all the videos I can find in slow motion and in real time, and I see a man filming with his phone at the corner of a car making a K-turn, and may have knocked into him as it moved. Ross seems to be leaning over the hood from a side angle to put the first shot through the windshield and firing the second and third shots into the car from the side, which makes it hard to believe that he thought the car was aimed at him or anyone else. The road appears clear behind him.

That’s not the final word, of course; though a news outlet disseminated his cellphone footage, his body-cam video, if it exists, hasn’t been released. Further investigation and more videos may reveal additional details. Unfortunately, we’ve become so polarized on the “who” that I no longer trust this administration — which immediately deemed Good a “domestic terrorist” — to adjudicate the “what.” And that is even more troubling to me than the death of Renée Good.

Harold Black is rightly disgusted with the clueless self-righteousness and hypocrisy of the likes of Zohran Mamdani and Cea Weaver.

The Washington Post Editorial Board appropriately excoriates the Chicago “teachers” union for the damage it does to that city’s government-run schools. A slice:

Then again, failure seems to be the gold standard for this union, and now its president Stacy Davis Gates will be able to spread her radical agenda across the state after being elected to lead the Illinois Federation of Teachers. Davis Gates, who has a history of blowing off mandatory union audits and has described testing as “junk science rooted in White supremacy,” is clearly allergic to accountability and excellence.

If the CTU actually cares about fighting injustice, it should focus on the basics. Black students in third through eight grade score 33 percent lower on reading than White students, and low-income students score 32 percent lower than the rest. Meanwhile, the union is being investigated by the House Education and Workforce Committee for failing to produce an annual audit of its spending over the last five years.

My intrepid Mercatus Center colleague, Veronique de Rugy, notes that “the Minnesota fraud scandal is just the tip of the iceberg.” A slice:

Minnesota is not the exception but rather the example Americans finally noticed. Medicaid fraud has been endemic at the state and federal levels for decades. Politicians haven’t done much, even with scholars and journalists raising the alarm.

Medicaid reports $543 billion in “improper payments” over the past decade, though that figure omits one of the largest sources of error: whether states correctly determined the eligibility of the individuals they enrolled and paid providers on behalf of. According to Paragon Institute calculations, this brings improper payments to $1.1 trillion over those 10 years.

Improper payments are not identical to fraud; many involve missing documentation or administrative errors. But that distinction offers little comfort considering how little money is recovered. They are also an open invitation for more abuse.

Actual fraud, meanwhile, is widespread and persistent. In 2024 alone, state Medicaid Fraud Control Units reported more than 1,151 convictions and more than $1.4 billion in civil and criminal recoveries. Federal enforcement recovers a tiny share of what is stolen. Fraud that goes undetected never appears in the data.

That’s only the tip of the iceberg. Medicare, the Supplemental Nutrition Assistance Program (SNAP), and many other welfare programs also suffer from massive fraud. The Affordable Care Act’s (ACA) exchange subsidies provide another cautionary example.

A recent Government Accountability Office report shows that the fraud risks in the ACA’s advanced premium tax credit remain severe a decade after they were first identified. The ability to gain subsidized coverage for fictitious applicants without providing required documentation, tens of thousands of Social Security numbers used for overlapping coverage, and more than $21 billion in subsidies never reconciled with tax filings are among the findings. Nonetheless, the Centers for Medicare and Medicaid Services has not updated its fraud risk assessment since 2018 and still lacks a comprehensive anti-fraud strategy.

Congratulations to Timothy Taylor on his receipt of a very-much-deserved honor.

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… is from page 1 of Francis W. Hirst‘s 1927 book, Safeguarding and Protection:

Some people imagine that economics and finance are complex, mysterious and almost incomprehensible subjects; but they really constitute the science of common sense, and their central truths are plain and simple. Of these, free trade stands first in practical importance, and once you have mastered the free trade principle in all its bearings you possess the elements of political economy. Free trade, or free exchange, is in reality the internal law of every pro- gressive and prosperous human society. The most reactionary Protectionist in England does not propose to “safeguard” the manufacturers and farmers of Yorkshire from their competitors in Lancashire by a tariff. The most reactionary of American Tariff-mongers does not suggest that the forty-eight states of the Union should be protected from one another. Within the Union free competition and free exchange are the touchstone of prosperity and progress. Thus in a limited sense the wisdom of free trade is universally acknowledged, and there is no logical argument against its extension from counties to countries or from interstate to international commerce.

DBx: Yes.

National-security concerns aside, protectionists have no good answer to this question: If it is economically enriching for you and the people of your neighborhood to trade freely with people in nearby neighborhoods, why is it not economically enriching for you and the people of your neighborhood to trade freely with people in other countries?

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Here’s a letter to the Wall Street Journal.

Editor:

Last week you published Ram Charan’s warning that Beijing is ingeniously turning China’s economy into an indomitable economic colossus by creating huge excess capacity in “key” industries (“China Seeks Power, Not Only Trade,” January 2).

This week, your columnist Joseph Sternberg reports that China’s economy is increasingly suffering “zombification” (“China Drifts Closer to Its Own Lost Decade,” January 9). “There’s reason,” he writes, “to suspect corporate zombies are proliferating. By one recent estimate, among service-oriented companies the proportion of total corporate assets held by firms that don’t earn enough to cover interest payments has risen to 17%, from around 8% in 2019.”

If Mr. Sternberg is right, Mr. Charan is wrong. And Mr. Sternberg surely is right. Governments that tie-up – as Beijing does, with subsidies and other special privileges – ever-larger amounts of their economies’ resources in unproductive industries grow poorer and weaker, not richer and stronger. We Americans, therefore, should reject Mr. Charan’s counsel to create a “Department of Manufacturing,” which would be a U.S. government boondoggle destined to introduce economic zombification on this side of the Pacific – and thus reduce the cost to Beijing of its own zombification.

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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Writing at National Review, Peter Wallison argues that “the Supreme Court is getting presidential power all wrong.” A slice:

The Supreme Court’s position seems to be driven by an idea — called the unitary executive theory — that has become popular with the current conservative Supreme Court majority. The first and most important case in which the Court adopted this idea was Seila Law, where the Court majority, led by Chief Justice John Roberts, signed on to this statement about the drafting of the Constitution:

The Framers made the President the most democratic and politically accountable official in Government. Only the President (along with the Vice President) is elected by the entire Nation. And the President’s political accountability is enhanced by the solitary nature of the Executive Branch, which provides a “single object for the jealousy and watchfulness of the people.”

This description of what occurred at the Constitutional Convention in 1787 is wrong and — as brief as it is — was essential to the idea that the president was made a powerful and all-important figure in the government at the time the Constitution was drafted. I am sorry to have to say this. Like all lawyers, I have immense respect for the Court as an institution and have always believed that what I have read in its opinions was well-researched fact. But this is not.

There was no thought at the Constitutional Convention that the president might be “the most democratic and politically accountable official in Government.” The debate over the nature of the presidency took place throughout the entire three-and-a-half months of the Convention, largely because most of the delegates — recalling the problems they’d had with King George only a few years before — feared giving power to a single person.

For the whole Convention, the debate was whether to have a single person as the president, or a group, or — if a single person — someone elected by Congress. There was no consideration — none — about the president ultimately being “democratic” or “politically accountable.” That was exactly what the delegates most feared. The Convention had already allotted to Congress most of the power they were willing to give to anyone, and they limited it to a list of specific powers in the Constitution’s Article I. The notion that these same delegates would — in Article II — give unlimited “democratic” or “politically accountable” power to a single person like a president is completely fanciful.

Although it was agreed that a president was necessary to see that laws were executed and enforced, most of the delegates appeared to fear a single person elected by the people, whatever his powers. They were concerned about an “elected monarch,” as they should have been at that time and place. This would have been clear if anyone at the Supreme Court had bothered to look at the debate in the Constitutional Convention.

Although the final decision, made in the last weeks of the Convention, was to have a single person as president, he was to be elected by an “electoral college” — a different organization than what we have today, but a compromise necessary to get the votes of the members of the Convention who feared a president elected directly by the people; their concern was that, with popular backing, he could become a dictator or elected monarch.

The original Electoral College enacted by the Convention did not have any relationship to the popular vote, as it does now. The electors were well-known people in each state, who would send two names to the central government. The person with the most votes would become president and the runner up vice president. This system was changed in 1804 to require the Electoral College to follow the popular vote in each state, but still we have had 19 cases (including 2016 and 2024) where the president was elected by the Electoral College, but without a majority of the national popular vote.

George Will is understandably dismayed by Trump’s megalomania. Three slices:

It is incongruous that Donald Trump, who advertises his disdain for things European, wants to give us something that no one in his or her right mind wants: a knockoff of France’s Arc de Triomphe.

…..

Given Trump’s gargantuan exercises of executive discretion regarding great matters of state, it might seem quaint to wonder why he cannot be stopped from treating Washington as his chew toy. This would be unworthy of our nation if he had exquisite taste. The fact that he revels in being a vulgarian takes a toll on the nation’s soul.

…..

Trump has the terrible strength peculiar to people who are incapable of embarrassment, and cannot fathom that they look ridiculous. Recently, however, Republicans in the House of Representatives, hitherto impeccably obedient to him, seem to have become healthily embarrassed about their subservience. There have been silent insurrections.

The New York Sun reads Congress’s spending bills so that the rest of us do not need to. It reports that the annual spending bill funding the John F. Kennedy Center for the Performing Arts refers to this venue by that name. If you can hardly believe this impertinence, check the bill’s page 371.

Andy Morriss reviews John Hasnas’s 2024 book, Common Law Liberalism: A New Theory of the Libertarian Society.

Christian Britschgi adds his wise voice to those who criticize Trump’s economically misguided scheme to ban institutional investors from owning single-family homes.

Trump last night revealed that he shares Kamala Harris’s affection for price controls by calling for a one-year cap on credit-card interest rates. [DBx: But, hey, not to worry; this endorsement of price controls comes from the leader of the MAGA right rather than from anyone on the progressive left, which must mean that these controls will work as promised.]

Scott Lincicome and Alfredo Carrillo Obregon make clear that “the US tariff system has gotten even more complex.” A slice:

The Supreme Court’s forthcoming decision in the Learning Resources Inc. et al. v. Trump case could significantly reduce the complexity of the US tariff system if the Court invalidates the Trump administration’s IEEPA tariffs. Such reprieve, however, would likely be temporary because the Trump administration has pledged to replicate the IEEPA regime through other executive tariff authorities, including through both Sections 232 and 301 measures, and previously unused statutes such as Section 122 of the Trade Act of 1934 and Section 338 of the Tariff Act of 1930. (Though, such authorities arguably have more built-in procedural and/​or substantive checks than IEEPA does.) This system, in fact, might be even more complex than what we have right now.

It will therefore remain the case that a true reduction in tariff red tape will only be accomplished through congressional action to revise various US trade laws and reclaim the legislative branch’s constitutional authority over tariffs.

The Editorial Board of the Wall Street Journal pleads for that which ought not – but, alas, today nevertheless does – need to be pleaded for: The U.S. shouldn’t deport a someone (namely, Guan Heng) who “escaped from China in 2021 having gathered, at great personal risk, unprecedented footage of secret reeducation camps and detention centers in Xinjiang province.” A slice:

He made the perilous trip via Hong Kong, Ecuador and by boat from the Bahamas to Florida. Before setting sail he scheduled the release of his evidence of Chinese prisons and camps holding the Uyghur minority in Xinjiang. Immigrations and Customs Enforcement encountered Mr. Guan by chance last August and arrested him for illegal entry. He has languished since in a New York jail.

DHS last month dropped its efforts to send him to Uganda while his U.S. asylum case was pending. But a DHS spokesperson and DHS lawyer Niles Gerry declined to say Thursday whether they plan to support Mr. Guan’s asylum claim. The concern is that DHS will oppose Mr. Guan’s claim in a bloody-minded attempt to punish his illegal entry.

Jonathan Hartley writes about Adam Smith’s Inquiry Into the Nature and Causes of the Wealth of Nations. Here’s his conclusion:

Two hundred and fifty years after The Wealth of Nations, and two hundred and fifty years into the American experiment, the core insight still holds. Prosperity is not planned into existence. It emerges from systems that let individuals focus on what they do best, coordinate through markets, and operate within a framework of law, property rights, and limited public investment. This, in turn, helps lift many out of poverty.

Smith ultimately offered a blueprint for growth grounded in realism about human knowledge and incentives. America’s most significant economic successes came when it followed that blueprint, even imperfectly. Remembering The Wealth of Nations at 250 is not about reverence for an old book. It is about understanding why a decentralized, specialized, and institutionally grounded economy has served America so well, and why abandoning those principles would be a costly mistake.

Here’s wisdom from John Stossel. Two slices:

America’s going broke, but we lavish money on people my age, many of whom don’t need it. Our deficit spending will cause horrible pain, and yet young people elect socialists who promise more spending. They clap when Zohran Mamdani, my new mayor, says he’ll replace “rugged individualism with the warmth of collectivism.”

They naively think that this time, socialism will bring prosperity and kindness. They don’t understand that the opposite is true. Government stifles innovation and reduces our choices. The only thing that creates prosperity is capitalism.

…..

Much of what we libertarians believe comes down to Henry David Thoreau’s line: “That government is best which governs least.” It’s just true, since markets mostly police themselves.

In a free market, every exchange must be voluntary. Nothing is bought or sold unless both parties think they benefit. So good businesses expand and bad ones atrophy. We don’t need bureaucrats to interfere!

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… is from page 400 of The Thomas Sowell Reader (2011):

There is something obscene about people holding protest rallies in order to try to keep getting money that someone else has worked for.

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My latest column for AIER is inspired by a Facebook comment, from Kang Chen, that I received a few weeks ago. In this column I do my best to explain that the case for free trade is not – contrary to Mr. Chen’s charge – narrowly materialistic. A slice:

First, very many (most?) free traders — including myself — support free trade ultimately because it’s consistent with individual liberty, while protectionism is an offense against individual liberty. Even if free trade somehow resulted in a reduced material standard of living, I and many other free traders would still champion it because of its non-economic virtue of being consistent with freedom. It’s fair for Mr. Chen and other protectionists not to esteem individual liberty as highly as do we free traders. It’s unfair, however, and mistaken for protectionists to accuse us free traders of valuing nothing higher than material enrichment.

Second, all motives for economic action ultimately are non-monetary (that is, they’re not about accumulating money for the sake of accumulating money). Some of these motives are material in a narrow sense and, hence, might be called “materialistic”: everyone must eat and be housed and clothed. And some of these materialistic motives are indeed crass and shallow and even contemptible: Joe uses some of his monetary earnings to get drunk on Friday nights while Janet regularly feeds some of her monetary earnings into slot machines. But other of these motives are not materialistic in any narrow sense: Jane spends much of her monetary earnings on piano lessons for her grandchildren while Jerry donates a portion of his monetary earnings to a community children’s theater and uses another portion to improve his and his wife’s learning by subscribing to The Rest Is History podcast. Because free trade increases the opportunities to do all of these things, it’s erroneous to suggest that the case for free trade is a case only for narrow material or sensual gratification.

Third, nearly all of the alleged non-materialistic benefits of protectionism are, in fact, materialistic benefits.

Consider, for example, job security. Job security is valued largely because a secure job is a secure stream of income. If job security really were a non-economic goal that trumps ‘mere’ material well-being, workers who have this goal could greatly increase the security of their jobs by offering to take a significant cut in their monetary wages. Yet, tellingly, such wage-cut offers seldom occur. The case for using protectionism to increase the job security of workers in protected industries is the case for having fellow citizens other than the protected workers pay the economic cost of making the protected jobs more secure.

It’s admirable to have non-economic goals. But it’s detestable to force other people to subsidize the achievement of these goals, and hypocritical to accuse those of us who object to such subsidization of being excessively materialistic. If any group in this situation is excessively materialistic, it’s the protected workers and the protectionists who apologize for them. These protectionists never pause to ponder what non-economic goals a policy of protectionism prevents the bulk of their fellow citizens from pursuing. As a result of having to pay prices driven higher by tariffs, how much leisure does a working mom lose? How much does a family’s education budget shrink? How much health care must another family forego? By how many years does dad postpone retirement?

If protectionists are in search of people who are mindlessly and narrowly materialistic – of people who are blind to the non-economic goals that most individuals have – protectionists should look in the mirror.

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Scott Lincicome, sharing his latest Capitolism column, ponders what is likely forthcoming in 2026. A slice:

Last year, I skeptically asked whether 2025 would be the year that “Bidenomics” industrial subsidies would combine with Trump 2.0 tax and deregulatory moves to help American manufacturing get its groove back. The answer through December—even acknowledging that sagging factory employment is a poor indicator of the industry’s overall health—has been a resounding “nope.”

Many of the reasons for the sector’s continued doldrums come right out of previous Capitolism editions (and Econ 101 textbooks). Discrete industrial policy wins have been costly, prematurely celebrated, and offset by losses elsewhere in the U.S. economy (owed in part to the inherent uncertainty baked into a system dictated by politics and elections rather than markets). Trump’s blanket and byzantine tariffs, meanwhile, have helped some U.S. manufacturers but saddled far more—especially small and medium-sized firms—with higher production costs, increased compliance burdens, and diminished global competitiveness. And any modest tariff benefits have been further muted by the uniquely erratic and complex nature of Trump’s unilateral levies. Indiscriminate deportations and new U.S. immigration restrictions are also causing problems by tempering demand and by straining an industrial labor market that was already struggling to find warm bodies. Overall, it’s a recipe for not the immediate boom the administration promised last spring but continued manufacturing stagnation. And that’s basically what we got.

Trump’s tariffs punitive taxes on Americans’ purchases of imports have dramatically increased the prices Americans pay for aluminum.

Josh Blackman decries the Heritage Foundation’s self-destruction. Two slices:

Rome didn’t fall in a day, and Heritage didn’t fall in a tweet. Kevin Roberts’s bungling defense of Tucker Carlson might have triggered the mass resignation of scholars from what was once America’s leading conservative think tank, but this exodus was years in the making. The Heritage Foundation made a strategic choice to adapt to the current political moment by refusing to exclude anyone from its boundless tent. That led Heritage to depart from its principles and embrace people who have no credible claim to conservatism, even at the expense of pushing out the brains that built the foundation. By obsessing over “what time it is,” Heritage lost sight of hard lessons learned from the past.

…..

Mr. Roberts’s infamous video was most sharply criticized for invoking antisemitic tropes such as “venomous coalition” and “globalist class.” The deeper problem with his message was its neglect for the integrity of the institution Mr. Roberts leads. He declared unconditional fealty to Tucker Carlson, who he said “always will be a close friend of the Heritage Foundation.” He defended Mr. Carlson’s softball interview with Nick Fuentes, a fringe figure who has denied the Holocaust. And Mr. Roberts said he wouldn’t be “attacking our friends on the right” or “canceling our own people,” referring respectively to Messrs. Carlson and Fuentes.

But the Heritage Foundation has no power to cancel anyone. All it can do is protect its own integrity by declining to associate with unsavory figures like Mr. Fuentes. That’s what National Review editor William F. Buckley did in 1962, when he denounced John Birch Society leader Robert Welch who claimed, among other things, that Dwight Eisenhower was a communist, and whose organization disseminated antisemitic propaganda even while professing to oppose antisemitism.

I agree with Ben Shapiro’s message to Mr. Roberts: “If Heritage Foundation wishes to retain its status as a leading thought institution in the conservative movement, it must act as ideological border control.” Because it failed to do so, scholars are self-deporting. What time is it? Too late to save the Heritage Foundation.

Wall Street Journal columnist Jason Riley wonders what is the difference between socialists and some modern American Democrats – or, perhaps also, some modern American Republicans. Here’s his conclusion:

As the midterm elections approach, Republican officials would like nothing better than to make Gotham’s mayor the face of the Democratic Party, but their digs at Mr. Mamdani’s socialism would have more credibility if they weren’t giving the Trump administration a free pass. According to the Tax Foundation, Mr. Trump’s tariffs amount to the largest U.S. tax increase as a percentage of gross domestic product since 1993. And it’s hard to seem credible knocking proposals for government-run grocery stores to control food prices when you support government-run pharmacies to control drug prices.

Give democratic socialist Zohran Mamdani credit for practicing something rare among elected officials: truth in advertising.

John Puri busts the myth – first peddled by progressives and now embraced by the Trump administration – that the purchase of single-family homes by institutional investment firms raises the cost of housing. Two slices:

“It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it,” Trump declared. “People live in homes, not corporations.”

He’s correct on that last point, at least. People do live in homes — and corporate ownership of said homes does not change that fact. The reason that institutional investors purchase single-family homes is not to give shareholders extra vacation options. Corporations don’t keep houses sitting around empty, simply waiting for them to appreciate. They rent them out to people.

…..

Banning institutional investors from buying single-family homes is such an appealing answer to tight housing markets because it’s easy and imposes no clear cost on voters, but it would do nothing to help struggling prospective homeowners. It would merely punish a small segment of renters who benefit from the options that large investors provide, while raising rents slightly for everyone else by decreasing overall supply.

Perhaps worst of all, it would distract from the real solutions that the U.S. housing market desperately needs: breaking down state and local barriers to new construction, such as exclusionary zoning laws, overly stringent building codes, and byzantine permitting processes. If Trump truly wants to expand housing availability, he should seek to liberate the businesses that provide it, not banish a disfavored few of them from the marketplace.

Vance Ginn explains why California is bleeding tech jobs.

The Editorial Board of the Washington Post is correct: “America doesn’t need Venezuelan oil.” A slice:

But if “No Blood for Oil” was dubious then, it’s nonsensical now. The oil industry has transformed in the intervening quarter-century, making Venezuela’s oil less necessary and less attractive, especially for the U.S.

New technologies like shale oil have greatly boosted production. In 2002, the world pumped 65.8 million barrels of crude oil per day. In 2024, it produced 76.6 million. Electrification, especially of automobiles, also means it takes less oil to power advanced economies. That combination keeps prices in check so well that the once-mighty OPEC cartel has given up restricting production and started fantasizing about driving producers of shale oil out of business by flooding the market with cheap crude.

The leader of the shale revolution has been the U.S., which went from being the world’s biggest net importer of oil — 11 million barrels per day in March 2003 — to one of its leading exporters. America now produces more oil domestically than any other country. While U.S. consumers might benefit from greater supply on the global market, American producers would not.

Rachel Lomasky makes the case that “Hayek’s Complexity Theory can provide essential frameworks for understanding the emergent systems we are building with LLMs, enabling us to solve novel, challenging problems that neither humans nor computers could address alone.” (HT Arnold Kling)