Northwestern University law professor John McGinnis explains how the sharing economy is reducing economic inequality.

Barry Brownstein corrects the late Stephen Hawking’s mistaken views of the consequences of technological innovation.

David Bier busts a common myth about immigrants and crime.

David Boaz rightly applauds marijuana legalization – and rightly objects to the government diktats that attend this legalization.

Matt Ridley warns against the pessimism bias – and of how news encourages this bias.

Ilya Somin makes a strong case against the folly of giving special credence to the political views of children and of victims.

Mark Perry busts some myths about the service sector.  A slice:

It’s a great point that all of the incessant hand-wringing about the loss of US factory jobs, the decline of the Rust Belt and the supposed “hollowing out of American manufacturing,” and the subsequent attempts to save or bring back those jobs with protectionist trade policy, miss the bigger picture of the US labor market, which is a job-creating machine when it comes to the dynamic, thriving service-providing sector that has added an average of 4,500 new jobs every day to the nation’s labor force over the last half-century.

My Mercatus Center colleague Dan Griswold corrects a misunderstanding that Larry Kudlow has about value-added taxes and trade.

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In the November 2008 Freeman I wrote about the structure of production – and distribution – of ideas.  My ideas are below the fold.

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… is from pages 390-391 of the 1982 Liberty Fund issue of the 1978 Oxford University Press edition of Adam Smith‘s Lectures on Jurisprudence; this quotation is from a lecture that Smith delivered on April 13, 1763:

The business of commerce and industy is to produce the greatest quantity of the necessaries of life for the consumption of the nation, or exchanging one commodity for another which is more wanted.  It is on the power of this exchange that the division of labour depends, which as has been shewn to the satisfaction of the whole of you is the great foundation of opulence, as it occasions the production of a greater quantity of the severall things wrought in.  The production of the necessaries of life is the sole benefit of industry.  If you do not use them, what is the benefit of the greatest abundance.  What would be the advantage of employing a number of hands and cherishing the cultivation of the arts.

DBx: Adam Smith here reminds his students – including us – that production is a means and not an end.  Production, of course, is an essential means: that which is not produced cannot be consumed.  But this truth does nothing to counter or to dilute another truth: the purpose of production is to enable as much consumption as possible.  We in our role as producers act to serve us as consumers.  Protectionists routinely deny this truth.  Protectionists nearly always have as a premise the false notion that we as consumers should act to serve us as producers.  And if, in the protectionist’s judgment, we as consumers do not so act, we should be coerced by the state until we alter our actions so that they conform to the protectionist’s fancy.

I often compare the ethics of protectionists to that of common thieves.  The comparison is apt.  But as I’ve heard my colleague Walter Williams say many times, in one significant way common thieves are superior to protectionists.  That way is this: although like protectionists, common thieves steal that which doesn’t belong to them, unlike protectionists, common thieves do not in the process insult their victims’ intelligence by asserting that their thievery will make their victims richer.

(Smith’s lectures – which are student notes taken of many of the lectures that Smith delivered – are available free-of-charge here on-line.)

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The Wall Street Journal‘s Mary Anastasia O’Grady exposes some of the Trump administration’s trade follies.  A slice:

After the fact, Mr. “Art of the Deal” figured out that his opening tariff bid was on track to blow up the two best foreign markets for American-made steel and significant markets for American-made aluminum. It’s a good bet that the same producers who are lobbying for protection asked the president to back off the neighbors.

The gaffe exposes the Trump administration’s failure to grasp the complexity of the supply chains that interconnect the global economy. A few exemptions won’t clean up the mess he has created with his tariff gambit. The new duties will clobber American fabricators, which rely on these imports to manufacture at competitive prices. Retaliation by injured trading partners will hurt U.S. exporters.

Pierre Lemieux joins in the fun of reviewing White House trade shaman Peter Navarro’s hilariously awful movie “Death by China.

Erica York adds her voice to those who oppose Trump’s punitive taxes on Americans who purchase steel and aluminum.

Shikha Dalmia reveals the hateful agenda of the Southern Poverty Law Center.

Robert Samuelson beautifully busts the myth that poverty is unrelated to the prevalence of single-parent households.

Richard Rahn reviews some of the ranks of the corrupt.

Ryan Bourne explains a problem with Pigouvian taxes.

Over on the monetary-policy front, George Selgin walks us through New Zealand’s experience with “a ‘floor’-type operating system.

Here’s Bob Higgs on two forms of socio-economic problems.  (Well, really only one form.)

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Here’s a letter to BloombergMarkets:

You report on a new “study” by the anti-free-trade Coalition for a Prosperous America that finds that Pres. Trump’s punitive taxes on Americans who buy steel and aluminum will create 19,000 jobs and reduce U.S. GDP by only $1.4 billion (“U.S. Tariffs May Add 19,000 Steel and Aluminum Jobs, Study Says,” March 20).  It’s unclear if this jobs figure of 19,000 is net or merely the number of jobs that the CFPA finds will offset jobs that the tariffs will destroy elsewhere in the U.S. economy.  No matter; in order to make the case for the tariffs as strong as possible, let’s assume (contrary to what economics predicts) that the additional 19,000 jobs created in steel and aluminum mills will be a net addition of 19,000 to all U.S. jobs.

By the CFPA’s own reckoning, then, each job created will cost $73,684 (which is $1.4 billion divided by 19,000).  The typical worker in a steel mill earns in annual wages about $55,556.  If we assume that this worker gets another 20 percent of this pay in the form of fringe benefits, each steel-mill worker, on average, is annually paid about $66,667.  It appears, therefore, that the price we Americans will pay per job created will be roughly $7,000 more than each of these jobs is worth.

The CFPA’s dodge that $1.4 billion is only a tiny percentage of GDP doesn’t justify the CFPA’s conclusion that the tariffs are therefore economically warranted.  Here’s why.  First, this same reasoning, were it valid, would also justify pickpocketing, as the negative impact of pickpocketing on U.S. GDP is likewise very tiny.  Second, not only is the cost of the tariffs a tiny percentage of GDP, the number of jobs created by the tariffs is also a tiny percentage of something relevant, namely, of the number of annual job openings.  Over the past three years the average number of job openings in the U.S. was about 67.8 million annually.*  And so 19,000 jobs is a mere 0.028 percent of the number of job openings annually today in the U.S. – hardly an impact that warrants Mr. Trump’s violation of Americans’ rights to spend their incomes as they choose.

Finally, as my Mercatus Center colleague Dan Griswold asked, in personal correspondence, when he read your report, “If the number of workers goes up, and total output goes down, is it not simple math that output per worker (or per hour worked) has gone down?” – and, thus, because worker pay is ultimately determined by worker productivity, isn’t it true that even by the CFPA’s own calculations these tariffs will reduce Americans’ wages?  The answer is yes.

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

* Calculated from here.  Here’s a screenshot of what I pulled up at this BLS site:

(I thank my intrepid Mercatus Center colleague Veronique de Rugy for alerting me to this BloombergMarkets report.)

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Students are encouraged to check it out and apply to attend.  It’s a great program.  I share here Public Choice Center director Alex Tabarrok’s advertisement for the seminar:

The 2018 Public Choice Outreach Conference, a crash course in public choice for students planning careers in academia, journalism, law, or public policy will held June 9-10 in Arlington VA. Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy political science, psychology, public administration, religious studies, and sociology have attended past conferences. Speakers include Robin Hanson, Bryan Caplan, Shruti Rajagopolan and many others.

You can find an application and more information here. If you are a professor please invite your students to apply.

Here are some quotes from past attendees of the Outreach Conference:

It was so useful to hear such varied and intriguing aspects of public choice thought. The other members of the conference were fantastic to meet and now I’m sure we all have so many new paper ideas and updated perspectives on our original interests, thank you!

Clara Jace, Creighton University

 I found the conference insightful into many different topics. What I think was most unique about the conference was the diversity of ideas, theorems and most importantly, ideas for solutions to these prevalent problems. I think my favorite part of the econ conferences is how quick presenters are to say “I don’t know” to questions and proceed to give the analytical reasoning for both sides of the argument instead of giving a BS answer that may or may not be true. Overall, I have loved this conference.

 Jalee Blackwell, West Texas A & M, School of Business

 Wow, this conference was absolutely exceptional. It provided some of the most interesting and thought-provoking Econ lectures and conversations I have ever had the privilege of engaging in. The opportunity to have one on one discussions with some of the world’s leading minds in these fields was truly an eye opening, educational, and inspiring experience that I won’t soon forget.

 Daniel Corley, University of Texas School of Law

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While laying back this morning in a chair at my dentist’s office having my teeth expertly checked and cleaned, I thought of my grandparents, each of whom I knew.  Each was born in the United States, and three of the four were born in a city (New Orleans).  (My paternal grandfather was born somewhere deep in the swamps of south Louisiana, although when 15 years old he ran away from home to New Orleans and lived in that city until he died 60 years later.)  The years of their lives are: 1900-1975; 1905-1967; 1914-1991; 1917-1996.

For as long as I knew my grandparents, each wore dentures…. which prompted me to reflect on all the jobs that have been destroyed by better dental care.

Losing one’s teeth, even in rich America, was far more common in the good ol’ days than it is today.  And while most of us celebrate this victory over tooth decay and other dental ailments, someone of a protectionist bent is likely unhappy about this improvement in living standards.

“After all,” wonders the protectionist, “what about all those unfortunate workers who lost their jobs as a result of this advance in dental health?  What about the hard-working men and women – all of whom played by the rules – who were laid-off from their jobs making dentures?  What about the honest, rule-following workers who once made and marketed products such as Polident and Poligrip?  Fewer such workers are needed today than would be needed had Americans not suffered this curse of improved dental health.”  The protectionist’s ire rises when he is informed that no small part of this improved dental health can be blamed on government interventions – interventions such as government subsidies for the training of dentists, tax-funded fluoridation of drinking water, and the U.S. Government’s complicity in USA Hockey’s requirement that all players wear facemasks.

The protectionist – ever-vigilant in keeping an eye on jobs destroyed by greater abundance – hurries off to his laptop (too bad he doesn’t hire a secretary who knows short-hand and how to type) to write a proposal to punitively tax Americans who purchase toothpaste, floss, electric toothbrushes, and dental care.  “Only thus will we level the playing field!” the protectionist tells his audience.

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In the September 2008 Freeman I wondered why so many people seek salvation through politics.  My thoughts are below the fold.

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Quotation of the Day…

by Don Boudreaux on March 20, 2018

in Myths and Fallacies, Travel

… is from page 368 of William Leggett‘s February 11, 1837, Plaindealer essay, “Free Trade, Taxes, and Subsidies,” as this essay is reprinted and titled in Democratick Editorials, Lawrence H. White, ed. (Indianapolis: Liberty Fund, 1984):

It is a mistake to say that theoretick free trade consists in the equality of duties.  It consists in levying no duties at all.  It consists in leaving the parties to trade – the buyer and seller -perfectly unrestrained by the conditions of a third party.

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… if he or his company isn’t making as much money as he believes that he or his company is entitled to make, finds excuses to support government coercion of his fellow citizens – coercion designed to restrict their options in the hope that his fellow citizens will thereby spend more money on his or his company’s offerings.  Again, a protectionist is someone who believes that he is entitled not only to money that he earns, but also to some portion of money that other people earn.  The ethics of a protectionist differ in no essential way from those of a thief.

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