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…. is from pages 265-266 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and still-important 1937 book, The Good Society:

For it is not necessary to choose between social control administered by the aggrandized state and a self-assertive individualism subject to no social control. That supposedly exclusive choice, which causes such furious party antagonism in our society, overlooks entirely one of the oldest, best established, and most successful methods of social control in human experience. It is social control, not by authority fro9m above commanding this man to to this and that man to do that, but social control by a common law which defines the reciprocal rights and duties of persons and invites them to enforce the law by proving their case in a court of law.

This method of social control is, I submit, the appropriate method for a self-governing people to use.

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Here’s a letter to the Wall Street Journal.

Editor:

You rightly decry Senator Katie Britt’s (R-AL) hypocrisy for seeking to exempt her constituents from the same Trump tariffs that she insists “work” (“One Senator’s Plea for Tariff Breaks,” September 15). But one other response is warranted to Sen. Britt’s public endorsement of Trump’s tariffs – tariffs that (as you quote her as saying) prevent our “return to the status quo of allowing American jobs and manufacturing to be sidelined in exchange for cheap junk from foreign adversaries.”

If Sen. Britt is correct that the tariffs work their wonders by preventing imports of cheap junk, it follows that the American jobs protected by the tariffs are ones that produce cheap junk.

One wonders why Sen. Britt and Pres. Trump believe that America is made great by ensuring that American workers are employed at producing cheap junk – that Americans, moreover, then buy at artificially high prices.

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

……

I thank Ed Tower for suggesting the final phrase of this letter.

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Here’s the abstract of a new paper by the great economic historian Gary Libecap:

The US federal government owns and administers 472,892,659 acres or 21% of the land area of the lower 48 states, the country’s largest landowner. The resource is held and managed as a collective resource, the Federal Lands, through political and bureaucratic interpretation of the Multiple Use principle and generally, the biological aim of maximum sustained-yield. By contrast, access, exchange, and investment for most other US natural resources are through private property rights and markets. Despite the magnitude of the resource, economists have devoted relatively limited attention to the economic and welfare impact. The objective is to suggest economic implications and to encourage additional economic analyses. The discussion summarizes federal lands privatization through 1891, when withholding of federal lands began. The literature reveals no demonstratable market failure or increased resource scarcity from private exploitation between 1870 and 1957 when most lands were withheld. Because land was nonmobile and observable private property rights could have been assigned and any externalities addressed via Pigouvian restrictions or Coasean exchange. Federal ownership was not obviously required. Progressive Era reformers, driven by concerns of impending resource depletion, called for scientific, sustained-yield management by government officials. The institutional change is economically important. As outlined by Dixit and others, private rights holders have high powered incentives for efficient resource use that are lacking in decision making by agency officials who do not hold exchangeable property rights and do not directly bear the economic costs and benefits of their actions. Consequential public goods delivery could be an offset, but these are not measured for tradeoff calculations. Following Krueger, a rent-seeking framework is presented for comparing outcomes with economic property rights and political management. The analysis suggests that a.) federal lands will have lower production value than comparable private, all else equal; (b). federal lands management will be less responsive to shifts in economic costs and benefits. Public goods may be provided for high amenity, recreation, and ecological areas, but the dominant Multiple Use management principle provides no objective criteria for allocation or for periodic outcome assessment and adjustment. A literature review and data for contemporary federal forests, range, and oil and gas lands are provided.

GOP politicians who publicly assert that Trump’s tariffs punitive taxes on Americans’ purchases of imports enrich America privately plead with Trump for relief from those same tariffs that raise prices for these politicians’ constituents. A slice from Wall Street Journal editorial:

Talking up tariffs is a way for Republicans to stay on President Trump’s good side, but in practice those tariffs hurt their constituents. Thus the pleas behind closed doors for exemptions. Step right up, Alabama Sen. Katie Britt.

“What the media won’t tell you is that President Trump’s tariffs work,” Ms. Britt wrote in February, after the Supreme Court rejected Mr. Trump’s “emergency” tariffs. “We are not going to return to the status quo of allowing American jobs and manufacturing to be sidelined in exchange for cheap junk from foreign adversaries.”

What Ms. Britt won’t tell you is that she was privately seeking exemptions 10 months earlier. That’s when her legislative director wrote an email, “Sen. Britt Alabama Trade Priorities,” seeking help for “specific Alabama manufacturers.” We obtained the email from the U.S. Trade Representative’s office via the Freedom of Information Act. The email begins by saying Ms. Britt “is supportive” of rebalancing trade. Then it moves to “four pressing issues,” each a plea for an Alabama company.

…..

Tariffs for thee, exemptions for me. Join the GOP club: In Mr. Trump’s first term, Sen. Josh Hawley lobbied for a carveout on saw blades, Rep. Mark Meadows on furniture wood, Rep. Andy Biggs on patio screens. Who else? When more records arrive, we’ll let you know.

Scott Lincicome tweets:

New polling from @CatoInstitute shows that 70% of Americans – and even 56% of Republicans! – think the President should be required to get congressional approval before imposing new US tariffs.

Jim Dorn tells of Gu Zhun and Wu Jinglian, two pro-market Chinese reformers who played a large role in promoting the growth of prosperity in China.

Tosin Akintola argues that “AI executives want international regulation. They could just slow down themselves.” A slice:

Calls for government intervention seem unnecessary for an industry that has shown it can self-regulate its leading companies. When OpenAI found its advanced models escaped their test environment and reached the internet earlier this year, it handled the incident in concert with industry partners like CrowdStrike, METR, and Redwood Research, which specialize in AI cybersecurity. Anthropic is even more stringent with its security checks. In July, it halted all active testing, notified its partners, and published a detailed report after its models reached the internet due to a mistake in the testing environment setup.

John Stossel understandably applauds the breaking of the fever for “net zero” carbon emissions.

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… is from page 289 of my Mercatus Center colleague – and GMU Econ alum – Liya Palagashvili’s excellent 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) [footnote deleted; link added]:

Consumers benefit most from dynamic pricing in ride-sharing services. Economist Juan Camilo Castillo, analyzing data from Uber in Houston during the spring of 2017, found that consumers are significantly better off under dynamic pricing relative to static pricing in ridesharing because surge pricing allows riders who highly value their time (e.g., they need to be punctual for an appointment or to catch their flight) to be picked up more quickly. Customers who don’t put as high a premium on their time can always wait until surge diminishes or take another form of transport. Under static pricing, only riders who are lucky to be near a driver get a ride, irrespective of how much they value it.

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Here’s a letter to the Wall Street Journal.

Editor:

Aluminum-industry lobbyist Mark Duffy’s case for tariffs on aluminum is weak (Letters, September 14).

He trumpets a reality that no tariff opponent denies, namely, that tariffs might spur investment and job creation in U.S. metals industries. But he ignores one of the core arguments against protectionism, which is that that investment and those jobs come at the expense of other sectors of the U.S. economy. By using tariffs to artificially direct capital and resources into U.S. metals production, which American industries shrink and which American jobs are destroyed? By ignoring this key question, Mr. Duffy reveals his unseriousness about countering the case against tariffs.

Mr. Duffy then doubles down on his unseriousness by asserting that “U.S. aluminum producers adhere to free-market principles.” Were these producers true adherents of free-market principles, they’d not demand special privileges from government – special privileges rooted in restricting Americans’ freedom to spend their incomes as they, not the government, deem best.

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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The Wall Street Journal‘s Editorial Board wisely counsels skepticism of AI CEOs’ calls for government regulation of AI. A slice:

The CEOs [of AI firms] can also see how the politics of AI are moving toward panic. The opposition to data centers based on misinformation is one signal. They can also see the plaintiff bar circling in wait for an incident when rogue agents do more harm than the Hugging Face event.

The warnings of Apocalypse are also growing, often uninformed and amplified by those like Bernie Sanders who want government to stop the industry until the politicians can run it. By offering to slow down on their own, and invite outside monitors to inspect their models, the CEOs are hoping to head off such an outcome.

But then nothing now is stopping these firms from “pacing the frontier” on their own, to use Mr. Amodei’s phrase. OpenAI and Anthropic are leading the frontier. If what they see in their shops is truly dangerous, by all means be responsible and “align” development. Slow down on your own.

The complication comes when these firms seek outside help to aid their cause. One ever-present risk is regulatory capture, in which government rules entrench market leaders—in this case especially OpenAI and Anthropic. If Mr. Amodei wants to bring in an outside referee for its models, go right ahead. But nonprofit monitors come with their own biases and business ties. We should be wary of entrenching them as de facto regulators for everyone.

Also writing wisely on the topic of government regulation of AI is David Sacks: (HT Kevin Briggs)

Dario has written that we need to “pace the frontier,” and Sam has agreed. People may be surprised by my response: go ahead.

You guys are the frontier. By any reasonable metric — market share, revenue growth, model capability — the two of you have a duopoly on frontier intelligence. You’ve also claimed the lead is widening because of recursive self-improvement.

I don’t see what you see in the lab. If the unreleased models are scary enough that you think you should slow down, I support your decision to be responsible.

But stop pretending you need anyone else’s permission. Stop pretending antitrust law has to be suspended so you can form a cartel. Stop pretending you need a regulatory approval process that supersedes product liability. Stop pretending METR is independent when it is intertwined with Anthropic’s investors and staff. Stop pretending you need those same evaluators to police competitors who aren’t even at the frontier.

Most of all, stop pretending the motivation to slow down is purely altruistic. You face massive product-liability exposure if your products enable a truly damaging cyberattack. The market already punishes models that behave in unpredictable or unauthorized ways. After the Hugging Face episode, it is simply good business for OpenAI and Anthropic to trade some raw power for reliability and predictability. Call it alignment if you want. It is also just giving customers what they want.

Pacing the frontier would also create breathing room for a more intelligent conversation about regulation than Bernie Sanders’ “shut it all down.” China is very unlikely to join a global agreement, as you know, and that has to be taken into account as well.

So go ahead and pace the frontier. You are the ones setting it. The easiest way not to build superintelligence is for you to agree not to build it. Demanding your preferred regulatory framework as the price of that will look like blackmail of the public and the political system. So just do it.

If you do, you’ll buy goodwill for the next conversation. If you don’t, we’ll know this was just another bid for regulatory capture — or an election-season psyop.

Alejandra Martínez Canchica writes insightfully about “Trump’s Venezuela oil deal.”

Ilya Somin, a GMU colleague over in the Scalia School of Law, argues that Trump’s Section 338 tariffs on some Canadian products punitive taxes on Americans’ purchases on some Canadian products are unlawful. A slice:

Section 338 was part of the infamous Smoot-Hawley tariff act of 1930, which gravely exacerbated the Great Depression. There is a strong case that Trump’s Section 338 tariffs are illegal both because Section 338 (which has never been used previously) was superseded by later legislation, and because Trump’s tariffs do not meet the textual requirements of Section 338. On the former point, see this 2025 Volokh Conspiracy guest post by Philip Zelikow of the conservative Hoover Institution. On the latter, see this excellent guest post by Georgetown University trade policy experts Peter Harrell and Jennifer Hillman.

Scott Lincicome tweets:

Just when you thought our Strategic Trade Policy™ couldn’t get any more strategicky: “Trump Says He’ll Remove US Tariffs on Irish Whiskey.”

The Editors of National Review decry what they rightly call “Trump’s reckless $5,000 ‘dividend.'” A slice:

As is his habit, Trump waved away any objections to this plan. Asked later if he would need Congress to agree to the payment, he said, “We think not.” Asked if it would add to the deficit, he said, “I’m not at all worried about that.” Asked why he couldn’t do it now, given that the Republicans already run Congress, he said, “Because they can’t. I’ll tell you what, because the Democrats can’t do it, because with them it’s negative growth. With us, it’s so positive.”

Glad we cleared that one up.

Not to be outdone, Vice President JD Vance got in on the action with nonsense of his own. Asked by Bret Baier about the potential consequences for the “deficit and debt” and “inflation,” Vance insisted that the checks could be paid for from tariff revenues. “We’re taking in an extraordinary amount of revenue,” he said.

None of this is true. In his speech, the president described the potential payout as a “Trump Dividend.” But this is a brazen misuse of that term. Were his plan to come to fruition, it would be good old-fashioned government spending — nothing more, nothing less. Under the U.S. Constitution, that spending would have to be authorized by Congress, not by the president. And, because the federal government is running multi-trillion-dollar deficits, that spending would have to be borrowed, which would increase the debt. If President Trump’s vow is to be taken literally, the cost would be between $1.3 trillion and $1.5 trillion. Adding that amount of money into the economy would undoubtedly make inflation worse, and, because it would eventually be paid back unequally via our highly progressive tax system, it would represent precisely the sort of “socialism” that Trump spent the rest of his speech in Texas denouncing. As for Vance’s preposterous claim that the project would be covered by the revenues from tariffs? The projecteted tariff haul in 2027 is $125 billion — less than 10 percent of the cost of Trump’s plan.

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with Stephanie Slade about the conservatives’ wrong turn.

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… is from page 11 of Thomas Sowell’s “Introduction” to Compassion Versus Guilt, a 1987 collection of some of his popular essays:

Another political concept often heard in our times is “solution.” Early in these essays, I argue that there are no real solutions in politics – only trade-offs. That theme also recurs in the essays that follow, and extends to foreign policy as well as domestic issues, to economics as well as law, to educational issues no less than to issues of race and sex.

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Here’s a letter to the Washington Post.

Editor:

Kudos to Dominic Pino for the reminder that those of us living in today’s industrialized, commercial economies enjoy nature only because nature for us has largely been tamed and sanitized by industrialization and commerce (“A hike through the woods feels natural. It’s anything but.” September 13). As Aldous Huxley wrote in 1928, reacting to William Wordsworth’s romantic attraction to nature,

The Wordsworthian adoration of Nature has two principal defects. The first … is that it is only possible in a country where Nature has been nearly or quite enslaved to man. The second is that it is only possible for those who are prepared to falsify their immediate intuitions of Nature. For Nature, even in the temperate zone, is always alien and inhuman, and occasionally diabolic…. Nature-worship is a modern, artificial, and somewhat precarious invention of refined minds. Admirable, but somehow, in too many instances, rather ridiculous in being so refined, so rootlessly high-class.*

More succinct, but no less accurate, were Will and Ariel Durant:

Word peddlers tend to idealize the countryside if they are exempt from its harassments, boredom, insects, and toil.**

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

* Aldous Huxley, “Wordsworth in the Tropics” (available here).

** Will and Ariel Durant, The Age of Voltaire (1965), p. 45.

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AIER’s Laura Williams reflects on Americans’ freedoms since 9/11.

Wall Street Journal columnist Holman Jenkins reflects on the U.S. government’s increased fiscal recklessness since 9/11. A slice:

A poorer country than the U.S. would have had to parcel out its resources more carefully in response to 9/11. Instead, the U.S. was distributing taxpayer checks to heiresses and hedge-fund managers because they happened to live in the vicinity of downtown.

The fiscal debacle of 9/12, to me, would come to seem of a piece with the fiscal debacle of ObamaCare, the fiscal debacle of climate policy and, in crescendo fashion, our Covid response.

Our globe-girdling society produces complex policy challenges. It has a hard time producing intelligent policy responses. In their place, we get bankrupting spending extravaganzas in which politicians demonstrate their caring by how much money they set on fire, facilitated by the accident of the world’s seemingly bottomless appetite for U.S. debt.

Jefferson famously said if forced to choose between living without newspapers and living without government, he’d prefer the latter. But the press no longer plays the role he expected, policing government policy failure—say, by discovering that the Affordable Care Act produces insurance so unaffordable nobody would buy it without a subsidy, or that green-energy handouts reduce emissions only in an imaginary world where energy consumption is capped.

It took two decades, but something new has come into the world perhaps to alter the path I trace here from Sept. 12. A voter can ask a large language model whether government policy makes sense and get a nuanced answer. I may be alone but I don’t see doom coming from AI. I see better decision-making, at last.

George Leef documents yet another instance in a long, sordid list of labor-unions’ assault against the rights and freedoms of workers.

The Editorial Board of the Wall Street Journal reports on new research that gives strong evidence that heavy taxes discourage economic innovation (and, hence, economic growth). A slice:

Economists keep warning politicians that incentives matter, and the latest teachable moment concerns taxation and innovation. New research suggests how sensitive investors in start-up companies are to changes in tax policy, and what this means for the economy.

In short: A big tax break for investment in new companies, introduced in 2009, resulted in more business unicorns. In a working paper published by the National Bureau of Economic Research, Murillo Campello and Guilherme Junqueira of the University of Florida track the effects of changes to the Qualified Small Business Stock (QSBS) tax break, which Congress made significantly more generous after 2009 and 2010.

Previously the law had offered a trivial tax break for investments in small companies. The changes eliminated capital-gains taxes on qualified investments—meaning newly issued shares in C corporations with assets of less than $50 million in certain industries.

This allowed the economists to compare investment decisions and performance in the relevant industries before and after that change. The researchers also distinguish between different kinds of investors with different incentives, such as “angels” investing their own money, venture-capital firms pooling money from many investors, and corporations that can’t benefit from the QSBS break. It adds up to a sample of 158,000 investment deals from 2004 to 2022, tracking those deals from initial investment to exit or failure.

The central insight is that by improving the return investors can hope to achieve, this capital-gains tax cut encouraged more risk-taking. After the tax cut, venture firms (the investors most sensitive to the tax break) were 81% more likely to invest in the earliest development stage of a new company. They were also more likely to invest in startups that already carried debt, or where the venture firm had no previous experience in the industry—all markers of higher investment risk.

Many of those bets didn’t pay off. The rate of failure for firms that received venture funding was 71% higher after than before the 2009 tax cut. But those that succeeded did so in spectacular fashion: Valuations for successful exits after 2009 were 131% higher than before, and startups whose investors were eligible for the tax break were twice as likely to become unicorns with valuations exceeding $1 billion.

The economic intuition here is straightforward. In order to take more risks, investors require higher returns. By allowing investors to keep their gains, this capital-gains tax cut increased the expected return of successful investments, encouraging venture firms to swing for the fences. The counterintuitive benefit of the tax break may be that it makes investors more tolerant of potential failure.

Wesley Smith tells of just how terrifyingly authoritarian are those people who believe that society is a science project.