Clark Packard’s and Scott Lincicome’s letter in today’s Wall Street Journal – a letter written in response to U.S trade representative Jamieson Greer’s hostility to the World Trade Organization – is superb:
Jamieson Greer’s frustration with the World Trade Organization is understandable, but his op-ed ignores how the U.S. unwisely accelerated the organization’s decline (“Another Fish Story From the WTO,” April 8).
The American middle class has prospered in the era of open trade, and U.S. manufacturing job declines—driven mainly by productivity gains—long predate China’s WTO accession. The U.S. was the WTO’s chief architect and reaped significant economic and geopolitical value from the system. Its retreat, which began before the administration, ignored these realities and instead prioritized U.S. farm subsidies and trade remedies, often resisting the disciplines Washington demanded of others.
Fealty to these and other insular political issues stymied multilateral negotiations and motivated four separate U.S. administrations to neuter the WTO dispute settlement by blocking Appellate Body appointments. Washington’s participation in disputes has also ground to a halt. You can’t complain about the rules of the game after you stop playing and strangle the referee.
Worst of all, the U.S. has been a bad-faith abuser of the rules it helped write, blowing through tariff bindings and invoking narrow WTO exceptions for national security and balance-of-payments crises to maintain President Trump’s global tariff wall.
Mr. Greer is right to decry the WTO’s consensus problem and the abuse of certain rules by other WTO members. The institution does need reform. But members’ continued participation shows the institution isn’t dead. And reform can’t happen if the U.S. keeps pretending it didn’t help cripple the institution it’s now eulogizing.
“The White House ballroom’s imported steel shows how tariffs encourage cronyism” – so reports Reason‘s Eric Boehm.
My Mercatus Center colleague Alden Abbott applauds Shanker Singham’s method of assessing anticompetitive market distortions (ACMDs). A slice:
The domestic-competition pillar asks a basic question: do firms compete on the merits, or do governments tilt the field through favoritism, incumbent protection, or directed allocation of capital and demand?
The international-competition pillar asks whether foreign firms can compete on reasonably equal terms. Localization rules, discriminatory standards, procurement preferences, and similar measures often push them to the sidelines.
The property-rights pillar asks whether firms can rely on secure legal protection for intellectual property, data, contracts, and investment-backed expectations.
This framework helps distinguish ordinary trade frictions from true market-rigging. A tariff can impose costs without reshaping the competitive order. By contrast, rules that channel procurement to politically favored firms, force technology transfer, or grant regulatory privileges to state-owned enterprises operate differently. They decide winners before competition even begins.
George Will explains that the U.S. president’s “’power to grant reprieves and pardons’ has become another source of political brutishness.” Here’s his conclusion:
So, the remedy for tawdry pardoning is not this or that institutional gambit. The only feasible solution is the election of presidents who are not louts. This, however, becomes less likely as voters are made ever more cynical by loutish pardons.
Phil Magness justly criticizes J.D. Vance’s support for Hungarian strongman Viktor Orbán. Two slices:
How did the vice president of the United States end up doing campaign work for a Hungarian strongman five days before an election? The answer runs through the most dangerous intellectual movement in American (and world) politics: postliberalism.
In Part 1 of this series, I documented how a visceral disdain for capitalism and economic modernity in general spawned the postliberal movement amid the failed apocalyptic predictions of “Peak Oil Theory” in the mid-2000s. In Part 2, I documented how postliberalism enlists the overtly fascist legal theories of Carl Schmitt to wage an attack on the Madisonian constitutional system of checks and balances and the classical liberal philosophical ideas that animated the American founding.
In this installment, I turn my attention to the postliberal movement’s search for a patron. The fundamental unpopularity of this movement’s ideas has sent them searching — to both the Catholic Church and Viktor Orban’s Hungary — for a top-down authority willing to override public opinion.
…..
Scholars from across the political spectrum have documented how the left-leaning identity politics of elite academia spilled out of the faculty lounge and into mass media, K-12 education, and even the corporate board room. Sociologist Musa al-Gharbi dubbed this the “Great Awokening” and dated it to the early 2010s. In my own work, I’ve documented how faculty political opinions underwent a hard left turn in this same period and flooded mainstream dialogue with previously obscure jargon from the Critical Race Theory academic literature.
Although the leftward cultural shift is real, [Gladden] Pappin’s diagnosis of its causes misses the mark. Rather than investigating its sources in the classroom, he defaulted to the ideological anti-capitalism and disdain for economics that undergirds the postliberal movement.
[Patrick] Deneen made a similar move in his own cultural diagnosis. In a 2023 interview, he attributed wokeness to a hypothesized merger between the 1960s sexual revolution and a “neoliberal capitalist ethos” in which everything is commodified to maximize consumption and material comfort.
Financial Times columnist Harvey Nriapia takes a look at the latest research on minimum-wage legislation. (HT Richard Ebeling) A slice:
The majority of this research shows that a minimum wage rise lowers employment, especially among younger and less-educated workers. While the evidence is not unambiguous, it certainly points in one direction.
The logic is quite straightforward: as the price of low-skilled work rises, employers demand less of it. This is especially true for the young, who might be less productive and more error-prone when starting out.
There are many potential mechanisms explored in the literature. It could be that in response to a minimum wage uplift, companies cut jobs and invest in more labour-saving technologies, such as self-service checkouts. Or perhaps, when thinking about business needs for the next fiscal year, they opt for one older, more experienced hire rather than two young workers. Of course, some unproductive companies also buckle under the weight of the new statutory pay demand, which could leave entire teams without jobs.
[David] Neumark’s research suggests the evidence is often at odds with how the body of research is summarised. “One can always say that a lot of studies are wrong, and some small set are right — and that could lead one to the conclusion that higher minimum wages don’t reduce employment in the US,” he told me. “But simply saying “studies show” that is highly inaccurate and continues to be since this paper.”
As for why the research and the communication about the research differ so markedly, Neumark posits three reasons. First, very few economists tabulate all the literature, so they don’t know what the majority of it says. Second, a few of the prominent studies that show no negative or even positive employment effects get disproportionate press, such as the Card and Krueger 1994 paper, which is a cornerstone of economics undergraduate courses.
The third is more concerning: “I have no doubt that there are some researchers . . . who are advocates for higher minimum wages,” he told me. “I’ve seen this reflected in so many ways. I think they amplify the claim that ‘most minimum wage studies show’ no effects, even though it’s inconsistent with the data.”
Ian Vásquez shares a report – one presented last month at a meeting of economists and policy-makers (that I, too, attended) – on impressive progress in Argentina of reducing economically stifling regulations.
At a meeting I attended last month with a small group of economists, Argentina’s Minister of Deregulation, Federico Sturzenegger, presented the graph above. It shows how satellite internet use exploded once the government lifted its ban, which had, until then, benefited a politically powerful local internet provider.
In a recent paper, Sturzenegger describes how Argentines and businesses that were previously isolated or harmed by the high cost of the internet benefited from the deregulation.
Competitive firms have no property rights or titles to a market share, and certainly none to profits. In a market with free entry and no restrictions on competitive practices (e.g., no advertising bans), past market shares yield no ex ante guarantee of future market performance. Observed market shares are ex post outcomes. Absent a secure property right, they tell us little about future market shares.
Under the law of nature, all men are born free, every one comes into the world with a right to his own person, which includes the liberty of moving and using it at his own will. This is what is called personal liberty, and is given him by the author of nature, because necessary for his own sustenance.
In a sense, the public-choice outlook at politics was meant to mirror the way welfare economists looked at markets. Just as the latter diagnosed real-world markets to be plagued by “failures” when compared with the ideal of perfectly working markets, public-choice economists insisted that real-world politics likewise “failed” when measured against its ideal image. Yet, unlike welfare economists, who considered such diagnosis of “market failures” a sufficient basis for recommending government intervention, public choice scholars did not draw symmetric conclusions. Rather, the point they sought to make was that measuring either real-world markets or real-world politics against unrealizable ideal standards is of no help whatsoever for answering the question of how problems a society faces ought to be dealt with. The only meaningful way to seek answers to such questions is, from a public choice perspective, to compare and evaluate feasible institutional arrangements, both in markets and in politics.
The good or ill accidents of life are very little at our disposal; but we are pretty much masters what books we shall read, what diversions we shall partake of, and what company we shall keep.
