I just realized that I have so far failed to archive, here at Cafe Hayek, a piece that I had in the January 26th, 2011, issue of the Christian Science Monitor. The full text of this long-ago essay – titled “State of the Union shows Obama is now pro-business. He should be pro-growth.” – is now available beneath the fold.
I much prefer complete separation of schools and state, but given that such a separation is unlikely, I’m confident that vouchers are a second-best option.
Editor, ProPublica.org
Editor:
In her critical report on support for school vouchers, Ava Kofman parrots fallacies when she writes that “vouchers undermine church-state separation while also draining resources from public schools” (“A Pair of Billionaire Preachers Built the Most Powerful Political Machine in Texas. That’s Just the Start.” Oct. 2).
First, vouchers allow parents, not government, to choose the schools their children attend. This feature of vouchers no more undermines church-state separation than does the fact that the GI Bill allows its beneficiaries to spend government funds to pay for tuition at schools such as Notre Dame, Yeshiva, and Liberty University.
Second, the school-choice enabled by vouchers would “drain” money from public schools only if public schools fail to offer education that is at least equal in quality to the education offered by private schools. The ability of Americans to buy GM and Toyota automobiles doesn’t “drain” resources from the Ford Motor Co. as much as it incites Ford (and GM and Toyota) to offer high-quality products. And just as it’s absurd to think that Ford would maintain the quality of its automobiles if it were protected from competition, it’s absurd to think that public schools maintain the quality of their instruction given their current protection from competition. Ms. Kofman’s confidence that vouchers will drain public schools of funds implies that she’s confident that public schools cannot or will not provide education as well as can and will private schools. Can you or Ms. Kofman articulate a sound reason why public schools should not lose funds if, in competition with private schools, they are unable to offer education at least comparable in quality to that of private schools?
By shielding public schools from the account that would be delivered by competition, your opposition to school choice belies your boast that you “hold power to account.”
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
Jay Bhattacharya, writing in Reason, reviews Anthony Fauci’s new memoirs. Four slices:
As a young medical student, I admired Tony Fauci. I bought and read Harrison’s Principles of Internal Medicine, a vital textbook that Fauci co-edited. In reading his new memoir, On Call, I remembered why I admired him. His concern about his patients’ plights, especially HIV patients, comes through clearly.
Unfortunately, Fauci’s memoir omits vital details about his failures as an administrator, an adviser to politicians, and a key figure in America’s public health response to infectious disease threats over the past 40 years. His life story is a Greek tragedy. Fauci’s evident intelligence and diligence are why the country and the world expected so much of him, but his hubris caused his failure as a public servant.
…..
By contrast, his treatment of scientific critics is harsh, crossing lines that federal science bureaucrats should not cross. In 1991, when University of California, Berkeley, professor and wunderkind cancer biologist Peter Duesberg put forward a (false) hypothesis that the virus, HIV, is not the cause of AIDS, Fauci did everything in his power to destroy him. In his memoir, Fauci writes about debating Duesberg, writing papers, and giving talks to counter his ideas. But Fauci did more, isolating Duesberg, destroying his reputation in the press, and making him a pariah in the scientific community. Though Fauci was right and Duesberg wrong about the scientific question, the scientific community learned it was dangerous to cross Fauci.
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By any measure, the American COVID response was a catastrophic failure. More than 1.2 million deaths have been attributed to COVID itself, and deaths from all causes have stayed high long after the number of COVID deaths themselves diminished. In many states, particularly blue states, children were kept out of school for a year and a half or longer, with devastating effects on their learning and future health and prosperity.
Coercive policy regarding COVID vaccination, recommended by Fauci on the false premise that vaccinated people could not get or spread the virus, collapsed public trust in other vaccines and led the media and public health officials to gaslight individuals who had suffered legitimate vaccine injuries. To pay for the lockdowns recommended by Fauci, the U.S. government spent trillions of dollars, causing high unemployment in the most locked-down states and a hangover of higher prices for consumer goods that continues to this day. Who is to blame?
…..
All this background makes his discussion of the Great Barrington Declaration all the more galling. The Declaration is a short policy document I wrote along with Martin Kulldorff (then of Harvard University) and Sunetra Gupta (of the University of Oxford) in October 2020. Motivated by recognizing that the lethality and hospitalization risk from COVID was 1,000 times lower in younger populations than in older, the document had two recommendations: (1) focused protection of vulnerable older populations, and (2) lifting lockdowns and reopening schools. It balanced the harms of the lockdowns against the risks of the disease in a way that recognized that COVID was not the only threat to human well-being and that the lockdowns themselves did considerable harm.
Fauci denigrates the Great Barrington Declaration as being filled with “fake signatures,” though FOIAed emails from the era make it clear he knew tens of thousands of prominent scientists, doctors, and epidemiologists had co-signed it. In his memoir, he repeats a propaganda talking point about the Declaration, falsely claiming the document called for letting the virus “rip.” In reality, it called for better protection of vulnerable elderly people.
Fauci asserted it was impossible to “sequester to protect the vulnerable” while simultaneously calling for the whole world to sequester for his lockdowns. His rhetoric about the Great Barrington Declaration poisoned the well of scientific consideration of our ideas. With brass-knuckle tactics, he won the policy fight, and many states locked down in late 2020 and into 2021.
The virus spread anyway.
Paul Best reports on “the paradox of protectionism.” Two slices:
In total, US businesses have paid $242.07 billion in additional taxes due to tariffs since 2018—costs that are either absorbed by those American businesses or, more likely, passed on to consumers. For example, General Motors and Ford said in 2018 that steel and aluminum tariffs would increase their costs by $1 billion each, translating to about a $700 jump in production costs for every vehicle made in North America. Similarly, tariffs on washing machines caused a 12 percent increase in consumer prices, which equates to an $86 increase per machine.
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Since then, despite criticizing tariffs ahead of the 2020 election, President Biden has maintained and even expanded on Trump’s protectionist agenda, issuing a new round of tariffs on Chinese goods earlier this year. Vice President Kamala Harris, the Democratic nominee for president, said in 2019 that she “is not a protectionist Democrat” but also hasn’t indicated that she would meaningfully change the Biden administration’s course on trade.
Trump, meanwhile, has doubled down on protectionism, promising to put a “ring around the country” in the form of a 10 percent tariff on all imports and a 60 percent tariff on Chinese imports. His running mate, Sen. JD Vance (R‑OH), represents a clean break from the GOP’s free-market tradition, embracing tariffs, higher minimum-wage laws, and industrial policy.
The unintended consequences of this new protectionism consensus will surely lead to calls for more state intervention, as when Trump handed billions in subsidies to farmers affected by his trade war.
America’s distillers will be harmed by Trumpian tariffs. (HT Phil Magness)
Elizabeth Nolan Brown reflects on Kamala Harris’s opportunistic flip-flopping on public policy. A slice:
While running for president last time, Harris said there was “no question” that she was in “in favor of banning fracking,” an oil and gas extraction method that has helped lower natural gas prices and reduced reliance on coal but troubled environmentalists over concerns about potential ill effects. In July, Harris’ campaign told The Hill that a President Harris would not seek a ban on fracking.
As part of the Green New Deal Harris supported, the federal government would have “guarantee[d] a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.” The Harris ’24 campaign has since said she does not support a federal job guarantee.
During her previous presidential bid, Harris said she was open to expanding the Supreme Court. In July, her campaign told The Hill she does not support this proposal.
What motivates the DC staffer?
Here’s George Will on how the FBI copes with mounting threats. A slice:
The blessings of life in the digital age are inseparable from dangerous potentialities. In 1995, a rogue trader at Barings Bank, then London’s oldest merchant bank (founded in 1762), inadvertently demonstrated how fragility can be an aspect of connectedness: He brought about his employer’s collapse with reckless keystrokes. Israel’s audacious ingenuity last month with Hezbollah’s exploding pagers and walkie-talkies demonstrated how connectedness can be weaponized.
Harold Black asks if kidney transplants are racist. Here’s his conclusion:
The algorithm once used to determine whether a patient went on the transplant list was found to understate the severity of kidney disease amongst blacks. That algorithm has since been changed to more accurately reflect the extent of kidney disease for black patients. This means that the real degree of kidney disease has been understated for blacks and the waiting lists for patients will grow. This further points to the necessity of finding more black living donors. If anyone at HHS is listening, please initiate a pilot program to offer monetary incentives to the family members of transplant patients. In order to make it sound race neutral, the incentives can be scaled acording to income.
The Administration has also stipulated hiring preferences for “underrepresented” groups, including “aging individuals,” prisoners, racial, religious and ethnic minorities, “Indigenous and Native American persons,” “LGBTQI+ persons,” and “persons otherwise adversely affected by persistent poverty or inequality.”
Good luck trying to find “underrepresented” hard-hats in Montana. An official overseeing Montana’s program told Congress last month that the Administration has given “conflicting or even new and changed guidance after submitting our plans” and is “slowing states down and second-guessing good-faith efforts.”
It’s hard not to roll your eyes at warnings that Donald Trump would use his power as president to punish opponents while special counsel Jack Smith pursues him with the zeal of Captain Ahab. Meantime, the press ignores how President Biden’s appointees target their business enemies.
The Federal Trade Commission last week whaled Hess CEO John Hess, a shale-fracking pioneer who has lambasted the administration’s energy policies. The message to other execs: Put up and shut up.
After Chevron last autumn announced plans to acquire Mr. Hess’s company, Democrats demanded that the FTC intervene. Senate Majority Leader Chuck Schumer tweeted the deal “would give Big Oil more fuel to raise gas prices,” never mind that the combined company would constitute a tiny fraction of global oil production.
Nonetheless, the FTC’s three Democratic commissioners contrived a fictitious narrative about Mr. Hess being in league with the Organization of the Petroleum Exporting Countries. They used this to scapegoat Mr. Hess for rising gasoline prices under Mr. Biden and as justification to bar him from Chevron’s board. Their claims are a lot of bark but no bite.
Fiona Harrigan exposes a recent fabricated claim by Trump about immigrants.
… is from page 520 of the 1988 collection of Lord Acton’s writings (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University; (I can find no date for this passage):
Limitation is essential to authority. A government is legitimate only if it is effectively limited.
John Hinderaker accurately identifies the greediest institutions in society as governments. (HT George Leef)
Florida relies on natural gas for 75% of its electricity, more than any other large state. That’s remarkable because of the five largest states, the other four—California, New York, Pennsylvania, and Texas—all have significant natural-gas reserves, while Florida has none. Yet compared with Florida, residential electricity is 27% more expensive in Pennsylvania, 60% more expensive in New York and 137% more expensive in California. Even pro-energy, GOP-controlled Texas has more expensive electricity than Florida, partly because of its large renewable energy sector, which makes its grid costly and difficult to operate.
Because it has avoided the misguided climate policies of other states, Florida is better positioned to weather the historic energy-scarcity crisis now bearing down on America’s electricity grid. Just as electricity demand is soaring across the country, driven by electric vehicles and artificial-intelligence data centers, a train wreck of federal policy failures is constraining the grid’s ability to meet the new demand.
Sheldon Richman understands just how very destructive would be Trump’s economic nationalism. A slice:
What’s foreign to Trump’s mentality is any notion of an unplanned, spontaneous market order built on individual freedom and choice, which is at the heart of sound economics. He must see himself as a hands-on CEO who can solve any problem. That’s the last thing we need. He should read Leonard Read’s “I, Pencil.” (The video version is here.)
In a word, Trump is an economic warmonger, a not-too-distant cousin of a regular warmonger. As the old free traders said, “When goods can’t cross borders, soldiers will.”
It would be one thing if Trump were promising to shrink the government so much that businesses everywhere wanted to flock to these hospitable shores. But his “New American Industrialism” is an old-fashioned industrial policy in which he or his team of experts would pick winners to carry out his glorious vision. Which firms and industries get protected or subsidized and which don’t? Those decisions would be made on a political, not an economic, basis. The problem is that Trump and his experts could not know what they would need to know to carry out their plan. Only the free market—through the unhampered price system—can produce that knowledge, which would be widely dispersed, often tacit, and therefore unavailable to a central bureaucracy. Even the great Donald Trump cannot defy the laws of economics.
Here’s GMU Econ PhD candidate Giorgio Castiglia on comparative advantage.
… is from page 354 of Hayek’s profound January 1970 lecture at the University of Salzburg, “The Errors of Constructivism,” as a translation of this lecture is reprinted in the 2014 collection, The Market and Other Orders (Bruce Caldwell, ed.), of some of F.A. Hayek’s essays on spontaneous-ordering forces:
The picture of man as a being who, thanks to his reason, can rise above the values of his civilization, in order to judge it from the outside, or from a higher point of view, is an illusion. All we can ever do is to confront one part with the other parts.
… is this recent tweet from GMU Law professor Todd Zywicki:
It is ironic that [Tim] Walz saying there’s no First Amendment protection for “misinformation” is itself misinformation.
Michael Strain explains that “protectionism is failing and wrongheaded” – and he’s got the supporting facts. Here’s the abstract:
The Trump–Pence and Biden–Harris administrations enthusiastically embraced protectionism. Each administration explicitly argued for a break from the bipartisan consensus of recent decades that has been generally supportive of free trade and of allowing markets to shape US industrial and employment composition. But the protectionism of the Trump and Biden administrations has not succeeded and likely will not succeed at meeting its goals: they have caused manufacturing employment to decline, not to increase; they have not reduced the overall trade deficit; they have not led to a substantial decoupling of the US and Chinese economies. More fundamentally, the goals that have not been met are wrongheaded: policymakers should not pay inordinate attention to manufacturing employment, and the trade deficit is a poor guide to economic policy. Finally, these wrongheaded goals often rest on fundamental economic misperceptions: free trade is not a policy to create jobs; it is a policy to increase productivity, wages, and consumption. The balance of the evidence suggests that free trade, including trade with China, has not reduced employment. Of course, trade has been disruptive. But populist policies adopted in response will hurt workers, not help them.
Tad DeHaven ponders ports, automation, and progress.
GMU Econ alum Dominic Pino is rightly dismayed by Biden’s and Harris’s pro-labor-union bias.
Jack Nicastro reports on the economic damage done by “Buy American” rules.
Phil Magness writes insightfully about the ridiculous popularity of Karl Marx. A slice:
The high level of Marx veneration in modern academic life makes for a strange juxtaposition with the track record of Marx’s ideas. The last century’s experiments in Marxist governance left a trail of economic ruination, starvation, and mass murder. When evaluated on a strictly intellectual level, Marx’s theories have not fared much better than their Soviet, Chinese, Cambodian, Cuban, or Venezuelan implementations. Marx constructed his central economic system on the labour theory of value – an obsolete doctrine that was conclusively debunked by the “marginal revolution” in economics in the 1870s. Capital was also riddled with internal circularities throughout, including its inability to reconcile the pricing of labour as an input of production with labour as a priced value onto itself. By the turn of the 20th century, Marx’s predictive claims about the immiserating forces of capitalism were confronted with the tangible reality of growing and widening levels of prosperity.
By every measure of its own merit, Marx’s economic system should have been relegated to the dustbin of intellectual history – and for a brief moment it was. Marx’s Capital struggled to find an audience in his own lifetime. He died in 1883 in relative obscurity and with little following outside of a small band of fanatical leftists led by his friend Friedrich Engels. Even among fellow socialists, Marx was a controversial figure. He spent the last decade of his life locked in endless internecine feuds with anarchists, non-revolutionary socialists, and even other competitor revolutionary factions. For decades after his death, he faced credible accusations of plagiarising his theories from other writers. The Manifesto has more than a few arguments that strongly resembled an 1843 pamphlet by French socialist writer Victor Considerant, and Marx’s doctrine of “surplus value” closely follows an earlier work by democratic socialist thinker Johann Karl Rodbertus.
Ms. Khan regularly vilifies business. While she has a right to free speech, her targets are also entitled to due process in formal government procedures. Express Scripts argues that the FTC report is defamatory, which may be a stretch. But businesses deserve the same protection against libelous statements made by government as they do private actors.
Ms. Khan is running rough-shod over due process as she tries to expand her authority. One result is she keeps losing in court. Another is that businesses are increasingly challenging the FTC’s power and structure. Ms. Khan may finally get punched back.
Alas, recycling China’s savings through a handout-palooza won’t fix this. Keynesians assume the Chinese save because they can’t rely on social benefits like America’s Social Security, which may even be true, but the high savings rate isn’t China’s problem. The low productivity of those savings is.
The political controls on the economy that created this situation aren’t going away under Mr. Xi and will thwart the Keynesians’ longed-for virtuous circle. Any new money funneled into consumption will land in a business ecosystem facing the same financial-political inhibitions on productive investment as before. A paradox: If China were capable of benefiting from a new spending stimulus, the economy wouldn’t need one.
Brad Thompson explores the connection between commerce and the birth of a free society.
James Hartley eviscerates the nonsense that goes by the name “limitarianism.” Three slices:
Limitarianism: The Case Against Extreme Wealth by Ingrid Robeyns is a very bad book. Writing a review of it thus presents a challenge. Who wants to read a review that is the equivalent of shooting fish in a barrel of dead fish? Yet, while reading Robeyns’ tendentious screed, I was faced with the absolute certainty that quite a few of my colleagues and students would love this book.
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As I said at the outset, writing an entire review just documenting how bad this book is would be an incredibly easy task. Pick a page at random, and you’ll find multiple examples of an argument neither cohesive nor persuasive. The question is: how is it possible that the book is this bad? The answer is found in the Introduction. On the third page, Robeyns notes, “For a long time, I felt that there was something wrong with an individual amassing so much money, but I couldn’t properly articulate why.” So, she “decided to deploy my training in philosophy and economics to answer the question: Can a person be too rich?” The arguments in this book did not lead Robeyns to her conclusion; she started with the conclusion. When you start your investigation already knowing the answer to the question, then you may not notice that the reasons you offer for your conclusion are not persuasive to someone who is skeptical about the conclusion. If it seems like the arguments are non sequiturs attacking straw men, that isn’t important to Robeyns. The conclusion is right even if the arguments fail. The result of this approach is a religious book written for the already converted.
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To pretend that you can have all the riches of the modern world and eliminate the ability for anyone to become wealthy is a sure sign of someone who has no understanding of how all this wealth was generated in the first place. Robeyns’ book, however, provides insight into why people advocating income limitation plans often seem so unaware of how economic growth occurs. If getting rid of rich people is akin to a religious mandate to rid the world of evil, then of course it is safe to impute bad motives to anyone arguing that there are possibly benefits to the world from allowing people to do things that will make them wealthy. Despite appearances, Robeyns book is not really an attempt to persuade anyone of her beliefs; instead, it is an insight into the minds of zealots.
… is from page 566 of the 1988 collection of Lord Acton’s writings (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University; (I can find no date for this passage):
Party does not mean that one set of men are especially able, always right, virtuous and able. But that the others are profoundly wrong.
DBx: It’s as if Acton foresaw from 19th-century Britain national politics in 21st-century America.
Coates’s overarching themes are familiar: the plundering of black wealth by the Western world, the hypocrisy at the heart of America’s founding ideals, and the permanence of white supremacy. If The Message departs from his earlier work in any way, it’s that his desire to smear America has been eclipsed by his desire to smear Israel—an exercise that takes up fully half the book. (More about that, which Coates has declared “his obsession,” in a bit.)
Blocking technological advancements is not only bad for the East Coast ‘Stone Age’ port workers, but it’s also bad for America’s competitive edge. Asian and Middle Eastern ports which do welcome technology will continue to grow faster in the long run compared to the U.S. ports. For those who sympathize with MAGA goals, banning technological advancements on U.S. ports is a great “American Last” strategy.
“Xi isn’t a follower of Hayek, but he should be.”
[C]ountries with a relatively young population and a need for domestic investment capital should expect net capital inflows, thus producing a trade deficit. That situation only becomes a problem if these capital inflows are not well-invested; for example, when Greece borrowed money after joining the eurozone, it was mainly spent on government salaries and not investments. Aging societies should invest part of their savings abroad to generate a net capital outflow and automatically achieve a trade surplus. Needless to say, an aging society with significant unemployment should still invest the bulk of its savings at home, but it can still potentially export capital. The trade surplus of such a country is caused by neither unfair behavior nor the country’s export competitiveness—instead, it is caused by the intertemporal decisions of its aging population.
GMU Econ alum Dominic Pino recalls how National Review stood up to a labor union.
