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Here’s a letter to the Harvard Gazette.

Editor:

Interviewed by Paul Massari, “China Shock” researcher David Autor correctly notes that the decline in U.S. manufacturing employment from 1999 through 2006 was unusually steep (“The Human Cost of Trade,” March 12). Mr. Autor is incorrect, however, to describe this ‘shock’ to employment in a major sector of America’s economy as being “unlike anything we have ever seen.” A somewhat larger ‘shock’ hit agricultural employment exactly 50 years earlier.

As a share of total employment, agricultural employment in 1949 was, at 13.3%, roughly the same as was manufacturing employment, at 13.0%, in 1999. And from 1949 through 1956 the absolute number of agricultural jobs fell by 18%, the same as the 18% fall in the absolute number of manufacturing jobs from 1999 through 2006. But because the workforce was smaller during that earlier period, the 1949-1956 fall in agricultural employment as a share of total employment was, at 26%, steeper than was 1999-2006’s 24% fall in manufacturing employment as a share of total employment.*

Notably, the steep mid-20^th-century fall in agricultural employment had nearly everything to do with labor-saving technology and almost nothing to do with trade. (Although the U.S. ran agricultural trade deficits for most of those years, those ‘deficits’ were overwhelmingly driven by imports of coffee, which was never a major crop in the U.S.)

Mr. Autor can undoubtedly identify details that distinguish the “Farm-mechanization Shock” of the mid-20^thcentury from the “China Shock” of 50 years later. But because the U.S. economy handled that earlier employment shock quite well even as agricultural employment as a share of total employment continued to fall (to less than 1.4% today), skepticism should greet Mr. Autor’s claim that the “China Shock” reveals a need for industrial policy to protect against employment shocks.

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

*

Agricultural employment as a share of total employment in the U.S.

Manufacturing employment as a share of total employment in the U.S.

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Richard Reinsch looks back on Trump’s “Liberation Day” tariffs as their first anniversary nears. Three slices:

At the time, Trump had boldly declared that Liberation Day would “forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” claiming that the tariffs would raise “trillions and trillions of dollars” to reduce taxes and pay down the national debt. “Jobs and factories will come roaring back into our country … and ultimately, more production at home will mean stronger competition and lower prices for consumers,” he added.

Yet today, the promises of those in power must be constantly trimmed to account for their negative side effects. Those with memories longer than a news cycle will recall that the response from the equity, debt, and currency markets to the April 2 “declaration of economic independence” was so immediately and overwhelmingly negative—the S&P 500 declined 10 percent, the dollar fell, and bond prices plummeted—that Trump had to reverse course, suspending the tariffs and then lowering them. Currently, 52 percent of imported items are exempt from tariffs because of trade agreements, exemptions, and carve-outs.

Over the past year, most of us have grown nauseated by the near-constant refrain from tariff advocates that Liberation Day has not led to economic disaster. Elites and globalists are part of a global free trade conspiracy, the argument goes, and don’t know what they’re talking about, especially when it comes to tariffs.

Yes, the tariffs haven’t led to disaster, but we’ve also been dealing with a moving target in tariff rates, tariff-affected goods, delays in implementation, and exemptions. And the need for this breathing space amid the tariffs seems to support the broader free-trade argument against them. Taxes stall commerce, both within nations and internationally among producers and buyers.

…..

To support manufacturing, we should reduce the federal regulations that drain around $350 billion per year from the sector, a burden that, to varying degrees, also constrains every other sector. The energy and capital expensing policies under the Trump administration are steps in the right direction. Trump’s energy policies aim to unleash energy production through deregulation and the easing of licensing and permitting requirements. The capital expensing policy allows companies to deduct the full value of capital investments from their taxes in the first year they are made. These are pro-growth measures. Tariffs are not.

…..

Tariffs are a very blunt form of taxation. They tax not only imported consumer goods but also intermediate capital goods. They lower workers’ real wages by making certain goods more expensive. They reduce the productivity of companies and capital by raising the prices of inputs and other goods used in business while protecting domestic industries, leading to inefficiencies and job losses in other sectors. We were promised liberation. Instead, we have relearned that tariffs are just taxes that slow down our strong economy and weaken America’s power.

The New York Times‘s obituary for Brian Doherty is good. Two slices:

“Libertarians talk a lot about freedom and responsibility,” Katherine Mangu-Ward, the editor in chief of Reason, a libertarian magazine where Mr. Doherty worked for decades, recalled in the magazine’s announcement of his death. “Brian embodied both. His weird, colorful life — filled with comics and festivals and music and books — was a model of life lived freely and openly.”

…..

Mr. Doherty became a libertarian at the University of Florida in the late 1980s, from which he received a bachelor’s degree in journalism. But he traced his political tendencies even earlier, to his reading, as a 12-year-old, of a science fiction trilogy, Robert Shea and Robert Anton Wilson’s “Illuminatus!”

“One of the specific purposes of that work, according to Wilson,” Mr. Doherty later wrote, “was to do to the state what Voltaire did to the church — that is, reduce it to an object of contempt for all thoughtful people.”

Wall Street Journal columnist William McGurn decries the increasing coarseness of public life in America. Here’s his conclusion:

Vulgar language can be effective in a sharp response, but it dulls with overuse. And too often we disdain politeness as phony rather than respect it as the tribute that vice pays to virtue. Like schoolyard kids forced to shake hands after a nasty fight, Americans could use a healthy respect for good form, even at the risk of being hypocrites.

Cuban-born Martin Gurri writes about Cuba. Here’s his conclusion:

Meanwhile, the Cuban people can only watch as their fate is determined by forces beyond their control.

Will they get a taste of freedom in the near future? I am a pessimist when it comes to toppling totalitarian regimes. Yet in the case of Cuba, special circumstances come into play. Inner rot combined with outside pressure may offer a measure of hope. Every dictatorship has a natural life cycle and an appointed end. I wouldn’t be shocked, therefore, to see the Cubans start their happy dance before the end of this year.

The Editorial Board of the Washington Post is understandably contemptuous of the Western elites who have traveled to Cuba to blame, not communism, but the United States, for the plight of the Cuban people. A slice:

More than a million Cubans have fled since 2021, when the Castro regime cracked down on protest amid a dire economic crisis. While the socialist tourists might blame American sanctions for the island’s decline, Cubans overwhelmingly believe the people who have run their economy since 1959 are more at fault. They also might take a jaundiced view of people coming to the island to support the dictatorship while enjoying a concert and air-conditioned buses.

Pierre Lemieux explains why there’s been no successful overthrow by the Iranian people of their vile, violent oppressors.

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with GMU Econ alum Romina Boccia about Social Security and its mythical “lockbox.”

“New York Gov. Hochul begs ‘high-net-worth’ refugees to return and be taxed.”

Solveig Singleton explains what shouldn’t – but, alas, what today nevertheless does – need explaining: Consumers will be harmed by government-imposed caps on credit-card interest rates.

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… is from page 15 of the late Brian Doherty’s excellent 2007 book, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement:

Libertarianism is based in economic theory, as economic science teaches how workable order can arise from the seeming chaos of free actions uncoordinated by a single outside intelligence, and how government intervention is apt to upset that balance. It is based in moral theory, positing what is or is not right when it comes to a human being, or group of human beings, using force or coercion on another. It is based in political theory, exploring the likely effects of granting human beings power over others. It is ultimately a delicate ecological balance of all these, with history in the mix as well, to further understand how the constant struggle of liberty versus power tends to play out in the real world.

DBx: Yes.

The libertarian – and the classical liberal – looks at, say, the current “partial government shutdown” that today has many Americans waiting in long lines just to get through airport security and concludes: “Yep, this is an unsurprising result of political control of human action.” The libertarian – and the classical liberal – is thus aghast that Substacks, newspapers, magazines, blogs, and the social-mediasphere teem with pundits who sincerely believe that the same agency that literally cannot balance its budget and keep its security staff on the job should be trusted with the power to try to outperform the market at allocating resources.

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This letter of mine appeared in this past Thursday’s edition of the Boston Globe:

Dr. Ashish K. Jha and professor Irene Papanicolas correctly diagnose a serious disease that afflicts US health care: lack of competition (“Your hospital bill is too high. Price caps are the answer,” Opinion, March 9). But their prescribed treatment — capping the prices health care providers can charge — would further sicken the patient.

The high prices that distress Jha and Papanicolas are perhaps the most common manifestation of monopoly power. However, masking this unpleasant symptom with price ceilings not only would do nothing to cure what actually ails the patient but it also would cause that monopoly power to manifest itself in even worse ways, such as delays in medical treatment, reductions in quality of care, and surcharges on services that are now supplied gratis as part of health care packages, such as patients’ hospital meals and bed-linen changes.

A reasonable case can be made that the disease of inadequate competition is caused by excessive government interference in the health care market. Treating that disease by imposing symptom-masking price ceilings would be akin to treating patients suffering the agony of alcoholism with the temporary relief of a shot of whiskey.

Donald J. Boudreaux
Fairfax, Va.

The writer is a professor of economics and the Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center at George Mason University.

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The Wall Street Journal‘s Editorial Board wisely warns of the taxing binge desired by progressives across the United States. A slice:

• In Virginia, Democratic lawmakers want to use their newly gained control of the governorship to wallop high earners. One bill would impose a 3.8% tax on investment income of taxpayers making more than $500,000, which would raise the top rate to 9.55%. Another bill would create two new individual top tax brackets of 8% (starting at $600,000) and 10% (more than $1 million). Democratic Gov. Abigail Spanberger campaigned last year as a moderate, but will she buck the leftists in her legislature?

Judge Glock argues that “ending property taxes would be a mistake.” A slice:

Homeowners thus have legitimate reason to complain. But ending property taxes would be a cure worse than the disease.

First: there are no good local alternatives to property taxes, which provide about three-quarters of all local tax revenue. A Tax Foundation study found that repealing property taxes in Florida would make it necessary to raise sales taxes to between 10 percent and 33 percent per purchase, depending on the county. In practice, sustaining these different tax rates would be nearly impossible, since people could easily drive across borders to buy cheaper goods.

The likely alternative—centralization of taxes at the state level, especially through higher income and sales taxes—would undermine growth. That’s because local governments are more favorable to growth when they can absorb its fiscal benefits through property taxes. A study in the Journal of Housing Economics found that countries with centralized finances tended to restrict housing growth. Countries that allowed local governments to keep more revenue, by contrast, permitted more development.

The Editorial Board of the Washington Post applauds the freeing of Poland’s economy. A slice:

You don’t have to credit communism for “breaking down old social barriers.” The truth is the opposite: Poland excelled by firmly embracing free markets and welcoming newcomers.

Taking control of their own destiny, Poles embraced market liberalization, abandoned price controls and scaled back state power. Warsaw joined the European Union’s single market in 2004, further embracing free trade.

Despite [Stephen] Miller’s claims, Poland operated one of the more liberal immigration systems in Europe until recently. Many came from other European countries. That’s no surprise: as a country embraces freedom, it grows more prosperous, and more outsiders want to move in. This is the virtuous cycle of human flourishing.

James Lileks is not amused by the late Paul Ehrlich’s wrong predictions. A slice:

It seemed perfectly likely that Africa and Asia would be overrun with people because there were just so many of them already. Then America would teem as well, just like in the movie Soylent Green, a vision of the future where everyone’s so hungry that they have to eat Edward G. Robinson (who was actually snack-sized and pretty gristly). How could you not worry about this? Ehrlich appeared on The Dick Cavett Show with warnings, and Cavett nodded gravely!

The subhead of Ehrlich’s New York Times obituary was amusing: “His best-selling 1968 book, which forecast global famines, made him a leader of the environmental movement. But he faced criticism when his predictions proved premature.” Premature. As in, “It’ll surely happen eventually, and we hope so because people are a pestilence and Mother Earth weeps every time a baby is born.” Optimism, of course, is for fools who just don’t know how bad things are — and who can actually close their eyes at night without thinking about microplastics.

Scott LIncicome tweets:

The best parts of this very good @60Minutes segment have gotta be when @cpgrabow tells @LesleyRStahl a few basic Jones Act absurdities, and she repeatedly gasps “NO!” in disbelief – truly shocked that a century-old US law could be so dumb and counterproductive.

Sadly, yes.

GMU Econ alum Romina Boccia says that “Congress knows it has a spending problem, but won’t fix it.”

Arnold Kling reflects on his time at UATX. A slice:

Also, I was happy with the results of “practice exams.” In both the Public Choice class and the Political Psychology class, I made up exams that tested students’ knowledge of the important concepts in the course. I gave them as take-home exams, told the students that they would get full credit for completion, and I gave them a prompt to give to an AI to grade the exams. They turned in by email their answers and the AI evaluations. I was very happy with the results. I could tell that the students wrote the answers themselves, and most of the AI evaluations of the answers were justifiably good. Students understood concepts like rent-seeking (in Public Choice) and moral dyad theory (in Political Psychology).

Robert Woodson looks back on Jesse Jackson. A slice:

At his best, Jackson confronted not only injustice from without, but the moral failures within our own communities. He spoke of responsibility and self-determination and challenged wounded people not to surrender to victimhood. Many of us respected him for that. I certainly did.

After he entered the partisan machinery, his prophetic voice gradually gave way to the language of grievance, compromise and self-preservation. He no longer spoke primarily as a reformer, but as a performer on the political stage—a power broker. His focus strayed from rebuilding the moral and social foundations of struggling communities toward mobilizing their resentments.

That decline wasn’t merely the problem of Jesse Jackson. It reflected a broader shift in America itself. The early civil-rights movement was grounded in discipline, sacrifice and character. Its strongest leaders spoke not only about the sins of segregation but also about the responsibilities of freedom, understanding that justice without moral renewal would leave communities politically visible but internally broken.

It was therefore telling that in 2008, when Sen. Barack Obama challenged young men to be responsible fathers, Jackson accused him of “speaking down to black people”—even though Jackson had delivered the same message to Mr. Obama’s generation in Ebony 30 years earlier.

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… is from page 524 of F.A. Hayek’s brilliant Postscript – “Why I Am Not A Conservative” – to the Definitive Edition (Ronald Hamowy, ed., 2011) of Hayek’s 1960 volume, The Constitution of Liberty:

I sometimes feel that the most conspicuous attribute of liberalism that distinguishes it as much from conservatism as from socialism is the view that moral beliefs concerning matters of conduct which do not directly interfere with the protected sphere of other persons do not justify coercion.

DBx: Hayek died on this date – March 23rd – in 1992, about six weeks shy of what would have been his 93rd birthday (May 8th).

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Here’s a follow-up letter to a new correspondent.

Mr. N__:

Thanks for your follow-up email, in which you write that, because today’s global economy is so integrated, “interventions of other governments which distort foreign economies still hurt us even if they hurt other countries more.” From this fact, you infer that “we can justify well-targeted U.S. tariffs.”

You’re correct that the U.S. economy is today integrated with the economies of other countries. You’re also correct that, because of this integration, foreign-government policies that distort the allocation of resources abroad also distort the global economy, making it less efficient – and thereby making Americans’ living standards lower than these standards would be absent these policies.

But this reality, I believe, doesn’t justify U.S. protectionism.

First, it’s fantastical to suppose that protectionist interventions will be “well-targeted” and used only to pressure foreign governments to practice better economic policies. American trade restrictions will continue to be driven by what has always driven them – namely, a noxious mix of interest-group politics and economic ignorance.

Second, we Americans have no property rights in, or ethical claims on, the economic performance of other countries. Sure, our absolute material prosperity would be somewhat higher if other countries reduced their trade restrictions. But so too would our material prosperity be somewhat higher if France deregulated its labor market – if Germany abandoned its obsession with “green energy” – if Turkey pursued better monetary policy – if Denmark lowered its income-tax rates. Although the resulting increase in economic productivity abroad would chiefly benefit foreigners, it would indeed also bestow some benefits on us.

Yet our government is no more entitled to try with intervention to improve the economic policies of foreign governments than those governments are entitled to try with intervention to improve the economic policies of our government. This conclusion is only strengthened by the fact that the economic means available to our government to put such pressure on foreign governments practically all involve restricting Americans’ economic freedoms.

A clever sophomore can tell a tale of how I might benefit tomorrow if the U.S. government restricts my freedom to trade today, but that’s all such a tale is: sophomoric. Because a policy of unilateral free trade is politically impossible, a second-best strategy of negotiated trade agreements that improve all parties’ economic policies is welcome. But the U.S. government neither has any business attempting unilaterally to pressure other governments to change their economic policies nor any right to hold your, my, and other Americans’ economic fortunes hostage in such attempts.

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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Pierre Lemieux asks: “If international trade is so bad and abusive, what’s all the fuss about keeping the Strait of Hormuz open?”

C. Jarrett Dieterle reports that “Seattle’s minimum wage laws backfired on Uber and Lyft. Now the union wants to limit drivers.” A slice:

In recent years, progressive locales like Seattle have experimented with minimum wage laws for rideshare and food delivery drivers. These laws have led to surging prices for rides and delivery, reduced demand for trips and orders, and no evidence of higher take-home pay for drivers.

As demand for trips has plummeted in the wake of the wage hikes, more rideshare drivers are finding themselves working longer hours to achieve the same number of rides as before. Instead of fixing the root of the problem, a union representing Seattle rideshare workers has a new solution: Limit the number of people who can work as Uber drivers.

According to the Drivers Union, which represents Lyft and Uber drivers in Washington State, there is a severe glut of rideshare drivers on the road in the Emerald City. The union bases this on a new report it released (with funding from the state Department of Ecology), which concludes that “a majority of miles driven by Uber drivers are now without a passenger.”

[DBx: Above are two economic lessons in one. The first is that, despite clever tales told by some pedants and data processors, minimum-wage legislation does indeed reduce the employment options of affected workers and, thus, makes those workers poorer. The second is that labor unions enrich their members by reducing the employment options of other workers and, thus, making those other workers poorer.]

Bjorn Lomborg, writing at National Review, looks back on the nearly twenty years since Al Gore’s movie, An Inconvenient Truth, first dazzled studio audiences with its fantastical, unwarranted tales. Two slices:

Let’s start with the film’s core narrative: that climate change is driving ever-worsening disasters. Gore painted a picture of a world besieged by floods, droughts, storms, and wildfires, with humanity on the brink.

The data tell a different story. Over the past century, as the global population quadrupled, deaths from climate-related disasters have plummeted. In the 1920s, an average of nearly half a million people died annually from such events. Today, that number is under 10,000 — a decline of more than 97 percent. This isn’t because disasters have vanished. It’s because wealthier, more resilient societies have adapted through better infrastructure, early warnings, and disaster management. Richer, smarter societies have made us dramatically safer, proving that adaptation and resilience work far better than alarmists suggest.

Gore’s movie famously warned of vanishing polar bears, using poignant computer-generated images to suggest they were drowning because of melting ice. Again, reality is starkly different: Polar bear populations have increased from around 12,000 in the 1960s to more than 26,000 today, according to the best available evidence, including from the Polar Bear Specialist Group under the International Union for Conservation of Nature. The primary historical threat was overhunting, not climate change. While future warming poses risks, the apocalyptic narrative is undermined by the data.

Hurricanes were another bogeyman. The film notably claimed that we would see more frequent and stronger storms; its poster cunningly showed a hurricane coming out of a smokestack. But global data from satellites actually show a slight decline in hurricane frequency since 1980. While Al Gore blamed Hurricane Katrina on climate change, just one year later, the U.S. began an unprecedentedly long streak of eleven years without major hurricane landfall. Indeed, the longest reliable data series for landfalling hurricanes in the U.S. has shown a decline since the year 1900, and major hurricanes are about as frequent as they were in the past. When adjusted for more people and more houses, the damages from U.S. hurricanes have declined, not increased.

Wildfires follow a similar pattern. Media hype suggests a planet ablaze, but global burned area has decreased by 25 percent since 2001, according to NASA data. Each year, the reduction spares from the flames an area larger than Texas and California combined.

…..

Two decades on, An Inconvenient Truth reminds us that claiming to care about the planet and future generations is not enough. Alarmism has cost trillions but achieved little. We need to embrace the evidence: Climate change is a challenge, not a catastrophe. And there are cost-effective solutions such as innovation, adaptation, and development, even if they are not as morally satisfying as the exhortations in Gore’s movie.

Jacob Sullum ponders Trump’s theory of the judiciary.

David Henderson sensibly asks “Can you make the case for the drug war by pointing out a bad effect of the drug war?”

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… is from page 648 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):

Every man is the best, the most responsive judge of his own advantage. Therefore don’t let some one else interfere.