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Unjust Propagandizing for “Just Societies”

George Mason University, an institution that I dearly love, is on the verge of imposing an unjust, illiberal, and anti-intellectual requirement that new students be indoctrinated in the idiocies of woke ideology. Obviously, the proponents of this initiative – called “Just Societies” – don’t describe themselves as pushing woke ideology; their description of their attempt to give a particular far-left ‘progressive’ bias to the core curriculum is here.

Of course the wording of the University’s proposal is sufficiently loose that anyone unfamiliar with the workings of modern universities and colleges can read it and suppose that the initiative, if adopted, will allow for a broad range of different particular viewpoints to win the designation as “Just.” But everyone who has any familiarity at all with the realities of modern higher education understands that this initiative is an anti-intellectual, dogmatic effort to impose a particular secular religion. That this particular secular religion is, in my view, a swirl of ignorance and intolerance is here beside the point. I would just as vigorously oppose any attempt by a state university to impose through its core curriculum an ideology of laissez faire.

Faculty, students, and staff are invited to submit comments about this proposal. Also welcome to submit comments is the public. You can do so here.

And here’s the comment that I submitted:

My colleague Bryan Caplan is correct: Because the taxpayers who fund state universities have amongst themselves a wide range of different views, almost all arguably legitimate, about the particular characteristics of a just society, any attempt by a state university to impose through its curricula one particular view (or one narrow range of particular views) of the specific features of a just society is illegitimate. Such an attempt is indeed unjust.

But there’s also the matter of academic freedom.

The “Just Societies” flag initiative amounts to the University prodding many of its faculty to express particular views that many of these faculty either do not believe to be valid or believe to be valid but ones that students should come to on their own without being force-fed by their instructors. It is unjust, illiberal, and anti-intellectual to attempt in this manner to restrict debate and discussion in the classroom about the particular features of a just society.

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Some Links

David McGarry is no fan of industrial policy. Two slices:

Anybody who has spent any time in the corners of X (formerly Twitter) that favor industrial policy has likely heard laments that America “doesn’t make things anymore.” This is, however, objective nonsense.

As the Cato Institute’s Colin Grabow has detailed at length, individuals and companies within the US makes quite a lot. “In 2021, [the US] ranked second in the share of global manufacturing output at 15.92 percent—greater than Japan, Germany, and South Korea combined—and the [US’s manufacturing] sector by itself would constitute the world’s eighth‐​largest economy,” Grabow writes.

Undaunted, advocates of industrial policy seek a dual regime of robust tariffs and domestic manufacturing subsidies. Free marketeers rightly object that these policies often weaken the very companies they seek to protect and ruthlessly gut downstream industries. Central planning invariably misallocates capital, promotes inefficiency and corruption, inflates prices, and lessens consumer choice.

Notwithstanding the importance of investments and liquidity, policy analysts must consider another indispensable, finite resource — human capital. Only so many Americans of working age exist. A worker who takes one job almost invariably cannot take another. A line worker at a shoe factory cannot contribute to the development of advanced microchips. Wasting human capital, or deliberately allocating it inefficiently, benefits neither the economy at large nor the individual worker.

…..

Grabow notes that manufacturing offers no special opportunity to job seekers and, consequently, merits no myopic affection from labor policy wonks. Today’s production workers in the manufacturing sector earn less on average than the private sector’s average for nonsupervisory positions.

Moreover, many American workers who “make things” do not, as a technicality, belong to the manufacturing sector, which distorts public perception. As Scott Lincicome, another Cato Institute scholar, writes, “Big, innovative US companies like Nike or Nvidia are expressly in the business of ‘making things’ like shoes or semiconductors, and they handle everything — design, R&D, marketing, etc. — except the final stage of production, which they’ve outsourced to other companies in the United States or abroad.”

Regardless of your stance on the prudence or imprudence of U.S. involvement in Ukraine’s struggle to repel Russian invaders, it’s difficult to disagree with Wall Street Journal columnist Gerard Baker’s harsh assessment of “Putin’s apologists on the right.” Baker begins with an accurate summary of these apologists’ views:

Why can’t we be more like Russia?

From state-of-the-art supermarket cart technology to a president who is youthful and vigorous, able to dilate on European history at length, the contrast couldn’t be greater with a technologically backward and collapsing U.S. in the grip of a geriatric autocrat who can’t remember what day it is.

American capitalism is corrupt and exploitative. Russia’s is well-regulated and committed to the common good. In the U.S., tech billionaires and Wall Street fat cats get rich on the surplus value their workers produce. Benevolent Russian oligarchs, cooperating with the state for the benefit of the people, are able to supply all Russians’ needs at a fraction of the exorbitant prices Americans pay. They are so successful that they create demand for hard-pressed sectors of the global economy, such as yachts, luxury London real estate and Swiss casinos.

George Mason University Scalia School of Law professor Adam White exposes the arrogance and economic ignorance of FTC Chairwoman Lina Khan.

As predictable as is the arrival in the summer of swarms of mindless blood-thirsty mosquitos in south Louisiana is “Progressives'” knee-jerk opposition these days to mergers – specifically, this time (as rightly ridiculed by the Wall Street Journal‘s Editorial Board) opposition to the announced merger of Capital One with Discover Financial Services. A slice from the Wall Street Journal:

Combining could also make it easier to shoulder increasing regulatory burdens, including the tougher capital requirements that the Federal Reserve last year proposed for banks with more than $100 billion in assets. Bigger government drives businesses to get bigger, not that progressives will admit it.

“The merger of @CapitalOne and @Discover threatens our financial stability, reduces competition, and would increase fees and credit costs for American families,” Ms. Warren tweeted. “This Wall street deal is dangerous and will harm working people.” Where’s the evidence for any of this?

The deal is likely to help Main Street retailers and consumers by increasing competition to the Mastercard and Visa credit-card duopoly. About 90% of credit-card purchase payments flow over one of the two networks. Visa and Mastercard require merchants to pay swipe fees that cover their costs for overhead and fraud protection. Banks return some of the fee proceeds to customers in rewards or points. This is one way credit-card issuers compete for customers. Nonetheless, merchants say that Visa and Mastercard charge excessive swipe fees because they face little competition.

Paul Schwennesen is in awe of emergent order.

Roger Pielke decries “the unstoppable momentum of outdated science.”

el gato malo makes the case for repealing the 17th amendment to the U.S. Constitution.

Jay Bhattacharya tweets:

Just wondering. Did the fact checkers ever correct Tony Fauci, Rochelle Walensky, or Rachel Maddow for saying that the covid vax prevents you from getting and spreading covid? If not, why not? It was one of the biggest lies of the covid era.

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Quotation of the Day…

… is from page 123 of the original edition of the late Wesleyan University economic historian Stanley Lebergott’s important 1964 volume, Manpower in Economic Growth:

Try one innovation a decade and you stand little chance of success. Try a thousand, and some of them will certainly pay off. (The same logic is in some measure pursued by the twentieth-century corporation with directed research teams, who look down a multitude of dead-end streets but win on the percentages.) A host of novel procedures or products, having proved their worth in this ceaseless ferment of experimentation, were then adopted.

DBx: One understands why Deirdre McCloskey insists on renaming capitalism “innovism.” The not-so-secret (but nevertheless easily overlooked) sauce of capitalist success at raising everyone’s living standards so remarkably is indeed market-tested (“proved their worth”) permissionless innovation.

Advocates of industrial policy would severely reduce the range of permissionless innovation in order to ensure that resources be allocated according to the plans of these advocates. In the minds of industrial-policy advocates, the test of a new pattern of resource allocation is in the minds of industrial-policy advocates. If these advocates like what their imaginations reveal to them, the imagined resource-allocation pattern is deemed good; if not, not. The preferences of hundreds of millions of other people spending and investing their own time and money are dismissed as irrelevant or unworthy.

All that is relevant and worthy in the minds of industrial-policy advocates are the imaginations and preferences of the industrial-policy advocates. That they can imagine and describe particular patterns of resource allocations or particular market ‘outcomes’ different from – and, in their minds, superior to – those allocations and outcomes that arise creatively in competitive market processes is sufficient justification, as these advocates see matters, to use coercion to impose their vision on all fellow citizens.

The hubris and arrogance are breathtaking.

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Apply the Insights Bruce Yandle

Here’s a letter that I sent earlier this month to the New York Times; it was not published.

Editor:

While many readers might find it odd that environmentalists and U.S. beef producers have joined forces to keep Brazil’s meatpacking company, JBS, from being listed on the New York Stock Exchange (“Unlikely Allies Want to Bar Giant Brazilian Meatpacker From Stock Markets in the US,” Feb. 1), economists and others familiar with the work of Clemson University economics professor Bruce Yandle will not be. In his seminal 1983 article, “Bootleggers and Baptists – The Education of a Regulatory Economist,” Prof. Yandle explained that there are good reasons why virtuous Baptists and self-interested bootleggers might come together to support prohibition of the sale of alcohol. Baptists sincerely support temperance; bootleggers greedily welcome reduced competition. Similarly, environmentalists genuinely committed to protecting forests and biodiversity might be joined by beef producers seeking nothing more elevated than a protected market. U.S. consumers perhaps have different preferences, but powerful combinations like this one can ride roughshod over the general public.

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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Some Links

The Wall Street Journal‘s Emma Osman applauds Dartmouth president Sian Beilock. A slice:

“I don’t want safe spaces, I want brave spaces,” says Dartmouth President Sian Beilock in a phone interview. At the start of the winter term in January, the Hanover, N.H., college launched the Dartmouth Dialogues program.

My Mercatus Center colleague Chuck Blahaus counsels that Americans be less complacent about Social Security.

Art Carden reminds us of the marvels of the market economy’s division of labor, division of knowledge, and process of valuation. A slice:

The structure of production shows us why land and labor have value. It’s a mistake, albeit a common one, to think that goods have value because of all the resources that went into them. This gets things exactly backward, however. Production moves forward through successive stages, from raw materials to finished goods. Valuation moves backward through successive stages of production from finished goods to raw materials. Land and labor get their value from the finished goods and services they produce. A stand of cedar trees, therefore, is valuable because it can be used to produce pencils, closets, shoe trees, furniture, and other goods. These goods do not get their value because they are created from cedar.

GMU Econ alum Dominic Pino argues against the ranking of U.S. presidents. A slice:

Efforts by others at National Review to rehabilitate the reputations of Grant and Harding, to give two examples, are beneficial exercises in historical education, and they carry with them messages about what the authors believe good presidents ought to do. Turning to examples of leadership from the past is part of a healthy political culture, and presidents are an obvious place to look within our system of government.

But ranking them simply makes no sense. We can comfortably say that Lincoln was a better president than Buchanan. But what does it really mean to say that, for example, Garfield was a better president than Tyler? Or Taft was a better president than Fillmore?

Jonathan Bean and Blaine McCormick propose “Entrepreneurs Day”. A slice:

Meanwhile, the entrepreneurs and inventors who do make daily life better are often ignored, or decried as profiteers later in life. Perhaps it’s time to give more credit where credit is due. The Journal of Management History recently published our third decade of research on America’s greatest entrepreneurs. We consulted 50 business and economic historians each decade to develop the rankings. Unlike the finite group of U.S. presidents (Joe Biden is just the 46th), the realm of American business history encompasses millions of stories, providing a rich tapestry of entrepreneurial greatness, ranging from Thomas Edison in the 19th century to Sam Walton in the 20th century to Elon Musk today.

On February 27th, at 2:00 EST, the Federal Society will host a webinar featuring my GMU Econ colleague Larry White.

John Stossel is understandably unhappy with the mainstream media’s portrayal of libertarians and conservatives.

Martin Gurri offers a prologue to an ideology of freedom. A slice:

A pseudo-ideology of control has taken root in democratic nations from Britain to Brazil, with the support and applause of transnational organizations like the United Nations and the European Union and the widespread backing of the intelligentsia everywhere. A few basic moves characterize the game. Those in charge of the established order declare a mortal crisis: Covid-19, say, or the climate, or white supremacy. They contend that the time to debate is over: immediate government intervention is the only ethical option. In a chorus of approval, prestige media, academics, and obscure experts in nongovernmental organizations provide arguments, statistics, and cross-references, joined by the occasional Hollywood star. Government-aided censors on social media identify and purge hostile views; extreme cases get thrown to the Internet mob to settle. The objective: a culture aligned with the dictates of power.

The cults of identity and ecology now serve as instruments of elite control in the United States. The elites have imposed conformity with astonishing rapidity. A majority of Americans report that they fear contradicting the orthodoxy, with the young—savviest about the information landscape—being most afraid. While the new censorship is often portrayed as the restoration of science and truth, the reality is that a panicked elite class has shredded constitutional norms, trying to cling to its old privileges. “Our democracy” is a closed circle, a cosa nostra, hostile to ordinary people and autocratic to the core. The ideology of control is the expression of a profoundly antidemocratic impulse.

Joel Zinberg decries the scientific ignorance of those who insist on vaccinating children against covid. A slice:

But protecting a low-risk group like schoolchildren from viral transmission has never made much sense. It was clear in the pandemic’s early days that children had little risk of severe outcomes from the virus. Over nearly four years (from January 2020 to December 2023), children aged five to 17 accounted for less than one-tenth of 1 percent of total Covid-19 deaths in the U.S. (911 deaths out of 1.17 million). In contrast, the most vulnerable group—people aged 65 and older—accounted for more than three-quarters of deaths. Similarly, those aged five to 17 have consistently had one-tenth the Covid-19 hospitalization rate of the population at large, while those aged 65 and older had rates 25 times as high.

Covid-19 vaccines, like any medicine, are not risk-free. They pose a documented risk of serious heart inflammation (myocarditis and pericarditis) most frequently seen in adolescent and young adult males. Such risks warrant caution in recommending the vaccines to a group with such an extraordinarily low risk of severe disease.

Jay Bhattacharya tweets:

Gavin Newsom lobbied cronies at the French Laundry. Boris Johnson held parties at no. 10. And LA public health excused itself from the draconian measures it imposed on others. Our leaders understood that between lockdown and hypocrisy, hypocrisy was the better way.

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Quotation of the Day…

… is from page 318 of Thomas Sowell’s 2002 collection, Controversial Essays:

Karl Spence of the Chattanooga Free Press aptly characterizes the views of the liberal intelligentsia as: “Let my conscience be your guide.”

DBx: Yep. (Of course, by “liberal intelligentsia” Sowell means “Progressive intelligentsia.”)

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You Should Stay for the Full Play

Here’s a letter to a new correspondent:

Mr. S__:

Thanks for your e-mail expressing disagreement with my recent blog post on why we Americans should welcome EVs and other valuable goods subsidized by foreign governments. You write that “when we import subsidized electric vehicles we shrink America’s capacity to produce these.”

It’s true that importing more EVs, whether subsidized or not, shrinks the portion of America’s industrial capacity devoted to producing EVs. And so it follows that importing fewer EVs enlarges the portion of America’s industrial capacity devoted to producing EVs. But it’s equally true that importing fewer EVs -and thus increasing EV production in the U.S. – shrinks the portion of America’s industrial capacity devoted to producing outputs other than EVs. If tariffs are imposed on EV imports, why would you not worry about the unavoidable shrinkage of America’s capacity to produce other outputs?

Do you trust government officials to be able to divine that the value to our economy of whatever EV-production capacity is protected by restricting EV imports is greater than the value to our economy of the resulting shrinkage of America’s capacity to produce outputs other than EVs? I certainly have no such trust. Despite their cocky assurances, politicians and their minions can’t possibly know which particular production capacities will shrink in consequence of higher tariffs on EVs. Nor can they trace out the economic consequences of these shrinkages.

The above consideration alone is sufficient reason to reject tariffs on EVs. But the case against such tariffs only grows stronger when it’s further realized that firms protected from competition have reduced incentives to innovate and operate efficiently, and more incentive to spend effort and resources seeking government privileges. Politicizing an economy is no way to strengthen it.

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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Some Links

Last month, Michael Strain defended people who earn billions of dollars in markets. Two slices:

Unsurprisingly, the economic populists and nationalists on the political right find themselves in agreement with the progressive left. A few months ago, Steve Bannon, former US President Donald Trump’s former chief strategist, called for “massive tax increases on billionaires” because too few of them are “MAGA.”

Billionaire innovators create enormous value for society. In a 2004 paper, the Nobel laureate economist William D. Nordhaus found “that only a minuscule fraction” – about 2.2% – “of the social returns from technological advances” accrued to innovators themselves. The rest of the benefits (which is to say, almost all of them) went to consumers.

According to the Bloomberg Billionaires Index, Amazon founder Jeff Bezos is worth $170 billion. Extrapolating from Nordhaus’s findings, one could conclude that Bezos has created over $8 trillion – more than one-third of the United States’ annual GDP – in value for society. For example, Amazon has reduced the price of many consumer goods and freed up an enormous amount of time for millions of Americans by eliminating the need to visit brick-and-mortar retailers. Bezos, meanwhile, has received only a tiny slice of those social benefits.

…..

Similarly, the furor over billionaires is misplaced in the debate about income inequality, which assumes that income is distributed to households and questions the share going to the top. But in a market economy, income is earned, not distributed. Moreover, when measured using the income of all households – not just billionaires – inequality has been stagnant or declining for well over a decade.

More fundamentally, billionaire-bashing sends young people the terrible and perverse message that success is bad. This could lead them to lower their aspirations, put in less effort, and become less tolerant of risk. Precisely because hard work pays off – productivity drives compensation – such a message could exacerbate inequality, the problem that anti-billionaire advocates purportedly want to fix.

Doug Bandow reports that “China is scaring away investors.” Three slices:

Only Mao’s death in 1976 brought relief. China’s subsequent liberalization demonstrated the power of private enterprise and free markets. “Paramount leader” Deng Xiaoping’s modest deregulation yielded tremendous growth by loosing the entrepreneurship of hundreds of millions of people. For years the PRC’s economy expanded explosively. The poverty rate dropped dramatically. Although CCP officials took credit for China’s growth, the critical factor was reversing their earlier collectivist nostrums, which treated the Chinese people as veritable human automatons.

A dozen years ago, the colorless apparatchik Xi Jinping, who had carefully ascended the PRC’s political hierarchy, took control, becoming both CCP general secretary and Chinese president. There was much hope that he would be a reformer, clearing away state economic controls and encouraging international trade.

He proved, however, to be Mikhail Gorbachev in reverse, disguising his true intentions to recommunize the economy and rest of society. In fact, the nature of his rule was presaged during the final days of his vice presidency, when he disappeared from public view, apparently busy combating an insurgent reach for power by the charismatic Bo Xilai, a provincial governor. Having elevated Xi with the responsibility to strengthen party unity in a crisis, CCP paladins should not have been surprised when he accelerated his campaign after being installed.

…..

The PRC’s return to political totalitarianism has weakened the economy. Beijing already faced strong headwinds. Although companies are not pulling out in great numbers, surveys reveal that firms around the world are less willing to invest in China. Last year foreign investment turned negative. Bloomberg reported “less willingness by foreign companies to re-invest profits made in China in the country.” Moreover, Chinese outflows exceeded foreign inflows in 2023 for the first time in five years.

…..

Political activists often accept the risk of arrest for their cause. Businessmen, not so much. At the very time economic conditions are deteriorating in the PRC, foreign investors are less able to accurately assess markets. Some expatriates express the desire to return home. The Wall Street Journal found: “Some Western firms have paused research work in China, especially when related to technology and other sensitive areas, according to business executives. Analysts at Wall Street firms, including those specializing in recommendations of Chinese stocks, said they are worried about getting their contacts in China in trouble because of the heightened government scrutiny over foreign connections.”

No wonder foreign investors have soured on the PRC and are pulling their funds.

Art Carden writes wisely.

Scott Alexander explains that “the most fragile thing in the world is a social consensus in favor of freedom.” (HT Arnold Kling)

Robby Soave is correct: “Claudine Gay’s defenders shot the messenger.”

My GMU Econ colleague Bryan Caplan talks with Vance Ginn.

Here’s the abstract of a December 2023 paper by Ryan Kellogg and Richard Sweeney:

We study how the Jones Act — a 100-year-old U.S. regulation that constrains domestic waterborne shipping — affects U.S. markets for crude oil and petroleum products. We collect data on U.S. Gulf Coast and East Coast fuel prices, movements, and consumption, and we estimate domestic non-Jones shipping costs using freight rates for Gulf Coast exports. We then model counterfactual prices and product movements absent the Jones Act, allowing shippers to arbitrage price differences between the Gulf and East Coasts when they exceed transport costs. Eliminating the Jones Act would have reduced average East Coast gasoline, jet fuel, and diesel prices by $0.63, $0.80, and $0.82 per barrel, respectively, during 2018–2019, with the largest price decreases occurring in the Lower Atlantic. The Gulf Coast gasoline price would increase by $0.30 per barrel. U.S. consumers’ surplus would increase by $769 million per year, and producers’ surplus would decrease by $367 million per year.

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Quotation of the Day…

… is from page 234 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and important 1937 book, The Good Society:

[T]he collectivist mentality belongs to the ages before the industrial revolution; it is the ideology of a more primitive, self-contained economy.

DBx: Yes.

The thinking and proposals of “Progressives” are no less antediluvian than are the thinking and proposals of MAGA-types. Both ideologies are rooted in simplistic, often infantile, understandings of the nature of society and economy, mixed with an intolerance for social and economic processes that happen not to satisfy the particular preferences of the “Progressive” or MAGA enthusiast.

Both ideologies are mere modern renditions of ancient prejudices and superstitions. Both ideologies are profoundly illiberal.

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America First! (Or So Pres. Xi Must Think)

Here’s a letter to a reader of my blog:

Mr. B__:

Thanks for your e-mail.

You ask “wouldn’t it be better economically to encourage Americans to buy Chinese EVs subsidized by their government (assuming no US tariffs)?  Would the loss of US automaking jobs be offset by consumers spending their savings on other US products creating jobs elsewhere?”

Yep.

To the extent that Beijing subsidizes the production of EVs in China, Beijing compels Chinese citizens to offer gifts to Americans. While I pity the Chinese people, who are made poorer by being forced to offer gifts to us Americans, the U.S. government, which also taxes its citizens to dispense subsidies to politically favored producers, has no legitimate grounds for preventing Americans from taking advantage of these gifts – gifts that unambiguously enrich us.

And, yes, the money that American consumers thereby save on EV purchases would indeed be spent on other outputs – or invested – in ways that would ‘create’ jobs elsewhere in the U.S.

It’s curious, isn’t it?, that among the people who roar most loudly in opposition to subsidized imports are people who proudly shout “put America first!” You’d think that everyone who admires Donald Trump’s alleged genius at re-arranging trade so that we Americans “win” at the expense of foreigners would be delighted at the wealth transferred to American consumers by foreign governments that subsidize their countries’ exports.

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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