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… is from page 75 of Richard Epstein’s magnificent 1995 volume, Simple Rules for a Complex World:

The desire for more is one of the few features that is indispensable for human progress and advancement. The right question to ask is not why we want more. It is how are we prepared to go about getting the more that we all want.

DBx: Please, let’s have here no snooty proclamations that ‘real’ human beings don’t always prefer more to less.

The “more” is not a specific thing or phenomenon (or set of phenomena). The “more” for you, a real human being, refers to whatever it is that you value. You might value only sensual gratification, in which case you want more rather than less such gratification. You might value only time spent with your family, in which case you want more rather than less such time. You might value the unchanging look and feel of your hometown’s downtown and residential areas, in which case you want more security, rather than less security, that that unchanging look and feel will be maintained.

And, of course, that which you want more of might or might not be that which I want more of. In the former case, we might nevertheless still disagree about what are the best means of obtaining more of what we both want. In the latter case, we must somehow compromise with each other (and countless other of our fellow human beings) to decide how much more you will get of what you want more of and how much more I will get of what I want more of.
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There’s a slight yet significant imprecision in what I wrote above. So let’s be precise: It’s never accurate to say that “you might value literally only more of X, Y, or Z.” No one values anything in such a way. We instead value ‘at the margin.’ Given your situation now, you will value some additional amount of X more than you value the increments of Y and Z that you must forego in order to obtain that additional amount of X. And when you obtain that additional amount of X, the value to you of yet more X will be less than was the value you expected to obtain from that first additional amount of X. At some point, you’ll prefer more incremental units of Y and Z than more units of X – although you very likely then still would prefer more units of X if obtaining more units X were less costly.

A final point: Being mortal, you will always have some desires – wishes – demands – goals – hopes – that are not fully fulfilled. This reality is no less true for trillionaires than it is for desperately poor persons. In this earthly vale, there will always be more of something(s) that you want. Always.

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Michael Saltsman, of the Employment Policies Institute, congratulates Oklahoma voters for wisely rejecting a proposed hike in that state’s minimum wage. A slice:

A recent survey of U.S. economics professionals, released by my organization, found nearly 3 in 4 believe a $15 minimum wage will reduce employment among young workers and increase automation. This concern doesn’t always resonate with voters who perceive an immediate benefit in a higher hourly rate for low-income workers.

Scott Lincicome and Chad Smitson write insightfully about Trump’s hostility to a trade agreement that Trump himself engineered and once praised: the USMCA (that is, the 2020 modified NAFTA agreement). A slice:

Thus, somewhat absurdly, the agreement that President Trump helped to create and is threatening to kill has become the primary way for North American supply chains to survive his tariff agenda.

The USMCA certainly has some faults, and perhaps forthcoming reviews will address some of them. Overall, however, it’s been a net benefit for American manufacturers and the US economy, and—contra Trump’s words—it’ll likely be here after he’s gone.

For a discussion of these issues (and plenty more), you can join us at Cato’s event this Thursday (6/25) or watch online at the same link.

Pierre Lemieux is correct: “Speaking precisely is useful.”

The Cato Institute’s Colin Grabow spoke out against the cronyist U.S. sugar program.

George Will describes Cuba as “a threadbare museum of Marxism.” A slice:

In March, a mob sacked a Communist Party headquarters in central Cuba. This spark of insurrection was aberrant and fleeting. Totalitarianism always has one foundational objective, which it has achieved in Cuba. The population is a dust of wary individuals, easily blown about. Their capacity for collaboration — for politics — has atrophied. A smooth democratic transition is a chimera.

Larry Ciolorito’s letter in today’s Wall Street Journal is excellent:

Barton Swaim’s plea for less government activism “Please, No More New Deals” (Unruly Republic, June 18) is reminiscent of an exchange from the movie “Lawrence of Arabia.” An officer says to Gen. Allenby, “Look, sir, we can’t just do nothing”, to which the general replies, “Why not? It’s usually best.”

The Editorial Board of the Wall Street Journal shares the finding of a new Mackinac Center report that shows – surprise! – that “corporate welfare is a bad economic bet.” A slice:

Michigan’s Democratic Gov. Gretchen Whitmer just finished a jaunt to Europe to attract business to her state, and if only she could be counted on to lure them with good policy instead of taxpayer money. A new report on business subsidies in Michigan during her tenure adds to the evidence that corporate welfare is a bad economic bet.

Gov. Whitmer has authorized nearly $7 billion in business subsidies during her two terms, says the report by James Hohman of the Mackinac Center for Public Policy. Mr. Hohman focuses on eight of the biggest projects, which put $2.7 billion of taxpayer money on the line. Some $1.8 billion has been paid out, and “none of these deals have delivered what was originally announced,” he writes.

Of 20,595 jobs promised from these deals, only 602 have been created—a mere 3%, estimates Mr. Hohman. The under-deliveries include $109 million in 2019 for Fiat Chrysler to upgrade plants and create 6,433 jobs in Warren and Detroit. Fiat Chrysler has added some jobs, says Mr. Hohman, but his evaluation of state reports suggests that’s no thanks to the state incentives, which were canceled.

Another dud: $125 million authorized in 2022 for Gotion to build an electric-vehicle battery plant employing 2,350 people that was never built. A $200 million deal in 2023 to upgrade a paper mill in Billerud was canceled. In 2024 the state touted a $250 million deal to bring semiconductor manufacturer Sandisk to Flint and create 7,400 jobs, but the company pulled out. “The result is a big empty field” and “one school demolished,” says the report.

Nick Gillespie warns against increased government regulation of AI.

Jeffery Degner recounts the sordid history and purpose of the 1936 Robinson-Patman Act.

Jonah Goldberg mulls the miasma on the Mall. A slice:

The man who vowed to “drain the swamp” of D.C.’s corrupt cronyism used figurative swampy means to deliver literal swampy ends.

Another familiar aspect of the pool fiasco: A project Trump touted as proof of his genius and expertise becomes proof of unpatriotic enemies undermining him when it flounders. Without any evidence, Trump claimed that the only reason the Reflecting Pool’s paint is peeling and algae blooming is because anti-American “vandals” sabotaged it with a “300-foot long gash.”

How vandals evaded park police, security cameras and his own National Guard deployment remains unknown. Never mind how they put a 300-foot gash in a paint job Trump described as “So very strong. You couldn’t, if you had a knife — I don’t want to give anybody ideas — if you had a knife, you can’t even cut it. So strong, so powerful.”

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… is from page 6 of historian Frank Trentmann’s 2008 book, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain:

Free Trade in Britain meant that there were no tariffs at all that discriminated against foreign imports in order to assist any branch of industry or agriculture. Customs duties were for revenue only. To prevent any protectionist effect, they were always matched by an excise tax on equivalent domestic goods. Britain stuck to Free Trade irrespective of the protectionist measures of other countries.

DBx: On this date, June 25th, in 1846 Parliament repealed Britain’s protectionist corn laws and moved Britain far down the road to being a Free Trade nation – a nation in which the government does not restrict the economic freedom of its citizens in order to enrich politically powerful special-interest groups at the greater expense of the general public.

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Phil Magness reveals just how Quinn Slobodian misrepresents Ludwig von Mises. Four slices:

Academic works on “neoliberalism” almost invariably share three characteristics. First, they portray neoliberalism as the dominant paradigm of the global economy since the mid-twentieth century. Second, they treat that development as harmful, attributing a long list of social ills to its rise. Third, they rarely explain what “neoliberalism” actually means. Nevertheless, the term has become one of academia’s favorite buzzwords, generating tens of thousands of books and journal articles purporting to document its corrosive effects on society.

Boston University Professor of International History Quinn Slobodian ranks among the most visible figures in this burgeoning genre of “neoliberalism studies.” His 2025 book Hayek’s Bastards: Race, Gold, IQ, and the Capitalism of the Far Right won the National Book Critics Circle Award for Criticism. He holds various elite academic honors, including a Guggenheim Fellowship, visiting stints at Harvard and Brown, and six-figure grants from a Hewlett Foundation program, which funds research opposing neoliberalism. All evince a strong adversarial stance toward the subject of his research.

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Intrigued, and taken aback, by these unfamiliar arguments, I decided to examine Slobodian’s evidence more closely. My worst suspicions were quickly confirmed. Slobodian had not, in fact, uncovered the much-touted “parenthetical openings” to racism and colonialism in Mises’s writings. Instead, I found a pattern of contextomy: selectively edited quotations in which phrases were clipped from sentences and adjoining passages omitted, all to shoehorn Mises’s interwar-era words into Slobodian’s own twenty-first-century political interpretations.

A revealing example appears below. Slobodian quotes a passage from Mises that seems to rationalize the violent history of European colonialism by appealing to its net economic benefits. In reality, he simply omits the second half of the sentence, where Mises explicitly disavows the very position that Slobodian uses the first half to attribute to him.

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In another example, Slobodian accuses Mises of drawing a distinction between persecuted white European minorities and nonwhite racial groups. Yet a review of the full paragraph reveals that he simply misrepresented its argument. Mises was describing Nazi efforts to identify purportedly “Jewish” ancestry among other white Europeans through facial features and bodily characteristics. Slobodian then spliced this discussion into an unrelated passage about differences in black and white skin color. Contrary to his claim, the second quotation appears nowhere near the argument to which he attributes it.

…..

In the passage at issue, Mises was once again arguing against the scientific validity of efforts to link intellectual capacity to race or ethnicity. And once again, Slobodian was “bastardizing” the text—rearranging quotations, splicing together unrelated excerpts, and constructing a false version of Mises’s position that conveniently reinforced the political narrative of Hayek’s Bastards.

Steve Swedberg explains that government limits on credit-card interchange fees harms consumers and small businesses.

Iain Murray – recalling the British East India Company – warns against the U.S. government taking ownership shares in private companies. A slice:

What Trump and Sanders have in common is that neither is calling for outright nationalization in the public interest (although Ezra Klein has done so, proposing a “public option” large language model). Instead, they favor different mechanisms for embedding public power within private enterprise. Both cloak the idea in the language of “sharing the gains,” but both are equally clear about the importance of state direction. Intel’s own press release described the equity stake as an $8.9 billion government investment tied to “key national priorities.” Sanders says his public ownership model would “give the public a direct role in determining the future of this technology.”

Smith’s indictment of the East India Company focused heavily on its role as the governing power over large parts of India. The Company possessed territorial authority, military power, the ability to raise taxes, and political protection at home. At the same time, it distorted trade, prices, and capital allocation throughout Britain. In many respects, the Company’s vices stemmed from its position as an arm of the British state.
Obviously, neither Intel nor AI companies possess territorial power, but the underlying confusion of roles is similar. While the firm remains formally private, its fortunes become politically significant to the state, which simultaneously acts as regulator, funder, and investor.

Alas, as reported here by the Cato Institute’s Tad DeHaven, the Trump administration continues to have the U.S. government take equity stakes in private companies.

Writing in the Washington Post, Jim Geraghty writes about how “foreign soccer fans marvel at features of U.S. life we take for granted.” A slice:

Note that almost all the World Cup tourists are, by nearly any standard, quite well-off. The cheapest World Cup tickets theoretically start at about $140 each and go way, way higher, now starting at about $900 on resale sites. Flying to the U.S. from a foreign country was never inexpensive, and that was before all the higher jet-fuel costs drove up airfares even more. It also doesn’t count the costs of staying in a hotel, local transportation, food, souvenirs, etc. And yet these tourists marvel at how wealthy America is, which appears to give us an answer to the question of why Americans think Europe feels richer when the statistics say the poorest U.S. states have a per capita gross domestic product significantly higher than European states. Our wealth is visible in ways that are mundane and ordinary to Americans.

American wealth manifests in some expected ways — larger houses, more spread-out suburbs, bigger cars, wider highways — but also in unexpected ways, such as ubiquitous water fountains and free public restrooms, nearly universal air conditioning, free glasses of ice water when you sit down at a restaurant, complimentary chips and salsa at Mexican eateries. Europe has its own convenience stores attached to gas stations; it just doesn’t have anything like Buc-ee’s.

And on a collectivism-saturated island just 90 miles from the United States are a people who, because of that island’s collectivism, cannot adequately feed and house themselves – as Mary Anastasia O’Grady makes clear. Two slices:

The confiscation of farms, haciendas and ranches triggered an immediate contraction of the food supply. By 1960 there was a meat shortage, according to Jorge Salazar-Carrillo and Andro Nodarse-León, authors of “Cuba: From Economic Take-Off to Collapse Under Castro” (2015). “Per capita consumption of meat in 1958 was 112 pounds per year. The collectivization of the cattle industry created such disruption that not even a meager ration of 0.75 pounds of meat per week (39 pounds per year) could be met. This also applied to dairy products such as milk, butter, and cheese.” The authors cite “lack of organization and inefficient production” on agricultural lands converted into “the People’s Farms.” The government couldn’t “depend on collectivized production.”

Ms. [Alma] Guillermoprieto witnessed Castro’s absurd effort to reverse the decline in sugar output with the order of a “10-million ton” harvest. Voluntary brigades worked alongside those forced into compulsory service. The plan failed and the diversion of resources from other industries increased dependency on Soviet borrowing.

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By the mid-2000s the lack of investment in infrastructure was compounding the high cost of central planning. “In June 2005 the national electricity system (SEN) was working at half capacity and blackouts lasted from 7 to 12 hours daily,” the prominent economist Carmelo Mesa-Lago explained in a 2005 paper for the Association for the Study of the Cuban Economy. “Instead of blackouts, Cubans jokingly refer to periods when electricity was available as ‘light-ins.’”

Most of the thermoelectric plants were 25 to 35 years old, Mr. Mesa-Lago wrote, and sourcing parts was “extremely difficult.” The plants used crude “heavy with high sulfur content that requires frequent maintenance,” and “many electric poles are rotten.” Some “1.9 million breakers must be replaced, and distribution leaks are estimated to waste 17-18% of electricity generated.”

Twenty years later the system has collapsed and the country has been plunged into darkness. It’s not that the regime hierarchy doesn’t know what it’s doing. It has gotten rich off this way of life, and it doesn’t want the party to end.

Wall Street Journal columnist Jason Riley rightly applauds the Trump administration’s attempt to eliminate “disparate impact” theory. A slice:

Earlier this month the Justice Department moved to rein in the EEOC’s use of “disparate impact,” or racially disproportionate results, to determine whether an employer has run afoul of civil-rights statutes. “Although the Constitution now guarantees equal treatment, it has never guaranteed equal results,” Justice’s Office of Legal Counsel said in an opinion that describes the agency’s Title VII rules and guidance as unconstitutional and inconsistent with recent Supreme Court decisions.

“Despite trying to promote equality, EEOC’s disparate impact liability interpretation under Title VII actually fosters the very discrimination its guidelines seek to address,” acting Attorney General Todd Blanche said in a statement. “This opinion will now allow businesses to hire based on performance, restoring equal opportunities in the American workplace.”

The straightforward intent of Title VII was to outlaw racial discrimination in the labor force, where blacks were being kept out of jobs and denied promotions. The act stated in plain English that it “shall be an unlawful employment practice” to “fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

Jessica Riedl tweets: (HT Scott Lincicome)

For those seeking clarification – yes, according to the Social Security actuaries, eliminating the tax cap (even without earning benefit credits) keeps Social Security out of annual deficits for just 4 years.

Bob Graboyes looks at the early Alan Greenspan.

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… is from pages 70-71 of Frank Knight’s 1944 paper “Economics, Political Science, and Education“:

A rational, common-sense approach to the subject matter of political economy begins with the fact that the economic problem for any individual or group is to make the best of what it has, through comparison, selection, and combination of competing alternative ends and procedures in the use of means. All practical problems arise out of conflicts of interest and differences of opinion. Economic problems arise out of conflicts due to limitation of resources in relation to total needs or wants, and these are social problems when the ends are those of diferent people. But human nature is clearly averse to such rational comparison. Men seize on particular aims or courses of action and treat them as absolute. Our whole moral tradition, sanctioned by our religious tradition, stresses disdain for the counting of costs. It is anti-intellectual; it teaches that if the heart is right, in relation to emotional or transcendental values, all concrete problems will be solved automatically. In this connection, it is the failure of men’s professions to carry over into practical thinking and action which saves them from disaster instead of causing it. Even “scientific” economics has slowly and as yet imperfectly come around to the comparative point of view, to recognition that the only cost which makes sense is a sacrificed alternative.

DBx: Yes.

It is commonplace, to the point of being tiresome, for people who don’t understand economics to pompously criticize economists for being narrowly obsessed with “efficiency.” These people mistake what economists mean by “efficiency.”

By “efficiency” we don’t mean that all that matters for human beings – or all that should matter for human beings – is money or that which is or can be exchanged for money. Nor do we mean that human beings do or should care only about material or sensual gratifications. Instead, we mean the achievement of one’s ends, whatever these ends might be, in that way that enables as many as possible other human ends also to be achieved.

The saintly caregiver who uses more resources (including time) than is necessary to provide some level of comfort to Mr. Jones is thereby rendered unable to supply that same level of comfort to Ms. Smith and Mr. Williams. In this case the saintly caregiver acts no less inefficiently than she would act were she instead a sybarite who carelessly overpays for a bottle of champagne.

And all we mean by “consumption,” is the fulfillment of ends whatever these ends might be.

Sound economic analysis is an analytical acid that, when properly applied, dissolves the dreams and hopes of those who refuse to acknowledge that resources are scarce and that different adults have different, often conflicting ends (as well as different assessments about the best ways to achieve any set of given ends). And so the many social reformers – left, center, and right – who offer up their utopian schemes are unhappy when economists expose these schemes as unworkable. But rather than rationally reassess the practicality of their schemes, these social reformers typically resort to issuing ignorant criticisms of economics and of economists – such as ‘economists are obsessed with efficiency, unaware that real human beings care about more than efficiency. Pay no attention to economists!’

Such statements about economics and economists are uninformed. Yet they are widely believed.

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Writing in the Washington Examiner, my Mercatus Center colleague Satya Marar – along with Mercatus intern Andrew Liu – warn of bipartisanship in Washington that now threatens to hobble U.S. tech companies. Two slices:

It’s no secret European bureaucrats aren’t fans of American Big Tech. Now, some American lawmakers are crossing party lines to steal pages from their playbook. Sens. Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) recently reintroduced the American Innovation and Choice Online Act, which revises a 2022 bill that stalled in the Senate. Like the European Union’s Digital Markets Act, it purports to stop large digital platforms like Amazon, Meta, Google, and Apple from harming consumers and the businesses that use their platforms to reach them. Instead, AICOA would police many conventional business practices that generally benefit both consumers and business users.

U.S. antitrust law already punishes “monopolization,” or a firm’s abuse of its market power to exclude competitors and harm consumers. Since some practices that improve products or lower costs can also “exclude” a firm’s competitors, antitrust courts apply the “rule of reason” by weighing the pros and cons of a practice in each case before penalizing defendants. This has created legal precedents that give businesses clarity about whether they are likely to face antitrust litigation or liability under some general “standards.”

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America’s world-leading tech sector emerged from vigorous competition and innovation under laws that generally favor commercial experimentation instead of punishing firms for their size, efficiency, or success. Europe has struggled to produce leading technologies and platforms despite its skilled and educated populace. Burdensome regulations that leave small and large tech firms in the dark without concomitant benefits don’t help. Just half of European startups actively use artificial intelligence today, compared to almost two-thirds in America. Importing their policy failures isn’t just unwise. It’s un-American.

The Wall Street Journal‘s Editorial Board reports on what is only one of industrial-policy’s latest failures – namely, the subsidized memory-chip factory in upstate New York. A slice:

While the world’s three dominant memory chipmakers—Micron, Samsung and SK Hynix—are working to expand production, America’s permitting morass makes that harder. Consider Micron’s massive fabricator project in upstate New York, which it announced in October 2022. “With the CHIPS and Science bill I wrote and championed as the fuse, Micron’s $100 billion investment in Upstate New York will fundamentally transform the region into a global hub for manufacturing,” New York Sen. Chuck Schumer boasted.

The 2022 Chips Act provided some $53 billion, plus a 25% investment tax credit, to subsidize U.S. chip-making. We warned this industrial policy would result in a political misallocation of capital, and here we are. Mr. Schumer brought home a chunk of the bacon even though Micron’s upstate site wasn’t ideal.

Once complete, Micron’s project will consume more power than the entire state of New Hampshire. That means major transmission upgrades will be required. Because New York is forcing natural gas power plants to shut down, energy regulators must ensure Micron won’t strain the grid.

Congress in 2024 passed a law exempting some semiconductor projects from the National Environmental Policy Act’s stringent environmental reviews. But the exemptions don’t apply to Micron’s project. Congress also didn’t pre-empt state environmental rules.

Mr. Schumer has described Micron’s site as “open fields,” but it includes hundreds of acres of wetlands and forestland that are nesting areas for endangered bats. This makes permitting and building more complicated. Trees can only be chopped down when bats aren’t nesting—i.e., from November to March.

To obtain federal and state permits, Micron committed to spend $1 million to protect the bats and install 10 “bat houses.” The manufacturer also agreed to provide on-site child-care for workers and enter into project labor agreements with unions in return for $6 billion in federal largesse.

Construction was supposed to start two years ago, but tree clearing didn’t begin until this past January owing to laborious environmental reviews. New York’s draft environmental impact statement numbered more than 700 pages, plus 22,000 pages of supplemental material. Environmental groups sued in January to stop the project, so who knows when it will be complete?

Also from the Editorial Board of the Wall Street Journal is this appropriate criticism of the late Alan Greenspan who, for all of his good qualities, helped to supply the artificial credit that fueled the 2008 housing crisis. Two slices:

Alan Greenspan, who died Monday at age 100, is being hailed in the press as a great central banker with the flaw that he didn’t endorse enough financial regulation. That narrative obscures the real success and failure of the man who presided as Chairman of the Federal Reserve from 1987-2006.

The paradox of Greenspan’s career is that he presided over the best and worst modern eras of the Fed. Appointed by Ronald Reagan to replace the great Paul Volcker, Greenspan kept the Fed on the policy path of disinflation. This became known as the Great Moderation as inflation was largely contained while the U.S. economy grew in robust fashion.

This was the era when Greenspan, supported by fellow Fed Governor Wayne Angell, followed a de facto price rule in setting monetary policy. The Fed focused on actual prices in the economy, including commodities, and Greenspan told us more than once that he even kept a wary eye on the price of gold.

Along the way he helped prevent various financial panics from becoming more serious—most notably, the stock market plunge of 22.6% on a single day in October 1987 that became known as Black Monday. The Greenspan Fed pledged to provide adequate financial liquidity, and the panic abated. He is also rightly praised for recognizing that the 1990s productivity boom gave the Fed leeway not to raise interest rates amid faster economic growth.

The bad turn came in the 2000s after 9/11 and the dot-com bust. Influenced by then Fed Governor Ben Bernanke, Greenspan became preoccupied with the risk of deflation. In June 2003 Greenspan cut the fed funds rate to 1% and kept it there for a year, though the second Bush tax cut had passed Congress in May and the economy had begun to surge.

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Greenspan’s worst moment came amid the financial panic, after he had retired from the Fed, when he blamed the financial meltdown on others. “Those of us who have looked to the self interest of lending institutions to protect shareholders’ equity, myself especially, are in a state of shocked disbelief,” he told Congress in October 2008.

That comment, which received enormous publicity, let the political class off the hook and fed the belief that the panic was a crisis of capitalism that needed more regulation. Greenspan never admitted the failure of monetary policy or of the regulators at the time who had allowed Citigroup and other banks to create the off-balance-sheet vehicles that failed.

The tragedy of this career finale is that it marred what was otherwise Greenspan’s keen lifelong understanding that government can’t fine-tune the economy or create wealth. The press called Greenspan the “maestro.” But he always knew that neither he nor anyone else in Washington conducted the U.S. economy.

GMU Econ alum Romina Boccia identifies “the hidden driver of Social Security’s fiscal crisis.”

My Mercatus Center colleague Rebecca Lowe weighs in on why AI isn’t going to ‘take all the jobs.’

Speaking of AI and jobs, here’s the abstract of a new paper by Lukas Althoff and Hugo Reichardt: (HT Scott Lincicome)

Artificial intelligence (AI) reshapes workers’ comparative advantage by altering the tasks they perform and the skills those tasks require. We develop a dynamic task-based model to quantify the general-equilibrium effects of task-specific technical change. Workers have multidimensional skills, choose occupations, and accumulate skills on the job; occupations combine tasks, and productivity depends on how workers’ skills match task requirements. We develop a computationally efficient procedure to estimate the model using panel data and a new database of task-level skill requirements. We apply the model to AI, allowing it to augment, automate, and simplify tasks. We find that AI narrows wage inequality and raises average wages across scenarios ranging from slow to rapid AI progress. The key equalizing force is simplification: by lowering tasks’ skill requirements, AI lets lower-skill workers compete for previously inaccessible jobs. Adoption costs, highest for lower-skill workers, dampen but do not eliminate the decline in inequality.

J.D. Tuccille reports that “rich Americans pay a higher share of taxes than the wealthy in most countries.”

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… is from page 107 of Tyler Cowen’s brilliant 2002 book, Creative Destruction:

Empirically, however, we find strong evidence that large potential audiences support product differentiation. Larger cities typically have more diverse cultural offerings than do much smaller cities or rural areas.

DBx: Yes. And it follows that, by expanding the size of firms’ potential audience – or customer base – free trade promotes more-diverse cultural offerings.

Progressive opponents of free trade are blind to this empirical (and theoretical) reality. If they understood that free trade actually has this effect, this effect would, for progressives, be regarded as a feature of free trade and not a bug. But, again, progressives – preternaturally skeptical of commerce that isn’t ‘local’ – are blind to this feature of free trade.

In contrast, national conservatives, MAGA-types, and many other right-wing protectionists are not blind to this empirical (and theoretical) reality of free trade. But it’s a reality that they dislike. The cultural diversity made possible by free trade is, for these ‘conservatives,’ a bug, and not a feature, of free trade.

True liberals are pretty much alone in both understanding and applauding this consequence of free trade.

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I first posted this call for papers about a month ago, and I’ve since gotten a few proposed abstracts – but not as many as I’d like. Please consider writing for this special issue of the Journal of New Finance.
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I’m serving as guest editor for a forthcoming issue of the Journal of New Finance. Here’s the call for papers.

We invite you to submit proposals for original papers to be published in a special issue of the Journal of New Finance. Each accepted paper will be awarded an honorarium of $600, and the authors are expected to participate in an online workshop on the papers.

The subtitle of this special issue – which indicates its focus – is “Tariffs, Capital Allocation, and Global Fragmentation.” Over the past ten or so years, the multilateral rules-based global trading system that reigned from the end of WWII until the early 21st century has come under severe attack. Why is economic nationalism now ascendant? What sorts of protectionism and industrial policies are playing out? What are the likely economic and political consequences of this fragmentation of global trade and finance? Is it desirable to reverse this fragmentation and, if so, what are plausible means of doing so?

If you have ideas for original research into this timely issue, please submit by July 1st an abstract of 500 to 600 words.

* Extended abstract submission deadline: July 1st
* Notification of abstract acceptance: July 15th
* Full paper submission deadline: October 15th
* Expected publication date: January 2027

Proposal can be submitted to me at [email protected]

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Writing in the Chicago Tribune, Bob Lawson explains what shouldn’t – but, alas, what always does seem to – need explaining: Government officials wield far more power over people than do even the trillionaire-iest of market entrepreneurs. Two slices:

While discussions around income inequality often target billionaires — and now a trillionaire — it is crucial to recognize that the most profound economic control lies not in the hands of a few rich Americans such as Musk, but rather within the halls of government.

Consider Congress. This joint assembly of just 535 individuals — less than 0.00016% of the U.S. population — spends approximately $7 trillion every year, accounting for about 23% of the more than $31 trillion U.S. economy. This Congress leaves just 77% of the income for the remaining 99.99984% of us. The 535 members exert economic influence that dwarfs that of the wealthiest individuals.

Based on the latest Forbes 400 list along with reasonable estimates for the next wealthiest 135 people, I estimate the combined net worth of the wealthiest 535 individuals in the United States, the same number as members of Congress, to be about $7.2 trillion, which translates roughly to around $400 billion in annual income.

Thus, the 535 members of Congress spend annually 17.5 times more than the richest Americans. But wait. It gets worse. While the richest Americans spend their time running their businesses and vacationing on their luxury yachts, they mostly leave the rest of us alone to live as we please.

These rich Americans mostly don’t even know each other, don’t have meetings to coordinate their actions and don’t meddle in our lives on a daily basis. In contrast, Congress meets regularly not only to decide how to spend those trillions but also to conspire to regulate so many facets of our lives: what drugs we can take, what health insurance we can buy and even what light bulbs we are allowed to use in our homes.

Everyone who thinks the rich should do more to solve our social and economic problems should instead be asking why Congress, with 17.5 times as much money to spend every single year, hasn’t yet solved any of these problems.

…..

If we are genuinely concerned about the concentration of wealth and power, our focus must shift — from the billionaires and trillionaire among us to our elected officials in Washington. They are the real oligarchs.

Mark Gianniny’s letter in today’s Wall Street Journal is excellent:

Your editorial “Why Does Trump Hate Anthropic?” (June 17) rightly exposes the dangerous precedent the Trump administration sets with its heavy-handed intervention in the AI market. When the White House abruptly restricts access to a model like Anthropic’s Fable 5, it accomplishes nothing but market distortion.

Government bureaucrats are ill-equipped to police the fluid boundaries of software “jailbreaks” and security safeguards. By micromanaging platforms, the administration is inadvertently picking winners and losers.

Security shouldn’t be dictated by administrative fiat; it should be treated as a critical competitive feature. Let the free market decide which platform delivers the most secure and reliable AI. The best way to outpace foreign adversaries is to unleash American enterprise, not chain it to the whims of Washington.

Sarah Parshall Perry explains that the American Bar Association’s “DEI retreat could reshape legal education.” A slice:

The irony, of course, is difficult to ignore. Legal education has traditionally prized adversarial reasoning, skepticism, and analytical rigor. But under mandates like 303(c), law schools increasingly encouraged ideological conformity on some of the most politically charged issues in American life.

Nor was the concern merely theoretical. Some state supreme courts and lawmakers began questioning whether the ABA was exceeding its proper role as an accreditor by imposing politically infused curricular requirements unrelated to minimum competency in legal practice. Others warned that mandatory bias instruction could itself create constitutional problems at public institutions, particularly where students were effectively compelled to affirm contested viewpoints as part of their professional education.

For years, diversity mandates were treated within legal education as morally untouchable and administratively irreversible. Yet the ABA’s abrupt retreat illustrates how dependent DEI enforcement always was on legal permissibility and political insulation. Once constitutional scrutiny sharpened and federal pressure mounted, the accrediting regime had to recalculate.

Todd Zywicki, a colleague over in GMU’s Scalia School of Law, writes in today’s Wall Street Journal of the recent action by Auburn University’s Board of Trustee to rein in the ideological free-wheeling of that school’s faculty. A slice:

The board began seizing the university’s academic programs—including curriculum, course offerings, degree requirements and academic credentials—at its June 5 meeting. The board also dissolved the faculty senate and replaced it with an advisory council to the president, which includes two faculty members from each of the university’s colleges and additional members appointed by the president.

The board’s assertion of authority mirrors incoming mandates by the Alabama Legislature restricting the role of faculty senates in the state’s public university system. Predictably, Auburn’s faculty has responded with howls of outrage, decrying these intrusions on the faculty’s authority over academic operations. How could outsiders appointed through a political process have the expertise to make such delicate decisions?

I’ve been a professor at a state university for almost 30 years, and I am sympathetic up to a point. But before becoming a professor I was a bankruptcy lawyer. And bankruptcy law teaches an important lesson for how academia can respond to this moment.

Bankruptcy gives businesses an opportunity to admit mistakes, reform and emerge stronger. Successful enterprises don’t need bankruptcy lawyers. But when an enterprise loses its way, it goes into receivership. Most universities aren’t financially bankrupt but have lost their mission and direction.

Society has long recognized certain institutions’ authority to manage their own affairs. Two notable examples are licensed professionals—such as doctors and lawyers—and universities. Universities, even state universities, have run their enterprises with minimal external oversight.

Faculties enjoyed substantial rights of self-governance because they committed to higher standards than those required by ordinary jobs. Professors would establish and maintain standards of scholarly integrity, freedom of speech and inquiry, and rigorous dedication to merit-based assessment of research in specialized areas. They policed their own house, enforcing norms of truth-seeking, maintaining scholarly integrity and rigor, and ensuring that students emerged with basic knowledge, employable skills and civic competency.

But over the past several decades, commitment to those values collapsed. Surveys by the Foundation for Individual Rights and Expression consistently reveal fear among students and faculty around expressing unfashionable ideas. Universities have seen shout-downs, cancellations and even violence against speakers. Merit and quality yielded to “diversity” and “equity.” Truth-seeking has been displaced by faddish theories and ideologically charged teaching and research. Professors design esoteric departments and teach niche classes to cliques of activist students while the needs of other students and taxpayers for real education go unaddressed.

Citing a new Cato Institute study by Andrew Gillen, the Editorial Board of the Washington Post busts some myths about the budgets of U.S. colleges and universities. Two slices:

While states cut back spending after the 2008 financial crisis hammered their budgets, those subsidies resumed their long-term upward trend by 2019. Last year, they averaged $12,081 per student, up from $7,677 in 1980, adjusted for inflation.

There is considerable variation between states: 26 consistently increased funding, 19 held roughly steady and five cut spending. But, on the whole, government is spending more on higher ed.

…..

College administrators desperate to protect bloated budgets will insist in the coming years that they need big state bailouts. But more spending hasn’t kept higher education affordable and, even worse, hasn’t necessarily led to better student outcomes.

Wall Street Journal columnist Andy Kessler is rightly contemptuous of ignorant claims, by progressives such as Alexandria Ocasio-Cortez and Bernie Sanders, that capitalism is failing to raise the living standards of ordinary people. Here’s his conclusion:

Progressives have a relative prosperity problem: envy. Yes, housing is expensive (see progressive policies). Billionaires and now a trillionaire are tantalizing targets even if they bring us the prosperity Ms. Ocasio-Cortez and Mr. Sanders are reluctant to see—or more likely politically forced to ignore. Remember, the future arrives via diffusion, at a different pace for everyone. But it happens. Worrywarts miss it.

To enjoy prosperity, you have to participate in prosperity. Sadly, the progressive money train runs through our teachers’ unions. Students are woefully unprepared for college and life. Realtor.com noted recently that a third of adults under 35 lived with their parents last year—a higher rate than during the pandemic. Maybe the free market should confiscate half of public schools. That’s a prosperity-popping idea I can get behind.

National Review‘s Dan McLaughlin celebrates Benjamin Franklin. A slice:

We were fortunate to have men of genius such as Franklin at the Founding of the country. And we were fortunate to have men of his virtues, too. Any serious book on the American founding will not omit the flaws, foibles, and sins of Franklin and his contemporaries. Yet, in an inversion of the line that Shakespeare gives to Marc Antony, it is their virtues that have endured. Over and over, Franklin put his own good name and accumulated respect and goodwill on the line in service of his country — and not the other way around. He set his considerable ego aside to make compromises, secure a united front, and make room for dissenting views to be reconciled. It is not only Franklin’s inventiveness and vision that contributed so much to the making of America, but also his wisdom, humility, unselfishness, and congeniality.

Scott Lincicome tweets:

It really is PERFECT that several elite economists just spent several weeks debating – with detailed data/charts/analysis/etc – US/EU wealth & living standards, & then a bunch of goofy European tourists simply tweeted abt a Texan gas station & settled the debate in 30 seconds.