“In a world full of people looking to impose their concepts of justice on others, it’s refreshing to revisit Adam Smith’s thinking.” That’s the opening sentence of my emeritus GMU Econ colleague Vernon Smith’s essay in the Wall Street Journal on Adam Smith and justice. Here’s another slice:
Smith thought society improved itself by controlling certain hurtful actions, rather than by trying to achieve some utopian benefit through collective action. History is littered with examples of unintended consequences and grandiose failures stemming from the latter approach. Smith’s preferred approach relied on people’s natural impulses to better themselves, risking only their own resources to do so. He opposed slavery, colonialism, empire, mercantilism and taxation without representation at a time when such views were considered radical. These ideas inspired the American Experiment, launched the same year Smith’s second book was published.
Given that tariffs last year raised the import costs of Chinese goods roughly 6 percent on average, if Chinese firms had cut prices to offset Trump’s tariffs the index would have fallen 6 percent since last June — when the trade war started. Yet the index has fallen barely 1 percent, and at least some of that tiny decline can be explained by Chinese currency depreciation — which makes Chinese goods cheaper for U.S. importers. There is, therefore, no evidence supporting Navarro’s claim [that Trump’s tariffs are paid for by the Chinese]. Americans are, in fact, bearing the burden of Trump’s China tariffs.
There are a lot of reasons for the rise of populism in the West, but one, almost trite, reason is often overlooked. Our schools and our media not only fail to educate the citizenry; they actively mis-educate the electorate. Instead of showing the unbelievable progress that humanity has made since the start of the Enlightenment some three centuries ago, history classes, to the extent that history is still taught, are used to whip up resentment and a sense of victimhood among different socio-economic, racial, ethnic, religious and gender groups. The media breathlessly repeat stories of (real and imagined) oppression and (supposed) economic retrenchment, even though people in the West currently enjoy a period of unprecedented peace and prosperity.
