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My intrepid Mercatus Center colleague Veronique de Rugy resists the growing support for industrial policy [3]. A slice:
What’s more, the late William Niskanen, economist and former Chairman of the Cato Institute looked at this issue in his 1997 paper “R&D and Economic Growth: Cautionary Thoughts [4].” He argued that the idea that R&D drives economic growth isn’t as sound as it seems on the surface. What we know, Niskanen writes, is that there is “a strong relationship between real expenditures for research and development (R&D) and the level of national output—but little relationship with the rate of economic growth. This record is more consistent with a hypothesis that R&D is an income-elastic consumption good, something that rich people and rich nations do, rather than an investment that will increase future economic growth.”
Kevin Williamson is right that Apple is right to refuse to help the FBI hack into iPhones [6].
Alberto Mingardi reviews Neil Monnery’s A Tale of Two Economies [7].
The Wall Street Journal‘s editors wonder how many studies of tariffs are enough to convince trade skeptics that an increase in overall wealth for the people of a nation does not arise from artificially enhanced scarcities in that nation [9]. Here’s their conclusion:
Protectionists may defend their policies on political grounds, but that means ignoring the mounting evidence of economic harm.