Tweet [1]
Paul Rubin, writing in the Wall Street Journal, explains that the ‘economics’ of the woke crowd is primitive [2]. Two slices:
Karl Marx called his system “scientific socialism.” Modern leftists advocate a similar ideology and call themselves “woke” to indicate that they understand the world better than the rest of us. Yet the worldview of Marxists and woke leftists alike is fundamentally primitive.
Folk economics is the economics of people untrained in economics. It is the economic view of the world that evolved in our brains before the development of the modern economy. During this period of evolution the economy was simple, with little specialization except by age and sex, no economic growth, no technological change, limited trade, little capital, and warfare between neighboring tribes.
Zero-sum thinking was well-adapted to this world. Since there was no economic growth, incomes and wealth didn’t grow. If one person had access to more food or other goods, or greater access to females, it was likely because of expropriation from others. Since there was little capital, a “labor theory of value”—the idea that all value is created by labor alone—would have been appropriate, and there was little need to protect capital through property rights. Frequent warfare encouraged xenophobia.
…..
Dislike of the rich makes sense in a world where one can become rich only by exploiting others, but not in a society full of creativity and useful inventions. Changing tax laws to soak the rich makes sense with a labor theory of value, but not with a sophisticated understanding of continual investment and technological change.
Speaking of the economically ignorant woke, Liz Wolfe reports on one such [3].
Antony Davies warns that federal-government spending is out of control [4].
Richard Rahn calls Biden’s team of economic advisors “fools.” This descriptor is accurate [5]. And as Pierre Lemieux reports, that team is about to get even worse with the addition of a Soviet-trained dirigiste as comptroller of the currency. [6]
So Biden, after all, on trade doesn’t much differ from Trump [7]. (HT Bryan Riley)
Here is Bryan Riley on Biden’s destructive protectionism [8]. And here’s Scott Lincicome [9].
On the evil and destructiveness of tariffs, see also this new essay by James Bovard [10].
According to Eric Boehm, “Biden’s China trade policy is littered with contradictions. [11]” A slice:
U.S. Trade Representative Katherine Tai delivered a speech [12] Monday morning that White House officials had been touting [13] as a major signal of the Biden administration’s shifting strategy in the trade war with China. In fact, the speech mostly doubled down on what Trump spent four years promising: that a mixture of big government at home and barriers to trade from abroad will strengthen the U.S. economy and benefit American workers.
There’s plenty [14] of evidence [15] to show [16] that Trump’s approach failed [17], but what Tai outlined was more of a shift in style than in substance. Rather than all-caps tweets about China stealing jobs, the Biden administration is pushing what Tai described as “a worker-centric trade policy” that will include “smart domestic investments”—Washington-speak for giving unions more influence over policy and for lots of new industrial subsidies.
Russ Roberts’s latest episode of EconTalk is with Arnold Kling [18].