The true nature of Cass’s displeasure is thus not that the U.S. isn’t a bounded market — it most certainly is. It’s that he wishes the market were bounded differently than it has, in fact, been bound.
But here’s the thing about government-bound markets: They will always be subject to special-interest pressure. This is especially true in the United States, where forming associations and petitioning the government for a redress of grievances are constitutionally protected rights. Trade groups and lobbying firms have every right to make demands in Washington that they believe will protect their members and clients. Other trade groups and lobbying firms have every right to disagree.
Every duty and every exception in the Harmonized Tariff Schedule has a backstory. These policies are not made by wise philosopher-kings seeking to create a flourishing and virtuous economy. They’re made by bureaucrats and members of Congress and presidential appointees, with input from the Chamber of Commerce and the American Association of Widget Makers of America.
In a representative republic with strong civil liberties, which is what the United States is, the moment you give the government power to set a boundary in the market is the same moment that interest groups you hadn’t even heard of before will be lining up to tell you where to draw it. Some of them are corrupt sleazes, but most of them are just exercising their First Amendment rights. And elected politicians chasing votes and campaign donations are going to listen to some of them.
If a bounded market is what you want, all you need do is look around. And the federal government’s track record on establishing market boundaries is not inspiring.
And here’s Dom’s response to Cass’s reaction to Dom’s earlier essay. A slice:
The reason to avoid this trap is not some utopian sense of global fairness. If all the costs to such intervention were borne by foreigners, there might be a case for taking them. But the costs of government-granted privileges for corporations are ultimately borne by American consumers, through higher prices, fewer options, and yes, less freedom to spend their hard-earned money as they see fit. If we want to see a flourishing American economy, a goal Cass and I share, we should take pride in our place as a hub in the global marketplace and remove the government regulations and taxes that unreasonably hold our people back from participating in it.
J.D. Tuccille explains that no crisis justifies a dictatorship. A slice:
So, environmental advocates aren’t the only people impatient with debate and persuasion. But they are on the leading edge of the illiberal impulse at the same time that they embody the dangers inherent in trying to achieve policy goals through authoritarian means—because authoritarian regimes have a terrible record on environmental issues.
“During the ‘environmental decade’ of the 1960s and 1970s scholars first wondered whether communist states might have developed in an environmentally more sensitive way than capitalist ones,” wrote Douglas R. Weiner in The Cambridge History of Communism, published in 2017. “Most concluded that not only did communist regimes fail to realize the theoretical advantages of a dirigiste system, their careless practices brought about, in the words of Murray Feshbach and Fred Friendly, Jr., an ‘ecocide.'”
Eric Boehm decries the Biden administration’s apparent cluelessness of economics.
Also decrying Biden’s economic cluelessness – and his penchant for cronyism – is my intrepid Mercatus Center colleague Veronique de Rugy. Here’s her conclusion:
So here you have it: Once again, Washington is giving us every reason to believe it’s selling favors to cronies even if it means worker safety, railroad efficiency, supply chains and the environment lose in the process.
As this editorial in the Wall Street Journal makes clear, politicians are self-spoofing. A slice:
A trio of House Democrats—Mike Thompson (Calif.), John Larson (Conn.), and Lauren Underwood (Illinois)—have introduced the Gas Rebate Act of 2022 to send Americans a $100 check in any month this year when the national average gas price exceeds $4 a gallon. Dependents will get another $100, so the family of four can fill up that SUV on Uncle Sam’s dime. The national average price has exceeded $4 in recent weeks.
The word “rebate” is a misnomer because this isn’t rebated from any payment to the federal government. It’s a government check to pay for higher gas prices caused in large part by government. Voters are blaming Democratic policies for inflation and for making it harder to produce American oil and gas. With an election coming, and their majority in peril, Democrats are resorting to what they do best: Spending more of your money.
The non-rebate rebate is even worse policy than the gas tax holiday that some states are proposing. Neither addresses the real problem, but at least the tax holiday lets people keep their own money. The rebate idea deserves to die in the crib, but the spectacle of climate-change warriors suddenly trying to subsidize fossil-fuel consumption is almost worth it.
John O. McGinnis reviews Steven Pinker’s new book, Rationality. A slice:
Third, determining the truth in social affairs is harder than in natural science. We cannot run the social conditions of the world over again, changing its conditions to isolate the causes of a social phenomenon. Causation is ultimately about counterfactuals. If A causes B, it follows that if A does not happen, neither will B given otherwise exactly similar initial conditions. But precisely defined counterfactual social worlds live only in our imagination. Thus, motivated reasoning inevitably dominates social science more than natural science. Not only are the real-world stakes in social disputes generally more immediate and personal (what will be the effect of higher taxes on me) than in purely scientific ones (does this gene cause this disease), but the effects of policy are genuinely hard to pin down.
Here’s part 17 of George Selgin’s marvelous series on the New Deal.
