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Phil Magness and Art Carden expose the many errors – several of which are jaw-dropping – committed by Sandy Darity, M’Balou Camara, and Nancy MacLean in their unintentionally comical attempt to portray W.H. Hutt and my late Nobel-laureate colleague Jim Buchanan as white supremacists [2]. Here are two slices from their conclusion:

The pattern of mishandled quotes, citation mistakes, superficial engagement with the sources they do cite, and clear factual errors convinces us that “Setting the Record Straight on the Libertarian South African Economist W.H. Hutt and James M. Buchanan” hasn’t set the record straight on anything. Their purported sequence of events establishing Hutt’s white supremacy doesn’t match the actual timeline and falls apart once we correct a citation mistake (see section IIa above). It’s hard to believe they are serious in suggesting that Leon Dure’s italicization was rubbing off on Hutt (discussed in section VII). Darity, Camara, and MacLean have not persuaded us that Buchanan and Hutt were white supremacists concocting “stealth plans” for America, South Africa, or anywhere. Does this make us guilty of “dogma-driven denialism”? We will let the reader decide.
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We don’t expect to change their minds. We expect the goalposts to move and maybe to be accused again of “dogma-driven denialism” if not conspiratorial obligations to nefarious “Dark Money” interests. That saddens us, but we think the issues at stake are very important because they affect real, flesh-and-blood human beings, and we think the Great Conversation that is the academic project is too important to be contaminated by well-poisoning, name-calling, and ad hominem. In any event, we’ve read student evaluations for years. We know which comments we need to take seriously and which ones to ignore. If the collection of inaccurate citations, selective presentation of sources, and strained interpretations is what Darity, Camara and MacLean believe to be an “irrefutable” argument, then we infer that there is little to nothing to be gained from engaging with their claims about on Hutt, Buchanan, Friedman any further. In this light, we wish them well, and we consider the discussion closed.

George Selgin busts another myth about private currencies – a myth recently promoted by Paul Krugman [3]. Three slices:

Although I’ve devoted many essays here to exploding myths about historical private currencies, there’s one I’ve yet to directly challenge. That’s the belief that such currencies only thrive in the absence of official alternatives. Otherwise, the argument goes, people would drop private currencies like so many hot rocks. Since this opinion assumes that private currencies are inevitably inferior to official ones, I hereby christen it the “ersatz” [4] theory of private currency. Note that “currency” means circulating or (in today’s digital context) peer-to-peer [5] exchange media: nobody denies that other sorts of private money, such as commercial bank deposits and traveler’s checks, can coexist with official alternatives.
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Paul Krugman explicitly appeals to the ersatz theory in observing, in a recent New York Times column [6], that although “private currencies did indeed circulate and function as mediums of exchange” during the United States “free banking” era, this was so “because there were no better alternatives: greenbacks—dollar notes issued by the U.S. Treasury—didn’t yet exist.” Krugman goes on to say that, because “greenbacks and government-insured bank deposits do exist” today, “stablecoins play almost no role in ordinary business transactions.”

Like [Yves] Mersch and most others who subscribe to the ersatz theory of private currency, either explicitly or implicitly, Krugman doesn’t seem to consider another possibility, to wit: that private currencies seldom survive, not because the public prefers centrally-supplied, official currencies, but because governments routinely slant currency playing fields in official currencies’ favor, often by banning private alternatives outright. Let’s call this the “coercive” theory of official currencies. If the ersatz theory is correct, the historical record should show that private currencies died out on their own once official alternatives were available. If, instead, the coercive theory is correct, governments would have had to take further steps to seal private currencies’ fate.

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I’ve singled out the story of U.S. “national” currency because Krugman refers to it. But it is only one historical instance of many that I might offer contradicting the ersatz theory of private currency, while affirming the coercive alternative. In fact, so far as I’m aware, private paper currencies, including notes issued by ordinary commercial banks without the benefit of official guarantees, have never been driven to extinction by the mere presence of official alternatives. Instead, they’ve always been forced out of existence, by prohibitive taxes, impossibly onerous regulations, or (most often) outright prohibition. This was so in England and Wales [7]. It was so in France [8] and in Italy [9]. It was so in Sweden [10] and Switzerland [11] and Canada [12] and…but it would be tedious to list all the cases I’m aware of. Instead, I challenge my readers to inform me of an exception, that is, a case where some official currency out-competed private rivals, fair and square.

Juliette Sellgren talks with my Mercatus Center colleague Thomas Hoenig about inflation and the Fed [13].

Jon Sanders explains, contrary to Biden’s assertion, that rising gasoline prices are no blessing in disguise [14].

The Wall Street Journal‘s Editorial Board praises Colorado’s Democratic governor, Jared Polis, for bucking that mix of bootleggers and Baptists who comprise the climate lobby [15]. A slice:

Colorado is more progressive than its neighboring Western states. But Democratic Gov. Jared Polis last week said no to becoming California by vetoing a bill that would have required parking lots of new buildings to be wired for electric-vehicle chargers.

Writing in the Wall Street Journal, Joel Zinberg and Gary Alexander explain the Biden administration’s perverse but predictable incentive to continue to extend the official covid emergency [16]. Two slices:

Covid is now endemic, yet the Biden administration keeps extending the public-health emergency. Its goal is to preserve the expansion of the welfare state through Medicaid, even though large and growing numbers of enrollees are ineligible for the benefit.

Medicaid, the federal-state entitlement that provides health insurance to nearly 1 in 4 Americans, ballooned during the pandemic. Enrollments had declined in 2018 and 2019, but jumped by 15.9 million—about 25%—between February 2020 and February 2022. According to the Centers for Medicare and Medicaid Services, the increase was “due, in large part, to the continuous enrollment condition” in Congress’s March 2020 Covid relief package, which encouraged enrollments by temporarily increasing the federal government’s share of total Medicaid costs by 6.2% while prohibiting states that accepted Washington’s help from redetermining Medicaid eligibility and removing ineligible people from the rolls until the emergency ended.

In other words, so long as the emergency persists, so too does the expansion of the welfare state. More than two years later, the Biden administration is intent on making permanent what were meant to be emergency measures.

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Extending the public-health emergency is a Trojan horse for further government takeover of the healthcare system through a massive expansion of Medicaid to cover those who aren’t even eligible. Washington should end the emergency so states can ensure Medicaid is reserved for those who are actually eligible.

Anthony LaMesa tweets [17]: (HT Jay Bhattacharya [18])

Shutting down large parts of the global economy for nearly two years was a major mistake.

Joakim Book shares some of the lessons found in Mattias Desmet’s new book, The Psychology of Totalitarianism [19]. Here are three slices from Joakim’s essay:

In his new book The Psychology of Totalitarianism [20], which comes out in an English translation this month, Belgian psychologist Mattias Desmet calls this phenomenon “mass formation.” He writes that he first began sketching on a comprehensive account of totalitarianism in 2017: woke culture and the intolerant anxiety that came with its rise to power was a symptom – as was the surveillance state and the hysteria in recent decades surrounding terrorism and climate change.

It’s not the topics themselves or the merits of their respective case that interests Desmet, but the way populations process them, get wrapped up in them, and psychologically attach themselves to their ideas.

Ultimately, it was the reactions to the coronavirus events in 2020 that was Desmet’s ultimate catalyst. It shone a bright light on many things that, beyond a doubt, had gone wrong with modern society. Here was mass formation, on full display; totalitarian behavior, suddenly lived and experienced by all of us.

In essence, mass formation is a sort of group-level hypnosis “that destroys individuals’ ethical self-awareness and robs them of their ability to think critically.” Labor camps and mass extermination, so unknown and so unfathomable to our delicate present, don’t come out of nowhere but “are merely the final, bewildering stage of a long process.”

The coronavirus crisis didn’t come out of the blue, either; we made it. (We probably made the virus [21] too, but that’s not the object of Desmet’s investigation.) “Totalitarianism is not a historical coincidence,” he writes, “In the final analysis, it is the logical consequence of mechanistic thinking and the delusional belief in the omnipotence of human rationality.”

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Desmet’s take, following Hannah Arendt (a hero for political theorists, particularly on the left), shows that opposition to coronavirus measures isn’t merely the mad ramblings of a right-wing fringe. Opposing the public measures taken in 2020 and 2021 crossed political lines [22], and the components of his argument are, if anything, more traditionally associated with values and worries on the left: loneliness, social isolation, atomized individuals, unseen collateral damage, bullshit jobs and rejection of the technocratic Enlightenment view of top-down rational control and scientific improvement.

The stunning question looms: how do we make sense of all of this? We overhauled society, on a whim and with very little to go on, for what seemed – both at the time and in hindsight – a rather minor threat. How did we all lose our minds at the same time? How could we all feel such incredible buy-in in the months and years that followed?

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The covid pandemonium was a reminder that even rich, sensible, well-mannered, and well-educated societies can descend into the pits of hell faster than you can cry “emergency.” Society always balances on the edge of an unspeakably horrific abyss.

For those of us scratching our heads in disbelief at what happened in 2020 and 2021, Desmet’s book comes up short. It’s not as comprehensive and conclusive as we might have liked, and it definitely won’t be the final word on this strange episode. Still, it offers us a plausible story, nested in the ways that the human mind can collectively go astray.