≡ Menu

Some Links

George Will is understandably unimpressed with both the conclusion and the reasoning of the U.S Supreme Court’s recent 7-2 ruling in Haaland, et al. v. Brackeen. A slice from Will:

The ICWA [Indian Child Welfare Act of 1978] was enacted to stop the wicked practice of forcing assimilation by removing Indian children from non-Indian families. Now it functions to yank even thriving Indian children from nurturing non-Indian families, in barbaric homage to Indian “blood.” This means that Declan Stewart and Laurynn Whiteshield and others died unremembered.

Shelby Steele, writing in the Wall Street Journal, describes the call for slavery reparations as “no more than a dream of privilege.” A slice (emphasis added):

Today we can see what we couldn’t in the ’60s: that this vast array of government programs has failed to lift black Americans to anything like parity with whites. By almost every important measure—educational achievement, out-of-wedlock births, homeownership, divorce rates—blacks are on the losing end of racial disparities. The reparational model of reform, in which governments and institutions try to uplift the formerly oppressed, has failed.

But why such immense failure in a post-’60s America that has only grown more repentant of its racist past? The answer, I think, is that the Great Society was profoundly disingenuous. It was a collection of reparational reforms meant to show an America finally delivered from the tarnish of its long indulgence in racism. The Great Society was a gigantic virtue signal. It was moral advertising when the times called for the hard work of adapting a long-oppressed people to the demands of the modern world.

My GMU Econ colleague Dan Klein wishes Adam Smith a happy 300th birthday.

Also celebrating Adam Smith’s works is Ian Vásquez. A slice:

Smith took a dim view not just of protectionism, but most any attempt on the part of the authorities to direct the economy. The true origin of wealth is explained by a counterintuitive concept based on another of Smith’s observations: The pursuit of self‐​interest in the marketplace, not mere benevolence or a plan imposed by rulers, ultimately produces prosperity and improves the welfare of others.

But Smith, a professor of moral philosophy, understood that people are complex and not just materialistic.

Inspired by Adam Smith, M. Nolan Gray explains that “markets find a way.”

Is Medicare coercing Merck?

Arnold Kling – wisely warning again of the inaccuracies that emerge when statistics are calculated on the assumption that a country’s economy is a GDP factory – is not convinced that the recent move to working-from-home is reducing worker productivity.

Norman Lewis isn’t buying the fear-mongering over artificial intelligence.

GMU Econ alum Ed Stringham – reviewing Maarten Prak’s and Jan Luiten van Zanden’s new book, Pioneers of Capitalism: The Netherlands 1000-1800 – explains that capitalism first emerged from the efforts of Dutch merchants and not from a strong state. Two slices:

Before writing this review, I asked Microsoft Bing: “When was capitalism invented?” Bing said: “1776.” Then I turned to Google: “What was the first capitalist country?” Google’s answer: “Great Britain.” I then asked the chatbot Lia27, “Was a strong state necessary to back the formation of capitalism?” It replied: “Yes, strong states are necessary to provide the infrastructure and legal framework that allows capitalism to thrive. Without a strong state, it would be difficult for businesses to operate and for markets to function efficiently.”

These answers are neat, clean, and wrong.

Maarten Prak and Jan Luiten van Zanden, two economic historians who do not have an obvious political agenda, tell a different story in a deeply researched and well-written new book, Pioneers of Capitalism. Differentiating small-scale markets from capitalism, they argue that a capitalist economy features advanced specialization and trade, the widespread use of wage labor, and financial markets. This sort of economy, they show, was neither invented in 1776 nor inseparable from a strong state. It evolved, from the ground up, over centuries, and Dutch merchants were some of its most important pioneers.

A thousand years ago, a traveling monk, Alpert of Metz, was dismayed by the scale of state collapse around him. In his visit to the merchants of Tiel, he saw, in Prak and van Zanden’s words, that “they enjoyed a certain degree of independence” and self-organized in various ways. They “used drinking societies to strengthen their mutual bonds, fostering trust and thus simplifying mutual trade.” They “also maintained their own system of justice, which deviated from canonical law.” In other words, order was coming from market participants through private governance, rather than being established by a strong state. (This irked Alpert, who was “annoyed by the customs of the merchants, with their own legal rules and pagan drinking societies.”)

The Netherlands was never entirely free from government. But through diligence, the Dutch eventually won various freedoms. In the early 13th century, a man from Friesland, in northern Holland, wrote that his region enjoyed “such great freedom that neither the bishop nor his henchman could rob us of even a chicken.” Friesland “is rich in freedom, which applies equally to the poor and the wealthy (an invaluable asset), and is prosperous,” he added.


My own research (in my book Private Governance) shows that by the 17th century, Dutch stock markets had become surprisingly advanced. They featured the equivalent of modern derivatives, including futures, short sales, options, and shares pledged as collateral for loans (called hypothecation). Government officials had very little understanding of financial markets and considered trading in them a form of gambling; furthermore, they did not enforce any contracts in them. People nevertheless continued trading, and the stockbrokers subjected themselves to the discipline of continuous dealings, relying on reciprocity and reputation mechanisms. Government did not invent the advanced financial markets that changed the world.

Later stock markets in 18th century London and 19th century New York showed many parallels to their ancestor in 17th century Amsterdam. Russell Shorto’s The Island at the Center of the World makes the case that New Amsterdam (New York)—and America itself—inherited its commitment to commerce and religious liberty from the Dutch. The commitment to religious liberty, Prak and van Zanden argue, was linked with capitalism: “The tolerance of the Dutch (for which they would later become famous) that arose during this period had, therefore, also a materialistic basis: one had to respect the beliefs of merchants with whom one regularly did business.” Here markets themselves, not government edicts, created the freedom that we have today.

So don’t credit a strong centralized state for inventing capitalism. Credit the Dutch merchants, laborers, sailors, whalers, fishermen, peat diggers, cheese​ jenever distillers, financial innovators, and brewers, all led by an invisible hand.

Writing in the Telegraph, Daniel Hannan isn’t hopeful that Britain’s Covid Inquiry will inquire objectively. Three slices:

It already seems clear that the inquiry, which finally creaked and rattled into life on Tuesday, is taking a similar approach. That, though, is not the worst of it. The worst of it is that, by framing the investigation as, in effect, “did these useless politicians prepare properly?” Lady Hallett and her team are missing the far bigger issue of whether non-pharmaceutical interventions were the right policy tool.

This matters because, sooner or later, there will be another pandemic, and the conclusions of this inquiry will shape our response to it. Just as, after the Iraq war, the Civil Service became obsessed with being Chilcott-compliant, now it will fret about being Hallett-compliant.

There is an urgent need to cross-examine the idea of lockdown and its associated restrictions. How did the models on which the closures were based compare to real-world data? Did skewed incentives push officials into excessive authoritarianism? Did scientists’ predictions match the actual development of the disease? Did facemasks work? Did closing schools make a difference? Were we right to insist on vaccinating young people who had already acquired natural immunity?


We learned last week that witnesses to the inquiry, as well as staff, will be required to take lateral flow tests. At first, I thought the report was a spoof. Covid-19 is an endemic disease, for heaven’s sake. Testing for it makes no more sense than testing for measles. Yet the inquiry solemnly tells us: “Though the UK government no longer requires people to self-isolate if they test positive for Covid-19, we are asking those who test positive to stay away from the hearings.”

There is a reason the UK Government, along with every other government in the world, dropped the self-isolation rule. The coronavirus has spread through the population, becoming milder in the process. It will come back every winter, along with the Spanish Flu virus, the Asian Flu virus, and hundreds of other rhinoviruses, adenoviruses and, indeed, coronaviruses that we now call “colds”.

Yet the people running the inquiry believe – or at least affect to believe – that it must be treated differently from other diseases. Such people, I put it to you, are unlikely to spend much time exploring the possibility that the restrictions were excessive.

Sure enough, proceedings on the first day were farcical. The counsel representing the bereaved families wondered whether NHS underfunding had contributed to the crisis (never mind that spending on the NHS had been rising). The inquiry’s chief lawyer, Hugo Keith KC, seemed to suggest that ministers’ focus on Brexit had distracted them from working out a pandemic strategy.


Then again, maybe I am missing something. Maybe the alternatives would have been worse. Maybe letting exams go ahead, or letting people sit on park benches, or taking the padlocks off playgrounds, would have had some monstrous impact. If so, then let’s hear why – because we sure as hell never heard any serious argument for these policies at the time.

The experts need to prove their case. Brandishing their credentials doesn’t work any more. We heard them contradict themselves over herd immunity, then over facemasks. We watched Neil Ferguson, whose work was so influential in encouraging ministers to impose lockdown on the rest of us, break the rules to pursue an affair. We read the letter by 1,288 epidemiologists and public health officials saying that, although everyone must stay home, it was different if they felt like going out to join a Black Lives Matter protest.