All of my professional life, it has been common for me to hear people argue that while they are a Marxist, they are not therefore a Stalinist, a Leninist, or a supporter of the politics, economics, and philosophies of Soviet Russia. At some level, this is all fair enough: blaming Marx for events that happened decades after his death seems unfair, as silly as blaming, say, Adam Smith (died in 1790) for modern capitalism. But on the other side, those who choose Marx as the avatar for their socioeconomic doctrines do bear some responsibility for their emphasis on Marx, who was uplifted by a considerable publicity effort from Soviet Russia, rather than choosing to fly the banner of his socialist contemporaries like Lassalle (who favored social-democratic labor reform in Germany and was denounced by Marx in anti-Semitic terms) or Rodbertus (who may well have originated the “surplus value” concept used by Marx). As Magness and Makovi put it:
While much of the discussion surrounding the bicentennial of Marx’s birth sought to differentiate consideration of his modern relevance from the totalitarian track record of twentieth-century communism, the elevation of Marx’s stature provided by the Russian Revolution illustrates that the two cannot be easily separated. It is insufficient to portray Soviet communism as an aberration from true Marxist doctrine, as the intellectual mainstreaming of Marxist theory is intimately intertwined with the political establishment of the Soviet Union. In assessing how this historical link shapes current interpretations of Marx, one must grapple with the implications of Marxism’s early twentieth-century intellectual ascendance as a Soviet political project.
It’s fashionable to claim that the free market ideas of Nobel laureate economist Milton Friedman have failed the country, and that it’s time for new policies. Campaigning in 2020, Joe Biden declared that “Milton Friedman isn’t running the show anymore.” More recently, New York Times columnist David Leonhardt noted that people like Friedman promised that the free market “would bring prosperity for all. It has not.”
This is nonsense. For one thing, I wish we lived in a world fashioned more fully by Friedman’s ideas. Sadly, while his insights have indeed influenced some U.S. economic policies, particularly during former President Ronald Reagan’s administration, the extent of their implementation has been quite limited.
Friedman, for example, would be appalled that federal debt is now roughly the size of annual gross domestic product (GDP), having grown like a kudzu vine since registering at around 25 percent in the early 1980s. Taxes remain lower since the Reagan revolution took place, but our incomes are often taxed multiple times. Nearly every aspect of our lives is regulated by various agencies—local, state, and national. And—no surprise—cronyism is alive and well.
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The U.S. isn’t perfect. Its social cohesion could certainly be better. But given a choice between an economic system that has been somewhat influenced by Friedman and one that’s barely been influenced by him at all, my choice is clear. I made it when I left France and became an American.
GMU Econ alum Paul Mueller continues his assessment of ESG ‘investing.’
Matthew Mitchell, Peter Boettke, and Konstantin Zhukov write about the realities of socialism … and release from it in Estonia. [DBx: Their new book is part of the “Realities of Socialism” project.]
Eric Boehm reports that rising costs are inciting automakers to “rethink EV investments.” A slice:
This is pretty much exactly the trade-off that many people outside the White House expected. “The union is asking for more money and fewer hours as the industry transitions to E.V.s, but established companies are hemorrhaging money on the transition” despite getting generous government subsidies meant to stimulate E.V. production, Reason‘s Joe Lancaster wrote last month. In that environment, “Either UAW members can get a big raise, or automakers can push forward in the transition to electric vehicles.”
Liberalizing trade on a multilateral level brought immense benefits to global welfare, particularly those living in extreme poverty (defined today as living on less than $2.15 per day). According to the World Bank, in 1820, more than half of the world lived in extremely impoverished conditions. In 1995, after the establishment of the WTO, 32.8 percent of the global population lived in poverty, but by 2019, that share dropped to 8.5 percent.
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For the first time, in 1995, fresh fruit became the United States’ top agricultural import. This is an unsurprising change given the North American Free Trade Agreement (NAFTA) entered into force in 1994. Canada already had duty‐free treatment through the US‐Canada free trade agreement, but Mexico did not. However, even before NAFTA, Mexico was a top trading partner for the United States for fresh produce because its climate provides a better environment for quality produce year‐round. After NAFTA entered into force and Mexican fruits and vegetables were no longer subject to high tariffs (e.g., Mexican asparagus was subject to a tariff between 5 and 25 percent depending on the time of year it was imported in 1993), fresh fruit and vegetable imports from Mexico soared.
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Trade contributes to higher wages not only because we import lower‐priced goods from trading partners but also because we then boost production in the industries in which US workers and companies have a comparative advantage (and thus specialize). The jobs in these industries tend to be better paying than the ones eliminated by competition. As a result, the time price of certain goods and services (e.g., the television) is even lower than the inflation‐adjusted list price.
The Wall Street Journal‘s Matthew Hennessey reports on one of the many unfortunate outcomes of covid lockdowns. Two slices:
By December 2020, countless Catholics nationwide had grown weary of church leaders’ acquiescence to state power. In these pages I urged bishops to stand up to politicians like Gov. Andrew Cuomo, erstwhile caesar of Albany, who seemed to delight in his arbitrary power to declare this shall open and that shall close.
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The pandemic was as much a political event as it was a public-health crisis. Church leaders, spooked at the thought of appearing partisan, failed in their duty to stand up for religious freedom.
