Samuel Gregg offers “a classical liberal’s guide to civilization building.” A slice:
There is, however, another sense in which Hayek utilizes the concept of civilization. In the Constitution of Liberty, he denotes civilization as an accumulation of knowledge and experiences over time that could never be designed by any one human mind, but which allows people to pursue their individual aims. The scope of possibilities open to people at any one moment in time is what Hayek refers to as “the state of civilization.” Some civilizations contain more possibilities than others; that is why Hayek speaks of “higher civilization.”
Civilization in Hayek’s sense thus embodies the wisdom transmitted from the past, often in the form of conventions and traditions. While no one person can fully grasp all this knowledge, it enables people to pursue “their individual ends so much more successfully than they could alone.” This “conservative” feature of civilization, however, goes together with a “liberal” recognition that as people freely pursue their chosen goals (especially the end of knowledge driven by humans’ innate desire to know truth) they may make errors but also likely uncover new information. This can form the basis of critiques of existing ideas, institutions, and conventions that in turn suggest revisions of what we already know.
Ryan Yonk and Jacob Bruggeman understand the true, destructive nature of industrial policy. A slice:
In the short run, subsidized investments in companies like GlobalFoundries appear to reshore supply chains, create jobs, stimulate the economy, and secure American access to critical technology. But the positive short-run effects of the CHIPS Act and other forms of contemporary industrial policy risk distracting us from ensuring cooperative exchange and long-run prosperity in the global economy.
Vance Ginn warns of the awfulness of Biden’s industrial-policymaking. A slice:
This move echoes a broader trend of governments worldwide intervening in their economies through industrial policy. A cocktail of targeted subsidies, tax breaks, and regulatory tinkering, industrial policy aims to sculpt economic outcomes by favoring specific industries or firms, all for the supposed benefit of the national economy. Industrial policy puts business “investment” decisions in the hands of government bureaucrats. What could go wrong?
While its champions tout its potential to boost competitiveness and spur innovation, the reality often tells a different story, especially in light of massive deficit spending. In practice, industrial policy tends to fan the flames of higher prices and sow the seeds of economic destruction.
Politicians too often meddle with voluntary market dynamics by artificially bolstering favored sectors through subsidies and tax perks, resulting in the misallocation of resources and distorted prices. Moreover, the infusion of government funds to bankroll these initiatives with borrowed money can contribute to the Federal Reserve helping finance the debt, increasing the money supply, and stoking inflation.
Bob Levy argues against antitrust. A slice:
First, antitrust debases the idea of private property, transforming it into something that effectively belongs to the public, to be designed by government officials and sold on terms congenial to corporate rivals who are bent on the market leader’s demise. Some advocates of the free market endorse that process, despite the destructive implications of stripping private property of its protection against confiscation. If new technology is to be declared public property, future technology will not materialize. If technology is to be proprietary, then it must not be expropriated. Once expropriation becomes the remedy of choice, the goose is unlikely to continue laying golden eggs.
The principles are these: No one other than the owner has a right to the technology he created. Consumers can’t demand that a product be provided at a specified price or with specified features. Competitors aren’t entitled to share in the product’s advantages. By demanding that one company’s creation be exploited for the benefit of competitors, or even consumers, government is flouting core principles of free markets and individual liberty.
Second, antitrust laws are fluid, nonobjective, and often retroactive. Because of murky statutes and conflicting case law, companies never can be quite sure what constitutes permissible behavior. Conduct that is otherwise legal somehow morphs into an antitrust violation. Normal business practices—price discounts, product improvements, exclusive contracting—become violations of law. When they’re not accused of monopoly price gouging for charging too much, companies are accused of predatory pricing for charging too little, or collusion for charging the same.
Third, antitrust is based on a static view of the market. In real markets, sellers seek to carve out mini‐monopolies. Profits from market power are the engine that drives the economy. So, what might happen in a utopian, perfectly competitive environment is irrelevant to the question whether government intervention is necessary or appropriate. The proper comparison is with the marketplace that will evolve if the antitrust laws, by punishing success, eliminate incentives for new and improved products. Markets move faster than antitrust laws could ever move. Consumers rule, not producers. And consumers can unseat any product and any company no matter how powerful and entrenched. Just ask WordPerfect or Lotus or Polaroid.
Trump’s proposed across-the-board ten-percent tariffs would be very costly.
Arnold Kling asks: “What is probability?”
J.D. Tuccille explains that “minimum wage make for great politics, but fewer jobs.” A slice:
“It’s increasingly hard to escape the conclusion that the continued push for minimum wage increases despite their predictably bad consequences is a triumph of in-group signaling over a concern for the material welfare of the poor,” Chris Freiman, a professor at the John Chambers College of Business and Economics at West Virginia University, commented in response to developments in California.
Kevin Bardosh tweets: (HT Jay Bhattacharya)
“Institutions need to be designed to withstand hysteria. Ours crumbled in the face of Covid, and in doing so helped create the disaster Britain now faces…a frank discussion about the nature & depth of that damage is needed”
– New Spectator editorial
