UVA economist Robert Parham speaks sense to America’s young people. (HT John Woody) Three slices:
Whenever I speak with my students—I teach at the University of Virginia—they seem deeply pessimistic about the state of the world. We all know the reasons. Climate change is going to kill us all; late-stage capitalism is running amok; inequality is at an all-time high; racism and bigotry are rampant; gender-nonconforming and queer people are under unprecedented attack; economic anxiety has never been worse; AI is coming for our jobs; and on and on and on.
I then pose a simple thought experiment to them: If you were given a time machine that could take you back to any period in the last 12,000 years—since the dawn of civilization—when would you rather live?
You see, I believe we currently live in the golden age of humanity. Things have never been better for human beings. Yet it seems we have never felt worse about our prospects.
If you’re a woman, go back more than about 100 years and you become property (of your father and, later, your husband), with no voting rights and little protection under the law. If you’re a person with above-average melanin levels, like me, the same (and worse) happens to you. Gender-nonconforming minorities would find the past just as terrible.
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But envy has also been transformed and rebranded. Once a deadly sin, it became a virtue. We call it “fairness” (or sometimes “equity”) now and concentrate our attention on all the ways the world is “unfair.” Mostly the ways that lead to others in our peer group having more than us.
The world is unfair. Deeply so. It’s just that you’re the lucky ones. You won the birth lottery.
In a truly fair world, any dollar you make or spend above $5,000 a year would instead be given to someone else. Maybe a poor Kenyan, or Bangladeshi, or Indian. But that’s not the kind of fairness and equity anyone talking about “fairness” and “equity” around you seeks.
You’ve been lied to. You’ve been told by the media, social networks, and not least your professors, that this fantastic world we live in is evil. Not only that, you’ve been told it’s your fault. You’re too racist, too greedy, too white, too privileged, not sufficiently attuned to the plight of the marginalized. It is not enough to be non-racist, they say; you must be anti-racist. Anything less than that, and you’re complicit in evil. Some of you are better by default due to some accidents of birth; some of you are worse. Small wonder you feel suffocated, anxious, and depressed. Any human, weighed down with this responsibility and guilt, would be just as down. The cognitive dissonance of being told colonialism is evil, American slavery is uniquely evil, that wealth and the markets that enable it are evil, while going to school at a top-tier U.S. institution built on “Monacan land” using slave labor would incapacitate anyone.
The people pushing these ideas may have meant well. I like to give people the benefit of the doubt. But we’ve seen more than enough to know that the outcomes of this worldview are terrible. And yet many of your professors keep reinforcing these harmful lies.
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Without fail, at the end of the class a few students tell me that the content of the course was diametrically opposed to what they had been taught so far. Prior, they had class discussions about the exploitative nature of the market system and its inherent unfairness; the evil and greed of corporations; and the fight of exploited workers against oppressive capitalists.
I point out to them that these paradigms imply a zero-sum world in which wealth can only be created by taking it from others, whereas they live in the positive-sum world of markets, in which wealth is created by exchange. Markets have deposited a magic wand in their hands, which allows them to freeze moments in time, observe what is currently happening in foreign lands, and conjure loved ones for a face-to-face conversation out of thin air. Kings would have given half their kingdom for such a wand, but now anyone can have it for the low, low price of $69.99 per month. Or about five hours of student work. This is how we got wealthy.
Sam Gregg talks about the American economy.
The Editorial Board of the Wall Street Journal decries Biden’s escalation of protectionism. A slice:
But Mr. Biden’s tariffs are mainly about domestic U.S. politics and his green dreams. Most goods on Mr. Biden’s tariff list aren’t needed for defense and don’t pose a security risk. His tariffs are intended to mitigate the economic and political damage of his climate policies.
Also decrying Biden’s Trumpian protectionism is the Cato Institute’s Clark Packard. A slice:
Thus, the new EV tariffs are similar to the steel tariffs also announced today by the Biden administration, which I covered with my Cato colleagues Scott Lincicome and Alfredo Carrillo Obregon last month. In the case of steel, the US has essentially eliminated Chinese products from the market using antidumping and countervailing duties. And like the new steel tariffs—and President Biden’s opposition to the purchase of US Steel by Japanese‐based Nippon Steel on bogus “national security” grounds—the new EV tariffs are driven mainly by domestic political calculations and the 2024 presidential campaign, not economics or geopolitics.
Citing anonymous administration officials, Politico confirmed as much last week: with the Trump campaign promising a 60 percent tariff on all imports from China, the Biden administration apparently feels compelled to respond with its own tariffs, in the hope of appealing to unionized auto workers in the Midwest. (Trump, meanwhile, responded to reports about Biden’s 100 percent EV tariff last Saturday with a promise to levy a 200 percent tariff on Chinese EVs made in Mexico.)
And here’s Eric Boehm on Biden’s new tariffs punitive taxes on Americans’ purchases of foreign goods. A slice:
“Tariffs on Chinese EVs won’t just make Chinese EVs more expensive, they will also make American EVs more expensive,” Ryan Young, a senior economist with the Competitive Enterprise Institute, said in a statement. “This is because domestic producers can now raise their prices without fear of being undercut by competitors. Good for them but bad for consumers—and for the Biden administration’s policy goal of increased EV adoption.”
David Henderson applauds the publication of the new book edited by Ryan Bourne, The War on Prices.
Lina Khan has championed this drive to challenge dominant tech platforms since her 2017 law school days, when she gained prominence for a controversial paper that criticized Amazon for gaining and maintaining its market position through allegedly anticompetitive and exclusionary practices. However, the current antitrust push began in earnest before her tenure as FTC chairperson, when the Trump administration filed suit against Google for using agreements with smartphone producers to make its search engine the default. Today, both agencies continue to wage major lawsuits against Google’s ad services platform, Amazon’s online marketplace platform, and most recently, Apple’s iPhone operating system, over business strategies and restrictions on entrepreneurs that use them. However, the practices in question often have countervailing benefits for these businesses, and proscriptions against them risk harming the same firms that these lawsuits purport to safeguard.
