Michael Strain explains that “protectionism is failing and wrongheaded” – and he’s got the supporting facts. Here’s the abstract:
The Trump–Pence and Biden–Harris administrations enthusiastically embraced protectionism. Each administration explicitly argued for a break from the bipartisan consensus of recent decades that has been generally supportive of free trade and of allowing markets to shape US industrial and employment composition. But the protectionism of the Trump and Biden administrations has not succeeded and likely will not succeed at meeting its goals: they have caused manufacturing employment to decline, not to increase; they have not reduced the overall trade deficit; they have not led to a substantial decoupling of the US and Chinese economies. More fundamentally, the goals that have not been met are wrongheaded: policymakers should not pay inordinate attention to manufacturing employment, and the trade deficit is a poor guide to economic policy. Finally, these wrongheaded goals often rest on fundamental economic misperceptions: free trade is not a policy to create jobs; it is a policy to increase productivity, wages, and consumption. The balance of the evidence suggests that free trade, including trade with China, has not reduced employment. Of course, trade has been disruptive. But populist policies adopted in response will hurt workers, not help them.
Tad DeHaven ponders ports, automation, and progress.
GMU Econ alum Dominic Pino is rightly dismayed by Biden’s and Harris’s pro-labor-union bias.
Jack Nicastro reports on the economic damage done by “Buy American” rules.
Phil Magness writes insightfully about the ridiculous popularity of Karl Marx. A slice:
The high level of Marx veneration in modern academic life makes for a strange juxtaposition with the track record of Marx’s ideas. The last century’s experiments in Marxist governance left a trail of economic ruination, starvation, and mass murder. When evaluated on a strictly intellectual level, Marx’s theories have not fared much better than their Soviet, Chinese, Cambodian, Cuban, or Venezuelan implementations. Marx constructed his central economic system on the labour theory of value – an obsolete doctrine that was conclusively debunked by the “marginal revolution” in economics in the 1870s. Capital was also riddled with internal circularities throughout, including its inability to reconcile the pricing of labour as an input of production with labour as a priced value onto itself. By the turn of the 20th century, Marx’s predictive claims about the immiserating forces of capitalism were confronted with the tangible reality of growing and widening levels of prosperity.
By every measure of its own merit, Marx’s economic system should have been relegated to the dustbin of intellectual history – and for a brief moment it was. Marx’s Capital struggled to find an audience in his own lifetime. He died in 1883 in relative obscurity and with little following outside of a small band of fanatical leftists led by his friend Friedrich Engels. Even among fellow socialists, Marx was a controversial figure. He spent the last decade of his life locked in endless internecine feuds with anarchists, non-revolutionary socialists, and even other competitor revolutionary factions. For decades after his death, he faced credible accusations of plagiarising his theories from other writers. The Manifesto has more than a few arguments that strongly resembled an 1843 pamphlet by French socialist writer Victor Considerant, and Marx’s doctrine of “surplus value” closely follows an earlier work by democratic socialist thinker Johann Karl Rodbertus.
Ms. Khan regularly vilifies business. While she has a right to free speech, her targets are also entitled to due process in formal government procedures. Express Scripts argues that the FTC report is defamatory, which may be a stretch. But businesses deserve the same protection against libelous statements made by government as they do private actors.
Ms. Khan is running rough-shod over due process as she tries to expand her authority. One result is she keeps losing in court. Another is that businesses are increasingly challenging the FTC’s power and structure. Ms. Khan may finally get punched back.
Alas, recycling China’s savings through a handout-palooza won’t fix this. Keynesians assume the Chinese save because they can’t rely on social benefits like America’s Social Security, which may even be true, but the high savings rate isn’t China’s problem. The low productivity of those savings is.
The political controls on the economy that created this situation aren’t going away under Mr. Xi and will thwart the Keynesians’ longed-for virtuous circle. Any new money funneled into consumption will land in a business ecosystem facing the same financial-political inhibitions on productive investment as before. A paradox: If China were capable of benefiting from a new spending stimulus, the economy wouldn’t need one.
Brad Thompson explores the connection between commerce and the birth of a free society.
James Hartley eviscerates the nonsense that goes by the name “limitarianism.” Three slices:
Limitarianism: The Case Against Extreme Wealth by Ingrid Robeyns is a very bad book. Writing a review of it thus presents a challenge. Who wants to read a review that is the equivalent of shooting fish in a barrel of dead fish? Yet, while reading Robeyns’ tendentious screed, I was faced with the absolute certainty that quite a few of my colleagues and students would love this book.
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As I said at the outset, writing an entire review just documenting how bad this book is would be an incredibly easy task. Pick a page at random, and you’ll find multiple examples of an argument neither cohesive nor persuasive. The question is: how is it possible that the book is this bad? The answer is found in the Introduction. On the third page, Robeyns notes, “For a long time, I felt that there was something wrong with an individual amassing so much money, but I couldn’t properly articulate why.” So, she “decided to deploy my training in philosophy and economics to answer the question: Can a person be too rich?” The arguments in this book did not lead Robeyns to her conclusion; she started with the conclusion. When you start your investigation already knowing the answer to the question, then you may not notice that the reasons you offer for your conclusion are not persuasive to someone who is skeptical about the conclusion. If it seems like the arguments are non sequiturs attacking straw men, that isn’t important to Robeyns. The conclusion is right even if the arguments fail. The result of this approach is a religious book written for the already converted.
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To pretend that you can have all the riches of the modern world and eliminate the ability for anyone to become wealthy is a sure sign of someone who has no understanding of how all this wealth was generated in the first place. Robeyns’ book, however, provides insight into why people advocating income limitation plans often seem so unaware of how economic growth occurs. If getting rid of rich people is akin to a religious mandate to rid the world of evil, then of course it is safe to impute bad motives to anyone arguing that there are possibly benefits to the world from allowing people to do things that will make them wealthy. Despite appearances, Robeyns book is not really an attempt to persuade anyone of her beliefs; instead, it is an insight into the minds of zealots.
