David Henderson describes Joseph Stiglitz’s new book, The Road to Freedom, as one of the worst books he’s read in years. Four slices from David’s excellent review:
Throughout the book, Stiglitz makes strong assertions with little or no evidence. Although the book is heavily footnoted, the footnotes are mainly to explain some of his ideas further or to reference other books or articles, disproportionately written by Stiglitz. There are few hard numbers, and he makes little attempt to cite writings by those he criticizes. He also shows a stunning ignorance of economic history and, in discussing price gouging, shows no awareness of the downside of price controls. His criticism of communism doesn’t even mention the millions of deaths it led to. At times, as when he discusses climate change, he is completely one-sided and seems completely unaware that he is. Moreover, Stiglitz is not shy about engaging in stunning personal attacks on Friedman and Hayek. The result is a book that preaches only to people who (1) already agree with him and (2) don’t need to see good evidence or arguments to support their views.
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Similarly, Stiglitz refers to people on the “Right” (he capitalizes the word) as advocates of “trickle-down economics.” They argue, he says, that “if we made the economic pie larger, all would eventually be better off.” (italics in original) Yet, I’ve never been able to find people on the “Right,” whether classical liberal, conservative, or libertarian, using the term “trickle-down economics” to refer to what they believe in. When someone uses terms to describe people’s beliefs, terms that those people never use to describe their own beliefs, we should be suspicious.
While we’re discussing it, though, it’s important to point out that the last two centuries of economic growth completely justify the idea that steady economic growth in a society does make virtually everyone better off. J. Bradford DeLong, an economist at the University of California, Berkeley—and certainly no one whom Stiglitz would regard as a “neoliberal”—beautifully documented that fact in a 2000 National Bureau of Economic Research study aptly titled “Cornucopia: The Pace of Economic Growth in the Twentieth Century.” This isn’t trickle-down economics; it’s gush-down economics.
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On a related note, Stiglitz accuses [Milton] Friedman of having been “a key adviser to the notorious Chilean military dictator Augusto Pinochet.” This claim has been refuted countless times. Friedman himself noted—and no one contradicted his claim—that Friedman spent about 45 minutes talking to Pinochet. Does that constitute key advice? And what is one to say about Stiglitz’s own close consulting relationship with Venezuelan strongman Hugo Chavez?
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One of the major players among free-market economists in the last century was the late Ronald Coase, who was even a player into the 21st century. Coase famously established that lighthouses in Britain, which so many economists—famously including Stiglitz’s own teacher, Paul Samuelson—assumed had to be provided by government, were actually provided privately. Coase never argued, though, that private producers could feasibly provide all public goods. Yet in a table summarizing various “neoliberal” views, Stiglitz writes, “[The] Coase theorem says that market will efficiently solve public goods problems.” Has he read Coase?
Michael Cannon rightly blasts “Kamala Harris’s irresponsible proposal to expand Medicare.”
The Environmental Protection Agency’s new greenhouse gas emissions rules require that battery-powered and plug-in hybrid vehicles make up 32% of auto maker sales in 2027. By 2032 no more than 29% of new cars can be gas-powered. Ergo, there will be only one gas-powered model for every two electric cars on dealer lots.
Ms. Harris and Democratic Senate candidate Elissa Slotkin claim the Biden rule isn’t an EV mandate. “No one should tell us what to buy, and no one is going to mandate anything,” Ms. Slotkin says in an ad.
The reality is that there will be many fewer gas-powered cars available, and they’ll cost much more owing to the government’s limit on supply. As her GOP opponent, Mike Rogers, points out in a dueling ad, Ms. Slotkin voted last month to keep the Administration’s mandate in place—an accurate reference to a House resolution to overturn the EPA rules.
Kerry Welsh did business in China, “but Americans benefitted more.” A slice:
Democrats and Republicans might not seem to agree on much these days. But when it comes to trade, they chant “China trade bad, tariffs good” in stereo, even as the data show the exact opposite.
For 15 years, I was responsible for hundreds of millions of dollars in Chinese imports entering the United States. I invented two enduring products—the “Backpack Beach Chair” and the “Magna Cart” portable hand truck—that can be found in Costco and other stores to this day.
Let’s use the Magna Cart to illustrate how America made billions while China made crumbs. The Chinese factory charged me $10 for a cart that cost them $9 to manufacture. U.S. retailers bought it from me for $15, then sold it to consumers for $30.
To recap: The factory made $1, I made $5, and retailers made $15, minus freight and U.S. tariffs.
Today’s federal government in the U.S. is appallingly irresponsible.
My GMU Econ colleague Dan Klein ponders Tim Walz and shouting “Fire!” in a crowded theater.
Kevin Corcoran is understandably unimpressed with the economics of Star Trek.
Jeffrey Blehar sincerely tried to give Kamala Harris a break.
Vanessa Brown Calder warns that Trump’s plan to subsidize IVF will bring disaster. Here’s her sensible conclusion:
Although Trump’s plan is a disaster from the perspective of cost, incentives, and value neutrality, IVF is a true medical miracle for many couples with fertility challenges. Protecting IVF means protecting individuals’ freedom to avail themselves of the most successful procedure to treat a range of fertility issues and create human life, and doing so is critical.
But protecting IVF from efforts to limit its use and reduce its efficacy does not mean subsidizing or mandating coverage. Trump and future policymakers would do well to enthusiastically defend the procedure, but avoid the cost and pitfalls of a government-supported industry.
Tolstoy’s characters in Anna Karenina each go through Kirzner-style processes of pursuing happiness. The title character, the unhappily married Anna, begins an affair with a dashing military officer named Vronsky. Parallel to their story is Levin, a young man Tolstoy modeled after himself, and Ekaterina, more often called Kitty, a debutante who is both kind-hearted and impressionable. The novel follows their lives, along with those of their family members and other people around them.
For many of the characters, part of their happiness discovery process is figuring out where to live. They go back and forth between the city and the country, with varying results. The country is a good fit for Levin, who has a pastoral romantic streak; his time in cities reinforces this for him.
Anna and Vronsky are more comfortable in Moscow and St. Petersburg conversing in salons, attending the theater, and dancing at balls, and don’t do as well out in the country. Different people have different preferences, both in markets and in happiness.
However, Anna and Vronsky’s affair is a scandal in their high society city circles. While the male Vronsky is mostly accepted back by his old friends, Anna is shunned in a double standard typical of the time and is isolated and lonely. Anna and Vronsky move abroad for a time to escape social censure, and then to a country estate.
They try new things in these settings, just as an entrepreneur would. While in Italy, Vronsky discovers his artistic talent, though he is disappointed that his skill with the paintbrush is limited to that of a copyist transcribing what he sees. A true artist, such as the one he and Anna meet and who paints her portrait, can instead create original interpretations and can bring hidden qualities into the open. Realizing this, Vronsky puts down his brush.
