… is from this Facebook post shared by Trace Mitchell:
“True socialism has never been implemented.”
No, but attempts to get closer to it have resulted in death and poverty.
“True libertarianism has never been implemented.”
No, but attempts to get closer to it have resulted in peace and prosperity.
Choose your direction.
Here’s a letter to CNN.com.
Editor:
Reporting on Trump’s tariffs, Olesya Dmitracova misleadingly, if unintentionally, understates the economic case for free trade by writing that “mainstream economists … have long disliked tariffs and can point to research showing they harm the countries that impose them, including the workers and consumers in those economies” (“Trump has delayed his monster tariffs. Here’s why you should care,” July 9).
Proponents of even the most outlandish notions can “point to research” that supports their positions. But on the question of free trade, the research in its favor is overwhelming. The freer are the people of a country to trade, the higher is their per-capita GDP, the faster is their rate of economic growth, the longer they expect to live, and the less likely their governments are to go to war with trading partners. Those researches that find otherwise are relatively minuscule, as can be verified by consulting almost any respected work on the economics of trade – works such as Jagdish Bhagwati, In Defense of Globalization (2004), Daniel Griswold, Mad About Trade (2009), Douglas A. Irwin, Free Trade Under Fire (2020), Pierre Lemieux, What’s Wrong With Protectionism? (2018), Johan Norberg, In Defense of Global Capitalism (2003), Arvind Panagariya, Free Trade & Prosperity (2019), and Martin Wolf, Why Globalization Works (2004).
Especially after what is now 250 years of serious economic theorizing and research into every nook and cranny of arguments for protectionism, these mainstream findings shouldn’t be surprising: National-security considerations aside, protectionism is the bizarre belief that a government can increase its citizens’ access to goods and services by decreasing its citizens’ access to goods and services. Or stated slightly differently, protectionism is the blind faith that by enabling some particular producers to commandeer parts of the incomes of their fellow citizens, governments raise the incomes not only of the privileged producers, but also of their victimized fellow citizens.
Protectionism, in short, is a belief in miracles. As such, it is a vestige of humankind’s pre-enlightenment, superstitious past – and its peddlers should be met with no less skepticism than is accorded palm-readers and hawkers of penis-enlargement pills.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
State governments are not powerless either. If Massachusetts, California, and New York want to ensure that Planned Parenthood’s doors stay open, they are free to allocate state taxpayer dollars to make that happen. And if some rural communities want to fund a women’s health clinic offering the full range of reproductive services, nothing in federal law stops them from raising money locally to do so.
But instead of holding those debates at the state or local level, we immediately rush to the courts and insist that the funding must come from Washington, D.C.
This reflex is part of a deeper problem: a political culture in which every program, every priority, and every budget line item must be nationalized. If something is valuable, we assume that it must be federally funded. If the federal government steps away, we act as though the service will vanish forever. That’s incorrect. Unfortunately, this way of thinking has been behind much of the federal government’s expansion over the last 100 years and our inability to scale it back.
Wall Street Journal columnist Matthew Hennessey applauds the denial of federal funding to Planned Parenthood. [DBx: One can applaud removal of these subsidies even if one is not opposed to abortion. As Vero notes in what’s linked above, there’s no good case for federal-government subsidies of these clinics.]
Pierre Lemieux warns against the (strange) allure of industrial policy.
Eric Boehm files a report from the front lines of the trade war. A slice:
One of the supposed goals of the Trump administration’s trade policies is to protect and promote American-made products.
Greg Shugar, who owns a business that does make things right here in America, has a hard time seeing it that way.
“I’m charging more and I’m making less,” says Shugar, owner of Beau Ties of Vermont, which manufactures neckties, socks, pocket squares, and other fashion accoutrements.
While the vast majority of American clothes and accessories are imported these days, Shugar’s company, which employs 18 people, is one of the few that are cutting and sewing those products here in the United States. He told Reason last week that the tariffs have not been a boost for his business. Quite the opposite, in fact, since his products depend on silk jacquard and other materials that are imported from overseas—mostly from China but also from Italy.
Bjorn Lomborg is correct: “Ignoring free trade benefits is absurd.”
GMU Econ alum Dave Hebert asks: “What is the Jones Act – and can it be fixed?” Two slices:
Counter to the goals of the Jones Act, raising the cost of domestic sea-shipping to such a degree has encouraged domestic producers to find alternative means of transporting their wares. In an extreme case, cows from Hawaii are frequently shipped by air because it is cheaper than shipping them by water. By reducing demand, high shipping costs actually reduce the number of domestically produced ships, the domestic shipbuilding facilities, jobs in the shipbuilding industry, and the number of qualified mariners available to crew Jones-Act-compliant ships.
Rather than nurturing an abundance of ships and mariners standing ready to bolster naval operations, the Jones Act has produced the opposite: shortages of both. In 2017, the Maritime Workforce Working Group reporteda deficit of 1,839 mariners for a “sustained sealift,” meaning “sustained wartime efforts.” Even this estimate assumes that all currently “actively sailing and qualified mariners with unlimited credentials available to crew… [were] available and willing to sail.” At a 2023 hearing before the Department of Transportation, Ann Phillips, then the Maritime Administrator, noted that since the 2017 study, “globally standardized credentialing requirements” and “the COVID-19 pandemic” have both “negatively impacted mariner retention.” While she did not provide new figures for the deficit, one can only surmise that the situation has gotten worse, not better.
The sobering unintended consequences of the Jones Act go further. At a 2013 hearing before the House Subcommittee on Coast Guard and Maritime Transportation, the Subcommittee’s staff reported as “Background” that between 1983 and 2013, at least 300 shipyards closed, leaving just four remaining open today.
The result of all of this has been a massive decline in the capacities of the US shipbuilding industry.
…..
Estimated savings from repealing the Jones Act would be enormous. In 2019, the OECD projected that “an abolishment of the Act will result in net economic gains for the US, in particular for US industries dependent on water transportation services for intra-US sales, and the shipbuilding industry itself” (emphasis added).
Nathan McGrath explains “how labor unions feed campus antisemitism.” A slice:
Although Mr. Lax wanted nothing to do with his union, he had no choice. In most unionized public-sector workplaces, even nonmembers must accept a union’s “exclusive representation,” meaning Jewish CUNY professors have to allow the PSC to represent them in contract matters even though the union prohibits nonmembers from voting on contracts. The Supreme Court opted not to review the practice after a legal challenge by Mr. Lax and others represented by the Fairness Center. Exclusive representation was upheld by lower courts, leaving Jews’ terms and conditions of employment in the hands of union officials responsible for effectively purging them from their membership rolls.
Damon Root reports on Arizona Supreme Court justice Clint Bolick warning that the Trump administration is further battering the rule of law. (Bolick, it’s worth pointing out, is co-founder of the Institute for Justice and a personal friend of Clarence Thomas.) A slice:
In a sane political climate, Bolick’s words of warning would be big news in conservative media. After all, he is a highly respected Republican-appointed jurist with a lengthy track record as a textualist. His resume and accomplishments should earn him a fair hearing from “his side” of the political aisle.
Yet as the Arizona Republic reports, the conservative response so far to Bolick’s speech has been a barely veiled political threat. “Justice Clint Bolick should stay out of the political arena,” declared Mike Davis, the head of the pro-Trump Article III Project. “When judges take off their judicial robes, climb into the political arena, and throw political punches, they should expect political counterpunches,” Davis told the Arizona Republic.
The fact that Bolick delivered this speech at this time suggests that he is ready for the fisticuffs. “Standing up for the rule of law and the independent judiciary, no matter who is attacking it, is an absolute priority,” Bolick declared, before adding, “count me in.”
Bolick is a principled legal thinker and one of the genuine good guys in American law. If he is worried about the health of our constitutional order, we should all pay heed.
… is from page 218 of Michael Strain’s 2025 paper “The (non) effect of tariffs on manufacturing employment” [link added]:
But when they study the effects of trade more broadly, Feenstra et al. find that job losses identified by [“China Shock” researchers] Acemoglu et al. and Autor et al. are fully offset by job gains due to US exports.
DBx: Shocking! (Not.)
… is from this excellent new essay, at National Review, by the businessman Neal B. Freeman:
You hear it said frequently that we Americans don’t make things anymore. While it’s true that we don’t make many of the things you see around the house – plastic flatware, keychains, underwear, sparklers – we make many of the things that are harder to make and that create more economic value – computer software, rockets, semiconductors, medical devices. And we make a lot of them. Of the 195 countries doing or trying to do business internationally, the U.S. manufactures and sells more products than all but one of them – China, which has a population four times larger than ours.
Colin Grabow reports that “Trump’s Vietnam agreement bodes poorly for future trade deals.” A slice:
Earlier this year, President Donald Trump stated that US tariff policy would be based on reciprocity. “Whatever countries charge the United States of America,” he wrote in a social media post, “we will charge them—No more, no less!”
Well, so much for that.
Announcing a new trade agreement with Vietnam last week, Trump indicated that tariffs between the two countries would be anything but reciprocal. Although details of the deal are scant, Trump crowed that US exports to Vietnam will enjoy tariff-free access while exports from Vietnam will face 20 percent tariffs. Exports transshipped through Vietnam to the US, meanwhile, will face 40 percent tariffs.
With the average US tariff on most favored nation countries (including Vietnam) when Trump took office at 3.3 percent on a simple average basis, the new rates constitute a substantial increase.
Nonetheless, Trump characterized this lopsided arrangement as a “great deal” for the United States. What it really signifies, however, is the president’s deeply confused understanding of trade policy.
Economists have long understood that to fully reap the gains from trade, the United States should pursue the mutual elimination of tariffs with its trade partners. This means expanded access for US exports to foreign markets (a win) and expanded access by American consumers and businesses to products from other countries (another win).
But President Trump doesn’t appear to see things that way. Instead, his Vietnam deal seeks to clear the path for US exports while raising tariffs on imports. The former are seemingly viewed as contributing to economic vitality, while the latter are a privilege extended to foreigners in exchange for payment in the form of a tariff (in reality, paid by American importers, not the foreign exporter).
Such mercantilism has been discredited since the days of Adam Smith. It’s now widely recognized that imports bolster a country’s economic efficiency and material standard of living through lowered costs and expanded choice and variety.
President Trump sure knows how to spoil an economic mood. Three days after he signed the GOP’s big budget bill, saving the economy from a scheduled $4.5 trillion tax increase, Mr. Trump was back playing the role of Tariff Man. On Monday he announced 25% tariffs on Japan and South Korea, while adding to renewed will-he-or-won’t-he uncertainty for the U.S. economy and trading partners.
In letters to Japan’s Prime Minister and South Korea’s President, Mr. Trump huffs and puffs again about bilateral trade deficits, which he mistakenly thinks are a sign of foreign exploitation. “We must move away from these longterm, and very persistent, Trade Deficits,” he says. Hence the new 25% tariffs, starting Aug. 1. This nearly matches Mr. Trump’s paused “Liberation Day” duties on the two countries, except Japan was supposed to get only 24%. Later in the day he sent tariff letters to a dozen other, less economically significant, countries.
…..
The economic damage will be broad as well, given the volume of trade. The U.S. last year imported $148.4 billion in goods from Japan and $131.6 billion from South Korea. Together that was about 8.6% of total U.S. imports.
Looking through the trade data, is it easy to see how Mr. Trump’s tariffs will hurt American businesses and consumers. Imports from Japan last year included $9.9 billion in assorted industrial machines, $7.5 billion in pharmaceutical preparations, and $3.1 billion in medicinal equipment. South Korea sent over $8.5 billion in semiconductors, $7.4 billion in computer accessories, and $3.2 billion in household appliances.
If Mr. Trump slaps on 25% tariffs, some of this trade might grind to a halt. Having less competition in the market for washing machines, say, isn’t to the American homeowner’s benefit. Businesses in the U.S. that rely on highly specialized industrial machines might not have easy alternatives to Japanese and South Korean imports. Meantime, the trade ructions and uncertainty make it harder to plan and invest.
One illusion that’s bursting is that Mr. Trump is imposing tariffs in the cause of free trade. He’s imposing tariffs because he likes them as an economic policy. The U.S. average effective tariff rate when Mr. Trump took office was 2.4%, according to the Yale Budget Lab. As of last month Mr. Trump had cranked that up to 15.6%. (See the nearby chart.) How much higher does he want to go? Mr. Trump’s deadline for a deal with the European Union is supposed to be Wednesday, and he has threatened 50% tariffs.
Eric Boehm reports on Trump’s art of destroying his own trade deals. A slice:
If you still believe there is some overarching goal—new trade deals, negotiating for lower trade barriers, or whatever—to the Trump administration’s trade policy agenda, Monday’s announcement of new tariffs targeting imports from South Korea ought to put an end to all that.
South Korea was not the only country whose goods were hit with higher tariffs on Monday, nor does it seem likely to be the last. President Donald Trump also announced higher tariffs targeting imports from Japan, Myanmar, Laos, South Africa, Kazakhstan, and Malaysia. The White House indicated that Trump will be sending letters to other countries in the coming days announcing various tariff rates. This is, in effect, a slow-motion repeat of the “Liberation Day” tariff announcements that were put on hold for 90 days in early April after the markets reacted negatively to those announcements.
Still, tariffing imports from South Korea, America’s sixth-largest trading partner, is particularly galling. If Trump’s goal here is to strike deals that will lower foreign barriers to American exports and deliver better trading conditions for American manufacturers (who rely on imports), then hiking tariffs on South Korea makes startlingly little sense.
For starters, that’s because the new tariffs seem to violate an existing trade deal between the U.S. and South Korea. That deal, the U.S.-Korea Free Trade Agreement, was signed in 2007 by President George W. Bush and implemented in 2012. Under the terms of the deal, about 95 percent of the goods traded between the two countries are imported tariff-free. Among other things, that deal put an end to high South Korean tariffs on American cars and light trucks, which has boosted American exports and U.S. auto manufacturing jobs.
Yaron Brook talks with Scott Lincicome about trade and protectionism.
Wall Street Journal columnist Sadanand Dhume decries the destructive ideology of Zohran Mamdani. A slice:
Start with rent control, which Swedish economist Assar Lindbeck called “the most efficient technique presently known to destroy a city—except for bombing.” India’s first rent-control laws were introduced during colonial rule. After independence, they became more draconian. In Bombay and Calcutta, landlords were forbidden to raise rents. Tenants could squat on property and pass it on to their heirs. Indian cities, once among the most advanced in the East, became known worldwide for squalor.
Mr. Mamdani opposes the rich. “I don’t think we should have billionaires,” he told Kristen Welker on NBC’s “Meet the Press.” Margaret Thatcher famously remarked that socialist governments “always run out of other people’s money.” India learned this the hard way. Under Prime Minister Indira Gandhi, who held office for most of the mid-1960s through the mid-1980s, the highest marginal rate of income tax reached 97.5%. High taxes coupled with reckless government spending spawned a vast underground economy and pushed talented Indians to emigrate. Facing an economic crisis in 1991, India had to turn to the International Monetary Fund for a bailout.
The parallels with socialist-era India don’t end there. Government-run grocery stores? Been there, done that. Government-built housing units? Their boxy contours mar urban India.
Mike Munger and Russ Roberts talk about capitalism.
And Kevin Gentry talks with Jim Piereson about how philanthropy helped build support for capitalism.
… is from page 320 of Thomas Sowell’s 2002 collection, Controversial Essays:
People who oppose school vouchers say that we should improve the public schools instead – but they never specify any time limit. Are we to continue through all eternity to pour more and more billions of dollars down a bottomless pit, without regard to whether or not any improvement results and without ever considering any alternatives?
DBx: Apologists for government K-12 “education” reveal through their actions that their answer to Sowell’s question is a resounding “Yes!”
Donald Trump – in character, words, and actions – is an exemplar of the business person that socialists and progressives assume dominates market economies. If Bernie Sanders or Barbara Streisand were to make a movie about a successful businessman, the chief character would be indistinguishable from Donald Trump.
Yet, of course, socialists and progressives are utterly mistaken about the market economy and the business people who play key roles in it. The vast majority of business people in market economies understand that the economy is not zero-sum; they are decent and honest; they realize that their potential gains are greater the greater are the gains they offer to others. Unlike Trump, they resist allowing their egos to override their good business judgment. They do not childishly take offense and take care not to give it. They do not treat those with whom they engage commercially as marks or as enemies. They know that value is best and longer-lasting when it is created by mutual agreement rather than extracted through the “art of the deal.” They are, in short, very much the opposite of what AOC, Sanders, Elizabeth Warren, or some talking head on MSNBC assume them to be. But Trump, unfortunately, confirms their ridiculous stereotype.
The Trump Administration is hyping a trade deal this week with Vietnam that could open that market to more U.S. exports. But it will increase costs for Americans as the current 10% tariff on goods from Vietnam—namely apparel and electronics—increases to 20% and to 40% for “trans-shipments” that originated in China and are exported to the U.S.
There’s still no trade deal with Europe or Japan, and this week Mr. Trump threatened to raise tariffs on Japan to “30%, 35%, or whatever the number is that we determine.”
Increasing tariffs won’t encourage the Federal Reserve to cut rates. Mr. Trump blames Fed Chair Jerome Powell for the slowing economy, but the problem isn’t the cost or availability of money. The 200 basis point cut that Mr. Trump wants is more likely to lead to more inflation and a surge in bond yields that will increase U.S. borrowing costs.
Wall Street Journal columnist Allysia Finley decries progressives’ paucity agenda. A slice:
Not that long ago, the “abundance” agenda was all the rage among liberal elites. Rather than wage class warfare, they called for easing regulations to boost the supply of housing, energy, jobs and more.
Then along came democratic socialist Zohran Mamdani, who won the New York City Democratic mayoral primary on a paucity platform that calls for higher taxes on the rich, greater income redistribution, and expanding government control over private business—or, as he put it in 2021, “seizing the means of production.”
Despite the tension between the two camps, both believe government should re-engineer the economy and society to their desired liberal ends. They simply differ in their methods. One favors government command and control like Mr. Mamdani’s proposed rent freeze. The other prefers a gentler form of government coercion.
Mary Anastasia O’Grady warns of “the lure of comrade Mamdani.” A slice:
As he led a guerrilla war to overthrow dictator Fulgencio Bastista in 1958, Fidel Castro promised Cubans that he was staunchly anticommunist and pro-free-speech. Once Batista was gone, Castro said Cuba would hold elections. Argentina’s Juan Perón wasn’t much different. Before he was first elected in 1946, the strongman said democracy must “serve the people.” As a candidate for president of Venezuela in 1998, Hugo Chávez framed himself as democrat.
All three socialists lied. They were extremists all along. The lesson is that communists and fascists, whom F.A. Hayek called members of “rival socialist factions,” will say anything to get into power and do anything to stay there.
This is something to think about as Zohran Mamdani, the Democratic Party’s socialist candidate for mayor of New York, poses as the morally superior candidate who will respect differences and protect rights. His radical utterances say otherwise and ought to frighten the pants off New Yorkers. Once in office, with an equally extreme City Council, it won’t be easy to stop him from doing grave damage to the place some of us call home.
Before Castro’s communist revolution, Cuba had the fifth-highest per capita income in the Western Hemisphere, where it ranked third in life expectancy. Its literacy rate of 76% was the fourth highest in Latin America.
In the 1950s, according to a 2005 PBS documentary, “Cuba ranked 11th in the world in the number of doctors per capita. Many private clinics and hospitals provided services for the poor. Cuba’s income distribution compared favorably with that of other Latin American societies.”
Today the island has dire shortages of food, medicine, housing and doctors, crumbling hospitals, recurring blackouts and a shrinking population.
Stefan Bartl celebrates “the merchant republic: America at 249.” A slice:
Today, the US economy represents nearly one-quarter of global GDP, despite being home to just five percent of the world’s population. Its GDP per capita ($83,000), is double that of the European Union ($41,000) and far surpassing Russia ($15,000) and China with ($13,000), a testament not just to scale, but to productivity, innovation, and dynamism.
As the Institute of Economic Affairs recently highlighted, even Mississippi, the poorest US state, has a per-capita GDP that now exceeds that of the United Kingdom and rivals France. In the words of IEA’s director Douglas Carswell, “The poorest state in America currently has a higher per capita GDP than Britain. And we’re about to overtake Germany in per capita GDP growth terms this year.”
It’s worth remembering what made America exceptional. This system attracted people who wanted more, gave them room to discover and create, and protected their right to do so. In other words, immigration, innovation, and institutions each made America a powerhouse.
“Freedom of speech is worth celebrating, as Europe ramps up prosecution of ‘hate speech’.”
Americans have been growing richer since the end of the 19th century and now enjoy levels of abundance and opportunity far greater than 50 years ago, and utterly unimaginable 150 years ago. The typical American can buy any fruit or vegetable in the dead of winter for a relatively small share of his or her wages, can own a wireless communications device with access to virtually unlimited information, and can enjoy more transportation options, a cleaner environment, more years of education, more leisure choices, and better long-term health than at any point in history. But all these benefits did not simply materialize, and they will not remain in such abundance if we fail to nurture the combination of knowledge, effort, and cooperation that enables their production.
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