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Among the many wonderful features of free markets is what my former Mercatus Center colleague Adam Thierer calls “permissionless innovation.” “Permissionless innovation” is the freedom of people spending their own money and time to experiment with producing new products, and new ways of producing existing products, combined with the freedom of people as buyers (also spending their own money and time) to choose which of these experiments to support and which not to support. Creativity being what it is, the outcomes cannot be predicted.

It’s beautiful, as such innovation is a peaceful means of promoting prosperity for the masses.

So I applaud this market experiment with a, shall we say, unusual kind of leisure spot.

But the experiment is failing. And yet some people – ignorant of the foundation, working, and benefits of free markets – are unjustly criticizing the owners of this experiment for trying to salvage it.

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Pete Earle, writing in the Wall Street Journal, tells the tale of Thomas Edison warning about the dangers of alternating-current electricity delivery. A slice:

Thomas Edison published an article in the North American Review in November 1889 with the headline “The Dangers of Electric Lighting.”

New York’s hurried electrification had filled its streets with overhead wires, uneven installation and high-voltage lines that could kill people. Safety had become a concern, and Edison argued that high-tension currents, particularly alternating current, posed an unacceptable danger.

AC also happened to be a threat to Edison’s business. Edison built his system on direct current. His competitor, George Westinghouse, was developing AC, which could transmit electricity economically over much greater distances than Edison’s low-voltage DC. Edison’s system required generating capacity relatively close to customers. AC could be stepped up for transmission and stepped down near where it was used. Amid the safety debate, the economics of electricity generation and distribution were at stake.

Edison favored restrictions that would have made high-voltage AC harder to deploy. His anti-AC publicity campaign worked to convince the public that AC was more deadly than DC. Electrical engineer Harold P. Brown, with assistance from Edison and his company, electrocuted animals using AC in public demonstrations. The use of an AC system for the first electric chair—which Edison actively encouraged—hardly hurt the message. In response to public concern, Westinghouse argued that the risks of his method could be managed through better engineering and safety precautions. He succeeded, and AC became the dominant U.S. electrical standard by the end of the 19th century.

It is easy in retrospect to turn Edison into a rent-seeking villain protecting his investment in DC. The history is less convenient. People really were being killed, and Edison seems to have believed the danger was severe. But the sincerity of his concern says little about the merits of the rules he wanted.

This is where public choice theory earns its keep. Rent-seeking doesn’t require corrupt businessmen scheming with corrupt politicians. Edison could have sincerely feared high-voltage electricity and preferred regulations that impaired Westinghouse. Safety and self-interest didn’t have to compete for space in his head.

The spectacle of artificial-intelligence executives traveling to Washington to warn government about the technology they’re building belongs to the same tradition as the so-called war of the currents.

The Editorial Board of the Washington Post wisely warns against a ban on diesel exports. A slice:

Disrupting the supply chain would risk increasing diesel prices in states with key Senate races, especially Maine and Alaska. The American Action Forum, a right-leaning think tank, notes that due to “pipeline bottlenecks” and insufficient domestic infrastructure, regions like Alaska rely on imports to top up their supplies. New England also “relies heavily on diesel imports” from Canada. Cutting U.S. exports would raise the global market price, which would be passed along to Mainers buying it from America’s northern neighbor.

Government interventions in energy markets never end well. Trump may not be thinking about 2029, but restricting diesel exports would give environmentalists a precedent to justify pushing the next Democratic president to do the same as a means of reducing emissions. Any perceived risk that government will block exports when it becomes politically convenient to do so would discourage capital investment in domestic refining capacity, which is desperately needed to achieve U.S. energy independence.
These are basic economic lessons that the U.S. should not need to learn anew. Trade makes us richer. Tariffs make us poorer. Price controls lead to shortages and, eventually, higher prices. Please, not another lesson.

Also writing insightfully about the infantile proposal to lower diesel prices by banning diesel exports is Eric Boehm.

Steven Greenhut explains what shouldn’t – but, alas, what today nevertheless does – need explaining: “Cutting off trade with Europe would not make America wealthier.” A slice:

Tariffs and other restrictions on trade do not, as Trump said, create a “tremendous good” for Americans. Quite the reverse. Think of all the wonderful benefits we get from open trade—the vast array of fresh fruits and vegetables we can now enjoy in January, the selection of products of every type from every corner of the world.

“The U.S. ran a $197 billion goods deficit with Mexico in 2025, but Mexico also supplies critical vehicles, machinery, electronics and agricultural goods to U.S. businesses and consumers,” explains FreightWaves, a transportation trade publication. If every one of those items had to be manufactured in the United States, it would take years to undo disrupted supply chains and lead to dramatic increases in consumer costs. Haven’t we had enough inflation?

The Financial Times reports this: “”Getting rid of de minimis was intended to clobber Temu, but it’s inflicted collateral damage on many thousands of [US small businesses].” (HT Scott Lincicome)

GMU Econ alum Julia Cartwright, writing in the Washington Post about a new book by James Galbraith, wisely warns against reviving John Kenneth Galbraith’s notion of having prices set by government. A slice:

But the real case for markets rests on a problem he never confronts: local knowledge. Galbraith writes that when profit becomes “the accepted criterion of success,” the result is “pathological.” But prices — and profits — coordinate information about scarcities, technologies and wants, information that no central authority could assemble.

His alternative to markets is a strategic administrative state because “systems need managers.” How the managers are to know what to do raises the classic knowledge and calculation problems associated with economists Ludwig von Mises and Friedrich A. Hayek.

Hayek argued that the information needed to coordinate an economy is dispersed among many people and communicated through prices. His name appears nowhere in this book. Neither does the question of whether or not it is possible to incentivize the managers to achieve Galbraith’s stated economic goals. For a man who opens by declaring his profession a fraud, Galbraith is curiously silent about one of the most important bodies of literature challenging the sort of planning he proposes.

George Will urges the U.S. Supreme Court to undo a wrong wrought by the Indian Child Welfare Act of 1978. A slice:

The ICWA has repeatedly been implemented not to serve “the best interest of the child” — the national standard regarding non-Indian children — but to serve tribal interests determined solely by the tribes. Hence a 6-year-old girl was taken from her adoptive family — the only family she had ever known — because a great-great-great-great-grandparent was Choctaw.

A California court has said that “children are not dogwood trees, to be uprooted, replanted, then replanted again.” But they often are so treated in obeisance to the ICWA’s race-based binary of “Indian” and “non-Indian” children. The former, subject to tribal jurisdictions less protective than states’ laws, are often more abused, and for longer.

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… is from page 181 of F.A. Hayek’s 1950 essay “Economics,” written for Chambers’s Encyclopaedia, as this essay is reprinted as chapter 11 in Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by the late Paul Lewis), of The Collected Works of F.A. Hayek:

While economics as a theoretical science is necessarily neutral between the ultimate goals of economic policy, there is much that it has to say about the appropriateness of different courses of action once the ends to be achieved are given.

DBx: The economist shares the stated goal of the ‘community activist’ to raise the take-home pay of low-paid workers. The economist, however, opposes – as a means to this end – a government-imposed minimum wage. The economist opposes the minimum wage not because she’s a meany or a baddie, or because she is ‘on the side’ of business rather than ‘on the side’ of labor. None of those accusations is true. The economist opposes the minimum wage because she understands that, while it will raise the pay of some low-paid workers, it will lower the pay of other low-paid workers and otherwise restrict these workers’ employment opportunities.

Disagreeing with someone over means is not disagreement with that someone over ends.

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Here’s a letter to a long-time friend.

R__:

It’s always good to hear from you.

In response to my letter pointing out that Trump contradicts himself in wishing both to reduce U.S. trade deficits and to ban diesel exports, you write “I don’t agree with Trump’s protectionism any more than you do, but this contradiction theoretically has a simple explanation: he wants people to buy our stuff, except the stuff we need for ourselves.”

Trump would undoubtedly offer such an explanation, but it would fail.

Consider his (bananas) complaint about Americans’ imports of bananas raising U.S. trade deficits: “If we buy $2 billion worth of bananas from Brazil, we’re actually losing $2 billion. So if we stop eating bananas, we actually save $2 billion.” This complaint reveals Trump’s embrace of the mercantilist fallacy that wealth is money rather than access to goods and services that money buys. And so by advocating that we Americans be prevented from exporting diesel, Trump advocates – by his lights – that we Americans be prevented from enriching ourselves with the money we’d earn on exports of diesel.

Trump’s ‘philosophy’ of trade is that we ‘lose’ insofar as we import (because imports are paid for with money) and ‘win’ insofar as we export (because exports bring in money). But because this ‘philosophy’ is absurd, it inevitably races head-long into hard realities that even he must acknowledge – such as that truckers run their rigs on diesel, not dollars.

What your theoretical defense of Trump amounts to is the claim that Trump gets to pick and choose which goods (e.g., diesel) are worth to Americans more than the dollars at which they sell, and which goods (e.g., bananas) are worth to Americans less than the dollars at which they sell. But surely the people in the best position to make these assessments are not politicians and bureaucrats but, rather, ordinary Americans, who are spending their own money.

Subscribers to a political movement that prides itself on refusing to be bullied by arrogant elites should reject such arrogance.

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

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Here’s a letter to the Wall Street Journal.

Editor:

Reporting on the GOP’s call to ban diesel exports, you quote President Trump: “I’ve said let’s not send out the diesel. We make a lot of diesel” (“Republicans Are Running on Empty,” September 23).

Mr. Trump is deeply confused. He incessantly accuses foreigners of “ripping us off” by buying too few of our exports. Indeed, he asserts that foreigners’ failure to buy as many of our exports as we buy of theirs constitutes a “national emergency” that warrants sweeping tariffs. Yet now he supports banning diesel exports, thereby – according to his own lights – aggravating the very “national emergency” that he insists justifies his tariffs.

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

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David Henderson shares a fond memory of the late Sen. John Kyl (R-AZ).

David Bahnsen busts the myth that the MAGA right is filled with principled libertarians.

Wall Street Journal columnist Gerard Baker, I’m sure, speaks for many sensible people. A slice:

I’ve never been a victim of Trump derangement syndrome. Yes, I’ve found much that is repellent in the man’s character and rhetoric. But whatever his shortcomings, it seemed clear to me by 2016 that the country had, through years of bipartisan failure and the transformative effects of a malign cultural revolution, reached a point where radical change was needed. I was open to the idea that jarring disruption of the political order—perhaps necessarily delivered by a jarring figure—might be the only way to reassert the sovereignty of a disenfranchised people, restore the primacy of American interests against globalized progressivism, and reclaim our traditional civilizational values.

Even after Jan. 6, 2021, removed any doubt about the threat Donald Trump might pose to our constitutional norms and rules, I thought the institutions of the U.S. would be strong enough (as they were then) to constrain his worst instincts and intentions. And by November 2024, after four years of a Democratic presidency had revived the prospect of a restoration of the progressive left’s crippling hegemony, the risks he posed seemed smaller than theirs.

But I am sorry to have to report that I have now self-diagnosed with a virulent form of TDS. Not one malady but three: as my condition has steadily progressed over the last year from Trump disappointment syndrome through Trump disillusionment syndrome to a full-blown case of Trump dismay syndrome.

Dismay seems to me the only natural response to the way the Republican Party has blown one of the great opportunities in political history in less than the time it takes to graduate from community college. When Mr. Trump won in 2024, becoming only the second Republican since 1988 to receive a plurality of the popular vote, he had a real chance to establish a new governing order, perhaps even to break the generation-long deadlock in partisanship.

He didn’t have to do anything especially risky. The opportunity was to use his victory—and a Republican Congress—to do things that would command significant majorities among Americans: take control of the border, alleviate the pressure on working Americans from rising prices, roll back the woke authoritarian takeover of governing and cultural institutions, and keep the U.S. military out of costly, ineffective foreign interventions so we could focus on confronting with our broad network of allies the great strategic threats of the next 20 years.

How’m I doin’? as another controversial, larger than life New Yorker used to ask.

Thanks to a self-indulgent tariff fixation based on a profound misunderstanding of international economics, an insouciance about public finances that has widened the deficit, and a reckless military adventure that has choked off global energy supplies, inflation and interest rates are higher than they were in November 2024. Instead of a hands-off approach to the economy that would have generated noninflationary growth owing to the AI investment boom, we now have gasoline prices 30% higher than they were two years ago, diesel 60% higher, and the average mortgage rate nearly a percentage point higher, adding more than $2,000 a year to a typical home buyer’s interest cost.

The war that has done so much harm to Americans’ finances is doing far more harm to our military capacity and our strategic interests. The president has alienated everyone in the world who could be helpful to us (perhaps excepting Israel) and emboldened and even embraced every country in the world that threatens us: China, Russia, North Korea.

A signal achievement has been getting control of the border and removing some of the people who have no legal right to be here. But even with this proper and overwhelmingly popular policy, the administration has managed to harm the country and the GOP’s standing. The unnecessarily cruel and indiscriminate approach has caught many in its dragnet who shouldn’t be treated that way and is fundamentally un-American. The political effect has been to devastate support for the GOP among Hispanics, more than reversing the gains Mr. Trump had made with the fastest-growing ethnic population in the country.

Further dismaying is the caesarism of the past two years: the grotesque self-enrichment, the self-satisfying prosecutorial pursuit of political enemies, the endless projects of self-grandiosity—the ballroom, the Kennedy Center and the Memorial Arch. Not to mention the buffoonish symbolic acts that substitute for actual thought and policy: the Gulf of America, Lake America, New America, the 51st state.

When presidencies fail, when political parties’ fortunes collapse, it’s often the result of circumstances and decisions beyond their control: an unforeseen global crisis, a recession caused by exogenous economic forces, the sentiment that it’s time for a change after a relatively successful period in office.

None of that applies to the looming Republican calamity. Instead, it will be the result of presidential hubris, vanity, recklessness and the wider party’s abdication of accountability. Instead of seizing an unrivaled opportunity to shift America off the path of progressive endangerment, the GOP risks handing it back to the Democrats and their own obsessions.

The Editorial Board of the Wall Street Journal is correct about today’s GOP: “The party’s panicky rush to ban diesel exports reveals their electoral trouble.” A slice:

A diesel self-embargo is a bad idea for many of the same reason Republicans criticized Joe Biden’s “pause” on new liquefied natural gas exports. The U.S. is the world’s largest exporter of diesel, selling about 1.5 million barrels abroad a day, mostly from the Gulf Coast. Proponents of a ban say this would increase U.S. supply and thus push down prices.

But there’s not enough pipeline capacity to move the diesel in the Gulf Coast that is normally exported to the Northeast and California, or for that matter to significantly boost flows to the Midwest. A ban on exports would increase global diesel prices, which would smack Americans living in coastal areas that rely on imports.

Diesel would pile up in Gulf Coast storage, prompting refineries to reduce run rates. That would lower the production of gasoline and jet fuel, whose prices would rise. Limiting exports would also signal the U.S. is an unreliable trade partner and might prompt allies to diversify diesel supply, perhaps by buying more from China. If Democrats win the White House in 2028, they’ll use GOP support for a diesel export ban to justify reinstating the Biden LNG embargo.

Americans are feeling the squeeze of higher fuel prices, and the pain is especially acute for farmers who use diesel to power equipment. Diesel prices have surged amid supply disruptions from the Iran war, and Russia’s new ban on diesel exports.

But if Republicans want to reduce diesel prices fast, they’d suspend or scrap the renewable fuel standard (aka ethanol mandate). The biofuel blending requirements add between 30 and 40 cents to every gallon of diesel. Refineries have to blend increasing amounts of biofuels into products or buy regulatory credits to comply with quotas.

The Editorial Board of the Washington Post decries the arrogance and economic ignorance of Sen. Elizabeth Warren (D-MA). A slice:

Sen. Elizabeth Warren (D-Massachusetts) doesn’t think food from some restaurant chains tastes as good as it used to. To address that, she wants to restrict the rights of private equity firms to buy restaurant chains. The senator is forgetting the check that already exists: consumer sovereignty.

Jacob Sullum rightly explains that “Trump’s banishment of disfavored news outlets reflects his contempt for freedom of the press.”

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… is from page 21 of John Lott’s 2007 book, Freedomnomics:

Although consumers may feel that they’re being ripped off when they see gas prices spike after a hurricane or realize that drugs are being sold far cheaper in foreign countries, there are in fact very subtle market mechanisms at play that increase supplies and eradicate market distortions. In these situations, the free market is working, and it’s ultimately working far more efficiently than any government-mandated controls would.

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… but it cannot be pointed out too often, given the blind reverence that so many people in America have for the calamity of government K-12 “education”: Nikole Hannah-Jones – curator of the fantasy 1619 Project – admits that “public schools” are worse than private schools. She makes this admission when attempting to justify her decision to sacrifice her own child’s welfare by sending that child to a “public school.” As reported by the Wall Street Journal‘s Matthew Hennessey, the fantasy writer explains that she and her husband, as she put it, “felt an obligation to make educational decisions based on the collective good and not just our individual advantage.”

Government K-12 “education” is such a horrible system that submitting one’s children to it is sacrificial.

It’s notable that, as Neal McCluskey reports, “in 47 States and DC, average private school tuition is below public school per-pupil.”

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For alerting me to this short clip, I thank Greg Rehmke.