… is from page 251 of the American jurist James Coolidge Carter’s profound, yet unfortunately neglected, (posthumous) 1907 book, Law: Its Origin, Growth and Function:
All the advances in civilization and morality which society has thus far made are due to the cultivation and development of those moral sympathies which find their activity in co-operation and mutual aid.
This piece by Benn Steil – who is usually great – is disappointing.
Editor, Project Syndicate
Editor:
Insisting that “free trade can’t bring peace” (Nov. 14), the usually astute Benn Steil demands too much of the doux commerce thesis and, thus, unjustly dismisses it. Contrary to Mr. Steil’s suggestion, the doux commerce thesis is not that free trade is sufficient to guarantee peace. Instead, this thesis is that free trade makes peace more likely – no small achievement.
It’s true, of course, that free trade also requires peace. It’s true, too, that Britain in the 19th century, and America after WWII, did much to keep shipping lanes open, as well as to encourage international cooperation that lowered tariffs and reduced the frequency of other beggar-thy-neighbor policies. But it’s untrue that the causality runs exclusively, or even chiefly, from peace to free trade.
Empirical evidence that free trade promotes peace is abundant, yet Mr. Steil ignored this evidence. He shouldn’t have. Walker Wright, in his contribution to the new Economic Freedom of the World: 2025 Annual Report summarizes much of this empirical research as well as provides many references to it. (See also here.) The doux commerce thesis, properly understood, is alive, well, and valid.
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
It was once a Republican article of faith—mostly because it is true—that government is the cause of most problems. Donald Trump’s GOP is finding a more politically expedient bogeyman. Welcome to the age of the Bernie Sanders-JD Vance coalition against Big Business. Say goodbye to prosperity.
A case in point: The president this past weekend floated a solid proposal. Rather than continue to dump government subsidies into the government-created and government-micromanaged system called ObamaCare—which is failing because of, well, government—why not hand that cash to individual Americans, giving them more choice over their care? “Republicans should give money DIRECTLY to your personal HEALTH SAVINGS ACCOUNTS,” Mr. Trump wrote on Truth Social.
It’s a smart concept, one that moves toward a free-market system in which consumers control dollars in ways that produce more transparent, portable, cost-effective and results-oriented medicine. Only the president in the same post undermined the premise by asserting that the reason to adopt his plan was to get revenge on the Democrats’ buddies in the “insurance industry,” which is “making a ‘killing’ ” while the “little guy” suffers. That is, move toward a free-market system so as to stick it to business. Work through that logic.
And so it goes. Vice President Vance regularizes the slur “Big Pharma,” trashing on drugmakers with a vitriol to make any socialist proud. The president orders the Justice Department to investigate the “Meat Packing Companies who are driving up the price of Beef through Illicit Collusion, Price Fixing, and Price Manipulation”—a replica of Joe Biden’s accusations. Missouri Sen. Josh Hawley introduces the End Airline Extortion Act—a new low in shooting fish in a barrel—making common cause with Elizabeth Warren. The only “Big” the GOP can tolerate these days are their own not-so-beautiful bills.
The most charitable excuse for this is economic ignorance. And it’s true that an alarming number of congressional members—and their staffers—these days think the supply side is a band from the ’90s. Then again, our onetime venture-capitalist veep suggests something more cynical at play. Trashing on wealth creators is an easy way to stoke the furies of the “forgotten man” voter the GOP courts. And it’s easier (read lazier) than explaining markets, intellectual property, prices—or the central and inevitable problem of government policy failure.
…..
Corporate America hasn’t bathed itself in distinction in recent decades, though its sin is hardly an excess of capitalist spirits. The exact opposite. Its failure has been making itself a government extension, working to capture its share of corporate welfare, to slice the regulatory pie to its benefit, to gain “woke” plaudits—rather than to fight interference. Let’s indulge the Biden electric-vehicle fantasy! Let’s work with the feds to censor Covid-19 debate! Let’s ask for subsidies for everything! Let’s roll over to European socialist price controls on drugs! It’s a bit much to ask CYA politicians to stick up for a business world that uniformly fails to stick up for itself.
Yet the Republicans pandering to antibusiness “populism” are already suffering the political and economic consequences. The GOP’s summer reconciliation bill was its best shot at injecting life into an economy still hampered by Biden-era blowouts and now tariff uncertainty. And yes, the party did waylay what would have been a devastating tax hike.
But it completely whelped on the policies necessary to spur growth quickly. Why? Because the panderers forbade all the pro-growth provisions—reducing top marginal rates, repealing the corporate alternative minimum tax, reducing the capital-gains tax—since those might help “the wealthy.” The party also (again) failed to reduce in any meaningful way the biggest drag on the economy—government spending. The bill’s money instead went to gimmicks to win votes, like tax exclusions for tips and overtime pay.
Scott Lincicome explains that “Trump’s China deal is a major indictment of U.S. trade policy.” Two slices:
Other terms of the deal are an expressly temporary return to the summer 2025 status quo rather than a grand resolution of the many issues that have long plagued the bilateral relationship. A one-year suspension of rare-earth restrictions, for example, doesn’t mean much when—thanks to various regulatory restrictions and permitting bottlenecks—it takes years for mining and processing facilities to get up and running in the United States (if you can do it at all). Neither will China be making any systemic reforms to its export-dependent economy, nor to trade or human rights issues that have long aggravated Washington and other U.S. trading partners. So, the best we can say about this deal is that—as Trump himself has acknowledged—it’s a one-year punt that we’ll do all over again next year. That approach might provide sufficient relief for stock traders and certain U.S. importers with orders already placed, but it’ll do little to nothing to improve the uncertainty plaguing U.S. trade policy and, as the latest ISM manufacturing survey shows, the operations of many American manufacturers today.
…..
Surely, there are other tariffs the U.S. could impose to offset some of these new Chinese advantages. For now, however, the combination of lower China tariffs and higher everyone else tariffs has shifted U.S. trade policy away from China hawkishness and toward global isolationism writ large—even if it benefits Beijing in the process. Other terms of the new bilateral deal, such as the United States’ unprecedented reversal of security-related export controls, also benefit China in surprising ways and indicate that Beijing may have more leverage today than the Trump administration is willing to admit.
This highlights the final problem that the China deal reveals: Recent U.S. isolationism has helped tilt the global balance of power toward China and away from the United States. As we’ve discussed repeatedly, the United States is a huge market but still a relatively small share of global trade, thus limiting Washington’s ability to force exporters into eating U.S. tariffs or to coerce the Chinese government into doing its bidding on trade or anything else. One obvious way to counter the latter issue was for the United States to create a voluntary coalition of like-minded countries freely trading with each other—building not only diplomatic goodwill but also a collective industrial base that outmatches even China’s behemoth and decreases dependence on the Chinese economy and exports.
Tim Worstall counsels: “Don’t panic about rare earths.” A slice:
Do not allow yourself to get confused by China having 40 per cent or whatever of rare earth reserves. Reserves are something made by humans — deposits are what God’s Friday afternoon engineer strew about the place. And rare earths are neither rare nor earths, and they are nearly everywhere. The biggest restriction on being able to process them is the light radioactivity the easiest ores (so easy they are a waste product of other industrial processes — monazite say) contain. If we had rational and sensible rules about light radioactivity — alas, we don’t — then that end of the process would already be done. Passing Marco Rubio’s Thorium Act would, for example, make Florida’s phosphate gypsum stacks available and they have more rare earths in them than several sticks could be shaken at.
Merrill Matthews reflects on last week’s oral arguments before the U.S. Supreme Court on Trump’s IEEPA tariffs. Two slices:
[Solicitor General John] Sauer may have done the best he could putting lipstick on the pig that is Trump’s tariffs — but it’s still a pig.
The most ludicrous aspect of Sauer’s Supreme Court argument was his claim that federal revenue from Trump’s tariffs was “incidental.” Sauer claimed Trump was just exercising his constitutional power to manage foreign policy, not raising federal revenue. According to Sauer, “These are regulatory tariffs, they are not revenue-raising tariffs. The fact that they raise revenue is only incidental.”
The problem with Sauer’s claim is that the president and his advisors have repeatedly cited increased federal revenue as one of the reasons for imposing tariffs.
Take, for example, Trump’s inaugural address on Jan. 20. In the speech Trump said, “I will immediately begin the overhaul of our trade system to protect American workers and families. Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”
Does that sound like federal revenue from tariffs was a byproduct of Trump’s plan?
…..
After striking down many of Trump’s current tariffs, the Supreme Court could deliver a broader ruling, outlining what powers the president does and does not have with respect to imposing tariffs. That would be the best way to resolve the issue so that the economy and trade policy can stabilize and taxpayers can be spared paying ever more tariffs.
The 2025 food basket is a perfect metaphor for the broader economy. The president insists that “every price is down,” but that’s incorrect. While chicken breasts cost a bit less than a year ago, eggs, bacon, orange juice, and beef are all more expensive. Trump’s policies didn’t trigger these price hikes, but they sure do perpetuate them.
Trump is also wrong to claim that “we’re at a perfect number” on inflation, which no longer dominates headlines. But it’s still affecting people. Since early 2021, average hourly earnings are up about 21.8 percent. Consumer prices have risen faster, with grocery prices up nearly 30 percent since 2020.
When Trump officials say inflation is down, they mean that the latest 3 percent year-over-year Consumer Price Index reading is nothing like the 9.1 percent experienced during the Biden years. They ignore that it’s up from 2.3 percent just this past spring.
At steady 3 percent inflation, a dollar is worth only 74 cents after 10 years.
Kate Andrews points out a harsh truth about the dangers of state-sponsored media. Here’s her wise conclusion:
No single media organization can claim to be the arbiter of truth. Competition makes us all better. American media may be bitterly divided, but hearing things you “do not want to hear” sometimes is, as Orwell identified, far better than the alternative.
… is from page viii of Brink Lindsey’s and Dan Ikenson’s superb 2003 book, Antidumping Exposed: The Devilish Details of Unfair Trade Laws:
Antidumping laws, contrary to the claims of their supporters, do not ensure a level playing field. Instead, they penalize foreign producers for engaging in commercial practices that are perfectly legal and unexceptional when engaged in by domestic companies. Such discrimination against foreign firms creates an unlevel playing field for imports. In other words, antidumping laws discriminate against imports, and that is the essence of protectionism.
He [Trump] then criticized his Administration’s immigration raid on a Hyundai-LG Energy Solution battery plant in Georgia when hundreds of South Korean nationals were detained. “They had like 500 or 600 people, early stages to make batteries and to teach people how to do it,” he said. Immigration agents “wanted them to get out of the country. You’re going to need” them.
He’s right. Nearly half of the Fortune 500 companies, including Nvidia, Google and Tesla, were founded by immigrants or their children. A quarter of billion-dollar U.S. startups were founded by an immigrant who arrived as an international student. These are often the people who remain in the U.S. after graduation on H-1B visas. Mr. Trump seems to recognize it is self-destructive to train these students and then send them back to India or China instead of building firms here.
***
As for Mr. Vance, he replied to an immigration question at a Turning Point USA event last month this way: “My honest view is that, right now, America, thanks in part to the Biden border invasion, but also thanks in part to a lot of bad immigration policy, right now, we have let in too many immigrants.” He also said legal immigrants “are undercutting the wages of American workers.”On wages, Mr. Vance is repeating the lump of labor fallacy that American and foreign workers compete for a limited number of jobs. Studies have generally found that immigration raises average wages and employment of native-born workers, in part because their work is complementary. Economists from the University of California, Davis, last year calculated that immigrants increased wages for less educated native workers by 1.7% to 2.6% between 2000 and 2019.
…..
Think of the Irish in the 19th century, Italians in the early 20th, or multiple Asian ethnicities today. The children of these immigrants learn English, attend American schools and most of the time absorb U.S. values. They certainly work hard. More than a quarter of Hispanics are marrying non-Hispanics.
The worst damage to our “common community” owes to the identity politics pressed by the political left, which includes hostility to America’s founding principles. That worldview preaches racial grievance and ethnic division, a la the New York Times 1619 project. The best response to that isn’t an identity politics of the right. It’s a reaffirmation of American principles that unites the country, as well as promoting economic growth and mobility to assure everyone has opportunity.
There are high-paying jobs that do not require a college degree. As of 2024, aircraft and avionics equipment mechanics and technicians have a median salary of $79,140 per year. Electrical power-line installers and repairers have a median salary of $92,560 per year. Elevator and escalator technicians have a median salary of $106,580 per year.
(Median salary means half the people in the group make more than that number, and half make less than that. Salary levels are influenced by the company, by experience, by location, by skill level, and in some cases, how well the employee can negotiate a higher salary. I know that after this is posted, someone on social media will say the above numbers are a lie because they know an elevator technician who makes much less than $106,000 per year. This also happens whenever I mention the national average price for a gallon of gas.)
Commercial pilots need a high school diploma, FAA certifications, and flight training, which can cost $55,000 to $100,000. But that investment in yourself can pay off; in 2024, the median salary of a commercial pilot was $198,100 per year.
If you can get an associate’s degree, you can work in some jobs in medicine and health care — MRI technologists, sonographers, dental hygienists, nuclear medicine technologists, and radiation therapists have median salaries ranging from $88,180 to $101,990 in 2024.
Bryan Riley tweets these data that reveal that a significant portion of U.S. imports of manufactured goods are inputs used by manufacturers in America or otherwise complement U.S. manufacturing activities: (HT Scott Lincicome)
Ted Zachariadis’s letter in today’s Wall Street Journal is spot-on:
After last week’s elections, Jim LeMunyon writes that Republicans need to wake up and smell the coffee (Letters, Nov. 10). Good idea, but with the effect tariffs are having on the price of java, they might not be able to afford it.
Will Marshall explains that “reindustrialization is just central planning, MAGA-style.” (HT Arnold Kling) A slice:
Trump believes free trade agreements and globalization eviscerated U.S. manufacturing, studding the landscape with shuttered factories — “tombstones” as he put it in his bleak 2017 inaugural address.
In fact, U.S. manufacturing output has grown substantially since 1980. What has declined is factory employment and manufacturing’s share of GDP. That tracks the trend of deindustrialization and rising demand for services in all advanced countries, regardless of trade policies.
Nonetheless, the president is ripping up trade agreements and taxing imports from friends and foes alike, in hopes of generating lots more factory jobs. But building walls around our economy won’t change the fact that automation has severed the old relationship between increased industrial production and blue-collar job growth.
[Bill] Pulte simultaneously pitched the plan as a “big deal for consumers.” On this point, he’s not wrong—the policy is eerily reminiscent of those that precipitated the 2008 financial crisis; it socializes the risk and incentivizes lenders to issue loans to those who are more likely to default. Anthony Randazzo, former senior fellow at the Reason Foundation (the think tank that publishes this magazine), explains that, leading up to the Great Recession, Fannie Mae and Freddie Mac “decided to begin taking on riskier mortgages in order to grab a slice of the subprime mortgage market [because] they knew they had a government safety net to back them up.” Adding insult to injury, the Securities and Exchange Commission charged top executives of Fannie Mae and Freddie Mac with securities fraud for misleading investors about their subprime exposure.
We are convinced that increased protective duties would be a mistake. They would operate, in general, to increase the prices which domestic consumers would have to pay. By raising prices they would encourage concerns with higher costs to undertake production, thus compelling the consumer to subsidize waste and inefficiency in industry. At the same time they would force him to pay higher rates of profit to established firms which enjoyed lower production costs.
The administration keeps trying to have its tariff cake and eat it, too. At the Supreme Court last Wednesday, Solicitor General D. John Sauer said the tariffs are regulations, not taxes, and that the revenue they raise is only incidental. Days later, Trump was back to emphasizing how much revenue the tariffs are generating.
The president can claim all he wants that tariffs are paid by foreign countries and companies. But the receipts make clear that the bulk are paid by U.S. companies. Americans pay taxes on the goods they import, and the sums are significant. The Tax Policy Center calculates that federal revenue from tariffs will bring in $299 billion next year alone, and $2.5 trillion accumulatively between 2026 and 2035. In other words, even if rebates eventually come, they would do little to offset the biggest tax hike on American businesses in modern history.
…..
Trump wrote on social media, “People that are against Tariffs are FOOLS!” There is plenty of foolish thinking to call out, but it’s hard to ascribe much of it to critics of the administration’s erratic trade policy.
A SCOTUS ruling is expected by December 2025 or January 2026, but a firm judicial rebuke of executive overreach will not by itself restore predictability—much less the pre-Trump status quo. Remember that economists view economic policy uncertainty as toxic for investment. When firms cannot foresee the rules of the game, they postpone hiring, delay projects, and hoard cash instead of building for the future. And the Trump administration would almost certainly use alternative authorities to maintain negotiated tariff deals, keeping global partners guessing and domestic firms on edge. Indeed, one would guess all these backup plans are currently being readied, just in case.
Ben Bayer argues that “the idea that the president is due some deference to manage his sweeping global tariffs in the name of ‘foreign policy’ is a complete sham.” Here’s his conclusion:
If no delimited, intelligible principle governs the congressional delegation, the separation of powers is dissolved and the door is opened to autocratic authoritarian control of the economy. The real targets will not be alleged threats from abroad, but the liberties of American citizens at home.
Wall Street Journal columnist Jason Riley writes about the demise of the Heritage Foundation. Two slices:
In the 1960s, William F. Buckley famously shunned conspiracy-minded Birchers, to the lasting benefit of the conservative movement. The current effort to marginalize figures such as Tucker Carlson, Steve Bannon and Nick Fuentes is evidence that the political right is still capable of policing itself.
…..
According to Mr. [Tim] Chapman, Heritage consciously decided to alter its mission. It is becoming the “enforcer” of the party leadership. What the White House proposes, Heritage advocates, regardless of the policy’s merit or the organization’s past positions. The rationalization is that the country faces an existential crisis and the Trump movement is the only way to save it from the political left.
Mr. Chapman’s assessment may be correct. Unfortunately, too many people on the left and right now traffic in apocalyptic scenarios should their political opponents prevail. The reality is that the country remains divided, but democracy isn’t under mortal threat, as evidenced by the robust turnout in last week’s off-year elections.
GMU Econ alum Julia Cartwright offers wisdom about populism and constitutionalism. A slice:
The New Right has been politically potent because it has mastered populism’s simple moral drama. Divide the world into two antagonistic camps, the virtuous “people” and the corrupt “elite,” and then promise power as the instrument of justice. Because populism is a “thin-centered” ideology, it readily fuses with other commitments like nationalism, cultural conservatism, and industrial policy. The current flavor of populism has produced an elastic coalition that includes Midwest factory workers who feel displaced by globalization, voters suspicious of credentialed expertise, citizens frustrated by immigration disorder, and even some small-government conservatives who see the state as a temporary sword to cut through captured institutions. Many of the New Right’s current policies would have been familiar to the Left a decade ago: tariffs and industrial policy; fixation on the trade deficit as a national scoreboard; a growing willingness to police speech in the name of public morality or national cohesion; and an eagerness to bend independent institutions to executive will. This is a politically marketable package because it translates frustration into concrete action: use the state. The rhetoric is crisp, the villains are named, and the time horizon is now.
But this is precisely why rule by populist diktat is so dangerous when the subject is speech. Tariffs and subsidies waste resources, regrettably, but discretionary censorship degrades the constitutional order that makes wealth creation and civic peace possible in the first place. Whether it is pressuring agencies to “do something” about disfavored pundits, threatening to make offensive expression a criminal act, or floating schemes to subordinate independent economic stewards to presidential whim, the logic is the same: expand discretion and promise it will be used for the “right” ends. Nevertheless, powers created to punish enemies never remain in friendly hands. The next administration will inherit the enlarged toolkit and repurpose it. In game-theoretic terms, precedents are strategies over time; once you normalize ad-hoc exceptions to speech protections, you change the repeated game from rule-guided cooperation to tit-for-tat escalation. The country then spirals into a contest of retaliation and control rather than a society governed by predictable, general rules.
Classical liberalism approaches the matter of free speech through the lens of preserving institutions that protect individual rights and pluralism rather than maximizing immediate leverage. It is less concerned with who wields power today and more with designing constraints that minimize damage when power is inevitably misused tomorrow. Classical liberalism values free speech not because every utterance is virtuous, but because open contestation is the only mechanism that reliably disciplines error, exposes falsehood, and diffuses power. Its time horizon is long, its disposition humble about knowledge, and its focus fixed on the rules of the game, not the score of the current inning.
Human Progress tweets: (HT Scott Lincicome)
Neoliberalism made two major promises: It would put Western nations on a better economic track and turbocharge development in the third world.
On both counts, it delivered.
History’s gears are lubricated by gore. Witness America’s Revolutionary War, whose continuing reverberations have done more to improve the course of human events than any other event in history.
The war was fueled by crystalline ideas couched in elegant prose authored by members of the Colonial upper crust. But from 1777 on, most bleeding was done by “the poorest of the poor — jobless laborers and landless tenants, second and third sons without hope of an inheritance, debtors and British deserters, indentured servants and apprentices, felons hoping to win pardons.”
So says a new telling of America’s origin story, which is a tapestry of suffering, viciousness, selflessness and nobility. Beginning Sunday, in six two-hour episodes on PBS, “The American Revolution” will immerse viewers in an often bewildering, sometimes dismaying, but ultimately exhilarating documentary by Ken Burns, Sarah Botstein and David Schmidt.
… is from page 654 of the 1988 collection of Lord Acton’s writings and notes to himself (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University:
False opinions work more mischief than bad men.
The rise of populism has been characterized by a liberalization of thought and speech that had previously been suppressed by the prevailing authorities of orthodoxy. Much of this was necessary and welcome. The cultural limitations on what ordinary people were supposed to think about issues like immigration and “gender identity” were thrown off when populist leaders came along who dared to say things that many people had felt. But with this liberation of legitimate and reasonable ideas inevitably came a wider unleashing of much uglier sentiments on the right.
…..
But nationalism has its malignancies. National exceptionalism is easily interpreted as national supremacism and, even in a multiethnic country like the U.S., as ethnic supremacism. As generations of Jews around the world know better than anyone, nationalism often breeds antisemitism and other bigotries.
The second factor feeding the far right is the collapse of trust in major institutions. Universities, public “experts” and the media have forfeited their credibility by promoting ideological viewpoints disguised as research and reporting. The effect has been to weaken public faith in authority more widely. Part of the far right’s appeal is to say: “If they lied to you about climate change and Covid, how do you know they’re not lying to you about the Holocaust and slavery?” In this void of mistrust, all kinds of noxious ideas will flourish.
Barry Brownstein reminds New Yorkers about what they’ve forgotten about prosperity.
Jack Nicastro reports that “Trump baselessly accuses meat packers of ‘criminally profiting at the expense of the American people.'” Here’s his conclusion:
Trump has expressed concern that American ranchers are being improperly blamed for high meat prices at the checkout counter. To ascribe blame for the recent uptick in meat prices to four-firm concentration in the meat packing industry is unconvincing at best and, at worst, a deliberate smokescreen for his restrictionist trade policies that have exacerbated the problem.
Erica York tweets: (HT Scott Lincicome)
The President is confusing tariff revenues with investment plans
Tariff revenues are paid by US importers (CBP shows $89B paid through mid-Sept) and would need to be returned.
Investment plans from foreigners are separate and would not require repayment if abandoned.
Ben Connelly rightly criticizes state lotteries. Here’s his conclusion:
Conservatives should be clear about something. Gambling is a vice. It is not a social good. It is not an individual good. One of the roles of the conservative in society is to frown upon vices, to enforce social stigma against those activities that harm both the individual and society. Whether or not you believe that adults should be free to make their own choices about their money, including choosing to waste it on sports betting or lotteries, every conservative should agree that states shouldn’t be profiting from a vice. Even libertarians should agree with that, even if they don’t believe there’s anything wrong with gambling.
… is from page 359 of Gordon Wood’s great 1991 book, The Radicalism of the American Revolution:
“The public happiness,” said Daniel Webster, “is to be the aggregate of the happiness of individuals. Our system begins with the individual man.” People did not have to feel guilty any more about pursuing their personal happiness here and now.
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