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Juliette Sellgren talks with economist Stan Veuger about a variety of things.

Nick Gillespie talks with the inimitable and always-wise David Boaz.

Arnold Kling riffs on “creative types and management types.” Here’s his conclusion:

My main point is that one should not think simply that creative types are good and management types are bad, or conversely. For startups, creativity is most important. But as a firm matures, it needs solid management. The transition is often painful and unpleasant. A firm will last longer if it can manage the transition from novelty-seeking to process reliability without completely losing its ability to foster creativity.

“Baseball, beer, and a dog.”

Gale Pooley reports on the tremendous improvements over the past half-century in commercial aviation.

Magdalene Horzempa explores “the dollars and cents of DEI” and finds them to be excessive. (HT George Leef)

I don’t count myself a great fan of Fareed Zakaria, but in this recent Washington Post column he offers much wisdom and sober counsel. Two slices:

Liberal democracies should avoid the temptation of using illiberal means, even when they confront views and positions that are forthrightly hostile toward liberal democracy itself. I worry about some of the court cases against Trump. While they might be technically legitimate, some involve offenses that happened years ago and for which he was not charged at the time. Would he have been charged for these were he not the controversial political figure he is today?

…..

As I write in my new book, “Age of Revolutions,” the new populist right’s disdain for liberal democracy is frightening, constituting the gravest threat we face to our political future. But the left also has its excesses in this direction. Many “want to dispense with some of liberalism’s rules and procedures. … They want to ban those who have ‘wrong’ ideas from speaking. They want to achieve racial equality by quota or decree. They want to use education or art to achieve political goals rather than educational or artistic ones. Convinced of the virtue of their ideas in theory — say, the rights of asylum seekers — they are comfortable pushing this abstract notion of virtue onto a reluctant society. But top-down revolutionary actions, from the uncompromising left or the reactionary right, often cause more turmoil than progress.”

Donald Trump’s brand of right-wing populism is illiberal and xenophobic and takes America into dark dead-ends. But the way to defeat it in a liberal democracy is not by using legal mechanisms that take him off the political playing field and canceling those who support him. Rather it is to debate his allies, to put forward powerful and persuasive positions that show Americans that you can address their concerns, and to confront Trump on the political battlefield — and beat him.

I’m always happy to be a guest of Dan Proft.

Here are some new and worthwhile reflections from Bob Graboyes.

Walker Wright reminds us of just how deeply awful were the explicitly illiberal ideas of the Virginia Confederate George Fitzhugh. A slice:

According to Fitzhugh, the North’s comparative liberalism produced a culture that was at war with nature itself. In Cannibals All!, Fitzhugh fleshed out this argument by appealing to Aristotle (as did many slavery defenders), declaring that liberal theorists “propose to dissolve and disintegrate society; falsely supposing that they thereby follow nature.”

spiked tweets: (HT Jay Bhattacharya)

Nick Cave is right – there is nothing right-wing or reactionary about opposing wokeness. Woke is a cruel and dogmatic creed. It seeks to destroy people’s lives without mercy. The fight against woke is a fight for tolerance, reason and sanity.

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… is from page 109 of my late, great colleague Walter Williams’s 1982 book America: A Minority Viewpoint (original emphasis):

Poverty is no mystery. Poverty has been, and remains, man’s standard dish throughout history at most places in the world. Affluence is the mystery. Why is it that a small portion of the world’s population for only a tiny part of its history is exempt from the fate that has befallen the rest of the world?

DBx: Yes.

Adam Smith inquired into the causes of the wealth of nations because he understood that poverty is humanity’s default mode. Do nothing or act in the countless ways that are foolish and you’ll suffer poverty. For you to become wealthy you must not only act, but act prudently, creatively, and with determination. And of course what’s true for you, an individual, is true for any group of individuals.

……

On this date – March 31st – in 1936 my late, great colleague Walter Williams was born.

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… is from page 317 of the 1991 Robert Schalkenbach Foundation edition of Henry George‘s 1886 book, Protection or Free Trade:

Yet to begin and maintain great popular movements it is the moral sense rather than the intellect that must be appealed to, sympathy rather than self-interest. For however it may be with any individual, the sense of justice is with the masses of men keener and truer than intellectual perception, and unless a question can assume the form of right and wrong it cannot provoke general discussion and excite the many to action. And while material gain or loss impresses us less vividly the greater the number of those we share it with, the power of sympathy increases as it spreads from man to man—becomes cumulative and contagious.

But he who follows the principle of free trade to its logical conclusion can strike at the very root of protection; can answer every question and meet every objection, and appeal to the surest of instincts and the strongest of motives. He will see in free trade not a mere fiscal reform, but a movement which has for its aim and end nothing less than the abolition of poverty, and of the vice and crime and degradation that flow from it, by the restoration to the disinherited of their natural rights and the establishment of society upon the basis of justice. He will catch the inspiration of a cause great enough to live for and to die for, and be moved by an enthusiasm that he can evoke in others.

DBx: In the 21st century – and especially in a country as large and as (relatively) market-oriented as is the United States – George’s language in the second paragraph above is admittedly a bit flowery. Nevertheless, it speaks a truth: Protectionism not only makes people in the home country poorer than they would otherwise be, it makes them less free. Economic protectionism is a violation of rights – a violation justified inevitably with bizarre or incoherent ‘theories,’ and incomplete or irrelevant data, all presented ultimately for no purpose nobler than to artificially enrich the few at the greater expense of the many.

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Scott Lincicome reports that free trade is good especially for the poor. Two slices:

Among the research I commended in the 2024 Economic Report of the President (ERP) last week was a solid section on free trade’s “pro‐​poor bias,” i.e., that eliminating US government barriers to cross‐​border commerce disproportionately benefited Americans with lower incomes. This week, the Federal Reserve Bank of Minneapolis highlights a brand new paper showing much the same thing.

…..

Given the ample academic research cited in the ERP, these new findings, while welcome, are unsurprising. However, they do raise the following question related to the 2024 US presidential campaign: If an across‐​the‐​board 10 percent reduction in US trade costs generates outsized gains for America’s poor, what does an across‐​the‐​board 10 percent increase in those same costs—say, via the universal tariff proposed by Donald Trump—do?

The Editorial Board of the Wall Street Journal notes that “the U.S. already soaks the rich.” A slice:

President Biden is proposing a bevy of tax increases, and his State of the Union address included the familiar call for the wealthy to pay their “fair share.” He should examine the Internal Revenue Service data. Recently released figures for 2021 show that the top 1% of Americans reported 26.3% of the country’s adjusted gross income, while paying 45.8% of total income taxes.

Is this not a “fair share” to Mr. Biden? Then what would be? Democrats always deploy the language of fairness without defining it or answering those questions. The truth is that the income tax is already steeply progressive. The top 10% of earners in 2021 provided 75.8% of the revenue. (See the nearby bar chart.)

George Will writes wisely about the sorry state of today’s GOP. Two slices:

His [Sherrod Brown’s] Republican opponent, Bernie Moreno, once called Trump a “maniac” and a “lunatic” akin to “a car accident that makes you sick.” He scoffed at Trump’s claims of election fraud and called the Jan. 6, 2021, rioters “morons” and “criminals.” But Trump, like a marsupial, has tucked Moreno into his pouch, and the amazingly malleable Moreno calls (as does Lake) the Jan. 6 defendants “political prisoners” and says the 2020 election was “stolen,” Joe Biden should be impeached and Trump is swell.

Moreno, who projects the Trumpkins’ chest-thumping faux toughness, disdains bipartisanship. Evidently, he plans to advance his agenda with 60 Republican votes. There have not been 60 Republican senators since 1910.

…..

The nation no longer has a reliably conservative party of sound ideas and good manners. If conservatism is again to be ascendant in their party, Republicans must stop electing the likes of Lake and Moreno. They would join other chips-off-the-orange-block in a Senate caucus increasingly characterized by members who have anti-conservative agendas, from industrial policy (government allocation of capital, which is socialism) to isolationism. And whose unconservative temperaments celebrate coarseness as an indicator of political authenticity and treat performative poses as substitutes for governance.

Who’d a-thunk it? “California won’t let homeowners insurance companies raise rates, so they’re leaving the state instead.”

Andrew Morriss reveals the bootleggers’ and Baptists’ reactions to the ruling by the Alabama Supreme Court that (in Andy’s words) “the parents of embryos created through in vitro fertilization could bring a statutory wrongful death claim when the clinic where their embryos were stored allowed the destruction of the parents’ embryos by an intruder.” A slice:

Most commentators, with the notable exception of Yuval Levin & O. Carter Snead, got the decision in LePage wrong. They got it so wrong it’s hard not to conclude that they deliberately did so. Virtually all of the media ignored what the decision actually said and the events that prompted the suit. By design or accident, the rush to portray the decision as the result of “creeping Christian conservatism” and ignorant Alabama judges who posed a threat to the availability of IVF for infertile couples put commentators of all political stripes in the position of playing regulatory “Baptists” to IVF clinics regulatory “bootleggers” in a classic “bootleggers and Baptists” coalition. That coalition delivered a sweeping exemption from normal tort liability to Alabama IVF clinics, enhancing the odds that clinics in other states will get similar immunities. In fact, LePage is nothing like the ideologically freighted, radical pro-life decision that the media claimed. It is a straightforward case of statutory interpretation in which the nine judges on the Alabama Supreme Court reasoned through a difficult issue using standard methods of reading statutes.

Economist Bruce Yandle created the bootleggers and Baptists theory after serving at the Federal Trade Commission. Why, he wondered, did regulators so often not listen to economists who pointed out how to accomplish public interest goals at lower costs, instead adopting policies that were less effective and more expensive? He reasoned that regulations were often the result of high-minded public interest rhetoric (the regulatory Baptists, just as real Baptists sought Sunday-closing laws to restrict liquor sales for wholesome reasons) and campaign contributions and other political muscle (the regulatory bootleggers, just as real bootleggers happily support Sunday closing laws to restrict legal liquor sales).

In using the decision in LePage to obtain immunity from tort suits, reproductive medicine clinics played the role of the regulatory bootleggers. Asking for absolute immunity from suit for negligence in handling embryos—embryos whose parents are likely to feel strongly about them—isn’t something for which many legislators would likely be sympathetic. After all, medical professionals, clinics, and hospitals are liable in tort for medical malpractice. Fertility clinics thus had a problem in explaining why they should get special treatment compared to other medical facilities and professionals. And negligence does occur in these clinics. A 2020 survey article in Fertility & Sterility Reports found 133 cases filed between January 2009 and June 2019 that credibly alleged the negligent destruction of cryopreserved embryos. (This does not include any losses of embryos where lawsuits were not filed.) While these losses represent only a tiny fraction of the almost 400,000 embryo thaw procedures clinics reported to the CDC in the same time period, each lost embryo was significant to the parents.

The Wall Street Journal‘s Elliott Kaufman profiles Israeli historian Benny Morris. A slice:

To many on the left, Mr. Morris says, “I seem to have turned anti-Palestinian in the year 2000,” when Prime Minister Ehud Barak and President Bill Clinton offered a two-state solution and Yasser Arafat rejected it. “I thought this was a terrible decision by the Palestinians, and I wrote that.” When the Palestinians, in response to the offer of peace and statehood, then launched a wave of terrorism and suicide bombings unlike any before it, Mr. Morris disapproved of that, too. “I began to write journalism against the Palestinians, their decisions and policies,” he says, “and this was considered treachery.”

Mr. Morris was suddenly out of step “because people always forgive the Palestinians, who don’t take responsibility,” he says. “It’s accepted that they are the victim and therefore can do whatever they like.” Mr. Morris doesn’t contest the claim of victimhood but sees it on both sides. “Righteous Victims” is the title of his 1999 history of the conflict.

GMU Econ alum Dominic Pino describes Pete Buttigieg as “a hack.”

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… is from page 152 of the late Richard Pipes’s excellent 2001 book, Communism: A History:

The nationalization of productive resources, far from liberating men from enslavement by things, as Marx and Engels had envisioned, converts them into slaves of their rulers and, because of endemic shortages, makes them more materialistic than ever.

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… is from page 60 of the 5th edition (2020) of Douglas Irwin’s excellent book Free Trade Under Fire (footnote deleted):

Tariffs and other trade barriers that raise the cost of capital goods mean that each investment dollar buys less capital. This reduces the efficiency of investment spending and can reduce overall investment and growth.

DBx: Indeed – and yet protectionists, against all logic and evidence, nevertheless insist that high tariffs promote investment and growth.

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Samuel Gregg offers “a classical liberal’s guide to civilization building.” A slice:

There is, however, another sense in which Hayek utilizes the concept of civilization. In the Constitution of Liberty, he denotes civilization as an accumulation of knowledge and experiences over time that could never be designed by any one human mind, but which allows people to pursue their individual aims. The scope of possibilities open to people at any one moment in time is what Hayek refers to as “the state of civilization.” Some civilizations contain more possibilities than others; that is why Hayek speaks of “higher civilization.”

Civilization in Hayek’s sense thus embodies the wisdom transmitted from the past, often in the form of conventions and traditions. While no one person can fully grasp all this knowledge, it enables people to pursue “their individual ends so much more successfully than they could alone.” This “conservative” feature of civilization, however, goes together with a “liberal” recognition that as people freely pursue their chosen goals (especially the end of knowledge driven by humans’ innate desire to know truth) they may make errors but also likely uncover new information. This can form the basis of critiques of existing ideas, institutions, and conventions that in turn suggest revisions of what we already know.

Roger Pielke looks back on the mindless mob that, ten years ago, could not bear to hear this message: “Disasters cost more than ever — but not because of climate change.”

Ryan Yonk and Jacob Bruggeman understand the true, destructive nature of industrial policy. A slice:

In the short run, subsidized investments in companies like GlobalFoundries appear to reshore supply chains, create jobs, stimulate the economy, and secure American access to critical technology. But the positive short-run effects of the CHIPS Act and other forms of contemporary industrial policy risk distracting us from ensuring cooperative exchange and long-run prosperity in the global economy.

Vance Ginn warns of the awfulness of Biden’s industrial-policymaking. A slice:

This move echoes a broader trend of governments worldwide intervening in their economies through industrial policy. A cocktail of targeted subsidies, tax breaks, and regulatory tinkering, industrial policy aims to sculpt economic outcomes by favoring specific industries or firms, all for the supposed benefit of the national economy. Industrial policy puts business “investment” decisions in the hands of government bureaucrats. What could go wrong?

While its champions tout its potential to boost competitiveness and spur innovation, the reality often tells a different story, especially in light of massive deficit spending. In practice, industrial policy tends to fan the flames of higher prices and sow the seeds of economic destruction.

Politicians too often meddle with voluntary market dynamics by artificially bolstering favored sectors through subsidies and tax perks, resulting in the misallocation of resources and distorted prices. Moreover, the infusion of government funds to bankroll these initiatives with borrowed money can contribute to the Federal Reserve helping finance the debt, increasing the money supply, and stoking inflation.

Kevin Corcoran makes a point that further argues against industrial policy and in favor of free, open markets filled with permissionless innovation: “Most new ideas are terrible.”

Bob Levy argues against antitrust. A slice:

First, antitrust debases the idea of private property, transforming it into something that effectively belongs to the public, to be designed by government officials and sold on terms congenial to corporate rivals who are bent on the market leader’s demise. Some advocates of the free market endorse that process, despite the destructive implications of stripping private property of its protection against confiscation. If new technology is to be declared public property, future technology will not materialize. If technology is to be proprietary, then it must not be expropriated. Once expropriation becomes the remedy of choice, the goose is unlikely to continue laying golden eggs.

The principles are these: No one other than the owner has a right to the technology he created. Consumers can’t demand that a product be provided at a specified price or with specified features. Competitors aren’t entitled to share in the product’s advantages. By demanding that one company’s creation be exploited for the benefit of competitors, or even consumers, government is flouting core principles of free markets and individual liberty.

Second, antitrust laws are fluid, nonobjective, and often retroactive. Because of murky statutes and conflicting case law, companies never can be quite sure what constitutes permissible behavior. Conduct that is otherwise legal somehow morphs into an antitrust violation. Normal business practices—price discounts, product improvements, exclusive contracting—become violations of law. When they’re not accused of monopoly price gouging for charging too much, companies are accused of predatory pricing for charging too little, or collusion for charging the same.

Third, antitrust is based on a static view of the market. In real markets, sellers seek to carve out mini‐​monopolies. Profits from market power are the engine that drives the economy. So, what might happen in a utopian, perfectly competitive environment is irrelevant to the question whether government intervention is necessary or appropriate. The proper comparison is with the marketplace that will evolve if the antitrust laws, by punishing success, eliminate incentives for new and improved products. Markets move faster than antitrust laws could ever move. Consumers rule, not producers. And consumers can unseat any product and any company no matter how powerful and entrenched. Just ask WordPerfect or Lotus or Polaroid.

Trump’s proposed across-the-board ten-percent tariffs would be very costly.

Arnold Kling asks: “What is probability?”

J.D. Tuccille explains that “minimum wage make for great politics, but fewer jobs.” A slice:

“It’s increasingly hard to escape the conclusion that the continued push for minimum wage increases despite their predictably bad consequences is a triumph of in-group signaling over a concern for the material welfare of the poor,” Chris Freiman, a professor at the John Chambers College of Business and Economics at West Virginia University, commented in response to developments in California.

Kevin Bardosh tweets: (HT Jay Bhattacharya)

“Institutions need to be designed to withstand hysteria. Ours crumbled in the face of Covid, and in doing so helped create the disaster Britain now faces…a frank discussion about the nature & depth of that damage is needed”

– New Spectator editorial

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… is from page 95 of the revised (1964) edition of T.S. Ashton’s 1948 book, The Industrial Revolution: 1760-1830:

If it cannot be held that the period of the industrial revolution was one of individualism – at least in the narrow sense of the term – it may with some justice be maintained that it was an age of laisser-faire . This unhappy phrase has been used as a missile in so many political controversies that it now appears battered and shabby. But there was a time when it was employed, not as an epithet of abuse, but as an inscription on the banners of progress.

DBx: The escape, starting about 250 years ago, from humanity’s never-before-escaped widespread material deprivation owed almost nothing to government planners. The escape occurred because bourgeois values became more widely accepted and practiced – a development that was key in turning the ages-old trickle of innovation into a Niagara.

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Here’s a letter to a new patron of Café Hayek:

Mr. D__:

Thanks for your e-mail in response to my criticism of calls to protect American aluminum producers from foreign competition.

You ask: “If we don’t protect our aluminum manufacturers against subsidized imports, what’s the good of low prices now if we wind up with no aluminum manufacturers in the future?”

Your question is fair, and I’ll answer it with some questions of my own.

First, if maintaining a domestic aluminum industry is worth sacrificing the opportunity to buy foreign-made aluminum at low prices, what difference does it make if the low prices of aluminum imports result from subsidies or from the genuinely superior efficiency of foreign aluminum producers? Aren’t subsidies largely a red herring?

Second, because U.S. government protection of American aluminum producers necessarily draws resources away from other American industries, how can you be sure that the resulting shrinkage – or even disappearance – of these other American industries is a price worth paying to artificially buoy American aluminum producers? Asked differently, what’s the good of protecting our aluminum manufacturers if doing so shrinks or even eliminates other American industries?

Third, because foreign-government subsidies of aluminum producers necessarily draw resources away from other foreign industries and, thus, benefit American producers that compete with the shrunken or even eliminated foreign industries, how can you be sure that the negative consequences of foreign aluminum subsidies on American aluminum producers aren’t outweighed by the positive consequences on those American industries that expand – or are even created – because of foreign aluminum subsidies?

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