Global warming contributes also in an even more-direct manner to human betterment. The reason is that cold weather kills about ten times the number of people who are killed by hot weather, so warmer weather reduces the killer cold to which people are exposed. The benefits to humanity of raising global temperatures are impossible to deny.
Unfortunately, though, the emitting of globe-warming carbon is (as economists call it) a “positive externality.”
For reasons given above, carbon emissions which warm the globe are obviously positive; they promote the improvement of material well-being and even save lives. Yet they are also an externality; carbon emitters, receiving no compensation for their contributions to global warming, have inadequate incentives to emit carbon. Because the social value of the benefits of these emissions is not ‘internalized’ on carbon emitters, when you drive your automobile you take no account of the beneficial effects on ice-cap melting of your driving, so you drive too little. Ditto for your neighbor who operates a factory; being unpaid for the contribution that her carbon emissions make to global warming, she emits less carbon than she would if she were paid for this contribution. An unfortunate result of the fact that the benefits of emitting carbon aren’t fully ‘internalized’ on motorists and factory owners is that too little carbon is emitted. Fortunately, an easy textbook solution is available to motivate individuals and firms to emit more carbon. That solution, of course, is government intervention.
Government could simply command motorists and factory owners to emit more carbon. But the sophisticated and much-preferred economic solution is instead for the government to subsidize carbon emissions. Government need only determine the socially optimal amount by which carbon emissions should be increased and then dispense subsidies in the amounts required to bring about these higher emissions. Problem solved. It’s right there in economics textbooks – in easy-to-grasp graphical form in ECON 101 texts and in pages of difficult and dense equations in ECON 999 texts.
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Despite the fact that the melting of Arctic ice caps resulted in the undeniably beneficial opening of shorter, faster trade routes – and despite the fact that cold weather is more lethal than hot weather – I don’t really want to encourage the government to subsidize carbon emissions. For starters, I worry that government officials would abuse the power to subsidize. But a far larger concern is that there is, in fact, no way to know if the benefits of a government-engineered increase in carbon emissions would be worth the costs.
While the evidence mentioned above about the benefits of higher global temperatures is genuine and significant, such evidence isn’t sufficient to carry the day in favor of government subsidization of carbon subsidies. After all, the consequences of successfully arranging for an increase in global temperatures, contrary to what you might infer from ‘the science’ as it appears in textbooks and academic papers, wouldn’t all be positive. Some consequences – and perhaps many – would be negative. So prudence demands that we ask: What might these negative consequences be, and how do they compare to the positive ones? If our obsession with increasing carbon emissions were to cause, say, the melting of another 60,000 square miles of Arctic ice, might the very real benefit that we predict, notice, and celebrate – namely, the further enlargement of ocean shipping lanes – be outweighed by some unpredicted and unnoticed cost elsewhere on earth? Possibly so. This possibility is enough to counsel against leaping too quickly from our textbook learning to the conclusion that the government should subsidize carbon emissions.
Economic Complexity is Vast
The chief problem isn’t the complexity of the natural environment. The chief problem is the complexity of the global economy – a complexity that’s magnitudes greater than that of the natural environment. We simply have no way to trace out more than a minuscule fraction of the economic consequences, positive and negative, of government efforts to alter a phenomenon as massive as the earth’s environment. To subsidize carbon emissions requires resources. From where will these resources come? The global-economy’s complexity makes it practically impossible to answer this question in detail. This lack of knowledge implies that we can’t be certain that whatever benefits arise from our engineered increase in global temperatures will exceed the costs created by the taxation necessary to secure the funds used as subsidies.
Wall Street Journal columnist William McGurn harshly criticizes the brutes in Beijing for their persecution of the great Jimmy Lai. Three slices:
No one doubts that the government will get its conviction in the end. But what all the testimony against Mr. Lai really shows is a passionate media proprietor who used his wealth and newspaper to advance his principles.
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Mark Clifford, a newspaperman who served on Apple Daily’s board, says the trial itself is an example of the trends Mr. Lai worried about. The proceedings resemble more a communist Chinese show trial than the fair judicial proceedings that once gave international investors confidence in Hong Kong as a global financial center.
“First they took his newspaper from him, and then they denied him his choice of lawyer in the most important trial of his life,” says Mr. Clifford, author of “The Troublemaker,” a forthcoming biography of Mr. Lai. “He’s being tried before three national-security judges rather than a jury.
“Foreign investors in Hong Kong now have to worry about something they never did before—could my company be next if we run afoul of the party line?”
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One longtime Hong Konger who asks not to be named for security reasons put it this way: “The old narrative that foreign money was behind the whole thing has disappeared. By Hong Kong standards Jimmy Lai is not that rich. Yet he’s funding the whole movement. He was even alleged to be buying influence in America.
“It’s a case of reverse collusion: Evil Americans were not trying to overthrow the dictatorship, it was one man’s desperate effort to save freedom in Hong Kong. The shame is that he was the only one of Hong Kong’s wealthiest business leaders to stand up for the system that made them rich.”
Back in the Fall of 2018, Simon Lester rightly criticized American trade hypocrisy. A slice:
And Trump’s claims about the WTO have no basis in fact. He says, “We lose the lawsuits, almost all of the lawsuits in the WTO—within the WTO. Because we have fewer judges than other countries.” The reality is that the U.S. record in WTO dispute settlement is very similar to that of other countries.
But the cheating narrative is not just wrong, it is dan- gerous. When we accuse foreigners of behaving unfairly, we fan the flames of nativism. Spreading the myth that others are taking advantage of us gives rise to xenophobia, which we have seen intensify in recent years. When politi- cal leaders and commentators continually cast aspersions on foreigners, people start to believe the foreigners are do- ing something wrong. Trump may be an extreme version of this, but people on both sides have been guilty over the years. The result has been a largely mistaken conception of how other governments behave on trade, and growing anti-foreigner sentiment.
Mr. Biden’s new loan forgiveness is still illegal. The High Court stressed that student loan forgiveness is a major question that requires clear authorization from Congress. But Mr. Biden seems to believe he can jam the courts by automatically forgiving debt before a judge has time to stop him.
The White House says most borrowers won’t even have to apply for loan relief. Sometime before the November election, Mr. Biden will simply declare their debt forgiven. That means a future Congress and a President Trump might be unable to undo the lawless act. Where are the press scolds who warn about a President who threatens democracy?
Mr. Biden is setting an awful precedent that Donald Trump will no doubt exploit. If courts say he can’t re-purpose defense money to build a wall on the southern border, he could simply use another means to do so. The right will cheer him on as the left is Mr. Biden. The rule of law and taxpayers are the losers.
Barton Swain has the measure of Biden the man – a measure that is as unflattering as it is accurate. Two slices:
He puts one in mind of Earl Haig’s remark about the Earl of Derby: “A very weak-minded fellow I am afraid, and, like the feather pillow, bears the marks of the last person who sat on him!”
Mr. Biden bears the marks of many a backside. For most of his career he supported the Hyde Amendment barring the use of federal funds for abortion. Running for president in 2020, Mr. Biden announced he favored repealing the amendment. In 2019, during an early Democratic primary debate, Sen. Kamala Harris lashed Mr. Biden for opposing forced busing in the 1970s. He had taken that position a half-century before for the excellent reason that the public overwhelmingly hated busing, but in 2019 he felt obliged to sound as if he half-supported it.
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If the left’s avant-garde wants a 32-hour workweek today—Mr. Sanders is pushing it—you’re safe to assume that a second-term Biden administration will make that demand, too. Racial reparations? The criminalization of “misgendering” and other forms of “hate speech”? Denuclearization? Nationalization of industries? Mr. Biden isn’t there yet, but give him time. It’ll only take the right people to sit on him.
Jeff Yass writes that “Biden is the worst president ever for [school] choice.” A slice:
I was wrong to think that Democrats would support school choice to help their constituents out of poverty. Although polling consistently shows that a majority of minority parents want school choice, progressive politicians consistently oppose all such programs.
To understand why, consider who’s funding their campaigns: teachers unions. For unions, choice means competition, and urban public schools with low proficiency ratings can’t compete. Unions know the only way to keep their political power is to keep children trapped in failing schools. Give parents access to other educational options, and they’ll ditch the schools that take them for granted.
Also worrying about the U.S. government’s fiscal incontinence is Doug Bandow. A slice:
As the Federal Reserve unwinds its essentially zero interest “quantitative easing” policy, Uncle Sam is now paying higher rates. Moreover, Washington must refinance maturing debt. Explained CBO: “The projected increase in 2024 occurs primarily because the average interest rate that the Treasury pays on its debt is higher this year and is expected to rise further as maturing securities are refinanced at rates that exceed those that prevailed when the securities were issued.” As a result, interest costs are rising faster than any other federal program and have doubled since 2020. This year, interest payments on the debt will exceed the cost of every federal program other than Social Security.
… is from pages 344 of Steven Pinker’s superb 2018 volume, Enlightenment Now:
The challenge in making the case for modernity is that when one’s nose is inches from the news, optimism can seem naïve, or in the pundits’ favorite new cliché about elites, “out of touch.” Yet in a world outside of hero myths, the only kind of progress we can have is a kind that is easy to miss while we are living through it. As the philosopher Isaiah Berlin pointed out, the ideal of a perfectly just, equal, free, healthy, and harmonious society, which liberal democracies never measure up to, is a dangerous fantasy. People are not clones in a monoculture, so what satisfies one will frustrate another, and the only way they can end up equals is if they are treated unequally. Moreover, among the perquisites of freedom is the freedom to screw up their own lives. Liberal democracies can make progress, but only against a constant backdrop of messy compromise and constant reform.
Jon Miltimore describes the economic lunacy of the Biden administration’s attempt to phase out gasoline-powered automobiles. Three slices:
The Biden administration and defenders of the policy argue that the EPA’s regulation is “not a ban” on gas-powered cars, since carmakers are not prohibited from producing gas-powered vehicles. Instead, automakers are required to meet a government-mandated “average emissions limit” across their entire vehicle line, to force them to produce more EVs and fewer gas-powered cars.
It’s a clever ruse in that it allows the Biden administration to use regulatory power to force automobile manufactures off of gas-powered vehicles while denying that they are banning them.
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A major reason why the White House is forcing this “transformation of the American automobile market” is that Americans aren’t voluntarily adopting EVs quickly enough to satisfy the White House.
Though Americans purchased more than a million EVs last year, that still represents less than 8 percent of total vehicle sales in the US. The government’s current target is 56 percent. (If the White House was serious about speeding up this transition, it might consider eliminating the 25 percent tariff on cars built in China — which accounts for some 60 percent of global EV sales — but that would be too easy.)
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Forcing automobile companies to expand production of their least-profitable product lines at the expense of their best-performing ones is economic madness. It calls to mind collectivized agricultural policies in the Soviet Union, where central planners embraced the worst farming methods.
While Stalin’s collectivization of farms in 1929 was a massive failure that led to the deaths of millions, agriculture in the USSR of course continued during and after his lifetime. But two distinct sectors emerged: a tiny private sector that produced a bumper crop of food, and a massive collectivized sector that produced very little.
The late economist James D. Gwartney (1940–2024) explained that families living on collectives in the USSR were allowed to farm on small private plots (no more than one acre) and sell their produce in a mostly free market.
Historians point out that in the 1960s these tiny private farms, which accounted for just 3 percent of the sown land in the USSR, produced 66 percent of its eggs, 64 percent of the potatoes, 43 percent of its vegetables, 40 percent of meat, and 39 percent of its milk.
Gwartney and economist Richard Lyndell Stroup note that by 1980, private farms accounted for just one percent of sown land in the USSR, but a quarter of its agricultural output.
Here’s David Henderson on the proposal to cap credit-card late fees. A slice:
Co-blogger Vance Ginn has nicely laid out some of the perverse, probably unintended, but definitely foreseeable, consequences of the federal government’s proposed $8 cap on the amount that credit card companies are allowed to charge credit card holders when they are late on a payment.
I want to point out two other consequences, both of which are perverse but one of which is especially perverse.
First, though, my personal story. Every once in a while, while I’m traveling or particularly busy, I’ve let slip a payment date and paid a credit card balance late. It happened only a couple of times because the credit card company taught me virtue with a $30 to $35 late fee. Ouch! I got very careful.
Now to my point about consequences. If the regulation is implemented, then, as Vance points out, credit card companies will adjust. He names a few adjustments.
One that he doesn’t mention is that they will, to the extent that can do it, try to figure out ways of charging more to people who are late. It might be by upping their interest rate once they’ve recorded x number of late payments over y number of months. It might be other adjustments that we don’t know but that some of the credit card companies’ best minds will think hard about.
Pierre Lemieux makes a plea for people to be more realistic about politicians and government.
Guard future generations against a strong president—or, worse, a weak one like Mr. Biden taken over by unelected administrators. The Constitution says legislators make laws, the executive branch enforces them, though it often doesn’t seem that way. Mr. Trump can make sure there are no more Obama “I’ve got a pen and I’ve got a phone” situations.
Some of this is already happening. The Supreme Court in West Virginia v. Environmental Protection Agency used the “major questions doctrine” to curtail executive-branch regulatory power. The justices may soon limit the Chevron deference doctrine and further restrain executive-branch regulators. Presidents can’t appoint special envoys without Senate approval anymore, though Mr. Biden ignored this when appointing John Podesta climate special adviser.
James Pethokoukis summarizes the current condition of the U.S. economy.
We study the effect of mandates requiring COVID-19 vaccination among healthcare industry workers adopted in 2021 in the United States. There are long-standing worker shortages in the U.S. healthcare industry, pre-dating the COVID-19 pandemic. The impact of COVID-19 vaccine mandates on shortages is ex ante ambiguous. If mandates increase perceived safety of the healthcare industry, marginal workers may be drawn to healthcare, relaxing shortages. On the other hand, if marginal workers are vaccine hesitant or averse, then mandates may push workers away from the industry and exacerbate shortages. We combine monthly data from the Current Population Survey 2021 to 2022 with difference-in-differences methods to study the effects of state vaccine mandates on the probability of working in healthcare, and of employment transitions into and out of the industry. Our findings suggest that vaccine mandates may have worsened healthcare workforce shortages: following adoption of a state-level mandate, the probability of working in the healthcare industry declines by 6%. Effects are larger among workers in healthcare-specific occupations, who leave the industry at higher rates in response to mandates and are slower to be replaced than workers in non-healthcare occupations. Findings suggest trade-offs faced by health policymakers seeking to achieve multiple health objectives.
… is from page 135 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and important 1937 book, The Good Society:
The period from, say, 1776 to 1870 was the golden age of free trade and of political emancipation throughout the western world. It was an age when the reforming passion of men was centred upon the abolition of privileges, the removal of restraints, the restricting of the authority of the state. It was an age when men were dominated by the conviction that it was by the method of emancipation, rather than by authoritative planning and regulation, that mankind could most surely achieve its promise.
DBx: Pictured here is an engraving of an 1846 meeting in London of the Anti-Corn Law League.
“Science is the great antidote,” wrote Adam Smith, “to the poison of enthusiasm and superstition.” Juliette Sellgren began recording episodes of her Smith-infused podcast, The Great Antidote, as a locked-down high school student in 2020, when neither enthusiasm nor superstition were in short supply. Early on, she gathered an impressive collection of economists and other public intellectuals, including Matt Ridley, John Stossel, Vernon Smith, Deirdre McCloskey, Lenore Skenazy, and Russ Roberts—plus quite a few Reason staffers.
Here’s more insight from Art Carden. A slice:
Second, demographics matter. Average income can fall even if everyone is strictly better off. Bryan Caplan explained this way back in 2005. If ten people earn $50,000 per year one year and $51,000 the next, but the group grows by another ten people entering the labor force and each earning $25,000, the group average will fall even though everyone is better off. Immigrants from Haiti routinely earn more in the US than they would back home but less than the average American worker. Low-skill, low-income immigrants can drag down the average and give the false impression of “stagnation” even though everyone is better off. Paradoxically, keeping immigrants out might mean higher average earnings in the US and Haiti, even though everyone is worse off compared to freer global labor markets.
I’m skeptical of the “stagnation” thesis for a third reason. Changing quality, variety, and assortment makes it harder to compare apples to apples. Many products today are simply better, and many things we take for granted today didn’t exist a generation ago. Comparisons between 2024 and 2023 aren’t that difficult, but largely due to changes in quality, we have to be cautious comparing 2024 to 1974.
Noah Rothman rightly encourages us to rejoice that we “are living in the Golden Age of fruit.” A slice:
Throughout history, mankind has devoted itself to engineering better produce. We are blessed to be present for the apotheosis of this enterprise.
Today, even in the dead of winter, you can head to your local grocery and find any number of wondrous varieties that have no natural right to exist. Huge, somehow crispy blueberries; seedless grapes with vivacious flavor and a light, low-tannin skin that snaps in your mouth; enormous, hydroponically grown strawberries that make no sacrifice of flavor in their pursuit of gigantism; and so on. From stone fruits that somehow manage to taste like confections to exotic oddities once exclusive to National Geographic magazine, a world of wonder is at our fingertips.
[DBx: And see also here.]
Progressives in Sacramento are becoming increasingly disconnected from the real economy. The latest evidence? A new California bill that would establish an employee “right to disconnect” and ignore a boss’s emails after normal working hours.
The Assembly bill is modeled after laws in a dozen or so countries, including such paragons of productivity as Argentina, France, Greece, Italy and Spain. “Smartphones have blurred the boundaries between work and home life,” says the bill’s sponsor Matt Haney.
Some workers may bristle at receiving emails beyond the normal eight-hour workday. But this is the flip side of more flexible work arrangements and smartphones. Workers have more freedom to pick up children from school, but they are sometimes expected to respond to important emails while at their kids’ soccer games.
Dylan Walsh argues for liberalizing the market in human kidneys. A slice:
There are 100,000 people in the United States waiting for a kidney. More than half a million are on dialysis, which from my experience I know to be more of a means of survival than a form of living. About 4,000 people die each year while waiting for a kidney. Another 4,000 become too sick to undergo surgery — a gentler way of saying that they, too, die. The National Kidney Foundation estimates that without more investment in preventing diabetes and other ailments, more than one million people will be suffering from kidney failure by 2030, up from over 800,000 now.
These numbers illuminate a story of largely preventable suffering. Hundreds of millions of healthy people walk the streets quietly carrying two kidneys. They need only one. The head-scratcher is how to get kidneys from the people who have one to spare into the people who need one. Getting them from genetically modified pigs, as was recently found possible, won’t be a widespread solution for a very long time.
There’s a simpler and long overdue answer: Pay people for their kidneys.
Vance Ginn decries “Biden’s war on credit.”
Gene Healy is not impressed by the modern U.S. presidency.
… is from pages 487-488 of the 1901 Third Edition of Henry Sidgwick’s 1883 book, The Principles of Political Economy:
I do not think we can reasonably expect our actual Governments to be wise and strong enough to keep their protective interference within due limits; owing to the great difficulty and delicacy of the task of constructing a system of import duties with the double aim of raising revenue equitably and protecting native industry usefully, and the pressure that is certain to be put upon the Government to extend its application of the principle of protection if it is once introduced. I think therefore that the gain that protection might bring in particular cases is always likely to be more than counterbalanced by the general bad effects of encouraging producers and traders to look to Government for aid in industrial crises and dangers, instead of relying on their own foresight, ingenuity and energy; especially since the wisest protection in any one country would tend in various ways to encourage unwise protection elsewhere.
DBx: It’s tempting to do economics as if an omniscient and omni-benevolent god were able and willing to hire itself out as the faithful agent to follow the mortal’s policy recommendations. Imagining oneself tapping into god-like knowledge and power is heady, and from that high perch the real-world, with all of its messiness and imperfections, does indeed appear to be in dire need of divine intervention. But economics properly and wisely done – economics done, for example, as it was done by Adam Smith, Ludwig von Mises, Frank Knight, F.A. Hayek, Fritz Machlup, Ronald Coase, Milton Friedman, Armen Alchian, James Buchanan, Gordon Tullock, Leland Yeager, Harold Demsetz, and Walter Williams – takes human nature, including humans’ limited cognitive abilities, as given. Most of the so-called “theoretical exceptions” to the economic case for free trade are relevant only in an alternative reality in which governance of humans’ daily economic and political affairs could actually be turned over to a god or to a mortal transformed into a god.
To describe, for example, how it is theoretically possible for government to use tariffs and subsidies to promote particular industries in ways that will ultimately improve the performance of the nation’s economy is of no more practical relevance than it would be to describe how it is theoretically possible for bioengineers to expertly alter the details of the human genome to give us all vision like that of eagles, hearing like that of owls, and lobster-like immunity from aging. In fact, the eventual success of such bioengineering is surely more likely than is the eventual success of such economic engineering.
Techno-pessimists should avoid the post hoc ergo propter hoc fallacy: The rooster crows, then the sun rises, so the crowing caused the sunrise. If smartphones vanished, schoolchildren would still be spoon-fed anxiety and depression about (if they are White) their complicity in their rotten country’s systemic racism, and (if they are not White) their grinding victimhood, until we all perish from climate change.
Haidt’s data demonstrating a correlation (the arrivals of smartphones and of increased mental disorders) suggest causation, but remember: Moral panics about new cultural phenomena — from automobiles (sex in the back seats) to comic books (really) to television to video games to the internet — are features of this excitable age.
Although Haidt is always humane and mostly convincing, his argument does not constitute a case for government trying to do what parents and schools can do.
I cannot recall a single time that any government rule has improved my life in any noticeable way. It’s usually the opposite. After the Legislature passed Assembly Bill 5 — the “landmark” labor law that largely banned companies from using independent contractors — many Californians lost their freelance income, with many adopting costly workarounds that involved myriad legal and accounting costs. Thanks very much for the “protections.”
AB 5 was an unmitigated disaster. That should be obvious to any policymaker in California and at the national level. An old friend of mine had a saying that went, “even the worm learns.” It referred to a scientific experiment that found if you prod the dumbest of creatures (worms) several thousand times they will eventually learn not to squirm in a particular direction. The Biden administration is filled with Californians (Kamala Harris, Xavier Becerra, Julie Su), yet they somehow missed the requisite lesson. They apparently need a lot more prodding.
To recall, the California Supreme Court in the 2018 Dynamex decision imposed a strict ABC test on companies that used contractors. The case involved a delivery service that shifted its workforce from permanent employees to contractors. The court decided that contractors must be A) outside the control of the company; B) do work outside the company’s core mission; and C) be working as contractors in general. Unions were giddy. The Legislature codified the decision in AB 5.
California’s progressive Democrats, who apparently spend little time talking to normal people, were shocked at the results. Instead of hiring contractors as full-time workers with 9-5 schedules and oodles of benefits, companies downsized their workforces. Unions claimed they were battling “wage theft” — but there is no theft when willing workers take jobs from willing employers at agreed-upon terms.
Kyle Smith rightly decries the unwarranted cancellation of Woody Allen. A slice:
Mr. Allen is unlike many others accused in the #MeToo era. His alleged transgression was taken seriously and investigated by police. There exists a compelling counter-narrative that exonerates him. Yet popular culture’s mandarins have turned against him like the townspeople who form a bizarre hostility brigade tormenting the character he played in his marvelous Kafkaesque parable, “Shadows and Fog” (1991). He is a pariah in a situation that to him makes no sense.
Why, for instance, did Amazon find “A Rainy Day in New York” so repellent that it refused to release it—only later to boost the film by placing it among its Prime Video offerings? Why, asked the essayist Freddie de Boer, does Hollywood ostracize Mr. Allen yet treat Mike Tyson as a beloved kitsch figure? Mr. Tyson is invited to goof around on Jimmy Kimmel’s show, even though the former boxer is a convicted rapist who has admitted to hitting his ex-wife Robin Givens so hard that “she flew backwards, hitting every room in the apartment. . . . That was the best punch I’ve ever thrown in my entire life.” Why do people lump Mr. Allen together with Mr. Weinstein, whom a jury convicted of sexual crimes, and Roman Polanski, who pleaded guilty to one?
Mr. Allen may shrug and say he’ll keep doing what he does even if every company shuns him. But the cultural forces that condemned him ought to put down their pitchforks and torches. This great artist shouldn’t end his career in shadows and fog.
On April 11th, Arnold Kling will talk with my GMU Econ colleague Dan Klein.
Samuel Gregg reviews Richard Cockett’s Vienna: How the City of Ideas Created the Modern World. A slice:
Viennese mixing extended beyond ethnicity. Drawing upon contemporary accounts and later reminiscences, Cockett demonstrates how students roamed freely across classes, seminars, and disciplines as their whims and changing interests took them. This saved the University of Vienna from what Cockett calls the “dead hand of specialization.” The effect was to stimulate a tremendous cross-fertilization of ideas that would lead notable Viennese figures to apply, for example, the insights of psychology to economic theory, or physics to the development of new literary trends. Interdisciplinary integration and synthesis thus drove intellectual creativity.
It wasn’t only in lecture halls that these dynamics manifested. Viennese café and salon culture helped to foster schools of thought as different as logical positivism and Austrian economics. In these relaxed settings, students and professors would furiously debate disputed questions in a cross-disciplinary manner until the wee hours.
Far from inimical to the interests of mankind, production is the means by which our material interests are satisfied. As Adam Smith says so succinctly in the Wealth of Nations, “consumption is the sole end and purpose of all production.” We are only able to consume to the extent that we produce. Those who oppose technologies that increase productivity actually oppose mankind’s wellbeing.
Juliette Sellgren continues her discussion with Kristi Kendall.
… is from page 187 of the late Wilfred Beckerman’s great and ahead-of-its-time 1974 book, Two Cheers for the Affluent Society:
Resources cannot be usefully measured just in terms of physical amounts of certain minerals that may exist at any moment of time. That is a fundamentally misleading way of looking at them. There are many physical elements in the world which are of absolutely no use at all given present costs of exploration and utilization, present techniques for using them, and the present demand for the products in which they might conceivably be used. But tomorrow all these things may change. What is a “resource” depends on the economic conditions determining the usefulness of the materials in question.
DBx: Indeed. This Julian Simon-esque point is important and vastly under-appreciated. The black molecular mash-up pictured here is not “naturally” a resource. It became a resource only because of human creativity and economic opportunity.
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I read Beckerman’s Two Cheers as a junior or senior in college. Perusing it this morning reminds me of what I’ve forgotten: Encountering this book had a very large effect on my view of the world.
Eric Boehm explains why Marco Rubio’s support for industrial policy is misguided. A slice:
In an op-ed published this week by The Washington Post, Sen. Marco Rubio (R–Fla.) makes the case for why conservatives ought to support top-down industrial policy set by the federal government—and, inadvertently, also provides a concise illustration of just how incoherent and illogical that idea actually is.
The article’s headline—which was likely applied by the Post‘s editors and not Rubio himself, but nonetheless captures the spirit of the piece—promises to explain why the senator believes in industrial policy “done right.” At its heart, Rubio’s argument is no more complex than that: Industrial policy is good when he gets to be in charge and bad when someone else is running it.
Certainly, there’s no way that could go wrong!
It might be slightly easier to believe that we ought to give Rubio and his friends more control over the economy if the rest of the op-ed wasn’t littered with factual errors and worrying gaps in logic. In fact, Rubio doesn’t even get through the first paragraph of the piece before making a significant error. “Today,” he writes, Congress no longer views industrial policy with the same skepticism that it once did, but “what replaces unfettered free trade remains hotly debated.”
Unfettered free trade? That’s hardly an accurate description of the current status quo in the United States—a fact that Rubio surely knows, since Florida’s sugar and fruit industries are the beneficiaries of some of the most aggressive protectionist policies on the books. Even before former President Donald Trump ramped up the use of tariffs, America had more protectionist policies than other large, developed economies: A 2015 report from Credit Suisse called the United States the world’s most protectionist developed nation.
My intrepid Mercatus Center colleague, Veronique de Rugy, isn’t amused by the “jobs-creation” circus. Two slices:
In the grand circus of politics, where elephants and donkeys alike perform under the big top, there’s one act that never fails to draw a crowd: the venerable “job creation” routine. Putting people back to work, especially those without college degrees and in the manufacturing world, is in the center ring. Unfortunately, when you look behind the smoke, mirrors and rabbits hidden in hats, you’ll see that promises to rebuild America through industrial policy are just plain old corporate welfare.
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So, industrial policy won’t create jobs for poorly educated workers, but it will supercharge cronyism. The Cato Institute’s Chris Edwards notes that Biden’s industrial policy is better described as a corporate welfare bonanza. The Inflation Reduction Act, he writes, “handed out $868 billion in energy subsidies, most of it to big corporations, including automakers, utilities, manufacturers, and hydrogen producers. Adam Michel finds that Biden’s energy tax subsidies could top $1.8 trillion.”
Mark Jamison warns of the dangers of the the Open App Markets Act.
George Leef asks: “Is learning ‘white’ English oppressive for Black students?”
J.K. Rowling deserves applause for defending freedom of speech. [DBx: At stake here is freedom of expression, not trans rights.]
Johan Norberg ponders the precariousness of freedom. A slice:
In the United States, the most illiberal elements of the right and the left are on the offensive. Declaring that they are each other’s opposites, they are really mirror images of each other. Both are intolerant, interventionist, and impatient—viewing constitutional constraints and the separation of powers as anti‐democratic restrictions on the will of the people. Some storm the Capitol when they lose an election; others storm the stage when they lose a debate. The common denominator is that they consider diversity a weakness and dissent as betrayal.
On economics, they tend to converge on statist, protectionist positions. These days, it’s difficult to tell if the person posting on social media about the global neoliberal conspiracy to crush the working class is a hibernating Marxist sociology professor or a young “national conservative” activist.
The Wall Street Journal‘s Editorial Board reports on yet another instance of Gavin Newsom’s hypocrisy. Two slices:
California’s new $20-an-hour minimum wage for fast-food restaurants is causing pain for employers and price increases for customers. But how is Gov. Gavin Newsom’s wine restaurant allowed to pay its bus-boys $16 an hour?
Republican Assembly Member Joe Patterson this week tweeted a ZipRecruiter job post offering $16 an hour for a part-time “busser” at PlumpJack Cafe near Lake Tahoe. Mr. Newsom founded the PlumpJack Group as a wine shop in 1992. His hospitality business has expanded to include four wineries and four restaurants and bars.
…..
California has never fully recovered from Mr. Newsom’s Covid lockdowns, when he was caught dining at Napa Valley’s fancy The French Laundry shortly before he shut down other restaurants. Food services and accommodation jobs are still roughly 25,000 fewer in California than before the pandemic, though there are 31,000 more in Florida and 77,000 more in Texas.
Unemployment in California has climbed to 5.3%, the highest in the country, and is in double digits in much of the rural Central Valley. The state’s new fast-food minimum will be another economic blow—unless, apparently, you are in Gov. Newsom’s wine business.
Eugene Fama remembers Michael Jensen, who died recently at the age of 84. (HT Tyler Cowen)
. @USMortality has done a great service making the developed world’s mortality statistics so readily and freely available to the public. And the lesson they tell is that lockdowns killed. Thank you, Ben!
