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… is from page xv of the 1994 Random House edition of Barbara Tuchman’s 1966 book, The Proud Tower:

Man had entered the Nineteenth Century using only his own and animal power, supplemented by that of wind and water, much as he had entered the Thirteenth, or, for that matter, the First. He entered the Twentieth with his capacities in transportation, communication, production, manufacture and weaponry multiplied a thousandfold by the energy of machines.

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Here’s a letter to a long-time Cafe patron:

Mr. B__:

Thanks for sending the recent essay (“The two faces of free trade”) by Dani Rodrik, which I’d missed. I don’t, however, share your good impression of it. He’s mistaken about at least two key facts, and at a critical juncture his language is vague.

Factually, Rodrik is dead wrong to write about “the erosion of the middle class in the United States.” Notably, he presents no evidence to back this claim, for no such credible evidence exists. As has been documented repeatedly by people who took the time to look carefully, the data are clear that America’s middle-class (at least up to the pandemic) is thriving. See the work of Phil Gramm, Robert Ekelund, and John Early – of Michael Strain – of Scott Lincicome – of Scott Winship – of Bruce Sacerdote – of William Cline – of Mark Perry – and even of me.

Rodrik also wrongly treats trade as if it’s a uniquely important source of economic change. It’s not. Yes, trade ‘destroys’ some particular jobs (as it creates others). Trade also changes the fortunes of some locales relative to others. But these are the consequences of all economic change. So will Prof. Rodrik propose to “democratise” all economic change as he proposes to “democratise” trade? Does he wish to subject to political control the introduction of all new consumer goods, all new methods of production, and all new means of transportation and communication? Does he also want government to have veto power over changes in consumer tastes, decisions about family size, and choices of whether or not to relocate across county or state lines – all things that destroy some jobs (as they create others)? If not, his proposal to single out for special control one lone source of economic change – namely, people’s access to imports – makes no more sense than would a proposal to single out for special control any other lone source of economic change, such as people’s access to the Internet or to new sources of energy.

And what does he even mean when he proposes to “democratise” trade? Does Rodrik think that post-war agreements to the GATT, WTO, and other trade pacts by the U.S., Canada, France, Sweden, the U.K., and other democratic countries are undemocratic? Apparently he does. So what’s his alternative? Plebiscitary control over any and all changes in trade opportunities? Who knows? Calling for greater ‘democratization’ of this and that strikes the modern ear as being oh so profound, progressive, and indisputably correct – until one asks “What, exactly, does that mean beyond greater government control?”

I’ve a final note. In the sentence immediately following his call to “democratise” trade, Rodrik writes: “That is the only way to ensure it serves the common good, rather than narrow interests.” Nothing could be more confused. History shows that governments with the power to restrict trade do so to enrich narrow interests at the greater expense of their citizens. Under free trade, in contrast, narrow interests are neutered, thereby leaving every person free to spend his or her income in ways that he or she judges best and, in turn, promoting the common good as well as is humanly possible. Rodrik’s belief that further politicization of trade is a means of diminishing the influence of narrow interests would be comical if its consequences weren’t so awful.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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To everyone – left, right, and center – who believes that the market economy can and will be made to operate better if more power to superintended and intervene in the economy is given to government officials, spend the less than two minutes it takes to watch this performance by the current Chairman of the U.S. president’s Council of Economic Advisors. Then tell me, or tell even just yourself, why you have the faith that you do in government. (HT Dan Klein)

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Max Gulker explains that “the DOJ’s Apple antitrust suit doesn’t add up.” A slice:

Some or all of the alleged conduct might be judged anticompetitive if the DOJ could show Apple’s intent was trapping users in its ecosystem rather than creating the ecosystem its customers want. Apple’s longtime successful branding as a “walled garden” suggests the opposite. It is difficult to envision remedies for decreasing Apple’s control over app distribution and use within the iPhone ecosystem that would not undermine the security, usability, and aesthetics many consumers prefer, which is fundamental to Apple’s competitive strategy. The DOJ’s theory rests on a “broad pattern” of exclusionary conduct because none of the specific acts clearly impose switching costs without making the iPhone ecosystem consumers have already chosen even more desirable.

Arnold Kling understands that the inequality of statism is far greater and more dangerous than are the income and wealth differences under capitalism. Two slices:

In a recent post, Matt Yglesias flatters the left by saying that it stands for equality vs. hierarchy and that its supporters are more intelligent than conservatives.

My 2010 book, the widely-unread Unchecked and Unbalanced argues against Yglesias. It says that the leftist approach to government creates inequality that far exceeds the inequality produced by the market. And it says that the power wielded by government officials far exceeds their intelligence. I suggest ways to break up the concentration of political power.

…..

While power has become more concentrated, knowledge has become more dispersed. In the economy, people are increasingly specialized. Science, medicine, and engineering have split into smaller sub-disciplines

In general, policy makers have too little knowledge relative to the high concentration of power. Consider the bills passed in Congress that run to hundreds of pages, which is more than they can read. And often the bills merely delegate power to unelected officials in government agencies.

My GMU Econ colleague Pete Boettke talks economics.

University of Florida president Ben Sasse reports that, at the University of Florida, the adults are in charge. Two slices:

At the University of Florida, we tell parents and future employers: We’re not perfect, but the adults are still in charge. Our response to threats to build encampments is driven by three basic truths.

First, universities must distinguish between speech and action. Speech is central to education. We’re in the business of discovering knowledge and then passing it, both newly learned and time-tested, to the next generation. To do that, we need to foster an environment of free thought in which ideas can be picked apart and put back together, again and again. The heckler gets no veto. The best arguments deserve the best counterarguments.

To cherish the First Amendment rights of speech and assembly, we draw a hard line at unlawful action. Speech isn’t violence. Silence isn’t violence. Violence is violence. Just as we have an obligation to protect speech, we have an obligation to keep our students safe. Throwing fists, storming buildings, vandalizing property, spitting on cops and hijacking a university aren’t speech.

…..

Young men and women with little grasp of geography or history—even recent events like the Palestinians’ rejection of President Clinton’s offer of a two-state solution—wade into geopolitics with bumper-sticker slogans they don’t understand. For a lonely subset of the anxious generation, these protest camps can become a place to find a rare taste of community. This is their stage to role-play revolution. Posting about your “allergen-free” tent on the quad is a lot easier than doing real work to uplift the downtrodden.

Universities have an obligation to combat this ignorance with rigorous teaching. Life-changing education explores alternatives, teaches the messiness of history, and questions every truth claim. Knowledge depends on healthy self-doubt and a humble willingness to question self-certainties. This is a complicated world because fallen humans are complicated. Universities must prepare their students for the reality beyond campus, where 330 million of their fellow citizens will disagree over important and divisive subjects.

Each major-party candidate for the U.S. presidency is wholly unfit – intellectually and ethically – to hold that post.

Eric Boehm is correct: Americans really are unhappy with today’s inflation.

Here’s David Henderson on the late Bob Hessen on the industrial revolution.

Vinay Prasad isn’t favorably impressed with Time‘s list of 100 of the most-influential people in health care. (HT Jay Bhattacharya)

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… is from page 117 of the 1947 “Crofts Classics” edition of John Stuart Mill’s 1859 On Liberty:

The mischief begins when, instead of calling forth the activity and powers of individuals and bodies, it [the government] substitutes its own activity for theirs; when, instead of informing, advising, and, upon occasion, denouncing, it makes them work in fetters, or bids them stand aside and does their work instead of them.

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… is from page 115 of Benn Steil’s and Manuel Hinds’s great 2009 book, Money, Markets & Sovereignty:

Development requires helping the poor find their way from farm to factory, and from factory to office, classroom, and laboratory. This requires massive investment, which in turn requires sophisticated financial intermediation. It is for this reason that the trade and financial dimensions of globalization are complementary.

DBx: Yes. And here we have yet another economic reality that is ignored by American Compass-types who decry the size of the finance sector. Such people are not merely ignorant of economics, they are naive physicalists. In their eyes, production consists chiefly in transforming matter into different combinations and shapes. Moreover, nearly all acts of transforming matter into different combinations and shapes are, in the minds of theses physicalists, ipso facto productive.

The economic ignorance that gives rise to this physicalist myth reflects primitive thinking.

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My intrepid Mercatus Center colleague, Veronique de Rugy, is not impressed with the evidence offered by members of Congress of the alleged successes of their boondoggles.

My GMU Econ colleague Bryan Caplan makes the case for housing deregulation. A slice:

Second, building off the work of Peter Ganong and Daniel Shoag, Build, Baby, Build shows that housing regulation also reduces the upward mobility of the poor. Decades ago, when housing prices were much lower — and more nationally uniform — poor Americans had a clear path to a better life: move to a higher‐​wage part of the country. Steinbeck’s Grapes of Wrath notwithstanding, this strategy worked well. Now, however, poor Americans who try this route typically find that the extra housing cost in high‐​wage regions eats up more than 100 percent of the wage gain. Lifting yourself up by your own bootstraps is still possible, but used to be quite a bit easier.

The Wall Street Journal‘s Editorial Board decries the latest lawless power-grab by the Biden administration. A slice:

We’ve been chronicling how Biden regulators are dusting off old laws to seize more power over the private economy. Now comes the Food and Drug Administration, which on Monday redefined blood cancer, genetic and other innovative lab tests as—get this—medical devices like pacemakers.

FDA’s 528-page rule snatches authority over tests that are developed, manufactured and performed by labs. Doctors prescribe such tests to identify prenatal genetic abnormalities, predict hereditary disease risks, select therapies, diagnose infectious diseases, and more. They increasingly use algorithms and artificial intelligence.

The agency claims it has long held the authority to regulate tests under the 1976 Medical Device Amendments, which augmented its purview over diagnostic devices such as blood-glucose monitors and test materials. But lab tests aren’t devices. They are analytical processes and patient services.

No matter. The FDA will now require some 12,000 labs to submit tests for agency review.

Robby Soave is right: Despite the vileness of campus antisemitism, Congress has no business trying to restrict antisemitic speech there.

GMU Econ alum Jon Murphy explains that market concentration does not signal monopoly. A slice:

The Federal Trade Commission (FTC) recently launched an antitrust investigation into Amazon, alleging the firm had used monopoly power to suppress competition. Through the Amazon Marketplace, Amazon supposedly limits competition to promote certain sellers and brands at the expense of others. Prima facie, this complaint may make sense, but the economic understanding of a firm discussed above gives us reason to question the FTC’s argument. We must ask the question “as compared to what?” Absent Amazon Marketplace, would these sellers and their listed products exist? Amazon Marketplace reduces the cost, in both money and time, of online buyer-seller transactions. These independent sellers get access to Amazon’s platform, Amazon’s customers, Amazon’s payment handling system, and as such are able to quickly and efficiently coordinate with potential buyers. All of these transaction costs, when not subsidized by a large firm, can represent a significant hurdle to would-be sellers. By reducing transaction costs, Amazon increases the number of sellers (and buyers) in the market; they make it easier for sellers to enter the market, find buyers, and complete transactions. Thus, we see the FTC’s complaint gets things exactly backward: Amazon isn’t reducing competition. Amazon is increasing competition! Breaking up Amazon’s supposed monopoly would likely result in less competition, even if it makes the market appear to be less concentrated.

GMU Econ alum Paul Mueller chews on Florida’s ban on producing lab-grown meat.

Megan McArdle writes insightfully about campus protestors and Democratic politics. A slice:

Generations of progressive strategists have nonetheless been dazzled by visions of the enormous coalition they could build if young voters would just turn out to vote as readily as retirees do. But there’s a reason these visions keep failing to materialize. When you ask young voters what they care about most, bread-and-butter issues such as inflation, health care and jobs top the list, while progressive priorities such as climate change, student loan forgiveness and Israel-Palestine are at the bottom. Moreover, this is especially true of young voters who don’t vote regularly: “at all ages, less-engaged people are less ideological and more moderate than consistent voters,” political analyst Matt Yglesias writes.

Randy Holcombe is understandably unhappy with the TSA.

Juliette Sellgren talks with Alice Temnick about Adam Smith as educator.

“Less Marx, More Mises.”

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… is from page 251 of Deirdre McCloskey’s 2024 paper “Market Prices are Not Inherently Corrupting,” which is chapter 19 in The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy (Ryan A. Bourne, ed., 2024):

Most often, and especially when dealing with strangers, money prices take an item out of the political or ethical realm in a way that paradoxically purifies it. Allocating goods by social class or race or violence or political pressures or party membership is disgraceful. A price for most goods is merely a price. No shame attached.

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An example of just how bonkers – and bipartisanly so – are many allegedly serious discussions by political types of trade is found in this short report on a recent hearing on Capitol Hill. In this hearing, Sen. John Thune (R-SD) complained about America’s trade deficit in agricultural goods. And U.S. Trade Representative Katherine Tai (also at this hearing) apparently treated this complaint as if it is economically meaningful.

But of course an “ag trade deficit” is no more economically meaningful than is a “yellow-things trade deficit” or a “things-bigger-than-a-breadbasket trade surplus.” There is absolutely no reason to expect that a country will export – during any year or over time – the same amount of agricultural products that it imports. Indeed, because of the principle of comparative advantage, each country will import things that it doesn’t produce at home and export different things. In short, countries are supposed to have so-called ‘trade deficits’ in some things and so-called ‘trade surpluses’ in other things.

Because “agricultural goods” is a portmanteau category – a category that includes many different agricultural  goods (strawberries, wheat, pineapples, pork bellies, etc.) some of which we Americans produce at a comparative advantage and others of which we produce at a comparative disadvantage – America almost certainly runs ‘surpluses’ in some of these goods and ‘deficits’ in others. For example, America might be a net exporter of wheat, maple syrup, and rawhides, and a net importer of grapes, artichokes, and alfalfa. It’s therefore possible that in a calendar year American exports of “ag goods” would equal American imports of “ag goods.” But, again, there simply no reason to expect any such ‘equality’ and, thus, mentioning and treating the “ag trade deficit” as if it is an economically meaningful concept only shows how primitive trade-policy discussions (and trade-policy making) remain in 2024.

(HT to Ricky Wylde for sending the piece linked to above.)