Russell Roberts's Blog, page 10
June 11, 2023
Some Links
Phil Magness busts three myths about Karl Marx.
Robert Poole offers a brief history of single-family zoning.
Steven Greenhut warns us not to confuse ‘local control’ with small government.
Wall Street Journal columnist James Freeman reports on “the continuing unreality of Bidenomics.” A slice:
A distinctive feature of Joe Biden’s presidency is the frequency with which his economic claims are rebutted by the government’s own statistics. One can find this disturbing or amusing—or perhaps both if one is determined to carry a good mood into the weekend while remaining clear-eyed about the country’s challenges.
Today in a Journal op-ed President Joe Biden follows up on a piece from last year in which he pretended to be the author of an economic rebound who took office amid a “stalled” recovery. Yet Mr. Biden’s own Commerce Department affirms that the U.S. economy was growing faster during the quarter he took office than it has in the two years since.
Mr. Biden is also once again posing as a deficit fighter, but this week’s monthly update from the Congressional Budget Office exposes this canard.
J.D. Tuccille decries the muzzling of lockdown dissenters. A slice:
As in Britain, U.S. officials leaned on multiple private firms to suppress messages the government didn’t like.
“The Centers for Disease Control and Prevention (CDC) played a direct role in policing permissible speech on social media throughout the COVID-19 pandemic,” Reason‘s Robby Soave reported in January. “Confidential emails obtained by Reason show that Facebook moderators were in constant contact with the CDC, and routinely asked government health officials to vet claims relating to the virus, mitigation efforts such as masks, and vaccines.”
[In 2021] New York led in net business out-migration (487), followed by California (456), Illinois (208), Maryland (50) and Pennsylvania (33). Florida (399), North Carolina (148), Nevada (103), Texas (103) and Tennessee (92) drew the most businesses from other states. All besides North Carolina have no income tax.
These figures probably underestimate the business migration that occurred early in the pandemic since they don’t capture larger firms shifting headquarters or workforces to other states. Texas saw a spike in headquarter relocations in 2020 (42) and 2021 (80), more than half of which came from California.
Here’s the abstract of a new paper by the University of Washington’s Kevin Bardosh (emphasis added): (HT Jay Bhattacharya)
Early in the Covid pandemic concerns were raised that lockdown and other non-pharmaceutical interventions would cause significant multidimensional harm to society. This paper comprehensively evaluates the global state of knowledge on these adverse social impacts, with an emphasis on their type and magnitude during 2020 and 2021. A harm framework was developed spanning 10 categories: health, economy, income, food security, education, lifestyle, intimate relationships, community, environment and governance. The analysis synthesizes 600 publications with a focus on meta-analyses, systematic reviews, global reports and multi-country studies. This cumulative academic research shows that the collateral damage of the pandemic response was substantial, wide-ranging and will leave behind a legacy of harm for hundreds of millions of people in the years ahead. Many original predictions are broadly supported by the research data including: a rise in non-Covid excess mortality, mental health deterioration, child abuse and domestic violence, widening global inequality, food insecurity, lost educational opportunities, unhealthy lifestyle behaviours, social polarization, soaring debt, democratic backsliding and declining human rights. Young people, individuals and countries with lower socioeconomic status, women and those with pre-existing vulnerabilities were hit hardest. Societal harms should challenge the dominant mental model of the pandemic response: it is likely that many Covid policies caused more harm than benefit, although further research is needed to address knowledge gaps and explore policy trade-offs, especially at a country-level. Planning and response for future global health emergencies must integrate a wider range of expertise to account for and mitigate societal harms associated with government intervention.
Quotation of the Day…
… is from page 9 of David Schmidtz’s and Jason Brennan’s 2010 book, A Brief History of Liberty:
Negative liberties are not guaranteed to make us better off, but neither is vitamin C, or exercise – so guarantees are beside the point. The point of negative liberty has less to do with what liberty guarantees and more to do with what liberty gives people the chance to do for themselves.
June 10, 2023
Some Links
George Will is justly critical of the U.S. Supreme Court’s recent ruling in the redistricting case out of Alabama. Three slices:
Section 2 of the 1965 Voting Rights Act, as amended in 1982, proscribes any voting arrangement that “results in a denial or abridgement of the right of any citizen … to vote on account of race.” Courts, prodded by groups intent on maximizing race-conscious policies and minimizing colorblindness as a social aspiration, have radically rewritten this. They have changed the right to vote into an entitlement to arrangements that make likely particular election results.
This week, the Supreme Court preserved this perversion of the law. It affirmed that the VRA protects Black voters against the “dilution” of their power to achieve their preferred (presumably racial) election outcomes. The court said Black Alabamians are entitled to a second district configured to increase the probability of success by Black candidates.
…..
The VRA was written to end voting measures involving racial discrimination; since 1986, the court has required such measures. This, even though Section 2 says that nothing in it “establishes a right to have members of a protected class elected in numbers equal to their proportion of the population.” Enacted in 1965, the VRA proscribed racist state practices. The VRA originally guaranteed equal access to ballots, and equality in the right “to participate in the political process” (emphasis added). But identity politics influenced courts’ construing of the VRA.
It has been wielded as a guarantee not of individuals’ rights but of the rights of racial groups that are presumed to think monolithically. In 1980, the court held that Section 2 prohibits only “intentionally discriminatory” government action. So, in 1982 Congress prohibited action that, regardless of intent, has a discriminatory “result.” Next, in a judge-created gloss on the 1982 amendment, the VRA was said to guarantee a “meaningful vote” — one conducive to producing a racial group’s presumed preference for representation by members of the group.
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[Chief Justice John] Roberts, in Thursday’s decision, correctly described it as consistent with precedents. But being consistent with incoherence is no virtue. After the decision, progressives paused their denunciations of what they call the “imperial” court. Switching gears, they praised its imperious rewriting of the Voting Rights Act. They ignored the fact that its authentic purpose was simply to end racial discrimination in voting rules.
With its new ruling, the court has again reaffirmed the federal judiciary’s repudiation of colorblind law. And the court lubricated today’s slide into incessant obsessing about race. This is a sordid business.
The organization I lead, the New Civil Liberties Alliance, represents plaintiffs in Missouri v. Biden, a lawsuit challenging the federal government’s campaign to censor speech on social media. For years, officials at the White House, the Federal Bureau of Investigation, the Department of Homeland Security, the Central Intelligence Agency and other agencies have pressured tech companies to suppress “misinformation.”
Much of the targeted speech doesn’t deserve that Orwellian label. Some of the speech is truthful, and some is simply opinion that dissents from the government’s viewpoint. Yet even actual misinformation—with a few exceptions such as commercial fraud and defamation—is fully protected by the First Amendment. The government makes no claim that the speech it seeks to suppress is unprotected.
So how does it defend its actions? On May 3, the Justice Department filed a 297-page argument that reveals how so many officials could suppress speech with so little fear of violating the Constitution. The root of the problem is judicial negligence.
The Supreme Court has adopted doctrines that inadvertently erode the ability of officials to see that censorship is unconstitutional. Although the doctrines, when carefully considered by sophisticated judges, reveal the unlawfulness of the suppression, they have weakened the constitutional obstacles to censorship by depriving them of their demotic clarity. They even seem to invite game-playing by officials. So FBI agents and other officials imagine that censorship is permissible. And in defending the errant officials, the Justice Department echoes their manipulative reading of weak doctrine.
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Supreme Court doctrine, however, dangerously encourages government to think it can use private firms to circumvent the First Amendment—as long as it doesn’t turn them into government actors. This is especially worrisome because it seems paradoxical and hazardous to say that private companies can be considered government actors. Many judges are reluctant to reach so perverse a conclusion, thus giving even greater leeway for privatized government censorship.
Americans hoping that President Biden’s agreement to sign permitting reforms as part of the debt-ceiling compromise signaled a policy change are going to be disappointed. His Administration’s hostility to natural-resource development continues apace.
On Tuesday the U.S. Army Corps of Engineers revoked a Clean Water Act permit granted by the Trump Administration for the NewRange copper and nickel mine in Minnesota’s Duluth Complex. The area isn’t virgin land. The Duluth site is part of the fabled Iron Range, which provided 70% of the iron ore that America used during World War II.
“Minnesota’s Iron Range has played a vital role in helping build America,” candidate Biden proclaimed in September 2020. “U.S. manufacturing and mining was the Arsenal of Democracy in World War II. It must be part of the Arsenal of American Prosperity today, helping power an economic recovery for working families.” Apparently not.
His Administration picked the anniversary of D-Day to deep-six the NewRange mine, which would provide minerals to power electric vehicles and his green-energy transition. The U.S. will have to import the minerals from arsenals of autocracy like Russia and China.
Phil Magness talks with Kate Wand about Karl Marx and the Russian Revolution.
Richard Fulmer welcomes the explicit admission of some environmentalists that their world view is a religious one. Here’s his conclusion:
I for one welcome it as a forthright admission that they wish to replace discussion, reason, and scientific inquiry with religious dogma. Better a visible adversary than one shrouded behind words and phrases meant to conceal and deflect rather than to enlighten.
Juliette Sellgren talks with John Cochrane about monetary and fiscal policies.
A few months ago, Ashley Rindsberg revealed “[h]ow Anthony Fauci manufactured consensus on the origins of COVID-19 with the help of science writers and the media.” A slice: (HT Jay Bhattacharya) A slice:
The deeper phenomenon at work, however, is that in the U.S. a large number of professionals who cover science for general readers and for news publications like The New York Times or The Wall Street Journalare not—and do not pretend to be—journalists per se. They are science writers whose field is science communications—a distinction with a huge difference. They see their role as translating the lofty work of pure science for a general audience, rather than as professional skeptics whose job is to investigate the competing interests, claims, and billion-dollar funding streams in the messy world of all-too-human scientists.
From the beginning of the pandemic, The New York Times, The Washington Post, CNN and other leading mainstream outlets were taking their cues—including their facts and their seemingly unflappable certainties—from peer-reviewed publications with authoritative professional reputations like Nature, Science, and The Lancet.
It was this small handful of peer-reviewed science and medical journals—and to a shocking extent just these three—on which the consumer media based key narratives, like the idea that SARS-CoV-2 could not possibly have come from a lab. Boiled down, “the science” on a given issue was often conclusively reduced to whatever these journals published.
But for the establishment science publishing community, the pandemic also had an unintended consequence. Through journalistic investigations, often powered by FOIA requests that ensnared hundreds of email exchanges with scientists and science writers, a spotlight was turned on science journalism itself. Writers like Paul Thacker, a contributor to The BMJ, Emily Kopp, a reporter for the watchdog group U.S. Right to Know, Michael Balter, who has contributed dozens of pieces to Science magazine, and the powerful decentralized group of COVID investigators called DRASTIC, exposed the inner workings of an industry that claims to speak for science but often works for political and corporate interests.
Quotation of the Day…
… is from page 220 of David Schmidtz’s excellent 2023 book, Living Together:
If I ask people to give me my due, I am after all asking for something. When I speak of justice, I speak of treating all cases alike, which is to ask the same of myself as of everyone else. That rudimentary egalitarian mutual respect is built into the basic concept of justice. Indeed, that rudimentary egalitarian respect is built into the concept of a mature adult.
DBx: Although very few people, upon reading what Schmidtz writes here, would disagree, very many people in practice act as though they disagree. Sometimes such hypocritical action is simply the product of greed: “I know it’s wrong for me to do X, but I value my gain from doing X more highly than I assess the cost to me of violating a moral principle that I know to be correct – a principle that I want to be widely respected in any society in which I live.”
Yet most of the time actions – and words – that run against the principle expressed here by Schmidtz come not from bad intentions but from bad analysis – especially, from bad economic analysis. When, for example, Jones calls for tariffs to protect domestic jobs, he simply doesn’t see that some individuals will reap benefits at the expense of others. This blindness is real even if we artificially confine the group of people for whom we are concerned to fellow citizens. The protectionist doesn’t see that if every worker were treated according to the protectionist’s ‘principles,’ all workers in the home country would be worse off than they would be under a policy of free trade.
Another example: The ‘social justice’ warrior who screams for government to ‘redistribute’ income sees only one inequality – namely, monetary incomes. This person sees neither the greater sacrifices and effort exerted by high-income earners nor the negative impacts that low-income earners would suffer over time as a result of government’s ‘redistribution’ of income.
As Dave Schmidtz suggests on the page previous to the above quotation, one of the chief results of economics done well – I would say the chief result – is to open people’s eyes to unseen positive consequences of free markets, as well as to unseen negative consequences of government interventions. When knowledge of these consequences is adequately grasped, actions and outcomes that once seemed to be unjust often are revealed to be just, while other actions and outcomes that once seemed to be just are revealed to be unjust.
June 9, 2023
Price Controls Are Government-Mandated False Advertising
Here’s a follow-up letter to my new correspondent from this morning:
Ms. H__:
Thanks for your prompt reply to my note of this morning.
About my opposition to price controls, you write that you can’t understand “many economists’ stubborn and doctrinaire hostility to a common sense policy for keeping consumables more affordable.”
With respect, while price ceilings strike you as a “common sense” means of making goods and services more affordable, they are revealed by economics to be a means of making goods and services less affordable. By encouraging suppliers to reduce the quantities they bring to market, price ceilings make price-ceilinged goods more scarce. This artificial decrease in a good’s abundance perversely raises the market value of – that is, raises the amount that buyers are willing to pay for – the relatively few units of the good that are brought to market. Because buyers can’t legally pay this higher amount with money, they pay it in other ways – for example, by spending time waiting in line, by increased willingness to accept lower quality, by providing in-kind favors (“I’ll serve you, for ‘free,’ a nice meal at my restaurant if you send to me several gallons of your gasoline”), and simply by doing without the good.
Government-mandated low maximum money prices is government-mandated false advertising. By imposing price ceilings, the government prohibits sellers from revealing to buyers the true market values of price-ceilinged goods. Opposition to price-ceilings, then, is no more perverse and doctrinaire than would be opposition to, say, a government mandate that nutrition labels on foods never report a calorie count per serving higher than 100. It looks nice, but it’s a government-enforced lie that makes people worse off.
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
Vernon Smith On Price Controls
In response to this letter, my emeritus Nobel-laureate colleague Vernon Smith sent to me the following e-mail, which I share here in full and with Vernon’s kind permission:
Don:
WWII price and wage controls had the unintended consequence of incentivizing the use of non-wage supplementary benefits like healthcare and insurance to induce workers to move from one job to another. Thereafter these programs became linked to employment limiting their availability to women and others not in the labor market.
Vernon
DBx: Indeed.
People who think that price ceilings are an effective way to help buyers specifically, or to improve the economy more generally, are people who do not think seriously.
Price Controls Are Not Justified by Monopoly Power
Here’s a letter to a new correspondent:
Ms. H__:
Thanks for your e-mail.
You write that, in my letter of yesterday, I “neglect a critical part of Isabella Weber’s case for using price controls to fight rising prices. That part is Professor Weber’s detection that many prices today like prices in wartime are monopoly prices.”
You’re correct that in my letter I didn’t mention Prof. Weber’s assertion that many prices are rising today as a result of what she calls a “temporary monopoly.” But contrary to Prof. Weber’s belief that the existence of temporary monopoly power justifies price ceilings, quite the opposite is true.
What she calls a “temporary monopoly” is more accurately described as a market many outputs of which are reduced by calamities such as covid and war. The resulting higher prices not only reflect these greater scarcities, they also incite suppliers to exert more efforts to increase quantities supplied, and incite buyers to further economize on their uses of these goods until more supplies arrive.
Price controls would obstruct this vital role of prices. Allowing prices to rise is especially important when goods are in unusually short supply. The higher prices charged by firms that Prof. Weber describes as possessing a “temporary monopoly” is the very nectar that attracts more firms and resources into those lines of production. And only by attracting more firms and resources into those lines of production will existing firms’ ‘power’ to charge unusually high prices be destroyed without simultaneously causing shortages.
In short, to impose price ceilings as a means of dealing with temporary monopoly power is to remove from the market the essential ingredient that will spur the more-intense competition that’s necessary to rid the market of monopoly power.
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
Quotation of the Day…
… is from page 264 of Thomas Sowell’s 1999 book, Barbarians Inside the Gates:
One of the great mysteries of our time is why so many people who are either born rich or who gain great wealth in the media are so hostile to the values of American society and Western civilization. The most plausible explanation I have heard is that this stance enables them to enjoy their wealth with a clearer conscience as friends of the “underdogs” and enemies of “the establishment” – even though in reality they are really friends of parasites and enemies of civilization.
June 8, 2023
More on the Absurdity of Price Controls
Just a few years ago I would have assumed that this piece in the New Yorker is a brilliant intentional spoof, meant to elicit laughs. Unfortunately, it’s no spoof.
Editor, New Yorker
Editor:
Zachary Carter writes that Isabella Weber’s proposal to control inflation by using price ceilings is “carefully grounded in history. Price controls, she argued, had been an essential element of the U.S. mobilization strategy during the Second World War” (“What if We’re Thinking About Inflation All Wrong?” June 6). Mr. Carter and Prof. Weber need to brush up on their history.
Contrary to what Mr. Carter and Prof. Weber apparently believe, no economist has ever denied the undeniable fact that government prohibitions of nominal price increases keep nominal prices from increasing. As even my freshman students would say, ‘Duh.’ And nor has any economist ever denied that price controls during WWII did indeed suppress inflation. But because the value of the monetary unit necessarily falls when the supply of money is increased relative to people’s desire to hold money (as it was during WWII) – and because inflation-induced price hikes reflect this falling value – price controls only distort this reflection. Price controls no more render goods and services as abundant as their low nominal prices make them appear to be as would me pasting a picture of Chris Hemsworth on my bathroom mirror render 64-year-old me younger and more handsome and hulking.
In fact, because price controls hide from consumers and producers accurate information about the true state of the economy, they worsen the economy’s performance. For example, as found by economic historian Robert Higgs,
For the four years from 1942 through 1945 as a whole, gross private investment fell to such low levels that it failed to compensate for the depreciation of the private capital stock. For that period, net private investment totaled minus $6.2 billion. In U.S. history, the only comparable evaporation of private capital occurred during the early years of the Great Depression.
And consider this report from economic historian Alexander Field:
In the presence of price controls, curtailment of consumption resulted from an interaction of limitation orders and other supply disruptions that restricted deliveries and availability, and end-user rationing, which constrained purchases even when consumers had money and an intent to buy….
In the summer of 1942 pumps went dry all along the Eastern Seaboard. Most filling stations closed. Automobiles would tail a gasoline tanker truck until it stopped for a delivery, trailed by a string of desperate drivers. If word got out that a station had gas, lines of cars – as many as 350 of them – would form.**
Save us, please, from any further such ‘successes’ of price controls.
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
* Robert Higgs, Depression, War, and Cold War (Oxford: Oxford University Press, 2006), page 84.
** Alexander J. Field, The Economic Consequences of U.S. Mobilization for the Second World War (New Haven: Yale University Press, 2022), page 160.
Some Links
Stephanie Slade is not impressed with Patrick Deneen’s case – made in his new book, Regime Change – for “common-good conservatism.” Two slices from Slade’s review:
Even going to great lengths to puzzle out the strongest versions of the arguments Deneen seems to be making will get the reader only so far. Every one of his major claims disintegrates under scrutiny. You’re left with the impression that he barely understands his own ideas, and that he misunderstands entirely the thing he’s arguing against.
Deneen’s case rests almost entirely on the idea that left-progressive liberalism and classical liberalism, far from representing opposing worldviews, are in fact “identical, monolithic, and eager to deploy power in the name of enforcing individual expressivism.” What unites them, he says, is a commitment to unrelenting progress. Classical liberals (including many American conservatives) might emphasize economic dynamism, innovation, and wealth creation, while progressives are focused on liberating people from lifestyle constraints by clearing away what they see as outdated social institutions such as religion and the traditional family. But Deneen thinks these are really two sides of the same coin. Liberalism is progressivism, full stop.
…..
But Deneen’s agenda also includes socially reactionary ideas (“renewed efforts to enforce a moral media”) and half-baked industrial policy (“domestic manufacturing in certain sectors should simply be mandated”). Often, his own means and ends aren’t even aligned. At one point, he names as a goal that “university education could be substantially reduced” and then, in the same paragraph, asserts that “vocational schools or tracks ought to be supplemented by required introductory courses in a university-level general education”—a proposal that would force people who want to pursue careers in the trades back into the classroom.
Deneen’s arguments frequently fall apart in just this way. Near the end of the book, he makes the case that a hallmark of liberalism is “separation” (e.g., between church and state) while a hallmark of conservatism is “integration.” Of course, economic liberalism includes a default commitment to allowing goods and people to flow across borders. Deneen waves this away, writing that “the ultimate logic” of globalization is “disintegration, the weakening and outright elimination of all cultural, geographic, traditional forms of membership,” apparently hoping readers won’t notice that the barriers to trade and immigration that he supports are ways of keeping us forcibly separated.
Writing in the Wall Street Journal, Robert Zoellick warns of the woeful consequences of Biden’s industrial policy. Two slices:
The new economic and social order incorporates six connected elements. The first is an aversion to trade. The new planners in Washington need trade barriers to limit competition with their protected national economy and reward special interests. But protectionist tariffs add to everyone’s bills. The U.S. has given up negotiating open markets abroad and lowering prices at home. U.S. Trade Representative Katherine Tai told a union panel in Detroit that trade policy had focused too much on liberalization, efficiencies and lower costs.
…..
Second, the administration’s industrial policy requires huge subsidies for favored causes. Such policies are notoriously difficult to implement and require not-so-fine tuning. Chad Bown of the Peterson Institute for International Economics has pointed out that the U.S., once the leading exporter of electric vehicles, provoked tariff escalations that pushed Tesla in 2018 to announce a manufacturing shift to China. Beijing is now the principal exporter of electric vehicles. Mr. Biden responded by subsidizing U.S. production. When the European Union threatened retaliation, the administration created a loophole for imports of leased vehicles, which escape even the restrictions that apply to U.S. production. Electric-vehicle imports, especially from the EU, continued to grow this year.
In another industry, the Commerce Department now has to decide which semiconductor producers to subsidize, for what types of chips, for how long and with what restrictions. If Washington orders companies not to sell any chips to China, American producers will lose earnings for research and development and expansion. Washington also has to decide what inputs must be produced at home—if feasible—and to expect retaliation.
A third element contributing to WOE: Antitrust authorities are blocking acquisitions on the theory that “big is bad,” regardless of consumer interests and price effects. As former Federal Trade Commission Chairman Timothy Muris observed in these pages, the new policy reverses 40 years of bipartisan, principled economic standards and opens the door to political favoritism. The FTC, led by Lina Khan, wants to dismantle business models of entrepreneurs selling innovations to larger enterprises with more capital and marketing reach. That comes right as the advent of artificial intelligence and cloud services has intensified competition and probably will create opportunities for invention within more open-source systems.
Michael Thomas and Anthony Gill write wisely about “effective altruism.”
Jack Nicastro reports a frightening finding.
James Pethokoukis explains why AI cannot replace market capitalism.
Michael P Senger tweets: (HT Jay Bhattacharya)
Australian Senator Alex Antic on the WHO’s new Pandemic Treaty: “The lamentable WHO will dictate, they’ll be able to declare when a pandemic starts, declare when it ends, they’ll be able to declare when we have a lockdown… Why are we signing up to it?”
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Negative liberties are not guaranteed to make us better off, but neither is vitamin C, or exercise – so guarantees are beside the point. The point of negative liberty has less to do with what liberty guarantees and more to do with what liberty gives people the chance to do for themselves.
If I ask people to give me my due, I am after all asking for something. When I speak of justice, I speak of treating all cases alike, which is to ask the same of myself as of everyone else. That rudimentary egalitarian mutual respect is built into the basic concept of justice. Indeed, that rudimentary egalitarian respect is built into the concept of a mature adult.

