Russell Roberts's Blog, page 117

Pittsburgh Tribune-Review: “Sequesterphobia”

(Don Boudreaux)

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In my column for the March 15th, 2013, edition of the Pittsburgh Tribune-Review, I ridiculed the ridiculous predictions many people were making back then about the likely consequences of tiny cuts in the U.S. government’s budget. You can read my column in full beneath the fold.

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Some Links

(Don Boudreaux)

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My GMU Econ colleague Vincent Geloso coolly assesses deaths caused by heatwaves. A slice:

“Lawn watering banned: mercury 101.3” read one Toronto newspaper. “Heat kills 100 Twin Citians” titled a St-Paul newspaper. These titles are not from the current heavily discussed heatwave. They are from the 1936 heat wave – one of the most extreme waves of the twentieth century according to the Environmental Protection Agency’s (EPA) Heat Wave Index. No other year since 1895 gets even close to that year in terms of intensity, and the next closest is 1934.

Highlighting this earlier historical episode is not something I do in order to push sideways the claim that heat waves have increased (and will increase further) because of climate change. I highlight this because it allows us to gain a perspective on the linkage between human wellbeing and climate that catastrophic media treatments fail to convey.

Richard Rahn decries what we might call the structural racism of Biden’s energy policies.

The Wall Street Journal‘s Editorial Board reports on the slimy strings that are inevitably attached to government-granted subsidies. A slice:

That message couldn’t have been clearer from President Biden on Tuesday when he told business and labor leaders on a conference call that the bill’s $52 billion in grants for Intel and other chip makers would not be “a blank check to companies.” The President said he will “personally have to sign off on the biggest grants.”

Hint to companies applying for money: Locate that new factory in a swing state with more than a handful of electoral votes. Mr. Biden or the Vice President may want to swing by during the 2024 election campaign.

The President also underscored that the law requires companies to pay union prevailing wages to build the semiconductor fabrication facilities funded by the bill. Communications Workers of America president Chris Shelton said this will ensure “there isn’t a race to the bottom.” Translation: Construction will be more expensive, and non-union contractors won’t benefit.

Arnold Kling corrects Peter Thiel by making an important and often-overlooked point. A slice:

I do not think of GDP as some objective measure of production, as if we all work in a GDP factory.

Instead, I think of GDP as a measure of economic activity. And every time we go to the market for something instead of providing it for ourselves, that is economic activity. That is true when we take an Uber instead of driving ourselves, when we eat in a restaurant instead of cooking at home, when we hire a contractor instead of building a deck as a do-it-yourself project.

Economic activity consists of specialization of trade. That means outsourcing. In a primitive economy, you do your own farming, your own cooking, make your own clothing, and so on. In an advanced economy, you do less of these things. You outsource them, in a pattern of specialization and trade.

My GMU Econ colleague Bryan Caplan riffs productively on Nobel-laureate Robert Lucas’s famous observation that “Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution.”

Cafe Hayek’s Bonus Quotation of the Day from exactly one year ago, and featuring an insight from José Ortega y Gasset about liberalism, is well worth revisiting.

Michael Brendan Dougherty – reacting to Fauci’s continuing, mad insistence that children should continue to wear masks – writes:

Seems crazy to me. Is there something we don’t know about? Are many children dying at your local unmasked summer schools and unmasked summer camps? Are the local emergency rooms clogged with juvenile Covid cases admitted because of Covid? I feel like the New York Times would be reporting on such a thing if it were true.

Guy Hatchard reports on the cruel masking of schoolchildren in New Zealand.

“Ministers do not know if Covid travel rules worked, report finds“. (HT Jay Bhattacharya)

The New York Post‘s Editorial Board draws sensible lessons from the mildness of Biden’s covid symptoms.

Jay Bhattacharya tweets:

The @latimes is fear mongering again, as it has throughout the pandemic. Calling covid a ‘mass disabling event’ is truly irresponsible. If I were not against censorship, I would wonder why @twitter does not tag this LA Times piece as misinformation.

Fortunately, as this tweet from Julie Hamill shows, there’s some legal resistance to the covidians’ on-going authoritarian reign in Los Angeles:

On behalf of @LACountyParents, I filed a petition for writ of mandate and complaint against @lapublichealth, Ferrer and Davis. We cannot live like this anymore. If she proceeds with the new mask mandate on Friday, we will immediately seek a TRO.

Quotation of the Day…

(Don Boudreaux)

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… is from page 51 of Richard Epstein’s brilliant 2003 book Skepticism and Freedom: A Modern Case for Classical Liberalism:

[T]he dark side of human nature does not disappear just because fallible human beings have assumed the trappings of public office.

DBx: Although this observation is hardly disputable by people older than six years of age, the mysterious fact remains that many adults continue to suppose that achieving government office, at least in a democratic society, makes someone – of the correct political party – closer to being godlike in both abilities and interests.

…..

BTW, I reviewed this book in the Spring 2004 issue of Regulation.

Save Us from Such “Bipartisan Progress”

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal:

Editor:

William Galston celebrates the Congressional bipartisanship now producing, among other pieces of legislation, subsidies to American producers of semiconductors (“Surprise: A Divided Congress Is Making Bipartisan Progress,” July 26). He should hold his applause.

First, contrary to Mr. Galston’s naïve suggestion, Democrats aren’t supporting these subsidies to private businesses out of a sense of patriotic duty. Instead, they’re doling out corporate welfare, a well-rehearsed practice that conjures political support for politicians doing the doling regardless of party.

Second, Mr. Galston mistakenly assumes that subsidies are necessary to spur investment in semiconductor production. In reality, as noted recently by Scott Lincicome and Alfredo Carrillo Obregon,

there has been even more chipmaking investment dedicated to the U.S. market, even as federal subsidies have languished. Construction is now underway at four major U.S. facilities and will continue with or without subsidies – something even Intel reluctantly acknowledged when it delayed the groundbreaking ceremony on its much‐​ballyhooed Ohio facility to protest congressional inaction. This is because, as numerous experts have explained over the last year, there are real economic and geopolitical reasons to invest in additional U.S. semiconductor production – no federal subsidies needed.*

Bipartisanship in this case is politically opportunistic cooperation across the aisle to loot taxpayers for the benefit of politically powerful producers.

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

* Scott Lincicome and Alfredo Carrillo Obregon, “Politics, Not Economics, Motivates Semiconductor Subsidies,” Cato@Liberty, July 20, 2022.

Pittsburgh Tribune-Review: “Minimum questions about minimum wage”

(Don Boudreaux)

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In my column for the February 27th, 2013, edition of the Pittsburgh Tribune-Review I asked some questions about minimum-wage legislation. You can read my column in full beneath the fold.

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Some Links

(Don Boudreaux)

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In a new interview with Reason‘s Robby Soave, Fauci opines that covid restrictions back in 2020 should have been “much, much more stringent.” (DBx: Fauci again proves that he has the heart, soul, and mind of a dangerous fanatic. He focuses obsessively on one goal; all other considerations are ignored or treated with disdain. And he has no qualms about using as much coercion as is necessary to further as much as possible his lone goal. When someone attaches value only to one goal, that someone experiences – and can see – no meaningful costs, for even the tiniest further movement toward the full attainment of that goal is by presumption worth whatever that movement costs. No such fanatic should possess any power or influence.)

In response to Fauci’s lament that lockdowns in America weren’t as draconian and as tyrannical as he would have liked them to be, Jay Bhattacharya tweets:

If only we had had Shanghai style drones on our streets reminding people to control their ‘desire for freedom’ while people run out of food, locked into their apartments. Then the laptop class could have had zero covid. At least we should have died trying.

In response to Fauci’s astonishing assertion that he didn’t recommend locking anything down, Jay Bhattacharya tweets:

Somehow I don’t think this blatant attempt to revise history is going to work. Dr. Lockdown owns the school closures and their attendant collateral harms. He would do better to offer an abject apology to those hurt by his policies.

Eli Klein tweets: (HT Jay Bhattacharya)

Those who follow me know my strong advocacy for open schools and intimate knowledge of this subject. I promise you, Fauci is an extended school closures villain. If he was actually pushing for open schools, much of the world would be in a better situation. He’s just such a liar.

Here’s the abstract of a new paper by Shamik Dasgupta:

This article argues that extended school closures during the Covid-19 pandemic were a moral catastrophe. It focuses on closures in the United States of America and discusses their effect on the pandemic (or lack thereof), their harmful effects on children, and other morally relevant factors. It concludes by discussing how these closures came to pass and suggests that the root cause was structural, not individual: the relevant decision-makers were working in an institutional setting that stacked the deck heavily in favor of extended closures.

Favorably responding to the above paper by Dasgupta, Vinay Prasad tweets:

This article is absolutely correct. Not only was it wrong, and harmful, it was a moral catastrophe. Many of us saw this, and were shouting it from the rooftops.

Universities were scared to host debates on this issue. Advocates for marginalized kids were on the wrong side of it

Matthew Lesh writes about “[t]he rise and fall of Jacinda Ardern.” A slice:

The borders will not fully reopen until the end of this month. Until recently, even many citizens were not allowed back into the country, a policy which tore families apart and left Kiwis destitute overseas. In one shocking case, a New Zealand journalist was forced to turn to the Taliban for sanctuary to deliver her baby after struggling to get home. For all that pain, the Covid reckoning has now arrived. An upsurge in cases has led to one of the highest daily death rates in the world and the reintroduction of restrictions, including a mask mandate and isolation requirements. It’s a gloomy turn of events for a country that is still unprepared to live with the virus.

The broader consequences of a nation closing itself off for such an extended period should not be brushed aside. Draconian pandemic policies turned the country inward and fearful of outsiders, scaring away immigrants and damaging trade relations. This is an about-turn for a country that achieved immense economic prosperity by being open to the world in recent decades.

Paul Schwennesen decries the “administrative despotism exemplified by zoning laws.”

GMU Econ alum Dominic Pino reports on the reduced construction of oil tankers. A slice:

Those global [environmental] standards also involve reducing the speed of oceangoing vessels, in an effort to save fuel and reduce emissions. As ships go slower, expected profits to decline because ships will be able to complete fewer trips in a given amount of time than they used to.

A new oil tanker is very expensive, and the time horizon that companies use when making purchasing decisions is decades long. With some Western leaders essentially signaling that they plan to use government power to end the petroleum industry in its current form over the next few decades, industry executives are likely hesitant to make long-term investment decisions.

Eric Bazail-Eimil explains how Trump’s tariffs on Chinese chemical products backfired.

Tyler Syck warns us of the dangers lurking in “national conservatism.” Two slices:

This approach fundamentally misunderstands the point of the American constitutional arrangement. The framers of our constitution well understood that a nation of our size and diversity had little hope of agreeing upon what constitutes immorality or dissolution. This is liberalism’s chief insight, that after centuries of violent fighting over religion and morality it is better if most of these issues are left to individuals and the communities to which they belong. The constitution takes this vital truth and makes it the centerpiece of our political order. It leaves to the states and to individuals the ability to decide how to live their lives, and in so doing makes possible the flourishing of a great many different forms of religion and morality. As Dennis Hale and Marc Landy have summarized in their moving defense of liberalism: “The genius of liberalism is that where it does not provide answers, it creates the space in which citizens can come up with answers of their own. This is why it’s called self-government, after all—the citizens will govern their selves first, and then govern their community.” As the founders well understood, when we insist upon national answers to hotly contested moral issues we end up with perpetual political war. Such a state of affairs is useful for partisan agitators but is not conducive to a healthy and peaceful society, which after all is what the national conservatives claim they wish to establish.

…..

The heart of the national conservative statement of principles is not simply a hatred of left-liberalism but of liberalism broadly understood. In making this claim they seem to have forgotten that America is a liberal nation with a liberal constitution. Those who do understand this fact make the contradictory argument that we must overturn and destroy the current American regime in order to save it. To accept the national conservative framing of the issues and the solutions they proscribe is to accept the destruction of the Constitution. In the end, it is to accept the destruction of what makes America great.

Quotation of the Day…

(Don Boudreaux)

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… is from pages 193-194 of former Caltech physics professor and provost – and former Energy Department undersecretary during the Obama administration – Steven Koonin’s excellent 2021 book, Unsettled? What Climate Science Tells Us, What It Doesn’t, and Why It Matters:

My inbox fills with fundraising appeals from such organizations as 350.org, the Union of Concerned Scientists, and the National Resources Defense Council. If you believe there is a “climate emergency,” have built an organization on that premise, and rely upon your donors’ continuing commitment to the cause, projecting urgency is crucial… It’s hardly in your best interest to tell your donors that the climate shows no sign of being broken or that projections of future disasters rely on models of dubious validity.

In Defense of Consumer Sovereignty

(Don Boudreaux)

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Over at EconLog, Pierre Lemieux has an excellent post on the importance of consumer (vs. producer) sovereignty. And here’s my own slightly amended comment on Pierre’s post:

Pierre:

You’re correct that in an economy in which people in their roles as consumers are expected – or, worse, coerced – to give priority to the preferences of people in their roles as producers would be an economy far less efficient and productive than is an economy in which there reigns consumer sovereignty. And the reason you offer for the superiority of consumer sovereignty over producer sovereignty (or some hybrid of the two) is creative, valid, and important.

But I believe that there’s an even more fundamental justification for consumer sovereignty. This more fundamental justification for consumer sovereignty is grounded in this reality: To produce is necessarily to assist in the satisfaction of consumption desires. Rearranging physical matter is productive only if and insofar as the result of the rearrangement is an improved ability of people to consume.

Judging whether or not rearrangements of physical matter are truly productive requires some reliable test of whether or not these rearrangements increase people’s ability to consume. A crucial feature of any such test is allowing income earners (or wealth holders) to spend their own (and only their own) money as they choose. Another crucial feature of this test is allowing people in their roles as producers to offer their own particular rearrangements of physical matter for sale to people in their roles as consumers. These two features combine to reveal, as best as is possible in our imperfect vale, what are the most productive uses of scarce resources, including labor.

Put differently, while production precedes consumption chronologically, consumption precedes production logically – in the sense of consumption being the goal and production being the means of satisfying that goal.

Put in yet a somewhat different way, while consumption desires can exist independently of any production that occurs to satisfy those desires, genuine production cannot exist independently of consumption desires. Production must be aimed at satisfying consumption desires; efforts at rearranging physical matter become productive only if and insofar as these efforts satisfy consumption desires. Thus we have the fundamental justification for an economy in which people in their roles as consumers, not people in their roles as producers, are sovereign.

Some Links

(Don Boudreaux)

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. A slice:

Hawley rejects the idea that “liberty is all about choosing your own ends,” a notion he derogatorily dismisses as Pelagian after a heretical 5th century British monk who believed that free will gave individuals the tools for their own salvation without the aid of clerical authorities. In fact, he sees freedom as a destructive turn away from a purer way of life that is constrained by social hierarchies and tradition. Liberty, he objects, “is a philosophy of liberation from family and tradition, of escape from God and community, a philosophy of self-creation and unrestricted, unfettered free choice.” He believes liberty has led to a country that is riven by conflict, marked by a distasteful cosmopolitanism, thanks to an overly welcoming attitude toward foreign people and ideas. It has made America too open to the outside world when it should focus on promoting a socially conservative working class protected by impenetrable borders.

But Hawley’s antipathy toward liberty runs deeper than his view of national interest. As far as he is concerned, your freedom to choose your own happiness “denigrates the common affections and common loves that make our way of life possible.” Hawley employs the phrase “our way of life” narrowly. It’s not what you find in America’s bustling, multicultural cities. Rather, it’s present in small towns, traditional families, strong churches, and blue-collar work. These sustain the kind of cultural homogeneity that fosters nationalistic unity, in his telling. Hawley believes the reason all of America doesn’t look like a Midwestern small town is because Hollywood, Big Tech, and foreigners are constantly injecting their alien ideas and cultures everywhere. Thus the proper role of government, which Hawley aspires to direct, is to use social and industrial policy to undo these influences and to impose a “happiness” that isn’t freely chosen.

Since entering the Senate, Hawley’s political project has been to harness Trumpism’s infatuation with an imagined “real America” into the service of a more intellectual and effective authoritarian movement.

Writing in the New York Times, Russ Roberts reflects on mature decision-making. A slice:

Human beings want purpose. We want meaning. We want to belong to something larger than ourselves. The decisions we make in the face of wild problems don’t just lead to good days and bad days. They define us. They determine who we are, who we might aspire to become, who we might come to be.

Swedish sociologist Charlotta Stern, writing at National Review, explains the reality of the Swedish labor market.

GMU Econ alum Ninos Malek identifies eight keys to thinking like a (sound) economist. A slice:

The complaint that businesses can charge “whatever they want” is nonsense. For example, why is it that movie theaters only charge $8 for popcorn and not $8,000 or $8,000,000 if they can supposedly charge whatever they want? There are two sides to a market transaction, and it’s this interaction of sellers and buyers that determines the price. What’s interesting is that many times the same people complaining are the ones making noise eating that popcorn during the movie.

Phil Magness plausibly predicts, on his Facebook page, that “historian” (so called) Quinn Slobodian’s forthcoming book will feature some fraudulence à la Nancy MacLean. (DBx: For the public record I note again the possibility that Nancy MacLean’s many egregious errors are perhaps due, not to any unsavory intention on her part, but instead to mind-blowing stupidity and grotesque carelessness. I assume that the same might be true of Mr. Slobodian’s work.)

Michael Deacon advises his fellow Brits to “ignore the heatwave hysteria.” A slice:

Climate activists seem to think that the heatwave was like nothing this country has ever seen before. But this isn’t entirely true. In the summer of 1911 – long before cars filled the roads and planes filled the skies – Britain endured a heatwave that was only slightly less hot than this week’s, with temperatures reaching 98.1F (36.7C). The main difference is that it lasted far longer. Rather than two days, it lasted two months.

Wall Street Journal columnist Andy Kessler is correct: “effective altruism” is neither. A slice:

It’s the classic progressive playbook: Raise taxes to fund their pet projects but not yours or mine. I don’t care if altruists spend their own money trying to prevent future risks from robot invasions or green nanotech goo, but they should stop asking American taxpayers to waste money on their quirky concerns.

“Most people have been infected with the virus, epidemiologists say, even if some don’t realize it“.

el gato malo has the evidence that Deborah Birx is lying about her earlier attitude toward covid vaccines.

Kbirb tweets:

States with fewer children vaccinated for COVID have significantly higher levels of protective antibody seroprevalence among their youth population. The correlation value is strong. CDC and AAP sources noted.

And in an approving response to the above tweet by Kbirb, Nobel laureate Michael Levitt tweets:

Looks convincing with correlation coefficient of 0.77. How do the experts in CDC & WHO explain this?

William Briggs offers “a people’s history of covid-19.” Three slices:

Enter Neil Ferguson, a well known infectious disease epidemiologist at the Imperial College of London and serial fornicator of reality. He and his Imperial College team’s model predicted millions of dead in the USA by mid-summer, 2020. Even if his lockdown recommendations were heeded.

Not only was this scary, but Ferguson said that his model was done on a computer, which for some became proof of its veracity.

What many do not understand is that every model, of every kind, in any application, on any platform, only says what it is told to say. This used to be a bedrock principle of science. It was forgotten, however, when people wanted to pass off models as independent evidence.

At the time, a few of us were amazed Ferguson was listened to. He had made a career of being wildly wrong, predicting medical catastrophe after catastrophe, none of which ever happened. My co-authors Jay Richards and Doug Axe and I documented his serial failures in The Price of Panic: How the Tyranny of Experts Turned a Pandemic into a Catastrophe.

In 2001, Ferguson asked for mass culling of beasts in the UK because of foot and mouth disease. This cost around 10 billion pounds. His model was called by Michael Thrusfield, professor of veterinary epidemiology at Edinburgh University, “severely flawed” and a “serious error.”

In 2002 he said between 50 and 150,000 people would die from mad cow disease. 177 died. That’s in the window, but both the UK and US governments fixated on the upper number. In 2004 he said “up to” 200 million would die from bird flu. The WHO agreed with him. Turns out fewer than 300 died from 2003 to 2009. And in 2009 he predicted a global 0.4% mortality rate for swine flu. That would have been about 65,000 dead in UK. 457 died.

And in 2020 anybody with a calculator, if they had wanted to, could have noticed Ferguson’s model was predicting 56,000 dead per day in the US somewhere around June 2020. This was not sane. But its very insanity caused more people to believe it.

…..

It’s odd. In medicine before 2020, cases were separate from infections.

A case was a patient seeking or requiring treatment, such as by a hospitalization. A case was infected, but not all infected people became cases. It became “fake news” to remind people of this. Or to suggest that anybody who was infected wasn’t going to have a near-death experience.

This was helped along by all the usual sources. We were treated to images of the pitiful withering away in oxygen tents inside sealed rooms, attended by space-suit wearing dancing nurses. Everybody, they said, could suffer this—if they didn’t listen to their betters.

It wasn’t until September of 2021 that the CDC quietly released a report stating that 15% of those infected never knew it. And that most infections were mild.

…..

Government rulers can’t keep a panic going forever. The world is not static. Energy flags. Priorities shift. They’ve been lucky with votes, the world over, but luck never lasts. In the US, there is no chance any candidate in the midterms will run on a lockdown platform.

The bureaucracy, however, is indefatigable. Their Experts can keep a low grade panic going indefinitely. They will try. There will be a host of new regulations to track all kinds of new diseases, real and imagined. Their budgets have swollen, and there’s no way they’re going to give up.

John Tierney says that it’s time to award the covid Nobels. Two slices:

The frontrunner for this year’s Nobel Peace Prize, according to the bets placed with British bookmakers, is the World Health Organization. It’s hard to imagine a worse choice. (Okay, Vladimir Putin.) The bettors’ theory is that the Nobel committee will honor the WHO for its efforts in fighting Covid-19—but it would be absurd to reward an organization that began the pandemic by spreading deadly misinformation, went on to promote disastrous policies, and now seeks new powers to do even more damage next time.

The Nobel jurors in Norway should be honoring the pandemic’s true heroes, starting with an obvious candidate across their border: Anders Tegnell, the state epidemiologist of Sweden. While the WHO and the rest of the world panicked, he kept calm. While leaders elsewhere crippled their societies, he kept Sweden free and open. While public-health officials ignored their own pre-Covid plans for a pandemic—and the reams of reports warning that lockdowns, school closures, and masks would accomplish little or nothing—Tegnell actually stuck to the plan and heeded the scientific evidence.

Journalists pilloried him for not joining in the hysteria, but he has been proven right. In Sweden, the overall rate of excess mortality—a measure of the number of deaths more than normal from all causes—during the pandemic is one of the lowest in Europe. Swedish children kept going to school and did not suffer the learning loss so common elsewhere. Swedish children and adults went on with their lives, following Tegnell’s advice not to wear masks as they continued going to schools, stores, churches, playgrounds, gyms, and restaurants. And fewer of them died than in most of the American states and European countries that delayed medical treatments, bankrupted businesses, impoverished workers, stunted children’s emotional and cognitive growth, and stripped their citizens of fundamental liberties.

If it hadn’t been for Tegnell and a few other heretics in places like Florida, we would not have clear evidence to prevent a similar catastrophe when the next virus arrives. Politicians and officials at the WHO and the Centers for Disease Control are still promoting useless mask mandates and defending their lockdowns with scientific sleight of hand: cherry-picked data and computer models purporting to show that the measures worked. Those claims have been rebutted in hundreds of studies, but journalists and politicians have mostly ignored that research, preferring to parrot the claims of the WHO and CDC officials who wave away the inconvenient findings.

But they can’t easily dismiss the results in Sweden and other places that followed its strategy. The real world trumps a computer model. Tegnell forced the lock-downers and mask zealots to test their unproven theories by making Sweden the control group in a natural experiment, and he did it in the face of extraordinary pressure, as the Swedish journalist Johan Anderberg recounts in superb detail in The Herd: How Sweden Chose Its Own Path Through the Worst Pandemic in 100 Years.

…..

With the possible exception of the Great Depression, the lockdowns were the costliest public-policy mistake ever made during peacetime in the United States. The worst consequences of lockdowns have been endured by people in the poorest countries, which have seen devastating increases in poverty, hunger, and disease. Yet the WHO has refused to acknowledge these errors and wants to change its pandemic planning to promote more lockdowns in the future. It has even proposed a new global treaty giving it the power to enforce its policies around the world—thereby preventing a country like Sweden from demonstrating that the policies don’t work.

The last thing the WHO deserves is encouragement from the Nobel jurors. The prize should reward those who protected the lives and liberties of millions of citizens during this pandemic, and whose work can help protect the rest of the world during the next pandemic. Besides Tegnell and Giesecke, the obvious candidates are three experts in public health who led the international effort to restore sanity to their profession: Jay Bhattacharya of Stanford, Sunetra Gupta of Oxford, and Martin Kulldorff of Harvard. In fall 2020, they issued a call to end lockdowns and school closures, the Great Barrington Declaration, which won signatures from tens of thousands of fellow scientists and doctors. They marshalled scientific evidence throughout the pandemic to counter Covid hysteria, and they helped persuade leaders in Florida and other places to follow successful strategies like Sweden’s.

Thinking Seriously About Responding to the Theft of IP

(Don Boudreaux)

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Here’s a letter to a correspondent who “worries about our trade with China”:

Mr. E__:

Thanks for your e-mail.

Objecting to my recent letter in the Wall Street Journal, you write: “Let’s hit the Chinese hard, fast, and where it hurts by stopping Chinese imports until they [the Chinese] stop stealing our IP.”

With respect, I disagree. I do so mainly because to “hit the Chinese hard, fast, and where it hurts” is to also hit Americans hard, fast, and where it hurts. Each dollar of Chinese imports into America is a benefit to Americans. Further, the dollars earned by Chinese exporters are spent and invested in the global economy. These dollars make their way – some directly, others indirectly – back to the U.S. as either demand for American exports or as investments in the American economy, also creating benefits for Americans.

I disagree with you also because intellectual property is private property – by which I here mean that intellectual property is not “ours” just because it’s owned by some fellow citizens. For example, Apple’s proprietary software belongs to Apple Inc. and not to me or my siblings. At best it’s unclear why American owners of intellectual property who choose to do business in China should not themselves shoulder the chief responsibility for protecting their IP.

Three reasons combine to counsel caution before using allegations of IP theft to justify trade restrictions. First, private owners of IP can themselves take measures – including refusals to do business in China – to protect their property from Chinese theft. Second, to the extent that our government is involved, it should first attempt to resolve IP issues by using the WTO’s dispute-resolution provision under its TRIPS (“Trade-Related Aspects of Intellectual Property Rights”) agreement. (See this 2019 Mercatus Center paper by Dan Griswold and me.) Third and most importantly, trade restrictions unavoidably inflict damage not only on those Chinese officials and pirates who are guilty of IP theft, but also, and substantially so, on Americans (and on Chinese citizens) who are guilty of nothing more than being caught in the crosshairs of governments waging trade wars as each pursues an idiotic mercantilist agenda.

At the very least, snagging government-granted protection from foreign competition shouldn’t be as easy as screaming “IP theft!”

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