Russell Roberts's Blog, page 30

Bonus Quotation of Day…

(Don Boudreaux)

Tweet

… is from page 11 of William Gladstone’s January 1890 contribution to a debate, with James G. Blaine of Maine, on free trade versus protectionism; these remarks are published in volume CCCXCVIII of the North American Review:

Protection says to a producer, Grow this or manufacture that at a greater necessary outlay, though we might obtain it more cheaply from abroad, where it can be produced at a smaller necessary outlay. This is saying, in other words, waste a certain amount of labor and of capital; and do not be afraid, for the cost of your waste shall be laid on the shoulders of a nation which is well able to bear it.

DBx: Yes. Protectionists are advocates of waste.

Some Links

(Don Boudreaux)

Tweet

Lee Branstetter, Guangwei Li, and Mengjia Ren looked closely at Chinese industrial policy. What they found did not impress them. (HT Roger Meiners) A slice:

Our analysis provides no evidence that the Chinese government consistently ‘picks winners’. There appears to be a statistically significant negative correlation between subsidies and TFP [total factor productivity], and a robust positive correlation between subsidies and firm size (as measured by the firm’s total assets) and between subsidies and net profit. These results indicate that, overall, subsidies are given to larger and more profitable, but less productive firms.

We also find little evidence that receiving a subsidy is correlated with subsequent growth in TFP. When we aggregate across subsidy types, total subsidies appear to have a statistically significant negative impact on subsequent TFP growth. When we disaggregate across subsidy types, we find that even subsidies given out in the name of R&D and innovation promotion or industrial and equipment upgrading have no measured, statistically significant positive effect on firms’ productivity growth.

Writing with his usual insightfulness, Arnold Kling here identifies some implications of the fact that most capital in a modern ‘capitalist’ economy is intangible, with much of it in the form of human capital.

Ramon DeGennaro unpacks some of the many problems with ESG investing. A slice:

Perhaps unsurprisingly, ESG rankings differ depending on who is doing the ranking. Writing in the Accounting Review, Professors Dane M. Christensen, George Serafeim, and Anywhere (Siko) Sikochi report that disparities can be large, and that more ESG disclosure actually increases the divergence of opinion. How can a socially conscious person decide which is correct? Perhaps worse, those with different social priorities may target those who favor diversity for cancellation, simply because they instead prioritize labor issues above diversity.

Jay Schweikert applauds Judge Don Willett’s objections to the doctrine of qualified immunity.

Juliette Sellgren talks with Troy Senik about the great Grover Cleveland (who was described by H.L. Mencken as “a good man in a bad trade”).

Caroline Breashears is correct:

Confused thoughts lead to sloppy language, which in turn leads to more confusion. Halting the process is essential. If, as some politicos claim, “Democracy is at stake,” then we can save it only by insisting on clarity in our language about it.

I’m always pleased to be a guest on Dan Proft’s radio program in Chicago.

George Leef recounts a tale – here, from the University of Washington – of just how threatening is woke ideology to higher education.

David Henderson and Charley Hooper recently had lunch with Jay Bhattacharya. A slice from David’s report on the lunch:

Not surprisingly, much of what we discussed was the ways in which Twitter, at the behest of various major players, tried to shut Jay down. He was so often accused of wanting to kill people and it seemed to be for at least one of the three reasons: (1) he pointed out that young children were at an extremely low risk from Covid and, therefore, there was little basis for shutting down schools; (2) he noted that so few economists were pointing out one of the most basic principles in economics–TANSTAAFL, which means there are tradeoffs; and (3) he reminded people that we do develop immunity to coronaviruses.

David Zweig reports on a private school, in upstate New York, run by people still – in 2023 – deeply ill with covid derangement syndrome.

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 194 of Thomas Cahill’s 2013 volume, Heretics and Heroes:

[T]hose with the emptiest heads often have the most to squawk about.

Boudreaux and Irwin on the Repeal of the Corn Laws

(Don Boudreaux)

Tweet

I just discovered that I’ve not yet shared in full, at Cafe Hayek, the full text of my and Doug Irwin’s June 25th, 2021, Economist essay commemorating the 175th anniversary of the repeal of the corn laws in Great Britain. So I do so here. You can read this text beneath the fold.

(more…)

Bonus Quotation of the Day…

(Don Boudreaux)

Tweet

… is Steven Kahn’s letter in the April 8th, 2023, edition of the Wall Street Journal:

It’s ironic that liberals hate book bans but are happy to ban speakers. They don’t accept cordoning off a section of a library from third-graders but insist on trigger warnings to protect college students from ideas they deem uncomfortable.

DBx: Of course, by “liberals” Mr. Kahn here means “progressives.”

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 117 of Kenneth Boulding’s December 1968 presidential address – titled “Economics as a Moral Science” – to the American Economic Association as this address appears in Boulding’s 1970 collection, Economics As A Science:

Adam Smith, who has strong claim to being both the Adam and the smith of systematic economics, was a professor of moral philosophy, and it was at that forge that economics was made.

Some Links

(Don Boudreaux)

Tweet

The Wall Street Journal‘s Editorial Board decries “the smearing of Clarence Thomas.” A slice:

ProPublica, a left-leaning website, kicked off the fun with a report Thursday that Justice Thomas has a longtime friendship with Harlan Crow, a wealthy Texas real-estate developer. The intrepid reporters roamed far and wide to discover that the Justice has sometimes traveled on Mr. Crow’s “Bombardier Global 5000 jet” and that each summer the Justice and his wife spend a vacation week at Mr. Crow’s place in the Adirondacks.

The piece is loaded with words and phrases intended to convey that this is all somehow disreputable: “superyacht”; “luxury trips”; “exclusive California all-male retreat”; “sprawling ranch”; “private chefs”; “elegant accommodation”; “opulent lodge”; “lavishing the justice with gifts.” And more.

Adjectival overkill is the method of bad polemicists who don’t have much to report. The ProPublica writers suggest that Justice Thomas may have violated ethics rules, and they quote a couple of cherry-picked ethicists to express their dismay.

But it seems clear that the Court’s rules at the time all of this happened did not require that gifts of personal hospitality be disclosed. This includes the private plane trips. ProPublica fails to make clear to readers that the U.S. Judicial Conference recently changed its rules to require more disclosure. The new rules took effect last month.

George Will recalls the Waco siege, which ended 30 years ago this month. A slice:

There is never a shortage of people eager to libel the United States as a nation defined by a unique susceptibility to recurring lunacies. Such people should acquaint themselves with human history, including the mass fanaticisms of the previous century, and this one. And with the meager resonance of most made-in-America manias.

Jane Shaw Stroup isn’t optimistic about U.S. government efforts to determine the details of America’s industrial make-up.

GMU Econ alum Scott Drylie, writing at National Review, reports that Edmund Burke never said that ‘education is the cheap defense of nations.’ A slice:

[Thomas] Chalmers invents the new quote in Burke’s name on August 4, 1827. He was addressing the University Commissioners of Scotland, trying to win greater investment into education. He ends his argument by showing that even the conservative Edmund Burke would agree to the venture.

Chalmers must have pleased himself with this invention. In his continued advocacy, he repeats it — in 1832, then again in 1835 and 1838. His praise for Burke also grows. Burke ends up writing “one of the weightiest of those sentences, or oracular sayings, which have ever fallen from any of the seers or sages of our land.”

The false version starting popping up everywhere. Not just in London, Edinburgh, and Dublin, but also in Philadelphia, Boston, and Macon, Ga. Burke is no longer the mad “Quixote” and “trumpeter” of conservatism, but now a “splendid man” in Ohio, an “eminent writer” in Baltimore, and the “oracular Burke” in Edinburgh.

By 1835, Chalmers is the first to call this invention a “memorable aphorism.” Others follow suit. By 1852, it appears in books of famous quotes and aphorisms. Through combinations of deceit and ignorance, Burke was transformed into an honorary ambassador for public education.

Gary Galles worries that the U.S. in November of next year will experience “the ultimate expressive voting election.”

My intrepid Mercatus Center colleague, Veronique de Rugy, warns of the consequences of politicians’ refusal to face the fiscal realities of Social Security and Medicare.

Also calling for reform of Social Security and Medicare is David Henderson.

Who’d a-thunk it? “Biden’s ‘Buy American’ rules are getting in the way of Biden’s rural broadband push.”

The Wall Street Journal‘s James Taranto profiles a New Age, anti-woke, and non-covid-hysterical Florida private school. A slice:

If you’re rolling your eyes, stop it. This New Age school is also resolutely and admirably antiwoke. Mr. Hills begins the tour by listing the three things he makes clear to visitors “before I let anybody into this building”:

First, “we have zero Covid policy at this point.” He doesn’t mean a zero-Covid policy; he means zero policy regarding Covid. Even by Florida standards, Centner moved quickly to return to normal during the pandemic, and its unorthodox approach drew indignation from local news organizations, one of which went so far as to urge the White House to intervene.

Second, “CRT”—critical race theory—“doesn’t exist in this building. We are all created equal. We all have equal opportunities, and we’re not in the business of telling anybody they may or may not have more privilege . . . based on skin tone. We don’t play that game in this building.”

Third, “we have a young men’s restroom and a young women’s restroom. We don’t allow anybody to pick what restroom they’re going to use.” If a pupil asks a grown-up about sex or sexual identity, “we say, ‘That’s a really great question. That’s probably a better conversation to have with your parent.’ ”

The Centners didn’t start out as culture warriors. “What happened through Covid opened our eyes,” Mrs. Centner says. “Oh my God, there is so much going on that has been going on for the last 20 years that we need to make a stance against.”

They watched the Chinese epidemic closely starting in January 2020 and were ready to act by the time its spread to the U.S. became undeniable. They shut the school down on March 16, 2020. Everything was fully online the next day. “We were probably the first school to go remote in all of Miami, maybe in the country,” Mr. Centner says. “But we were also the first school to reopen in the fall.”

Mrs. Centner sought expert opinions and concluded that the virus posed little threat to the school’s students or its mostly youthful staff. By the time the Miami-Dade County Public Schools announced a “staggered return for selected students” starting on Oct. 5, 2020, Centner was already back to normal.

At the time, normality was a brave act of defiance. Florida businesses reopened much earlier than those in blue states, but local governments and private companies in Miami still demanded that everyone don a face mask in almost all indoor public spaces. Not the Centners, who made masks optional. Some parents “were irate with me,” Mrs. Centner says. “How dare I allow other kids to not wear a mask? I’m putting their family’s lives at risk.”

The school brought in experts to brief parents on the inefficacy of masks. “Several parents took their masks off in the middle of the presentation as they’re learning information,” Mr. Centner recalls. “But most people get pretty stuck in their beliefs.” Some tagged the couple as “wacko” and withdrew their children from the school.

Wall Street Journal columnist Holman Jenkins continues to write insightfully about covid and covid hysteria. A slice:

Bottom line: Covid spreads a lot faster and easier than the flu; our steps aimed at stopping Covid were a lot better at stopping the flu than at stopping Covid. Indeed our actions in 2020 and 2021 all but vanquished the flu while seeming to have little effect on the coronavirus.

The corollary goes unnoticed—even though it seemed obvious from day one—because it conflicted with the story we wanted to tell ourselves. In naughty-schoolboy fashion, John Barry, author of an admired history of the 1918 flu, drew the lesson in a recent Washington Times podcast. Whether it came from a lab or a natural setting, the virus was already out of the bag globally before Beijing knew about (or dissembled about) its existence. Our own early testing fumbles were also irrelevant: A fast-spreading, mostly mild or asymptomatic virus—indistinguishable from the cold or flu to most sufferers—was not going be stopped from infecting the U.S. population.

Inevitably, politics takes charge. Our leaders waved their arms unrealistically, but the idea originated with voters and the media that our politicians should somehow save us from encountering the virus at all. I was especially critical of Vice President Mike Pence for his appearance on CNBC on March 27, 2020. But he and others may have believed Job One was preventing panic. For this motive to be evaluated, it needs to be acknowledged. In every other way—public health, the economy, political sanity—our actions collectively produced a large dollop more cost than benefit.

Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 5 of George Stigler’s November 1955 Economica paper, “The Nature and Role of Originality in Scientific Progress,” as this paper is reprinted in Essays in the History of Economics (George J. Stigler, ed., 1965):

Wares must be shouted – the human mind is not a divining rod that quivers over truth.

Bonus Quotation of the Day…

(Don Boudreaux)

Tweet

… is from page 85 of the late Allan Meltzer’s 2012 book, Why Capitalism?:

Capitalism’s edge was in putting many minds to work with the freedom to innovate, protected by the rule of law to protect personal and property rights, in place of a small group of planners.

One Good Outcome of the Great Depression

(Don Boudreaux)

Tweet

Here’s a letter to the Wall Street Journal:

Editor:

Jason Taylor tells the interesting tale of the re-legalization of beer in the U.S. ninety years ago (“A New Deal on Beer,” April 7). But legalizing the sale of alcohol – first of beer and, soon afterward, also of stiffer beverages – wasn’t only about creating jobs and lifting Americans’ depressed spirits. Politicians’ focal motivation was financial.

In 1913, the year the national personal income tax was created, liquor taxes accounted for about one-third of federal revenues while customs duties accounted for nearly half. Together, these taxes brought in about two-thirds of U.S. government revenue. But the income tax soon proved to be prodigious at raking in revenue. By 1920 – the year prohibition began – income taxation alone brought in 70.3 percent of federal government revenue. The sharp decline in the importance of liquor-tax revenues made it fiscally feasible to prohibit alcohol sales.

But the Great Depression greatly depressed incomes and, hence, income-tax revenues. Between 1930 and 1933, these revenues fell by nearly 70 percent. Thirsty for revenue, Congress and FDR successfully pressed for prohibition’s repeal.*

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

* See Donald J. Boudreaux and A.C. Pritchard, “The Price of Prohibition,” Arizona Law Review, Spring 1994; and Thomas L. Hungerford, “U.S. Federal Government Revenues: 1790 to the Present,” Congressional Research Service, September 2006.