Russell Roberts's Blog, page 72

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 138 of the 11th (2006) edition of one of greatest economics textbooks of all time: Paul Heyne’s, Peter Boettke’s, and David Prychitko’s The Economic Way of Thinking (original emphasis):

The traditional (some would say notorious) hostility of most economists to a high legal minimum wage is rooted in their conviction that supply curves slope upward to the right and demand curves slope downward. The number of unskilled persons willing to supply their labor services is not a constant but increases when the wage rate rises, so more people will be competing for the available jobs when the prevailing wage is higher. And at higher wages, employers of unskilled workers will find all sorts of ways to economize on the help the “need.”

DBx: Indeed.

I regard an economist’s rejection, or even skepticism, of this line of reasoning to be a sure sign that that ‘economist’ is a quack.

“Ah, but it’s an empirical question!” comes the inevitable, faux-scientific retort. To which I say: Of course it is, as ultimately are all questions about reality. But here the germane reality – a reality confirmed by overwhelming empirical evidence – is that the less attractive to someone is an option, the weaker is that person’s willingness to pursue that option. Because there’s no good reason to suppose that this empirical reality fails to hold for employers of low-skilled workers, we can conclude confidently that a government-imposed minimum wage above the wage that would otherwise prevail on the market reduces the employment options of low-skilled workers.

The most obvious way, of course, for employers to adjust to a minimum wage is simply to employ fewer workers. But notice above Heyne’s, Boettke’s, and Prychitko’s careful wording: imposing or raising a minimum wage means that “employers of unskilled workers will find all sorts of ways to economize on the help they ‘need.'” That is, in addition to prompting employers to employ fewer low-skilled workers, minimum wages might instead, or in addition, also prompt employers to reduce low-skilled workers’ fringe benefits (including ‘informal’ fringe benefits such as frequently cleaned break rooms), or to work these employees harder.

For any number of reasons it might well be an interesting empirical question how, in a particular time and place, the employment consequences of a certain-size increase in the minimum wage divide themselves into, on one hand, job losses, and, on the other hand, worse jobs. To discover such facts requires careful empirical investigation. But no such investigation – even one that purports to find that minimum wages cause no job losses – should be interpreted as evidence that minimum wages do not harm at least some, and perhaps many, of the very workers who minimum-wage supporters assert they wish to help. Any such interpretation is the economic equivalent of a physicist being misled by some observation to the conclusion that the law of gravity sometimes and in some places mysteriously ceases to operate.

And please, no comments about how monopsony-power might cause minimum wages to work as advertised. For the monopsony-power exception to the standard economic analysis of the employment consequences of minimum wages to hold, a necessary (although not sufficient) condition would be that employers of low-skilled workers have available to them only one way of reacting to minimum wages – namely, changing the quantity of low-skilled labor they employ. But because in reality employers with monopsony power can, like all employers, respond to minimum wages by adjusting on a variety of different margins, the textbook ‘monopsony-power exception’ is practically irrelevant.

Homeschooling As Evidence of the Decrepitude of Government K-12 “Education”

(Don Boudreaux)

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Here’s a letter to National Review:

Editor:

Nate Hochman eviscerates the left’s case against homeschooling (“‘A Revulsion from Distinctness’,” Dec. 1). No greater indictment of the poor quality of government schooling exists than the move toward homeschooling.

In nearly all facets of our lives, a virtuous cycle plays out: As we become wealthier, we rely more and more upon specialists to perform tasks for us, and as we rely more and more upon specialists, we become wealthier. Compared to just a few decades ago, today we less often prepare our own meals at home and more often dine on meals prepared by restaurants and supermarkets; today we less often change the oil in our own cars and more often go to Jiffy Lube and Pep Boys; today we less often even drive ourselves to restaurants and supermarkets, as we more and more outsource to companies such as DoorDash and Uber Eats the task of delivering our groceries and meals from supermarkets and restaurants to our front doors.

As Adam Smith taught, prosperity grows with greater specialization. Compared to non-specialists, specialists perform their tasks more reliably and faster. But if specialists are to develop and use skills that are beneficial not only to themselves but also to the public, specialization must be driven by markets – that is, driven by consumers and producers spending their own money.

In the case of government schooling, the specialists who operate this system are shielded from market forces. Government arranges for their ‘customers’ to be captive and for their pay to be disconnected from how well or poorly the children under their charge are educated. Government-school administrators’ prosperity depends not on educating children but on playing politics. As such, the specialized skills acquired and honed by government-schooling administrators have little to do with teaching and almost everything to do with politicking.

The fact that so many Americans, who rely more and more upon specialists in most areas of life, now are turning to homeschooling is strong evidence that the specialized skills of government-school administrators are not ones that make these schools sources of true learning.

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…

(Don Boudreaux)

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… is from page 129 of the 1987 reprint of my late colleague Gordon Tullock’s 1970 book, Private Wants, Public Means:

It must be remembered, of course, that selecting a suitable institution to deal with an externality, in a sense is playing God. In the real world, these decisions are likely to be made either by governments or by businessmen. Neither is free from error; mistakes are made. Furthermore, the decision-making processes used in democratic governments insure a suboptimal outcome.

DBx: No informed person denies the reality that Gordon here identifies. Yet very many people – including economists who should know better – continue to discuss ‘market failure’ and ‘externalities’ as if the very existence of these problems implies that government should be empowered to ‘solve’ them. The market is recognized, correctly, to be the imperfect real-world institution that it is, while government is assumed, quite incorrectly, to be godlike.

Pittsburgh Tribune-Review: “Mute applause for free-trade deals”

(Don Boudreaux)

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In my column for the July 9th, 2013, edition of the Pittsburgh Tribune-Review, I conditionally applauded free-trade deals. You can read my conditional applause beneath the fold.

(more…)

Bonus Quotation of the Day…

(Don Boudreaux)

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… is from page 115 of Eamonn Butler’s 2018 monograph, An Introduction to Capitalism:

Perhaps the greatest threat to capitalism comes from intellectuals. Their motives may be public spirited, or not: perhaps they feel undervalued by the market, or fancy themselves running a new economic order, or do not trust others to make rational choices. Either way, the public and politicians still generally regard intellectuals as informed and wise, accept their criticisms of capitalism, and conclude that it needs serious repair.

But intellectuals rarely understand the nature and intricate workings of capitalism, and often have little personal experience of it. Too often, therefore, they imagine its problems, misdiagnose the causes and apply the wrong remedies.

DBx: Yes – except that intellectuals today do universally have much personal experience of capitalism as consumers. Yet the typical intellectual takes his or her capitalist-created riches for granted. He or she never stops to wonder, with any seriousness, why he or she has ready access to the likes of food, clothing, housing, schooling, books, travel, artistic productions, cappuccinos, and the wi-fied laptops on which he or she pounds out uninformed criticisms of, and arrogant complaints about, capitalism.

….

Pictured above is one such uninformed and arrogant intellectual, Duke University “historian” Nancy MacLean.

Some Links

(Don Boudreaux)

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AIER’s Samuel Gregg talks with my intrepid Mercatus Center colleague, Veronique de Rugy, about the condition of liberalism in America.

Also from Samuel Gregg is this argument that business schools should stop teaching ESG ‘investing.’ Two slices:

One of ESG’s many difficulties, however, is that its goals and methods are characterized by an incoherence sufficient to call into question not just specific features of ESG but the conceptual integrity of the entire ESG endeavor. Another ESG problem is its tendency to blur ethics and sound business practices with the promotion of particular political causes. This mindset has spilled over into the outlook of financial regulators, and consequently threatens to facilitate widespread dysfunctionality in these agencies’ operations. Lastly, the adoption of ESG risks corroding understanding of the nature and proper ends of commercial enterprises—a development that has broader and negative implications for society as a whole.

…..

Or take ESG’s stress on diversity. ESG materials do not present diversity as a species of pluralism, understood as individuals, associations, and communities in a given society living out their freedoms in different ways while being bound together by some common commitments and obligations. Nor is it about promoting individuality. Instead, diversity reflects the idea that, as Peter Wood relates in Diversity: The Invention of a Concept, everyone is defined by membership in social groups and is largely the product of such groups’ collective experiences. That draws attention away from two things: first, our common human nature and the essential equality of all humans qua humans derived from that; and second, the idea that all of us are as much individuals as we are social beings and thus shouldn’t be boxed into particular unchanging and unchangeable categories, whether by custom or law.

Roger Koppl and GMU Econ alum Abigail Devereaux write informatively on disinformation. Here’s their conclusion:

[Sen. Ed] Markey’s march on Musk is being conducted under that banner of fighting “disinformation.” But his real motives are not hard to guess. Diving is deception. And the good (at diving) Senator Markey’s pretense of fighting disinformation is deception. His goal is to decide for you what you are to believe. If he can to that, he gets to stay in power. “Disinformation” is an empty word and a bogus bogey held up to hide this dishonorable end. The first and highest freedom is freedom of speech. We must not let them take it from us. We should honor those who gave their last full measure of devotion to defend freedom by fighting for freedom from domestic oppression, including Senator Markey’s assault on free speech. Let the blue checks fall where they may.

Writing in the Wall Street Journal, Eugene Volokh – founder of the blog “The Volokh Conspiracy” – exposes the pretense and folly of a New York State statute that, as Volokh describes it, “requires social-media networks, including any site that allows comments, to publish a plan for responding to alleged hate speech by users.” A slice:

The Supreme Court has carved out several narrow categories of unprotected speech, but hate speech isn’t one of them. Speech is protected except in the case of fighting words, true threats, defamation or incitement, and these exceptions are applied without regard to whether the speech in question is hateful. The court has wisely recognized that each of us has a different idea of what constitutes good or bad speech—and we can’t trust the government to decide which viewpoints are too hateful to merit legal protection.

But that’s not stopping New York from trying. The new law would force me to act on the state’s disdain for online speech that someone, somewhere believes can “vilify, humiliate, or incite violence against” groups based on protected class, even if that speech is protected by the First Amendment.

Does speech by Richard Dawkins comparing George W. Bush’s faith to that of Osama bin Laden’s vilify conservative Christians? Does speech condemning trans athletes who join women’s sports teams vilify or humiliate based on gender identity? Do harsh criticisms of Israelis or Palestinians vilify those groups? Do some feminist comments criticizing patriarchy humiliate men? Can your comment on any of the blogs, news sites or social-media platforms swept up in New York’s law be defined as hateful conduct?

Nobody knows. But New York is imposing legal obligations on me and other platforms to pressure us to censor such speech. And though the New York law doesn’t itself require the removal of such speech, that may be the ultimate goal. Such censorship fits neatly within Attorney General Letitia James’s recent report that calls for sweeping regulations compelling further restrictions on speech the state considers hateful.

The Wall Street Journal‘s Editorial Board wisely applauds the U.S. Supreme Court’s decision to hear a case challenging Biden’s unilateral ‘forgiveness’ of student-loan debt. A slice:

President Biden has tried to pull a constitutional trick for the ages by ordering the forgiveness of up to $20,000 per borrower on his own authority. Congress had given the executive no such power, as even Mr. Biden had previously noted.

But an election loomed, Democrats looked to be in trouble, and in August the President declared one of the greatest vote-buying exercises of all time. The Education Department located a heretofore obscure corner of the 2003 Heroes Act that supposedly justified mass loan cancellations owing to the Covid emergency. It’s a classic example of a political need in rampaging search of a legal excuse.

Also applauding the courts’ refusal to look the other way as Biden attempts to rule like a despotic monarch is Charles Cooke.

Arnold Kling identifies one of the many differences separating Jeff Bezos from Sam Backman-Fried. A slice:

For several years after Amazon was founded, I was a Jeff Bezos skeptic. My line was that for Amazon to compete with Wal-Mart, Amazon had to master logistics. For Wal-Mart to compete with Amazon, Wal-Mart just needed a web site.

To my surprise, Amazon was able to master logistics before Wal-Mart figured out online sales. And along the way, Amazon was able to master cloud computing as well. It is a remarkable story.

Juliette Sellgren talks with Dartmouth’s Hank Clark about Montesquieu.

Fraser Myers reports that “the grand folly of lockdown is coming home to roost.” A slice:

Although seeking healthcare was allowed under lockdown, there is no doubt that many who needed treatment, and who could have accessed it at the time, were reluctant or afraid to do so. After all, the public were ordered, in no uncertain terms, to ‘stay at home’. To stay at home or face arrest. To stay at home or get infected. To stay at home or kill granny. Back in October 2020, then health secretary Matt Hancock issued a stark warning to cancer sufferers: accessing treatment would be contingent on everyone obeying the rules. He said this when hospitals had plenty of spare capacity, with only around 3,000 Covid patients across all English hospitals at the time (at the peak of the second wave, more Covid patients would be admitted every single day). Even when there were lulls in the pandemic, the government’s priority was managing Covid. Other health issues came a distant second.

To see the folly of the UK’s approach, you just have to look at Sweden, which had no lockdown and far lighter restrictions. As a cancer surgeon pointed out in the Spectator last year, the difference in access to cancer services was astonishing. Taking prostate cancer as an example, during the first wave in 2020, the number of patients undergoing prostatectomies fell by 43 per cent in Britain, but by just three per cent in Sweden. Such a stark gap cannot simply be blamed on the virus. Lockdown is the difference here.

Perhaps the most obvious impact of lockdown has been on the economy, where a new grim milestone is surpassed every month. Shops, restaurants, offices and factories were shuttered for months on end in 2020 and 2021. Vast swathes of the economy were either mothballed or severely disrupted – far more by state-enforced restrictions than by the pandemic itself. The lockdowns of 2020 resulted in the UK’s worst recession in the history of industrial capitalism – a fall in economic output not seen since the Great Frost of 1709.

Aaron Kheriaty decries “the evil of coerced medicine.”

Niall McCrae is correct:

How do you know when politicians are lying? When they are signalling virtue. As the last three years has shown, their supposed liberal values are a façade, masking a self-serving and authoritarian outlook. Unless useful to their career, they are not really interested in the wants and needs of ordinary people. They want to be seen as progressive and compassionate, but by performance rather than by principles and practice. Our corrupt mainstream media do their bidding.

Martin Kulldorff tweets:

After censoring accurate covid information, while promoting incorrect information, it is wise of @Twitter to stop pretending to know more about covid than infectious disease epidemiologists.

Quotation of the Day…

(Don Boudreaux)

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… is from page 333 of F.A. Hayek’s October 1973 Wincott Memorial Lecture – titled “Economic Freedom and Representative Government” – as the text of this lecture appears as chapter 24 of Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by Paul Lewis), of The Collected Works of F.A. Hayek:

Indeed, in a market economy in which no single person or group determines who gets what, and the shares of individuals always depend on many circumstances which nobody could have foreseen, the whole conception of social or distributive justice is empty and meaningless; and there will therefore never exist agreement on what is just in this sense. I am not sure that the concept has a definite meaning even in a centrally-directed economy, or that in such a system people would ever agree on what distribution is just. I am certain, however, that nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice.

Some Links

(Don Boudreaux)

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George Will – inspired in part by GMU law professor David Bernstein’s new book, Classified: The Untold Story of Racial Classifications in America – laments that there is no complete separation of race and state. A slice:

In 1977, to facilitate gathering racial and ethnic data, the government promulgated racial and ethnic categories, but stipulated that they should not be “determinants of eligibility for participation in any federal program.” This was promptly ignored, and has been exacerbated by the American tradition of self-identification.

Soon a scramble was on to win victim status, and to deny that status to groups which, if they clambered aboard the gravy train, would leave less gravy for the supposedly more deserving. Some classifications are racial (e.g., Black). Hispanic is cultural, and capacious enough to include South Americans of German descent and Ted Williams, whose mother was Mexican. The geographic classification “Asian” assumes that Vietnamese and Pakistanis are somehow akin.

Jonathan Leaf recommends Peter Wood’s demolition of the 1619 Project. Two slices:

In August 2019, the New York Times magazine published the “1619 Project.” This series of essays and articles provided readers with many “facts” that they may not have known: that the American Revolution was fought to preserve slavery; that Abraham Lincoln was a racist; that America’s foundational premise was “slavocracy;” that present-day American wealth is a direct consequence of slavery; and that the essential pattern of our history is not one of unprecedented growth in freedom and democracy but institutional hatred and oppression of blacks.

If you were unfamiliar with these facts, there is good reason—none are true. As National Association of Scholars president Peter W. Wood reveals in 1620: A Critical Response to the 1619 Project, the larger purpose of the Times’s project appears to have been to promote racial grievances and resentment. Most damningly, Wood points out that a Times fact-checker who contacted a radical historian to weigh the claim that the revolution was fought to protect slavery was told that this was nonsense. But the paper ignored that input, and 1619’s creator, Nikole Hannah-Jones, herself recently said that the project was not intended to serve as history (after nearly a year of claiming the opposite).

Wood’s 1620 is an extraordinary book. Readers looking for a polemic should be forewarned: it is a learned and thoughtful investigation of the topic, and Wood goes to considerable lengths to give a hearing to Hannah-Jones’s assertions. In doing so, he systematically demolishes all but one of them.

…..

The New York Times, so dogged in refusing to admit error, remains bedeviled by a mix of arrogance, entitlement, and radicalism. Its management understands that the paper’s revenue increasingly comes not from middle-of-the-road advertisers but from online subscriptions, most of which come from committed leftists. Thus, like MSNBC, the Times now pursues radical messaging for financial reasons, which precludes journalistic objectivity as a guiding light. The New York Times’s motives, in other words, appear to be as much mercenary as devotional. This dynamic is likely contributing to the paper’s obstinacy about the errors of the 1619 Project, notwithstanding the damage it is doing to our educational system and even to the fabric of our democracy.

My intrepid Mercatus Center colleague Veronique de Rugy calls for an end to the child tax credit. A slice:

These problems are not unique to the extended child tax credit. In fact, the child tax credit itself has mostly been a failure since its inception in 1997. It has consistently failed to deliver on its promise of reducing child poverty. None of the many expansions since then have succeeded, either.

In a recent piece for The Wall Street Journal, economist Scott Hodge described how the whole debacle began as a result of his floating the idea of a child tax credit in 1993. He writes, “The ‘put money in people’s pockets’ approach of the child tax credit might have been good politics, but 25 years’ experience shows it was bad policy.”

A massive expansion of the credit, along with the lack of work requirements and the cash payments, would add significantly to the problem. In fact, most studies that forecast a significant reduction in child poverty due to the expanded version do not account for the many potential short-term work disincentives embedded in it.

Laurie Wastell is correct: “Safetyism is a menace to family life.”

Brendan O’Neill applauds Nigerian novelist Chimamanda Ngozi Adichie’s stirring warnings of cancel culture’s “unconscionable barbarism.”

Tom Slater applauds the “incredible courage of the Chinese protesters” against covidian tyranny.

Guy Sorman explains that “the popular uprisings over Xi Jinping’s Zero Covid policy illustrate the limits common to all authoritarian regimes.” A slice:

Will the certain failure of the Zero Covid strategy, along with the economic stagnation that it produces and the continuing popular rebellions, motivate Xi to “reform” the system, to ease up on the pressure? Certainly not. Another thing the Chinese leaders have learned from the fall of the USSR is that the public will perceive any reform as an admission of weakness. Tocqueville in his day wrote, concerning the French Revolution, that an authoritarian regime is never so fragile as at the moment that it considers reform; this was true for absolute monarchy, for Gorbachev’s Russia, and it would be true if Xi admitted his mistakes. One might object that Xi’s predecessor Deng Xiaoping restored land to the peasants and authorized private enterprises in 1979. But Deng, unlike Xi, enjoyed the legitimacy of a founder, alongside Mao Zedong and the popular Republic. In any case, we should recall the limits of Deng’s reformism: when the students of Beijing demanded democracy in 1989 in Tiananmen Square, they were crushed, by his order.

J.D. Tuccille writes that “China’s covid lockdowns once inspired western officials; they should listen to protesters instead.” A slice:

And it wasn’t that long ago—July of 2022—that Fauci told Reason‘s Robby Soave he would recommend “much, much more stringent restrictions” if he could go back in time to redo America’s COVID-19 response.

In fact, before their current public dismay at what China’s pandemic policy has wrought, public health professionals often showed signs of envy at Beijing’s ability to impose tough measures.

“In the face of a previously unknown virus, China has rolled out perhaps the most ambitious, agile and aggressive disease containment effort in history,” fawned a February 2020 World Health Organization report on the country’s COVID-19 response. “China’s bold approach to contain the rapid spread of this new respiratory pathogen has changed the course of a rapidly escalating and deadly epidemic.”

“These extreme limitations on population movement have been quite successful,” insisted Michael Osterholm, an infectious-disease specialist at the University of Minnesota, in a March 2020 assessment of China’s response (he became more skeptical of the approach with the appearance of Omicron).

And while Western countries rarely went so far as China’s total lockdowns, to the significant extent that schools and businesses were closed, movement curtailed, and life disrupted, much of the inspiration for such policies came from the allegedly successful Chinese model.

“They claimed to have flattened the curve. I was skeptical at first. I thought it was a massive cover-up by the Chinese. But as the data accrued it became clear it was an effective policy,” Professor Neil Ferguson, the U.K.’s counterpart to Fauci until he violated his own rules and resigned in disgrace, told The Times of London in December 2020. “It’s a communist one-party state, we said. We couldn’t get away with it in Europe, we thought. And then Italy did it. And we realized we could.” (unpaywalled summary here.)

Martin Kulldorff tweets:

Lockdowns are anti-science

Quotation of the Day…

(Don Boudreaux)

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… is from page 246 of the American jurist James Coolidge Carter’s profound, yet unfortunately neglected, (posthumous) 1907 book, Law: Its Origin, Growth and Function (original emphasis):

Some think that tyranny is a fault only of despots, and can not be committed under a republican form of government; they think that the maxim that the majority must govern justifies the majority in governing as it pleases, and requires the minority to acquiesce with cheerfulness in legislation of any character, as if what is called self-government were a scheme by which differed parts of the community may alternately enjoy the privilege of tyrannising over each other. The principal evils of legal tyranny arise from the instrumentality which it employs, which is always force. What is called the tyranny of fashion, or custom (using this word in its common sense), does no great harm. No one is compelled to submit to it, and the penalty of being unpopular is not ordinarily very severe; but when force is called in to compel men to act in accordance with the opinions of others rather than their own, the worst mischief ensues.

To Have A Comparative Advantage At Supplying X Is Necessarily to Have A Comparative Disadvantage At Supplying Y

(Don Boudreaux)

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Here’s a letter to the Wall Street Journal – overly long, I know, and I still have much work to do at coming up with a concise crystal clear explanation of comparative advantage.

Editor:

Tunku Varadarajan’s review of two books on China (“Two Books on China’s Post-Mao Era,” Nov. 25) – including one by Frank Dikötter – would get an A+ rather than an A- were it not marred by the following two sentences, each of which reflects an economic fallacy:

“As Mr. Dikötter explains, thanks to the ability of the Chinese state to manipulate not just the exchange rate but also the means of production – cheap land, labor, raw material and energy to Chinese enterprises – no country inside the WTO can compete with China. Remarkably, many American economists had believed that China’s accession to the WTO would reduce the trade deficit between the U.S. and China.”

The first fallacy is that the Chinese economy can be arranged to ensure that “no country inside the WTO can compete with China.” If this statement were true, not only would China be the only WTO member country to export, no WTO country other than China would produce tradeable goods, as Chinese exports would by now have bankrupted all such producers.

The fact that these outcomes aren’t remotely occurring is no surprise to economists, who recognize the meaninglessness of talking of countries competing against each other economically. Economic competition occurs at the level of particular goods and services, and is carried out by producers specialized in supplying these goods and services. Chrysler competes against Honda at selling automobiles. Amazon competes against Ikea at retailing furniture. Exxon competes against BP at selling refined petroleum products. “America” and “China,” in contrast, are here merely the jurisdictions in which countless individual sellers operate as they – and not the countries in which they operate – economically compete against each other.

Further: No country (or region, or firm, or person) can possibly be more efficient than all other countries (or regions, or firms, or persons) at producing everything. If China becomes more efficient at producing, say, tires, it necessarily becomes less efficient at producing other goods or services. The reason is that as efficiency within China at producing tires increases, the financial returns to the Chinese of producing tires increases. This fact means that with every rise in China’s efficiency at producing tires, China’s cost of producing things other than tires rises – that is, China’s efficiency at producing things other than tires falls.

Finally, in our world of nearly 200 countries there is no reason whatsoever to expect any pair of them – such as the U.S. and China – to have ‘balanced’ trade with each other. Therefore, no competent economist would ever speak of “the trade deficit between the U.S. and China,” for the reality to which this phrase refers is no more economically meaningful than is the phrase “the trade deficit between Don Boudreaux and Amazon.”

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