Are humans the most intelligent species, or just the most arrogant? NYU primatologist Christine Webb, author of The Arrogant Ape, believes that human exceptionalism is a myth that does more harm than good. Listen as she speaks with EconTalk’s Russ Roberts about how research has skewed our understanding of animals’ capabilities, the surprising inner lives of animals, and how a shift from dominance toward connection with the larger living […] The post Humans Are Overrated (with Christine Webb) appeared first on Econlib.

(This post is part of a series that began with this post.) The overarching theme of Musa al-Gharbi’s book is examining the gap between the ideas most supported by those who are woke and the actions of those same people. While al-Gharbi isn’t overtly hostile to woke ideas as such, he is troubled by how people who are most aggressive advocates of those ideas don’t live in a way that reflects them. This is why his book is entitled We Have Never Been Woke, and not something like “Why Wokeness is Bad.” Given how al-Gharbi argues that wokeness has been used to justify policies that enrich and support members of the symbolic capitalist class, often at the expense of the poor and vulnerable populations the woke claim to want to help, it might be tempting to conclude that the woke simply use wokeness as a cynical ploy to cover up their own greedy desire to keep the plebs in their place. But, al-Gharbi says, this need not be the case. He does not think that the woke are generally insincere in their beliefs: Critically, none of this entails that symbolic capitalists are cynical or insincere in their professed commitments to social justice. We tend to be true believers. This sincerity makes it difficult for the woke to understand why various marginalized groups have increasingly been turning away from progressive politics and instead moving toward embracing the Republican Party: Growing numbers of poor, working-class, and nonwhite voters are growing alienated from the Democratic Party and have been migrating to the GOP. It is difficult for symbolic capitalists to understand these trends because, again, we believe that we represent the will and interests of the marginalized and disadvantaged, while our opponents serve elite interests (and are driven by racism, sexism, authoritarianism, and ignorance). This is not to say the woke elites haven’t noticed the fact that woke progressivism is largely the ideology supported by wealthy white elites while the Republican Party has become much more of a multiracial party of the working class. But this fact tends to be interpreted in a self-serving way – and one that reverses the logic that progressives used to employ when the relative makeup of the parties went in the other direction: As the partisan and ideological alignment of symbolic capitalists has shifted, so has the narrative about what the partisan diploma divide “means.” When professionals and highly educated Americans skewed Republican, Democrats held this up as proof that the GOP was controlled by elites while they were the party of “the people.” Now that the pendulum has swung the other direction, the narrative is that the Democratic Party appeals to the educated and professionals because their policies are simply more rational, informed, and effective. As Stephen Colbert put it, “Reality has a well-known liberal bias.” The GOP, meanwhile, is depicted as the party of ignorant and regressive zealots. Still, that puts the woke in the uncomfortable position of trying to explain why, increasingly, working-class nonwhites prefer the GOP, and have little regard for the policy preferences espoused by the (mostly white) woke elites: In principle, this state of affairs could be defended on the grounds that relatively well-off and highly educated liberal whites—precisely in virtue of their college education and higher rates of consumption of “woke” content in the media, online, and so on—perhaps understand the reality and dynamics of racism better than the average Black or Hispanic person. However, given that many of their preferred approaches to “antiracism” are not just demonstrably ineffective but outright counterproductive, I wouldn’t recommend that anyone try to take a stand on that hill. How do we square this circle? How can it be that the woke are both sincerely committed to bringing about social justice, while also advocating for policies that enrich themselves at the expense of the poor and vulnerable, and that are often contrary to the expressed views of those same people? According to Musa al-Gharbi, the fundamental problem is that woke progressives sincerely desire two different things that are fundamentally incompatible with each other: Members of the symbolic capitalist class want to bring about social justice and support egalitarianism, but they also want to be social elites. They want to hold positions of high prestige (high paying, high status), and they want to climb the ladder and to take steps to ensure their own children will be at least as successful as themselves. But al-Gharbi sees an incompatibility between wanting to bring about egalitarian outcomes and also wanting to be upwardly mobile: Symbolic capitalists simultaneously desire to be social climbers and egalitarians. We want to mitigate inequalities while also preserving or enhancing our elite position (and ensuring our children can reproduce or exceed our position). These drives are in fundamental tension. This tension has defined the symbolic professions from the outset. Both commitments are sincere. Here’s an example of a different form of this dynamic that many people will find relatable. John Q. Hypothetical has a sincere desire to lose thirty pounds. At the same time, he also has a sincere desire to eat lots of really tasty foods. In practice, these desires conflict with each other, but that doesn’t make either desire insincere. If Mr. Hypothetical ends up eating lots of tasty food rather than losing weight, this does not show that he doesn’t really want to lose weight or that his desire to trim down is insincere. But it shows that, if forced to make a choice between a smaller waistline and abandoning tasty food, he prefers tasty food more. In the same way, al-Gharbi argues that while the woke sincerely value both egalitarian ideas as well as being social climbers, that does not mean these ideas are equally important to the woke. To see which of these is more important, you have to observe how the woke behave when the incompatibility between them forces a choice of how to behave: Throughout this text I have insisted that symbolic capitalists are likely being sincere when they espouse social justice commitments. However, just because an expressed conviction is sincere doesn’t mean it’s particularly important. One advantage of drawing this distinction is that determining whether something is important (or a priority) for someone does not require scholars to take anyone’s word. One’s priorities are manifested through action…Put another way, you don’t observe what is important to someone by what they say but rather by what they do, and by how they structure their lives. If something is valuable to a person, truly central to their being, they make room for it. They make sacrifices for it. It reshapes one’s other (more peripheral) commitments, and one’s behaviors, relationships, and life plans. This is why the woke have never truly been woke, al-Gharbi says. When faced with a policy choice that would make things better for the poor and vulnerable but would be costly for the symbolic capitalist class, they are faced with a choice about whether to make a sacrifice to support egalitarianism or protect their elite status. More often than not — almost always, in fact — they end up choosing the option that preserves their elite status. To use a tangible example, al-Gharbi extensively documents how licensing and certification regulations were created with the explicit purpose of shutting out the “wrong” kind of people, and have had the effect of artificially boosting the wealth of the symbolic capitalist class. These barriers to entry are disproportionately harmful to racial minorities and serve as structural restrictions that make it far more difficult for members of those communities to improve their situation. However, given the choice between removing these restrictions (thus opening up their own livelihoods to increased competition) in the pursuit of egalitarian goals or preserving these barriers and protecting their own status, the woke consistently pick the latter over the former. Promoting egalitarianism is a sincerely held desire, but it is ultimately less important to the woke than their desire to preserve and enhance their social status. Rather than go through the painful experience of confronting the inconsistency between their behavior and their professed values, they instead reinterpret their behavior as though it reflected those values. There are four key methods al-Gharbi identifies that can be used to justify how one might behave in ways contrary to their moral commitments: “moral credentialing, moral licensing, moral cleansing, and moral disengagement.” Of the first, al-Gharbi says: Moral credentialing is a phenomenon where people become more likely to act in inegalitarian ways, and (critically) become convinced that their actions are nonbiased, after affirming their commitment to egalitarianism or engaging in behaviors they interpret as egalitarian. For instance, studies have shown that when white people publicly affirm their commitment to antiracism, they often become more likely to subsequently favor other whites in decision like hiring and promotion, even as they grow more confident that race played no role in their decision-making. When men identify with feminism, they regularly grow more likely to favor other men in their decision-making, but also grow more confident that their judgments were non-biased. Sometimes, however, people do things they recognize were wrong to do, but they use moral licensing to get around the problem: They can exempt themselves from the moral standards they apply to everyone else, confident that the good actions they have performed, or will perform (or other bad actions they have taken or will refrain from taking), will basically “even things out” ethically, result in a net positive, or at least fail to harm their reputation. If these two strategies don’t work, one can employ moral cleansing: In situations like these, where our self-image and reputation are compromised or at risk, we often engage in rituals of moral cleansing—behaviors that help restore the sense that we’re “on the side of the angels.” And it turns out that one of the most effective ways we can come to feel good about ourselves in the aftermath of a moral failing is to point out bad behaviors in others. Research shows that condemning and (especially) sanctioning others for wrongdoing can reduce one’s guilt over committing the same offense and helps assure oneself and others that they are different from “those people” being condemned (even if one is, in fact, engaged in similar or worse behaviors). When these three strategies fall short, the woke tend to pivot towards moral disengagement: However, should moral credentialing, licensing, and cleansing collectively fail at preserving our sense self-image and reputation, we often resort to moral disengagement instead: redefining situations in ways that neutralize their moral stakes. Sometimes we do this by downplaying the risks or costs imposed on others by our actions or by insisting that any negative eventualities were caused by circumstances beyond our own control, thereby minimizing our own perceived role in others’ misfortune. Other times, we tell ourselves that difficulties imposed on others serve some worthy goal or “greater good.”…For instance, this chapter highlighted how symbolic capitalists often define minorities who espouse inconvenient views as “compromised” in some way, allowing us to simply disregard their perspectives despite our expressed commitments to epistemic and moral deference toward people from historically marginalized and disadvantaged groups. This is moral disengagement in action. These strategies don’t only allow the woke to feel secure about the virtue of their own behavior. They also allow them to find ways to believe that those who are beneath them in social status are less deserving: In other cases, guilt over harm caused by people “like us” fuels moral outrage against third-party scapegoats; subsequent retributive actions against these scapegoats tends to cleanse our own guilt or shame. Or, all else failing, we find ways to collectively write off concern about those harmed by the pursuit of our own group interests. For instance, symbolic capitalists regularly portray the “losers” in the symbolic economy as unworthy of moral consideration because they’re racist, or sexist, or transphobic, or ignorant, or support “fascists” like Donald Trump. If “those people” are marginalized, good. They should be. If they’re suffering, who cares? All of these modes of behavior have the unfortunate effect of actually making the problems the woke want to eliminate even more pronounced within organizations that are controlled by the woke themselves. The more woke values are upheld and promoted, the more it creates the very behavior the woke oppose: That is, in environments where antiracism, feminism, and other egalitarian frameworks are widely and very publicly embraced, it can become easier for people to act in racist, sexist, or otherwise discriminatory ways while convinced that their behaviors are fair—and to have those actions actually perceived as fair by others who share the same ideological and political leanings, or who belong to the same social or institutional groups. Further, al-Gharbi points out that these forms of motivated rationalization are something woke symbolic capitalists are particularly prone to employ, compared to others: Critically, although moral credentialing, licensing, cleansing, and disengagement are general cognitive and behavioral tendencies, symbolic capitalists may be especially susceptible to these forms of self-serving moral reasoning. As discussed throughout this text, the kinds of people who become symbolic capitalists (those who are highly educated, cognitively sophisticated, etc.) tend to be particularly prone to, and effective at, motivated reasoning in general…Taken together, symbolic capitalists have especially powerful means, far more frequent opportunities, and a pronounced need to produce moral credentials and more licenses or engage in moral cleansing rituals or moral disengagement. On top of all of this, because the values espoused by woke progressives are generally antithetical, if not outright hostile, to the values held by most (nonelite) members of minority communities, woke culture itself becomes a sort of hostile environment for these vulnerable populations: Similar realities hold for other forms of social sanction for insufficiently “woke” views. In general, immigrants and racial and ethnic minorities tend to be more religious and more culturally and symbolically conservative than whites—as are people of more modest socioeconomic backgrounds compared to social elites. Consequently, inculcating an environment that is hostile to more “traditional” values and worldviews, although typically carried out in the name of diversity and inclusion, will often have the perverse effect of excluding, alienating, or creating a more precarious situation for those who are already underrepresented and marginalized in elite spaces. When we try to understand why it is that so many “people of color,” or people from low-income, immigrant backgrounds or otherwise “nontraditional” backgrounds, feel as though they don’t “belong” in symbolic capitalist spaces—whether we’re talking about elite K–12 schools, or colleges and universities, or professional settings—this is likely a big, and underexplored, part of the story. But after all this, there is one final question to be explored. As I pointed out at the start of this post, there is a reason al-Gharbi’s book is titled We Have Never Been Woke, and not something like Why Being Woke is Bad or Why We Shouldn’t Be Woke. If the problem is that we’ve never been woke, that leaves open that the solution is that we should be woke. Is there anything in the ideology of wokeness, properly understood, that ought to be preserved and practiced in a different way from how the woke currently behave? That question will be the subject of part 10 of this series.   As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

We’ve long been told that if there’s one issue economists agree on… it’s free trade. Maybe economists still agree, but protectionism is all the rage in the policy world today. What gives? In this episode of EconTalk, Russ Roberts brings back trade historian Douglas Irwin for a rich, illuminating discussion on tariffs, trade policy, and the ongoing temptation of economic nationalism. If you’re wondering why we keep having the same arguments about trade—over and over again—Irwin’s insights help explain both the history and the enduring politics behind it. (And if you’re not convinced after listening to this interview, you can also check out a similar conversation with Irwin on the Great Antidote Podcast with host Juliette Sellgren.) Irwin opens with the economic basics: tariffs are taxes on imports, and like most taxes, they distort behavior. They may benefit a small, concentrated group—domestic producers—but they do so at the expense of the larger, dispersed group of consumers. As Irwin notes, this isn’t just an abstract efficiency loss. Tariffs represent a real redistribution of wealth from the many to the few. The conversation moves fluidly between historical examples and modern parallels. Irwin revisits the Smoot-Hawley Tariff (a disastrous policy that helped deepen the Great Depression) and draws connections to more recent trade skirmishes. He underscores that the U.S., once a champion of liberal trade, is drifting toward a more nationalistic approach, one that’s increasingly skeptical of global interdependence. Irwin doesn’t shy away from the geopolitical context that challenges support for free trade—especially tensions with China—but he warns that trade wars often backfire. What lingers most from this conversation is a sense of frustration. We know tariffs are costly and often ineffective. And yet, the same bad ideas find new packaging—and new support. Irwin reminds us that economics doesn’t defeat politics on its own. It needs allies, storytellers, and persistence. Let’s hear your ideas! 1. Irwin points to the power of narrative to help explain the resurging popularity of tariffs. The appeal of protecting domestic jobs, restoring industry, or “bringing back” lost greatness often overwhelms quiet economic reasoning. Politicians love the symbolic clarity of “saving American jobs,” even if the policy in question raises prices and undermines broader prosperity. We know the economics of these explanations supporting protectionism are wrong. Can economists make a better case to the public for free trade? How would you correct these narratives? In other words, what might you say in response to these sorts of arguments? What new narrative might you offer that could be more compelling to the public at large? 2. Why aren’t trade deficits a big deal, according to Roberts and Irwin? The United States runs a trade deficit in goods with the rest of the world. That sure sounds bad. Why would the U.S. do such a thing, according to Irwin? And why are the deficits run by the United States with individual countries so varied? Irwin also notes that the US runs a surplus in services with the rest of the world, particularly with regard to investment opportunities. Roberts asks why the stock market seems to be doing so well if indeed US trade policy is so terrible. How does Irwin reply, and to what extent does he persuade you with his reasoning? 3. Saving American jobs is often invoked as a reason to support tariffs and other trade restrictions. Yet Roberts insists that trade doesn’t affect the number of jobs. What does he mean by this? Roberts also acknowledges that freer trade makes the nation better off, even as some individuals will be made worse off. How can both these things be true? Why do both Irwin and Roberts think it’s a good thing that the share of American jobs that are in manufacturing has shrunk so drastically? (And why do they argue we shouldn’t try to bring those manufacturing jobs “lost” overseas back?) How would you frame these arguments if you were making them to a person who lost their job as a result of foreign competition? 4. Roberts asks Irwin to respond to the claim that the decline in the Rust Belt is a result of policies that were advocated by economists and which have only benefited rich people. How does Irwin respond, and again, to what extent are you convinced? We’ll close with a question Irwin posed generally in response to the one above. How would you answer this question from Irwin, “How do we help individuals or communities—if we care about the community as well—in terms of overcoming some of these hurdles and the difficulties of economic dislocation, loss, and then the societal consequences of that?” (0 COMMENTS)

President Trump fired the Bureau of Labor Statistics commissioner, Erika McEntarfer, after July’s jobs report showed very little job growth over the past quarter.  Initially, the President accused her of “rigging” the numbers to make him look bad.  More recently, members of his administration have tried to reduce the criticism to just that of substantial revisions (one such representative case is Casey Mulligan’s tweet here). Let’s take the less inflammatory reason (unreliable jobs figures) as the true motivation here to ask a probing question: What would a successful change to the statistics program look like? It would not be the case that revisions would disappear.  With statistics, there will always be revisions.  Any statistical report is necessarily built on various assumptions.  Ultimately, you are collecting a sample that you use to, based on assumptions and stylized facts, make claims about the entire population.  Ideally, one would survey the entire population, but that is cost-prohibitive, both in terms of money and time.  So, one uses an (ideally) representative sample of the population.  If those assumptions and stylized facts change or are no longer useful, then the model must be revised. Revision will, in turn, change the results of the claims the sample can support.  In such a case, the presence of revised data is a sign of an improvement to the model.  Without revisions, the model will become less useful over time. What about the size of revisions?  That, of course, is a concern.  If the model’s revisions frequently swing by huge amounts, then the model is fundamentally flawed. But University of Central Arkansas economist Jeremy Horpedahl shows that the BLS’s data revisions have shrunk over time (see also this post by University of Louisiana economist Gary Wagner).  Not much room for improvement there. Size and frequency of revisions will depend on the sample, and most importantly, on the response rate of the sample.  A major problem with the BLS data in general is that response rates have been falling.  Falling response rates mean that larger and larger imputations have to be made with less data.  Not ideal.  Improving response rates could be a sign of better quality data. We could also see how the BLS data correspond to other sources.  ADP, the payroll company, puts out their own monthly survey of jobs.  It’s not quite identical to the BLS report (see their FAQ at the bottom for differences), but it is a useful comparison tool.  Indeed, the revisions to the BLS data (and ADP’s own revisions) tend to bring the two data sets closer together.  Over time, the BLS’s private employment numbers and ADP’s private employment numbers differ, with ADP Report on average 1,000 jobs lower than the BLS report.  Given we are talking job gains/losses in the tens, if not hundreds of thousands, each month, such a discrepancy is not bad at all.[1]  Lower discrepancy between the two data sets would be a sign of improvement. Improvements to economic data are a good thing.  But any improvement will be a difficult process.  One must be very, very careful about how one evaluates whether a change is an improvement.   — [1] Note: All data are using non-seasonally adjusted figures.  Since seasonal adjustment is a function of models chosen by each agency, NSA provide the best apples-to-apples comparison.  However, using seasonally-adjusted figures doesn’t alter this much.  The discrepancy rises to 5,000 employees per month. (0 COMMENTS)

“Fiscal dominance” refers to the state’s expenditures (fiscal policy) dominating monetary policy. Instead of the legislature (Congress in the US) controlling government expenditures while the central bank (the Fed) tries to control inflation, the latter helps finance expenditures and Congress obtains more leeway to run deficits. Fiscal dominance is the opposite of central bank independence. The idea is making a comeback (see Ian Smith, “Investors Warn of ‘New Era of Fiscal Dominance’ in Global Markets,” Financial Times, August 20, 2025; see also Greg Ip, “Get Ready for the End of Fed Independence,” Wall Street Journal, August 26, 2025). From a monetarist viewpoint, fiscal dominance would lead the Fed, under political pressure, to increase the money supply to stimulate the economy, if not to finance the government more directly. Other macroeconomic theories emphasize different means of intervention and causality chains. For example, the central bank may try to push down interest rates in order to reduce the government’s interest costs on its deficits and the rolling of its debt. As investors start to fear inflation, however, long-term interest rates, including on mortgages, will increase because a higher risk premium is required to incentivize the lenders. This probably explains the recent increase in the spread between long-term and short-term interest rates. (Co-blogger Jon Murphy made important related points earlier this week.) One way or another, sooner or later, fiscal dominance will lead to inflation, which is defined as a sustained increase in the price level. It is sustained in the sense that the central bank sustains it or “accommodates” it. Under fiscal dominance, the central bank cannot resist pressure from the ruling politicians. Many government expenditures, such as Social Security, are indexed to inflation, but some unprotected political clienteles will cry for assistance. Worsening budget deficits and further financing assistance from an obedient central bank can thus generate a self-perpetuating vicious circle. “Financial repression” is the use of financial and regulatory means by the government to divert resources away from the private economy to itself. Inflation is a major instrument of financial repression. For example, it played a large part in financing WWII as well as the growth of the welfare state in the 1970s. The political pressures for fiscal dominance suggest that financial repression through inflation will return. In this context, inflation is the result of the government bidding up prices and winning the bidding to get the resources to produce and do what it wants. The government can always win (in the virtual auctions that markets are) if the obedient central bank finances whatever its master needs to be among the highest bidders. Note that the government largely bids against its own citizens. Populist governments have been habitual practitioners of financial repression through inflation. In their study on the economics of populist regimes over more than a century, many of them South American and European, Cas Mudde (University of Georgia and University of Oslo) and Cristóbal Rovira Kaltwasser (Diego Portales University in Santiago de Chile) provide some econometric evidence to that effect (“Populist Leaders and the Economy,” American Economic Review, vol. 113, no. 12 [2023]). Inflation produces a stealth increase in real taxation (gaining control over real resources), which allows the government to bribe the clienteles whose support is most needed. Think of Nicolás Maduro or Recep Tayyip Erdoğan. The latter also believed that pushing down interest rates would reduce inflation, with the consequence that the annual increase in the country’s consumer price index reached 80% and is still half that rate (“Turkey’s Economic Woes Catch Up With Erdoğan,” Financial Times, June 27, 2025). After the speech of the Fed’s chairman in Jackson Hole, an editorial in the Wall Street Journal notes (“Powell Flips the Fed’s ‘Framework,’” August 22, 2025): The Fed Chair on Friday seemed to move toward the view that tariffs won’t lead to permanently higher inflation. “A reasonable base case is that the effects will be relatively short lived—a one-time shift in the price level,” Mr. Powell said. The editorialists could have been a bit more explicit on this point. A supply shock caused by a large increase in tariffs shifts the production possibility frontier downward and thus generates a one-time increase in the general price level. It may not cause inflation in the sense of a sustained increase in the price level, but only if the Fed doesn’t sustain it by increasing the money supply or helping finance the government deficit in some way (see my “Assessing Trump’s New Tariff Ideas,” Regulation, vol. 47, no. 3 [Fall 2024]). These rather basic observations do not imply that a more radical criticism of central banking is not warranted (see my post “A Bad Solution to Very Real Problems,” January 31, 2018). On the contrary, the Fed participates in the logic of self-sustaining government intervention. Government intervention begets government intervention. At a time when nationalization appears (again!) as the solution to all problems, radical critiques need to be emphasized.   ******************************   Financial repression, by ChatGPT (0 COMMENTS)

Soon before the election that made Javier Milei president, 108 economists around the world (including prominent names like Thomas Piketty, Gabriel Zucman, and Jose Ocampo) signed an open letter warning about the dangers of “non-traditional” economic thinking. Even at the time, the letter was cluttered with flawed thinking. The letter then bemoans that “the laissez-faire model assumes that markets work perfectly if the government does not intervene.” While there is some truth to the statement, the letter completely ignores the fact that most of Argentina’s problems over the past decades came about from government failure and over-intervention in the market. Later on they say that “Argentines are too familiar with the pain of laissez-faire economics”, as if Argentina has been this beacon of freedom beforehand. According to the Economic Freedom of the World index, Argentina has been in the bottom two quartiles of countries in its “laissez-faire economic polices” since 2005 and ranked 130th or lower every year since 2010.  So how has Argentina done with these “dangerous” policies of Milei? Pretty strikingly well, actually. Noah Smith, who is no free-market zealot, wrote what can essentially be called an apology to free-market supporters for Milei’s recent successes. The outcomes have been stunning, and even faster than I personally expected. Universidad Francisco Marroquin in Guatemala has a “Reform Watch” about Argentina and reveals some of the most impressive trends. Monthly inflation was 25.5%, now it is 1.5%, in part due to the massive austerity measures implemented. Also impressive is that the federal government is now in a budget surplus (pre-interest payments). The construction sector has skyrocketed, and rents have decreased, despite Milei removing rent controls, in large part because now rental housing supply has increased dramatically. Poverty rates have fallen sense his tenure, the country’s bond market has recovered. So why did these economists get it wrong? In part, because they do not appreciate the knowledge problem. Being experts in their field, they can fall trap into being overly optimistic about their role in perfectly tinkering with the economy, much like what we saw at the Federal Reserve during the Great Recession. But Hayek taught us that millions of individuals actors make up the market, not expert czars. Roger Koppl touched on this key point in his book “Expert Failure.” It’s a fundamental disbelief in the market process, and an overly optimistic ability to fine-tune the economy. Milei’s policies are allowing the millions in individuals that make up “the economy” and “the market” to act voluntarily and purposefully, in a way that is showing real steps to more prosperity for everyday Argentines.    Justin Callais is the Chief Economist with the Archbridge Institute and Co-Editor of Profectus Magazine. He has a Substack on economic prosperity called Debunking Degrowth. (0 COMMENTS)

My last post in this series on We Have Never Been Woke by Musa al-Gharbi ended by mentioning another form of symbolic capital very valuable to symbolic capitalists, particularly with the advent of victimhood culture – what al-Gharbi calls totemic capital. As he describes the concept,   In sociological terms, a totem is a sacred symbol that represents a people; it marks an essence they are uniquely bonded to; it connects their past with the present; it links the fates of totem bearers and endows them with distinct social proprieties. If we understand labels like “Black,” “LGBTQ ,” “disabled,” “woman,” and so on as serving a function akin to totems in contemporary victimhood culture, then we can define “totemic capital” as the epistemic and moral authority afforded to an individual on the basis of bearing one or more of these totems—that is, on the basis of claimed or perceived membership in a historically marginalized or disadvantaged group. In order to wield this totemic capital, elites have a strong incentive to lay claim to as many of these totems as they can. But, al-Gharbi says, the lives and circumstance of elites from minority backgrounds are more similar to their fellow elites than to other minorities. Put another way, a member of the elite who is Black is has more in common with an elite who is white by virtue of being a fellow elite, than they have in common with a nonelite who is also Black by virtue of their shared race: In virtue of these background characteristics, these “representatives” typically grew up in communities and homes very different from those of most other African Americans. Their social networks, education levels, and professions are uncharacteristic of most other African Americans. Their material interests and worldviews are often demonstrably out of step with most other African Americans too. Attempts to gain totemic capital also become an escalating status struggle: Far from using their elite position to meaningfully help genuinely disadvantaged members of the groups they claim affiliation with, symbolic capitalists typically attempt to leverage collective identities in the service of their individual benefit. Discussions turn on what I am entitled to on the basis of my identity claims. These claims are, themselves, predicated on pitting women against men, Blacks against whites, LGBTQ Americans against cisgender heterosexuals, wherein one party bears collective guilt, and the other collective entitlements, on the basis of past or ongoing victimization. Even historically marginalized and disadvantaged groups are often competitively set against one another, with exchanges often devolving into a form of “oppression Olympics.” Who had it worse historically—Blacks, homosexuals, or women? Who has it worse today? How many stigmatized identities can I claim compared with you? This totemic capital is often used to as a means of bolstering one’s credibility or enhancing one’s prospects: People attempt to leverage totemic capital by making claims introduced by phrases like, “As a [insert totemic identification here], I think/feel/desire …,” under the implicit expectation that their personal thoughts, feelings, or desires will be given more weight than they otherwise would in virtue of their affiliation with a historically marginalized or disadvantaged group. Others attempt to exert totemic capital by suggesting that some slight to them personally is actually a slight against their group – tied to the history of oppression, exploitation, or marginalization against “people like them” – or else suggesting that some kind of boon to them personally is actually a great “win” for “people like them” more broadly. Other times, claims are made in the form, “[Insert totemic identification here] people think/feel/want …,” where the assertion of what the people in question desire, believe, and so on is derived not from cited and robust empirical evidence but apparently from some quasi-mystical connection that unites other group members to one another—allowing the claimant’s own thoughts, feelings, preferences, and experiences to be held up as representative of “their people” as a whole (without a need to empirically investigate and substantiate how most others in the group think, feel, or desire with respect to the issue at hand). This also creates an incentive for people to try to claim membership in a group with better totemic capital than the group into which they were born. Rachel Dolezal is perhaps the most infamous case in recent years, but al-Gharbi also describes many more such instances, such as Margaret Seltzer, BethAnn Mclaughlin, Satchuel Cole, Natasha Bannan, Raquel Saraswati, Jessica Krug, Kelly Kean Sharp, Andrea Lee Smith,  CV Vitolo-Haddad, and Tom MacMaster. Summing up these cases, al-Gharbi notes: Across the board, these actors were engaged in social justice–oriented work. In all cases, they could have done the same work as white people—but they recognized that their work would not be received and interpreted the same way were it not for the ruse. It would be unlikely to have the same impact. It would be unlikely to be as well respected. They wanted the moral and epistemic authority that comes with being a totem bearer. And these behaviors are both enabled and incentivized by woke culture: Certain elements of contemporary “victimhood culture” facilitated their ruses: the insistence on accepting identity claims uncritically and nonjudgmentally, the taboo against doubting (let alone demanding evidence for) victimization claims, the more general tendency to place subjective interpretations and experience largely above scrutiny. While intended to serve the genuinely vulnerable, these norms enable – and the rewards of possessing totemic capital create the incentives for – performances like those of Sharp, Vitolo-Haddad, and who knows how many others (there is some evidence that these behaviors may be fairly widespread). Totemic capital also creates a situation where elites in general “consecrate” specific elites of minority backgrounds. As al-Gharbi has discussed, woke elites of minority backgrounds share far more of their worldview with fellow elites than with “normies” of the same identity characteristics. This creates an awkward situation for elites – the poor and vulnerable populations in whose name they claim to act overwhelmingly reject the woke framework and the values of progressive elites. In response to this, elites will insist that the true voices of the struggling communities can be found among their fellow elites, rather than from among the unwashed masses: Insofar as they affirm their preferred narratives about the world, elites from majority groups have a strong interest in “consecrating” elites of other backgrounds as “authentic” voices for “their people.” Elites from historically underrepresented backgrounds have strong material and emotional incentives to understand themselves in this way as well. As a result of this overlap, as we will see, elites from historically marginalized and disadvantaged groups end up playing a pivotal role in legitimizing broader elite attempts to enrich themselves and undermine rivals in the name of social justice. These “consecrated” elites support the values and narratives that are dominant among the (mostly white) progressive elite class: Because the work produced by consecrated voices is often cosmetically radical or subversive—often highly critical of the United States, or various symbolic capitalist institutions, or white people, or men, or cisgender heterosexuals, or socioeconomic elites or liberals—it can be easy to fall under the illusion that consecrated creatives are producing genuinely edgy work or speaking uncomfortable truths to power. In reality, they’re typically producing exactly what their primary audience wants. The more these consecrated elites continue to push this preferred progressive narrative, the more support they gain from the existing elite establishment: The higher they rise, the more mainstream elites aggressively defend them from challenges by dissenters, the more they get softball questions in increasingly fawning interviews and profiles, and the more money they make. They may accumulate a growing list of haters, particularly among those aligned with the Right, but they become largely untouchable nonetheless—at least, so long as they keep telling elites what they want to hear. But this support for intellectuals of minority background is dependent of whether or not those intellectuals are speaking in support of the preferred narrative. But not every intellectual with the proper totemic attributes actually toes this line: Should consecrated minority voices produce content that is genuinely challenging or threatening for mainstream symbolic capitalists—something that is actually unpleasant for them to engage with, something that powerfully calls into question rather than affirming their preferred values and narratives, something that threatens their interests—the offending intellectuals and creatives will often find themselves suddenly facing harsh criticism from the people who used to praise them and, sooner rather than later, widespread neglect from mainstream symbolic capitalists. Frustrated elites generally respond to unacceptable deviance not by rethinking their own positions but by consecrating and subsequently deferring to someone else instead – someone perceived to be more congenial to producing the kind of narratives they want to hear. And there is always some ambitious “diverse” person waiting in the wings to do just that. One such example al-Gharbi describes is the sociologist William Julius Wilson, who pointed out that while the policy measures supported by the woke such as “civil rights laws and affirmative action” had managed to “significantly improve the prospects of upper-middle-class and wealthy Black people, there seemed to be little to no measurable socioeconomic benefit to working-class and poor Blacks.” This finding was not in support of the narrative preferred by the elites, and rather than rethink their position they shunned Wilson in favor of other writers who affirmed their preexisting beliefs. Thus, woke support for the voices of minority intellectuals depends critically on if those intellectuals flatter the political views of the woke: Those who defy symbolic capitalists’ preferences and priorities are deemed unworthy of being taken seriously. Opponents of “Latinx”—including (perhaps especially) if they are Hispanic or Latino—are cast as homophobic, misogynistic, and transphobic and therefore worthy of being “dismissed.” Increasingly, racial and ethnic minorities who reject symbolic capitalists’ preferred narratives on race, or who vote for the “wrong” political candidate, are branded as “multiracially white” or “politically white”—that is, they cease to be minorities at all. As then–Democratic presidential hopeful Joe Biden memorably put it, “If you have a problem figuring out whether you’re voting for me or Trump, then you ain’t black.” When surveys revealed the vast majority of people of Hispanic or Latino background had never even heard of the term “Latinx,” and of those who had, the overwhelming majority hated it, this did not cause woke intellectuals to reevaluate their own use of the term. Instead, a properly concentrated member of the elite arose to reinforce what the woke wanted to hear: In an interview with the New Yorker, one Latinx-identifying symbolic capitalist described detractors of the term as the “weakest link toward true progress, reciprocity and inclusivity.” “For that,” he continued, “you are dismissed. Vamoose. Begone. Get to steppin’. Corran camino. And take your ****** misogynistic, homophobic, and transphobic family members with you.” Another case would be when Out magazine, a long-running gay publication, released an article arguing that while Peter Thiel might sleep with men, he can’t be considered truly gay because he didn’t properly support left wing politics. According to this mindset, being gay wasn’t simply a matter of a person’s private sexual orientation or preferences – it was a full-fledged political project to bring about leftist goals, and anyone who wasn’t on board with this political project therefore failed to be truly gay. However, al-Gharbi also points out that this doesn’t mean such consecrated elites don’t actually believe what they say. He points to the case of Ta-Nehisi Coates, someone whose writings are held in very high regard by woke elites. Still, Coates himself struggled to accept the reception to his work – finding himself bewildered over the fact that the audience most receptive to and in support of his ideas was…rich white people – the very people Coates thought his work would undermine. Unable to make sense of why the message he considered to be subversive was also exactly what wealthy white establishment elites wanted to hear, this “ultimately led Coates to resign from his post at The Atlantic in favor of a faculty position at flagship HBCU Howard University.” Overall, al-Gharbi sums up the dynamics of totemic capital in this way: However, orthogonal to any aspiration to uplift hitherto underappreciated voices and perspectives, sincere though it might have been, these moves were also clearly a gambit by aspiring elites to delegitimize establishment rivals and enhance their own image—efforts sustained through the constant appropriation and policing of others’ “authenticity.” The explicit politics of deference often serve to mask the actual power dynamics at play. Consecrated intellectuals and creatives are not the ones steering the ship—their affluent, highly educated, white, liberal audiences are. And they have never been woke. And neither have we. But this leads us to the big question connecting al-Gharbi’s work together – why is it that the ostensibly woke have never truly been woke, in the sense of attempting to bring about a fairer and more just world? That will be reviewed in the next post. (0 COMMENTS)

It is a bit of a mystery why people who claim to be American-style conservatives do not embrace Friedrich Hayek, the economist and legal theorist who was awarded a Nobel Prize in economics in 1974. The mystery dissipates when one realizes that most self-identified conservatives are in fact as collectivist as the self-defined progressives (“liberals” in the confusing American terminology). Each side gives primacy to collective and political choices over individual and private choices, except that it is different collective choices that each side wants to impose. The difference is typically about which groups in society will be favored and which ones harmed. Let me quote a revealing passage from Hayek’s Law, Legislation, and Liberty (1973–1979; 2021 for the new edition by Jeremy Shearmur), which opposes the common interest of all individuals to each follow his own ends and purposes to an overarching “public interest.”[1] Observe how the quoted passage expresses ideas that are radically opposed to what “the left” and “the right” in the world, Democrats and Republicans in America, believe (to the extent that they believe in anything and, of course, that neither of these two constructed collectives is unanimous). Hayek explains the role of the judge in a free society under the common law (pp. 151–152): The judge, in other words, serves, or tries to maintain and improve, a going order which nobody has designed, an order that has formed itself without the knowledge and often against the will of authority, that extends beyond the range of deliberate organization on the part of anybody, and that is not based on the individuals doing anybody’s will, but on their expectations becoming mutually adjusted. … But although the judge is not committed to upholding a particular status quo, he is committed to upholding the principles on which the existing order is based. His task is indeed one which has meaning only within a spontaneous and abstract order of actions such as the market produces. He must thus be conservative in the sense only that he cannot serve any order that is determined not by rules of individual conduct but by the particular ends of authority. A judge cannot be concerned with the needs of particular persons or groups, or with ‘reasons of state’ or ‘the will of government’, or with any particular purposes which an order of actions may be expected to serve. Within any organization in which the individual actions must be judged by their serviceability to the particular ends at which it aims, there is no room for the judge. In an order like that of socialism in which whatever rules may govern individual actions are not independent of particular results, such rules will not be ‘justiciable’ because they will require a balancing of the particular interests affected in the light of their importance. Socialism is indeed largely a revolt against the impartial justice which considers only the conformity of individual actions to end-independent rules and which is not concerned with the effects of their application in particular instances. Thus a socialist judge would really be a contradiction in terms. … The difficulty many people feel about conceiving of the judge as serving an existing but always imperfect abstract order which is not intended to serve particular interests is resolved when we remember that it is only these abstract features of the order which … can constitute a true common interest of the members of a Great Society, who do not pursue any particular common purposes but merely desire appropriate means for the pursuit of their respective individual purposes. In short, the role of the judge in a free society has nothing to do with the policy interests of the government or with the personal interests of politicians and bureaucrats, and everything to do with the maintenance of a free society where each individual can pursue his own interests limited only by abstract rules banning some means of action (say, murder, aggression, and theft). But note that this logically condemns not only a socialist judge, but any collectivist judge, whether of the left or of the right, that is, any judge pretending to enforce the supremacy of collective choices. It is virtually certain, I believe, that Hayek would have accepted this amendment. Note how radical this part of Hayek’s legal theory is. A judge in a non-collectivist (classical liberal) political regime has no role in defending government policy. He only follows and enforces general rules meeting the long-term agreement of a majority of the population and that apply to both private individuals and government agents (except for the government’s power to levy taxes and some other exceptions that I criticize in my review of the third part of Law, Legislation, and Liberty). A recent court case provides an interesting illustration. The Department of Justice wanted a court to dismiss the case of a policeman found guilty of using excessive force (and on a woman at that!), arguing that the “public interest” is “what the government says is the public interest in this courtroom.” Judge Stephen Wilson, acting like a non-collectivist judge, rejected this argument. From a short review of the decision by Paul Cassell, who argued against the Department of Justice in court (see “The Volokh Conspiracy” in Reason Magazine, August 11, 2025), we may suspect—or hope—that Judge Wilson’s view was not far from Hayek’s distinction between a common interest in the existence of a free society on one hand, and the public interest as whatever the government determine it is on the other hand. These considerations remind us that the “public interest” as an impossible summation of private interests is either an empty or a contradictory concept. [2] It is tempting to propose a reductio ad absurdum in the spirit of Anthony de Jasay: the state is needed to defend the public interest, and the public interest is what the state decides it is. ****************************** [1] I reviewed the whole trilogy for Econlib, and the third article of my review provides hyperlinks to the other two. [2] See my EconLog post, “What in Heaven’s Name Is the Public Interest?” and my Econlib article “The Vacuity of the Political ‘We.’   As an Amazon Associate, Econlib earns from qualifying purchases. A non-collectivist judge, by ChatGPT (0 COMMENTS)

Short version: no. In my recent post on central banks and independence, I cited Harvard economist Jason Furman in discussing how lower central bank rates won’t necessarily translate into lower private borrowing costs: The Federal Reserve only sets a handful of interest rates, and those are limited to rates between banks—the discount rate (the rate at which banks can borrow from the Fed) and the interest rate it pays on bank reserves at the Fed.  The Fed tries to influence the Federal Funds Rate (the rate at which banks borrow from each other) through FOMC operations, but they do not set that rate. The actual rates you and I see are still determined by market factors: risk, inflation, supply, demand, etc.  The Fed cannot set interest rates for mortgages, credit cards, and so on.  It does not have that power.  It tries to influence those rates, yes, but it does not set them. However, the President has argued that reducing rates would reduce Federal borrowing costs, lowering costs for all Americans.  There are two problems with this, one theoretical and one practical. First, the theoretical: US Treasury interest rates are set in the market, not by the Federal Reserve.  Like most prices (and an interest rate is a price), the rate emerges from the intersection of supply and demand.  The rate is not set by the Federal Reserve.  The Federal Reserve tries to influence rates through its monetary policy, but it does not set rates.  If the Federal Reserve lowers its rates but the fundamental supply and demand in the marketplace does not change, neither will Treasury rates.  It’d be like pushing on a rope: no matter how much you push, it’ll just coil in on itself. Indeed, if the market believes the Federal Reserve rate cuts are unjustified, likely causing inflation, the market may demand higher interest rates to compensate for the expected inflation.  Thus, arbitrarily lowering Federal Reserve rates could actually lead to higher borrowing costs for the Federal government. We have seen this behavior in the US before.  For example, in the period 2003–2004, the Federal Reserve target rate was falling/flat, and Treasury interest rates were generally rising.  In the period 2008–2015, the Federal Reserve target rate was flat—close to zero—and Treasury interest rates did their own thing: sometimes rising, sometimes falling, sometimes being flat.  Most recently, Treasuries started to rise in August 2020, a full year and a half before the Federal Reserve started raising rates.  And Treasury rates continued to rise even as the Fed began cutting rates in 2024. Second, the practical: Current projections of the US federal budget and debt indicate that debt will continue to grow if nothing changes.  Consequently, this suggests that the Federal Government will need to issue more Treasuries to fund the debt.  That suggests an increasing supply curve.  If the supply curve increases, all else held equal, the price of a commodity falls.  Since the price of a bond and its interest rate are inverses, the increase in Treasury supply indicates a rising interest rate, thus leading to higher borrowing costs. Ultimately, it is only good economic sense, not wishful thinking, that will lead to lower borrowing costs in the US. (1 COMMENTS)

I began my blogging career at TheMoneyIllusion in early 2009 and ended that blog last year.  In January 2014, I started blogging here at EconLog and have greatly enjoyed the opportunity.  This will be my final post. I wish to thank everyone who works at EconLog, and I wish the best to all of my co-bloggers.  A very special thanks to EconLog editors Lauren Landsburg and Amy Willis, who helped me greatly during my 11 years blogging at EconLog. In today’s post, I’ll provide a few parting thoughts on what I see as the greatest challenge facing America: Almost everything is downstream of integrity Most of us have our worldviews shaped by the era in which we came of age.  For me, it was the Watergate hearings of 1973–74.  I still recall the inspiring bipartisan investigation into that scandal.  Thoughtful and idealistic senators like Howard Baker (R-Tennessee) probed witnesses, asking questions like “What did the President know and when did he know it?” Obviously, that America is long gone.  We now live in a highly polarized country, where even election results are contested.  Politicians are cheerleaders, not statesmen.  Economic statistics are discussed not in terms of their implication for the economy, but rather whether they have been altered to reflect a political agenda.  The media is highly polarized and “news” is often just propaganda.  People speak of “red states” and “blue states”, terms that were never used when I was young. Instead of focusing on specific political issues, I’d like to take a broader view.  As I’ve gotten older, I’ve come to view integrity as the sine qua non of effective public policy.  To see why integrity is important, consider the role played by America’s Constitution.  Most of us view the Constitution as a document that protects individual rights and limits the power of the various branches of government.  In fact, almost every constitutional provision could be easily evaded by a government that lacked integrity.  Laws mean almost nothing unless they are accompanied by informal norms of behavior.  Here are just a few of the many ways in which things might go wrong: The independence of the Supreme Court might be eroded if the court were expanded in size and packed with lots of new judges loyal to the executive. Congress’s power to declare war or impose tariffs could be evaded by an executive that declared a “national emergency”. Term limits on the presidency could be evaded if a spouse or child of the executive were elected, and then effectively turned over power to the termed-out president. (Something similar used to happen with southern governors.) Freedom of speech could be eroded if the government threatened regulatory action against companies or universities that displeased the executive. Subsidies are negative taxes. The withdrawal of a government subsidy is equivalent to the imposition of a tax.  If subsidies are given out to favored industries, then governments can pressure individual firms to do their bidding. The constitutional ban on export taxes could be eroded if the executive demanded that exporters “donate” money to the government in exchange for the privilege of exporting goods. Voting districts might be “gerrymandered” to thwart the will of voters. The “takings clause” in the Constitution might be subverted if courts started ruling that private condominium developments constituted a “public purpose”. Selective prosecution could be used to go after one’s political opponents. Bans on bribery can be easily evaded if people seeking political favors buy goods and services from businesses owned by politicians. In most advanced countries, the government has accumulated a vast amount of fiscal and regulatory power.  It would be nice to assume that the Constitution can protect us from the abuse of that power, but unfortunately, there are too many ways around the restrictions (just as banks can find ways of evading regulations against excessive risk-taking.) In my view, people focus far too much on individual issues and far too little on the essential role of integrity in the political process.  We should demand that politicians tell the truth.  We should demand that politicians refrain from corrupt practices.  We should demand that politicians adhere strictly to not just the letter of the law, but also its intent.  If we need to pay much higher salaries to attract the best people, then we should do so.  History has shown that a lack of integrity in the public realm leads to very bad outcomes in the long run.  In the end, integrity is the only way to prevent a country from becoming a failed state. Some will argue that these views are unrealistic, that we cannot expect politicians to show any integrity.  I disagree.  While perfection is never possible in human affairs, it is obvious that some politicians have more integrity than others.  It’s also clear that some political systems have less corruption than others.  If you suggest that there is no possibility of electing at least somewhat idealistic people, then you are essentially saying that there is no way for America to avoid being a banana republic.  I’m not that pessimistic. If you have enjoyed reading my posts, then please continue following my blogging over at Substack. (2 COMMENTS)