After almost 17 years of blogging at EconLog, I have decided to resign, effective today, and focus more on my Substack. It’s called “I Blog to Differ.” The big advantage of my Substack is that I have total control over subject matter and content. These 17 years, which include my last 9 as an economics professor and my first 8 as a retiree, have been very fulfilling. If I highlighted a lot of the posts I’m particularly proud of, this would turn out to be a long post. So I’ll mention:  A series of 4 posts on monopsony;  A series of 3 posts on Tyler Cowen’s critique of the Great Barrington Declaration; A post on how New York City, despite all the regulation, works as a city; A post in which I advocated allowing contraceptives to be sold over the counter;  A post challenging some wokeness engaged in by the New York Times.   Monopsony In October 2016, economists at Barack Obama’s Council of Economic Advisers published an electronic report in which they argued that there was a lot of monopsony in the U.S. economy. It’s titled, “Labor Market Monopsony: Trends, Consequences, and Policy Responses.” Their claim struck me as odd and so I pored over the report. I found a lot wrong with it, too much to put in one post. So I did a 4-parter. Here’s “The CEA’s Mixed Thinking on Labor Market Monopsony, Part I,” EconLog, October 27, 2016, which gives some background before I proceed to critique the CEA report. Here’s “The CEA’s Mixed Thinking on Labor Market Monopsony, Part II,” EconLog, October 28, 2016, where I lay out some huge weaknesses in the CEA report as well as some fine economic reasoning. Here’s “The CEA’s Mixed Thinking on Labor Market Monopsony, Part III,” EconLog, October 31, 2016. I won’t quote from the above 4 posts. Doing so would make this post way too long. And finally, here’s “The CEA’s Mixed Thinking on Labor Market Monopsony, Part IV,” EconLog, November 5, 2016. By the way, this series led to an interview of me by Ben Casselman of the New York Times. He did this article on January 25, 2018, over a year after I wrote. I reported on the NYT piece here. I didn’t bother pointing it out because it happens so often and I get so tired of pointing it out, but notice that Casselman identified (not completely correctly, by the way) the ideology of the Hoover Institution. Apparently the authors of the NBER report, even Marshall Steinbaum, have no ideology.   Cowen on the Great Barrington Declaration I wrote a number of posts addressing arguably the most important U.S. policy issue from 2020 to 2022: how to deal with Covid. I’ll focus here on my critique of some sloppy thinking by Tyler Cowen. Here’s “Is Cowen Right about the Great Barrington Declaration? Part 1,” EconLog, October 16, 2020. Here’s “Is Cowen Right about the Great Barrington Declaration? Part 2,” EconLog, October 17, 2020. Here’s “Tyler Cowen Doubles Down,” EconLog, October 26, 2020.   Reflections on Life in New York City Here’s “Reflections on Freedom in New York,” EconLog, January 12, 2011. Here are three paragraphs: Because I persuaded United to fly me to San Diego instead of back to Monterey (I would have got back to Monterey too late to catch my flight to San Diego for a Liberty Fund conference), I’m short on clothing. So I bought a nice dress shirt on sale at a store on Fifth Ave. The man behind the counter, who was friendly and helpful, was dark-skinned and had an accent. I asked him if he was from Iran. He is. When he saw that it was just my curiosity at work and not some kind of negative judgment on my part, he warmed up more. When I asked him his name, it sounded complicated, and I spelled it correctly the first time, he was pleased. Why do I tell these stories? Because, when I think of New York city abstractly, I think of a city that doesn’t work. Taxes are high, there are too many crowds, people are pushy and unfriendly, etc. Then, when I actually experience New York, I see how well it works. People are trying to give me what I want, at a fairly low price. The immigrants I run into–and there have been many over the last two days–don’t seem to have come here for welfare but for opportunity to get wealthier. And people are friendly. Why are people friendly? Partly because I love people and I’m friendly to them. But also partly because they are paid to be friendly; they do better by being friendly to customers. As I laid out in The Joy of Freedom: An Economist’s Odyssey, markets create virtue. Part of virtue is simple friendliness and helpfulness.   Let Contraceptives Be Sold Over the Counter In “How to Cut the Cost of Contraceptives by Regulating Less,” EconLog, February 13, 2012, I laid out how women could get contraceptives more quickly and more cheaply if the feds allowed them to sold over the counter. I was one of the first to do so, but in the next few months, several people made the same proposal.   Workplace Challenges Finally, this post, “Workplace Challenges,” EconLog, January 7, 2019, on a New York Times article about a panel at the January 2019 American Economic Association meetings. Notice in the comments how my thoughts upset economist Joshua Gans. Fortunately, commenter RP Long, responding to Gans, understood my point, writing: David presents a very reasonable, empowered, and assertive solution to the problem: Rather than getting caught up in what we privately think people might want and might do, he suggests simply asking people how they want to be treated, and then obliging them. Not only is that reasonable, but it’s also consistent with the recommendation of clinical psychologists: stop worrying about what people might think and just ask them outright (politely, respectfully) what they think.   A Final Note I have enjoyed immensely blogging for Liberty Fund. One of the things that always animated me is the name of the organization that funded me: Liberty Fund. I believe strongly in liberty. That’s different, by the way, from saying that I substituted belief in liberty for good economic reasoning. Writing an average of 24 posts per month helped me develop my ideas and my writing ability (especially my speed at writing.) Lauren Landsburg was very helpful when I was getting my feet wet and Amy Willis has been great to work with. Thanks to Emilio Pacheco for offering me the gig and to former fellow blogger Bryan Caplan for being so welcoming when I began. Thanks also to the literally hundreds of commenters who have added valuable insights or asked good questions.   Remember that if you want to follow my work and thinking, subscribe to my Substack “I Blog to Differ.” (0 COMMENTS)

What can Ernest Hemingway teach us today about the morality of war, the eternal and transient nature of love, and how to write a masterpiece? Listen as author and teacher David Wyatt talks with EconTalk’s Russ Roberts about Hemingway’s epic For Whom the Bell Tolls. Topics include Hemingway’s role in the wars of the 20th century, the book’s context and themes, and its lasting influence on American literature and […] The post Hemingway, Love, and War (with David Wyatt) appeared first on Econlib.

  Are the BLS and Other Government Statistical Agencies Partisan? Here’s What My Research Found by Vincent Geloso, The Daily Economy, August 18, 2025. Excerpt: There is little to substantiate the claim that the BLS produces low-quality data. The BLS (and every other statistical agency) frequently issues preliminary reports from surveys it conducts. As such, revisions are common. How big are those revisions? Pretty small! The graph below (courtesy of my co-author Gary Wagner at the University of Louisiana at Lafayette) shows error rates in monthly payroll employment estimates. It plots the percentage difference between the initial and final estimates. On this graph, a positive value means the initial estimate was lower than the final one. As can be seen, the errors (since 2000) are generally between ±0.5 percent. Most of the time (more than 90 percent), it’s within ±0.25 percent. On a pure absolute benchmark, this is not bad. In fact, if anything, the errors are getting smaller relative to the early period.   Why Collectivism Is Surging by Paul Mueller, Law & Liberty, August 19, 2025. Excerpt: Collectivism also seems to answer many people’s cultural insecurities. On the political left, many wealthy, educated people feel deeply uneasy about their success and blessings, which they label “privilege.” And others, who have not done so well economically and are saddled with five, sometimes six, figure debt from their college years, resent the hand they were dealt and how they have played it. Collective government programs of welfare, redistribution, and rent control look like appealing solutions. The political right has different cultural insecurities. Many worry about declining labor force participation among working-age men, about the opioid crisis, about falling birth rates and falling family formation, about declining manufacturing employment, and about reduced national defense capabilities. They suggest a naïve free trade, free market, and limited government philosophy allowed corporations to wipe out communities and their corresponding civic institutions, especially in middle America.   D.C. Residents Are Right To Protest Unconstitutional Police Roadblocks by C.J. Ciaramella, Reason, August 15, 2025. Excerpt: NBC News and other outlets reported that more than 100 protesters turned out on Wednesday night to heckle federal law enforcement at a checkpoint on 14th Street Northwest and warn drivers of the police ahead. And good for them. Leaving aside the dubious overall legality of the White House’s takeover—the D.C. attorney general filed a lawsuit over that issue Friday—the use of such generalized roadblocks is obnoxious, impinges on Americans’ traditional freedom to travel, and is unconstitutional under the Fourth Amendment’s protections against unreasonable searches and seizures.   Deregulate the Remittance Industry by Jeffrey Miron, Cato at Liberty, August 20, 2025. Excerpts: Remittance regulations force money service providers to act as law enforcement, collecting detailed personal data, performing extensive customer screenings to bar sanctioned individuals, obtaining licenses in both sending and receiving countries, and hiring additional compliance personnel. US financial institutions spent $46 billion in 2022 on compliance. And: Not only does this regulatory regime impose costs on consumers, but it also decreases competition. Due to regulatory requirements, entry into the remittance market is difficult, so the number of operators is small. This often results in a nearly oligopolistic market, including major banks with pricing and markup power.   Georgia Woman Could Lose $30,000 After Local Government Denies Her Permit To Open Hair Salon by Tosin Akintola, Reason, August 21, 2025. Excerpt: When Khalilah Few opened her salon, Creative Crowns Collective, in 2023, she didn’t think her business savvy would put her at odds with the local government. But two years later, she now finds herself in a legal battle with Clayton County, Georgia. After outgrowing her original studio space, Few signed a two-year lease for a new salon housed in an old barbershop in Jonesboro, a city in Clayton County, in March. She invested over $30,000 into the property and applied for a Conditional Use Permit (CUP) in April to open her salon. Despite meeting the legal requirements for a permit [sic: misplaced modifier in original], the Clayton County Zoning Advisory Board and the Board of Commissioners denied Few’s application in July.   Fixing Higher Ed: The Bailey-Caplan Convo by Bryan Caplan, betonit, August 22, 2025. Excerpt: Last month, Michael Bailey interviewed me on higher education, focusing on my most controversial views. Here’s his list of questions: 1. Although I want to focus attention on what in higher education is worth saving, let’s begin by discussing what is wrong. Just this week you cosigned what I believe is an important statement from the Manhattan Institute, “The Manhattan Statement on Higher Education.” Can you tell us more about that statement? Like how did it happen, and what are its main points? 2. The statement pinpointed two recent crises that revealed big problems: the 2020 Summer of George Floyd and the past two years of pro-Palestinian protests. To what extent do you think that universities have declined, and when did this happen?   DRH Note: Bryan Caplan is on fire. He’s at his scintillating best.   Postscript: This is a longer list of highlights than usual. The reason is that it’s the last “highlight reel” I’m doing. I’ll explain in a blog post tomorrow. (0 COMMENTS)

In 1975, New York City’s government ran out of money. “On the simplest level” journalist Martin Mayer wrote, “the story of New York’s financial collapse is the tale of a Ponzi game in municipal paper – the regular and inevitably increasing issuance of notes to be paid off not by the future taxes of revenue certified to be available for that purpose, but by the sale of future notes. Like all chain-letter swindles, Ponzi games self-destruct when the seller runs out of suckers, as New York did in spring 1975.” “And God knows, New York was prodigal,” journalist William Broyles wrote: The balance sheet fairly groans with with the weight of fiscal sins too numerous to detail: ambitious social programs where economy and efficiency were unknown; outrageous contracts with public employees and a gargantuan public payroll; welfare recipients in the Waldorf; irresponsible record-keeping that disguised the city’s financial problems; a less than hospitable attitude toward the apartments and businesses which made up the bulk of the city’s tax rolls.  Others disagreed. “Our true sin, in the eyes of Philistine skinflints and neoconservative ideologues, has been the decency – if not sufficient, still impressive – with which New York has treated its poor” the socialist Irving Howe wrote. “The assault on the city is an assault on maintaining, let alone extending, the welfare state. The assault on the welfare state is an assault on the poor, the deprived, the blacks, the Puerto Ricans.”    This argument persists. In Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics, Kim Phillips-Fein writes: …today as in the 1970s, austerity remains a political choice…Beneath the narrow debates about how debts can be paid reverberate larger, as yet unresolved questions about what kind of society we want to have, about who will pay for certain kinds of social provisions and whether we will have them at all. At the end of the day, these are inescapably political questions, not accounting ones. These arguments were absurd when Howe made them in 1976 and were just as absurd when Phillips-Fein made them in 2017.  First, New York’s “austerity” was not “an assault on the poor, the deprived, the blacks, the Puerto Ricans.” To say it was demonstrated “a characteristic form of liberal racism,” Treasury Secretary William E. Simon wrote. “[T]he assumption underlying the rhetoric is always the same: Blacks and Puerto Ricans congregate in New York to go on welfare.” In fact, Simon argued, “[m]embers of racial and ethnic minorities come to New York to work, not to go on welfare. The typical member of a minority group in New York is working at a productive job – and paying exorbitant taxes.”  Indeed, those “tax revenues go to employees’ salaries, pensions, and fringe benefits – all directed to the middle class,” Simon continued. In addition, “the middle class absorbs a significant percentage of the funds allegedly allotted to the poor.” One study “found that some 100,000 middle-class children were receiving welfare;” “…more than one-third of the children attending day-care centers were found to be ineligible;” and “…the free city university system was essentially a gift to the children of the middle class.” New York’s “unpleasant little secret,” Simon concluded, was that the city’s “subsidies to the middle classes have been overwhelmingly greater than its subsidies to the poor.” Something similar is true of social spending more generally, which helps explain why reform is so politically challenging.  Second, whether a government balances its budget is not merely “a political choice.” A government needs money to pay for the goods and services it provides. If it cannot print that money – which New York’s government cannot – if it cannot borrow it – which lenders ceased facilitating in April 1975 – and it cannot tax it – which New York’s government could not do sufficiently as residents and businesses fled the city – then it will have less money to provide those goods and services and will have to provide less of them. Intoning that “another world is possible” does not revoke these fiscal facts of life.  “[H]ad a national government been in place that was willing to accept more responsibility,” Phillips-Fein writes, “the city might not have had to make the kind of cuts it did.” True, the federal government has sources of funding not available to state and city governments, primarily the printing press, but with inflation hitting 11% in 1974, even here there were limits. “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it,” Thomas Sowell wrote. “The first lesson of politics is to disregard the first lesson of economics.” New York’s politicians disregarded the lesson to the city’s cost. Sowell might have noted that academics often disregard it, too.     John Phelan is an Economist at Center of the American Experiment. (0 COMMENTS)

In his 1992 article “Congress is a ‘They,’ not an ‘It’: Legislative Intent as Oxymoron” (International Review of Law and Economics 12 (2)), Harvard University political scientist Kenneth Shepsle opens: An oxymoron is a two-word contradiction.  The claim of this brief paper is that legislative intent, along with military intelligence, jumbo shrimp, and student athlete, belongs in this category. I agree and add that any sort of group behavior (legislative intent, market intent, Supreme Court intent, etc) belong on this list.  In this post, I will focus primarily on economic reasons for methodological individualism, but as the title states, the analysis can (and should) be broadly applied. Methodological individualism is the idea that the dynamics of a group can best be analyzed by looking at the actions of the individuals that make up the group.  Methodological individualism does not deny the existence of groups—of course groups exist.  Indeed, there are times when it makes sense to refer to the group as something that accomplished a goal given the inherent complexities of life. For example, we might say “the firm produced the pencil.”  Yes, many individuals toiling away at various stages worked to make a pencil, but the firm is the framework, or the coordinating mechanism, that brought the pencil into existence.  Applying methodological individualism means that individual behavior is the focus of our analysis.  The constitution of the group emerges out of the behavior of the individuals who make up the group. Furthermore, the relationship is bidirectional.  Individual behavior reflects the constitution of the group, and the constitution of the group influences the behavior of the individual.  As Adam Smith discusses in The Theory of Moral Sentiments, our interactions with one another teach us what behaviours are appropriate and which are not.  We learn conventions, customs, and self-control through our interactions with our peers. Understanding group behavior as the result of interactions among individuals is key to understanding the nature of market behavior.  Some time ago, I discussed the difference between economic theories and accounting identities.  The discussion was mainly focused on technical differences, but methodological individualism, properly understood, leads us to another important distinction: markets do not force people to do anything.  The relationship between economic variables does not represent compulsion.  Behaviors and results are observed and explained, not imposed, by economic theory.  There is no pre-existing equilibrium price, or optimal level of output, that the market desires or moves toward.  Rather, those outcomes emerge from the actions of individuals.  People are not profit-maximizing (which implies that a pre-existing level of profit is known and that individuals act to maximize it), but rather profit-seeking (which indicates people act in pursuit of profit).  In the former description, people are passive.  In the latter, they are active. This is a long way of saying that those who treat economics, markets, or any group behavior as mechanistic fundamentally misunderstand the necessary method of analysis.[1]  Rather, group behavior is organic and emergent.  Methodological individualism helps us see this emergent nature.   — [1] At least in economics, there are other problems with a non-individualist approach to group behavior.  I’d posit that the entire argument relies on an observed contradiction: groups are modeled as rational, but are observed as irrational.  But that is a conversation for another time. (0 COMMENTS)

A few days ago, I listened to Russ Roberts’s EconTalk interview of cardiologist Eric Topol on the health issues involved with aging. For some reason, I’m getting increasingly interested in that issue. An interesting issue comes up at about 36:00 point. Topol states: We should be using better nanoparticles and keeping that mRNA from ever having untoward side effects. But, we haven’t. The companies that make these are stuck in the original version. But, we got about a billion people exposed to them. Later, Russ follows up with this: When you say companies are stuck with their original versions, is that because of the intellectual property protection that they’re relying on and that it’s expensive therefore for them to start from scratch, and therefore they just don’t have an incentive to innovate? Or is there something else going on? Russ is onto something: the expense of starting from scratch. Topol responds: No, I think part of it is the intellectual property. Part of it is they have now had mass production of hundreds of millions of vaccines and to go to a new process–the point being, is: we’ve known that the nanoparticles can be optimized so they even have better penetration. We have these things called self-amplified vaccines where you give much tinier amounts of mRNA. And that’s approved in Japan. But there’s not even a bit of effort to get that going in the United States. That would help reduce the mRNA side effects. So, these companies, they did very well during the pandemic and they got things going quickly. That’s great; but they’re not keeping up with the field. And we’re seeing in other parts of the world the innovations that we need. What Topol doesn’t get into is why there’s progress in Japan that is not being replicated in the United States. The answer is the Food and Drug Administration. Ever since the 1962 change in law, drug companies that want to introduce a drug into the lucrative U.S. market must show not only safety but also efficacy. The requirement for showing efficacy has added almost a decade to the drug development process. So the issue is not intellectual property per se. It’s that the process of getting approval is daunting. That’s why it makes sense, as Dan Klein has argued, for the FDA to automatically approve drugs that have been approved by the FDA’s counterpart in even one of, say, a list of 15 relatively wealthy countries. You might argue that that’s too risky. But if you don’t like the risk, wait until the FDA approves it. Other people can take their chances. That’s what’s so great about freedom. We need more of it. (0 COMMENTS)

A report in the Financial Times indicates that Mexico is in the process of eliminating the checks and balances in its political system: But the bills passed in the past two weeks ultimately implement key elements of the former president’s agenda, including eliminating autonomous regulators and replacing them with ones under greater central government control. “It’s a step back,” said Carlos Ramírez of political risk consultancy Integralia. “It’s the end of the era of the autonomous institutions and now we’ll start a new era where these institutions are where they were 30 years ago: in the executive’s hands.” The other new laws implement further key aspects of López Obrador’s agenda, such as strengthening state companies and cementing military control of an empowered National Guard. The changes came weeks after a controversial election to replace the country’s judges resulted in a supreme court where all nine members were put forward by Sheinbaum or her coalition. “It’s an attempt to dismantle the old Mexican state,” said political analyst Sabino Bastidas. In the very same issue of the Financial Times we see the following story: In an interview with the Financial Times, [Abbe] Lowell expressed alarm at the president’s use of executive power to target law firms and the authority of courts, suggesting it could put unbearable strain on the judicial system. . . . Trump’s broader campaign has included executive orders blocking access to federal buildings for some law firms — a threat to their businesses — prompting splits between litigators willing to fight the government and more commercially minded colleagues. A form of coexistence that had existed for decades was now breaking under pressure from Trump, Lowell suggested.  It seems to me that the rise of a unified executive is one of the most important stories of the past decade.  In one country after another, we see executives gaining power at the expense of other parts of the government.  Examples include China, Russia, India, Turkey, Hungary, Poland and many other places.  In the US, we’ve recently seen the president gain the right to fire the head of independent agencies. Under previous administrations, the president was not allowed to fire independent agency officials other than for reasons of malfeasance.  Some might argue that this is a return to first principles: In an interim order in May concerning the leaders of two other agencies, the Supreme Court appeared to agree. The majority wrote that Mr. Trump could remove officials who exercise power on his behalf “because the Constitution vests the executive power in the president.” Of course, it’s equally true that the Constitution vests the tariff power in Congress.  Also the power to declare war.  So I believe that what we are seeing is much more than a return to traditional modes of governance. During the 20th century, vast new powers were given to the federal government, under the implicit assumption that no executive would abuse those powers for personal gain.  But what would happen if a president used those powers to go after individual people and companies that he viewed as disloyal?  Perhaps it is already happening. Why are we experiencing a global rise in authoritarianism?  In my view, that’s the most important unanswered question of the 21st century. PS.  On the plus side, Mexico does seem to allow its residents to buy the world’s best electric cars.  I saw this SUV parked outside my hotel on a recent visit to Tucson, Arizona: Sadly, those cars are not available to American motorists.  (For privacy reasons, I blurred the license plate number.) (0 COMMENTS)

One of the questions that animated Musa al-Gharbi’s investigation into the causes and consequences of wokeness was why highly successful elites seem so eager to portray themselves as otherwise. As he puts it, Why is it that the “winners” in the prevailing order seem so eager to paint themselves as helpless victims, as marginalized, as vulnerable, and as allies of the same? If it is a genuine disadvantage to be a woman, or a minority, or LGBTQ, or disabled, then why are elites so eager to identify themselves as these very things, or to publicly associate themselves with people who can—even to the point of bending the truth in order to accomplish these goals? This is striking because it used to be the case that people in general, and the successful in particular, actively sought to avoid associating themselves with narratives of helplessness, victimhood, and vulnerability: For instance, to be pitied by others used to be humiliating, and to be “victimized” by others was a source of shame. People were encouraged to directly (personally) confront those who wronged them. If they were unwilling or unable to stand up to aggressors, they were supposed to be stoic; to be proudly defiant; to not let those who harmed them see them broken. Respect was accorded to those who demonstrated themselves as capable and powerful, who were resilient to suffering and hardship, who were brave in the face of risk and danger, who were collected and confident in response to challenges and uncertainty. These values still prevail in much of the world, and indeed in many U.S. subcultures. However, sociologists Bradley Campbell and Jason Manning argue, a different moral culture has taken hold among contemporary symbolic capitalists – a “victimhood culture.” Rather than status being achieved by facing hardship with poise, determination, and refusing to let adversity keep one down, this victimhood culture produces incentives to present oneself as being as weak, fragile, and vulnerable as possible – thus deserving of special protection by institutional power: For instance, rather than directly confronting or negotiating with adversaries (settling things “between ourselves”), the norm in a victimhood culture would be to appeal to third parties to adjudicate conflicts, intervene one’s behalf, or offer support and validation. In order to enlist these third parties, harm is discussed in hyperbolic ways. People attempt to paint themselves as weak, vulnerable, helpless or damaged – especially relative to their adversaries. The wrongs done to oneself are are tied to historical and ongoing injustices affecting others. An awkward racially inflected comment, for instance, is not describe as an isolated remark made by a particular person within a specific context – instead, the comment is tied to America’s history of slavery or Jim Crow, or contemporary tragedies like the murder of George Floyd. Localized or otherwise trivial incidents are recast as fronts in cosmic struggles that others have a perceived stake in. This creates additional incentives for people to gain status by bending over backwards to affirm every allegation of wrongdoing they encounter, no matter how little evidence there is to support the accusation. As an example, al-Gharbi describes how the actor Jesse Smollett claimed to have been the victim of a racist and homophobic attack, in a story that seemed to be wildly unrealistic in every detail: Although virtually every part of his story seemed implausible, even ridiculous, many celebrities and political figures immediately rushed to signal that they believed Smollett. Indeed, the fact that the story was so absurd on its face created an opportunity for status competition. It provided a chance for people to distinguish themselves by demonstrating just how committed they were to trusting purported victims relative to their peers. And so, despite the rather obvious problems with Smollett’s narrative, many immediately rushed to condemn the ostensibly racist and homophobic attack against him, exerted major pressure on the authorities to identify and punish the perpetrators, and viciously targeted those who expressed skepticism about the actor’s claims. But this general desire to present oneself as weak and helpless, like many aspects of woke culture, is generally shunned by the actual populations the woke seek to uplift. Instead, this struggle to paint oneself as weak and helpless is almost entirely done by people who are privileged, wealthy, and well-off: For instance, those who are genuinely marginalized and disadvantaged in society are much less likely to perceive or describe themselves as victims of identity-based bias and discrimination than highly educated and relatively affluent liberals. And there’s a reason for that. Although virtually no one wants to be genuinely victimized by others, many status seekers are nonetheless interested in presenting themselves as victims and being perceived as victims—especially in contexts where “victimhood culture” prevails (such as most symbolic capitalist spaces). Some go so far as to reorient their whole identity around having been victimized in order to enjoy the benefits that come with perceived victimization indefinitely. Others find creative ways to capitalize on victimhood they didn’t personally experience at all. Of course, many of these people are genuinely convinced of the truth of their own victimhood narratives. But there’s a catch – adopting a victimhood mindset leads people to treat others around them worse, to take advantage of them, and to feel justified in doing so: For instance, research has found that people who understand themselves as victims often demonstrate less concern for the hardships of others; they feel more entitled to selfish behavior; they grow more vicious against rivals—not just against the people who victimized them but against anyone who stands in the way of their goals or aspirations. Yet even as they grow more likely to engage in immoral behaviors—and often victimize others who did them no wrong—they also gain a sense of moral superiority relative to everyone else… The more frequently they evoke their victimhood, the more ethically dubious behaviors they feel entitled to engage in—confident that they will not be held responsible, morally or practically, for their actions. But not all potential sources of hardship are treated equally by the woke: Only certain types of victimization tend to be honored in a victimhood culture. First, in order to reap the benefits associated with being recognized as a victim, one’s victimhood has to be a product of malevolent actions by others. That is, one cannot merely be a victim of circumstances – there must be someone who can be blamed (and, ideally, punished) for one’s victimized status. Second, one’s victimization should appear to be a result of factors outside of one’s control. This makes poverty only conditionally a source of victimhood, because poverty is often thought of as something ones actions can at least influence to some degree. Thus, “The most compelling forms of victimhood are tied to immutable elements of a person’s being rather than changeable aspects of their present circumstances.” This also creates an incentive for people to describe the sources of hardship they face as insurmountable – something in the face of which they are utterly powerless: Women, racial and ethnic minorities, sexual minorities, those with disabilities, trauma survivors, certain persecuted religious minorities—these are identities that are especially respected in symbolic capitalists’ victimhood culture. Being poor, or coming from poverty, can enhance one’s moral standing if one also bears some other marginalized identity. However, there is very little sympathy for impoverished “cishet” whites. Indeed, they are often viewed as being not just responsible for their own suffering but deserving of it—and their struggles, frustrations, and concerns are widely mocked or dismissed. This remains true despite the fact that white Americans are not the most successful racial or ethnic group in America, or even at the upper end. Most outcomes for whites tend to be about average overall for racial groups, and whites tend to do worse on most measures than Americans of Asian, Middle Eastern, or Indian descent, and even compared to Black Americans of Caribbean descent or African immigrants (as distinct from native born Black Americans). But people who fail to have the proper characteristics of victimhood can still try to find a way to get in on the action: For elites who cannot directly claim affiliation with the “right” kind of stigmatized identity, engaging in the culture wars often allows them to experience something like “victimhood by proxy”: progressive whites are keen to broadcast their status as “allies” and tell stories about how their unyielding commitments to social justice put them at odds with “other” whites. Insofar as they manage to alienate themselves from white peers (or even family members) on the basis of social justice advocacy, they often portray themselves as being “in the same boat” as minorities. For instance, receiving pushback from whites for their approach to antiracism allows them to paint themselves as fellow victims of racism. Constantly “struggling” with (other) whites about racial issues makes them feel like they understand the experience of being a minority. People are often strikingly explicit in making associations like these. Wealthy symbolic capitalists find other ways to try to claim victimhood identities to gain cultural capital.  For example, al-Gharbi points out that while symbolic capitalists are objectively the “most physically fit and cognitively sophisticated people in America,” they are also vastly disproportionally more likely to identify themselves as suffering from physical or mental impairments. Even the ability to make use of a possible victimhood identity is itself an activity that favors wealthy and privileged elites rather than genuinely vulnerable people: One irony, as sociologist Lauren Rivera noted in her landmark study of hiring at elite firms, is that the people best positioned to spin compelling narratives of this nature tend to be those who hail from relatively advantaged backgrounds. People who were or are genuinely underprivileged, abused, or stigmatized often try to conceal these facts rather than broadcast them. And even to the extent that they are aware that it would be advantageous to spin a story about their social mobility, and are willing to do so (often, they think it would be harmful or shameful to talk about what they’ve been through), people from genuinely disadvantaged backgrounds are generally less effective at producing the kinds of accounts that resonate with elites, as compared with people from more advantaged backgrounds. All of these elements of victimhood culture create another form of symbolic capital beyond the political, academic, and cultural capital discussed previously – something al-Gharbi calls totemic capital. We will look at what this is and how elites seek to cultivate it in the next post.   (0 COMMENTS)

Counterfactuals are a necessary part of any scientific analysis: If X didn’t happen, then Y would have.  But counterfactuals, by definition, can never be known.  They never occurred, so we can never truly know if the counterfactual would have happened.  For example, there was much debate in the Truman Administration and the US military during World War 2 over whether or not to drop atomic bomb(s) on Japan.  Some argued that the bombings were necessary to end the war: conventional warfare would cost significantly more American and Japanese lives and continue to drag on the war.  Others argued the Japanese were close to surrender and that the bombings were going to cost more innocent lives.[1]  The debate continues to this day.  But the American military did drop the bombs, with estimates upward of 200,000 lives lost. What we can never know for certain is what would have happened if the US military had never dropped those bombs. Of course, just because a counterfactual can never be known does not mean that every counterfactual is reasonable.  Counterfactuals have to be justified.  A good theory and model help us justify our counterfactuals.  If I were to say, “without dropping the atomic bomb, the Japanese military would have unleashed Godzilla upon our soldiers, devastating our military, and then invaded San Francisco,” I’d rightfully be laughed out of the room.  That’s a goofy B-movie plot, but not a reasonable counterfactual for historical discussion.  There’s simply no evidence that Godzilla was a tool of the Japanese military. In international trade discussions these days, the focus is often on the counterfactuals…at least, after protectionists make empirical claims that are easily debunked by the data.  A famous counterfactual revolves around the (oft-cited-never-read) China Shock paper.  If not for China joining the WTO, protectionists claim, the US would be a thriving place, rather than the devastated hellhole it is now. University of Central Arkansas economist Jeremy Horpedahl recently explored the metro areas hit heaviest by the China Shock (as identified in the original China Shock paper), and he found something surprising to everyone except economists: [A]ll of the MSAs hit hard by the China Shock still managed to have significant and positive real wage growth across the distribution since 2001…Wage gains in several of these places, in fact, are better than the national trends. And, except for the Hickory, North Carolina MSA[2], all MSAs have more jobs now than before the China Shock. Austin, Texas has doubled the number of jobs.  The overall economic changes in these areas are rising real wages for all income levels, more jobs, and a growing economy. These changes suggest that trade has been good for the region: newer, higher-paying jobs have entered to compensate for the lower-paying jobs that were lost (as trade theory predicts). If trade were restricted, these better, higher-paying jobs would likely be lost. But what of the individuals laid off?  Do they lose their well-paying factory jobs and have to take low-paying service sector jobs?  The evidence indicates “no.”  In his 2025 book Crushing Capitalism, Cato Institute economist Norbert Michel provides evidence that displaced workers were not necessarily made worse off.  Using data from the BLS, Michel found that about 43% of workers displaced between 2001 and 2003 earned as much or more than their previous job.  Between 2015 and 2017, that figure was 51% (pg. 70 of the Kindle Edition).  During the China Shock, displaced workers found it easier to find new jobs that paid the same or better.  Looking even further back, in 1991–1992, only about 1/3rd of reemployed workers had pay at or higher than their previous job (ibid).  Furthermore, over two-thirds of people displaced were finding jobs quickly (within a year), and again, those jobs were paying at or better than previous wages.  Since NAFTA and WTO,  it has become easier for displaced workers to find employment at or better than their previous jobs. So, the relevant counterfactual to compare against increased trade is not that, the US with a thriving economy and protectionism in place.  Instead, the data indicate that higher-paying jobs would be lost in favor of lower-paying, less productive jobs.   — [1] There are other arguments, such as retribution for the heinous war crimes the Japanese committed during the war, but this post is about counterfactuals, not retribution, so I won’t be dealing with those arguments. [2] Hickory could have fewer jobs because the town is becoming a retirement hotspot.  Retired people don’t work. (0 COMMENTS)

These tweets caught my eye: I suspect that it would be possible to create some sort of argument that the AI boom is hurting the job market, but at the risk of being unserious I don’t find this one to be particularly persuasive.  Suppose I made the following argument: Interest rates would be lower if we went into recession, which would help employment.  “Economic booms don’t hurt the job market” is an unserious view. Long time readers have probably guessed that I’d view this hypothetical claim as an example of the fallacy of “reasoning from a price change.” In some respects, it is surprising that the labor market is so strong.  We had a period of high inflation during 2021-23, and unemployment often rises sharply when the Fed uses a restrictive monetary policy to bring inflation back down.  Why has unemployment merely edged up from 3.4% to 4.2%?  I’m not certain, but perhaps because the disinflation policy was gradual, and even today inflation remains above the Fed’s 2% target.  Nonetheless, if the labor market is currently a bit subpar, it is probably due to the lingering effects of the Fed’s anti-inflation policy, not the AI boom. I certainly agree with claims that unemployment might rise if the Fed pushed interest rates above their natural rate.  But an AI boom tends to raise the natural rate of interest.  Other things equal (including the Fed’s target interest rate), a higher natural rate of interest is actually expansionary—likely to lead to faster NGDP growth.  Of course other factors such as the lower rate of immigration tend to reduce the natural rate of interest, so I’m agnostic on the question of whether monetary policy is currently too tight.  (As an aside, TIPS markets are currently pricing in about 2.5% inflation over the next 5 years, which doesn’t suggest that money is particularly tight.) Perhaps there’s an argument that AI spending crowds out more labor intensive industries, although in principle the Fed should offset that effect.  Of course monetary policy is not perfect, but the internet boom of 1999-2000 doesn’t seem to have hurt the labor market.  In 2000, unemployment fell to the lowest level since the 1960s. We eventually did have a mild recession, after the Fed engineered much slower NGDP growth in 2001. (0 COMMENTS)