“Only schmucks pay retail.” wise aphorism I like to think I love saving money, but I’ve made many penny-wise, pound-foolish choices. I remember telling my mother, “Watch the pennies, and the dollars will take care of themselves.” I had read it in an old Blondie strip. Mom wasn’t impressed; she replied, “But don’t step over nickels to pick up pennies.” It took me a long time to think straight about it, and I probably still don’t. I have a weakness for “free” calories at conference receptions, no matter how empty, when I should probably pay to load up on protein. No one is above error. The fact remains, though: if I can “save” $250 by comparison shopping for a plumber but it costs me the opportunity to do $251 worth of work, I’ve chosen poorly. Should you drive around looking for gas that’s two or three cents per gallon cheaper? Probably not: first, your time is valuable. Second, you’re burning gas to get from one place to another. Suppose you save sixty cents on gas by saving three cents a gallon, but you had to burn sixty cents worth of gas to get the savings. Never mind the value of your time–it’s a wash even if you just look at the cost of the gas you burn and the benefit of the money you save. Trips to the gas station yield important insights into why prices might differ for the “same” good in different locations. A can of Sprite in downtown New York differs importantly from a can of Sprite in rural Iowa. Most of the value comes from its location. There might be liturgical and ritual value in bargain-hunting, though. Maybe it is a useful exercise in affirming the kind of person you are (frugal, penny-pinching). I saw something on social media saying it’s customary in the Midwest to explain that you got a great deal when someone compliments you on something.  It might be like taking communion at church, doing a morning Bible study, or going to the driving range. “Bargain hunting” also brings a bit of a thrill and can be fun for its own sake. Paying retail, however, is a way of outsourcing your analysis and thought processes to people specializing in curation. When should you pay retail? Pay careful attention to the costs of looking for a better deal. Consider tickets to a sporting event or a concert. I’ve paid retail (plus “convenience charges”) to buy tickets to a minor league hockey game when, in previous years, I would have just scoured the parking lot looking for people with an extra ticket or two to unload. Needing four seats, wanting to sit close to friends, and having a busy day such that we didn’t arrive until after the puck dropped, it was much easier to bite the bullet and pay retail. So, who pays retail? Schmucks, maybe–but also people with high search costs. It hurts a bit when I know I could have gotten a better deal with a little more work, but I can at least console myself by saying I had better things to do.   For more information on how entrepreneurs Sol Price and Sam Walton changed the face of retail, see “The Vital Two: Retail Innovation by Sol Price and Sam Walton” by Art Carden, Charles Courtemanche, and Reginald Harris, available without charge from Essays in Economic and Business History.   Art Carden is Professor of Economics & Medical Properties Trust Fellow at Samford University, and he is by his own admission as Koched up as they come: he has an award named for Charles G. Koch in his office, he does a lot of work for and is affiliated with an array of Koch-related organizations, and he has applied for and received money from the Charles Koch Foundation to host on-campus events. (0 COMMENTS)

Earlier this week, I described a new Netflix documentary purporting to compare the benefits of healthy omnivore versus vegan diets. In that post, I questioned the adherence of the series to the scientific study it’s describes as being based on, and I asked, “Who ordered this banquet?” Well, funding for You Are What You Eat was provided by the Vogt Foundation, which, according to Charley Vogt, its secretary-treasurer, funds “organizations that protect animals and promote plant-based products.” Well, we have gotten plenty of pitches for plant-based products, often by brand name. The Vogt Foundation also funds the Oceanic Preservation Society, which apparently includes investment by Kyle Vogt in Wild Type—a cellular agricultural start up that recently launched “sushi-grade” cell-based salmon. Kyle Vogt also is Executive Producer of the Netflix documentary. We do not hear about the Wild Type startup or the sushi-grade salmon. But boy, do we get an earful on farmed salmon. Many presentations begin with the twin pairs talking about their diet menu and its components. One discussion is with Don Staniford, who founded Scottish Salmon Watch to campaign for the end of salmon farming in Scotland. He has carried out covert filming operations to highlight what he regards as mistreatment of the fish and environmental damage. On a trip to the fish market, and with shots of salmon farms, he asserts that the safety and benefits of farmed salmon is “complete and utter bollocks.” He will reveal “the full horror behind salmon farming” and its products that you should “avoid like the plague.” We do not hear statistics, but general warnings about parasites, viruses, and bacteria. And a dye added to the fish that is linked to human health problems.  And seemingly without context or assertion, he will drop, “and there is diabetes.” So, don’t think you can become a pescatarian instead of a vegan. Unless you can afford wild salmon? Well, not really, the pollution from salmon farming and other sources is alleged to be infecting wild salmon, too. And what about dairy?  We are told that cheese is addictive and asked to consider this wonderful alternative- a pitch for cheese made from cashews.  We begin with statistics on American consumption of pizza with plant-based mozzarella cheese. One of the firms profiled has made pizzas using this cheese- “brilliant out of the box thinking,” says the narrator. And now, at the World Pizza Expo in Las Vegas, we get testimonies from passersby who taste the pizza. They love it. In other running commentary, two celebrated chefs testify that they woke to the health and climate drawbacks of meat, and now, despite threats and warnings, run a successful vegan restaurant in Manhattan, Eleven Madison Park. We return there in show after show to see a lot of appetizing plates. A “born-again” cattle farmer from Texas that we met earlier visits the restaurant and reports it is a transcendent experience. In the final episode, we attend the awarding of three Michelin stars to the restaurant. Now back to the original premise. Where are those results of the Stanford twin study? We finally arrive at the fourth and final episode of the series. The most notable result is those on the vegan diet ended with a lower (i.e., more healthful) score on LDL-C),  the so-called bad cholesterol. For the omnivore group, their LDL-C levels barely budged, ending on average at 116.1 milligrams per deciliter, above the optimal maximum of 100mg/dc. For twins on the vegan diet, there was an average 13 percent decrease to 96.5 mg/dl. That is potentially important for cardiovascular and other health issues. But this “prime” result of the study, it appears, could have been taken for granted. It is well-established. In fact, none of the outcomes of the study apparently are surprising. Walter Willet, a professor of epidemiology and nutrition at the Harvard School of Public Health, commented to VOX, “There is no body of evidence that conflicts with the finding that a healthy plant-based, vegan diet as implemented in this study is better than a typical omnivore diet.” If in fact these results are nothing new, what then was the intention of the Stanford study? Given the timing of the release of the  documentary series on January 1, 2024–just two months after publication of the study results–it must have been developed and filmed as the study was underway. Would that have been the case, given the sponsors of the documentary, if there had been any chance the study’s results would not be “pro-vegan”?  Just asking. My intention here is not to make the case against climate alarmism (although I have done so elsewhere), nor to defend the animal husbandry industry against multiple attacks, and certainly not to evaluate the benefits of meat substitutes. My point is that a competent (though apparently not very new) scientific study, which itself may have been designed mostly to promote veganism, became the platform for blatant propaganda. The bait-and-switch tactics draw in audiences seeking to be informed by science about their health and instead get lectures motivated by ideology—a ploy that is getting old. With that disclaimer, let me comment briefly on two of the most egregious rants that for my own interest I followed up with a little research. First, on the “horrors” of farmed salmon, Harvard Health Publishing of the Harvard Medical School examined the entire issue and concludes: Bottom line: Don’t stress too much about your salmon selection. Follow the American Heart Association’s advice to eat two servings of fish a week, letting affordability and availability guide your choices. As for me, I often opt for farmed salmon for dinner once a week or so, but I’ll splurge on wild salmon if it looks especially good. Second, on the threat to global climate from the emissions of cattle, the CLEAR Center for Clarity and Leadership for Environmental Awareness and Research at the University of California, Davis, makes a very revealing point. Yes, gas emitted by cattle is methane, which is  a 28 times more potent greenhouse gas than CO2. But CO2 persists in the atmosphere for hundreds or thousands of years, whereas methane degrades almost entirely in about 12 years. This methane is made in the stomachs of ruminants from CO2 drawn from the atmosphere by plant photosynthesis, which creates cellulose in the plants upon which cattle feed. Their digestive systems convert the cellulose into methane, which they emit. Methane is emitted, degraded away, and emitted again in an repetitive cycle called atmospheric gas flow- a constant wash. In my view, You Are What You Eat: A Twin Study exploits a scientific study to attract an audience for indoctrination. I add the footnote that two of the chief such pitches also appear to be easily debunked by science.   Walter Donway is an author and writer with more than a dozen books available on Amazon and an editor of the e-zine Savvy Street. He was program officer or director at two leading New York City foundations in the healthcare field: The Commonwealth Fund and the Dana Foundation. He has published almost two dozen articles in the Blockchain Healthcare Review. (0 COMMENTS)

It is not because a law has been democratically and duly adopted that it necessarily exemplifies the rule of law. It is not because democratically elected politicians govern that governing is good. One current example is given by the US and EU governments siding against Apple and in favor of its developers (outside suppliers) and competitors, under some antitrust “laws” that pretend to determine what consumers want. Another of the myriad of cases that could be cited is the US government siding with the United Steelworkers against US Steel which wants to strike a bargain with Nippon Steel. (On Apple, among other reports, see “Apple Turns to Longtime Steve Jobs Disciple to Defend Its ‘Walled Garden,’” Wall Street Journal, March 27, 2024.) Not to mention discrimination for or against preferred identity groups. For Anthony de Jasay, the central problem with the state is that it takes sides among its citizens, favors some and harms others, which he sees as the essence of governing. His ideal and unattainable “capitalist state” would not govern: its raison d’être would be only to ensure that a worse state, intent of governing, does not take over. In other words, the problem is that the state discriminates against some citizens in order to favor others. This idea is not quite as revolutionary as it appears. Less radical liberals believed in a similar theory. Nobel prizewinner Friedrich Hayek argued that, in the classical liberal tradition, a law must be a general and abstract rule that applies to unknown future cases and cannot target any specific individual or group. (See his Law, Legislation, and Liberty, especially Volume 1 and Volume 2.) James Buchanan, another Nobel economist, also believed that a law cannot discriminate against any individual or group. The rule of law defines what we otherwise describe as a government of laws, not of men. The rule of law in the liberal sense is more demanding than what most people (including many if not most lawyers) believe. The law is not merely a trick that allows a democratic government to do anything it wants provided it respects certain formalities, such as adoption by the two chambers of Congress and the signature by the president. For example, a “law” decreeing that all citizens will have their left arms equally amputated would be no law in the liberal sense. To be consistent with the rule of law, a law must also have some substantive content. For Hayek, it needs to be essential for the maintenance of an autoregulated order. For Buchanan, a law must respect constitutional rules that presumptively meet the consent of all and every individual in the society. Contrary to what Vladimir Putin claimed, and despite his laughable efforts to give his state the look and feel of democracy, there cannot be a “dictatorship of the law,” for the two terms are antinomic terms. (On Putin’s “dictatorship of the law,” see Geoffrey Hosking, “Dictatorship of the Law,” Index of Censorship, Vol. 34, No. 4 [2005].) The objection that the state cannot avoid discriminating is weak. Criminals are often proposed as an example. But a liberal state does not “discriminate” against criminals since laws against murder or other major threats to the ethics of reciprocity (Buchanan) or to the autoregulated social order (Hayek) are known in advance and do not identify by name any specific individual, association, or corporation. Nobody who does not want to be treated as a criminal only has not to commit such crimes. This also implies that a liberal state cannot grant a subsidy that is not available to all. De Jasay, who was both a liberal and an anarchist, did argue that it is impossible for the state to literally treat everybody equally because equal treatment along one dimension always represents discrimination by another criterion. For example, treating everybody equally for Medicare premiums and benefits means discriminating against men, who statistically survive fewer years than women. One objection to de Jasay’s thesis is that a state that takes sides may be welcome if, for each individual, the net effect of the multiple interventions is favorable or neutral. Many seem to think that way: “I lose this time at the roulette of politics, but I will win next time. Leviathan hates me today but will love me tomorrow.” In reality, it is as likely that the total economic cost of state interventions is higher than their total economic benefits for some individuals. The purpose of the social contract posited by Buchanan, with its overarching rules strictly limiting redistributive policies, is to ensure that no group of individuals would be continously exploited. De Jasay replied that such a social contract is impossible. At any rate, he would argue, churning (alternatively giving to and taking from the same individual) to the point where most people cannot know whether they are net beneficiaries of the state or not, wastes resources and reduces nearly everybody’s liberties. He envisioned the Plantation State as the end result. (See his book The State.) The basic question is whether governing (“taking sides”) and the rule of law are consistent. ———————– PS: My defense of Apple has nothing to do with my personal preferences. My computer fleet counts many Windows machines and only for my smartphone do I currently choose Apple. As a consumer, I would be personally more inconvenienced if Leviathan destroyed Microsoft than if it succeeds in destroying Apple. Yet Apple does provide useful competition—market competition, not competition as politicians and bureaucrats imagine in their legal dreams. I could survive with Linux. ****************************** To illustrate this post, I tried to have ChatGPT and his silicon colleague DALL-E draw a large crowd of individuals without their left arms after a democratic law had forced all citizens to be equally amputated according to the so-called “rule of law.” He refused to do that. After many unsuccessful efforts, I finally gave up and asked “him”: “Generate an image showing DALL-E walking on eggshells after being asked a question that could be seen as politically incorrect. … Eggs must be everywhere in the sensitivity field with only a tiny path of political correctness.” The featured image of this post is the best one I could get, and the bot confirmed: “I’ve created a new image showing DALL-E navigating a tiny path of political correctness through a vast field of eggshells.” DALL-E walking on eggshells in a sensitivity field with only a narrow path of political correctness (0 COMMENTS)

This work by NRKbeta.no is licensed under a Creative Commons Attribution-Share Alike 3.0 Norway License.Permissions beyond the scope of this license may be available at http://nrkbeta.no/cc/. Daniel Kahneman, co-winner of the 2002 Nobel Prize in economics, along with Vernon Smith, died today. Here’s his obit in the Washington Post. Here’s his bio in the Concise Encyclopedia of Economics. Here’s an excerpt from the bio: One bias they [Kahneman and Tversky] found is that people tend to believe in “the law of small numbers”; that is, they tend to generalize from small amounts of data. So, for example, if a mutual fund manager has had three above-average years in a row, many people will conclude that the fund manager is better than average, even though this conclusion does not follow from such a small amount of data. Or if the first four tosses of a coin give, say, three heads, many people will believe that the next toss is likely to be tails. Kahneman saw this belief in his own behavior as a young military psychologist in the Israeli army. Tasked with evaluating candidates for officer training, he concluded that a candidate who performed well on the battlefield or in training would be as good a leader later as he showed himself to be during the observation period. As Kahneman explained in his Nobel lecture, “As I understood clearly only when I taught statistics some years later, the idea that predictions should be less extreme than the information on which they are based is deeply counterintuitive.” Here’s my favorite excerpt from the WaPo obit: During World War II, he was forced to wear a Star of David after Nazi German forces occupied the city in 1940. One night in 1941 or ’42, he later recalled, he stayed out past the German-imposed curfew for Jews while visiting a friend, and he turned his sweater inside out to hide the star while he walked a few blocks home. He then crossed paths with a soldier in the SS, who called him over, picked him up — and hugged him. “I was terrified that he would notice the star inside my sweater,” Dr. Kahneman noted in a biographical essay for the Nobel Prize ceremonies. But the German pulled out his wallet, showed him a photo of a boy, gave him some money and sent him on his way. “I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.” My favorite work of his is Thinking, Fast and Slow. I read about half of it on a flight from San Francisco to Seoul just after it came out and was so excited about his distinction between System 1 (fast) and System 2 (slow) thinking that I wanted to share it with my seat mates. Unfortunately, they didn’t speak English. I figured out that from a very early age I’ve been mainly a System 2 thinker. After having honed the skill for decades, though, I do it fairly fast. Here’s former co-blogger Bryan Caplan’s Eureka moment where he uses a Kahneman insight to explain why people often go wrong in thinking about economics and economic policy. (0 COMMENTS)

There’s a debate over whether to save Social Security with higher taxes or lower benefits. Matt Yglesias suggests a mix of the two approaches: Let’s consider two methods, starting with an all tax approach: 1. Increase the payroll tax by 1%, from 15.3% to 16.3%, and add a $1000 tax on affluent seniors Now consider a mix of tax increases and benefit reductions: 2. Increase the payroll tax by 1%, from 15.3% to 16.3%, and cut the Social Security benefits of affluent seniors by $1000. Do you see the difference?  Neither do I. Yglesias is essentially proposing that the problem be addressed entirely through higher taxes.  (That doesn’t mean it’s a bad idea, I’m just trying to clarify the issues involved.  And I’d add that Yglesias probably understands this, as he doesn’t claim that it is not an implicit tax increase.) A useful way to approach government tax and spending issues would be to look at the impact of various proposals on implicit marginal tax rates for both current and future consumption.  Payroll taxes and VATs tax current and future consumption at equal rates.  Taxes on capital income effectively tax future consumption at a higher rate than current consumption.  There may also be different implicit marginal tax rates on low and high levels of consumption (such as “progressivity”).  Poor people often pay relatively low taxes in absolute terms, but face high IMTRs due to a rapid phase out of benefits as they begin to work. PS.  There are warnings that Social Security might run out of money in 9 years, leading to automatic cuts in benefits: A Social Security funding crisis could be on the horizon if policymakers fail to take action to protect the program in the next decade, threatening a 23% cut to all 70 million recipients’ annual benefits, a new report claims. The analysis by U.S. Budget Watch 2024, a project from the public policy organization Committee for a Responsible Federal Budget, predicts that if the primary trust fund used to bankroll Social Security runs out of reserves by 2033, the average newly retired dual-income couple would see an immediate reduction of $17,400. Single-income couples would lose $13,100. Even though I am currently on Social Security, I would personally benefit if this were to occur.  That’s because the alternative (tax increases and/or steeper benefit cuts for “the rich”, i.e., former thrifty teachers like me), would hurt me more.  To be clear, this outcome is very unlikely to occur, as Congress will almost certainly find some sort of less politically toxic fix to the program.  BTW, “borrowing money” is not an answer, even if the extra debt is never repaid.  That’s because it would require much higher taxes merely to service the additional debt.  One way or another, higher taxes are on the way.  I had this view even before the GOP switched to being a populist big government party.  Now, I’m almost certain.     (0 COMMENTS)

I’m something of a tech nerd – I enjoy new gadgets and technology more than the average person. As a result, I keep up with the latest news and rumors in the gadget and gizmo space. I also follow the work of various tech reviewers and bloggers. One such person, Michael Fischer (aka “MrMobile”) posted a video recently talking about upcoming products he had a chance to explore at the Consumer Electronics Show.  One of the first products he describes is the R1, made by company called Rabbit. This is a small device that uses AI to perform automated tasks on your behalf – they give the example of using a voice command to tell the R1 to order you an Uber, and it places the order itself without you needing to unlock your phone and use the Uber app.  While Michael Fischer seemed excited about this device and optimistic about its potential, I’m much more skeptical. I’m not sure why I’d pay $200 to pull one device out of my pocket and tell it to operate an app for me, rather than just pull my phone out of my pocket and just use the app myself. And this is a reaction I have at seeing a lot of things on the cutting edge of the tech space – most new ideas seem pretty ill-considered to me, and most new product innovations seem likely to fail, or at best find only niche appeal. And this very fact – the fact that new ideas mostly seem pretty terrible – highlights something I think is great about markets.  Part of this relates to Vernon Smith’s insight about the interaction between constructivist rationality (deliberately thought out and articulated reason) and ecological rationality (emergent, evolving, and nonarticulated processes). As Smith put it in his book Rationality in Economics: The two concepts are not inherently in opposition: the issues are emphatically not about constructivist versus ecological rationality, as some might infer or prefer, and in fact the two can and do work together. For example, in evolutionary processes, constructivist cultural innovations can provide variations while ecological fitness processes do the work of selection.  The constructivist rationality of the people who run Rabbit tells them the R1 is a good product many people will find helpful or useful. My constructivist rationality tells me this product will probably be a dud. But thanks to the market, we have a way to figure out who is right – because the ecological rationality of the market process will sort that out. I’ve certainly been wrong before, after all. I remember when the iPad was first announced, I thought it would be a flop. All I saw when I looked at it was just an oversized iPhone that didn’t actually make phone calls. Who was going to want to drop several hundred dollars on something like that? Well, it turned out, quite a lot of people.  If I had been assigned the role of Technology Czar and given sole authority to decide what new products would be available on the market, I would have prevented a lot of flops from ever occurring. However, I would also have prevented some truly great products from arriving as well – products that I eventually came to use myself! And many things I thought would be great successes in fact turned out to be flops. The same would true for any other prospective Technology Czar, or Technology Committee. What’s great about markets is that nobody gets to be a Czar, and new ideas don’t have to be approved by committee. Markets allow a tremendous amount of variation to be generated, and markets generate selection from that variation using what Deirdre McCloskey calls market-tested betterment. So when I see a product like the Rabbit R1 on the horizon, it makes me smile. Someone has an idea for an innovation, and they are taking a chance to put it out there and see if it works. Maybe I’m wrong and it’ll be a big hit! But even if my skepticism turned out to be correct, the fact that new ideas get to be constantly tried and tested is a beautiful thing. (0 COMMENTS)

If I hesitate to criticize the new Netflix hit, You Are What You Eat: A Twin Experiment, as bait-and-switch propaganda—exploitation of audience trust in “science”—it is only because…well, what’s new?  Aren’t most “science” documentaries riding some hobby horse?  Attacks on virtually all companies in the natural resources field?  Attacks on “big” anything—except, of course, government?  Aren’t almost all “nature” shows, today, vehicles for climate alarmism? Is this documentary series, then, egregious? I would say, yes. Is it not just “more of the same,” but an exemplar of a “latest science” report filmed through the lens of ideology? I would say, yes. Let’s have a look. Results of the Stanford University twin study of a vegan diet, hailed as the first of its kind with 22 pairs of identical twins, was published in November 2023 in “Journal of the American Medical Association (JAMA) Network Open.” (Its director, Christoper Gardner, Ph.D., has been a vegan for 25 years.) The study’s premise seems straightforward: a randomized controlled trial to measure the results for health (or biomarkers of health) of eight weeks on a “healthy” omnivore diet versus a “healthy” vegan diet. To control for as many “confounding factors,” or variables, as possible, it selected 22 pairs of identical twins, with no current indications of cardiovascular disease, and randomly assign one twin to the omnivore diet and one twin to the vegan diet. The results were reported in November and two months later (January 1, 2024), a four-part documentary series on the study was ready to premier on Netflix. The amount of information from the Standard study that made it into the documentary- almost none. In its organization, the four-part series bears no resemblance to a scientific report. No outcomes are reported, even hinted, until the fourth and final part. The series nevertheless rapidly became a Netflix U.S. hit show. Omnivore? Vegan? Undecided? Tune in for this report on a controlled study by a prestigious academic medical center. What is the unbiased verdict of science on the diet controversy of our time? (More than half of Generation Z’ers, for example, are mostly vegetarian and 21 percent are vegan. Consumption of meat substitutes is expected to see exponential growth.) For the Netflix series, producers selected four of the twin pairs. For the first four weeks, the menus of the omnivores and vegans are delivered in their entirety ready to heat up. For the second four weeks, the twins prepare their own meals according to basic principles of each diet. The series begins with the battery of tests on the twin pairs to establish the baseline of biomarkers. It is important to emphasize biomarkers, because the study- but not the documentary- emphasizes that eight weeks is far too short a time to speak of health outcomes. At most, biomarkers such as low-density-lipids cholesterol (LDL-C), fat gain or loss versus muscle gain or loss, and so on can be measured. Perhaps to spice things up, twins are tested for blood chemicals related to libido. How to fill up three more shows waiting for the eight weeks—in TV time—to pass?  There are long presentations on how the “astounding” amount of beef, pork, and chicken that Americans consume is raised—and the resulting catastrophe for climate change and the dire threats to public health in each type of meat. Beef comes in perhaps for the most sustained attack. Estimates of the amount of beef that Americans consume are surprisingly varied. The range is from under 100 pounds annually to more than 250 pounds annually. The Netflix series uses the highest figure. Cattle ranching in America and internationally comes in for a sustained bashing. The burps and farts of cattle, the show reports, account for some 14 percent of the U.S. human-caused contribution to greenhouse gases. Not only that. We switch repeatedly to the Amazon rainforests where jungle giants are crashing to earth to clear pastureland for cattle. Cattle ranching also raises the issue of animal cruelty; at some time during their lives 90 percent of U.S. cattle are in feedlots, physically constrained and fed nonstop. This leads to to a presentation on the benefits and quality of meat substitutes, featuring such brands as Impossible and Stanford students in a laboratory producing—they eagerly report—healthier and better tasting plant-based eggs. We get another presentation on hog farming—its squalid conditions, its rank odors. One of the longest segments deals with chicken farming, since in recent years consumption of chicken has increased relative to pork (which has remained about steady), and beef (which has declined). A visit with, in effect, a reformed chicken farmer is narrated by a woman who advocates life and freedom for animals. We see these factory farm chickens sickened and deformed by overeating and the intense crowding of chicken barns. All meats, but especially chicken, are portrayed as public health hazards, with perilous levels of bacteria, hormones, and dangers of increasing human resistance to antibiotics. The factory farmer and the animal rights advocate convert the chicken farm into a mushroom farm. Happy ending. There is no presentation of any kind to address the question: If all these meat products are inspected and approved by the U.S. Department of Agriculture and instances of meat-borne diseases are tracked and reported, for example, by the Centers for Disease Control, what are the actual risks to consumers of these alleged levels of pathogens? How much peril does our government confess to permitting in our meat supply? Or, to put it simply: What is the response to this one-side condemnation of America’s meat supply? (The brief answer, of course, is that the infectious agents characterized so vividly in the documentary are killed at a certain temperature, so that “thorough cooking can generally destroy most bacteria on raw meat, including pathogenic ones.”) And why is this series that is devoted—we assumed—to presenting an objective scientific study comparing a healthy omnivore diet with a healthy vegan diet spending the majority of airtime attacking the climatological, social, and ethical consequences of the omnivore diet? Who ordered this banquet?   Walter Donway is an author and writer with more than a dozen books available on Amazon and an editor of the e-zine Savvy Street. He was program officer or director at two leading New York City foundations in the healthcare field: The Commonwealth Fund and the Dana Foundation. He has published almost two dozen articles in the Blockchain Healthcare Review. (0 COMMENTS)

A free trade zone (such as NAFTA, now called USMCA) has free trade among its members and separate external tariffs. A customs union (such as the EU) has a common external tariff wall. Prior to the Trump administration, that distinction was not all that important, as NAFTA members had relatively low external tariffs. Now it’s become a major issue.  Here’s The Economist: Mexico’s official customs data show no sustained influx of goods from China. But some US officials and industrialists believe Chinese inflows are being undercounted, whether deliberately or not. The suspicion is that Mexico turns a blind eye to imports from China, and that those are then re-exported to the United States. . . . “What we’ve seen is that USMCA has really become a us, China and Mexico deal, where China is trans-shipping a lot of product through Mexico,” says Jeff Ferry of the Coalition for a Prosperous America, a group that represents manufacturers. As the US has become more protectionist, the incentive to evade tariffs increases.  It’s no surprise that imported parts are shipped to Mexico with little paperwork, just as it’s no surprise that illegal narcotics are sent to the US via Mexico.  Bad regulations create black markets. The US is one of the worst abusers of international trade rules.  We routinely sign agreements and then ignore the provisions.  During the Trump administration we forced a more punitive trade regime on Mexico, and I expect us to eventually abandon that agreement and force even more punitive rules on Mexico.  When you are the biggest kid on the block, it’s easy to play the bully: USMCA rules against unfair subsidies and market practices, which are common among Chinese companies. But in many cases no law or rule is being breached. Mexico offers Chinese automakers a path around the tariff wall because USMCA’s rules of origin contain what one us official calls “loopholes” that allow for the integration of Chinese components. An importer can assemble Chinese components in Mexico and label Mexico as the country of origin, obscuring Chinese involvement. “New tools may be needed,” says the official. . . . Robert Lighthizer, who was the lead trade negotiator during Donald Trump’s presidency, has said that a first step would be to strip China of its most-favoured-nation status. That would automatically ratchet up tariffs on Chinese products across the board. Enrique Dussel of UNAM, a university in Mexico City, says this would unmoor the world trade system. “The United States [would be] saying ‘adopt my rules or you’re against me’.” Almost everywhere in the world, nationalism is on the rise.  These periods generally don’t end well. (0 COMMENTS)

From the mid-1970s until his death in 1990, Ludwig Lachmann played a central role in reinvigorating interest in the Austrian School as a viable alternative to the reigning neoclassical approach to economic analysis. He, along with Murray Rothbard and Israel Kirzner, helped foster a revival that continues to this day and owes much to Lachmann’s insistence on the extension of subjectivism to the analysis of all forms of economic relations. Lachmann emphasized the importance of studying markets as an open-ended, entrepreneur-driven process. He criticized deterministic models that closed off the investigation of change arising from the complexity of individual subjective differences. Like his teacher Friedrich Hayek, he argued that a pure logic of choice needs to be complemented with an empirical account of how people learn, and that plan coordination, rather than equilibrium modeling, provides the appropriate framework for a causal analysis of change. See his 1986 book, The Market as an Economic Process. This is from Hans Eicholz and Bill Tulloh, “Ludwig Lachmann, 1906-1990” in David R. Henderson, ed., The Fortune Encyclopedia of Economics. Since the print version of the second edition of the Encyclopedia came out in 2008, I have been updating with biographies of important economists. The typical criteria, besides their being important in some way, is that they are dead or that they won the Nobel Prize in economics. I usually write them, but Hans and Bill were quite interested and know a lot more about Lachmann than I do. Read the whole thing, which is nice and succinct. Thanks to Amy Willis for suggesting a Lachmann bio, and thanks to Tyler Cowen and Lauren Landsburg for helpful comments. By the way, I met Lachmann at the famous Austrian Economics conference in South Royalton, Vermont, which occurred in June 1974, almost 50 years ago. I liked the twinkle in his eye. Tyler Cowen told me that he took Lachmann’s class at NYU when he, Tyler, was 17. Says Tyler, “It was great.”   (0 COMMENTS)

Suppose an adult—call him Tom—faces a choice between two alternatives, A and B. Alternative B (mnemonic: B for “best”) is the one he prefers and will choose if left free. If you coercively forbid him to do B, forcing him to choose A instead, are you rendering him a service? Will he thank you for that? B and A could represent, for example, the alternative between working for $10 an hour or not being hired by anybody (because Tom’s productivity is not higher than the equivalent of $10 an hour); or between working in a third-world “sweatshop” and scavenging in a dump. My first example refers to minimum wages, which force less productive workers to choose A. (See this morning’s story in the Wall Street Journal: “California Restaurants Cut Jobs as Fast-Food Wages Set to Rise,” March 25, 2024,) My second example refers to the employees of sweatshops in poor countries who lose their jobs (and are forced to choose A) when rich Western intellectuals, activists, and trade unionists succeed in forcing them to increase wages and reduce production, or close down (see pp. 66-68 of the link). Coercively preventing an individual from choosing what he considers his best alternative harms him, even if he would describe it as his least bad one. (One’s best alternative is always anyway less bad than something else that is not accessible.) The only way to avoid this conclusion is to assume that you are better placed than Tom to know what is best among his available options. This paternalistic assumption can conceivably be true in some cases but it is not the recipe for a free society of equals. This reflection leads to another simple idea in economics: the distinction between economics as a positive science, and the value judgments that underlie most if not all authoritarian interventions in the economy. “Value judgment” is the economic jargon for a moral or normative judgment. From a positive viewpoint, we observe that an individual will always try to do what he thinks is good for him or what in his evaluation will contribute to whatever other goal he may have (such as charity or good parenting, for example). This is so true that if the prohibition of B is not enforced with penalties or punishments high enough, Tom will try to do it anyway; black markets are a case in point. From a normative viewpoint, one may believe in some ethical theory that supports forbidding Tom to do B, but one needs a good and coherent argument. Such arguments are much more demanding than the typical social activist or planner thinks. Of course, most people make some personal choices that they later regret. But the probability of an error is likely higher if the choice is imposed by an external party. Since an individual who makes a choice for himself will get its benefits and support its costs, he has more incentives to decide wisely than anybody else—except perhaps for a great friend or lover who would not use coercion anyway. One example of a value judgment libertarians and classical liberals make is that the more desirable for all individuals are the available alternatives, the better it is. This ethical judgment is consistent with the fact that, ceteris paribus, most individuals want more opportunities, economic growth, and wealth; and it is easy for those who have wealth that they don’t want to give it to friends or charity. Some people may make different value judgments, but it is more difficult to justify imposing them on others. ****************************** Some readers may think that the featured image of this post does not directly relate to its topic. Here is the story. To illustrate my post, I ask ChatGPT and DALL-E to depict “a very poor woman in a very poor country who is scavenging in a dump to survive and feed her children.” Obviously, she must judge her choice of activity to be the least undesirable option in her circumstances; A could be prostitution. (See my Regulation review of Benjamin Powell’s Out of Poverty.) ChatGPT refused to generate such an image because his “guidelines prioritize respect and sensitivity towards all individuals and their circumstances.” I spent about an hour trying to persuade the dumb machine that my request did not violate his trainers’ guidelines. I finally gave up and asked for an image of “a government office. There are lots of cubicles with bureaucrats in front of computers. In the corner office, we see the politically appointed director who has big red hearts radiating from his body.” The featured image of this post is what “he” produced. An image that did not violate ChatGPT-DALL-E’s guidelines (0 COMMENTS)