Speaking about the forthcoming presidential election and the prospects of Donald Trump, an Iowa GOP official said that “anything can happen” (“The Inevitable Nominee? Trump’s Election Momentum Builds Even as Legal Problems Mount,” Wall Street Journal, August 27, 2023). Considered in light of what we know about the economics of politics, this reflection is more than just an intuition from a minor party official. The idea that anything can happen in political space is supported by science—logic, mathematics, economics, and some historical and empirical confirmations of political chaos. In his influential 1982 book Liberalism Against Populism, political scientist William Ricker summarized what was already known. I am quoting a whole paragraph (from p. 187), but the penultimate sentence gives the concise result: In a remarkable discovery, [the late MIT economist Richard D.] McKelvey has shown that, for a wide class of differentiable utility functions, once “transitivity breaks down, it completely breaks down, engulfing the whole space in a single cycle set. The slightest deviation from a Condorcet point (for example, a slight movement of one voter’s ideal point) brings about this possibility.” Hence not only is a Condorcet winner unlikely, but also when one does not exist, anything can happen. There is no “small” set of probable outcomes. (I have explained elsewhere the Condorcet Paradox and related theories as well as some of their implications for a realistic conception of democracy and elections; see my Independent Review article “The Impossibility of Populism” and also in my Regulation review of Riker.) A breakdown of the rule of law, a civil war, the Argentinization of America, or something banal like the election of Joe Biden or Mike Pence—any of that can happen. All of this follows from rational-choice analysis; it assumes that individual voters are rational. (Dropping this assumption, we could envision the possibility that if Caligula’s horse were running under the QAnon banner, the horse might win.) These results must be qualified. As long as certain institutions—courts, constitutions or fundamental laws, political parties, government assemblies, bureaucracies, decentralized power centers, a free press—frame and constrain voting and its consequences, ordinary times will display more standard and predictable results, which public-choice analysis has explained. In times when the institutional structure of a society is under heavy strain, like in America today, political processes do resemble a roulette wheel. And we can’t seek refuge in “ordered anarchy” (a Buchananian term), because this is not the situation now and it is very unlikely to be after the political wheel is spun. (0 COMMENTS)

Can economics and better measurement help us understand racial disparities and suggest how to reduce or eliminate them? Economist Roland Fryer of Harvard University believes deeply in the power of data to help us understand how the world works and how we might change it. Listen as he tells EconTalk’s Russ Roberts of his devotion to this […] The post Roland Fryer on Race, Diversity, and Affirmative Action appeared first on Econlib.

Here are four particularly notable articles, blog posts, or videos from this week. First, the case for drinking. Highlight: [Alcohol] helps us to be more creative. It helps us to be more communal. It helps us to cooperate on a large scale. It helps to make it easier for us to kind of rub shoulders with each other in large-scale societies that we live in. So it solved a bunch of adaptive problems that we uniquely face as a species because of this weird lifestyle we have. The speaker is Edward Slingerland, author of Drunk: How We Sipped, Danced, and Stumbled Our Way to Civilization. If you read Tyler Cowen much, you know how hostile he is to drinking alcohol. What I’ve always found striking is that he tends to emphasize the costs and doesn’t even attempt to assess benefits. Second, Scott Beyer, “Africa’s Planned Cities Need Unplanning,” Reason, October 2023. Highlight: The more “formal” a project is—with master plans, institutional investors, and government involvement—the more slowly it materializes. The more “informal” it is, with minimal rules other than how locals self-govern, the more quickly it becomes a real city. Another highlight: Such ingenuity is common in other slums. Days later we visited Agege on the northwest side. It too is packed with markets, including one that, due to lack of space elsewhere, has grown organically along the train tracks. The area has become known as a place to buy furniture, with patrons hopping off the line and back on with their new cabinets and beds. When a new train arrives, every few hours, merchants move their belongings to let it pass. They reoccupy the tracks afterward. Third, Lee Ohanian, “I Once Thought California Would Fix Itself. I Was Wrong,” Hoover Institution, September 1, 2023. Highlight: One reason state government compensation significantly exceeds private-sector compensation is because few public-sector agencies seriously benchmark their compensation practices to those in the private sector. Private-sector compensation is disciplined by the value created by their employees. In a competitive marketplace, private-sector employers need to pay enough to attract the talent they seek but will suffer losses if they overpay. These compensation dynamics are largely absent in the public sector, which leads to public-sector workers receiving higher compensation than they would in the private sector. For example, average compensation in California’s Highway Patrol was $209,000 in 2019. For comparison, total compensation in the highest paying private-sector industry in the country (utilities) averaged about $128,000 in 2019. This is for an industry that is extremely capital intensive and that tends to hire highly skilled specialists. In contrast, the primary requirements for becoming a highway patrol officer are high school graduation or equivalent, a valid California driver’s license, and no felony convictions. The reason highway patrol employees receive such high compensation is because they are represented by a powerful union, and there are inadequate incentives within state government to do anything other than agree every three years to the union’s lucrative collective bargaining agreements. If Ron DeSantis has the sense to quote facts like these when he debates Gavin Newsom, he wins. Fourth, Michael Chapman, “Cato Report: Zero Chance of Being Killed by Terrorist Who Crossed U.S. Border Illegally, 1975-2022,” Cato at Liberty, August 28, 2023. Highlight: In that period [1975-2022], the report documents that “the approximate annual chance that an American resident would be murdered in a terrorist attack carried out by a foreign‐​born terrorist was 1 in 4,338,984.”         (0 COMMENTS)

Tyler Cowen has a good post on the debate over China’s economic policy, which links to a recent WSJ article on the topic. I’ve noticed that when people debate this issue, they tend to talk past each other. This is because people throw around phrases like “more consumption”, without clearly indicating what they are talking about. Regarding China’s economy, here are some issues to consider:1. Nominal demand vs. real demand.2. Fiscal policy vs. monetary policy.3. Consumption vs. investment.4. Private investment vs. public investment. I cannot emphasize enough that each of these four issues is radically different from the other three. Let me first describe what I think China needs, and then discuss the WSJ article:1. China needs steady growth in nominal demand (NGDP.)2. China needs to rely on monetary policy, and should not use fiscal policy for stabilization purposes.3. China should let the market determine the relative size of consumption and investment.4. China should reduce the role of the government in investment. With this framework in mind, lots of confusing issues raised in the WSJ article begin to make more sense: Economists and investors have been calling on Beijing to make bolder efforts to boost output—especially by promoting consumer spending, if necessary, by offering cash handouts, as the U.S. did during the pandemic. Accelerating China’s transition to a more consumer-led economy—such as that of the U.S.—would make growth more sustainable in the long term, economists say. But top leader Xi Jinping has deep-rooted philosophical objections to Western-style consumption-driven growth, people familiar with decision-making in Beijing say. Xi sees such growth as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse, they say. Xi believes Beijing should stick to fiscal discipline, especially given China’s deep debt. That makes stimulus or welfare policies akin to those in the U.S. and Europe less likely, the people said. Notice that the WSJ frames this as welfarism vs. austerity.  So which view is right?  I’d say neither.  Xi’s right that welfarism is not right for China, and the economists are right that China needs stimulus. So if there is to be no fiscal boost to consumption, and yet demand must increase, does that mean I favor more government investment?  No.  I favor monetary stimulus to boost NGDP. This is where the Keynesian framing is so counterproductive:  GDP = C + I + G + NX.  This framing tempts economists to want to play God, to wave a magic wand and determine how much of GDP will be C, how much will be I and how much will be G.  The government clearly determines G.  But the government should not be determining the mix of consumption and investment.  No policymaker could realistically have the information required to make that judgment. Take a second look at this: Accelerating China’s transition to a more consumer-led economy—such as that of the U.S.—would make growth more sustainable in the long term, economists say. How can we make sense of this claim, which on the surface seems bizarre?  For growth to be sustainable, you need investment.  And yet these western experts are not fools; they must have some sort of valid argument for this claim. I suspect the actual claim here is that China needs to stop its extremely wasteful investment in certain areas, in order to avoid ending up with lots of “white elephants” and a mountain of unsustainable debts.  In a healthy economy, only productive investments are undertaken.  The current level of China’s investment as a share of GDP seems higher than can be justified by the low rates of return experienced in recent years: Investment in roads, factories and other hard assets to drive growth has been yielding diminishing returns as the government runs out of useful projects to build. Rather that say,”China needs more consumption”, I’d argue that China needs less wasteful investment.  Aren’t those the same thing?  Not really: Also unlikely are major market-oriented changes, or a dramatic reversal in the multiyear shift toward more centralized control of the economy. Although Beijing has eased off efforts to clamp down on consumer internet firms and other private companies—a campaign that led to weaker private investment—it remains skeptical of their unregulated expansion. . . . More likely options now include greater spending on infrastructure and other government-favored projects, as well as further credit loosening—following several recent interest-rate cuts—economists and people familiar with Beijing’s thinking say. Such moves reflect Beijing’s preference for having the government play the central role in goosing growth, either by investing in infrastructure or by channeling funds to selected sectors such as semiconductors and artificial intelligence that can advance Communist Party aims. The Chinese government has been discouraging private investment and encouraging public investment (as well as quasi-public investment, as in real estate and favored tech sectors.)  That’s a mistake. For many western economists, “stimulus” is synonymous with fiscal stimulus, whereas stimulus should be done by the central bank.  And monetary stimulus is viewed as being synonymous with low interest rates and more investment, whereas the term ‘monetary stimulus’ should mean more nominal GDP—which might be either consumption or investment. Some might argue that my analysis is naive because China is far from being a laissez-faire economy.  Monetary stimulus won’t necessarily go into the most efficient sectors.  I agree.  I am describing the sort of outcome that China should be aiming for.  Determining which policy levers to push requires an in depth knowledge of the current policy distortions that lead to a misallocation of resources.  Thus monetary stimulus might be combined with banking reform to reduce moral hazard.  The goal would be to reduce lending for nonproductive investments, such as dubious real estate projects.  But again, that’s not aiming for “less investment”, that’s aiming for less wasteful investment.  I am not suggesting that public investment should be zero.  By all means continue doing public investments that pass cost/benefit tests.  But that will not include more bridges in Guizhou province, an area that is already absurdly overbuilt.  (And many “public investments” could be done by the private sector—look at Hong Kong’s excellent subway system.) To summarize, much of the debate conflates unrelated concepts.  Pundits conflate nominal demand and real demand.  They conflate monetary and fiscal stimulus.  They conflate public and private investment.  They conflate consumption with aggregate demand. Sorry, but “More consumption!” and “More investment!” are meaningless slogans.  The real issues are using monetary policy to assure nominal stability, and moving to a more market oriented economy to insure economic growth and higher living standards for the future. If you want a simple slogan, here’s something that all sides should be able to agree upon: More Chinese consumption in the year 2040!! PS.  Here’s China Daily: Guizhou is home to 49 of the 100 tallest bridges in the world, including four of the 10 tallest, the commission said. Four bridges in the province have won the Gustav Lindenthal Medal, one of the most prestigious bridge construction awards in the world. Check out the link.  They sure built some beautiful white elephants in Guizhou province, a poor mountainous backwater in China’s interior.  Imagine being told that West Virginia had 49 of the world’s 100 highest bridges.  Might you suspect a bit of pork barrel politics?     (0 COMMENTS)

On Monday, August 28, a colleague at the Naval Postgraduate School emailed a number of us retirees to tell us some unfortunate news. It turned out that our retiree passes that let us get on the base where the Naval Postgraduate School is would be cancelled effective August 31. To get a new pass, we needed to fill out a form and provide paperwork. It was really great of my colleague, Geraldo Ferrer, to get the word out. What wasn’t so great was that the Department of Defense had made this decision in February and didn’t bother to tell us retirees. So we found out with 4 days notice. I need to get on the base for four reasons: (1) I give occasional guest lectures, (2) I attend occasional lectures, (3) I meet with former colleagues, and (4) I still occasionally take books out of the library. In each of these cases, I could get a colleague to come to the gate and escort me in, but that would get very old for the handful of colleagues whom I feel comfortable asking. So I pulled down the form to fill out and noticed right away that because I’m a dual citizen, there was extra paperwork. One of the pieces of paper required was some kind of petition that somehow related to my having become a U.S. citizen. I had no what or where that was. So the next day I went to my safe deposit box in Carmel and got my required Certificate of Naturalization but could find no “petition.” I wasn’t hopeful. The part of me that feels hopeless said, “They’re going to turn down my application because it’s missing this one item.” But my brain said, “Be an empiricist. Present all the papers, don’t even mention the one missing, and see if  the person I meet with asks for it.” By Wednesday morning, I had all the documents assembled. We had been told to make an appointment because there was only one person tasked to handle the new IDs and he might be swamped. So I called to make an appointment and the very pleasant man on the other end told me to come down because there was no one waiting. By the time I got there, there were two people in front of me. I had a nice conversation with one while the other was filing his paperwork. I waited only about 20 minutes total. I went in with all my documents. The employee took the form I had filled out and eyeballed my other documents in about half a second. I already started to feel relief. He did a bunch of things, moving back and forth between his computer and a printer. Then he was done. I thought I would have to wait until someone in the police office on campus looked at my docs and I wouldn’t have been surprised if they had to be sent to the Pentagon. Why did I think that? Because of this language in the email: While every effort will be made to expedite DBIDS card issuance for eligible DoD Retired Civilians, the standard turnaround time for receiving a DBIDS card is three (3) business days. Applicants deemed unfavorable within this period will receive notification. But no. After my 8-minute wait in the office, the employee handed me my new ID. It was that simple. I told him that I appreciated how pleasant he was on the phone and how easy he was to deal with. He replied, “I try.” I answered, “You don’t just try. You succeed.” Now I’m good for 3 more years. I could have let my public choice theory of government, which often guides me well, tell me that there would be numerous screw-ups, that the one employee would feel overwhelmed and might have attitude, blah, blah, blah. But instead I was an empiricist. “Just try; be pleasant; don’t assume.” It worked. (0 COMMENTS)

What threatens the future of America (and other Western societies) was forecasted in a 1988 book by Friedrich Hayek, The Fatal Conceit: The Errors of Socialism. It is the return of tribalism. The Wall Street Journal writes (“Why Tribalism Took Over Our Politics,” August 26, 2023): It was the latest example of the Republican former president employing a potent driver of America’s partisan divide: group identity. Decades of social science research show that our need for collective belonging is forceful enough to reshape how we view facts and affect our voting decisions. When our group is threatened, we rise to its defense. The research helps explain why Trump has solidified his standing as the front-runner for the Republican presidential nomination despite facing four indictments since April. The former president has been especially adept at building loyalty by asserting that his supporters are threatened by outside forces. His false claims that he was the rightful winner of the 2020 election, which have triggered much of his legal peril, have been adopted by many of his supporters. Democrats are using the tactic, too, if not as forcefully as Trump. … Yet the research on the power of group identity suggests the push for a more respectful political culture faces a disquieting challenge. The human brain in many circumstances is more suited to tribalism and conflict than to civility and reasoned debate. The journalist unfortunately does not mention Hayek, a 1974 laureate of the Nobel Prize in economics, who devoted much work to tribalism and its modern forms. For most people, it seems, “social science” does not include economics—while it is the social science par excellence, as Hayek’s work demonstrates. Some 300,000 years have wired and coded the human brain for survival in the tribal environment where humans lived until about 12,000 years ago. The wiring was genetic but the coding, which is Hayek’s subject, was cultural. In The Selfish Gene, evolutionary biologist Richard Dawkins expressed a similar idea: “Man’s way of life is largely determined by culture rather than by genes.” With Hayek’s analysis, we can see more clearly that the hundreds of thousands of years of tribal evolution solidified group identity and collective action (if we may use a term that looks anachronic) for the purpose of survival. The discovery of what Hayek calls the “Great Society” may have started with the first urban societies but only showed up with the Ancient Greeks circa 500 B.C. By the 18th century and the Enlightenment, the Great Society was clearly recognizable. (Hayek’s Great Society has nothing to do, quite the contrary, with Lyndon Johnson’s welfare-state slogan in the 1960s.) It continued with the Industrial Revolution, the explosion of trade, and a general escape from poverty for the first time in the history of mankind. (See my Regulation review of Joel Mokyr’s A Culture of Growth and my short Regulation treatment of why the Great Enrichment started in the West.) In the West, the Great Society, which is the same as classical liberalism, started to decisively replace group identity and submission of individuals to political rulers. (For a different interpretation of Western history since the end of the first millennium of our era, see the beginning of Chapter 4 in Anthony de Jasay’s 1989 book Public Good, Free Ride.) The Great Society is characterized by abstract social relationships based on general rules, as opposed to concrete obligations to family, stifling customs of the tribe, or commands from political authority. Trade, contract, the rule of law, and individual liberty—all abstract institutions—replace tribal autarky and individual submission to political rulers. (Another major work of Hayek that develops these ideas is his trilogy Law, Legislation, and Liberty. See my Econlib review of Volume 1; links to my EconLib reviews of the two following volumes can be found on my personal website.) The Great Society is still a work in progress as shown has been subject to attacks and steps back during the past century or so. Furthermore, most humans are still not living in the Great Society, even if many have tried to imperfectly imitate it so attractive is its model of wealth and independence for ordinary individuals. The problem, argued Hayek, is that individual minds have been capable of adapting only partially to the new liberal world. Most people still instinctively long for primitive societies, the noble savage, group identity, or a strong political leader. Many if not most are attracted to social engineering and conscripting everybody toward collective goals. They wrongly believe that human reason is able to reconstruct society ab novo, an intellectual error that Hayek called “constructivism.” Therein lies the fatal conceit. These instincts and beliefs can undermine and eventually destroy the abstract liberal civilization, which is the only one compatible with prosperity and individual liberty—a danger much more serious danger than an increase of three degrees Celsius in world temperatures. But identitarians of the left (woke) or the right (nationalists and such) don’t understand that. Was Hayek’s warning prescient or unduly alarmist? Were he still alive, I think he would have seen in wokism an ultimate form of the social constructivism he blamed socialism for. I think he would also agree that we have learned something important during the last political decade in America: it is not inconceivable that civilized society would start unraveling under some ignorant and immoral demagogue for whom personal loyalty and the right tribe, not abstract rules, should govern. Too bad that conservatives, just like socialists, don’t (and perhaps cannot) understand Hayek. (0 COMMENTS)

What threatens the future of America (and other Western societies) was forecasted in a 1988 book by Friedrich Hayek, The Fatal Conceit: The Errors of Socialism. It is the return of tribalism. The Wall Street Journal writes (“Why Tribalism Took Over Our Politics,” August 26, 2023): It was the latest example of the Republican former president employing a potent driver of America’s partisan divide: group identity. Decades of social science research show that our need for collective belonging is forceful enough to reshape how we view facts and affect our voting decisions. When our group is threatened, we rise to its defense. The research helps explain why Trump has solidified his standing as the front-runner for the Republican presidential nomination despite facing four indictments since April. The former president has been especially adept at building loyalty by asserting that his supporters are threatened by outside forces. His false claims that he was the rightful winner of the 2020 election, which have triggered much of his legal peril, have been adopted by many of his supporters. Democrats are using the tactic, too, if not as forcefully as Trump. … Yet the research on the power of group identity suggests the push for a more respectful political culture faces a disquieting challenge. The human brain in many circumstances is more suited to tribalism and conflict than to civility and reasoned debate. The journalist unfortunately does not mention Hayek, a 1974 laureate of the Nobel Prize in economics, who devoted much work to tribalism and its modern forms. For most people, it seems, “social science” does not include economics—while it is the social science par excellence, as Hayek’s work demonstrates. Some 300,000 years have wired and coded the human brain for survival in the tribal environment where humans lived until about 12,000 years ago. The wiring was genetic but the coding, which is Hayek’s subject, was cultural. In The Selfish Gene, evolutionary biologist Richard Dawkins expressed a similar idea: “Man’s way of life is largely determined by culture rather than by genes.” With Hayek’s analysis, we can see more clearly that the hundreds of thousands of years of tribal evolution solidified group identity and collective action (if we may use a term that looks anachronic) for the purpose of survival. The discovery of what Hayek calls the “Great Society” may have started with the first urban societies but only showed up with the Ancient Greeks circa 500 B.C. By the 18th century and the Enlightenment, the Great Society was clearly recognizable. (Hayek’s Great Society has nothing to do, quite the contrary, with Lyndon Johnson’s welfare-state slogan in the 1960s.) It continued with the Industrial Revolution, the explosion of trade, and a general escape from poverty for the first time in the history of mankind. (See my Regulation review of Joel Mokyr’s A Culture of Growth and my short Regulation treatment of why the Great Enrichment started in the West.) In the West, the Great Society, which is the same as classical liberalism, started to decisively replace group identity and submission of individuals to political rulers. (For a different interpretation of Western history since the end of the first millennium of our era, see the beginning of Chapter 4 in Anthony de Jasay’s 1989 book Public Good, Free Ride.) The Great Society is characterized by abstract social relationships based on general rules, as opposed to the stifling customs of the tribe,  obedience to the collective, or commands from rulers. Trade, contract, the rule of law, and individual liberty—all abstract institutions—replace concrete individual obedience. (Another major work of Hayek that develops these ideas is his trilogy Law, Legislation, and Liberty. See my Econlib review of Volume 1; links to my EconLib reviews of the two following volumes can be found on my personal website.) The Great Society is still a work in progress as shown has been subject to attacks and steps back during the past century or so. Furthermore, most humans are still not living in the Great Society, even if many have tried to imperfectly imitate it so attractive is its model of wealth and independence for ordinary individuals. The problem, argued Hayek, is that individual minds have been capable of adapting only partially to the new liberal world. Most people still instinctively long for primitive societies, group identity, or a strong political leader. Many if not most are attracted to social engineering and conscripting everybody toward collective goals. They wrongly believe that human reason is able to reconstruct society ab novo, an intellectual error that Hayek called “constructivism.” Therein lies mankind’s fatal conceit. These instincts and beliefs can undermine and destroy the abstract liberal civilization, which is the only one compatible with prosperity and individual liberty—a more serious danger than an increase of three degrees Celsius in world temperatures. But identitarians of the left (woke) or the right (nationalists and such) don’t understand that. Was Hayek’s warning prescient or unduly alarmist? Were he still alive, I think he would have seen in wokism an ultimate form of the social constructivism he blamed socialism for. I think he would also agree that we have learned something important during the last political decade in America: it is not inconceivable that civilized society would start unraveling under some ignorant and immoral demagogue for whom personal loyalty and the right tribe, not abstract rules, should govern. Too bad that conservatives, just like socialists, don’t (and perhaps cannot) understand Hayek. (0 COMMENTS)

The answer is “both”. I’ll try to illustrate this with a few examples.Almost every day, I see a report in the local media (OC Register) that leaves me scratching my head. A few days ago, three young women from Orange County were killed when Gregory Black sped through a red light at 100 mph and hit their car. It turns out that Black has a long criminal record: Moreno described Black as “a well-known gang member” with a long criminal history. . . . Black pleaded no contest to one count of attempted murder in 2021. But he was only sentenced to five years of probation. The Los Angeles County District Attorney’s office said that besides vehicular manslaughter charges for Black, he faces special allegations of two or more prior felony convictions and aggravated circumstances of great bodily injury. At the same time, our prisons are full of people who have committed much less serious crimes.  Roughly 40,000 people are currently incarcerated for possessing or selling marijuana, an activity that is legal in nearly half of all states.  In contrast, attempted murder is illegal in all 50 states, as well as Washington DC. Whenever I see a news story describing a horrific crime, the article almost invariably includes a long list of the previous offenses for which the accused was previously found guilty.  So it’s pretty clear to me that we are able to identify the most serious criminals.  But in most cases the accused merely received a slap on the wrist for the previous offenses. On the other hand, you can also find innumerable examples of people being incarcerated for minor offenses. After all, America has more than 2 million people behind bars. For every news story about a violent criminal who receives an absurdly mild sentence, I can recall stories with exactly the opposite outcome.  I recall reading about a female high school teacher sentenced to years in prison for having sex with a boy in her class.  Why prison?  I get that her behavior is not OK, but why not fire her from her job?  Or how about the young woman who was sentenced to decades in prison after being pressured by her boyfriend to carry some drugs to a drop-off location.  Isn’t that a bit extreme?  Or how about the woman sentenced to prison for insider trading?  Wouldn’t a hefty fine be adequate?  Or how about women in jail for prostitution? Matt Yglesias has complained that DC prosecutors are failing to prosecute people caught with illegal firearms.  Not surprisingly, these people then go out and commit violent crimes.  I don’t know about you, but I’m far more concerned about being victimized by a guy with an illegal gun than I am by a high school teacher, the girlfriend of a drug dealer, a prostitute or an insider trader.  There’s a huge disparity in the incarceration rates of men and women.  Perhaps the disparity should be even greater. Time magazine recently had this to say: Murder, for instance, should be treated as a far graver crime than writing a bad check.  That would seem obvious.  But our actual sentencing practices don’t seem to follow any rhyme or reason.   Some politicians say that we need to be tougher on crime, while other politicians suggest we have too many people behind bars.  According to Reason magazine, some politicians can’t seem to decide what they want: In my view, the debate over criminal justice is too simplistic.  We don’t need more people in prison.  We don’t need fewer people in prison.  We need different people in prison. (0 COMMENTS)

If you follow discussions about tax policy that academics and politicians engage in, sooner or later you’ll come across the concept of a “tax expenditure.” The term seems internally contradictory. How could something be both a tax and an expenditure? It can’t.  The term is contradictory. And thinking in terms of tax expenditures can lead you to some strange conclusions. These are the opening paragraphs of David R. Henderson, “The Bizarre Economics of ‘Tax Expenditures‘”, TaxBytes, Institute for Policy Innovation, August 29, 2023. I use a numerical example with the deduction for home mortgages. I chose that on purpose because I think there should not be a deduction for interest on a home mortgage. But that doesn’t mean that using the term “tax expenditure” to refer to the deduction is a legitimate use of language. I go on to point out some implications of using the term “tax expenditure” to describe the home mortgage deduction. Here’s one: Similarly, raising his tax rate would increase the tax expenditure. And then tax policy wonks would say that he benefited hugely from the tax expenditure even though the higher tax rate made him worse off. Read the whole thing, which is not long.   (0 COMMENTS)

Nowadays, it is common, when introducing an event, to say something along the lines of: “We are grateful to the XYZ Indian Tribe for allowing us to hold this gathering on what is really their land.” Universities, bastions of the left, have been particularly intent upon engaging in this practice. For example, Northwestern University offered this “expression of gratitude and appreciation to those whose territory you reside on, and a way of honoring the Indigenous people who have been living and working on the land from time immemorial.” Here is another instance: “Princeton (University) seeks to build relationships with Native American and Indigenous communities and nations through academic pursuits, partnerships, historical recognitions, community service and enrollment efforts.  These communities and nations include the Lenni-Lenape people, who consider the land on which the University stands part of their ancient homeland.” Do the American Indians really own the entire country based upon homesteading, mixing their labor with the land? Not at all. There are now some 350 million people in the country, and there are still vast areas of it that have never so much as been touched by human feet, let alone homesteaded as farms, factories or residences. Before the white man came to the continent the best estimate is that there were only 2-3 million native persons in existence (the lowest estimate is less than one million; the highest, 18 million). It is difficult to see how they, alone, could have accomplished any such task. There is a continuum issue heavily involved in homesteading. How intensively must the land be homesteaded, and for how long, before it can be clearly stated that ownership has been attained? Experts aver that it must be more intense, and less acreage attained for any given amount of effort, east of the Mississippi rather than west of it. Why? This is due to the fact that area off the Atlantic is far more fertile, on average, than in most of the west. Thus, a family of four would rationally invest in the homesteading of less acreage in the east than in the west. Not only is there a continuum in terms of how intensively must be the homesteading, and the duration thereof in order to attain ownership, but, also, the degree of property rights after the fact. Consider many Indian tribes in the Midwest of the United States. They had a southern encampment which they utilized in the winter, and a northern one, occupied in the summer. Each consisted, say, of 100 square miles. However the two camps were located, perhaps, 1000 miles away from each other. Therefore, of necessity, to get from one to the other, and back again, they had to traverse this larger distance. So, what property do they own and to what degree? In my view, there are three different statuses. First, they own, fully, the one square mile inside each of their two locations, fully. They had their tents therein, and their crops were grown there. Second, what about the other 99 square miles in each of these two sites? They only hunted there. Thus, they have only semi ownership therein. They may continue to hunt there, but, assuming no chance of over hunting, they cannot object to other tribes hunting there too, especially in the hunting areas they are no longer occupying for six months of the year. Third is the 1000-mile path between their two encampments? Here, there property rights are even less intense. To be sure they would have the right to continue to travel back and forth between those two places, but may not properly prohibit others from also engaging in this practice, provided, only, that there would be no clash between them and anyone else. If there were, then “our” Indian tribe which had first used this avenue would have priority. There is also more than just a little bit of hypocrisy involved in this left wing land recognition movement. If the native peoples really own it in total, all others should either depart (back to Europe? Back to Africa? Back to Asia?) and/or start paying rent to the rightful owners. Has anything of this sort, on a serious basis, been placed on the table by any of these advocates? If so, not by too many of them; this would hardly be popular. Nor would it be justified, given the paucity of the case in favor of their total ownership of the entire country.     Walter E. Block is Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics at Loyola University New Orleans and is co-author of the 2015 book Water Capitalism: The Case for Privatizing Oceans, Rivers, Lakes, and Aquifers. New York City, N.Y.: Lexington Books, Rowman and Littlefield (with Peter Lothian Nelson ). (0 COMMENTS)