David Epstein is an American journalist and author who wrote the New York Times best-sellers, The Sports Gene and Range: Why Generalists Triumph in a Specialized World. Epstein was a high-level runner at Columbia University where he is a record holder and was awarded with NCAA All-East honors twice in the 800 meters. In this episode from 2013, EconTalk host Russ Roberts welcomes David Epstein to talk about his book The Sports Gene. Roberts and Epstein discuss the growing variety and specificity of gene pools in sports along with the heightened influence of natural advantages for certain position groups and high-level athletes with the growing profitability and globalization of sports.   1- A topic of conversation throughout the episode is the relationship of biological diversity to different outcomes. Roberts and Epstein highlight the individual variation of biological makeup among people, especially athletes, as they discuss the 10,000 hours phenomenon. How much variation do you think exists in different people’s pursuit of expertise? Is 10,000 hours a good mark to list when quantifying a journey toward mastery, or should it be more accurate to say 7,000-40,000 hours as discussed in the podcast? Have you tried to implement such a practice, and if so, what was your experience like?   2- Epstein argues against Malcolm Gladwell’s claim that the 10,000 hours rule should not be applied to sports, as they are not an intensely cognitive activity. Epstein says that sports scientists would disagree; what do you think? Are sports less cognitively intensive compared to less physical pursuits of excellence?   3- Epstein and Roberts talk about globalization and technology’s role in data-based conclusions, which have changed the gene pools present in sports. People are recognizing that their bodies “fit” into particular sports, like seven foot tall individuals. The fact that recruiters and talent evaluators are specializing in body types is increasing the correlation between athletic success and genetic makeup. If you could evaluate your own or your children’s genes, and you find an advantageous trait, would you want to pursue a specific sport or encourage your child to do so? Why or why not?   4- Epstein appreciates the biological diversity showcased in sports, where people can get the most out of their physical gifts in a variety of positions across all sports. An intriguing case is runners who have a competitive advantage with increased oxygen carrying capacity due to their bodies overproducing red blood cells in response to the EPO hormone. Thinking about this case, do you agree with Epstein that each athlete having their own natural gifts should eliminate the prospect of others being allowed to use things like blood doping to match the oxygen-advantaged runners? What other controversial cases of genetic advantage/disadvantage can you think of in sports? In other fields?   [Editor’s note: Don’t miss Epstein’s appearance on The Great Antidote podcast from September 2022, in which he talked about Range with host Juliette Sellgren.] Brennan Beausir is a student at Wabash College studying Philosophy, Politics, and Economics and is a 2023 Summer Scholar at Liberty Fund. (0 COMMENTS)

In a June 15th blog post entitled “Productivity Down as Remote Work Up?”, Arnold Kling discusses recent US productivity numbers, which show weakening productivity per worker in the aggregate.  Kling’s argument is straightforward: he points to the mathematics of the “GDP Factory” idea of macroeconomics and, consequently, the calculation of productivity can mislead if one is not careful about looking at the underlying figures.   Kling goes on to discuss how many combine the productivity figures with the Work From Home (WFH) trend which has been happening since the governments locked everything down in response to the COVID-19 pandemic at the beginning of 2020.  The conclusion, then, is that WFH is bad for productivity.  But Kling notes that’s not necessarily the case, and not just because of the mathematical fluke of how productivity is calculated.  Work From Home has a large increase in well-being associated with it, as well as the reduction of dead time such as commuting and annoying meetings: I think that WFH is a huge increase in well-being, regardless of what the GDP factory is reporting. Whatever the drawbacks are, business executives should be trying to overcome them, rather than go back to the bad old days. If you need to get employees together, do so at short offsite retreats. Keep upgrading the technology for interpersonal interaction on line. Evaluate what you have and keep tweaking. Emphasize quality of communication rather than quantity (I am very dubious of Slack on those grounds). I certainly do not dispute the well-being effects of WFH.  When Virginia and Maryland shut everything down in 2020, my life improved along many margins.  At the time, I lived an hour away from George Mason University, where I was a graduate student.  There were obligations I had to attend to in person several times a week, and with Northern Virginia traffic, that one hour drive could sometimes take three hours.  Once everything went online, my personal productivity and well-being skyrocketed, for sure.   However, I do question WFH’s ability to result in long-run productivity gains, especially as new workers enter the labor force.  Much knowledge of our jobs is tacit and, in many cases, inarticulable.  There are numerous pitfalls new employees can fall into about how things are done in the firm, or what expectations are, etc.  Every system has its own quirks, and those cannot be understood unless one is actively interacting with the system. Institutional knowledge is transferred from employee to employee through interaction, imitation, and observation.  Yes, meetings can be boring, and who hasn’t wanted to shout at a boss “Just leave me alone and let me work!”  But, I contend, they also can serve as a vital knowledge-transmission service.  The office exists for a reason, and given how much communication is non-verbal, I strongly doubt communication software can replicate those knowledge-transmitting avenues.  Small chats between workers, or even just seeing how others solve the same problems, help expand our knowledge.  Humans are social creatures, and we work better when we work together. Kling ends his post by stating “We should not convict WFH.  It has not been proven guilty.”  True.  But I think economic theory gives us enough evidence to indict WFH.     Jon Murphy is an assistant professor of economics at Nicholls State University. (0 COMMENTS)

I had a letter published in the Carmel Pine Cone, June 23-29, 2023 and, as far as I can tell, the editor didn’t change a word. Quick background: There’s a DEI Task Force in my city of Pacific Grove, California and instead of doing their job, they are trying to persuade the city council to spend over $360,000 on a consultant to do it for them. To put that in perspective, the proposed annual operating budget of the 15,000 person city for 2023-24 is about $28.7 million. So this one expenditure alone would be over 1% of the annual budget. Here’s the letter I wrote: In his excellent report “Residents skeptical of pricey DEI consultant for P.G.,” Kelly Nix writes that the Pacific Grove DEI Task Force wants to pay Seed, a southern California consulting firm, over $356,000 to devise a plan to make Pacific Grove “more equitable and inclusive.” He also notes that Seed did a similar assessment for Dublin, California in 2001. Seed recommended that Dublin’s boards and commissions ask applicants to “disclose their race, gender, and income levels.” It’s very hard to categorize race in a country where there is so much intermarriage. You need to make fine distinctions. But here’s an idea. Maybe the DEI Task Force could investigate how South Africa’s Apartheid government discriminated among various races.   (0 COMMENTS)

The Financial Times is one of my favorite newspapers, with lots of good columnists. Rana Foroohar is my least favorite FT columnist. Her columns often attack neoliberalism by citing lots of economic problems that are in fact caused by counterproductive government regulations.Foroohar recently posted a brief review of a book entitled, The Death of Public School. The first two sentences contain four important errors—can you spot them? Education used to be a way to get ahead in America. But the defunding of public schools and the rise of private education is increasing, rather than reducing the wealth divide. 1. When I was young, blue color workers often made as much as college professors. My first job as a professor (in 1981) paid $19,300. At the time, there were UAW autoworkers at Michigan plants earning more than that. The obsession with getting into the top schools was much less pronounced in the 20th century, as the education/income gradient was much flatter than today. Thus, the first sentence in Foroohar’s review gets things exactly backward. Education is now a much more important way to get ahead than in earlier decades.2. Not only have American public schools not been “defunded,” spending on public education has risen over time, even in real terms (and as a share of GDP). Spending in the US is high when compared to other developed countries. Spending is especially high in poor neighborhoods in some of our biggest cities. The quality of education at a given school depends largely on whether the students at that school come from families that emphasize education, not dollars spent. So Foroohar’s second claim is incorrect.3. There is no “rise of private education” in the US.  The Huffington Post reports that: Proportion of U.S. Students in Private Schools is 10 Percent and Declining Here’s the graph they provide: 4.  And since private education is not on the rise, it hardly seems likely that the rise of private education is increasing the wealth gap. Well meaning people can have different interpretations of recent trends. But any discussion of those trends should be based on rigorous facts, not lazy clichés.   (0 COMMENTS)

Can we, from an economic viewpoint, say anything useful about the implosion of OceanGate’s small submersible, and the death of its four passengers as well as of its pilot, the founder and CEO of the company? My co-blogger David Henderson beat me to that topic, but here are a few other, complementary ideas that I had started putting on electrons. A first, basic, point relates to consumer choice and sovereignty. Four adult consumers paid money (rumored to be $250,000 each) to participate in the unique adventure of seeing the wreckage of the Titanic two miles deep in the North Atlantic. The adventurous passengers certainly knew the risk, as the Wall Street Journal notes (“Prior Submersible Passengers Recount Thrilling Experience: ‘Pretty Extreme’,” June 21, 2023): Past travelers who climbed into the minivan-sized tube that is the Titan deep-sea submersible knew they might die.Risk of death is mentioned at least three times on a waiver they signed before boarding. The passengers still decided to buy the service because each judged its expected cost, including risk, to be lower than the expected subjective benefit of the adventure. When a market demand exists, supply follows. No entrepreneur would mobilize resources to create the sort of service that OceanGate offered if he didn’t think he would have paying customers. “Consumer sovereignty” means that consumers decide through their demand where scarce resources are allocated. The second idea is related to the eclectic way in which most economists look at the non-economic concept of “human nature.” Human nature is seen as the way biological and social evolution influence individual preferences (see notably Friedrich Hayek on this topic). In the human species, “nature” leaves much room for diversity in individual preferences, as advanced societies demonstrate. Not all individuals would pay to dive in the ocean imprisoned in a metal tube. But there are more adventurous individuals who love that. Wherever individual preferences come from, in their commonality and they diversity, they motivate action, and economics takes it from there to analyze society. A third idea lies in the benefits of a free and rich society, the second feature flowing from the first. It is only in a free and rich society that it is possible for ordinary individuals—not just great rulers and great criminals—to live great adventures according to the preferences, and of course the constraints, of each. There is no OceanGate company in North Korea nor, for that matter, in Russia or China, even if some of their institutions sometimes partly succeed in simulating freedom by simple imitation. This applies equally to lots of smaller adventures that are accessible to individuals with private cars, boats, trailers, cabins in the woods, and guns for self-defense if needed. Even the prices of more involved adventures in space or undersea should, ceteris paribus, decrease with time and entrepreneurship. A fourth idea, which cannot but pop up under our Nanny State, in our society which is a mix of liberty and government control, is whether adventure and risk are sufficiently regulated. A Wall Street Journal story notes (“Rescuers Follow Banging Noises in Search for Missing Titanic Submersible,” June 21, 2023): The vessel is owned and operated by a little-known company called OceanGate Expeditions, whose founder and chief executive is on board, and has put a spotlight on a niche and generally unregulated part of the tourism industry, typically for wealthy people. … Submersibles operate outside the boundaries that regulate other vessels, said Salvatore Mercogliano, who teaches maritime-industry policy at Campbell University in North Carolina. The irony, he said, is that the sinking of the Titanic inspired laws that governed maritime law, including requiring certain safety procedures and distress signal requirements. Many calls for regulation have been heard. If we accept normative values consistent with the economic way of thinking, not only the rich should be entitled to make their own choices and take their chances. More regulation of adventurous and risky activities would, on the one hand, increase their costs. On the other hand, by reducing risk, regulation would also increase demand from less adventurous segments of the market. The effect of a reduced supply (because of higher production costs) and increased demand is a higher price. If supply diminishes more than demand increases, regulation could reduce access to adventure. We should be suspicious of imposing anything over very basic safety measures, which should anyway be largely in the interest of the suppliers to adopt. Indeed, new products are often voluntarily tested by third-party laboratories is done in most cases exist, but it may have been bypassed by OceanGate when it changed the material used for the hull of the submersible. (See notably “Submersible Passengers Died in Implosion,” Wall Street Journal, June 22, 2019.) On the other hand, it’s pretty clear that the entrepreneur at the origin of the submersible tours to the Titanic wreckage had skin in the game: he was on bord the fatal trip. Voluntary safety rules sometimes fail, especially in the case of new and extreme adventures. But so do coercive government regulations in ordinary cases. It should be sufficient that candidates for extreme adventures be informed of whether or not the safety measures recommended by the government or by private verification laboratories were or were not implemented. Avoiding new coercive regulations is even more clearly desirable in a general situation where, as nowadays, regulation is already pervasive after increasing non-stop for several decades. And as pointed out by David, new products, services, or activities, which “the legislator” has not even thought of, are of necessity unregulated. Moreover, as much as adventures such as submersible expeditions could be regulated, they will never be perfectly safe. For adventurous individuals, less risky adventures would be less attractive. The Peltzman effect suggests that risk-seekers and extreme adventurers would move to non-regulated or less-regulatable risks, which may include crimes. As Francis Fukuyama argued, bored people can be dangerous. And, of course, the goal of regulating all risks of life entails reducing many of its pleasures. A last point is the argument that taxpayers, many of whom are not themselves risk-seekers, should not be on the hook for rescuing adventurers and participants in risky activities, who should make their own insurance arrangements. This ideal should certainly be encouraged or not discouraged, but with the understanding that it can never work perfectly for a reason of moral hazard that is inseparable from a rich society with governmental institutions: everybody knows that risk-seekers and adventurers will be rescued by public agencies if they haven’t purchased insurance. It is still notable that many private or semi-private organizations helped the rescue effort for the OceanGate submersible. A more challenging idea comes from a contractarian perspective à la Buchanan-Tullock, but is not incompatible with private rescue contributions: it may be that all individuals in society agree on rules establishing public rescue services in emergency situations, a sort of public insurance. (0 COMMENTS)

Who’s Life Is It Anyway? We now know that the 5 adventurers who went underneath the Atlantic Ocean’s surface to explore the Titanic have died. By about Tuesday, I had figured they were dead but I held out hope. Unfortunately, various people have tweeted nasty comments and gone after OceanGate’s CEO Stockton Rush (who is one of the 5 dead) for taking excessive risk. One of the worst is someone named Alexandre Erin, who said. Here’s a reason I’m a pro-mockery of the OceanGate fiasco: that whole “regulations stifle innovation” thing that crops up in their PR to present the whole “untested and unlicensed” thing as a feature rather than a bug: people who want us eating heavy metals for breakfast say that. So she mocks them because they use an argument that “people who want us eating heavy metals for breakfast” use. I can’t vouch for or against her claim; I don’t know anyone who wants me eating heavy metals for breakfast; maybe that’s because I travel in a smaller circle than she does. But even if there are such people, that doesn’t mean that everyone who argues for using something that is “untested and unlicensed” is wrong. Every innovation was, at some point, unlicensed and untested. Indeed, in this case, they were testing it. Do I think it would have been better to send Titan down a number of times before having people in it? Yes. But that reflects my preferences about risk; I’m quite cautious and won’t even try scuba diving. But different people have different preferences for risk. Consider people who try to climb K2, which is much dangerous than Mount Everest. As of March 2019, there were 355 ascents of K2–and 82 deaths. So deaths as a percent of summits were 23 percent. Now that’s risky. Would Erin mock those people too? There is one major difference between the two activities. We are unlikely to get much innovation out of people climbing K2, although you never know. We have a much higher chance of getting valuable innovation out of people doing what OceanGate is doing. I do think that, as Christian Britschgi of Reason pointed out, we taxpayers should not be on the hook for the resources put into tracking Titan with the goal of rescuing the occupants. I would bet that the various operations have already cost millions of dollars. You might argue that much of this was good training for other things that taxpayers should pay for. You might. But I’m skeptical. (0 COMMENTS)

In this episode of EconTalk, Russ Roberts hosts Laurence Kotlikoff, a professor of economics at Boston University. Roberts and Kotlikoff discuss the fiscal health of the US federal government, and the so-called “fiscal gap” between official government debt and outstanding government obligations such as Social Security and defense spending.   1- Throughout the conversation, Kotlikoff mentions the (2014) $205 trillion fiscal gap between government debt and outstanding government obligations. Kotlikoff asserts that federal taxes will have to be raised significantly or government spending will have to be cut substantially to pay for government debt and forthcoming obligations. Should the federal government raise taxes or cut government spending to minimize the national debt problem? If the federal government opts to raise taxes, which taxes should it raise? If the federal government cuts spending, which programs, agencies, or initiatives should it prioritize?   2- Kotlikoff criticizes America’s accounting of its financial records and debt obligations for covering up the $205 trillion fiscal gap. Kotlikoff argues that both the Bill Clinton and George W. Bush administrations were aware of the fiscal gap, but removed it from their economic plans. Kotlikoff goes as far to label the government’s accounting as worse than that of Bernie Madoff or Enron. To what extent does Kotlikoff convince you that the US government underestimates or misrepresents the true scale of its debt problems? Is it fair to compare the government’s accounting shortcomings to that of Bernie Madoff or Enron, given the difficulty in measuring the numerous government assets and liabilities? Explain.   3- Kotlikoff argues that when countries are broke, they print money at a rapid and irresponsible pace, leading to inflation or hyperinflation. Kotlikoff considers printing money at an excessive rate to be the means by which the United States can declare bankruptcy. During 2020, The Fed printed money at astounding levels, and for the past two years, the CPI has been well above the Fed’s target rate of 2%. To what extent do you consider the extent to which the United States printed money in 2020 to be a declaration of bankruptcy? Just how necessary was it for the United States to print money at record levels in 2020 to finance government stimulus? Was the abundance of money printed in 2020 directly responsible for the 2022 inflationary crisis? 4- In the past, Wall Street has failed to foresee recessions and economic downturns. Kotlikoff mentions the cases of Bear Stearns and Lehman Brothers, whose respective stock prices crashed rapidly. During the past year stock indexes have risen, in spite of a widespread fear that the United States is destined for a recession.  How much is the health of Wall Street an adequate indicator of the overall health of the American economy? Do you think that Wall Street’s current success reflects an economy that is healthy nationwide, and why? If not Wall Street, what are the best indicators of the economy’s overall health?    5- Kotlikoff credits a collective panic for causing the Great Recession, and criticizes both Bush and Obama for inciting the panic. In recent years, President Biden has been criticized for not panicking about high inflation rates and declaring the overall health of the economy to be prosperous. To what extent do you agree with Kotlikoff that a collective panic is what caused the Great Recession? What sort of obligation do elected officials and government representatives have to express positivity during stressful times? Do you concur with President Biden’s long-standing strategy of viewing current economic conditions in a positive light? Why, or why not?   6- Kotlikoff, along with many other economists, fears that the debt crisis is portrayed as a left vs right conflict, when in reality the true conflict is between adults and children. Kotlikoff feels for the younger generation that will have to pay for the national debt. Do you view the debt crisis as a political or generational conflict? Explain. What consequences do you foresee from the recent federal debt ceiling battle and Washington’s ongoing failure to fully address the national debt problem?   7- Kotlikoff advocates for reform of the tax, Social Security, and health care systems. Kotlikoff argues that economists could best fix the economic problems and fractured systems in America, and wishes that politicians would listen to economists. Roberts disagrees with Kotlikoff’s viewpoint that politicians should listen to economists, worrying that politicians will listen to the wrong economists. How can these systems best be reformed, to maximize economic efficiency and fairness? Do you share in Kotlikoff’s desire that politicians listen to economists, or agree with Roberts’ dissent and fear that politicians will listen to unqualified economists?   Kyle Fowler is a student at Indiana University studying Accounting and Finance and is a 2023 Summer Scholar at Liberty Fund. (0 COMMENTS)

David Beckworth recently interviewed Chris Hughes, who wrote a paper entitled: “Rethinking Arthur Burns, the “Worst” Fed Chair in History“. This is from the podcast: There is demand-driven inflation headed into the early parts of Burns’ tenure, for instance in 1971, but then the real extreme periods of very high inflation in the 1970s, the first during Burns’ tenure, the second under Volcker, are the result of supply shocks in commodity and energy markets. So, you see, obviously the work of Alan Blinder on this has been formative for many, including myself, but you see core inflation going from about 4% in the late 1960s and early 1970s to around six by the mid to late 1970s, and then by the time we get on the other side of the Volcker shock, it comes back down to around four, but with these two very significant bumps, the first in 1973 and the second in 1979 and 1980, both of which related to geopolitical events, the Yom Kippur War, and then later the Iranian revolution and the Iran-Iraq war. In my view, Burns’ tenure was even a bit worse than suggested by this quotation. Take a look at 12-month nominal GDP growth rates: A few comments: 1. Under Fed chair William McChesney Martin, the inflation problem worsened during the 1960s.  The problem was entirely demand driven; indeed the supply side of the economy did extremely well during the 1960s.  Given those NGDP growth rates, it’s amazing that inflation was not even higher. 2.  Arthur Burns was Fed chair from February 1970 to January 1978.  At the end of the 1960s, a tight money policy had briefly reduced NGDP growth. So the situation inherited by Burns was not that bad.  Unfortunately, he presided over an easy money policy that drove NGDP growth in the 1970s to rates even higher than those experienced in the 1960s.  Thus “supply shocks” don’t tell us very much about inflation during Burns’ tenure (except during 1974.)  The problem was excessive growth in aggregate demand (NGDP.) 3.  By the time Burns left office in 1978, inflation had reached double digits.  I don’t buy Blinder’s claim that core inflation was only about 6%.  Closer to 8%. Hughes has a nuanced view of the Burns’ tenure at the Fed: Well, I think Arthur Burns is one of the most fascinating and overlooked figures in American economic history. I should say that I am under no illusions about the guy’s virtue. He made plenty of mistakes as Fed chair and my project here isn’t to try to paint him nostalgically as some hero that we can look back on. Instead, it’s to hold up a light to what in my experience is considered a kind of heresy. The idea that Burns was a leader of the Fed who operated from a place of ideological consistency, even conviction at times, and who importantly in his time was considered to be quite hawkish on inflation, which is just head spinning to people today. It’s clear that the Fed performed very poorly during the Burns period.  Any defense of Burns based on things like supply shocks won’t work.  On the other hand, Hughes is correct that the political environment at the time was quite different than today.  The zeitgeist within the economics profession was extremely dovish, and the Fed rarely deviates far from that consensus.  Another Fed chair might well have produced similar results.  Indeed, policy got even worse under ill-fated G. William Miller, who followed Burns and was replaced Paul Volcker after just 18 months as Fed chair.  Even Volcker did quite poorly during his first 20 months as chair. (0 COMMENTS)

  It’s not just home insurance. Auto insurance is also increasingly hard to get in California, according to insurance agents who say they are struggling to find quotes for clients who would have easily gotten insurance just a year ago, as inflation and other factors take a toll. “The withering availability of auto and home insurance in the state seems headed for a death spiral,” Mike D’Arelli, executive director of American Agents Alliance, an association of insurance agents that provides access to insurers as a wholesaler for its members, wrote in an email to The Chronicle. “Never in my career have I heard from so many insurance agency owners and consumers, desperate to buy auto or home insurance, yet unable to purchase it due to lack of availability,” he continued. Last month, State Farm announced it would stop writing new homeowner’s policies in California, setting off worries of shrinking insurance availability in the state, particularly in high-risk wildfire areas. The Chronicle also confirmed that Allstate quietly stopped writing new homeowners, condo and commercial policies last year. In addressing concerns about homeowner’s insurance, California’s insurance commissioner Ricardo Lara has emphasized the role of climate change making coverage more tenuous across the country, not just in California. But with auto insurance, the climate change connection doesn’t hold — spurring insurers to blame what they say is dysfunctional regulation and consumer advocates to accuse insurers of withholding coverage as a political ploy. These are the opening five paragraphs from Claire Hao, “It’s not just home insurance, Californians are struggling to insure their cars, too,” San Francisco Chronicle, June 20, 2023. Her news story is long, good, and factual. There’s one problem. In a 27-paragraph news story, Hao doesn’t get to the cause of the shortage until the 16th paragraph. Here it is: Inflation has caused many costs associated with auto accidents to go up, such as car parts and hospital bills, insurance agents said. More significantly, they pointed to the fact that insurance commissioner Lara didn’t approve any rate increases for auto insurers from May 2020 to October 2022 — which Progressive’s CEO cited in an earnings call last year as an explanation for slowing business in California. In short, price controls are causing the shortage. And notice price controller Lara’s justification in the very next paragraph: The rate moratorium was part of Lara’s efforts to compel insurers to compensate consumers he says were overcharged during the beginning of the pandemic, when many were not driving as much because of stay-at-home orders. So they overcharged in 2020; maybe they did. What does that have to do with 2023? I’ll be charitable here about his motives and say only that Ricardo Lara doesn’t have a clue about how markets work. (1 COMMENTS)

If you asked where you can find a regular criticism of anything that looks like a classical-liberal approach to social, political, and economic problems, I could recommend the pieces of Financial Times columnist Lana Foroohar. Her latest column is another good illustration: “America Is Telling a Very Different Story About Trade,” Financial Times, June 18, 2023. Forget the strange title, which, to somebody used to thinking in individualist terms, suggests an anthropomorphic America speaking with our collective mouth; of course, newspaper titles must be short. The “very different story” that the American government is telling us is, the column argues, a protectionist story—as if any US government had ever advocated unilateral free trade, that is, the freedom of Americans to buy and sell wherever they privately find the best available terms. The Financial Times columnist praises Joe Biden’s US Trade Representative (USTR), Katherine Tai, who said she wanted to “put the US back in USTR.” Despite her protests to the contrary, our columnist also seems to like this sort of Trumpian banter. In fact, it would be as difficult to put the “TR” in USTR. By this, I mean that if Ms. Tai and her boss think that they represent all Americans, they should equally support those who want to freely buy dolls, contra Donald Trump, or deodorant, contra Bernie Sanders, from foreign producers or from any producer. The Financial Times columnist and the USTR claim to oppose any concentrated power. To pursue that goal, they want to concentrate power in the state, to expand the realm of politics. This ideal state power includes an ideological cartel between the US and the EU governments to fight high-tech companies. More state power means more regulation in general. (See also my post “Forward to the Past: US Regulators Top European Ones.”) The fact that the Financial Times columnist is not a loving user of new technologies, as I pointed out in a recent post, must not distract us too much, although it does suggest some pretentiousness among regulation fans. Ideal state power also includes enforcing trade union cartels against poor-country workers, the poorest of whom are thereby forbidden to compete. In the same Financial Times column, we read: Tai put a provocative gloss on this new approach, saying that [quoting Lai] “we are turning the colonial mindset on its head”—by partnering with emerging markets to put a floor, rather than a ceiling, on labour and environmental standards. “The key is to offer economies a spot in vertical integration so that developing countries are not perpetually trapped in an exploitative cycle,” she said. Offer foreign economies a spot in vertical integration? How nice of us, cognoscenti and rulers of the rich world! The reality is that ordinary people in poor countries started, 40 or 50 years ago, thanks to trade and the liberation of their own entrepreneurship, to escape dire poverty after decades during which Western intellectuals had persuaded their governments that central planning and economic autarky were the panaceas. The dramatic reduction of poverty in underdeveloped countries is the big story of the past few decades. The Financial Times columnist I am gently criticizing is, I fear, quite attuned to the zeitgeist of our times, a quest for social nirvana through the transformation of the individual into Homo Politicus Perfectus. From this perspective, every problem resulting from voluntary social interaction has a bright political solution. “Of course, the devil will be in the detail,” the columnist says. Indeed, intellectuals always curse the actual governments under which they live as enthusiastically as they idolize the perfect state in their dreams. It is not impossible—and I am saying this seriously—that the Financial Times columnist is right and that I, and all classical liberals and libertarians of the past three centuries, are wrong. Perhaps a most just and prosperous future lies in a fuzzy mixture of dirigiste-authoritarian ideas from the left and the right. Or perhaps, more realistically, some of the currently fashionable ideas, stripped of their worst coercive features—that is, reinterpreted à la Hayek* or à la Buchanan**—have something salvageable. But it seems quite obvious, doesn’t it, that the reign of Homo Politicus Perfectus is a regression toward mankind’s impoverished and tribal or collectivist past. ————————————————— * I provide an introduction to Friedrich Hayek’s social and legal thought in my separate reviews of the three volumes of his trilogy Law, Legislation, and Liberty: Volume 1, Rules and Order; Volume 2, The Mirage of Social Justice; and Volume 3, The Political Order of a Free People. ** Again as an introduction, I could recommend my reviews of two books of James Buchanan: his classic The Limits of Liberty: Between Anarchy and Leviathan; and his Why I, Too, Am Not a Conservative. (0 COMMENTS)