Everybody should be impressed when comparing the effects of the 18th-19th-century Industrial Revolution with the previous world depicted by, say, 15th-century poet François Villon. This world was one of dire and hopeless poverty for ordinary people, with few exceptions. Villon imagined that, if he had any money, he would make a bequest to “three naked little children” (trois petits enfants tout nus) who might not otherwise survive the winter, and to remark: II n’est tresor que de vivre à son aise. (The only treasure is to live comfortably.) In the wake of the Enlightenment, the Industrial Revolution produced the Great Enrichment, rapidly realizing the dream of comfort and wealth for ordinary people, as illustrated by my chart below. The great increase in productivity benefited all industries, not only manufacturing. My chart is built on the basis of long-term estimates of economic growth by the Maddison Project, which updates the pioneering work of Angus Maddison (1926-2010). The standard of living over time is measured with gross domestic product (or income) per capita. Many caveats are of course in order regarding historical estimates of the complex concept of gross domestic product developed in the 20th century. But the broad trends drawn by the Maddison estimates are consistent with how other historical sources depict the former epochs of mankind. To keep the chart readable, I start it at the beginning of the 18th century and graph only two countries, the United States and Switzerland, as representative of the effects of the Industrial Revolution. This momentous event actually started in the United Kingdom and the Low Countries, and most Western countries rapidly followed. For many territories corresponding to today’s countries, the Maddison Project (like Maddison’s original estimates) provide some data points back to year 1 CE. Extending my chart backward in time would show that there was generally no economic growth between year 1 and the 17th century, that is, we would see a long visually flat line at roughly the level of the American standard of living in 1650 (i.e. $897). For example, the GDP per capita of the inhabitants of current Switzerland is estimated to have been $956 in year 1. (The Maddison Project does not provide estimates where no recorded history exists at all.) It is generally recognized that the unprecedented growth unleashed by the Industrial Revolution finds its source the in economic, political, and social institutions that protected property rights and allowed or promoted free enterprise and free markets. I have a bit more to say about this in the forthcoming issue of Regulation. Another phenomenon the chart emphasizes is the interrupted industrial revolutions of some countries. For example, consider Argentina, whose economy seemed to be taking off along with other Western countries until the end of the 19th century. But then, with one authoritarian or populist regime after another, economic growth slowed down. As a consequence, real GDP per capita in Argentina is now barely more than one-third of the US level. Or consider Venezuela, whose industrial revolution started only in the mid-20th century and stopped a few decades later. Helped by higher oil prices, GDP per capita increased a bit under the elected dictatorship of Hugo Chavez (from 1999 to 2013), but plunged dramatically under that of Nicolas Maduro (2013 to now). Venezuela’s GDP per capita is now only 20% of America’s. (For perspective, China’s GDP per capita is one fourth of the American level.) The unresolved question is whether and under which conditions the prosperous civilization built by the Industrial Revolution could crash and bring mankind back to the the Middle Ages or Antiquity, as Jose Ortega y Gasset feared (see my review of his The Revolt of the Masses in the forthcoming issue of Regulation). Nobel prize-winning economic historian Douglass North expressed somewhat similar fears (see his Understanding the Process of Economic Change [Princeton University Press, 2005], pp. 77-78): The long run economic success of western economies has induced a widespread belief that economic growth now is built into the system, in contrast to the experience of the previous ten millenia [sic] when growth was episodic and frequently non-existent. … It is still an open question whether in fact that supposition is correct. It is important to understand that experiencing economic growth for fifteen or twenty years is not a guarantee that it is built into the system. Sources for each country at https://www.rug.nl/ggdc/historicaldevelopment/maddison/data/md2010_vertical.xlsx. (0 COMMENTS)

Will Hodges and Art Carden Santa Claus, the Easter Bunny, and the Tooth Fairy are all notable gift-givers. So who is the best gift-giver? If we define “best” as “most economically efficient” (in a narrow sense), the Tooth Fairy is a runaway winner. Santa Claus and the Easter Bunny offer variety, but they presume to choose for you. Santa brings the toys you put on your list and the socks you didn’t. The Easter Bunny fills your basket with candy…and poorly painted hard-boiled eggs. The Tooth Fairy, to her credit, doesn’t ask you to make a list. She doesn’t presume to pick candy for you. She just brings you cold, hard cash. So, while Santa and the Easter Bunny think they know best, the Tooth Fairy embraces the Economic Essentials.  Specifically, she understands that trade-offs are everywhere. The time people spend in stores and on Amazon could have been used doing something else. The adults (and some of the kids) have jobs. While time is not exactly “money,” we can use data on hourly earnings to estimate just how valuable it is. Average Hourly Earnings of All Private Employees in December 2022 were $32.82 per hour. The time people spent in department stores and shopping online could have been spent working. Then they could have given cash and probably had something left over. That’s one reason many economists think cash is a great holiday gift–and it looks like it’s how the Tooth Fairy operates. Giving a gift is like getting a college degree. College degrees send valuable signals about prospective employees’ skills, work habits, diligence, etc. A gift should send similar signals, but it runs into a knowledge problem. Givers try to align gifts with recipients’ preferences but make mistakes. Hence, people waste valuable time returning gifts they don’t want. Not all signals are informative, which can certainly be true about the signals you’re unwrapping during the holidays. The Tooth Fairy avoids complications and awkwardness by just giving cash. Then, the recipient can use it on whatever they want. If prices are sticky and there are a lot of unemployed factors of production, there might even be a multiplier effect. Because time is valuable and interests are only sometimes understood, cash is the best gift. The recipient can use the cash on anything. The Economic Essentials explain that trade is cooperation, not exploitation. Cash means recipients can cooperate with whomever they please instead of hoping that Santa, the Easter Bunny, or Aunt Sally choose wisely. When someone gets cash, they can create win-win scenarios with people selling what they want. Consumers get the goods and services they want, and merchants get the money they want. All in all, cash is the most economically efficient gift. It offers the most opportunities for gains from trade. By giving cash, the Tooth Fairy shows that she is the most efficient gift-giver. Maybe Santa Claus and the Easter Bunny should take notes.   Will Hodges is a student, and Art Carden is an economics professor at Samford University. They reluctantly acknowledge that Anthony Gill and Michael D. Thomas might be right about the dynamic efficiency of gift-giving. (0 COMMENTS)

Matt Damon as Sonny Vaccaro in AIR Some movies not only entertain and inspire but convey broader lessons. “Air” is one of them. The film is about Nike’s efforts in 1984 to secure Michael Jordan’s endorsement of its basketball shoes, which soon after became the iconic Air Jordans. But it also tells anyone who will listen that ESG investing—environmental, social and governance—is a trap. When the company begins its quest for Mr. Jordan (played by Damian Young), Nike is an underdog. He and his parents are leaning toward a Converse or Adidas sponsorship, as these companies are more established in basketball. Adidas is a front-runner until Nike alerts Mr. Jordan to a problem with that company. Nike’s determined employee, Sonny Vaccaro (Matt Damon) tells Mr. Jordan’s mother, Deloris (Viola Davis), that because the head of Adidas has just died, there will be turmoil at the top of the company that would hurt her son’s interests by creating uncertainty about his sponsorship. These are the opening paragraphs of Donald J. Boudreaux and David R. Henderson, “Air is a Cautionary Tale About ESG,” Wall Street Journal, April 13, 2023 (April 14 print edition.) I don’t love the title because I think it’s an overstatement. Our point is that if you understand Sonny Vaccaro’s point in the movie that uncertainty about who will run a company hurts stockholders, then a fortiori, you should understand that uncertainty about whether the company is trying to maximize stockholder value or conform to ESG will hurt stockholders. (Or, as the character in the play Other People’s Money put it,“stuckholders.”) I’ll post the whole thing in 30 days. This, by the way, is the first time I’ve co-authored with Don. I hope and think that it is the beginning of a beautiful writing relationship. (0 COMMENTS)

Late in Super Bowl XXXII, the Green Bay Packers allowed Denver to score, rather than have the clock run down close to zero, at which time Denver would almost certainly kick a game winning field goal.  The thought was that allowing Denver to score with 1:45 left would give Brett Favre a chance to lead the Packers on a late drive to tie the game.  (It didn’t work.)  I’m reminded of this game when I look at the standoff between China and Taiwan, which next to Israel might be the most complex foreign policy problem in the world. When the Nationalist army fled to the island of Taiwan in 1949, they continued to insist that they represented the legitimate government of all of China.  This is arguably still the official policy of Taiwan, although in reality the Taiwanese government would prefer to be independent.  Officially, the PRC, the Taiwanese government and the US government still adhere to a “one China policy”.  Neither the Taiwanese government nor the US government has officially recognized Taiwanese independence, due to fear that this might trigger a Chinese invasion.  So the standoff that has been going on for 74 years continues. This odd history has created a rather unusual situation.  For instance, many people equate “Taiwan” with the “Republic of China” (ROC), which is the official name of the “country”.  This is not accurate.  Taiwan is one island, while the Republic of China includes 168 islands.  Obviously Taiwan is far and away the most important part of the ROC, but the other 167 islands have great political significance.  Most importantly, if Taiwan were a truly independent country (not just de facto, but also de jure), then most of those 167 islands would not be a part of Taiwan.  The current structure of the “Republic of China” only makes sense if you view Taiwan as a part of China. For instance, consider the ROC-controlled island of Taiping, which is far and away the largest of the Spratly Islands.  “China” is heavily criticized for occupying the Spratly Islands, which are much closer to the Philippines than to China.  And yet almost none of the criticism is directed against the government in Taiwan.  I actually agree that the criticism should be directed against the PRC and not the ROC, but to understand why we need to take a deeper look at what’s actually going on. Outside of Taiwan, the most important parts of the Republic of China are what might be called “ROC occupied Fujian”.  Both the PRC and the ROC agree that islands such as Kinmen (aka Quemoy) and Matsu are part of Fujian province, an important Chinese coastal province.  Indeed Kinmen is practically a suburb of a large Chinese city (Xiamen.)  Thus Taiwan’s ownership of Kinmen only makes sense if you assume that the ROC is the legitimate government of all of China. You can argue that the Taiwanese are “not Chinese”, but it’s hard to argue that the Kinmenese are not Chinese. In recent decades, the Taiwanese have abandoned any thought of retaking the mainland.  So why not jettison all those outer islands and make Taiwan independent?  And why doesn’t the PRC simply occupy Kinmen?  Donald Canton has this to say: After the PLA liberated Hainan Island in May, 1950, General Peng Dehuai and some generals of the People’s Liberation Army strongly advocated taking down the two islands of Kinmen and Matsu in one go. They asked Mao Zedong for instructions and were denied. Everyone did not understand. Mao Zedong once said privately that the two islands of Kinmen and Matsu were like the two small hands of a child holding his mother’s shirt. If they were taken back, it would be like the hands of the child were cut off. Then, the child (Taiwan) would never come back to the mother (China). In other words, as long as the ROC holds onto parts of Fujian province, then it’s clear that the ROC is part of “China”.  So until the bigger issue of Taiwan can be resolved, it is in China’s interest to allow Taiwan to maintain control of a portion of Fujian province. OK, then why does Taiwan station troops in Kinmen?  Why not let the Chinese walk in and take control?  Isn’t this struggle a zero sum game? I’d say it’s not quite a zero sum game, as both sides would rather avoid war, at least at the moment.  But that might change in the near future. Now perhaps you see the analogy to the odd ending of Super Bowl XXXII.  If it was in the Packers’ interest to allow Denver to score, then wasn’t it in Denver’s interest not to score?  And what happens if a player wants to be tackled, and the other team doesn’t want to tackle them? I suspect that one almost never sees this sort of standoff in football because players are highly competitive and primed to be aggressive, not passive.  The ROC would be sort of embarrassed to surrender Kinmen, even if in some sense it’s in their interest.  Or perhaps they fear that the PRC would interpret surrender as a declaration of independence, and react accordingly. The Cato Institute recently had this to say: So far, most discussions implicitly assume that a PRC military move would take the form of an offensive against Taiwan itself. Only a few experts raise the question of what the United States would do if Beijing launched a more limited action—one against Kinmen (Quemoy) and Matsu (small Taiwanese‐​controlled islands just a few miles off of China’s coast) or against other, more distant islands that Taipei claims. Yet that is a much more likely scenario than a full‐​scale war to subjugate Taiwan. Moreover, it would be a bold, yet relatively low‐​risk way for Beijing to test the extent and reliability of Washington’s resolve to defend Taiwan. The author (Ted Galen Carpenter) suggested that the US would have a difficult time justifying a military response: Xi Jinping and his colleagues would have legitimate reasons to doubt whether the United States would be willing to risk a horribly destructive war with China over small islands that are merely claimed by Taipei. Indeed, the Biden administration would encounter considerable difficulty securing the support of the American people for a war over such meager stakes. Chinese officials very likely understand that point as well. Seizing Pratas/​Dongsha would be a bold move, and certainly is not one without risks, but it also would put the onus of any subsequent, dangerous escalation totally on the United States while sending an emphatic message of China’s determination and fraying patience. Washington needs to pay more attention to this scenario before being blindsided by a major crisis. I think it’s even worse.  Kinmen is not part of “Taiwan”, it’s ROC-occupied Fujian.  If you really believe that Taiwan is an independent country, then it has no business stationing troops in Kinmen.  So why would the US wish to defend that island? If you argue that the Kinmen residents don’t wish to be a part of China, isn’t it equally true that the Chinese soldiers stationed in the Spratly Islands don’t wish to be a part of the Philippines?  And I’m not sure exactly how Kinmen residents feel about the question.  A recent article in The Economist suggests that the residents are rather pro-Chinese: In 2001 a ferry started operating to Xiamen, turning the island into a centre of tourism and business exchange. Many in Kinmen would like to be closer still—some have proposed a bridge and want the electricity grids to be connected. They hope not just to make Kinmen more prosperous, but also that closer integration with the mainland might be the best way to avoid being attacked. “America, China, Taiwan, whatever you do, just leave us out of it,” says Chen Yang-hue, a local councillor. He is one of several local politicians to demand, in February, that Taiwan withdraw its troops and “demilitarise” the island. Taiwan’s central government has not issued a response. . . . Kinmenese want to be part of China’s growth and China wants to invest, says Chen Yu-Jen, who represents Kinmen in the national parliament: “They will treat us well, make us a model, and Kinmen can develop and prosper. But Taiwan won’t accept this.” I’m not certain what Taiwan should do if Kinmen is attacked.  On the one hand, Taiwan might be better off if it jettisoned all its outer islands and tried to form an identify as “Taiwan”, not the “Republic of China”.  On the other hand, not defending Kinmen might be viewed as a sign of weakness, and embolden China to make further moves. There are no easy solutions to this problem, but I wonder if both sides of the dispute would benefit from the following proposal: Taiwan agrees to join the PRC in 50 years, and the PRC agrees that Taiwan can maintain its independent military during that interim period.  (The latter condition distinguishes this proposal from the flawed Hong Kong deal.) Both sides would probably reject my plan, but I believe that both sides would benefit.  China could declare that the principle of eventual unification was firmly established, and the Taiwanese could privately decide that if China remained an unpleasant authoritarian place in 2073, then it would renege on the deal.  Doing so would probably trigger war in 2073, but better to kick that can down the road 50 years than face the risk of war in 2030. Of course another solution would be for China to grant independence to Taiwan.  Another solution would be for China to become a model democracy with human rights, making reunification more acceptable to Taiwan.  My plan certainly isn’t the ideal solution, but at the moment it’s the least bad solution that is at least slightly realistic. An article in the NYT recently suggested another solution: Three months after Russia invaded Ukraine, Annette Lu, a former vice president of Taiwan, stood before reporters to promote a wildly unpopular idea. China and Taiwan, she said, should form a commonwealth that would be integrated economically, like the European Union, but remain separate politically. She called it One Zhonghua — a word that means “Chinese” in a cultural, ethnic or literary sense but is distinct from the word that refers to China in a political sense. It was a wink at the Chinese Communist Party’s insistence that there is only one China and that Taiwan is an inextricable part of it. All realistic plans involve goodwill from the PRC, and right now I just don’t see that. PS.  The US officially views Taiwan as being a part of China.  Unofficially, the US views Taiwan as being independent.  But the official view does matter.  The FT reports that Taiwan chip investment in Arizona will be double taxed: Everyone wants a compromise. But solutions risk igniting a difficult diplomatic problem. The US does not see Taiwan as a sovereign nation. Any special tax deal would acknowledge sovereignty. China could regard this as provocation. In contrast, Samsung’s chip plant in America avoids double taxation due to a South Korea tax treaty with the US.  To give such a treaty to Taiwan would require that the rule apply to all of China, or else the US government would have to treat Taiwan as being independent. PPS.  The Economist has an interesting survey article on Taiwan, full of surprising information: But the army is still one of Taiwan’s most conservative, pro-KMT institutions. Many officers are “equally as suspicious of the United States as they are of China,” says an American official once based in Taipei. As late as the mid-2010s, officers told him the Chinese were their cousins and they would “never fight for Taiwan’s independence,” he adds. PPPS.  Believe it or not, the islands of Kinmen and Matsu were a major issue in the 1960 presidential election debate between Nixon and Kennedy. PPPPS.  The Packer’s coach actually misjudged the situation on second down, thinking it was first down.  But the principle involved is what interests me. (0 COMMENTS)

I recently encountered a laundry list of objections to the profit motive. The following is the list with redundancies removed, edits for clarity, and my comments. Many of the complaints are based in ignorance of how markets work, ignorance of the perverse incentives created by government regulation, failure to consider problems with available alternatives, refusal to consider the possibility of government failure, demands that companies solve complex social problems (some of which are created by government), and an insistence on perfection.   1- Lack of accountability Accountability to whom? Companies are certainly accountable to their shareholders, suppliers, and customers. To a large extent, they are also accountable to employees and annuitants. They are required to adhere to contracts their officers have signed and to the laws and regulations of the communities in which they do business. By contrast, to whom are unelected bureaucrats accountable? Bureaucrats who can: write regulations that have the force of law, interpret their own regulations, determine whether a company is in violation of the regulations, and penalize companies that they determine have violated them.   2- Disregard for public welfare Companies that are unconcerned with the welfare of their employees and customers tend not to stay in business long.   3- Increasing inequality Having a job is, by far, the surest way out of poverty. An American who is keeps and holds a job is unlikely to be poor. According to a 2019 U.S. Census Bureau report, the poverty rate for individuals who had worked full-time for the entire year was 1.5%. In the U.S., much of the current wealth gap is due to asset inflation caused by the Federal Reserves’ easy money policies, which were, in part, driven by the federal government’s deficit spending. Globally, however, poverty significantly declined prior to the COVID pandemic. For the first time in human history, less than 10% of the world’s population lived in extreme poverty. Prior to the Industrial Revolution and the spread of free markets, the extreme poverty rate was over 90%. Extreme poverty was humanity’s “natural state” for most of its estimated 300,000-year existence. Its drop to 10% from 90% in just two hundred years is nothing short of miraculous.   4- Lowering product quality Companies produce goods of varying quality to match the needs and means of their customers.   5- Price gouging As economist Alex Tabarrok observed, “A price Is a signal wrapped up in an incentive.” High prices reflect demand and provide incentives for producers to meet the demand by increasing production and redirecting goods. Prices also provide incentives for consumers to purchase less and find substitutes. Artificially limiting prices in the face of real shortages does little more than spread and prolong the shortages.   6- Exploitation “Exploit” means to make full use of and derive benefit from a resource. Companies that make full use of natural resources minimize waste and pollution. Companies benefit from employees and employees benefit from their employers – by definition, they exploit each other. As long as employees are free to accept or reject their conditions of employment, there is no exploitation in the pejorative sense. Karl Marx claimed that employers exploit workers because they do not give them the full exchange value of the goods and services they produce. However, Marx’s alternative also exploits workers. The formula “From each according to his ability, to each according to his need,” necessitates Marxian exploitation. A worker whose ability exceeds his need receives less than he produces and is, by Marx’s own definition, exploited.   7- Subversion of government laws and regulations Some companies do ignore laws and regulations and, when caught, pay penalties. Occasionally, company officials go to prison. Perfection is not an option while human beings are imperfect.   8- Prioritization of stockholder interests A company’s responsibility is, first and foremost, to satisfy its owners’ interests. In a free market, they can best do this by providing – within the confines of the law – goods and services for which consumers are willing to exchange the products of their own labor. This activity benefits consumers and society.   9- Neglect of environmental stewardship Much of this neglect stems from a failure by governments to define and protect private property rights. During America’s Industrial Revolution pollution was worse than it needed to have been because the courts refused to enforce property rights. When people sued factories for polluting their air and water, for example, judges decided in favor of the factories on the utilitarian basis of “the greatest good for the greatest number.” Judges reasoned that more people – employees and customers – benefitted from the factories’ activities than were harmed by their pollution. Had property rights been enforced, factory owners would have been required to pay restitution for the harm they were doing, giving them an incentive to find ways to reduce that harm. Settling ponds, for example, could have been used to eliminate the heavy solids released into streams and rivers. Perhaps, companies could have even found uses for those waste products. Standard Oil, for example, found ways to use gasoline, which before, had been considered useless and dumped into the nearest river. Given freedom and the proper incentives, people find ways to turn problems into opportunities.   10- Risky and unsafe working conditions Most of the reduction in workplace deaths and injuries has been the result of technological advances made by the private sector. Throughout human history, knowledge was gained through trial and error – trial and error in a world in which error often resulted in death. The first steam engines were dangerous because they were the first steam engines. We hadn’t yet learned all the ways they could fail and how to prevent those failures. The same is true for the first factories, cars, and airplanes. The steady decline in workplace accidents in the United States began long before OSHA and other regulatory agencies were created.     Richard Fulmer worked as a mechanical engineer and a systems analyst in industry. He is now retired and does free-lance writing. He has published some fifty articles and book reviews in free market magazines and blogs. With Robert L. Bradley Jr., Richard wrote the book, Energy: The Master Resource. (0 COMMENTS)

I’ve been reading Robert Hetzel’s excellent new history of the Fed, and came across this November 1992 quotation from Alan Greenspan: We have seen that to drive nominal GDP, let’s assume at  4 1/2%, in our old philosophy we would have said that [requires] 4 1/2% growth in M2. . . .  I’m basically arguing that we are really . . . using a nominal GDP goal of which the money supply relationships are technical mechanisms to achieve that. [p. 426] Later on, Hetzel discusses Greenspan’s views on the appropriate inflation goal: Greenspan wanted price stability subject to the proviso that at low rates of inflation productivity growth would be high enough to restrain growth in labor unit costs to be consistent with moderate wage growth. He feared that with price stability wage compression coming from an inability to cut nominal wages would increase unemployment. [p. 435] This led to a procedure that is essentially equivalent to targeting NGDP per worker: However, for Greenspan, at low rates of inflation, the amount of inflation that the FOMC would tolerate would vary inversely over time with the rate of productivity growth.  [p. 437] This is quite close to George Selgin’s “productivity norm”. PS.  As of the fourth quarter of 1992 (when Greenspan made this statement), NGDP growth had averaged 8.29% over the previous 30 years.  How likely does it seem that NGDP growth would average 4.5% over the subsequent 30 years?  Not likely, unless you’re one of those people (like me) who believes that it is the Fed (not Congress) that determines the trend rate of NGDP growth.   In fact, NGDP growth averaged 4.65% in the 30-year period after Greenspan’s remarks.  And Greenspan helped to make it happen. (0 COMMENTS)

I’ve had some complaints about how the news media operates. And my less than rosy view of the news is hardly unique – Bryan Caplan, for example, has written on this very blog about his own misgivings about the news. But because I’ve never seen a dead horse that didn’t look like it needed a good beating, I thought I’d add a thought experiment that illustrates another reason to discount the value of being “up to date” with the “latest news.” Let’s think of an event of historical significance – not a recent event, but still within living memory for many people. The Vietnam war would be a good example. In the decades since that conflict began and ended, we have learned a great deal about both what led to it, as well as what actually happened while it was ongoing. Hundreds of history books and scores of documentaries have been released detailing new information and casting new light on the war. And as time goes on, it seems extremely likely that our understanding will be further refined by new discoveries and new examinations of existing materials. Now, imagine someone has just miraculously awoken after spending decades in a coma, fully mentally alert despite their long slumber. Upon awakening, they learn of the existence of the Vietnam war, and they want to know what led to the United States entering that war. If you wanted to help them get the best possible understanding of what happened, which of these two routes would you suggest? Provide them with a recently published book on the Vietnam war from a reputable historian, or perhaps suggest they watch the recent and acclaimed documentary by Ken Burns and Lynn Novick. Suggest they go to a library with a good newspaper archive and read all the stories that were being published in the news as the war was beginning. You’d obviously suggest the first course of action, right? Someone trying to understand what led to US involvement in Vietnam purely from the information that was being published in the news media at the time would end up somewhere between poorly informed and actively misinformed. This isn’t unique to the Vietnam War, of course. A common experience from reading history books is noticing the historian’s task of distinguishing what was being said at the time from what the historical record has established. There are a multitude of reasons why contemporary commentators can get things wrong. Events that were attention grabbing at the time and seemed very important can turn out to have been relatively trivial in retrospect. And events that were overlooked or seemed minor at the time might turn out to have had a very large impact. Sometimes relevant information is classified or otherwise unavailable until well after the event has passed. Other times, formerly hostile parties may establish better relations and begin sharing information with each other that casts a new light on the historical record that commentators at the time couldn’t have possibly known. The Vietnam War provides a clear example of all of this, but this is true of history more generally. The gap between “what the historical record shows” and “what was being said in the news at the time” is usually very large. And when viewing the news today, you should assume the gap between current news reports and reality will be approximately as large. It’s not literally zero information, but it rarely provides more than a vague outline at best. Mark Twain once reminded us to never let school interfere with education – to that I would add, never let the news interfere with being well informed. (0 COMMENTS)

You Will Respect My Authoritah! My wife and I are big fans of the PBS series “Call the Midwife.” She also gets a kick out of how teary-eyed I get watching some of the episodes. Season 12, Episode 4, which aired last Sunday on KQED, was no exception. Something else happened on it, though, that I found particularly interesting given the implicit position that the show takes on Britain’s expanded welfare state. We’re, of course, meant to believe that the National Health Service is great. Also, in various episodes, this or that nurse reminds a low-income Brit about various subsidies that are available for a wide range of services. So it was interesting that the latest episode dealt with one of the downsides of having centralized government control. There’s an outbreak of E. Coli in one of the facilities that the Nonnatus House runs and Dr. Turner and various nurses hop to it, moving quickly to quarantine the patients and nurses who are in there and to prevent other people from entering. Then someone from the London Board of Health shows up, and he is pissed. Here’s the dialogue, which takes place at around the 30:30 point: Threapwood: My name is Threapwood. I’m the new chairman of the [London] Board of Health. Doctor Turner: I informed the board, as soon as the outbreak [of E. coli] became apparent. Threapwood: You also “informed” us of the measures you’d be taking. That is not for you to do in a situation of this magnitude. Sister Julienne: Dr. Turner acted very swiftly. I, for one, was extremely grateful to him. Threapwood: And, as is so often the case, it is not the opinion of the Nonnatus House that matters. (Pause.) There’s nothing wrong with your policies, Turner. It’s the assumption of autonomy the board doesn’t care for. Note what he’s saying. Dr. Turner was wrong to do what he did so quickly, not because he made the wrong move, but because he assumed he could do it without consulting the Board. Turner had, in Hayekian terms, “local knowledge.” Of course, if he had consulted the Board, it would have taken at least a while for the Board to get back to him, which might have cost lives. (The little newborns were losing weight.) So what mattered to Threapwood (what a great name for a villain) was not saving lives, but losing control. This happens when you centralize power in government. I noticed something similar, by the way, in the U.S. government’s reaction to peace breaking out in the Middle East. Here’s Ron Paul, noting the U.S. government’s upset that peace is being achieved without the U.S. government’s input: Take, for example, the recent mending of relations between Saudi Arabia and formerly bitter adversaries Iran and Syria. A China-brokered deal between the Saudis and Iran has them re-establishing full diplomatic relations, with the foreign ministers of both countries meeting in Beijing last week. It is the highest level meeting between the two countries in seven years. Additionally, Riyadh is expected to invite Syria back into the Arab League and Syrian president Assad may attend the next Arab League summit. Syria was suspended from the Arab League 12 years ago when then-US allies in the Middle East signed on to Washington’s “Assad must go” policy that wreaked havoc across the region. And the nearly decade-long war in Yemen, which has devastated that population, appears to finally be ending, as Saudi Arabia is expected to announce an end to its US-backed war on that country. Troops from the United Arab Emirates are leaving Yemen and a Saudi delegation is arriving to negotiate a peace deal. [DRH note: That is no small deal; according to the UN, 150,000 people in Yemen have been killed by the war and another 227,000 have died due to the resulting famine.] To normal people the idea of peace breaking out in the Middle East is a wonderful thing. But Washington is anything but normal. President Biden dispatched his CIA Director, William Burns, to Saudi Arabia in a surprise visit last week. According to press reports, Burns was sent to express Washington’s surprise and frustration over the peace deals going through. Biden’s foreign policy team “has felt blindsided” by Saudi Arabia’s sudden move to get along with its neighbors.     (0 COMMENTS)

Captivated by their scintillating Internet marketing, I went to see Shen Yun, now branded “China before Communism”. Shen Yun is the theatrical enterprise of Falun Gong, apparently a rather profitable venture. Falun Gong is a controversial religious movement that is ostracized in mainland China and Shen Yun is controversial, too: see, for example, the New Yorker here. I wasn’t particularly excited. The show is divided into many, shorter bits. Some are rather interesting: I was enchanted by an Erhu soloist and found the singers pretty good. I thought the orchestra was excellent, and Shen Yun seems clearly capable of attracting great talent. They attracted great interest too; the theatre was packed, for a matinee in a mid-size Italian city, and most of the audience members were Italians, rather than Chinese expatriates. In the songs, a couple of verses were explicitly anti-evolution and anti-atheism, without much of an argument more than, “these things are bad for you.” Still, I don’t think many noticed at all. I was more puzzled by the rather naïve and cartoonish, dancing presentation of dramatic events such as protest repression and “organ harvesting”. I wish I could ask somebody from China if that kind of representation, which is necessarily euphemistic as it goes through dancing in beautiful costumes, resonates with her. To the Western eye, it doesn’t: it trivializes something very serious. However, the big criticism of Falun Gong is that this show is propaganda wrapped up in theater. I think that’s unfair. If this is propaganda, it is of the obvious, hence harmless, kind. The denunciation of communism is clear, but it is not overwhelming (it doesn’t touch any economic arguments, for example) and it can be ignored by the audience. In fact, I think most of the audience, in the case of the representation I attended, didn’t pay much attention and wasn’t nudged to. Plus, I can hardly see why this kind of “propaganda” should be a problem, in a world in which we are deafened by politically correct propaganda of the opposite time: which is not more subtle, but only more pressing. While my sympathies do not lie with the religious values of Falun Gong, I am appalled that such a show can be considered a “problem” by anybody. A last, bittersweet comment. Falun Gong could have gone for more religious preaching, or more political pamphleteering. Instead, they created a music show and achieved tremendous success. They understood something most of us libertarians don’t: that people respond to stories, not to arguments. Perhaps some creative minds in our movement should create a show, “America before socialism”, and tour the world and compete with Shen Yun. I bet it wouldn’t be the worst strategic move in the history of libertarianism. (0 COMMENTS)

  Only 3 years too late. President Biden did something today that I approve of: signed a bipartisan bill to end the COVID emergency that President Trump had declared a little over 3 years ago. The bill passed the U.S. Senate by a vote of 68-23. Here’s a summary of the bill, Senate Joint Resolution 38: Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That, pursuant to section 202 of the National Emergencies Act (50 U.S.C. 1622), the national emergency declared by the finding of the President on March 13, 2020, in Proclamation 9994 (85 Fed. Reg. 15337) is hereby terminated. Actually, that’s not the summary. That’s the whole thing. Congratulations to Senator Roger Marshall (R-Kansas) for pushing this. It’s virtually always bad to give a President emergency powers. Here’s how Senators voted. 21 Democratic Senators and 2 Independents (King and Sinema) joined 45 Republicans in a Yes vote. No Republicans voted against but 4 Republicans (Barasso, Blackburn, Hagerty, and McConnell) refrained from voting. (0 COMMENTS)