At least for a non-insider, sociology is not a very useful science, if it can be called a science or even a discipline at all. With its checkered history, it looks more like an “undiscipline.” Although there are some brilliant exceptions, the common denominator of most sociologists seems to be the belief that individuals, or at least non-sociologists, are a product of society and that socialism is the solution to all problems. Current exceptions revolve around the rational-choice school of sociology, inspired by economists who applied their methodology to “social” issues such as discrimination, marriage, social capital, etc. At the first rank of these economists figures Gary Becker, laureate of the 1992 Nobel prize in economics In his Nobel lecture, “The Economic Way of Looking at Life,” Becker noted: Specialists from fields that do consider social questions are often attracted to the economic way of modelling behavior because of the analytical power provided by the assumption of individual rationality. Thriving schools of rational choice theorists and empirical researchers are active in sociology, law, political science, history, anthropology, and psychology. The rational choice model provides the most promising basis presently available for a unified approach to the analysis of the social world by scholars from the social sciences In one of his most important works, Law, Legislation, and Liberty, published in three volumes from 1973 to 1978 (University of Chicago Press, 2022, for the consolidated edition by Jeremy Shearmur), Friedrich Hayek, also a Nobel economist, suggests that a distinct science of society (“sociology”) does not make more sense than would a distinct science of the natural world (call it “naturology”): I must confess here that, however grateful we all must be for some of the descriptive work of the sociologists, for which, however, perhaps anthropologists and historians would have been equally qualified, there seems to me still to exist no more justification for a theoretical discipline of sociology than there would be for a theoretical discipline of naturology apart from the theoretical disciplines dealing with particular classes of natural or social phenomena. (p. 534) (0 COMMENTS)

Did you know that 51% of the world’s top revenue-generating bodies are private corporations? There is no doubt that companies have the potential to generate investment, employment, and economic growth, and can play an essential role in poverty reduction, promoting respect for the law and democratic processes. They also can provide high-quality work, equal opportunities, non-discrimination, and access to knowledge and technology through the market, expanding political, economic, and social opportunities for people, thus contributing to the realization of various human rights. There may also be market failures or gaps, and companies may not always be willing to respect human rights. For example, they may pay lower wages than the legal wage, endanger the health and safety of their workers, violate freedom of association, or participate in the forced displacement of indigenous communities in certain countries.  For example, according to Amnesty International, more than 20,000 people died from a toxic gas leak from a Union Carbide chemical plant in India in 1984. 100,000 people received medical treatment for various health problems following the dumping of toxic waste at various sites in Abidjan, Côte d’Ivoire, in August 2006. The waste was generated by the multinational oil company Trafigura. Although the issue of the relationship between business and human rights is not new, it has become increasingly important due to the rapid expansion of transnational economic activities and the consequent failure of global governance. Therefore, the question arises: is it possible to hold companies accountable for human rights violations in the international human rights protection system?  To address this problem, the United Nations approved the Guiding Principles on Business and Human Rights in 2011, the first global framework to promote corporate respect for human rights. This document enshrines the responsibility of states to redress business impacts suffered in their territories and establishes the responsibility of companies to respect human rights. It should be noted that for private companies, this is not a legally binding responsibility. However, this pact offers a global standard of conduct that applies to all companies, regardless of where they operate (Isea, 2011). Generally, the state has the greatest obligations stipulated in international human rights law. Likewise, states cannot waive these international obligations by privatizing the provision of services. Suppose the state cannot ensure that the companies providing these services comply with its human rights obligations. In that case, the consequences can damage the country’s reputation and generate severe legal consequences.  According to Ruggie (2007), when the state controls a company, or its behavior can be attributed to the State for other reasons, the violation of human rights by the company can mean a violation of obligations under international law, since the closer a company is to the state, or the more it depends on the support of public institutions or taxpayers, the more reason the state has to ensure that it respects human rights. In this sense, the fact that the states are the signatories of the legal instruments that oblige them to respect human rights, their violation can only and exclusively be committed by them. Thus, the possibility of appealing to the Inter-American Commission on Human Rights (IACHR) for human rights violations committed by transnational corporations is ruled out since the states would be legally responsible at the international level for the actions of individuals. However, this does not mean that transnational corporations are exempt from responsibility; companies have a domestic legal duty to respect human rights based on the legal instruments relating to human rights.  The United Nations Resolution 17/4 (2011) has pointed out that transnational corporations and other business enterprises have a responsibility to respect human rights, and that states should ensure due regulation through national legislation since the responsible operation of these can contribute to the respect for human rights and help to channel the benefits they derive towards the enjoyment of human rights and fundamental freedoms. There has been much debate on the customary nature of human rights. Recently, the Supreme Court of Canada in Nevsun Resources v. Araya held that the customary nature of international law tacitly implies the domestic application of international human rights law as domestic law applicable to corporations. Newsun is a compelling case to highlight as the appellant; a Vancouver-based mining company could be held directly responsible for violations of customary international law standards against slavery, forced labor, and cruel treatment in connection with the operation of a mine in Eritrea. This is why it is important to analyze the organization’s value chain and understand where a company’s operations begin and end to calculate its human rights and social responsibility impacts.  People today are more aware of the role of business in human rights, and, based on this, they demand that their social, economic, and cultural rights be respected and guaranteed. Public opinion is crucial in this regard. On the one hand, society demands change in how companies conduct their business operations. On the other hand, the legislation increases the fiscal burdens on business, as the state cannot assume all its administrative and public purposes. It is not only morally and legally necessary for companies to be the source of positive effects for people.  Corporate Social Responsibility (CSR) is a strategic part of business, and this is not a matter of philanthropy since companies are oriented to make social investments in areas of their business activity, mitigate risks associated with their stakeholders, and maintain a positive reputation with public opinion that gives them their “license to operate”. Companies must innovate how they produce, manufacture, and distribute their products or services. It is no longer a question of being an entrepreneur just to make a profit; companies must add value to consumers’ lives. For some, the dilemma posed by corporate social responsibility is the crossroads between competitiveness and the goal of a fairer society. The answer is clear: respect for human rights and social responsibility does not make a company less competitive than another in financial terms. Both CSR and human rights represent opportunities that companies should capitalize on for the benefit of all because only a responsible company can do truly meaningful business in today’s world.   Bibliography: Isea, R. (2011). Las Empresas y los Derechos Humanos. IESE Business School: Universidad de Navarra. Nevsun Resources Ltd. v. Gize Yebeyo Araya, et al., sentencia del 28 de febrero de 2020: https://decisions.scc-csc.ca/scccsc/scc-csc/en/item/18169/index.do.  Organización de las Naciones Unidas. (2011). Principios Rectores sobre las Empresas y Derechos Humanos. Ginebra. Organización de las Naciones Unidas. (2016). Principios de contratación responsable: integración de la gestión de los riesgos relacionados con los derechos humanos en las negociaciones entre Estados e inversores: orientación para los negociadores. Ginebra. Ruggie, J. (2007). Business and Human rights: The Evolving International Agenda. John F. Kennedy School of Government, Harvard University: Cambridge. Tangarife Pedraza, M. (2010). La estructura jurídica de la responsabilidad internacional de las empresas transnacionales y otras empresas comerciales en casos de violaciones a los Derechos Humanos.   Michelle Bernier is an attorney specializing in international law and commercial law. She is studying Master of Laws and International Business with a double degree from the Universidad Internacional Iberoamericana in Mexico and the Universidad Europea del Atlántico. She is also a part of Students for Liberty’s inaugural cohort of Fellowship for Freedom in India.  (0 COMMENTS)

For the last ten years I have been baffled as I watched the conservative movement devolve into a weird wing of progressivism—especially on economic issues. While once at least paying lip service to limited government, fiscal prudence, and personal responsibility, conservatives now ignore the size of government and fiscal responsibility. They increasingly call for a larger child tax credit, a universal basic income, and paid leave arranged and ensured by the federal government. Many conservatives now also proudly embrace tariffs, hyperactive antitrust, and industrial policy (often justified, of course, as necessary to ‘fight’ China). Conservatives – or at least the more politically active ones – are reverting to their 1920s selves (See Matt Continetti’s book, The Right: The 100 year war for American Conservatism.) I failed to see this reversion occurring, in part because I moved to the United States in 1999 and was until recently fairly ignorant of the history of the conservative movement- and how the last forty years were more an exception than the rule.   I fear that this recent trend is just the beginning. It won’t be long before the conservatives’ platform is a full-on version of big government, big business, and big unions. It’s depressing. It is hard not to wonder if the liberty movement is now failing to follow in the footsteps of Hayek, Friedman, and other great 20th-century champions of freedom. It’s important now to recognize that on most fronts the challenges faced by the first- and second-generation members of the Mont Pelerin Society were, if anything, greater than what we champions of freedom face today. After all, people in 1947 – or even in 1987 – could not, as we can today, point to the actual collapse of the socialist states as evidence of the dangers of collectivism. And yet Hayek and his peers left us a world that was more accepting of free trade and free-market economics, even if these liberal policies were not the default position. Perhaps a more optimistic way to view the current situation is to be inspired by those who fought for a more classical liberal world at a time when things looked particularly grim. Rather than despair, get energized by the challenge. But this raises the question of what is the best way not merely to preserve the flame of freedom but to spread it. What the next steps are, I do not know. I am open to your suggestions. The private sector continues to deliver innovation, growth, and widespread prosperity. But as of today, few people are willing to acknowledge that it is the free-market system that allows these wonderful things to happen, and that while of course imperfect (often because impaired by government interventions), any alternatives would be much worse. How do you fight the battle of ideas when so many people distrust the institutions that host those of us who produce and apply these ideas? I have spent most of my professional life producing work to show that arguments for government interventions are bunk. For instance, in this new paper with Chuck Blahous, he and I take on the new conservative recommendation that Social Security be used to provide paid-leave benefits. We show, again, all the ways that this is a terrible idea. Of course, I believe that work such as this is important, since these are serious propositions introduced in Congress and supported by a fairly large number of conservatives. But is there a better way? In this new paper, Gary Leff and I argue that next time legislators are tempted to bail out airlines ostensibly to ensure that they will be ready when the economy reopens, the public should remember the actual, depressing results of the most recent such bailout. But Congress won’t change its response unless we change the incentives politicians face during the next emergency. How do we do that? After all these years, I still don’t know. Maybe it is more effective to offer a vision of what a libertarian world looks like. This is what Aaron Powell does in this edited volume. I recommend it. I think this approach describes also a lot of the work of former EconLog blogger Bryan Caplan. He inspires by offering a vision of what a world would look like without government subsidies to higher ed, a world with largely open borders, and a world with radically fewer restrictions on home building. The Fraser Institute’s Economic Freedom Index offers such a vision, because it is a concrete way to illustrate what countries with less economic freedom look like compared to those with more freedom. The 2022 Economic Freedom of the World Report was released earlier today; all countries have declined in economic freedom, thanks to over the top pandemic responses, but the U.S. has actually declined even more relative to other countries. The U.S. rating fell by twice the amount of the average reduction worldwide. The U.S. is at its lowest level of economic freedom in four decades. The bottom line is that while I am usually an optimist, I find myself increasingly worried and wondering what we did wrong and what to do next.   Veronique de Rugy is a Senior research fellow at the Mercatus Center and syndicated columnist at Creators. (1 COMMENTS)

  But guess who got to ignore California’s restaurant-closing measure? That’s right: Governor Gavin Newsom. On October 9, 2020, his own Department of Public Health issued a prohibition on gatherings of more than three households. But on November 6, less than four weeks later, Newsom was seen at an expensive restaurant attended by at least twelve people, celebrating the birthday of a lobbyist. Newsom did what politicians often do when caught: he lied. He claimed that the dinner had been outdoors. But photos showed his claim to be false. Then Newsom did what politicians often do when caught in a lie: he apologized. Although I may have missed it, I don’t recall his expression of sympathy for others who might have wanted to celebrate birthday parties indoors with people from multiple families. Newsom and his staff set the rules for all of us and expected us to obey them. But Newsom exempted himself and his friends and apologized only when caught. That is the aristocracy of pull. This is from David R. Henderson, “The Aristocracy of Pull,” Defining Ideas, September 8, 2022. I also get into the higher minimum wage we can now expect for fast-food workers in California: Economists know what happens when governments raise minimum wages. In the simple model that we teach our students, employers lay off workers whose productivity isn’t high enough to match the higher minimum wage and employers also adjust by making production more capital intensive. We often point out that the minimum wage law doesn’t guarantee a job; all it guarantees is that if you get a job, it will pay the minimum wage. But for workers who are relatively unskilled, that’s a big “if.” It’s precisely the requirement that they be paid the minimum wage that makes them less likely to get or keep a job. But some economists also teach a more complex model that more completely fits the reality of the labor market. They point out that the wage is only one part of the compensation package. Other components are employers’ contributions to health insurance and retirement plans, and general working conditions: free food for employees, flexibility so that employees can deal with sick children, etc. When the government sets a high minimum wage, employers can reduce those benefits. Critics of this view might argue that employers of unskilled workers do not give a lot of fringe benefits. But that actually helps make the economists’ case: the higher the minimum wage, then, all other things equal, the skimpier the fringe benefits. And a chance to recount one of my favorite skits: In the 1930s, in a play on Broadway called Ballyhoo of 1932, actors Willie and Eugene Howard did a famous skit. In the skit, a speaker, wanting to persuade his audience of how great communism would be, shouted, “Come the revolution, everyone will eat strawberries and cream.” One member of the audience yelled back, “But I don’t like strawberries and cream!” The speaker responded, “Come the revolution, you’ll eat strawberries and cream—and like it!” I think of that when I think of the fast-food council. This council will make decisions for thousands of employers and hundreds of thousands of employees. It’s true that many employees might like the decisions. But it’s also true that many employees might dislike the council’s narrowing of their options. In a world of heterogenous tastes, many employees might not “like strawberries and cream.” Read the whole thing.   (0 COMMENTS)

“There’s someone in Bangladesh who would almost surely be a better economics professor than I am and is now behind a water buffalo,” he told me. “The market economy gives me and my preferences 200 times the voice and weight of his. If that isn’t the biggest market failure of all, I don’t know what your definition of market failure could possibly be.” This is from Annie Lowrey, “The Economist Who Knows the Miracle is Over,” The Atlantic, September 3, 2022. Don Boudreaux has made the point that it’s hard to claim this as market failure when Bangladesh is a country whose markets are most repressed by government. He points out that in the 2022 edition of the Annual Report on Economic Freedom of the World, about which I’ll have more to say in a day or two, Bangladesh ranks a dismal 139th out of 165 countries that are rated. That’s a major contributor to the water buffalo driver’s poverty. I won’t say more about that because Don said it well. But there’s another point to make. The Bangladesh government is not the only government preventing that water buffalo driver from being an economist: governments in richer countries such as the United States also play a huge role. Whatever you think of restrictions on immigration, they are restrictions; they are heavy regulation of the labor market. If the United States substantially relaxed its restrictions and let, say 5 million Bangladeshis into the country, that water buffalo guy might actually get here and become an economics professor. And Brad might be right: this former water buffalo driver might well do a better job than Brad at teaching what is, and what is not, market failure.   (0 COMMENTS)

Some economic models rely on the assumption that people are entirely selfish. But these models tend to be internally inconsistent, as they often assume an economic regime that could not possibly exist if people had absolutely no regard for the broader society.  At a minimum, a market economy requires at least some willingness of people to refrain from rent seeking in the form of barriers to commerce. People are somewhat selfish.  Most people care a great deal about their own interests, and somewhat less about the interests of strangers that they have never met.  Nonetheless, people often engage in activities (such as voting) that are hard to explain from a narrow self-interest perspective.  People seem to have at least some sense of solidarity with others, which shows up in a willingness to fight for one’s country or to pursue philanthropic causes. A Bloomberg article about a power crisis in California caught my eye: A timely mobile alert may have prevented hundreds of thousands of Californians from being plunged into darkness in the middle of a heat wave Tuesday night. Just before 5:30 p.m. local time, California’s grid operator ordered its highest level of emergency, warning that blackouts were imminent. Then, at 5:48 p.m., the state’s Office of Emergency Services sent out a text alert to people in targeted counties, asking them to conserve power if they could. Within five minutes the grid emergency was all but over. This graph shows the impact: It is possible that some power consumers wrongly assumed that their decision to turn down the AC would have a significant impact on the risk of a blackout.  That decision would be consistent with selfishness. Given California’s vast population, however, any individual power reduction would be a drop in the bucket. I’m certain that at least some California consumers understood that their decision to turn off the AC would have little overall effect on blackout risk, and did so out of solidarity with society as a whole.  How can I be certain?  Because I received this text message, at a time the outside temperature was in the high 90s.  I immediately shut down our central air conditioning.  I suspect that other people had the same thought process. Homo economicus is a reasonable approximation for some purposes.  A more realistic economic model, however, would assume that people care a lot about their own self-interest and put a much lower but still positive weight on the utility of their fellow citizen.  In addition, people have more solidarity with people that live nearby than with those who live far away. Countries with a high level of solidarity, such as Denmark, tend to have more effective governance than countries where most people have a low level of solidarity with strangers, such as Afghanistan.  More specifically, countries with a great deal of solidarity tend to be more market-oriented than countries where people have less solidarity with strangers. Back in 2008, I wrote a paper that touched on these issues, which began as follows: The Great Danes: Cultural Values and Neoliberal Reforms “Virtually every commercial transaction has within itself an element of trust . . . It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence.” (Kenneth Arrow, Gifts and Exchanges, Philosophy and Public Affairs, 1972, p. 357.) I don’t know whether Arrow is correct, but the following anecdote might help to illustrate the concept that Arrow had in mind. While traveling in Northern Michigan this summer I noticed farm stands by the edge of the road selling cherries. Often, no salesperson was present. One simply placed a five dollar bill in a small metal box, and drove away with a quart of cherries. This system makes one realize the enormous waste of labor resources involved in someone waiting by the roadside for motorists to stop and purchase cherries, and may be one reason why high-trust societies tend to be relatively prosperous. (0 COMMENTS)

It’s said that one man’s trash is another man’s treasure. In the same way, one man’s market imperfection is another man’s market opportunity. Imperfections in markets don’t prevent markets from operating – they are a driving force of the market process. As Hayek once said, in the standard economics model of “perfect competition,” there is no actual competition! A commonly cited market imperfection is “imperfect information.” Lack of information is indeed a problem, but companies and consumers both have incentives to find ways to solve this problem. One way to achieve this is through branding. Suppose you’re on a road trip and need to make a quick stop to eat. You have two options – a local burger joint called Billy’s Burgers, or a McDonalds. You know nothing about the former restaurant – it could be a hidden gem, or it could leave you chained to your toilet for the next three days. You’re just passing through town, so you’re not going to be a repeat customer; this is a one-time transaction. You might not want to take the risk that Billy’s might turn out to be a dud. Meanwhile, with McDonalds, you know exactly what you’re going to get. It’s going to be basically the same as every other McDonalds you’ve ever tried. The same is true for other major chain restaurants. The brand name communicates valuable information to the consumer, alleviating the problem of imperfect information. But times have changed. We don’t need to rely so much on branding to supplement our information. Nowadays, everyone knows about Yelp, Google reviews, and other similar review aggregators. If you were to take that road trip now, you could just pull up the Yelp reviews for Billy’s Burgers. You’d see the results of hundreds, if not thousands, of others who have been through that town. You’d be able to see the full menu, along with pictures posted by both the restaurant and the customers. Suddenly, your ability to choose between McDonalds and Billy’s can be much more informed. In fact, a working paper from the Harvard Business School looked into the effect of Yelp on the restaurant industry. The author, Michael Luca, found that a rating increase of one star on Yelp leads to an increase in revenue between 5% to 9% – but that this impact was limited to independent restaurants. Chain restaurants saw no significant effects from Yelp reviews. This makes intuitive sense – I’ve often consulted Yelp and similar apps when deciding about an independent restaurant or a food truck. It’s never even occurred to me to look at Yelp to find a rating for any given Chipotle or Applebee’s. Why would I? I already know what to expect from those places. And I’ve also found that because of Yelp, I’m far more likely to seek out and eat at independent or specialty restaurants instead of chains, because Yelp has made it so much easier to find the gems among the grit.   What to make of all of this? I think there are three takeaways. Markets are not about reaching and maintaining an equilibrium, free from frictions or imperfections. Markets are an ever-ongoing process, working in response to those frictions and imperfections. The solution used yesterday may not be the same as the solution used today. Where branding was once key to imperfect information, crowdsourcing has now emerged as a valuable tool as well. Tomorrow’s might introduce a new solution which is totally different – the process will continue to evolve, in ways that aren’t always apparent right now. Because the process always evolves, there is no fixed, “correct” answer to how to handle market imperfections over time. This should make us extremely reluctant to use regulation. Once you do, you’ve said a single institution (the state) must create a one-size-fits-all solution for everyone. Once implemented, a political solution will inevitably create some winners and losers, which itself inevitably creates interest groups out of the winners who have reason to maintain this new status quo. If a better solution emerges, markets could smoothly transition to it, as we’ve seen with branding giving way to crowdsourcing. But political structures force you to battle with special interest groups and entrenched interests before you can gain new options. This can leave a suboptimal solution in place long after it stops being useful – if it ever was useful to begin with.   Kevin Corcoran is a Marine Corps veteran and a consultant in healthcare economics and analytics and holds a Bachelor of Science in Economics from George Mason University. (0 COMMENTS)

On August 23, in an interview with Dr. Anthony Fauci, Fox’s Neil Cavuto asked if the school shutdowns had “forever damaged” kids. Fauci answered, “I don’t think it’s forever irreparably damaged anyone.” If only that were true. But a large amount of accumulated evidence contradicts Fauci’s rosy claim. Moreover, not only did the school shutdowns damage millions of children, even worse, those shutdowns will shorten their lives. Keeping schools open would have saved lives. School closings caused losses in learning, which will lead to long-term losses in income, which, in turn, will lead to lost and shortened lives. This is from David R. Henderson and Ryan Sullivan, “Contra Fauci, School Closings Will Shorten Lives,” AIER, September 5, 2022. Co-author Ryan is the father of two young kids whom he loves very much. That motivates him a lot to write these things. And: Other estimates put the shortening of lives caused by the school shutdowns at much higher levels. A paper by Dimitri A. Christakis, Wil Van Cleve, and Frederick J. Zimmerman published in the Journal of the American Medical Association estimated 13.8 million years of life were lost due to the school closures. This number was estimated from a standard analytical model that examined the association between school closures and reduced educational attainment and the association between reduced educational attainment and life expectancy. It was based on data from the CDC, the Social Security Administration, and the U.S. Census Bureau. Dividing 13.8 million years of life lost by a normal life expectancy of 78 years in the U.S. indicates that the school shutdowns were responsible for the equivalent of about 177,000 deaths. Economists often use the term “invisible graveyard” to refer to deaths such as these. The idea is that these deaths are not yet identified, but they will take place in the future. That’s a tragic outcome regardless of whether we see them in the obituaries. Read the whole thing.   (0 COMMENTS)

Tyler Cowen was recently interviewed by Brian Chau. Tyler was somewhat critical of woke excesses in the US, particularly in universities. Chau was much more critical of wokism. The most interesting part of the interview came during a period (of roughly 20 minutes) after the 44-minute mark in the podcast. Tyler suggested that many developing countries could use more wokeness, and cited India as an example. Chau seemed somewhat confused by this claim, and pushed back a bit. My own views are closer to Tyler’s, but I’d like to frame this question in a way that tries to make sense of Chau’s view as well.  I’ll use a simple two-dimensional model of politics.  You can say it’s wildly simplistic, but in my defense I see lots of people using one-dimensional models (e.g., wokism is good, non-wokism is bad, or vice versa.) Think about a model where the extreme right represents political regimes where the powerful oppress the disadvantaged and/or minority groups.  On the extreme left, the powerful oppress the advantaged.  Of course that raises an interesting question—if they are advantaged, how can they be oppressed?  One example might be the Chinese Cultural Revolution, where people that came from upper class families were persecuted.  (Again, I understand that this model only addresses a few aspects of politics, and leaves much out.) From this perspective, the “moderate” position between the extreme left and the extreme right is not really moderate at all; it represents a sort of extreme liberation. People are not oppressed by anyone.  The following pyramid might make it easier to see my point: Let’s say we start from a position on the extreme right, where the powerful people repress weaker groups like women, racial minorities, religious minorities, gays, etc.  Over time, weaker groups are gradually liberated.  At some point this movement gains so much power and prestige that society begins discriminating in favor of the traditionally weaker groups, and begins oppressing the strong (say Protestant, white, heterosexual men.)  Now instead of moving up and to the left from Nazism to liberation, society begins moving down and to the left, toward Maoism.  (BTW, I’m certainly not suggesting that white males in America are strongly oppressed, but this is the sort of issue that right-wingers worry about.) Tyler uses India as an example of a place where more wokism is needed. Indeed by 21st century American standards, much of the world is still on the right side of the pyramid.  (Africa, South Asia, Russia, the Middle East, etc.)  But note that when making this claim, Tyler is implicitly defining wokism along a sort of left-right access.  The woke are the people pushing us to the left, toward (what they perceive as) greater help for the disadvantaged.  In many countries, that means pushing toward greater liberation. In the interview, it’s pretty clear that Chau hadn’t given much thought to woke issues in developing countries.  He clearly saw the phenomenon from a “freedom-oppression” perspective.  He’s implicitly assuming that we are on the left side of the pyramid.  Because the most controversial aspects of wokism in America lead to a reduction in freedom, he found it hard to understand how India could possibly benefit from more wokism.   On the other hand, even many American conservatives would probably agree that India could benefit from a bit more enlightened attitudes on issues like gender, caste and religion.   But perhaps they don’t see that as wokism. To leftists in the US, more wokism means better treatment of the disadvantaged.  To rightists in the US, more wokism means more oppression of non-favored groups.  Cowen and Chau both agreed that recent trends in wokism in US universities are doing more harm than good.  But when you remove wokism from that specific context, and look at it from a global perspective, one’s perspective depends on whether you see wokism as a left-right issue, or along the freedom-oppression axis. Tyler’s point is that in India there’s a lot of oppression of women, Muslims, Christians and lower caste people in general, and in that sense India needs more leftism.  Here I mean leftism in a social sense, not in terms of economic policy.  India’s current (populist right wing) government is making things worse.  And (in my favorite part of the interview), Tyler points out that this is a blind spot for American right-wingers when they look around the world: Maybe completely is too strong a word but look in India there’s plenty of groups I spoke to some people who were involved with them to give women who are raped the chance to bring actual suits against their violators in a way that doesn’t take 20 years or involve extreme humiliation. Make them unacceptable on the marriage market and so on and I don’t doubt the motives of those people are mixed. There’s a lot of hypocrisy and (???) reasoning might apply. It just seems to me those are largely highly beneficial movements and I’m rooting for them to succeed and I view that as a pretty big and essential part of the emancipatory perspective of libertarianism and classical liberalism and I don’t quite get why what you might call the North American right isn’t just fully on board with that as part of a belief in human liberty. Chau responded “I don’t think they aren’t.”  And yet I see the same thing as Tyler when I read many right wing pundits.   All of this has echoes of a period that I recall from my youth.  Broadly speaking, socialism was the major global political movement of the mid-20th century, just as right wing authoritarian nationalism is the major political movement of the 21st century.  In the post-war decades, most American progressives thought the communists went too far, just as today most American conservatives presumably think that people like Putin, Xi, Orban, Modi, Bolsonaro and Erdogan are too authoritarian.  At the same time, while America progressives were not communist, they were not sufficiently anti-communist.  Similarly, I now see American conservatives intrigued by extreme right wing foreign leaders who parrot “anti-woke” rhetoric.  Believe me, the major problem on this planet is not that “me too” has gone too far.  It’s not that gay rights have gone too far. Right wingers used to call progressives “communist.”  A more accurate charge was “soft on communism.”  That was a real thing when I was young.  Today I see right-wingers who are soft on misogynist authoritarian nationalism. PS.  I’m aware that India has lots of affirmative action.  As I said, politics is complicated.  It’s quite possible for some aspects of a society to be on the right side of the pyramid while other aspects of the same society are on the left side.  Nonetheless, India is mostly on the right side. PPS.  Oddly, the American right is much tougher on Xi Jinping than it is on other right-wing authoritarian leaders, even though Xi is most definitely a right-wing authoritarian.  Today’s China is clearly fascist, and the continued use of the term “Chinese Communist Party” is just a fig leaf to cover up that embarrassing fact. (0 COMMENTS)

I used Labor Day to write my biweekly column for the Hoover Institution’s online publication Defining Ideas. Hey, that’s why it’s called Labor Day, right? So we can labor? Here’s my Labor Day post, a day late. Start with this quote from Phil Gramm and John Early, “Income Equality, Not Inequality, Is the Problem,” Wall Street Journal, August 29, 2022. (August 30 print edition.): Real government transfer payments to the bottom 20% of household earners surged by 269% between 1967 and 2017, while middle-income households saw their real earnings after taxes rise by only 154% during the same period. That has largely equalized the income of the bottom 60% of Americans. This government-created equality has caused the labor-force participation rate to collapse among working-age people in low-income households and unleashed a populist realignment that is unraveling the coalition that has dominated American politics since the 1930s. And: Our most significant finding from correcting the census income calculations wasn’t the overstated inequality between top and bottom earners. It was the extraordinary equality of income among the bottom 60% of American households, regardless of employment status. In 2017, among working-age households, the bottom 20% earned only $6,941 on average, and only 36% were employed. But after transfer payments and taxes, those households had an average income of $48,806. The average working-age household in the second quintile earned $31,811 and 85% of them were employed. But after transfers and taxes, they had income of $50,492, a mere 3.5% more than the bottom quintile. The middle quintile earned $66,453 and 92% were employed. But after taxes and transfers, they kept only $61,350—just 26% more than the bottom quintile. I haven’t checked Gramm’s and Early’s numbers but they appear to be well-sourced. The bottom line is that the welfare state in the United States is now so extensive that for people in the bottom 60 percent, work pays off at best marginally. We need to make work pay better. Not by dictating higher wages; we know the problems with that. But by paring down the welfare state. Note: The one thing I wonder about their numbers is how they account for spending on in-kind government welfare programs like Medicaid. Finkelstein, Hendren, and Luttmer found that Medicaid recipients value a dollar of Medicaid spent on them at only 20 to 40 cents. If Gramm and Early valued the Medicaid at $1 of benefit to the recipient for $1 spent on the recipient, they would be overstating the income of the bottom 20 percent. That would mean that the gap in income between the bottom quintile and the next two quintiles would be higher than their numbers show. However, it should be noted that one reason Finkelstein et al found such a low value is that “the uninsured pay only a small fraction of their medical expenditures. Put differently, if there was [sic] no Medicaid, this population would still receive some health care and would pay only a small share of its cost, likely due to the large amount of uncompensated care provided by hospitals.” So we might be back roughly to the dollar for dollar value of Medicaid spending, that I suspect Gramm and Early used, not being as big a problem as I first thought. Without Medicaid, they would still get a fair amount of medical treatment without working and being covered by health insurance. The graph above is from their WSJ article. (0 COMMENTS)