Continuing from earlier this week.  Military rivalry combined with economic cooperation is hard – but not impossible – to reconcile with “grand strategy.” Of course, in neither case were those who advocated for economic ties with the Soviet Union or China, or their intellectual opponents, devoid of rational arguments. Indeed, the similarities between the two cases are striking, with many in the United States calling for a civilizing mission toward the communist rival. Yet I show in this chapter that this makes little sense as motivation for American policy. In the case of the Soviet Union, the view that trade with that nation was good was not shared by those at the top of the government; they simply failed to prevent it from happening. When faced with the rise of China, American leaders did emphasize that worldview, and business was actively encouraged to engage in trade. But if you look more deeply, the attempted reconciliations just reveal total incoherence: Yet this theory of the world, that engagement with potential rivals is better than isolation, has not been applied to other countries. If trade and economic openness would make China into a capitalist democracy, why could US engagement not do the same in the post- Cold War era for North Korea, Iraq, and Iran? Incoherence, again: The public choice perspective presents one possible solution. In this framework, there is no need for different components of American foreign policy to be tuned toward achieving the same goals. Domestic interest groups have a stake in trade liberalization, particularly businesses seeking out financial profit. They do not have to compete for influence with the groups that have a more direct role in the outcome of issues such as those surrounding American military posture. The national security bureaucracy and government contractors want money funneled to them. In theory, a foreign rival of the rising power might seek to lobby the American government to prevent the United States from trading with it, but the rising power itself will be just as able to lobby, and its stake in the outcome of the policy decision should be greater than those of its rivals, who would at most be trying to head off a potential threat. Once that country rises, however, one of two things happens. First, geopolitical events may force a temporary grand strategy on the United States, and it either allies with the rising power or treats it as a rival. If this does not happen and things proceed as normal, then concentrated interests have an incentive to engage in threat inflation. They should recommend and advocate dealing with the threat they have emphasized in ways that benefit themselves: doubling down on military alliances and larger military budgets rather than trying to, for example, undo the economic gains that the rival has made. Thus, a schizophrenic policy develops in which the United States allows rivals to rise economically while seeking to prevent an increase of diplomatic power and military capabilities proportional to their new economic status. While such policies are incoherent from the perspective of a grand strategy pursued by a unitary actor, they make sense from the public choice perspective. As will be seen, the cases of the Soviet Union and China both support the public choice rather than grand strategy framework. More: [T]he idea that trade leads to liberalization was applied by American leaders in a way that was extremely selective. With the end of the Cold War, the United States faced a series of challenges from “rogue regimes” who stood opposed to American interests by oppressing their people, threatening their neighbors, and developing weapons of mass destruction. In each major case – for example, Cuba, Iran, Iraq, Libya, and North Korea – few top officials ever had the conception that the best way to change behavior was to delink these issues from that of economic engagement, and hope that greater wealth would automatically cause target countries to become democratic, peaceful states. In fact, the logic of sanctions makes the exact opposite assumption. When the rival country in question is not China, sanctions are said to make it more likely that the problematic regime will be replaced by leaders more amenable to American interests and values ( Solingen 2012 ; Niblock 2002 ). Whatever the plausibility of the theory of how China’s greater wealth would influence its internal politics, the fact that the idea was applied so selectively casts doubt on the importance of ideology as a causal factor. American leaders have simultaneously been able to believe both that sanctions and economically harming a regime would lead to democratization, and the same for economic growth, depending on the nation in question. This shows how ideological justifications can be post hoc rationalizations for what leaders want to do anyway. (emphasis original)   (0 COMMENTS)

with Lynne Kiesling   One of the few things that has made this particular bleak midwinter bearable has been the sudden rise of the viral game Wordle. For those who have not yet been initiated, Wordle offers a single puzzle each day. The goal is to guess a 5 letter word. You have only 6 guesses to get it right. After each guess, color coded squares indicate which letters are in the secret word and in the right place, which are in the word but in the wrong place, and which are not in the word at all. It’s a charming little game, made all the more fun by the restraint it imposes (Only six guesses! Only one puzzle per day!) and by the ease with which one’s success–but not the solution–can be shared on social media. The game has spawned imitators of all sorts: an equation based version called “Nerdle,” a version called “Absurdle” where the secret word changes as you play the game, and a four-letter word version called “Sweardle.” Others are certainly being created as this post is being written. You can even play Wordle in French, si vous voulez. On January 31st, The New York Times announced that it had purchased Wordle for a price in the low 7 figures.  Naturally, we’re pleased for the game’s creator. But the flurry of concern this has raised among Wordle fans reminds us of nothing so much as the 18th and 19th century debates over enclosure in England.  Enclosure is the practice of privatizing land that has been held in common by a community. These commons and customary rights dated from the time when farming best practices involved rotating crops among fields and leaving one field unplanted to regenerate. That field was available for grazing livestock. In the 17th century, enclosures were motivated by improvements in agricultural technologies and practices that could increase yields and output, although the magnitude of that actual effect is still a matter of debate among economic historians. These “first round” enclosures were typically governed in communities by using a unanimity rule, which almost certainly meant that those being dispossessed of customary grazing rights had to be compensated for the loss. The most fertile fields were the first to be enclosed, and by the 18th century many of the most mutually-beneficial enclosures were complete. In contrast, 18th century enclosures, backed by new Parliamentary legislation passed by landowner MPs, required only a community majority rule rather than unanimity.  Land that was formerly open for small tenant farmers and others to graze their animals was closed off from that use and reserved for private use by larger landowners with larger flocks and more political power. As enclosure became an increasingly common practice and was backed by this increasingly heavy handed use of political clout, protests grew and even became violent. Read more on the history of enclosure from Deirdre McCloskey here, here, here, and here. See also the entry on Tragedy of the Commons in the Concise Encyclopedia of Economics. Obviously, the owner and creator of Wordle can sell it to whomever he likes. He made it. It’s his. Private property for the win. We’re not objecting to the sale. But we are noticing that, because Wordle has been free to play and easy to share, and because The New York Times requires a subscription for its most popular games and puzzles, people are very worried that an enjoyable game that has been treated as a common pool resource is about to be enclosed. As of this writing, the NYT has said that “At the time it moves to The New York Times, Wordle will be free to play for new and existing players, and no changes will be made to its gameplay.” But no assurances have been given about Wordle remaining free to play in the future. If the NYT is going to leave Wordle free to play, why would they pay a seven-figure sum to acquire it? Are they planning to enclose the commons and remove the perceived customary rights of incumbent Wordle lovers? We’re fascinated by how quickly people become invested in something they consider a common pool resource. When we talk about the kerfuffle over enclosure in the 18th and 19th centuries, we tend to focus on how enclosure overturned centuries worth of assumptions about the ways that land holding, animal husbandry, and English culture worked. Wordle has only been around for 6 months or so. We’re also interested to see that concerns over enclosure don’t just arise over vital resources for sustaining human and animal life. They can crop up over a word game.  We haven’t seen any Wordle riots yet. And we’re certainly hoping that we don’t. But for students of economics, or for teachers of economic history, Wordle makes an interesting object of study, as well as a good way to kill time on a coffee break. (0 COMMENTS)

During my recent visit to Austin, I interviewed Richard Hanania for the Salem Center’s podcast.  Very wide-ranging, hence the title: “The Politics of Everything.”  Enjoy! (0 COMMENTS)

In a recent tweet, George Selgin pushes back against the view that the Fed creates asset price bubbles that persist for more than a decade.  But then why do these theories keep finding support? The basic problem in economics, especially in macroeconomics, is that people tend to believe what seems plausible, not the view supported by scientific theory and evidence. The field is so complex that many interpretations are possible. This is why macroeconomics is cyclical, much like many of the arts, or like the hemline of women’s dresses.  Theories go in and out of fashion for one simple reason—their plausibility varies with the state of current events. There are three true facts that give the hypothesis of Fed created asset price bubbles a superficial plausibility: 1. Over the very short run, the Fed controls short-term interest rates via monetary policy. 2.  When the Fed cuts its interest rate target, asset prices often rise immediately on the news. 3.  Market interest rates have been trending lower for more than 40 years, and asset prices have risen sharply. An average person looking at those three true facts might be inclined to reason as follows: “The Fed has been reducing interest rates on and off for 40 years.  We know that asset prices rise when the Fed reduces interest rates.  Asset prices have rising sharply in recent years, far faster than the overall rate of inflation.  Hence asset price bubbles are being created by expansionary Fed policy.” Here’s why this view is a cognitive illusion: 1. Real interest rates have been trending lower for 40 years for reasons essentially unrelated to monetary policy.  The Fed has cut its target rate in response to falling equilibrium interest rates. It’s a follower, not a leader. If that were not the case, inflation would have been accelerating over the past 40 years. There is absolutely no mechanism by which money can “go into” asset markets but not goods and services markets.  Monetary policy is either inflationary, or it isn’t. [BTW, money doesn’t actually “go into” markets, it goes through them.  For instance, did lots of money “go into” the stock market on October 19, 1987, when stocks crashed by 22% on record volume?] 2. When the Fed cuts its target short-term interest rate by more than expected, long-term real interest rates sometimes rise.  But even in those cases, stock prices often rise sharply (for instance, on January 3, 2001.)  The mostly likely explanation is that both stock prices and long-term real interest rates rose on expectations that monetary easing would lead to higher economic growth. These facts lead to a situation where people are especially likely to see imaginary “bubbles” after long periods of a depressed economy—a cognitive illusion.  During these periods, news of monetary stimulus may boost asset prices for reasons essentially unrelated to lower interest rates—expectations of faster growth.  Interest rates become a mere epiphenomenon.  At the same time, “secular stagnation” leads to lower equilibrium real interest rates, which means future expected rents and dividends are discounted at a lower rate.  That makes the equilibrium level of house and stock prices unusually high relative to rents and dividends, looking to the average person like a “bubble”. Many years ago, I predicted that people in the 21st century would be obsessed with “bubbles”, a topic hardly even mentioned by economists during the first 30 years of my life (1955-85).  It’s an endless battle, because most people will always go with the view that is intuitively plausible. HT:  Patrick Horan (0 COMMENTS)

  The interview is here. It’s about 5 minutes. I think John looks good with a beard. (0 COMMENTS)

Ben Zycher, an energy economist with the American Enterprise Institute and my predecessor as senior economist for energy with President Reagan’s Council of Economic Advisers, saw my recent post on subsidies to U.S. fossil fuel industries and sent me the following. I post it with his consent. The often-criticized “subsidies” for fossil energy in my view are not “subsidies for fossil energy” properly defined. There is the percentage depletion allowance, which is just a form of depreciation; all extractive industries are allowed it, and the only exception is the major integrated oil companies, which are required to use standard cost-based depreciation. As a practical matter, it is limited to very small fossil fuel producers. There is the partial expensing of intangible drilling expenses (for the most part labor costs); because all R&D is treated that way, it not a “subsidy” for fossil energy. (It may be inappropriate in that the costs of creating a capital asset ought to be depreciated rather than expensed, but that is a separate question.) There used to be (until the Trump tax bill) the 9% (Section 199) credit for manufacturing output; all “manufacturing,” as defined by the wisdom of the IRS, received this, and so it was not a “subsidy for fossil energy.”  (I think that there actually is an Earl Thompson-type efficiency argument for it: The likelihood of price controls during a future emergency exceeds zero, and so there might be underinvestment in “manufacturing” beforehand.) The environmental left pretends that the absence of a tax or other constraints on fossil-fuel use in the context of GHG emissions is a “subsidy”; that is silly, as it assumes the answer to the climate policy question and, anyway, the absence of any tax can be construed as a “subsidy” if one assumes a sufficiently high number for the value of public services received by a given industry.  There is the further matter that substantial amounts of both federal and state highway fuel taxes (20 percent?) are used not for highways but instead for mass transit, bicycle lanes, and other programs not providing benefits for consumers of highway fuels. There is the LIFO provision in the tax laws, which hardly is limited to fossil producers, even if we assume that it is inefficient simply for discussion purposes. (That assumption is very far from obviously correct.) Even if we ignore all this and assume that the “subsidies” for fossil energy indeed are “subsidies” properly defined, the Congressional Research Service analysis shows that fossil fuels are about 78 percent of energy output and about 26 percent of the “subsidies”; renewables (including hydropower), respectively, 13 percent and 65 percent; and nuclear, respectively 9.5 percent and 1.7 percent.  The major “subsidies” for fossil fuels are outside the U.S., taking the form of consumption subsidies (artificially low prices) in particular in less-developed economies, as a tool to support living standards/consumption and so protect social peace (or the tenures and perhaps the lives of the incumbent officials). See this: https://www.nationalreview.com/2021/05/fiction-vs-reality-on-fossil-fuel-subsidies/   (0 COMMENTS)

“CEOs make too much and they exploit the common worker.” This is a refrain I hear with surprising regularity at college. When pressed, many claim it seems impossible that one person could produce something of so much value, while others do not. However, many of the voices that decry income inequality see nothing wrong with preferring Charli D’Amelio, Kanye West, or Andrew Sullivan’s content. Consuming celebrity content tends to promote the very income inequality they think should be impossible. Fortunately, these entertainers can teach us something about how the ‘superstar’ effect works with, well, superstars. The superstar effect is when an individual gets a disproportionate share of the gains from what seems like small differences in ability. In the digital age, more of the economy has converted to winner-take-all situations because the marginal costs of producing an additional unit of a good are small, and the fixed cost associated with getting started is high. If two products cost the same, but one is better, people are almost always going to choose the superior product. Since there is not a clear limit to the supply of the superior product, only the best services are frequented, and wealth is distributed disproportionately to the especially talented. Some may suggest we resist the income distribution that comes from superstar firms. In effect, this means choosing inferior goods over superior goods. If it costs ten dollars to see a movie, I’d prefer to watch a good one. Resisting the superstar effect may result in having a society of worse. As a general rule, people prefer having the best option for a given price and prefer better products. In effect, resisting a more unequal distribution means choosing worse stuff. Charli D’Amelio is the among the most famous of the TikTokers. She started posting dance videos in 2019 and has leveraged her 100 million followers to obtain sponsorships, and create a podcast and a makeup line that has moved her net worth to $20 million dollars. The popularity she has attained has resulted in a considerable windfall. One can imagine that D’Amelio may not have been as popular had she gotten involved later in TikTok, or that she exploits the employees of TikTok by sharing a disproportionate share of the platform’s gains. In a sense, these arguments against her wealth boil down to the premise, “you didn’t make that.” Still, the revealed preferences of those who prefer to purchase her products signifies that she creates something extraordinary. If it was as simple to create value as detractors claim, it seems odd that others would not be in similar positions. Kanye West is another example. As a rapper, he was known for his creativity and artfulness and is one of the best of all time. His net worth is around $1.8 billion dollars, which is fueled in large part by his Yeezy brand. The value of the brand in turn, builds on the status associated with his music. There are scores musicians, some who probably have lyrics almost as good as Kanye’s. However, few consumers want to pay for second best, and the cost of producing another ‘Homecoming’ download is infinitesimal. The small differences in a winner-take-all environment matter. Journalism is dying has become another standard refrain. A better refrain might be that journalism is becoming customizable. Instead of having to pay for a New York Times subscription, I can choose to read only the authors I see as insightful. The creation of Substack has made it so that institutions are less able to gatekeep authors people want to read, and it allows readers to avoid paying for the chaff. The beneficiaries of the customizability of journalism are those who produce content people are interested in. Andrew Sullivan is an example. After leaving New York Magazine for expressing an unpopular opinion, Sullivan quadrupled his income and can be paid closer to the value he creates, while maintaining editorial control. This trend of people being paid significant sums for the value they create is no different in the business world, but it seems significantly less flashy. Tyler Cowen estimates that the skillsets of CEOs allow them to capture between 68 and 73 percent of the value they bring to firms compared to an estimate that workers are paid approximately 85% of their marginal product on average. The value they create is harder to visualize than the output of celebrities, but it illustrates the same concept.   (0 COMMENTS)

Interpersonal comparisons of utility (that is, of preferred positions on an individual’s preference scale) are known to be scientifically impossible in economics. LSE economist Lionel Robbins, who published the second edition of his famous Essay on the Nature and Significance of Economic Science in 1935, argued that interpersonal comparisons of utility could not be used to justify either redistribution of income or even free trade—both policies that he favored, very strongly in the last case. (See my anniversary review in the Winter issue of Regulation.) Modern economic theory does not even need to assume diminishing marginal utility of income or consumption, only a diminishing rate of substitution between goods. Constitutional political economy à la Buchanan cleverly avoids the impossible mission of comparing individual utilities, as I point out in my review of James Buchanan and Gordon Tullock’s classic book The Calculus of Consent: By focusing on each individual’s rational decision to adhere to a social contract that serves his interests, Buchanan and Tullock avoid the problem known as the interpersonal comparisons of utility. Such comparisons are scientifically impossible because each individual’s utility is subjective, in his own head. But, of course, an individual can decide whether he prefers one situation to another for himself. There is no way to demonstrate that the poor get more utility from a given redistribution than the rich lose in financing the transfer. Does a rich woman from whom $50 is taken and transferred to a poor man lose less utility than the latter gains? Suppose the rich woman would have bought one more bottle of Bourgogne and the poor man buys three cases of beer with the transfer. Does your (or another external observer’s) opinion change if we suppose that the poor man buys three jugs of milk instead? An external observer must evaluate what is better, according to his own preferences or perhaps values (“in an ideal society, the poor should drink more milk”). Interpersonal comparisons of utility are moral opinions (what society should be) or, if it is one of the parties involved who makes the comparison, self-interested claims (“I want more beer”). Hence the impossibility of scientific interpersonal comparisons of utility. There is  no way to tell whether the transfer has increased or decreased “aggregate utility,” an expression that have no ascertainable meaning in economics. Add to this that if money is redistributed from a few rich to many poor, the gain by any of the latter must be so much smaller, and the argument for redistribution is even more debatable. There are extreme cases where nearly everybody would agree that little utility is lost on one side and much gained on the other: consider the transfer of $10 from Bill Gates to a homeless man in a tent near a Macdonald’s. But this still remains merely an intuition because the ordinal ranking of some good (more or less preferred to another good) is not comparable across the preferences of two separate individuals. Anyway, moral intuitions about such extreme cases don’t seem to provide any general justification for coercion. Some argue that parents implicitly make utility comparisons among their children. But is this really what parents do or should do? Don’t they instead compare different future opportunities for each child while assuming the equality of their children? Children, by definition, cannot make such evaluations, and their parents are the best placed to do it. Even then, some external observers may disagree with some parents’ decisions. The two parents may disagree among themselves. At any rate, the government is not our parent. One might think he can read in a friend’s mind, but somebody else, including the friend himself or herself, may think differently. When they are not constrained, politicians and other rulers may, implicitly or explicitly, make interpersonal utility comparisons among their subjects. This does not prove that their comparisons are not arbitrary or self-interested. As Anthony de Jasay wrote, “when the state cannot please everybody, it will choose whom it had better please.” Indeed, the redistribution often goes from the poor to the rich. Some economists, including Nobel prizewinner Amartya Sen, have proposed counter-arguments against the rejection of interpersonal utility comparisons. One is that external observers or public discussion can form objective opinions on interpersonal utility. Another one is that utility as judged by the individual himself—that is, what he prefers—is not really what he prefers. Still another counter-argument is that there is more in life than what an individual likes in his own life. All these counter-arguments seem to crucially depend on assuming that external observers know, in a paternalist or elitist way, what other individuals prefer or should prefer. (For a summary of the counter-arguments, see Amartya Sen, Collective Choice and Social Welfare, Expanded edition [Harvard University Press: 2007], pp. 1-41.) Influenced by Buchanan, I would argue that, if we hold the equality of all individuals to be a crucial normative value, public policy and the very existence of government cannot be justified by impossible interpersonal comparisons of utility. The justification must come from the enforcement by a limited government of the general rules to which individuals can be presumed to unanimously consent at some abstract social contract or constitutional stage (see James Buchanan, Why I, Too, Am Not a Conservative [Edward Elgar, 2005]; and his seminal The Limits of Liberty [1975] [Liberty Fund, 2000]). Perhaps we can fit in this approach the economic justification of government as a producer of strict “public goods” or the Hayekian theory of the rule of law as coordinating conventions. Otherwise, only anarchy seems to be morally justifiable. (0 COMMENTS)

Richard Hanania’s new Public Choice Theory and the Illusion of Grand Strategy is an eye-opening contrarian take on the academic discipline of  “international relations.”  It is a self-conscious critique of the so-called “realist” view that countries maximize their long-run national interest.  In the next three posts, I’ll share some highlights. The central argument: [T]his book argues that both primacy and liberal internationalism are labels put on a collection of policies that are not primarily motivated by geopolitical goals. The public choice model provides a better explanation of US policy than that of grand strategy. Decisions are made mostly on the basis of short- term political considerations, with a playing field tilted by concentrated interests. Different interest groups control different aspects of U.S. foreign policy, making U.S. foreign policy simply incoherent. [I]n dealing with rising powers, the United States adopts a strategy of what I call build, then balance. It trades with such countries, helping them become wealthier, and then balances against them when economic power is translated into military capabilities. For example, U.S. business mostly controls trade policy, but the military-industrial complex handles military affairs. Even more than in other areas, voters cannot simply “trust the experts” because the questions are too complex: There is no experiment or study that can conclusively speak to many of the large questions in the field of IR. How can we know for certain whether the US presence in East Asia deters the Kim regime or needlessly provokes it? Or whether a world without American hegemony would spin into chaos, or see various regional actors come together and largely work out their differences peacefully? One can uncover statistical relationships through large-N studies, and this can at best provide some guidance if we trust the methodology. Nonetheless, one can always argue that a relevant causal relationship is unlikely to apply in any given case, or even that with changes in technology, culture, and international norms over time, it cannot be established with certainty that a causal relationship established between one variable and another in one era provides any guidance for the contemporary period. Thus: Consider that at the end of 1945, an observer would have had a great deal of data suggesting that in the coming decades there would be great power wars, and also that when wars were fought the combatants would use the most effective technologies possible against their opponents. Such predictions would have been consistent with the way nations have behaved across recorded history. Yet since that time, there have been no great power wars, and no use of nuclear weapons either ( Hanania 2017 ; Pinker 2012 ). Why is this the case? No one can say for sure. Although some IR theorists credit nuclear weapons with keeping international peace, this is difficult to square with the fact that there have been multiple cases of nonnuclear powers attacking nuclear states without any apparent fear of retaliation ( Paul 1995 ). Given that the list of technological, political, and cultural changes in the world since 1945 is practically endless, pinning down what exactly has determined our unprecedented run of great power peace may be impossible. Cool details on the “iron triangle“: Bender (2010) found that between 2004 and 2008 around 80% of retired three- and four- star generals went on to work as consultants or executives in the defense industry. This was up from about 50% in the period from 1994 to 1998. Moreover, many of these generals see overlap between their careers in government and the private sector, further raising conflict of interest issues. Bender found dozens of generals who maintained Pentagon advisory roles while working for corporations, often being recruited into the private sector before retirement. The practice of “rent-a- general” is so well- developed that some niche companies have emerged, including the Four Star Group, in which generals use their experience and contacts within the Pentagon to make profits in equity investing. Chomsky’s a realist, and he’s wrong: In order to fi nd a “grand strategy” in American behavior, observers have had to be creative. Chomsky acknowledges that Serbia had no direct strategic or economic value, but compares the United States to a mob boss who occasionally must stamp out any signs of disrespect ( Chomsky and Barsamian 2010 :54). In this way, practically any intervention can be labeled as part of a “grand strategy.” To grasp Hanania’s central thesis, just look at a map: In addition to investigating under which conditions the United States uses force, it is interesting to consider the issue of American troop deployment. Are the patterns we see consistent with a grand strategy, or a public choice model? According to the Defense Manpower Data Center, not including active war zones, as of September 2019 the United States had about 200,000 soldiers stationed abroad. The top five countries with the largest American presence were Japan (62,482), Germany (47,066), South Korea (29,565), Italy (15,411), and the United Kingdom (10,586). These states hosted over 80% of American military personnel stationed abroad. In 1951, during the Korean War, the top five countries were South Korea (326,863), Germany (176,084), Japan (172,861), the United Kingdom (26,313), and France (22,876); though the total numbers are different, the bulk of American forces 30 years after the Cold War are in almost exactly the same places they were at its beginning (see Kane 2004 )… Looking at the maps reveals an interesting pattern. What was happening in the world in the 1940s and 1950s is a better guide to American troop distribution abroad today than anything that has happened since. The top four countries with the largest American presence are the nations that were the main members of the defeated Axis powers and the country that the United States defended in the Korean War half a decade later. It seems very unlikely that the strategically most important parts of the world in 2019 were those that happened to require the largest American troop presences in the 1940s and early 1950s. There is no strategic threat to Italy, and the threat that kept the United States in Germany after World War II has disappeared. (emphasis mine) This inertia fits a broader pattern of foreign policy incoherence: American policy does not appear to be driven by a quest for global supremacy either. This is particularly true in the conflicts since the end of the Cold War. Afghanistan can be justified as part of the war on terror. Iraq did not in any way increase American power; in fact it empowered Iran. The United States was not even willing or able to ensure that American corporations would profit from Iraq’s oil reserves, discrediting the claim of anti- war activists that the United States was spilling “blood for oil” ( Walt 2009 ). In Libya, Mummar al-Gadhaffi had made a surprise announcement in late 2003 to dismantle his weapons of mass destruction (WMD) program. He became an ally in the war on terror and made amends for terrorist attacks decades earlier as Libya was declared a success for the Bush administration ( MacLeod 2006 ). When he was overthrown in 2011, it was a clear signal to every other dictator in the world who might otherwise be tempted to trust the United States on matters of national security. North Korean officials years later specifically cited Libya as a reason not to give up their nuclear deterrent ( Specia and Sanger 2018 ). More highlights later this week.   (0 COMMENTS)

What does it mean to treat the family like a firm, and how might this strategy work? That’s the idea behind Emily Oster‘s latest book, The Family Firm, and the topic of this episode. Host Russ Roberts welcomes Oster back for her fifth EconTalk appearance. She’s had a lot to share over these espisodes about being pregnant, about the challenges of parenting infants, and in her latest title, raising school-age children. (When she’s not investigating the effects of the pandemic on children…) Oster is known for being a data-driven parent, but what she stresses in this episode is more deliberateness than data. (In fact, the conversation includes plenty of references to areas where the data we have at our disposal as parents is not very reliable…) Let’s hear what you have to say. Use the prompts below to share your reaction with us, or to start a conversation offline. If you really want to go “Full Emily,” you might start with your parenting partner…     1- What does Oster mean when she argues we don’t recognize the interconnectedness of our decisions? To what extent do you think Oster is right in suggesting we might attend to our parenting decisions in the same way we make choices in our jobs?   2- How can Oster’s approach help you deal with your partner when making parenting decisions, and why does she suggest her method is most useful when you and your partner don’t agree?   3- Oster admits that most research on the common questions we want answers to is of limited value, and Russ of course reminds us that what we really care about often can’t be measured. What are some of the areas Oster suggests the data is unreliable? Which among these parenting “truths” most surprised you, and why?   4- Roberts concludes by asking Oster how writing this book has changed her views as a parent. What, if anything, will you do differently as a parent after this episode? What is your family’s “mission statement?” (P.S. I’m trying to write down the three three things I most want to do each week…)   (0 COMMENTS)