I thought I had told this story on EconLog before but a thorough search convinces me that I haven’t. It’s a story about how an insurance company treated 3 of my lost books from a devastating fire. In February 2007, a fire destroyed the 19th-century wooden building in which I had my office in Monterey. I don’t know if I would have lost everything if I had got in soon enough, but days and weeks later, with the rain coming down (my office was on the top floor) pretty much everything was destroyed. Early on, the Monterey city manager, Fred Meurer, refused to let me go into the building. When I pointed out that someone had offered free use of his cherry picker so that I wouldn’t have to touch the floor (which easily could have fallen through), Meurer came up with another objection: asbestos. I pointed out that one couldn’t get badly sick from asbestos with the little exposure I would have. Meurer didn’t budge. That’s the bad news. In what also looked like bad news, I was underinsured. I had a computer, printer, 6 file cabinets full of files, a nice couch, 4 nice wooden book shelves, and about 1,500 books. The representative from Safeco, my insurer, agreed with me that I would easily hit the $14,000 limit on my policy and so he sent a check right away for $8,000 so I could quickly set up everything I needed in a new office. I told him that I had 3 autographed books from Friedrich Hayek and a few from Milton Friedman, who had died 3 months earlier. He told me that since I was already at the $14,000 loss point, I wouldn’t get any extra for those books. Then, about a week later, he called and told me that he had found a provision in my insurance policy that he and I had both missed: I was allowed up to $10,000 for “fine art.” “And let me read you the definition of fine art,” he said. It included books autographed by famous authors. He then told me that this wasn’t his specialty but Safeco dealt with a company that specialized in valuing autographed books. He suggested that I send him my estimate of value. I came up with a number of $200 per book, figuring that no one could say that was too high. I also told him that meanwhile I had discovered that my autographed books from Milton Friedman were at home and at my campus office. About a week later I was flying to Baltimore Washington International Airport (BWI) from Monterey on Delta. I was on sabbatical and I was about to spend about 10 weeks of the sabbatical with the economists at George Mason University. (Thanks to Don Boudreaux, then chairman of the economics department, for letting me have an office.) The flight was from Monterey to Salt Lake City and then from SLC to BWI. As soon as I got off the flight in SLC, I turned on my flip phone and the phone rang. The woman on the other end told me that she was from the company hired by Safeco and she was calling to discuss the value of the Hayek books. “I notice that you said you thought they were worth $200 each,” she said, “how did you come up with that?” Oh, here we go, I said to myself. They’re going to dispute even that. “I figured no one could argue that they weren’t worth at least $200,” I replied. “I know something about the value of books autographed by Hayek,” she responded. “You don’t get it,” I replied, “these weren’t just books autographed by Hayek; these were books autographed by Hayek to me.” “Mr. Henderson, you don’t get it,” she replied, “these books aren’t worth $200 each; they’re worth $2,400 each.” I was dumbfounded. This conversation occurred as I was walking to the gate for BWI. I thanked her and hung up. “How much would I have to pay to upgrade to first class?” I asked the Delta employee. “$300,” he answered. So I did. Spending 4% of my $7,200 windfall seemed about right. Note: The picture above is of Hayek autographing my copy of his Studies in Philosophy, Politics, and Economics at the second Austrian economics conference at the University of Hartford in Hartford, Connecticut in June 1975. This was 6 months after Hayek had been presented with the Nobel Prize. Studies was one of my favorite of Hayek’s books. The photographer was Richard Ebeling. I had the picture as a book mark in my copy of another of my favorite of his books, Individualism and Economic Order. So of course it burned in the fire. I regretted that mainly because when I taught “The Use of Knowledge in Society,” I had showed the students the pic of Hayek and me. A few years later, Richard Ebeling emailed me and attached the above picture, asking if it was I. I  replied that yes it was, and I love him. (0 COMMENTS)

December 25th is certainly a time for celebration among those of us observing Christmas, but today also marks a day for all of humanity to rejoice and celebrate, regardless of creed, for today marks the 30th anniversary of when the Soviet sickle and hammer last flew over the Kremlin, marking the dissolution of the Soviet Union. The inhumanity and deprivation of that tyrannical regime remains terrible to contemplate. According to political scientist R.J. Rummel (1994), conservative estimates of the deaths deliberately caused by Soviet government policy, or “democide” as he refers to it, between the years 1917 and 1987 amount to almost 62 million people. Let that figure sink in, particularly because these figures do not include combat deaths on the Eastern Front during World War II (which would further increase the figure by millions), but deaths caused by state-sanctioned famine, imprisonment, and outright murder. What’s tragic about such figures is that the objectives of socialism were diametrically the opposite- namely, to bring forth a more economically prosperous world without class struggle. As Karl Marx and Friedrich Engels state in The Communist Manifesto (1848 [1998], p. 75), the “proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the state, i.e., of the proletariat organised as the ruling class; and to increase the total of productive forces as rapidly as possible.” Despite the abject failure of socialism to achieve its stated and well-intended ends, and the appalling figures outlined above, renewed sympathies for central planning are not absent. For example, according to a poll conducted by the Levada Center (2021), a Russian non-governmental research organization, as much as 60 percent of Russians are supportive of central planning as an appropriate means for allocating resources, with a corresponding decline in acceptance of a market economy[3]. Perhaps this figure speaks more to the way in which “privatization” at the hand of Russian “oligarchs” was implemented during the post-Soviet transition period, and that Russians have come to associate a market economy with cronyism. Written in the memory of my late father-in-law, Spiridon Albu, who persevered the tyranny and deprivation of socialism in Romania and was a never-ending support of my pursuit to articulate the case for a free society. My point here is not to use this poll to infer such a conclusion, but to appeal to a whole generation of individuals who are alive today, and who might still appeal to socialism as the means for organizing an economic system, but have no living memory of life in the Soviet Union, nor of the tyranny and deprivation it imposed behind the Iron Curtain (as has been recounted to me by my loved ones who, fortunately, survived that tyranny to celebrate Christmas with me). Did socialism fail in the Soviet Union because the “wrong people” were in charge, or did socialism fail because it generated the very conditions for the wrong people to become in charge? The answer to this question, I argue, turns on the continued relevance and understanding of an argument first put forth by the great Austrian economist, Ludwig von Mises. In the context of Soviet experiment with socialism, Mises wrote his classic article “Economic Calculation in the Socialist Commonwealth” ([1920] 1975), in which he argued that abolishing private property in the means of production would eliminate the possibility of central planners to allocate scarce resources according to their competing consumer uses, resulting in economic waste. This is because only within a context of private property are individuals able to exchange resources, the act of which generates exchange ratios denominated in money, also known as market prices, which are necessary to calculate the opportunity costs of using resources in the production of one consumer good, as opposed to another. Therefore, the impossibility of economic calculation under socialism is based not on any lack of motivation among central planners to allocate resources according to its most valued consumer uses, but because, without private ownership of those resources, the context-specific knowledge that is necessary – communicated through market prices in the form of profit and loss signals – simply does not exist for the central planner (see Boettke 1998, p. 149). The failure to understand the logic of Mises’s argument by economists outside the Soviet Union only reinforced the myth, through Soviet propaganda and fictitious statistics, that the Soviet GDP would eventually surpass that of the United States (Levy and Peart 2011; see also Ebeling 2020). Mises’s critique was the first salvo in what became known as the Socialist Calculation Debate, in which proponents and opponents of Mises attempted to defend or counter his claim, respectively. For my purposes here, I will not directly address the arguments made during that debate, the definitive account of which was written by Don Lavoie (1985a).[4] Rather, the main point I wish to argue here is that the “knowledge problem” (Hayek 1945) that is inherent to the problem of economic calculation extends not only to the comprehensive planning of an entire economy, but also applies to any form of non-comprehensive planning in which an individual is not assigned residual claimancy for their decision-making. To illustrate this point, let’s take a very simple and mundane example of economic calculation that I’ve used elsewhere (both here at EconLog and in a working paper co-authored with Peter Boettke and Peter Jacobsen), one in which scarce resources must be sorted to consumers according to their willingness to pay: the allocation of overbooked passenger seats on an airline. When passenger seats are overbooked, from an economic perspective, there is a conflict between consumers because of an imperfect assignment of property rights by the airline. This raises a question: what method of (re)allocation can be utilized to resolve such a conflict? An involuntary method of reallocating seats can be used, known as “bumping,” the consequence of which could be the violent removal of an individual from their seat, as exemplified by the United Airlines 3411 incident in 2017. Otherwise, a voluntary method can be used, utilizing market pricing to calculate the scarcity of airline seats, as was first devised by Julian Simon (1968) in the form of a reverse auction. According to this latter method, passengers are assigned the ability to exchange claim to their seats, in effect creating the conditions for economic calculation. This exchange process generates knowledge that is discovered only through the reverse auction, namely the discovery of who is the person with the lowest reservation price. Given that airlines in this case are private, for-profit firms, one could not claim that its owners are neither more nor less motivated before or after the implementation of the airline overbooking auction system. Therefore, a lack of motivation cannot explain why an airline had been unable to allocate airline seats to consumers who value them the most. Rather, without the knowledge generated through the reverse auction, it would be simply impossible for the airline to discover which individual would have the lowest reservation price. To be fair, one could object and argue that Mises’s critique (and my example above) are not applicable here. Given that Mises raised his critique in the context applied of economy-wide central planning, it may be the case that I am attacking a strawman, which is not applicable to today’s context, especially if the word “socialism” is being conflated today with “a larger welfare state,” “income redistribution,” or some other loose terminology that does not fit the classic definition of socialism (i.e. abolition of private property in the means of production). Moreover, one might also object that socialism as practiced in the Soviet Union, as well as Eastern and Central Europe in the past, or Cuba, North Korea, and Venezuela in the present, are not exemplary of “real-world socialism,” because their failures were caused by the “wrong” person being in charge, someone who was not well-motivated to allocate scarce resources in a peaceful, productive and responsible way. However, “[w]hether applied to comprehensive or noncomprehensive planning,” Lavoie (1985b, p. 57) argues, “the knowledge problem argument crucially depends on the view that knowledge is not the same as data, that is, given pieces of explicit information” that be gathered through search. Rather, “economic rivalry among competitors in the market,” as in the case of an auction, “generates knowledge that no rival on his own could have possessed in the absence of that rivalry” (1985, p. 26), particularly the price that an airline must pay to the individual giving up his or her seat as compensation for the error of overbooking. The point here is that even if we assigned Mother Teresa as a central planner, however well-intended or well-motivated she may be, she would still be precluded from the knowledge necessary for economic calculation, because such knowledge, embodied in market pricing, does not exist outside the context of exchangeable private property. How is all of this relevant to the example of the auction solution to airline overbooking? Nothing about the failure of an airline to assign airline seats according to consumer valuations can be attributed to the lack of motivation on the part of the airline, since it is a private firm striving to earn the highest profits possible. Such airlines were just as motivated to maximize profit before the existence of the overbooking auction as they were after its implementation. And yet, without economic calculation established through a reverse action, airlines are unable to address the misallocation of overbooked airline seats, despite being well motivated to do so. Again, my example may seem, at best, irrelevant, or at worst, just the silly cleverness of an economist with an ideological ax to grind. My point, however, is not a trivial one, but one with deadly serious implications. That is, if there are renewed calls for socialism, then how can we even begin to even reconsider its implementation on a grand scale if it is impossible to rationally calculate the price of overbooked airline seats outside the context of an auction, even under the best-case scenario of a well-motivated, profit-maximizing firm? The point of my illustration has not been meant to be an exercise of cleverness, but an exercise of warning. When so many innocent individuals have paid for the ideal of socialism with their own blood, as illustrated by the figures above, it is high time to remember that the nature of this problem, even under conditions as small-scale as an airplane, is not one of a lack of motivation, but of a lack of contextual knowledge that only emerges in the context of exchangeable private property rights. Moreover, if voluntary exchange and market pricing is not utilized as a means of competition for scarce resources, then individuals will learn involuntary methods of resource allocation, which is “why the worst get on top” under socialism, as F.A. Hayek (1944) argued. Overbooking on an airline without auction pricing as a solution can get an individual “bumped” from an airline against their will, but failure to comply with the central plan of socialist regime can get millions of individuals executed. Thus, socialism failed in the Soviet Union, not because the wrong people were in charge, but because the socialist economic system generated the very conditions for the wrong people to rise to the top and become in charge (see Boettke 1995). This continued relevance of Mises’s original contribution to the socialist calculation debate must be constantly reiterated, one that applies to planning and coordination not only across markets, but within any economic organization, both profit and non-profit. Without it, civilization and continued human progress hangs in the balance. Rosolino Candela is a Senior Fellow in the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics, and a Program Director of Academic and Student Programs at the Mercatus Center at George Mason University. References Boettke, Peter J. (1995). “Hayek’s The Road to Serfdom Revisited: Government Failure in the Argument Against Socialism.” Eastern Economic Journal 21(1): 7–26. Boettke, Peter J. (1998). “Economic Calculation: The Austrian Contribution to Political Economy.” Advances in Austrian Economics 5: 131–158. Boettke, Peter J., (Ed.). (2000). Socialism and the Market: The Socialist Calculation Debate Revisited (9 Volumes). New York: Routledge. Ebeling, Richard M. (2021). “Socialism-in-practice was a Nightmare, not Utopia: Ludwig von Mises’s Critique of Central Planning and the Fall of the Soviet Union.” The Review of Austrian Economics 34(4): 431–448. Hayek, F. A. (1944). The Road to Serfdom. Chicago: University of Chicago Press. Hayek, F.A. (1945). “The Use of Knowledge in Society.” The American Economic Review 35(4): 519–530. Lavoie, Don. (1985a). Rivalry and Central planning: The Socialist Calculation Debate Reconsidered. New York: Cambridge University Press. Lavoie, Don. (1985b). National Economic Planning: What is Left? Cambridge: Ballinger Publishing. Levy, David M., and Sandra J. Peart. (2011). “Soviet Growth and American Textbooks: An Endogenous Past.” Journal of Economic Behavior and Organization 78(1-2): 110–125. Mises, Ludwig von. ([1920] 1975). “Economic Calculation in the Socialist Commonwealth.” In F.A. Hayek (Ed.), Collectivist Economic Planning (pp. 87–130). Clifton: August M. Kelley. Rummel, R. J. (1994). Death by Government. New Brunswick: Transaction Publishers. Simon, Julian L. (1968). “An Almost Practical Solution to Airline Overbooking.” Journal of Transport Economics and Policy 2(2): 201–202.     [1] Written in the memory of my late father-in-law, Spiridon Albu, who persevered the tyranny and deprivation of socialism in Romania and was a never-ending support of my pursuit to articulate the case for a free society. [2] I thank Peter Boettke, Christopher Coyne, and Andreea Candela for their very helpful comments and suggestions. [3] I am very grateful to Konstantin Zhukov for his research assistance in pointing me to this reference. [4] For a selected collection of literature revisiting the socialist calculation debate, see also Boettke (2000). (0 COMMENTS)

In my recent post about Walter Block, I wrote: I notice that Provost Singh thinks that a statement that the Disability Act shouldn’t exist is racist and/or sexist. Seriously? Is she aware that one of the groups that has been most hurt by that law is people who are disabled? The reason is that the requirement for accommodating those with disabilities makes employers hesitant to hire disabled people. A commenter on my post, Daniel B, in what he called a rant but I thought to be a good comment, stated: Now that my rant is over, I must ask David to please post some ADA readings for us in the comments section 😀 I want to learn more! I replied that I was pretty sure I had read an NBER working paper on it some years ago. It turns out that I did, but I had forgotten who the authors were. The paper is Daron Acemoglu and Joshua Angrist, “Consequences of Employment Protection? The Case of the American with Disabilities Act,” NBER Working Paper #6670, July 1998. Here’s their abstract: The Americans With Disabilities Act (ADA) requires employers to accommodate disabled workers and outlaws discrimination against the disabled in hiring, firing, and pay. Although the ADA was meant to increase employment of the disabled, it also increases costs for employers. The net theoretical impact turns on which provisions of the ADA are most important and how responsive firm entry and exit is to profits. Empirical results using the CPS suggest that the ADA had a negative effect on the employment of disabled men of all working ages and disabled women under age 40. The effects appear to be larger in medium size firms, possibly because small firms were exempt from the ADA. The effects are also larger in states where there have been more ADA-related discrimination charges. Estimates of effects on hiring and firing suggest the ADA reduced hiring of the disabled but did not affect separations. This weighs against a pure firing-costs interpretation of the ADA. Finally, there is little evidence of an impact on the nondisabled, suggesting that the adverse employment consequences of the ADA have been limited to the protected group. Angrist, by the way, is one of the three co-winners of the 2021 Nobel Prize in economics. The paper was ultimately published in the Journal of Political Economy, 2001, Vol. 109, No. 5 (0 COMMENTS)

Part 1: Food Security Supporters of alternative agricultural systems often argue that present-day monocultures are primarily the result of climate change-inducing cheap petroleum and subsidy programs that benefit large-scale producers. They would rather leave fossil fuels in the ground, redirect government support towards “regenerative” approaches in which smaller and more diverse operations grow a variety of crops and keep diverse animals that complement each other, and have these operations serve primarily a localized “foodshed.” As stated by alternative food system guru Michael Pollan, the vast US federal agricultural policy apparatus should support “a transition to a new solar-food economy” by, for instance, adjusting payment levels to “reflect the number of different crops farmers grow or the number of days of the year their fields are green,” subsidizing four-season farmers markets, and rebuilding local distribution networks. This narrative is both incorrect and puzzling. For instance, the regional specialization of agricultural productions in the United States and elsewhere long predates the development of transportation fuels out of petroleum. Even more puzzling is that present-day alternatives look very similar to the way our ancestors once produced food, albeit supplemented with technologies whose development required an ever more globalized market. To critics of agri-business, however, modern practices were shoved down the throats of reluctant consumers. Unbeknown to them though, food security was a key consideration as will now be discussed. Farming activities are categorized as being either of a subsistence or commercial nature. Subsistence farming typically takes one of three forms. One is shifting agriculture where a patch of often newly deforested land is cultivated for a few seasons before being abandoned after its fertility has run out or weeds and other pests have taken over. Pastoral nomadism revolves around the movement of livestock from one grazing area to another depending on the local landscape and season. In some of the best locations though, individuals often practiced rudimentary sedentary tillage in which they continually exploited the same plot of land and, by necessity, produced a mixture of crops and animals raised for family consumption or trade with more or less distant neighbors. (For instance, the typical thirteenth century western European peasant strived “not exactly [for] self-sufficiency, but self-supply of the main necessities of life” such as bread, pottage or porridge, and ale.) In the context of shifting agriculture and sedentary subsistence farming, individuals preserve and store crop products at the end of the growing season and draw upon them until the next harvest. Farm animals are fed organic waste (including crop residues), low-grade forage (such as the low quality weeds that would typically appear on fallow land) and are left to scrounge for insects, greens, acorns, wild fishes and whatever other nutrition they can find. Some animals are used for power and transport (e.g., plowing, pulling a cart) while others provide intermittent variety in the diet (e.g., meat, milk, eggs and blood) along with valuable by-products (e.g., hides, leather, fibers and feathers). All of these also provide manure and can serve as a form of insurance against crop failures. In the words of agricultural economists George Norton, Jeffrey Alwang and William Masters, in subsistence agriculture livestock acts as “a savings bank and an insurance plan.” Like all agricultural producers, however, subsistence farmers could never avoid insect pests, diseases and bad weather during the growing and storage periods. The Roman poet Virgil alluded to some recurring problems and calamities in his Georgics. Weeds invaded the land. Voles and mice spoiled the threshing floor. Cranes and geese attacked the crops. Goats ate the young vines. Moles, toads and ants feasted on or undermined the farmer’s work. Virgil added that whatever production survived this onslaught could then be damaged or wiped out by summer droughts and winter windstorms, snow, hail or heavy rain. Even in good years, he added, a field might be accidentally set on fire. (Some of the calamities Virgil left out include frost, fungus and animal diseases, including diseases of work animals that severely reduced agricultural productivity.) These risks were traditionally minimized by growing different kinds of crops simultaneously, by producing as much as possible beyond the immediate year’s requirements, and by having one household work different parts of the local landscape (e.g., one family could simultaneously work a plot in a river plain and another on a hillside). “Catch crops” that could be grown quickly after the early failure of a more desirable one were often crucial. For instance, in the Mediterranean context, a failed winter wheat crop could be partly compensated by the planting of short cycle crops such as millet or dry legumes. In England, lesser spring-grown grains such as oats and barley played the same role for rye and wheat, while in central Pennsylvania fast growing buckwheat was another option. Unfortunately, no matter how diversified their operations were, subsistence farmers had no choice but to put all their food security eggs in one regional basket. This was always and everywhere a recipe for disaster. As Gregory of Nazianzus observed in the fourth century AD about the inland city of Edessa: There was a famine, the most severe within the memory of man. The city was in distress, but there was no help forthcoming from any quarter, nor any remedy for the calamity. The maritime cities support without difficulty occasions of want like these, since they can dispose of their own product and receive in exchange those which come to them by the sea. But we in the inland can make no profit on our superfluous products, nor procure what we need, having no means of disposing of what we have and importing what we lack. Fortunately, the 19th century saw the development of coal-powered steamships and railroads which made it possible for the first time in human history to move large quantities of food at a low price, not only on water but also on land. This transportation revolution not only paved the way to an ever more abundant, affordable and diverse food supply, but it also put an end to widespread hunger and misery in more advanced economies. Most people at the time were extremely grateful for these developments. Writing in 1856, British historian George Dodd observed that in the “days of limited intercourse, scarcity of crops was terrible in its results; the people had nothing to fall back upon; they were dependent upon growers living within a short distance; and if those growers had little to sell, the alternative of starvation became painfully vivid.” In 1862, economist and agricultural writer T. E. Cliffe Leslie reminded his readers about the “unmistakable warnings … in the last few years,” such as the potato disease, that “we cannot afford to be dependent for the staples of our food and industry on any single place or production.” In his 1871 Annals of Rural Bengal, William Wilson Hunter noted that an important set of preventive steps against famines included “[e]very measure that helps towards the extension of commerce and the growth of capital, every measure that increases the facilities of transport and distribution… [and whatever tends] to render each part [of a country] less dependent on itself.” In a speech delivered in 1875, the Australian entrepreneur Thomas Sutcliffe Mort observed that the advent of the railroad, the steamship, and artificial refrigeration had paved the way to a new age where the “various portions of the earth will each give forth their products for the use of each and of all,” the “over-abundance of one country will make up for the deficiency of another,” and so would the “superabundance of the year of plenty… for the scant harvest of its successor.” Humanity’s long history of famine and chronic malnutrition, he pondered, had not so much been the result of God’s not having provided enough to spare, but rather the unavoidable consequence of the fact that “where the food is, the people are not; and where the people are, the food is not.” It was now, he observed, “within the power of man to adjust these things.” This power is still very much with us and it would be nothing short of suicidal to turn our backs on it.   Pierre Desrochers, is Associate Professor of Geography, University of Toronto Mississauga. 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As his flying truck was clearing the half-frozen runway, Santa reflected on how the world had changed. His co-pilot was his Chief Diversity Officer, a blue hermaphrodite. (Ze was also his Chief Scientific Officer.) Her presence was not formally required by law but Santa knew he would otherwise get in trouble with “the authorities” and their armies of bien pensant minions. Not that Santa held any partisan political opinion: for decades, he had delivered the gifts requested by children, with due consideration to their parents’ wishes, and just wanted his customers to be happy. He had been a smiling merchant. “Merchant” is not the correct term because, as is well known, Santa did not charge anything for his services. But that was not an excuse for ignoring officially-defined fairness, as Google, Facebook, and Twitter had learned in times past. It must however be admitted that Santa partly financed his activities with ads from Amazon, the logo of which figured on all his gift bags. There is no such thing as a free lunch. Also, his flying truck was loaned by Space X and bore the company’s logo: there is no such thing as a free launch either. At that time, historians will recall, Amazon was still trying to survive a long decline while fighting new legal challenges from antitrust authorities, who had been lobbied by some new competitors. Poor economics, of course. Heavily subsidized universities had stopped teaching standard economics which, it was complained, transmitted “an oversized and anti-social view of the individual.” The State of California had forced Santa to fill 10% of his cargo space with non-gendered gifts. Although the required proportion did not correspond to straight demographics, it made sense given that non-gendered people were more privileged and much wealthier than average and typically spent much more on their children’s gifts. In a rare fit of dark humor, the old Santa had filled the mandated space with cowyouth revolver toys. The packaging of the gun toys also warned: “For Social Justice Enforcement Only.” Long guns bore the inscription “The Long Arm of the Law.” It would be incorrect to believe that Santa had become a moral nihilist. On the contrary, he had simple moral beliefs, perhaps reminiscent of what Honoré de Balzac said of a character (Borgeat) in one of his novels: “This man’s faith was perfect; he loved the Virgin Mary as he might have loved his wife.” (In the French original: « Cet homme avait la foi du charbonnier. Il aimait la sainte Vierge comme il eût aimé sa femme. ») This did not fit well with the Brave New World, where the simple person’s morality now consisted in worshipping Gaia, claiming for sacrifices to social justice, and obeying the authorities. Entering America’s airspace was not easy but it was just business as usual. A Great Invisible Wall had been created that blocked any foreigner until he could be vetted. As an exclusive service to good American citizens, the federal government was offering the completely free insertion under the skin of a complimentary microchip that automatically opened The Wall, except of course if an order from a secret court dictated otherwise. (These national security measures had been reconducted under the latest Matriot Act, renamed to position it squarely against patriarchy.) Santa had to produce personal and customs e-documents, show the QR of his special cabotage permit (the Jones Act had been recently modernized), provide a link to his DNA profile and complete medical file, answer questions, and swear not to make any trouble. He was not comfortable with that promise but he was not a pure Kantian and thought that lying, although generally wrong, could be justified under special circumstances such as coercion. As Friedrich Hayek wrote in a 1973 book, “The first attempt to secure individual liberty by constitutions has evidently failed.” Santa had not read Hayek, who was by then totally forgotten after being openly censored as an old white man. Crossing The Wall was only the beginning of Santa’s problems. Once he started landing on roofs, he saw that the vast majority of chimneys had warnings such as “Only Local Toys Accepted,” “Union-Made Toys Only,” “No Sexist Toys,” “No Gun Toys,” “Blue-Made Toys Only,”  “Nothing But Educative Toys,” “No Foraign [sic] Stuff,” “Warning: Inclusive House.” When in the weeks preceding Christmas, Santa had met little boys and girls in stores and shopping malls, he whispered in their ears: “If your gifts are not by the chimney, go and see outside the backdoor of your house or outside your school.” (An increasing number of families lived in public or subsidized apartment blocks as opposed to single-family houses, which were said to “waste our national resources.”) By Christmas morning, all children had received the gifts they had asked for—except for a few inappropriate requests from naughty kids and, of course, from children in jail, where deliveries were forbidden. An electronic Christmas card accompanied each gift, paraphrasing a reflection by (now officially canceled) economist James Buchanan: “You will need liberty to become the individual you want to become.” Interestingly, Santa had heard about Buchanan, perhaps in Econlib or Regulation articles that circulated on the dark web. After Santa had delivered his last gift, any passerby would have heard a short burst (ho-ho-ho) of his famous laugh. He then hurried back to the North Pole, his truck in hypersonic mode, to escape being canceled by the mob or arrested by its very representative government. (0 COMMENTS)

The Economist has an interesting article on the world’s largest city: Tokyo is now the world’s largest city, with 37m residents in the metropolitan area and 14m in the city proper. It is also one of the world’s most liveable, with punctual public transport, safe neighbourhoods, clean streets and more restaurants and Michelin stars than any other. In the liveability index of the Economist Intelligence Unit, our sister group, Tokyo comes joint fourth, but its population is larger than the combined populations of the others (Adelaide, Auckland, Osaka and Wellington). “It’s possible to have a liveable city at any scale—Tokyo proves that,” says Gabriel Metcalf, at Committee for Sydney, an Australian think-tank. The article discusses the role of planning: Tokyo’s liveability is a product of planning’s successes but also its failures, argues Jordan Sand of Georgetown University. One success was public transport. After the Meiji restoration, the government put rail ahead of roads, expanding networks through the city and then underground. Even as large firms in America built headquarters in suburbs, in Japan they clustered around transport hubs, incentivising the use of trains and subways, says Okata Junichiro of the University of Tokyo. That helped make Tokyo polycentric, with many hubs, not one. What the article doesn’t say is that the transit system is surprisingly decentralized.  While Tokyo’s largest operator (JR East) is government owned, the metro area is served by 48 different commuter rail operators.  Of the 158 rail lines in the Tokyo area, no fewer than 55 are run by private operators.   You may recall that Japan’s postwar boom occurred partly because firms like Honda ignored the diktats of government planners (who wanted them to stick to motorcycles.)  Something similar happened with urban planning: Around those hubs grew dense, mixed-use neighbourhoods. That was the planning “failure”. After the war, city planners sought to impose zoning as in the West, as they had after the Great Kanto Earthquake of 1923. But the government’s resources were too limited and Tokyo’s growth too rapid to control the process. Japan instead developed lax zoning codes, which allow pretty much anything to be built, rather than prescribing what is permitted. Historically, this model “was part of a modernist ethos to separate functions, to say work happens here, living happens here”, explains Mohsen Mostafavi of Harvard’s Graduate School of Design. For those interested in urban planning, I found this video on Tokyo’s lax zoning rules to be quite interesting: (0 COMMENTS)

In one of the lead letters in the Wall Street Journal on 12/20/21 (print edition on 12/21/21), John Tamny closes with the following statement: The state of the consumer-price index is a political phenomenon born of panic, not an inflationary story of dollar-price decline. I assume that by “dollar-price decline,” Tamny means a decline in the value of the dollar; otherwise it wouldn’t be an “inflationary story.” But Tamny doesn’t deny that consumer prices have risen a lot. Another way of saying that consumer prices have risen a lot is that the value of the dollar has fallen. So the CPI increase is a story of dollar-price decline. Does anyone know any interpretation of Tamny’s sentence that both fits the recent data and is not contradictory? Note: Lawrence H. White, “Inflation,” in David R. Henderson, ed., The Concise Encyclopedia of Economics, is still one of the best overall concise treatments of inflation. (0 COMMENTS)

Cardiologist Eric Topol writes: Rapidly scale the production of the anti-Covid pill Paxlovid, which is about to get FDA emergency authorization and the topic of my last post here. There will be a large number of non-mild infections going forward and we now have a treatment that is expected to work extremely well against Omicron, but the supply is dreadfully short. I wrote more about this today Enacting the Defense Production Act, as the President has done for rapid test production, is one way to solve this shortage problem. Our healthcare workforce, already compromised in numbers and morale, will likely be hit hard by Omicron infections. Having a pill treatment that knocks viral load down by 10-fold quickly, to potentially get them back in action in a short time lag (e.g. 2 days instead of 10) may prove vital. We need to get studies on transmission of Omicron done ASAP, and particularly with Paxlovid treatment to nail this time interval down, as discussed in my recent Q&A with New York magazine. Good for him. He wants the FDA to approve Paxlovid rapidly. This is better late never. Contrast his view here with his view that he hoped the FDA would slow down the Covid vaccine and make sure it didn’t get approved until after the November presidential election: If Trump badgered the US Food and Drug Administration into prematurely releasing a vaccine that wasn’t effective, or even caused harm, it could shake the public’s trust in any covid-19 vaccine. And if we are to achieve wide immunity against SARS-CoV-2, we’ll need to vaccinate more people than the number that get flu shots each year. Releasing a vaccine that people are afraid of could do more harm than good. To prevent such a scenario, Topol led online calls for FDA commissioner Steve Hahn to resign after his agency was criticized for cowing to political pressure—and then phoned Hahn a number of times to urge him to resist Trump’s influence. Topol also targeted Pfizer, the only pharmaceutical company likely to seek approval of its vaccine before Election Day, which eventually set up a meeting for him with its vaccine team. On October 16, Topol and his allies were able to claim success: Pfizer CEO Albert Bourla said the company would not be able to seek emergency approval for its vaccine before the third week in November, owing to safety standards that had been put in place by the FDA. Those standards had been issued against Trump’s wishes, but at the urging of Topol and other advocates. The above is from Antonio Regalado, “One doctor’s campaign to stop a covid-19 vaccine being rushed through before Election Day,” MIT Technology Review, October 19, 2020. Call me cynical about cardiologist Eric Topol’s motives, if you will, but in this case I spell cynical r-e-a-l-i-s-t-i-c. HT2 chrisare, a commenter on this post. Question: With the benefit of hindsight, and assuming, as seems plausible from the MIT Technology Review article referenced above, that Topol helped slow the vaccine approval by a few weeks, how many extra deaths did Dr. Topol contribute to?   (0 COMMENTS)

On December 10, the Provost of Loyola University of New Orleans wrote the following to Walter Block. Walter is the Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics at Loyola. Re: Another complaint Dear Dr. Block, I write to inform you that I am in receipt of three additional complaints against you from three different students. The key allegations are troubling and they are in clear violation of Loyola’s values, mission and policy. Indeed, the alleged actions are flagrant violations of the well-established principles of Catholic morality and in clear violation of Chapter 9 of the Faculty Handbook. These complaints were received during the course of our ongoing investigation into similar alleged conduct. The three complainants allege that your statements and commentary have included such abhorrent comments as “slavery wasn’t bad”, “women make less money because they are lazy or incapable,” “women are paid less because they don’t work as hard, and it’s the same with people of color”, and that “‘Disability Act’ shouldn’t exist.” One of the students noted that you openly expressed your racist, homophobic, transphobic and sexist statements publicly in classes, in your writings, and in your emails. This had a profoundly negative impact on the student’s experience at Loyola. These alleged actions indicate a pattern of complete disregard for Loyola’s values and mission considering the prior investigation and complaints we have received from students. Central to our Jesuit, Catholic identity is our commitment to human dignity and the whole person. I am extremely disappointed that, in spite of your written commitment to “do better”, you seem to continue to ignore your obligation as a faculty member of a Jesuit, Catholic University. You also seem to continue to create a hostile and discriminatory environment for our students. The University has an obligation under Title IX to ensure that the educational environment is welcoming, equitable and not permeated by ridicule and comments that are derogatory on the basis of gender, race or any other classification. Faculty conduct must be guided by the principles stated in our Faculty Handbook that “concern for the student as a person is central to the Jesuit educational mission.” As with prior complaints, we will investigate these additional complaints, and you will receive a written determination regarding these alleged actions. Please note, that in light of (1) the number of complaints we received regarding the substantially same alleged conduct, (2) the impact these alleged actions is having on our students, (3) Loyola’s legal obligations, and (4) your apparent continued violation of your obligations under the Faculty Handbook, Loyola may be forced to institute disciplinary proceedings under Chapter 9 of the Faculty Handbook based upon the outcome of these investigations. Sincerely, Tanuja Singh, DBA Provost and SVP of Academic Affairs cc: Michael Capella, Ph.D., Dean of the College of Business   Notice what Dr. Singh doesn’t do: she doesn’t invite Walter to respond. Instead, she writes “we will investigate these additional complaints, and you will receive a written determination regarding these alleged actions.” Wouldn’t someone who cares about the truth want to know if these alleged actions even occurred? And Walter is willing to help her find the truth. On that same day, Walter replied: Dear Provost Singh: I hereby acknowledge receipt of this letter of yours. I have recorded every session of my course this semester. Please tell me on which dates it is alleged that I made these statements. Also, the approximate time during each session I am accused of making them. I shall then respond to these complaints. Your letter appears to be a summary of three separate complaints made by three of my students in my law and econ class. Please send me, verbatim, a copy of the complaints they sent you. Whatever happened to that complaint made the first week of this semester to the effect that I likened Ghandi to Hitler, and that the Mises Institute is a Nazi organization? I responded to that in early September, and I have not heard your assessment of that complaint. Best regards, Walter Campus Reform tells some of the story here. Some students who are fans of Walter put together a letter, but it seems to be one that was written in response to similar threats some time ago. It’s here. It’s titled “Give Walter Block a Pay Raise.” I signed it and wrote the following as my explanation: Walter is a thinker who tries to get his students to think. And, from everything I can tell, he succeeds. Of course, like one of the students who complained, I was not in Walter’s class. But I have known him since attending a one-week conference with him (and with Nobel Prize winner Friedrich Hayek) in June 1975. Walter provokes in a friendly way. But he is one of the least racist people I know. I notice that Provost Singh thinks that a statement that the Disability Act shouldn’t exist is racist and/or sexist. Seriously? Is she aware that one of the groups that has been most hurt by that law is people who are disabled? The reason is that the requirement for accommodating those with disabilities makes employers hesitant to hire disabled people. But I wouldn’t accuse Provost Singh of being against the disabled because she favors a law that hurts them. She should just admit her ignorance and let professors who are opening students’ minds continue to do so. I don’t have a position, by the way, on whether Walter deserves a pay increase, although if we buy into the idea that people should be paid more for taking risk, then he probably does. The Provost arrived on campus in early 2020. She may not be familiar with a  past attack on Walter by the President of Loyola that he handled very well. Here’s my post on a previous attack. Postscript: In reading Provost Singh’s letter to Walter, I noticed something else that’s concerning. She writes “The key allegations are troubling and they are in clear violation of Loyola’s values, mission and policy.” I agree with her that allegations of racism and sexism are troubling. (As noted, I don’t agree that opposing a law that hurts disabled people is troubling.) But how can she say that the allegations “are in clear violation of Loyola’s values, mission and policy?” That would be true only if the allegations are true. Has the Provost already made up her mind? Now that would be troubling. (0 COMMENTS)

Co-blogger Scott Sumner recently responded to co-blogger Bryan Caplan’s critique of Scott’s earlier post in which Scott stated “On a list of regulatory overreaction, these mandates [on masks, vaccines, etc.] don’t even make my ‘top 100’.” Bryan agreed with Scott that the ratio of costs to benefits for many other regulations is higher than the cost/benefit ratio for Covid regulations in the United States. But, argued Bryan, the difference between costs of Covid regulation and benefits of Covid regulations was much greater than the difference between costs and benefits for the other regulations Scott referred to. Scott’s recent response meets Bryan on this territory and he argues that Bryan substantially understates the benefits of Covid regulations and overstates the costs. My view is that Bryan is closer to being right than Scott, although, like Scott, I don’t have Bryan’s confidence that he can use survey data on how people value years under Covid regulations versus years under Covid life. (By the way, a criticism Scott could have made, and maybe implicitly made, is that that’s the wrong comparison. We had “Covid life” with various degrees of regulation. I think the survey, to be useful for this discussion, should have been years of life under Covid with no regulation versus years of life under Covid with some degree of regulation. Admittedly, this is hard to get at because you’re getting not just people’s subjective valuations of life but also people’s subjective estimates of probabilities.) This will not be a complete response to Scott but here are the major areas on which I agree and disagree with Scott. I have one major agreement with Scott on his statement about risks: When I read critics on Covid caution (not Bryan), I see a lot of innumeracy.  People talk about a 1% chance of dying as if it’s a small risk. I agree and I thought that as early as March 2020. I did my Ph.D. dissertation on the economics of safety legislation in underground coal mines. In the late 1960s, if I recall correctly, the risk of dying for coal miners in underground mines was about 1 in 10,000. That’s a 0.01 percent chance of dying in a year. And we thought (and thought correctly) that coal mining was a very dangerous occupation. Not like logging, by the way. When I worked in an underground nickel mine in 1969, older fellow workers (and they were all older than me) told me never to work as a logger. So a 1% chance of dying is huge. A key number in Scott’s analysis is the infection fatality rate. Scott claims that it’s 0.6, but the number I recall (I can’t find the source offhand) over the whole U.S. population is less than half as much, at about 0.25. That’s a big difference. Another area of contention is the fatality rate for people with pre-existing conditions. Scott writes: Some talk about the risk for the under 65 group being merely people with pre-existing conditions, as if those people are sickly invalids.  But I often see pictures in the media of healthy looking cops who have died of Covid.  On closer inspection, some of them looked a bit overweight.  And of course obesity is a major a pre-existing condition.  I’m rather thin, and play tennis three times a week.  So I’m healthy, right?  Actually I’ve had crappy lungs my entire life, with several bad cases of pneumonia in my 30s. (If I’d been born before antibiotics, I doubt I would have lived to age 40.)  So am I at higher risk?  I honestly don’t know.  But I really don’t see the point of people saying Covid is only a problem for the old and those with pre-existing conditions.  Lots of people have at least one pre-existing condition.  Obesity is not exactly rare in America. Scott notes that he has a pre-existing condition, namely “crappy lungs.” But that’s just one. My reading of the Italian data in March 2020 was that disproportionately the people who died of Covid-19 were not just old but also had 2 or more pre-existing conditions. One big difference between Scott, on the one hand, and Bryan and me, on the other, is over how hard it is to be masked. Scott writes: Wearing a mask is a pain?  All I can say is if you think that’s a major problem, I wish I could have your life!! But that’s not analysis; that’s just Scott telling us his own subjective valuation. As I noted above, Scott rightly is skeptical of Bryan’s use of survey data to measure people’s attitudes to life under Covid. But at least Bryan had a sample size of 476. That’s 475 more than Scott’s sample size. In a comment responding to “DeservingPorcupine,” Scott says, “And when people talk about the awful suffering involved in wearing a mask, all I can do is roll my eyes.” In other words, Scott admits that he really doesn’t take seriously people’s thoughts and feelings about wearing masks. What matters is his subjective valuation. One commenter on Scott’s recent post, Mark Bahner, writes: Not only are most of the 800,000 dead old and sickly,  but many of  the deaths (approximately one-third, per the NY Times in June 2020) have occurred in nursing homes, where COVID restrictions did nothing to help them. This is a relevant point. And understated. Not only did Covid restrictions do nothing to help them, but also governors in New Jersey, New York, and Pennsylvania actively hurt them by requiring that people with Covid be placed in nursing homes. Scott doesn’t reply to this point. Scott also seems to vacillate about what his topic is. I took it to be about both regulation and private responses to Covid. After all, Bryan was addressing Scott’s original post about regulation. But in a response to Todd Kreider, Scott writes: This has absolutely no bearing on anything in my post, as I’m sure you must know.  My post is not about government policies. And then Scott elaborates further to Todd: You still don’t get it.  You are talking about no government actions, I was talking about no attempts by the private sector to avoid Covid.  (That’s also what Bryan Caplan was talking about.) But that’s not what Bryan Caplan was talking about. He was talking about both private sector actions and government actions. Bryan referred to “America’s strange experiment in federalist dictatorship,” for example. And he mentions Scott’s earlier statement, “I’m surprised the regulations aren’t far worse.” This is a discussion of government actions.   (0 COMMENTS)