Harvard University is a great private institution, albeit too enmeshed in our naive political zeitgeist. At least two PhD graduates from that university—and in economics, of all fields!—occupy senior positions in Trump’s entourage. About one of them, Elon Musk said that he is “dumber than a sack of bricks,” to which I would not strenuously object. Note that Harvard University is not just a factory of “radical leftists”; it also produces collectivists of the right. And the VERITAS (“truth”) motto on its coat of arms is reassuring, even if it must look like Chinese in the White House. My main point, however, is that as a wealthy and influential private organization, Harvard University can provide a barrier to the power grab within the federal government and the centralization of power in this country. It is true that, like all large private universities, Harvard has imprudently become dependent on federal government money, but this was under the tacit, albeit naive, understanding that the government was motivated by education, research, and a love of free inquiry and the people. I wouldn’t say that the Federal Reserve System is a great institution, as its creation was at best a diversion from an overregulated and thus fragile banking system. Moreover, the organization is only marginally private through its regional components, each of which is an association of mostly private regional banks but with only a minority of private bankers on its Board of Directors. As a sort of central planning bureau, the Federal Reserve System flies blind in manipulating the money supply and meddling with interest rates, not to mention its growing regulatory mandates. Yet it introduces a crucial element of decentralization in the City of Command (as Bertrand de Jouvenel called the seats of modern Leviathans). Imagine if Donald Trump held the levers of monetary policy (or if Joe Biden had, to add the mandatory qualification “But Biden.”) I take an institution to be a set of rules, like when we say that the family or the free market are useful institutions. Some institutions double as organizations or generate organizations, in the sense of structured entities with goals, agents, and representatives: Harvard is an organization within the institution of higher education and research. In a free society, institutions and accompanying organizations help coordinate independent individual actions. Many institutional barriers to power exist in the private sector (private property, large companies, a free press, financial markets, and so forth, including even organizations that can be otherwise detrimental such as trade unions) and in the public sector (independent courts, federalism, separation of power, inspectors general, FOIA, etc.). In the public sector, Montesquieu noted that to prevent the abuse of power, “it is necessary [that] from the very [arrangement] of things, power should be a check to power.” (I think that “arrangement” is a better translation than “nature.”) Strong private institutions constitute essential barriers to the expansion of political power outside its domain. Anthony de Jasay, a classical liberal anarchist, believed that the domain of political power can and should be reduced to zero or, at least, as close to zero as possible. The current functions of governments could be assumed by private institutions, notably private property and free markets. Their accompanying organizations would provide private producers of “public goods.” Which leads to an observation we find in his seminal book, The State: Self-imposed limits on sovereign power can disarm mistrust, but provide no guarantee of liberty and property beyond those afforded by the balance between state and private force. A model often invoked by other theorists is the decentralized armed power of the High Middle Ages, where lords were able to protect their domains and even resist the king’s power. Of course, local political power can only approximate private force—if it does not degenerate into roving bandits, which the Church effectively prevented. (See William Salter and Andrew T. Young, The Medieval Constitution of Liberty [University of Michigan Press, 2023]; and also Jouvenel.) This balance of force may have lasted until the 16th century in England. In his History of England (Volume 1), Thomas Babington Macaulay offers a qualified statement: It was, however, impossible for the Tudors to carry oppression beyond a certain point: for they had no armed force, and they were surrounded by an armed people. Two centuries later, in his Commentaries on the Laws of England (Volume 1), British jurist William Blackstone extended the private force barrier to the armed force of common people: The fifth and last auxiliary right of the subject, that I shall at present mention, is that of having arms for their defence, suitable to their condition and degree, and such as are allowed by law. Which is also declared by the same statute, 1 W. and M. st. 2, c. 2, and is indeed a public allowance, under due restrictions, of the natural right of resistance and self-preservation, when the sanctions of society and laws are found insufficient to restrain the violence of oppression. It is true that—especially today—individuals armed with handguns or assault rifles could not easily resist our heavily armed Leviathans, but what often matters is the marginal cost of imposing tyranny: What cost (including in political capital and public support) is the government willing to support to climb another rung on the ladder of tyranny? De Jasay, who was an admirer of the liberal 19th century, was no doubt closer to (a more radical) Blackstone than to medieval lords. Powerful private organizations, backed by a general belief in private property and in a strict limitation of political power, would hold a potential of private force in the literal sense. Whether large capitalist corporations would ever actualize this potential to physically resist tyranny is uncertain, and therefore so is the solidity of this barrier. They could still, however, resist in indirect ways like employing unpopular dissidents as Hollywood studios did during the McCarthyist persecutions (as noted by Milton Friedman in his Capitalism and Freedom). Decentralized government and its internal barriers to power can sometimes be detrimental, as when southern American states resisted attempts by the central state to stop the public discrimination they imposed. No political system is perfect, but central tyranny is more dangerous than localized tyranny—unambiguously so when free movement of people is possible at relatively low cost. As Montesquieu noted, Since a despotic government is productive of the most dreadful calamities to human nature, the very evil that restrains it is beneficial to the subject. [French original] Comme le despotisme cause à la nature humaine des maux effroyables, le mal même qui le limite est un bien. In short, private institutions, especially large private organizations, provide a barrier to government power, even if their “private force” is limited. Public or quasi-public organizations can play a similar role as long as they are not subverted by the central power. When these countervailing organizations are enfeebled, liberties become more fragile. ****************************** Independent institutions as bully barrier (0 COMMENTS)

I wrapped up my initial post on Lam’s book Fewer Rules, Better People: The Case for Discretion with the remark that Lam sets out to make a case in favor of legalism (defined as the view that sticking to the rules is the preferable default, with discretion in the enforcement of rules as at best a necessary evil) before critiquing it. He actually distinguishes between two schools of thought that reach similar conclusions for different reasons. One is legalism as it is traditionally understood in the Western liberal tradition, and the other is Legalism, capitalized, as put forth by the Chinese philosopher Han Fei. Lam starts with the former: One of the best cases for legalism comes from the importance of rules in ensuring fairness and equitability. Aristotle proposed the idea that living under the power of rules is far better than living under the power of people. The power of rules is, of course, what is meant by the rule of law: The rule of law states that rules and laws, not people, are what ought to determine proper conduct on the playing field, whether that is in sports, on the streets, or in the courtroom. Lam leans heavily into sports as a paradigmatic case for the importance of rules being applied consistently and to the letter: Referees and umpires cannot just decide that a particular touchdown looks four times harder than a field goal and so is worth twelve points rather than six. Rule makers cannot simply decide on new rules mid-game. Players and fans would never accept the legitimacy of a sport that did not have the rule of law. Fairness and justice require that like cases be treated alike. Consistently applying the laws, as written, is a way to ensure this happens. If the law says “X conduct shall be met with Y penalty,” but police offers use discretion to enforce this rule for some cases of X but not others, then like cases are not treated alike. People are treated unjustly: Fairness, which is an ideal of justice, requires competition and cooperation under the same set of rules, regardless of how perfect or imperfect the rules happen to be. It does not consist in allowing referees and umpires to decide, even within the spirit of a rule, not to enforce it on a given occasion. Selective discretion is a violation of this basic value and should not be allowed. The Legalism of Han Fei, by contrast, was not motivated by concerns of arbitrariness or fairness or disparate treatment. Han Fei’s primary concern was human mediocrity: Humans are not mediocre by nature, but rather, any arbitrarily chosen human being would be mediocre along most dimensions. The truly gifted exist, in athletic ability, in artistic talent, and in the wise governance of others. But as a population, we are not athletic; we are mostly in the middle, flanked by the most and least athletic…And this is also true of our cognitive traits. Are the judges in our society particularly fair, objective, or devoid of prejudice? The answer has to be: some are, some aren’t, most are probably in between. In principle, Han Fei says, wise and virtuous enforcers using discretion might outperform lesser enforcers operating according to rules. But the problem is that it will not – indeed, cannot – be the case that most enforcers most of the time will be especially wise and virtuous: As a result, discretion is a losing strategy for governance. Good governance by discretion requires the top percentile of people in terms of intelligence, wisdom, and moral character. Even if you end up finding such people now, you are not likely to find them again. To tie good governing to good quality people means failing – certainly in the long term, maybe even in the medium term. So we should tie good governance to something else: a system of rules, procedures, and regulation, something even the most mediocre can follow. Han Fei’s was not elitist in this line of thinking – he did not think this was a problem for the unwashed masses but something that could be overcome by the upper classes of life: Han Fei applied his reasoning to leadership as much to workers, to kings and presidents and dictators as he did to the citizens over which they rule. People who rule and govern, make and enforce laws, are also by and large mediocre, so administering punishment and rewards to them is also a job, requiring as many strict rules and regulations as any other. Thus, according to Han Fei, when a system is breaking down or operating poorly, the real solution isn’t to try to ensure better leaders hold positions of authority. The solution is to be found by improving the system of rules by which the organization operates: If there are problems, the problems will be with the rules of the system, and not flaws of individuals. If a particular rule has failed us, the solution is not discretion, but finding a better rule. While small-l legalism is often associated with Western democracy and Han Fei’s Legalism is a foundational idea in authoritarian systems, both are united in their rejection of the use of discretion: Western democracy is usually held up as a stark contrast to China’s authoritarianism, but at root they agree on a very significant point. Selective discretion is to be rejected. Arguments for the rule of law and for Chinese Legalism arrive at the same conclusions from very different starting points. Rules are blind but fair, and good rules of governance are the result of contemplative knowledge and foresight. Neither moral nor effective governance can depend on on-the-ground snap judgments by street-level bureaucrats. Whether in sports, in restaurants, or in government, fairness and effectiveness requires that the rules need to be in charge. Lam admits there is much force in these arguments: Arbitrariness that leads to injustice (as feared by Western liberals) and mediocrity that degrades society (as feared by Han Fei) together present a powerful case for legalism. Still, Lam ultimately argues that while there “is good reasoning in legalism,” overall “we must ultimately reject where it leads.” However, Lam’s argument is not that we need a binary, either/or approach where we are either all-in on legalism or all-in with discretion. Instead, he argues that despite the strong case for legalism, the current system has crowded out too much in the way of discretion, and the space for discretion should be expanded: As a result, I am not seeking to smash the regulatory state or rage against the bureaucratic machine. Instead, I want to increase both the discretionary power and the moral responsibility of the bureaucrats and their functionaries. In the next post, I’ll be looking at Lam’s description of how the legalist approach arises, why it triumphs over discretion, and what he sees as the descriptive laws that guide how a legalist approach evolves – the Laws of Bureaudynamics.   (0 COMMENTS)

When the Civil War broke out in 1861, the federal government, like any government in any situation, had three sources of money: taxing, borrowing, or printing. Taxing The federal government was much more successful than its Confederate counterpart in funding the war via taxation.  In August 1861, tariffs were hiked and the first federal income tax in American history was enacted. “The Republican architects of the 1861 income tax made it modestly progressive by imposing the 3 percent tax on annual incomes over $800 only,” historian James M. McPherson notes:  …thereby exempting most wage-earners. This was done, explained Senate Finance Committee Chairman William Pitt Fessenden, because the companion tariff bill was regressive in nature. “Taking both measures together, I believe the burdens will be more equalized on all classes of the community.” Subsequently, “[t]he Internal Revenue Act of 1862 taxed almost everything but the air northerners breathed,” McPherson writes: It imposed sin taxes on liquor, tobacco, and playing cards; luxury taxes on cigarettes, yachts, billiard tables, jewelry, and other expensive items; taxes on patent medicines and newspaper advertisements; license taxes on almost every conceivable profession or service except the clergy; stamp taxes, taxes on the gross receipts of corporations, banks, insurance companies, and a tax on the dividends or interest they paid to investors; value-added taxes on manufactured goods and processed meats; an inheritance tax; and an income tax.  It also established a Bureau of Internal Revenue.  “[W]hile the South ultimately obtained only 5 or 6 percent of its funds by actual taxation,” McPherson notes, “the northern government raised 21 percent in this manner.”  Borrowing With federal government finances on something approaching a firm footing, lenders were more willing to lend to it. “Unlike the Confederacy, which relied on loans for less than two-fifths of its war finances,” McPherson notes, “the Union raised two thirds of its revenues by this means.” Printing The federal government’s relative success in financing the war by taxing and borrowing meant that it had less recourse to the printing press.  When the Legal Tender Act of 1862 proposed to issue $150 million of Treasury notes, opponents worried about a repeat of the inflation happening in the Confederacy. “The wit of man has never discovered a means by which paper currency can be kept at par value, except by its speedy, cheap, certain convertibility into gold and silver,” warned Ohio Congressman George Pendleton. If the bill passed, he argued, “prices will be inflated…incomes will depreciate; the savings of the poor will vanish; the hoardings of the widow will melt away; bonds, mortgages, and notes – everything of fixed value – will lose their value.”     This did not happen, at least not to the extent that it did in the Confederacy. The Confederates did not make their notes legal tender, the federal government did, creating a transaction demand absent in the Confederacy. In addition, the increasing success of Union armies on the battlefield reinforced promises of redemption in specie whilst undermining them in the south. The issue of a further $150 million of “greenbacks” in July brought the total roughly into line with the total circulating in the Confederacy. “But,” McPherson notes: …while the southern price index rose to 686 (February 1861 = 100) by the end of 1862, the northern index then stood at only 114. For the war as a whole the Union experienced inflation of only 80 percent (contrasted with 9,000 percent for the Confederacy), which compares favorably to the 84 percent of World War I (1917-1920) and 70 percent in World War II (1941-1949, including the postwar years after the lifting of wartime price controls). Crisis and Leviathan  The Republicans were of the Hamiltonian tradition in American politics, which imagined a strong central government, and war presented their opportunity. “Under the emergency of war,” Roger Lowenstein writes,  “…Lincoln’s party formulated a new notion of what the federal government could do. They raised and spent unprecedented sums. They launched the country’s first truly national currency, pushing aside an inchoate system of thousands of disparate bills issued in the states. They created a national banking system and the first credible program for federal taxation. They inserted the government into railroads, education, agriculture, immigration, the sciences, financial regulation. The war government interposed a visible (and at times dubious) hand into industry by enacting a series of high protective tariffs…”  The Bureau of Internal Revenue, for example, “remained a permanent part of the federal government even though most of these taxes (including the income tax) expired several years after the end of the war,” McPherson writes: “The relationship of the American taxpayer to the government was never again the same.”    John Phelan is an Economist at Center of the American Experiment. (0 COMMENTS)

  In the April 24 Wall Street Journal (April 23 electronic version), regular writer Joseph Epstein, in an article titled “Is That an Augur, or a Mere Economist?” does a disservice to economics in 2 ways. I’ll deal mainly with one of them. Epstein writes: Economics is supposed to be a science. The “dismal science” Thomas Carlyle called it, having in mind the dark views on population of the 19th-century English economist Thomas Malthus. Epstein is right that Carlyle coined the term. But it had nothing to do with Thomas Robert Malthus. The real story, as many long term readers of this site may remember, is far more interesting. It was uncovered years ago by David M. Levy and Sandra J. Peart. Their January 22, 2001 article is titled, “The Secret History of the Dismal Science.” They write: While this story [the story that Epstein and many others before him tell] is well-known, it is also wrong, so wrong that it is hard to imagine a story that is farther from the truth. At the most trivial level, Carlyle’s target was not Malthus, but economists such as John Stuart Mill, who argued that it was institutions, not race, that explained why some nations were rich and others poor. Carlyle attacked Mill, not for supporting Malthus’s predictions about the dire consequences of population growth, but for supporting the emancipation of slaves. It was this fact—that economics assumed that people were basically all the same, and thus all entitled to liberty—that led Carlyle to label economics “the dismal science.”   Later in their article, Levy and Peart write: The Exeter Hall that Carlyle mentioned was a real building. Located on the Strand in London, it served as the political center of British evangelicalism. By invoking the marriage of economics and Exeter Hall, Carlyle is reminding us of a vastly important fact about 19th century British politics: Exeter Hall was not the only moral center of the British anti-slave movement. In the fight against slavery, Christian evangelicals such as William Wilberforce and Thomas Macaulay were joined by political economists, such as James Mill, Harriet Martineau, J. S. Mill, Archbishop Richard Whately and John Bright. The two sides agreed that slavery was wrong because Africans are humans, and all humans have the same rights. They however disagreed over exactly what it is that ties us together. The economists drew on their assumption that deep down, we all share the same basic human nature. The evangelicals drew on their assumption that we are literally all brothers and sisters since we share the same first parents, Adam and Eve. Carlyle disagreed with the conclusion that slavery was wrong because he disagreed with the assumption that under the skin, people are all the same. He argued that blacks were subhumans (“two-legged cattle”), who needed the tutelage of whites wielding the “beneficent whip” if they were to contribute to the good of society. In short, black lives matter. As I’ve said when I’ve given talks in which I briefly discuss the origin of the term “the dismal science,” given that Carlyle rejected economics as the dismal science because it did not assume that blacks are subhumans, one wonders what this party animal would regard as hopeful? The above is Epstein’s main disservice to economics. The other is to give the reader the impression that economics is all about opinion and, relatedly, that economists never agree on anything. That comes across most clearly in the following: How little in the way of unanimity they show. Whether one prefers the views of Larry Summers over those of Art Laffer or vice versa, nothing near a consensus among economists about the likely effect of these tariffs has arisen. What has emerged instead is the obvious influence of politics on economics. On Fox News economists strongly approve of the tariffs, on MSNBC economists just as strongly disapprove. It’s kind of stunning that Epstein would single out the issue on which there actually is a consensus. As I wrote in the preface to the first edition of The Concise Encyclopedia of Economics, then called The Fortune Encyclopedia of Economics: That economists agree on most micro issues became clear in the late seventies when the American Economic Review, the world’s largest-circulation economics journal, published an opinion poll of 211 economists. The poll found that 98 percent agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.” Similarly, 90 percent of economists agreed that “a minimum wage increases unemployment among young and unskilled workers.” And 97 percent agreed with the statement “Tariffs and import quotas reduce general economic welfare.” The entries on those topics in this encyclopedia explain why economists are in such startling agreement on these and many other issues. (italics added) What about Larry Summers and Art Laffer? Larry Summers thinks that Trump’s tariffs will have bad effects. Unless, he has changed his mind since I read him last, so does Art Laffer. Also, although I’ve seen economic commentators on Fox News approve of Trump’s tariffs, I haven’t seen economists do so. As for MSNBC, I watch it too little to know. Postscript: When I researched to find Art Laffer’s views on Trump’s tariffs, I found this interview with Larry Kudlow on Fox Business. The title is misleading. It’s true that Laffer is saying that Trump’s economic policies are spectacular. But when he actually discusses the trade issue, he notes that there’s nothing wrong with trade deficits; that Trump’s and his advisors’ way of calculating reciprocal tariffs is nonsense; and that the ultimate goal should be free trade for all countries. Laffer, like Larry Kudlow, sees Trump’s moves as a negotiating move to get other countries’ governments to lower their tariffs. I think Art Laffer is way too optimistic about Trump’s goals and his negotiating skills. But that’s separate from the issue of the harmful effects of tariffs. On that, Larry Summers and Art Laffer agree. (Indeed, near the end of the 10-minute interview, Laffer talks about how damaging Nixon’s 10% tariff was.)         (0 COMMENTS)

Dwarkesh Patel interviewed the most influential thinkers and leaders in the world of AI and chronicled the history of AI up to now in his book, The Scaling Era. Listen as he talks to EconTalk’s Russ Roberts about the book, the dangers and potential of AI, and the role scale plays in AI progress. The conversation concludes […] The post The Past and Future of AI (with Dwarkesh Patel) appeared first on Econlib.

Air pollution from coal-fired power plants has negative externalities, damaging human health.  Carbon emissions from these power plants contribute to global warming.  A recent article in The Economist discusses the recent acceleration in global warming, and suggests that the twin goals of a cleaner air and a cooler planet may be in conflict: Evidence against different culprits comes from work published recently in Science. Helge Goessling and his colleagues at the Alfred Wegener Institute in Bremerhaven used satellite data and weather records to show that over the course of this century Earth has gradually been reflecting less sunlight back into space than it used to. 2023 was the dimmest year to date. This was apparently due to paucity of cloud cover, particularly in the northern mid latitudes. Part of this could be down to the new IMO rules [reducing ship engine emissions], but the dimming is too strong to be explained by that alone. Bjorn Samset of CICERO, a Norwegian climate research institute, points to another possibility: the lack of sulphate emissions is not a result of cleaner ships, but of cleaner Chinese coal-fired power plants. Since 2014 China has been making progress in reducing sulphur emissions by closing particularly noxious power plants and scrubbing sulphur out of the flue gases at others. New data leads Dr Samset and colleagues to think the cleanup is having a marked effect across the North Pacific, where cleaner air and fewer clouds will mean more warming. This graph shows the recent acceleration in warming: Some have proposed using “geoengineering” to address global warming.  A recent article in The Guardian lists three options: Stratospheric aerosol injection: Airplanes release tiny aerosol particles that reflect light back into space. Cirrus cloud thinning: The least understood method, seeding thin cirrus clouds in the upper troposphere with ice nuclei could reduce their lifespan and increase cooling.  Marine cloud brightening:  Boats release aerosol particles that increase the reflectivity of low clouds. There are substantial political challenges with any geoengineering project.  Some countries might gain while other lose, especially if rainfall patterns were affected.  Nonetheless, I suspect that geoengineering will be tried at some point in the future, as the world seems to be giving up on the objective preventing global warming by restricting the emission of greenhouse gases. Keep in mind that we are already doing “geoengineering” in the sense of artificially changing the world’s climate.  The debate is whether we should try to do so in a constructive fashion, rather than a destructive fashion. PS.  I’ve always been a moderate on the global warming issue, about half way between the doomsters and those who dismiss the problem as a myth. (0 COMMENTS)

  With Proposed Glue Trap Ban, San Francisco Sides With the Pests by Christian Britschgi, Reason, April 24, 2025. Excerpt: The “abundance” discourse, sparked by Ezra Klein and Derek Thompson’s book of the same name, has directed a lot of attention to liberal America’s failure to build. Blue cities and blue states can’t deliver projects on time and on budget, which is dragging down economic growth and sending people fleeing to red states that can. As much truth as there is to that complaint, it ignores the other reason people hate progressive governance: the complete inability of politicians and bureaucrats to keep their noses out of individuals’ private business. Earlier this week, the San Francisco Chronicle reported on an in-the-works proposal from the city’s Commission of Animal Control and Welfare to ban the sale, and potentially even the use, of glue traps. Per the Chronicle‘s reporting, the commission—an advisory body that makes policy recommendations to the San Francisco government—is considering such a ban because of the allegedly cruel nature of glue traps.   The Road to Campus Serfdom by John O. McGinnis, Law & Liberty, April 24, 2025. Excerpts: It seems remarkable that seemingly antisemitic protests by undergraduates, such as those at my own university of Northwestern, could threaten the biomedical research funding of its medical school. But the structure of civil rights laws as applied to universities has long allowed the federal government to cut off funding to the entire university based on the wrongful actions of particular units or departments. Ironically, the left, now alarmed by the federal government’s intrusive reach, bears direct responsibility for crafting the very legal weapons wielded against the universities it dominates. Almost four decades ago, progressive legislators demanded sweeping amendments to civil rights law, expanding federal oversight over higher education. The sequence of events reveals a cautionary tale of political hubris: progressive confidence that state power would reliably serve their ends overlooked the reality that governmental authority, once unleashed, recognizes no ideological master. Today’s circumstances starkly illustrate how expansive federal control over civil society, originally celebrated by progressives, returns to haunt its architects. The left’s outrage ought to focus not on this particular administration but on its own reckless empowerment of the state. And: And Democratic administrations made aggressive use of this leverage to change practices at college campuses in heavy-handed ways. The Obama administration’s “Dear Colleague” letter in 2011 effectively mandated that universities overhaul their procedures for sexual abuse and harassment cases or face total loss of federal funding. For instance, the letter asked that guilt be determined by a bare preponderance of the evidence standard, despite the heavy costs to a student from a guilty verdict and expulsion. It also undermined due process by discouraging cross-examination and mandating training in which investigators were encouraged to believe the accusers. The government was deploying its enormous power to dictate processes to universities and regulate their relations with their students and, by extension, students with each other. The Obama administration did not limit itself to regulating conduct; it aggressively extended its authority to police campus speech. It argued that speech that listeners thought was of a sexual nature could lead to a finding of a hostile environment actionable under Title VI, even if that conclusion were not based on objective facts, but on subjective feelings. Such interventions encouraged speech codes and chilled debate. In 2016, the Obama administration issued guidance interpreting Title IX to cover gender identity, advising schools that transgender students must be allowed to use facilities and participate in programs consistent with their gender identity or else be in violation of federal law.​ This requirement included access to bathrooms, locker rooms, and sports teams corresponding to their identity. Again, this interpretation represented an aggressive and expansive reinterpretation of Title IX. It seems plainly inconsistent with this language, which prevents discrimination based on sex—a concept that at the time of Title IX was passed—referred to biological sex. But colleges did not want to risk their federal funding by flouting such government ukases.   Will the ‘Abundance’ Agenda Make California Great Again? by Steven Greenhut, Reason, April 25, 2025. Excerpt: Up until the 1970s, California was a state known for its commitment to boundless opportunities, with the Edmund G. “Pat” Brown governorship reflective of the can-do spirit that drew people here from across the world. Given the degree to which modern California is noted for its ineffectiveness, wastefulness, and regulatory sclerosis, it’s difficult to imagine a California that took its Golden State moniker seriously. Brown “envisioned a future in which economic growth would be driven by a network of state-of-the-art freeways to move people, reservoirs, and canals to capture and transport water and intellectual capital from low-cost institutions of higher education. He sold that vision to the public and, in doing so, as the late historian Kevin Starr wrote, putting California on “the cutting edge of the American experiment,” per a Hoover Institution retrospective. The state grew dramatically as a result. The Brown administration built most of the State Water Project in less time than it would take to complete an Environmental Impact Report these days. California officials still have big dreams, of course, but they are more of the social-engineering variety than the civil-engineering type. Brown built freeways that people actually use, whereas today’s big project is a pointless high-speed rail line that’s way over budget and unlikely to serve any serious need.   Sweet Melodies of the Catacombs by Richard Gunderman, Law & Liberty, April 25, 2025. Excerpts: In 1953, subscribers to the Great Soviet Encyclopedia received a replacement page, one of many examples of Soviet attempts to rewrite history to suit the ruling Communist party’s interests. The page in question extended the article on idealist philosopher George Berkeley, after whom Berkeley, California, is named. The page it replaced contained an article on Lavrentiy Beria, one of Stalin’s longest-serving secret police chiefs. After a successful coup led by rival Nikita Krushchev that same year, Beria was arrested, tried as a “traitor and capitalist agent,” and executed, the historical record of his existence having become a matter of embarrassment to those in power. It is hard for the inhabitants of a free nation such as the United States, with its First Amendment protections for free speech, to appreciate the pervasiveness of state censorship within the Soviet Union. Accounts of such varying events as the starvation of Moscow’s population during the October Revolution, defeats of the Red Army, the civility and generosity of Westerners, and the advanced state of technology and high Western living standards were all rigorously repressed. Likewise, photos were doctored to remove repressed persons, films were edited to promote Soviet ideals, and newspapers and broadcast media were all subject to strict state control. And: One of the most intriguing means of thwarting the censors was known as roentgenizdat, sometimes referred to as “bone music.” “Roentgen” was Wilhelm Röntgen, the German physicist who received the first Nobel Prize in Physics for the 1895 discovery of x-rays. Medical x-ray film represented a relatively inexpensive and widely available medium onto which such audio recordings could be etched, enabling the production of homemade phonograph records. Three basic ingredients were required: the original audio of a live performance, a recording lathe, and a piece of x-ray film, onto which a circle could be traced using a compass, with a hole cut in the middle. Running at 78 rpm, most such discs could hold three to four minutes of material, enough to capture many of the most popular songs of the day.   Everyone Says They’ll Pay More for “Made in the USA.” So We Ran an A/B Test. Afina, April 23, 2025. Excerpts: Our bestselling model—manufactured in Asia (China and Vietnam)—sells for $129. But this year, as tariffs jumped from 25% to 170%, we wondered: Could we reshore manufacturing to the U.S. while maintaining margins to keep our lights on? An important part to mention is that our most filter materials (KDF-55) is sourced from the US. So technically we partly source from Asia.  We found a U.S.-based supplier. The new unit cost us nearly 3x more to produce. To maintain our margins, we’d have to sell it for $239. So we ran an experiment. We created a secret landing page. The product and design were identical. The only difference? One was labeled “Made in Asia” and priced at $129. The other, “Made in the USA,” at $239. And: Add-to-carts for the U.S. version were only 24! Conversion? 0.0% (zero). Not a single customer purchased the Made-in-USA version. DRH note: This is zero for U.S. version vs. 584 for the Asia version. The vast majority of economists would not be surprised, and probably a majority of Americans would not be surprised. HT2 Ross Levatter.   (0 COMMENTS)

  Let’s consider the argument step by step. First, is a trade deficit with a particular country bad? No. One of the easiest ways to see that is to look at your own spending on other producers’ goods. Consider mine. Our household spends over $5,000 a year on groceries from Safeway. But those scoundrels at Safeway spend nothing on my output. If you’re employed, your employer has a trade surplus with you. He or she spends much more on your services than you spend on his products. But that’s not a problem. The same reasoning applies to a specific country. Our trade deficit with Canada in 2024 was about $36 billion, not the $100 billion that President Trump seems to have pulled out of thin air. And contrary to Trump’s belief, the fact that we spend more on imports from Canada than Canadians spend on our exports does not mean that we’re subsidizing Canadians, any more than I’m subsidizing Safeway. There’s no reason that we should have a zero trade deficit with a particular country. In 2024, the United States had trade surpluses with the Netherlands ($56 billion), Hong Kong ($22 billion), Australia ($18 billion), and the United Kingdom ($12 billion). Was that a problem for those countries? The heads of those countries and, apparently, many of their citizens, don’t seem to think so. It’s very much like you having a trade surplus with your employer. How about the fact that the United States has an overall trade deficit with the rest of the world in general? In 2024, we exported $3.19 trillion in goods and services and imported $4.11 trillion in goods and services, for an overall trade deficit of $0.92 trillion. What happened to that $0.92 trillion? Did people in other countries keep those dollars? It would have been great if they had. Our government spends less than 10 cents printing a Benjamin. And in return for each $100 we got $100 in goods and services. I’ll take that deal any day. Actually, though, the vast majority of the money came back to the United States in the form of investment. Foreigners used it to buy US government bonds, to buy land and plant and equipment, and to invest directly. The United States, for all its problems, is still seen by much of the world as a haven for investors. Note the irony. On the one hand, Trump is happy that many foreigners are investing in the United States. On the other hand, he’s upset that we have such a large trade deficit. Mathematics is not optional: the trade deficit and the capital surplus are the mirror images of each other. The above is from my latest Hoover article, “Clearing The Air On Tariffs And Trade Deficits,” Defining Ideas, April 24, 2025. And: On April 2, in a Rose Garden speech, President Trump finally unveiled his plan to impose “reciprocal tariffs” on imports from other countries. The chart he presented, though, was not based on the tariffs those countries were charging. Instead, it was based on an equation that nowhere included the tariff rates charged by governments of other countries. While Trump listed all the countries he wanted to impose higher tariffs on, he neglected to mention that the tariff rates charged by forty-four countries are lower than the average that the United States imposed before Trump’s increases. Most of these countries, admittedly, are small, but they include Canada, France, Germany, Italy, and Japan. Trump did not announce a cut in tariff rates to these countries, thus putting the lie to his claim that he wanted reciprocal tariffs. But put all that aside. Imagine, contrary to the data, that every country’s government in the world imposes higher tariffs on our exports than the US government imposes on our imports. What would be the best strategy for our government? The answer may shock you, but I assure you that my answer is based on decades, nay centuries, of economic reasoning and evidence. The answer is: cut our tariffs to zero. Why? It’s true that when a foreign government imposes tariffs on our exports, it hurts our producers. It also hurts the foreign government’s consumers. If our government responds by imposing tariffs on imports from that country, it helps our producers who compete with those products but hurts our buyers of those items. Those buyers include not just ultimate consumers, but also producers who use the tariffed items as inputs. It’s relatively easy to show, although you need a graph of supply and demand, that the losses to our consumers exceed the gains to our producers. The bottom line, therefore, is that whatever the other country’s government does, our government’s best option, if it puts the same weight on losses to consumers as it puts on gains to producers, is to have zero tariffs. And finally: Two major figures in the last century used metaphors to make the point. One was President Reagan. In the early 1980s, he argued that if you’re in a lifeboat and someone shoots a hole in the boat, it’s not a good idea to shoot another hole in the boat. Yes, you’ll hurt the first shooter; but you’ll also hurt yourself. The other was famous British economist Joan Robinson. If someone in another country to which you ship goods puts rocks in the harbor to make shipping more difficult, she asked, does it make sense for you to put rocks in your harbor? At the end I give two plausible arguments for tariffs. The second one is one that I haven’t seen anyone using and I suggest why. Read the whole thing. (0 COMMENTS)

Janet Bufton has an excellent recent post on Adam Smith on tariffs.  I wish to add my own thoughts to her post. Bufton rightfully points out that Smith would staunchly oppose these tariffs because they focus on the trade deficit, something he calls “absurd.”  Smith was a free trader, through and through: All systems of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.  Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, order of man.  The sovereign is completely discharged from…the duty of superintending the industry of private people, and of directing it towards he employments most suitable to the interest of the society” (Wealth of Nations pg 687, Book IV, Chapter ix, Paragraph 51). Smith would oppose the “retaliatory” tariffs because they are not retaliatory in any reasonable sense of the word.  He would also oppose these supposed negotiations taking place for the same reason (I say “supposed” because, as of this writing, the White House has refused to provide a list of countries currently negotiating).  Trump is not negotiating for free trade, or even for “fair trade” (however defined).  He is obsessed with trade deficits.  Assuming Trump is good to his word, the negotiations would be about reducing the trade deficit, not about allowing the “simple system of natural liberty” to come about.   Don’t get me wrong, I am glad Trump blinked in this very dangerous game of Chicken.  While a 90-day pause and the blanket tariffs are still quite bad, it’s not as bad as things looked on April 3.  But I am not optimistic about any negotiations insofar as they generate any true moves toward free markets.  I suspect that, if negotiations are taking place, they are an attempt by Trump to “direct the industry of private people.”   Adam Smith was a classical liberal.  For him, government had three roles: Protecting the society from violence and invasion from other countries Administering justice Creating certain public works and institutions that may not be viably provided by individuals (i.e. collective-consumption goods) In none of those three would Smith approve what is going on with tariffs right now.  If he were alive right now, I think he’d be yelling at Trump: “WE ALREADY MADE THIS MISTAKE!” (0 COMMENTS)

Artificial food dyes have been garnering a surprising amount of attention over the last few months. The FDA recently banned Red No. 3 due to concerns about the product’s safety.  Now a number of states are making a push to prohibit even more artificial food dyes. These bans are defended on the grounds that artificial dyes pose health risks, add nothing of nutritional value, and serve only to make food and drinks more visually appealing. So why not prohibit them? It seems like a ban would be all benefit and no cost. Let’s assume, at least for the sake of argument, that the above concerns are justified; even so, we shouldn’t ban artificial food dyes. The reason is simple: people have the right to decide for themselves whether they have good reason to accept risks to their own health. Suppose, as some claim, that the bans on artificial dyes would make the relevant products more expensive. For instance, the National Confectioners Association suggests that they “will make food significantly more expensive for, and significantly less accessible to, people in the states that pass them.”  Someone should be free to buy and consume riskier food to save money given that people generally have the right to take health risks for financial reasons. Jane is free to quit her desk job to start work on a commercial fishing vessel for a trivial increase in salary even though commercial fishing is a lot riskier than working from an office. Similarly, someone should be free to consume products with artificial dyes to save money if they prioritize savings over safety. Now, the claim that the artificial dye bans will make food more expensive is contested. So let’s suppose it’s false and prices won’t change at all. Maybe the only reason why these dyes are used is to make food and drinks more aesthetically appealing. Still, people have the right to take risks for purely aesthetic reasons. Imagine you’re at a car dealership choosing between a gray car and a red car. They’re the same price, but the red car has fewer safety features than the gray one. However, you simply prefer red and so you buy the red car. Maybe that’s an unwise choice, but it’s yours to make. Or suppose you’ve got a headache and you’re choosing between two pain relievers. The red pill carries greater risks than the gray pill. But here again, you simply prefer red to gray, and so you opt for the riskier pill. Few would dispute that you should be free to make this choice. The right to make decisions regarding your own health is grounded in the right of bodily autonomy, which is sometimes summarized as “your body, your choice.” Since it’s your body, you have the right to take risks with it. You can undergo risky surgeries, climb Mount Everest, or simply refuse to take needed medication. Think of it this way: if the Picasso painting is yours, you have the right to play Frisbee with it. This risks harming the painting, but it would be wrong for others to forcibly stop you. Similarly, maybe consuming artificial food dyes is risky and unwise, but you’re taking the risk with your own body. So, it would be wrong for others to forcibly prevent you from consuming them. Lastly, consider that the state doesn’t ban substances that are far more harmful than artificial food dyes, such as cigarettes. This is strange—it’s analogous to the state making it illegal to stub your toe to ensure that you’re taking care of your health, while at the same time legalizing dueling. If we’re unwilling to ban products that are more harmful than artificial food dyes, we shouldn’t be willing to ban artificial food dyes either.   Christopher Freiman is a Professor of General Business in the John Chambers College of Business and Economics at West Virginia University. (0 COMMENTS)