One of the many fascinating observations in Charles Postel’s The Populist Vision (Oxford University Press, 2007, p. 164) is the sweet spot that American populists of the late 19th century generally had for emperor Napoléon Bonaparte, the French dictator at the beginning of the century: In the 1890s, a Napoleon revival spread in the United States, as many Americans hoped for a strong man to deliver the nation from its multiple ills. Reporting on the so-called “Napoleon craze,” Century magazine reported that “the interest in Napoleon has recently had a revival that is phenomenal in its extent and intensity.” Muckraking journalist Ida M. Tarbell and Princeton Professor William Milligan Sloane contributed serialized Napoleon biographies in the Century and McClure’s Magazine. Politicians preened themselves in Napoleon’s image. Harper’s Weekly reported that then Ohio governor William McKinley, known as “the Napoleon of Protection,” also “looks like Napoleon and knows it.” The fascination with the French emperor corresponded to a broad discontent with corrupt and impotent political institutions, as well as strong currents of militarism and nationalism in American public life. The Populists were not immune to these currents. Tom Watson [a politician and writer of the times] and the Populists, however, were drawn less to military valor and patriotic glory than to the example of Napoleon’s administrative systems and energized state power. … In Watson’s treatment, Napoleon towers as “the peerless developer, organizer, [and] administrator,” who had applied the science of government to build a centralized and rational system of law and education, the Bank of France, and a strong state. … The general, Watson noted, was a “master builder” with “modern tone.” Contrary to today’s populists in America and in other countries, the American populists of the late 19th century believed in science and experts as Enlightenment people did in the previous century. Yet, both kinds of populism–the old one and the new one–are similar in favoring state intervention. In the old American populism, authoritarian experts and science represented rationality, hence the reverence for Napoleon; today’s populists prefer authoritarian politicians and their intuitions. Library of Congress, http://loc.gov/pictures/resource/cph.3a14529/ In its military version, the American infatuation with Napoleon appears to go back at least to the Civil War as illustrated above by the picture of General George B. McClellan in a typical Napoleonic pose. The Library of Congress says that McClellan was popularly known as the “little Napoleon.” General Ulysses S. Grant stroke the same pose. Craig Walenta, a frequent commenter on this blog, brought these pictures and others to my attention. A Napoleonic infatuation is not surprising. Since the “will of the people” does not exist and is unknowable, populists have to find a dear leader to incarnate it. (See “What Is Populism? The People V. the People,” Econlog, September 11, 2020.)   PS: I owe the Postel book reference to Jeff Hummel who, besides being a scholarly economist, is a walking encyclopedia on American history. (0 COMMENTS)

How dangerous are mountain lions? The data tell an interesting story. Since 1980, there have been only 13 attacks in all of California (where David and Charley live) and three people have died as a result. Compare this with attacks by dogs. Each year in California, about 100,000 dog attacks cause their victims to get medical attention. This means that California residents are approximately 180,000 times as likely to be seriously attacked by a dog as by a mountain lion. But to really compare dogs and mountain lions, we need to check our base, because there are a lot more dogs than mountain lions. With so many more dogs running around, a reasonable person would expect more dog attacks. With about 8 million dogs and 5,000 mountain lions in California, we see that there are approximately 1,500 dogs for each mountain lion. Once we check our base and correct for the numbers of dogs and mountain lions, we see that dogs are still more dangerous, and in fact, the risk of serious attack from an individual dog is about 120 times that of the risk from an individual mountain lion. Mountain lions present a daunting and ferocious image, but with so few attacks, they must have very little interest in attacking people. This quote is from David R. Henderson and Charles L. Hooper, Making Great Decisions in Business and Life, Chicago Park Press, 2006. The picture above is of me at the entrance to Stanford University yesterday. It reminded me of maps I saw of Germany divided into 4 zones after World War II. My friend and co-author Charley Hooper and I walked on the campus and notice a whole lot of 20-somethings walking around wearing masks even though they were typically walking alone and were not closer than 30 feet to anyone else. They seem to fear COVID-19 the way some people fear mountain lions. My guess is that it’s a mixture of their fear and the fear of the administrators of Stanford, who seem to have taken an extremely anti-intellectual approach to the issue. Either way, the risk to the young is extremely low. Here are data from the Centers for Disease Control as of November 12, 2020. They are for the number of deaths between February 1, 2020 and November 7, 2020. (The CDC notes that there is a lag because death counts are somewhat delayed.) The number of Americans of age 15 to 24 who have died of COVID-19 is 410. The number of Americans of age 15 to 24 who have died of all causes is 26,662. Watch out for dogs, not mountain lions. If you’re young, watch out for deaths from other causes, not COVID-19. Postscript: What brought us to Palo Alto is my 70th birthday, which I celebrate on Saturday. Because it’s impractical right now to do what Governor Newsom did but tells the rest of us not to do, I’m not having a 70th birthday party. Instead, I’m seeing individual friends for outdoor lunches and conversation. Charley, Jay Bhattacharya, and I had a wonderful almost 3-hour outdoor lunch and conversation. (2 COMMENTS)

Julius Probst directed me to a list of the share of whites that are college educated in various states. (See the list at the bottom of the post.) Note that the 10 states with the highest college share all voted for Joe Biden, as well as 8 of the next 10.  Only Texas and Utah were exceptions, at #12 and #19. At first glance the explanation seems obvious; white college grads voted strongly for Biden. I believe that’s only part of the explanation; they actually didn’t vote all that overwhelmingly for Biden. Rather, college grads also reshape the broader society in a way that is friendlier to the modern Democratic Party. When I was young, middle class people would mow their own lawns. As time went by, the “middle class” tended to segment into the upper middle class and the working class, with different lifestyles. Working class people still cut their grass, while upper middle class people frequently hire others to do so, often immigrants from Latin America. Perhaps white people who cut their own grass tend to vote for Donald Trump, while those that hire others vote for Biden, as do the people they hire. More broadly, in upper middle class areas there’s been an explosion in service industries, everything from pet grooming to nail salons to full service car washes. Many working class immigrant people migrate to affluent professional cites, where they provide services to upper middle class professionals. And while Hispanics shifted slightly toward Trump in the latest election, in absolute terms they still voted overwhelmingly for Biden. The symbiotic relationship between affluent professions and the immigrant communities that provide services to them creates a very different society from what you see in more “self-sufficient” working class states like Kentucky and Arkansas (the bottom two states on the list.) Indeed if you look at the bottom ten states, only one voted for Biden. And that one exception–Nevada– is itself very interesting. Biden won Nevada because of strong support among Hispanic voters. While Nevada does not have a big group of college educated whites, it does have a huge tourist industry, catering to affluent travelers. Thus it has lots of the same low-skilled service jobs that you see in places like California, and the immigrant population to match. This idea is familiar to those who have studied racial politics in America. States with large (but minority) black populations such as Mississippi, Alabama, Louisiana, South Carolina, and Georgia mostly voted for Trump. But that’s not because lots of blacks voted for Trump. Rather having a large black population reshapes society.  It makes the non-blacks behave differently, more likely to vote overwhelmingly for the candidate that blacks are not voting for. In contrast, whites in Vermont probably don’t think about the preferences of their tiny black population when casting their ballots. The states full of affluent whites and large immigrant populations are likely to be relatively open to immigration, trade, specialization, etc. They will also tend to be more urban.  This creates a dilemma for Democrats. How can they appeal to this group, and also to the factory workers to which Bernie Sanders was trying to appeal (albeit not necessarily successfully?) America is too complex a society for either political party to have a neat and tidy solution to coalition building in a two party structure. There will always be strange bedfellows. Furthermore, as society changes over time, the parties will evolve into new and different coalitions. For the moment, the Dems are the “college plus minorities” party. Who knows what they’ll be in 50 years? (0 COMMENTS)

In Open Borders, I heavily rely on the National Academy of Sciences report on The Economic and Fiscal Impact of Immigration to estimate the net fiscal effect of immigration.  Recently one of my graduate students pointed out this post by Jason Richwine criticizing my interpretation of the results. Among dropouts, immigrants in the 25-64 and 65+ age categories are clearly fiscal burdens, as they cost taxpayers $225,000 and $257,000, respectively. Caplan, however, is tantalized by the age 0-24 column, which shows positive $35,000. “Even young high school dropouts more than pull their weight,” he concludes. That conclusion is based on a misunderstanding of the table. Among immigrants in the age 25-64 and 65-plus columns, the education rows refer to the education of the immigrants themselves. However, in the age 0-24 column, education refers to the education of the immigrants’ parents. As p. 464 of the National Academies’ report explains, “If the immigrant arrives before age 25, we instead predict a future education level … based on parental education.” The reason the fiscal impact appears positive is that the model assumes that the children of high school dropouts will get more education than their parents did. In other words, most of Caplan’s “young high school dropouts” are not dropouts at all. Richwine concludes in a gentlemanly manner: This is an understandable mistake, as the National Academies authors should have been clearer that the age 0-24 column has a different interpretation than the other two age columns. Nevertheless, Caplan’s misinterpretation has led him far astray. Did I indeed misread the report?  Yes.  Volume editor Francine Blau connected me with Gretchen Donehower, one of the authors of the section, and she confirmed my mistake. Here’s the relevant NAS passage: Because an individual’s tax payments and benefit receipts differ so much by the individual’s educational attainment, to predict future flows for an immigrant one must first predict the educational level that individual and his descendants will attain. An immigrant who arrives after age 25 is likely to maintain the education level observed on arrival, so we assume no change in educational attainment after age 25. If the immigrant arrives before age 25, we instead predict a future education level by estimating regression functions that predict offspring education based on parental education. In hindsight, I was always a little puzzled by the NAS tables.  What does it mean, after all, to report the net fiscal impact of a 10-year-old college graduate?  I was also somewhat puzzled by how young immigrants could have such a favorable fiscal effect when taxpayers are immediately paying massive sums to educate so many of them.  But I deferred to the NAS numbers instead of double-checking the text.  I did read the whole chapter, but this qualification failed to register.  Mea culpa. In light of Richwine’s correction, here is my revised position on the NAS report. 1. Young immigrants (ages 0-24) whose parents are high school dropouts have a positive net fiscal effect. 2. But the dropout parents themselves generally have a negative effect, even if they arrive as young adults. 3. Even 25-year-old immigrant high school dropouts have a negative net fiscal effect (-$186,000), though 25-year-old immigrant high school graduates have a positive net fiscal effect (+$72,000).   I continue to stand by several closely related controversial claims, most notably: 1. Immigrants have a much more favorable fiscal effects than matching natives.  The table showing that 25-year-old immigrant dropouts have a net fiscal effect of -$186,000 also shows that 25-year-old native dropouts have a net fiscal effect of -$388,000! 2. If you consider this an inadequate basis for restricting the reproduction of natives, it is hard to see why it is an adequate basis for restricting the migration of foreigners.   Last point: If there is a second-edition of Open Borders, I’ll definitely fix the mistake and thank Richwine for pointing out my error. (0 COMMENTS)

A Review of The Fabric of Civilization: How Textiles Made the World, by Virginia Postrel, Basic Books, 2020   In 1998, Virginia Postrel closed her now classic book The Future and its Enemies with the observation that “We live in an enchanted world, a world suffused with intelligence, a world of our making. In such plenitude, too, lies an adventurous future.” Though I suppose some might see her books written since then–The Substance of Style and The Power of Glamour—as somehow “artsy” and disconnected from the more traditional political and economic arguments of The Future and its Enemies, they seem to me to be deeper explorations into that enchanted world and the intelligence that suffuses it.   Postrel’s newest book, The Fabric of Civilization: How Textiles Made the World (out this month from Basic Books) applies this same sense of wonder and wealth to the subject of textiles. The book is an ideal example of the value added to a subject by Postrel’s wonder-filled approach. As an avid knitter and embroiderer, an occasional crocheter, quilter, and constructor of clothing, I know a good bit about textiles. Nearly everything that I hoped would be mentioned in the book was in there–a discussion about the sea snails that provide the blue dye for tallit fringes? An exploration of the coal-tar dyes that provided D.H. Lawrence with one of his best images for beauty coming from unexpected places? The complex sexual politics of women and spinning? They’re all in there. (I did hope for a discussion of green arsenic dye, but that is a story that has been widely covered in other discussions of tragedies of the Industrial Revolution.)    And there is so much else I didn’t know. The radical nature of the first published weaving patterns. The sumptuary battle over–of all things–calico, which we moderns think of as a hopelessly out of date and “countrified” fabric.The complex interplay among weavers, dyers, and traders of different nations that resulted in kente cloth. Readers will pause throughout the book to examine the clothing they are wearing and the textiles that fill their home as Postrel points out what makes each of them remarkable.   And each of Postrel’s detailed explanations is fascinating. I was particularly entranced by her chapter on the gross and beautiful explorations of dying. The long history of revolting ingredients and smells that produce objects of great beauty sums up, for me, something central to the human condition–our endless hunger for the sublime, and our inability to achieve it without lowly tools and methods. But it also, in Postrel’s hands, becomes a reminder of that “world suffused with intelligence” that is so central to her understanding of how humans operate.   The best example I can give of this is her observation that: “Nowadays we call [indigo] that plant-derived coloring ‘natural’ to distinguish it from dyes formulated in chemical labs, including chemically identical synthetic indigo. But producing indigo takes far more artifice and effort than the word natural implies. Its source may grow in the wild, but turning leaves into dyestuffs for making blue cloth requires considerable technological prowess.” We have had that prowess for at least 6000 years, and in five concise and enormously readable pages, Postrel takes us through the development of that technology in ancient times, the later refinement of it into a portable technology that could be traded, and her own attempts to replicate the techniques for dying with indigo at home. Never once do we lose her sense that each step in the process of this technique is a leap for human intellect and a step into the future.   The political and economic are not absent in The Fabric of Civilization, either. Regular readers of Econlog and economic historians will find much to think about here, and textile historians will find new economic and political insights into their subject.    Though Postrel is happy to tell readers all about the different looms used to weave different kinds of fabrics, she is equally detailed in her discussion of the reasons behind different rates of pay for different kinds of textile workers in different times and places. She also reminds us that the history of textiles is the history of trade–not just in the existence of the Silk Road, or in the birth of banking from the textile merchants of the early Renaissance, but also in the use of different textiles as money, the development of arithmetic and double-entry bookkeeping as offshoots of textile trading, and on and on. She reminds us, as well, that in contrast to the too-frequent reliance on a narrative that focuses on colonialist oppressors appropriating the culture and art of the colonies, that artistic trade went both ways. Artists and consumers on both sides of these exchanges influenced and were influenced by trading partners. That’s a more complicated, more interesting, and richer story than the one we think we know.   It would be easy for a book on textiles to focus exclusively on the pleasures of home crafting, small producers, and vintage, even antique, technologies. But Postrel, a dynamist since before she coined the term, is as fascinated by the engineer and the chemistry lab as she is by the dye pot and the loom. Her discussion of the Swisstex company’s work on “creating colorful textile with minimal side effects” is a fitting close to her chapter on dying. Their chemistry experiments and engineering innovations lead the way to a modern dye process that allows us to leave behind the stench and the dangerous by-products of ancient methods and early industrial improvements to them. You don’t get those, notes Postrel, “by thinking like a nature child. You get it by thinking like a Swiss engineer.”    Her final chapter, “Innovation” explores the already existing improvements in textiles made by companies like Under Armour, and the technologies that soon might overturn everything we think we know about fabric. Smart fabric that charges your phone when you put it in your pocket? Fabric that only needs to be brushed clean, not washed? Clothes that make us cooler instead of warmer? Friends of the future may want to start the book here, and then travel backward to see how far we have come.   There are plenty of books about textiles for those of us who are interested in them. But there is only one by Virginia Postrel. You should read it. 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In a recent post, I discussed the appeal of conspiracy theories. Some of these theories are probably harmless, as with the belief that the government is hiding evidence of alien contact from outer space. In other cases, however, the theories are quite costly. I’d encourage people to read this twitter thread from a nurse in Texas. He’s a brief excerpt:   And a recent Yahoo article mentions a similar example from South Dakota: I don’t know how many people share this view, and indeed it is unlikely that people fall neatly into one of two camps.  Thus one poll suggested widespread skepticism about Covid was increasing: In February, a little more than a quarter of U.S. adults believed the coronavirus was being blown out of proportion. Now, that number has risen to nearly 40% of respondents. However “blown out of proportion” can include both those who see a hoax, and those who correctly understand that the risk is fairly low for younger people.  There are degrees of skepticism. Nonetheless, I’ve see quite a few press reports of people are open to some pretty extreme conspiracy theories about Covid: The survey conducted earlier this month also asked voters how likely they are to believe that “vaccines for COVID-19 will be used to implant tracking chips in Americans,” another baseless theory that has spread on social media this year. More than a quarter of voters in the poll, 27 percent, said they thought the statement might be true, while 73 percent said it was likely false. (Yes, I’m just as frustrated by the vague wording as you are.  “Might be”?  “Likely”?) I don’t have any solution to this problem, but I do believe that when issues become politicized the problem often gets worse.  On average, people will probably make better choices when we don’t protect them from the consequences of their actions.  Treat them like adults and they are more likely to act like adults. At the same time I understand that there are “externality” issues with a pandemic, so it’s unlikely that the issue will remain completely apolitical. HT:  Razib Khan (0 COMMENTS)

  The 30-day period has passed and so I’m now able contractually to post my op/ed on Milgrom and Wilson.   Thank These Nobel Laureates for Your Cellphone Economists Paul Milgrom and Richard Wilson get the prize for devising spectrum auctions. On Monday the Royal Swedish Academy of Sciences awarded the Nobel Prize in Economic Sciences to two American economists at Stanford, 83-year-old Robert B. Wilson and 72-year-old Paul R. Milgrom. The citation was “for improvements to auction theory and inventions of new auction formats.” Auction markets range from selling items on eBay to the sale of billion-dollar assets such as radio licenses and electromagnetic spectrum by the Federal Communications Commission. Messrs. Wilson and Milgrom did much of their theoretical work on auctions from the 1960s to the 1980s. In the early 1990s, the FCC decided to stop giving away valuable spectrum and sell it instead. An FCC economist named Evan Kwerel worked with Messrs. Wilson and Milgrom to help design an auction for both licenses and spectrum. In its technical paper justifying the awards, the Nobel Committee points out a major problem with using taxes to fund government programs: taxation distorts. The term economists use is “deadweight loss,” a loss that is not offset by a gain to anyone. Economists have estimated that raising $1 in taxes doesn’t cost society only $1; it costs somewhere between $1.17 and $1.56. The extra 17 to 56 cents is deadweight loss. The committee notes that by auctioning off major electromagnetic assets, the federal government avoided having to tax as much. This isn’t to say that the ideal auction is one that maximizes government revenue. One way to maximize auction revenue is for the FCC to act like a monopolist and hold spectrum off the market. But what matters most is that spectrum gets into the hands of the most-productive users. As former FCC chief economist Thomas Hazlett, now at Clemson University, and his co-author Roberto E. Muñoz of the Universidad Técnica Federico Santa María have pointed out, the gains from efficient allocation swamp the gains in government revenue. The 2017 wireless spectrum auction, for example, redirected spectrum from broadcast television to cellphone companies. If you’re reading this on a cellphone, you can thank Messrs. Milgrom and Wilson. Ronald Coase, who won the Nobel Prize in 1991, advocated auctioning off spectrum in a 1959 article. But governments tend to prefer to hand things out; it makes them popular and gives officials power. One of the few benefits of the large federal budget deficits in the 1980s and early 1990s was that the federal government started looking for ways to raise more money. Auctions were one solution. But what do you do when some license holders are keeping spectrum from being redeployed to more efficient uses? The FCC asked Mr. Milgrom and a team of economists to design an auction to get over-the-air broadcasters to relinquish their spectrum rights voluntarily. Then the FCC sold the rights. The gain to the federal government was $9.7 billion. The gain to consumers was many times greater. The two winners will split 10 million Swedish kronor, which is about $1.1 million at today’s exchange rates. But as George Mason University economist Alex Tabarrok notes on his blog Marginal Revolution: “The money won’t mean much to these winners, who have made plenty of money advising firms about how to bid in the auctions that they designed.” Mr. Milgrom advertises that his company saved Comcast and its consortium, SpectrumCo, nearly $1.2 billion. This is a potential conflict of interest. Still, the auction that Mr. Milgrom helped design is better than an alternative proposed by Microsoft economist Glen Weyl. In a recent critique of Mr. Milgrom’s role in FCC auctions, Mr. Weyl argues that a better way of allocating electromagnetic spectrum “is analogous to the way that urban areas address the ‘complex interference patterns’ that motivate zoning rules, such as that one building may block another’s view.” Such a method, Mr. Weyl admits, would “involve a complex and messy web of democratic participation in zoning proceedings, legal disputes with associated liability findings adjudicated by courts and quasi-markets operating in the shadow of these legal constraints.” Mr. Weyl doesn’t point out that his method has no real chance of allocating resources to the highest-value uses. And a lot of the value would dissolve during the rough-and-tumble political process. I invite Mr. Weyl to California, where developers deal with this “complex and messy web” almost daily. The result: Very little new housing is built, and middle-income people are priced out of the market. The Nobel Prize is sometimes given for contributions that are technically interesting but of low value. I argued on these pages last year that the 2019 prize for work on poverty fell into that category. But this year’s winners helped create huge value for producers, consumers and, indirectly, taxpayers. Mr. Henderson is a research fellow with Stanford University’s Hoover Institution. (0 COMMENTS)

Announcements: 1. I’m visiting the Yucatan after Thanksgiving.  I’ll be staying in Cancun, Chichen Itza, Merida, and Playa del Carmen. 2. To all my friends in Mexico: If you want to meet up, let me know. ¡Y si solo hablas español, mis hijos pueden traducir! 3. I’m going to be a Visiting Scholar at the University of Texas during most of December and January. 4. I will be on-campus at UT almost all weekdays, and would be delighted to meet friends old and new for lunch during my time in Austin. 5. My house in Austin has a big outdoor TV, so I also plan to do at least one karaoke night, as well as a sing-along of Emo: The Musical.  If you haven’t seen it, you must! 6. No joke! (0 COMMENTS)

This fall, LIFE magazine has published a special issue commemorating the 50th anniversary of the movie M*A*S*H. Despite the hook, the issue focuses on the ensuing TV series, which ran from 1972 to 1983. Though the show has often been characterized as being politically left-wing, it actually is heavily classically liberal, celebrating the individual, civil liberties, and the market, and harshly criticizing anti-individualism, government compulsion, and government decision-making. In a series of essays, I examine the classical liberalism of M*A*S*H. This is Part 5. Part 1 is here. Part 2 is here. Part 3 is here. Part 4 is here.   Conscription not only steals young men from their private lives and puts them in harm’s way; it also steals their labor. Though M*A*S*H’s draftees receive Army pay, their wages are far below what they would earn back home — let alone what they would demand for performing  medical duties in a combat zone for months on end. That stolen labor features in two episodes, “Payday” (s. 3) and “Back Pay” (s. 8), in which Hawkeye tries to get the Army to compensate him fairly for his work. The Army does no such thing, of course, but Hawkeye gets a measure of justice. Labor is not the only good in which M*A*S*H depicts the virtues of voluntary exchange. Many episodes show Radar and Klinger making back-channel deals (often in violation of “the regulations”) to get the unit much-needed supplies and unit members much-wanted personal items. Hawkeye and others swing similar deals for items they want, even going so far as to trade on the black market. Those voluntary exchanges are often explicitly contrasted with the bizarre — and sometimes miserable — results of the command-and-control “Army way.” For instance, in “The Incubator” (s. 2), Hawkeye and fellow surgeon “Trapper” John McIntyre (Wayne Rogers) follow procedure to order an incubator for diagnosing infections. Quartermaster rejects their request, informing them such a device would be “a luxury” — but they could have a pizza oven for unit movie nights. (“Just use the standard S-1798 and write in ‘pizza’ where it says ‘machine gun.’”) As they continue trying to work the system for the needed hardware, their experiences offers a fine example of public choice theory, the idea that government officials and employees are as self-interested as private-sector workers: Hawkeye and Trapper repeatedly encounter supply officers who want to know what they would get in exchange for the unit. As the two explain to a general who asks if they’ve followed proper procedure for their request: TRAPPER Sir, we started with a captain, went on to a major, then to a colonel. HAWKEYE On the way, we’ve encountered oral compulsiveness, raging paranoia and a colonel who’s shipping Korea to Switzerland one dollar at a time. TRAPPER Which makes you the next contestant, general. HAWKEYE [In a Groucho Marx voice] And the subject you’ve chosen is incubators. Ultimately, Radar ignores regulation and wheels-and-deals for a unit. There are other examples of exchange “the Army way.” In “Give ’Em Hell, Hawkeye” (s. 10), the 4077 is informed it can have a much-needed hot water heater — if its members first “beautify” the camp to impress visiting dignitaries. In “The Life You Save,” unit chaplain Fr. Francis Mulcahy (William Christopher) explains Army thinking to Hawkeye after Hawkeye takes over for Mulcahy as mess officer and discovers the unit is missing food trays for which Hawkeye is now responsible: MULCAHY Look, I was just as upset as you were when I took over the mess tent. Here’s how it was explained to me. The Army doesn’t do things the way real human beings do them. Now, then, you’re minus 75 trays. HAWKEYE Yeah. MULCAHY But they’re not good for anything except putting under Army food. So, some mess tent somewhere is plus 75 trays. When this war is over, a few generals will get together, and add up all the pluses and all the minuses, and it’ll all come out even. Besides which, long before that happens, you’ll already have stuck somebody else for them. At the end of the episode, Hawkeye indeed sticks Margaret with mess duty — and he and Klinger trick her into thinking that all trays are present and accounted for. M*A*S*H shows considerable respect for entrepreneurship. As noted above, Radar and Klinger swing clever deals for desired goods. They both also try their hands at get-rich schemes, some of which are hare-brained, but others are clever — such as Klinger’s toying with selling early versions of the Hula-hoop and Frisbee (“Who Knew?”). Hawkeye and B.J. invent a vascular clamp and contract to have it produced (“Patent 4077,” s. 6). Koreans are portrayed as virtuous entrepreneurs, from craftsmen who sell their wares at the 4077 (“Dear Mildred” [s. 4], “Patent 4077”), to domestic workers providing laundry and housekeeping services, to the recurring character Rosie (usually played by Eileen Saki), the proprietress of the off-base saloon. Private property is also respected. Though the series regularly promotes an ethic of sharing (and features comic retribution for those who violate the ethic), property is not commandeered by the unit’s commander. Potter relies on moral suasion to have Klinger give his dresses to a group of prostitutes in exchange for using their brothel as an operating room (“Bug Out,” s. 5). Charles agrees to share his newspapers from home with the camp — after he finishes reading them (“Communication Breakdown,” s. 10). And, of course, the most famous property on the show is the surgeons’ still — and woe comes to those who violate it. The only instance I can think of where property rights are infringed by command is when Colonel Potter orders Hawkeye and B.J. to get rid of their trouble-causing portable bathtub — and they then trade it for strawberry ice cream (“None Like It Hot,” s. 7). It should be noted that though economic freedom is respected in the show, there is often “persuasion” — sometimes heavy-handed — against some economic activities. In “Souvenirs” (s. 5), a chopper pilot is pushed to stop buying dangerous war souvenirs from Korean children. In “Change Day” (s. 6), Hawkeye and B.J. refuse to help Charles profit from a shady arbitrage scheme when the Army changes military script. And in “Private Finance” (s. 8), Charles and B.J. use a false diagnosis to temporarily stop a patient from pressure-selling investment products to other patients. But in each of those cases, transactions are obstructed out of an ethic of caring (about children, Korean peasants, and convalescing patients) and are blocked through private arm-twisting, rather than by order. Likewise, acts of charity are strongly encouraged, but are not ordered. For instance, in “Dear Sis” (s. 7), Charles is free to decline to donate to the unit’s Christmastime orphans fund. However, after Father Mulcahy secretly arranges for Charles’ family to send him a beloved childhood item as a comfort for homesickness, Charles has a Scrooge-like change of heart: CHARLES Uh, Father? Is there still time to, uh, contribute to your orphanage fund? MULCAHY Always. CHARLES Good. Here. [Hands over a wad of money.] Buy them whatever they need. Oh. Oh. Here. [Hands over more money.] Buy them whatever they don’t need. MULCAHY Major? Are you all right? CHARLES [Laughing.] You saved me, Father. You lowered a bucket into the well of my despair, and you raised me up to the light of day. I thank you for that.   In this way, M*A*S*H offers a resolution to an age-old dilemma for classical liberals: how to balance an ethic of caring for others with respect for peoples’ property, values, and choices. The solution is to do so through persuasion and example, not force. For a show about a military base in a war zone during the draft era, that is a classical liberal solution. (0 COMMENTS)

My friend and sometime co-author Alexander William Salter has written an excellent piece in National Review in which he makes the case for confirming Judy Shelton as a member of the Federal Reserve Board of Governors. It’s “Confirm Judy Shelton to the Fed Board of Governors,” National Review, November 16, 2020. Alex writes: There are three strikes against Shelton in the eyes of her detractors. The first is her fond view of the gold standard, a decidedly gauche position among monetary economists. The second is her academic background: Her Ph.D. is in business administration, not economics, and was awarded by a non-elite university besides. The third is her perceived partisanship, which Shelton skeptics contend would reduce the political independence of the Fed. Alex answers each in turn. You can go to his article and see if you’re convinced. I am. One highlight from his piece is his defense of the classical gold standard, not that Shelton would have much chance to move us toward it: And let’s be clear: It does work just fine. Specifically, the “classical” gold standard, which prevailed from 1879 to 1914, in many respects outperformed the system we have now. (It’s important to specify which gold standard we mean. The “gold-exchange” standard that prevailed between World Wars I and II was awful, largely because central banks mucked it up.) In an important paper comparing the pre- and post-Fed periods, George Selgin, William Lastrapes, and Lawrence White found that “the Fed’s full history . . . has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment.” In a subsequent study, Thomas Hogan found that GDP growth was better in the pre-Fed period, while inflation and inflation volatility (a key measure of purchasing power predictability) were worse. When I wrote about Shelton in July, I leaned in favor but didn’t know enough to take a position. But even without reading Alex’s piece, I had come in the last few months to the view that Shelton should be confirmed. And my reason doesn’t have to do with monetary policy but with industrial policy. If you judge the Fed solely on the basis of monetary policy, you’re leaving out a lot of what they do. The Fed Reserve is now a practitioner of industrial policy, picking winners and losers. I wrote at the end of July: Moreover, the Federal Reserve, which took on new powers during the financial crisis of 2007-2009, is going further down that path. In a March 23 press release the Fed states, “The Federal Reserve is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time.” The release then goes on to list various assets that the Fed will buy, including corporate bonds and municipal government bonds. We used to think of the Fed as the agency whose main purpose was to keep inflation low. That’s so 20th century. The Fed is now essentially the agency that gets to decide which investments are important; it is conducting an industrial policy in all but name. I’m fairly confident that Shelton is sufficiently against central planning to oppose these Fed powers. And certainly I think she would favor them less than almost all, or maybe all, the other Fed governors. (0 COMMENTS)