From deep Maine comes the story of the pastor of Calvary Baptist Church in Sanford who is reportedly at the source of the Covid-19 infection of 120 people. He held religious services in Sanford and officiated a marriage ceremony in the Katahdin area (of Thoreau fame). He does not encourage wearing masks and many of his flocks didn’t. His sermons apparently have political tones, which are not those of the Scottish Enlightenment. He warns against any future coronavirus vaccines, claiming they will contain “aborted baby tissue.” He believes that only God can control epidemics. Source: “Sanford Preacher Linked to Outbreak Tells Followers to Put Faith in God, Not Government,” WGME, September 2, 2020. Their website is currently down. Your blogger risked life and limb to drive to Sanford and take the feature image of this post. It is tempting to think that with friends like this pastor, individual liberty does not need enemies. Yet, it is impossible for us—we who prefer to use our liberty in different ways—to claim the freedom to do what we like while not recognizing the same freedom of choice to the Sanford Baptist pastor and those who choose to follow him. They are adults. (Children present special problems, but note that the danger would be much worse if, as some French revolutionaries wanted, children were raised not by their parents but by politicians, bureaucrats, and “the will of the people.”) The ideal of individual liberty is predicated on the reasoned belief that, within very wide limits (murder, the war of all against all, and such, although admittedly the limits are not always easy to draw), all individuals should be free to live their own lives as they please according to their own beliefs; and that voluntary cooperation will lead to more prosperity and more individual flourishing than any other system. Or, as Adam Smith put it, Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice. The partial realization of this ideal since the Enlightenment and the Industrial Revolution very strongly suggests that this system works as theorized, despite some inconvenience—including superstitious and unenlightened sects. It is sad that some people have to die to demonstrate this, but then again they are adults. Politics is worse anyway as it forces people to flock manu militari to what they don’t want or believe in. Government actions during the pandemic crisis—from price caps to stiffening regulations and command-and-control allocation–provided numerous confirmations. And let’s remember John Stuart Mill’s argument: it is only by letting people defend strange opinions or pursue risky lifestyles that we can (provisionally) know what is true and what is false. In On Liberty (1859), he wrote: There is the greatest difference between presuming an opinion to be true, because, with every opportunity for contesting it, it has not been refuted, and assuming its truth for the purpose of not permitting its refutation.  Complete liberty of contradicting and disproving our opinion, is the very condition which justifies us in assuming its truth for purposes of action; and on no other terms can a being with human faculties have any rational assurance of being right. As it is useful that while mankind are imperfect there should be different opinions, so is it that there should be different experiments of living; that free scope should be given to varieties of character, short of injury to others; and that the worth of different modes of life should be proved practically. when any one thinks fit to try them. It is desirable, in short, that in things which do not primarily concern others, individuality should assert itself. (0 COMMENTS)

I’ve long held the view that pundits pay far too much attention to American elections and not enough attention to elections in foreign countries. It’s not that US elections are unimportant—we are the world’s dominant power—rather the relative importance of the US is generally exaggerated. The US is more important than the world’s 3rd largest economy, but surely it’s not 100 times more important. How many people know that Japan just picked Yoshihide Suga as its new leader?  How many know that his policy preferences differ somewhat from those of Prime Minister Abe? After graduating, he became secretary to a Yokohama politician, where his real education began. His boss was minister of transport in the early 1980s, heavily involved in the privatisation of Japan Railways. “I think that’s the basis for Mr Suga’s politics,” said Isao Mori, his biographer. “It’s something like Thatcherism or Reaganism.” Whereas Mr Abe is a conservative, Mr Suga belongs more to the free market wing of the LDP, aiming to shake off the shackles of Japan’s regulatory state. One thing I’ve noticed is that the view of the media on issues such as deregulation are very much dependent on context. When discussing deregulation in the US, there’s often a high degree of skepticism. In contrast, there’s generally a tacit assumption that deregulation is a positive development when discussed on other countries—something that would boost efficiency. I’d be interested in knowing if other people have noticed the same pattern. PS.  Of course most media outlets do not even discuss deregulation in foreign countries.  Here I’m focusing on outlets such as the Financial Times, the New York Times, The Economist, the Wall Street Journal, the Washington Post, the South China Morning Post, etc.

NASA recently announced that the Space Launch System (SLS), its next-generation rocket, will cost significantly more than originally anticipated. In a recent announcement, NASA confirmed that the rocket was expected to cost $9.1 billion, and the ground system for mission support $2.4 billion. That’s a 33% increase over estimated costs in 2017! In contrast, the private sector has performed phenomenally in lowering launch costs. Between 1970 and 2000, the cost of getting to space was about $18,500 per kilogram. When SpaceX came onto the scene, however, things started to improve. The private launch provider has significantly reduced the costs of accessing space: By 2019, using its Falcon 9 rocket, costs had fallen to $2,720 per kilogram. Due to SpaceX’s innovations in reusable rockets, experts say launch costs might fall below $1,000 per kilogram in as little as five to ten years. The opportunity this presents for space exploration and development is exciting. This is from Alexander W. Salter and David R. Henderson, “For-Profit Companies Must be the Backbone of the New Space Age,” American Institute for Economic Research, September 5, 2020. Alex is turning into an excellent op/ed writer and co-author. Read the whole thing, which is short. A personal reminiscence: In the fall of 2012, I taught, as I did every fall between 2002 and 2015, an economics class in our distance learning Executive MBA course at the Naval Postgraduate School. It’s the only economics course the students got in the curriculum and so my course was approximately 8 3-hour lectures in microeconomics and 3 3-hour lectures in macro. The students were typically at Navy bases around the country. This time, though, I had 5 civilian students at NASA’s Johnson Space Center in Houston. I could tell from the start that this was a special group. They were involved from the getgo. Whenever I had 5 or more students at a location, I made a trip sometime during the quarter to that location and broadcast from there to the other locations. So in October I went to Houston. The students were even better than I had expected. I’ve taught well over 2,000 students in my career and probably closer to 3,000 and I don’t remember a lot of names. But I remember all 5 names: George Gafka, Jose Garcia, Lara Kearney, Brad Niese, and Joe Williams. Typically when I finished a class at a remote location we would quickly go out to a restaurant. This time was different. They wanted to hang around and talk about the material we had just covered plus other things they were wondering about economics. We didn’t leave for a restaurant until half an hour later when an exasperated janitor kicked us out of the room. At the restaurant, I decided to risk my good will by suggesting that, in light of everything I had taught them about incentives and residual claimants, a better alternative to NASA would be private space exploration. Brad Niese, the most junior of the 5, said immediately, “That makes sense.” We had a good and spirited discussion. I’m not sure I convinced the other 4 but none of them seemed to think it was a crazy idea. I was one of the two toughest graders, out of about 60 professors and lecturers at the NPS Graduate School of Business and Public Policy. All 5 earned an A, the highest grade one can earn at NPS. (0 COMMENTS)

The Center for Disease Control issued an order on September 1 that tenants earning less than $99,000 a year who fail to pay their rent due to COVID-19-related financial hardships cannot be evicted for non-payment of rent until at least January 1. This raises a number of legal, ethical, and logistical questions, not least of which is whether a public health agency staffed by non-elected officials even has the authority to effectively command specific people to provide free housing for other specific people for any amount of time. Further, if enforceable, such an edict has the potential to cause some serious long term damage that could wind up hurting renters. There’s a long history of antagonism towards landlords in the popular imagination. Like owners of other resources, landlords are sometimes considered to have not really earned their money. To be social parasites who don’t even deserve rights. Even Adam Smith seemed to express distaste for the occupation, writing that “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed.” (Of course, I think the clause “like all other men” is important here as well—wanting to put your situation to its best advantage is hardly unique to owners of rental property.) And I’m not deaf to the sentiment myself, having met a number of wonderful landlords but also a couple real stinkers who wouldn’t give back a deposit if you spit shined the place. However, love ‘em or hate ‘em, Smith also recognizes that landlords and other resource owners play an important part in the process of bringing much-needed resources to the market: “If, on the contrary, the quantity brought to market should at any time fall short of the effectual demand, some of the component parts of its price must rise above their natural rate. If it is rent, the interest of all other landlords will naturally prompt them to prepare more land for the raising of this commodity; if it is wages or profit, the interest of all other labourers and dealers will soon prompt them to employ more labour and stock in preparing and bringing it to market.” In other words, if for any reason there is a temporary shortfall of a product—whether because of increased demand or some kind of shock to the existing stock or productive capacity—the price is going to go up. This will in turn drive up the price of at least some of the inputs to production, including possibly the rental price of the land production takes place on. (Smith was focused here on commodity production, but the same principle applies in a modern housing rental market.) When prices go up is when the landlord will tend to be most hated. But it’s also their time to shine. The increase in rental prices makes it worthwhile for financially capable individuals to seek out additional land that could be rentable, or to rent land that was previously held idle because the going rate couldn’t cover the bother of renting it out. Having people in the economy with a strong incentive to provide additional housing is a very good thing. There is already a serious problem with the exorbitant price of housing in urban markets, and I can’t imagine that this action by the CDC is going to encourage anybody who is on the fence to start renting out additional property. Landlords are, after all, not really lords, but mere humans who have their own children to feed and bills to pay. What happens if non-payment of rent is going to prevent them from paying their own mortgage? Will rent default insurance become prohibitively expensive, forcing some who offer rental properties to pull out of the market? Such effects are particularly likely to impact the kind of landlords who rent out small numbers of properties, which could concentrate the market even further around less flexible corporate entities. The potential for long chains of unintended consequences abounds. Hopefully the fact that housing prices are currently down in some of the country’s most expensive markets will help prevent this order from being too painfully binding. But at the end of the day, any political action that makes offering rentals more difficult could wind up creating a lot more harm than good for renters. I’m reminded of my colleague Chris Coyne’s argument for adopting a constrained vision when trying to help others, taking seriously the limits of what can be achieved given the inevitability of scarce resources and imperfect people: “Adopting a constrained vision is not to accept the status quo regarding human suffering but rather is the recognition that an array of constraints limit what is possible and that any proposed or actual change in the status quo must be achieved relative to those constraints… while the claims stemming from this vision are not as extravagant as those coming from the man of the humanitarian system, they are more realistic and go further towards achieving our shared goal of relieving human suffering and improving the human condition” (Doing Bad by Doing Good, p. 27.)     Jayme Lemke is a Senior Research Fellow and Associate Director of Academic and Student Programs at the Mercatus Center at George Mason University and a Senior Fellow in the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics.   As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

The Economist has an article that discusses the proposed US shutdown of WeChat. This caught my eye: Foreigners in China have long relied on virtual private networks (vpns) to jump the great firewall. Now, Oscar Li, a postgraduate in Colorado, plans to do the reverse. After his mother in China heard the news about a possible WeChat ban, she called him, frantic with worry. He reassured her that he would download a vpn to circumvent the new great firewall of America. A sign of the times. Readers interested in China should also checkout a longer article in the same issue of The Economist, which provides an excellent discussion of recent changes in Chinese economic policy. PS.  Here’s a bit more from that famous Robert Frost poem: Before I built a wall I’d ask to know What I was walling in or walling out, And to whom I was like to give offense. Something there is that doesn’t love a wall (0 COMMENTS)

A piece in the Wall Street Journal in late July that explored the future of travel has been making the rounds on social media recently. The airline execs and regulators interviewed there agreed on a number of things, most important that business travel is going to be in real trouble even after the immediate dangers of COVID are past. A number also thought that leisure travel would come back “robustly” once travelers feel sufficiently safe.   I think that broad picture is probably right, but I wanted to add a few additional thoughts to consider. First, it’s important to disentangle the relative weight of leisure versus business travel from the question of the overall level of the total amount of travel. That is, are we looking at a future where people travel less overall but a greater proportion of that travel is for leisure, or will that overall level recover or surpass where it was pre-COVID?   No doubt, business travel is in trouble. Just as many in-person meetings within an organization generate the “this could have been an email” reaction, we’re looking at a future where in-person meetings across geographical distance will generate “could this be a Zoom?” considerations. (I ignore the question of what proportion of Zoom meetings also could have been an email!) Firms are going to have to think very carefully about the marginal benefits of in-person meetings involving travel compared to teleconferencing, especially as the software continues to improve and we learn to take advantage of that specific mode of interaction. Even if we assume away all health risks, can organizations really afford to pay travel expenses and sacrifice employee time when a Zoom meeting can accomplish most of the same things? And will employees be as willing to travel for business, with all of its headaches from the TSA to potential health risks to whatever health protocols stick around?   The WSJ piece suggests this will raise the cost of leisure travel, especially by air, as sellers lose the segment of their market that would pay high prices. That seems right, but the elasticity of demand might matter here. Leisure travelers are more price-elastic with respect to airfares, and if air travel becomes more of a hassle, the full cost of flying will quickly get prohibitive. Many folks have become used to driving longer distances the last few months, and the car might look like a better option on an increasingly large margin. Car rental places may have to re-orient their business more toward leisure travelers.   One piece of evidence of the tilt toward leisure is the recent decision by the airlines to waive change fees for essentially all travelers. This is one way to appeal to leisure travelers who previously might have been hesitant (on the margin) to fly if there was significant uncertainty. The elimination of change fees is a reduction in the total cost of the ticket in any case. But it also takes away a perk from frequent flyers, who are more often business travelers, by making it available to everyone.   Hotels will be in better shape, but here too, they will have to adapt to business that is relatively more leisure-oriented. Think about a chain like Marriott’s Courtyards, which are clearly designed for business travelers (e.g., no free breakfast). Many hotels got rid of pools, often for liability reasons. And it’s hard to find ones with adjoining rooms anymore. Chains that don’t allow pets will find it tougher going. If travel does tilt toward leisure, amenities such as free breakfasts, pools, adjoining rooms, and pet-friendliness will be part of that shift.   The WSJ piece also concludes with a call by former Transportation Secretary Ray LaHood to have clear and strict national safety and health standards for air travel. Just as hotels are going to compete to provide not only leisure-friendly amenities but also to assure customers of their health protocols, so will airlines compete to make clear how safe air travel is, even in the absence of national mandates. And this is the way it should be. Let the travel industry be free to experiment with different methods of addressing the concerns of their potential customers. If it’s correct that travel is going to be a challenging business for the near future, these firms have every incentive to figure out the right combination of safety and affordability to meet people’s desires. One-size-fits-all mandates squelch experimentation and assume we know things that only market proceess can discover.   Finally, just like the many Econlib readers who are academics, I’m not sure what this means for the future of academic conferences. Presenting papers and the other forms of more formal interaction can actually be done pretty well by Zoom, as can the preliminary rounds of job interviews that are central features of many such conferences. However, I do think there’s something really valuable about the in-person informal interaction at such conferences that cannot be replicated by Zoom. With colleges suffering in a post-COVID world, budgets will be even thinner, especially for travel. And while professional organizations might be able to negotiate really good hotel deals if total travel is down, it probably won’t be enough to entice a lot of academics to come who wouldn’t otherwise attend. Professional organizations are going to have to think very creatively about what pieces of their conferences do and do not have close enough substitutes over the web and just what their members are willing and able to pay for. Here, as everywhere, letting professional organizations experiment will be key to finding out what works best for their members. (0 COMMENTS)

And the men of Kharkov and Karachi are not different from the men of Kalamazoo. The specific objects of wealth and power may differ between Kalamazoo and Kharkov. But if Kalamazoo teems with thieves and brigands while Karachi is serenely industrious, the explanation lies not in differences in goals. Differences in goals will not explain differences in the way individuals…

This is the final response by Mario Rizzo and Glen Whitman, authors of Escaping Paternalism, for my Book Club on their treatise.  Don’t forget to review the book on Amazon! We want to thank Bryan one more time for hosting this book club, which has been entertaining and enlightening for both of us.  Although the discussion has naturally gravitated…

On Saturday, the federal government’s Center for Disease Control will issue a new regulation barring eviction of millions of residential tenants around the country. If it survives likely legal challenges, the new policy would set a dangerous precedent undermining federalism, the separation of powers, and property rights. Conservatives, in particular, will have reason to regret it…

On April 15, I did a post arguing that Sweden is not the right Covid-19 model for libertarians, rather Taiwan is the model. Now that we are in September, it’s time to revisit some of the arguments. One argument is that countries trying to control Covid-19 were merely delaying the inevitable. You hear people saying “we’re all going to get…