In a recent post, I imagined a hypothetical situation where cranberries turned out to be a surefire way to prevent cancer. I described how this would create a huge shift in demand, leading to an increase in prices, which in turn would lead to an increase in supply: Suppose tomorrow, scientists announce that eating 100 grams of cranberries per day has been proven to make one immune from ever developing cancer. What would happen in the short run? There would be a huge increase in the demand for cranberries – the demand curve would shift sharply to the right. Cranberries, in turn, would become much more expensive, so even though demand will drastically increase, the quantity demanded will not rise by all that much, at least in the short run. What would happen on the production front? For any given cranberry farm, you’d expect there are some marginal adjustments they could make to increase output, but those changes hadn’t been worth the cost of making. But when the price rises, those adjustments become worth making. You’d expect current cranberry farmers to immediately try to maximize their yields and push as many cranberries out the door as they possibly could. In the longer term, you’d expect them to increase their cranberry production capacity, and you’d also expect to see many other people shift away from growing blackberries or marionberries and start growing cranberries instead. This, in turn, shifts the supply curve to the right as well, bringing the market price for cranberries back down. The process of adjustment will take some time, but if your goal was to make sure lots of people can take advantage of cranberries and their cancer-preventing properties, implementing price controls on cranberries would be your worst enemy, because it would prevent these adjustments from occurring. At least, the process I describe above is what would ideally happen if cranberries were found to have such amazing properties. Realistically, I suspect what would actually happen is that after the initial demand increase and subsequent price spike, the government would intervene with price controls and regulate the cranberry market into oblivion. And part of what would motivate those policies is a claim we often hear in favor of price controls for some good – that in the absence of price controls, “only the rich” will be able to afford such-and-such, so we need price controls to ensure the good in question is “affordable” for everyone. If the price of cranberries suddenly shot up to $1,000 per serving, there would doubtless be outrage that “only the rich” can now afford cranberries and their cancer-preventing properties. (This outrage often tricks people into thinking the case against price controls somehow overlooks the distinction between “willingness to pay” and “ability to pay” – an elementary yet common mistake, because outrage rarely sharpens one’s reasoning skills.) The problem with this mode of thinking is that it (like Ferengi economic philosophy!) fails to think past step one. Yes, if such a thing were to happen, “only the rich” would be able to afford cranberries – at first. But the high price would incentivize huge numbers of people to get in on the cranberry market, pushing the supply curve out to the right and bringing the price back down. If you’re stuck in a static, one-stage frame of mind, pontificating about how “only the rich” can afford this or that may seem troubling. But if you can think beyond stage one, you realize how much that view misses. Given that the way we frame issues has a significant impact on how people view that issue, here’s a framing I think would be helpful: high prices today enable the rich to subsidize access for the poor tomorrow. In the case of cranberries, in order for supply to rise, existing farms will need to be expanded and new farms will need to be created. This involves a great deal of expensive, up-front costs. Letting cranberries be sold for a high price to the rich today is what funds that very process of expansion, pushing out the supply curve and making cranberries abundant for everyone else. That is, allowing the rich to buy at high prices early on subsidizes the process of making goods available to the poor at low prices for the long haul. This isn’t a fanciful process – this reflects what we can see throughout economic history. Whenever there is some new technology, product, or breakthrough, in the early stages it’s usually very expensive. But as time goes on, costs come down and it becomes more available and affordable. But in order to reach that stage, it needs to be able to go through the “very expensive” step first, to help offset all the costs that went into bringing the product to market, and the still-high marginal costs of production for this new product. Take, for example, electric cars. A newcomer in the electric car space is Rivian. Their first two vehicles, the R1S and R1T, started at over $80,000 and could easily go for over $100,000 if you added a few basic options. But now Rivian is preparing to release newer, more mass-market vehicles at half the price of the initial generation. In order for Rivian to be able to produce less expensive electric cars more accessible to the average consumer, they first had to go through a process of selling expensive cars to wealthy consumers. Those high income people buying the initial rounds of $100,000 Rivians enabled the company to begin producing more affordable versions of their vehicles. Almost everything you enjoy today was once an expensive luxury only affordable to the rich. With this in mind, look back and ask yourself what would have happened if any of these things were immediately hit with price controls when they first came to market to prevent “only the rich” from being able to afford them. If you can see why that would have been a bad idea in all those cases, you can understand the same thing in present times as well. The rich paying top dollar for things today is what will make them affordable for you tomorrow – so keep that framing in mind when feeling upset about the high price of something. And remember to always think past step one. (0 COMMENTS)

  On December 2, President-elect Donald Trump wrote: I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan. So you would expect that he would dislike foreign investment in the United States, right? Wrong. Donald Trump says he wants more foreign investment. In “Why Trade Should be Free,” Defining Ideas, October 30, 2024, I wrote: In his recent appearance before the Economic Club of Chicago, Trump said he wants to impose high tariffs so that foreign firms will move their production to the United States. In other words, he wants more foreign direct investment. If you click on his speech in the link directly above, go to about the 11:30 point where he says that to avoid tariffs, foreign companies need only build their plants here. Not buy their plants here. Oh, no. Build their plants here. He never explains why he wants foreign investors to build, but not buy. Vice-President-elect JD Vance used to understand why it was good for the United States if the government allowed foreign companies in Japan to buy domestic firms that were in danger of shutting down. As Eric Boehm of Reason wrote on December 19, 2023, quoting a passage in Vance’s book Hillbilly Elegy: “The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world,” Vance writes. “If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.” Too bad Vance seems to have forgotten it. He should refresh his understanding by reading Hillbilly Elegy. Why do I say that Donald Trump is attacking U.S. Steel? Because he doesn’t want to allow its owners to sell. Ultimately, he’s attacking their property rights.   (0 COMMENTS)

A chain of coffee shops near me has had a sign outside their establishments this fall that simply reads, “Pumpkin is a Feeling.” Some might read this and simply conclude that it’s false. Pumpkin isn’t a feeling. It’s a plant!  But when it comes to the pumpkin flavored treats that are popular each autumn, the most important thing isn’t the presence or absence of that specific plant. The important thing is evoking a feeling. Pumpkin puree is of course an important ingredient in many pumpkin flavored treats, most notably the iconic pumpkin pie. Yet when people want to evoke pumpkin pie, it’s often just as important for them to include pumpkin pie spice, a blend that includes nutmeg, cinnamon, allspice, ginger, and cloves. There’s a reason that Starbucks doesn’t name their signature fall drink simply a “pumpkin latte,” but rather a Pumpkin Spice Latte. These spices evoke a set of feelings that people in our culture associate with pumpkin pie, which they likewise associate with Thanksgiving and fall. And as pumpkin spice flavored treats proliferate, this association between this spice blend and fall is reinforced.  As a result, the most salient feature of a “pumpkin” flavored product might not be the presence of pumpkin at all. Instead, it’s whether the flavors in the product evoke the correct culturally constructed feeling! If your sole lens for understanding the world were botany, biology, or another natural science, this might seem odd. Are people simply making a mistake? Are they using the word “pumpkin” incorrectly? But if you take social science seriously, the actions and choices of consumers and producers can become intelligible. This is because, as Nobel laureate in economics F.A. Hayek taught us, the facts of the social sciences are what people believe and think.  Hayek emphasizes that social sciences are concerned with people, their choices, and their relationships and interactions. This impacts which features of an object are most relevant for identifying and analyzing it. Hayek asks, “Is it the physical attributes of the objects—what we can find out about these objects by studying them—or is it by something else that we must classify the objects when we attempt to explain what men do about them?”  To answer this question, Hayek considers “such things as tools, food, medicine, weapons, words, sentences, communications, and acts of production—or any one particular instance of any of these.” He argues that these concepts do not refer “to some objective properties possessed by the things, or which the observer can find out about them, but to views which some other person holds about the things.” Rather, they are defined “defined only by indicating relations between three terms: a purpose, somebody who holds that purpose, and an object which that person thinks to be a suitable means for that purpose.” The operative word here is thinks. A person’s thoughts, beliefs, and purposes are what defines something as an instance of one of these social categories.  Each fall, many consumers act with purpose. We want the flavor of pumpkin pie and its associated spices. We want the feelings, moods, vibes, and associations it evokes. And to achieve these ends, we purchase products that we believe and think will have that flavor. The physical properties of these products will vary. Some contain pumpkin puree, while others do not. The pumpkin spice flavored Oreos that I’m eating right now do not include “pumpkin” on the ingredients list. But their appearance and flavor serve my purposes, and likely served the purposes of various other pumpkin spice enthusiasts this autumn. The physical features of these cookies differ substantially from the various pumpkin-flavored coffee drinks that people are buying this fall. But they serve complementary purposes and plans.  To understand the decisions consumers and producers made that led us here, you need to consider the relevant facts. Not the facts of the natural sciences, but the facts of the social sciences. Not the facts of botany, but the relevant facts about what consumers and producers believe and think.   Nathan Goodman is a senior fellow at the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.  His research interests include defense and peace economics, self-governance, polycentricity, public choice, institutional analysis, and Austrian economics.  (0 COMMENTS)

Visiting a 13th-century cathedral, climbing a bell tower stairway with stone steps bowed by centuries of human footsteps, and meeting the chimeras and gargoyles that look over Paris roofs provide a unique esthetic if not religious experience. But in the restauration of Notre-Dame de Paris ravaged by fire five years ago, an economist may see something else. The magazine The Economist illustrates its story on the reopening of the cathedral with pictures of the fabulous stained-glass windows and the majestic nave (“Emmanuel Macron Shows Off the Gloriously Restored Notre Dame,” The Economist, November 29, 2024): Perhaps the most breathtaking feature is the cathedral’s newly luminous quality. After being darkened by centuries of grime, the blanched stonework of the pillars and vaults now appears as it would have done in medieval times. The pristine aspect of the stone—cleaned, consolidated, recut and replaced—will doubtless take by surprise visitors expecting to find the pillars rising “majestically into the gloom”, as Victor Hugo wrote of them in “The Hunchback of Notre Dame”. The Economist also reminds us of a remarkable fact: a large part of the work, which cost about $1 billion, was privately financed. I couldn’t find up-to-date official figures but it appears that about one-half of the money came from a small number of French billionaires and large corporations, which confirms that it is useful to have rich people and large corporations around. Most of the rest of the money seems attributable to small private donors in France and elsewhere in the world. The magazine could have gone further by observing that the reconstruction of Notre-Dame illustrates how some public goods can realistically be financed privately by consumers who prefer paying a steep price to being deprived of a public good they dearly want for whatever subjective reason. “Consumers” includes anybody who will benefit from the availability of the public good. Anthony de Jasay developed this argument with much force, notably in his Social Contract, Free Ride. (My linked review explains in some detail what are “public goods” in mainstream economics and how their special character is often exaggerated.) Perhaps a public good that cannot be voluntarily financed is not “public” at all. As de Jasay would say, let the people who want it enough pay for it, and let free riders ride. It is true that the public subscription for the reconstruction of Notre-Dame was launched by the French government and that generous tax deductions were available, but a partial tax deduction of course does not mean that a donation costs nothing to the donor. And if there were no compulsory taxes, many people would have more money to contribute to their preferred public goods. The lesson remains that it is not unrealistic to think that the public goods worth a lot to some part of the public could be financed voluntarily. Note also that a public good is rarely (if ever) a public good for every member of a territorial society. No doubt that many individuals in France or in the world (even in the civilized world) don’t view Notre-Dame as a good, that is, as something that brings utility. We can certainly find some atheists or Muslims or Baptists who hate it or, at least, would genuinely not be willing to pay a single cent to benefit from its availability. The largely private, non-coercitive financing of the reconstruction of Notre-Dame shows how to solve conflicts in society: pay for what you want and don’t force anybody to pay for it. These considerations do not provide a panacea but they show how to set the problem. ****************************** Closeup of chimera on top of a bell tower of Notre Dame de Paris (0 COMMENTS)

There has been a great deal of recent discussion of the problem of debanking. Most of what I’ve read seems to miss the root causes of the problem; debanking is a symptom of deeper problems with our system of governance. The problem cannot be fixed through “regulation”, because the problem is caused by regulation. Debanking has many causes; here are just a few: 1. Federal drug prohibition 2. The federal income tax 3. Federal deposit insurance The first two were progressive era initiatives, passed right before WWI.  The third was passed during the Great Depression.  (Interestingly, FDR strongly opposed deposit insurance, but signed the Glass-Steagall bill anyway due to the importance of its other provisions.) Because of deposit insurance (and related policies such as “too big to fail”), profit maximizing banks are encouraged to take socially excessive risks, knowing that the consequence of mistakes will be partially born by taxpayers.  Because of this moral hazard problem, deposit insurance almost inevitably leads to the regulation of banking.  Banks are pressured to behave in such a way as to please the bureaucrats that regulate them. Both drug laws and the income tax are exceedingly difficult to enforce.  As a result, the federal government has increasingly relied on the banking system to aid its efforts to prevent money laundering and tax avoidance.  Even when drugs are legalized at the state level, they remain a crime at the federal level.  Thus most banks shun marijuana businesses.  Once you give regulators the power to shut down non-conforming banks, it is almost inevitable that “mission creep” will set in and the regulations will become increasingly politicized.  Whole classes of people become targeted.  Certain ethnic groups associated with terrorism are viewed with suspicion.  Americans living overseas are viewed as potential tax evaders, and often find it difficult to find a bank that will accept their deposits. I doubt this can be fixed through regulation.  There are too many different ways for regulators to exert subtle indirect pressure on banks.  For instance, although the Federal Reserve has completely abolished the system of formal reserve requirements, banks now hold far larger reserve balances than back when there was a minimum level of required reserves.  That’s partly because of the policy of paying interest on reserves, but also it is partly due to the fact that bank regulators increasingly pressure banks to hold extremely large reserve balances.     If we sincerely wish to reduce the problem of debanking, deregulation would be far more effective than additional regulation.  Legalize drugs.  Abolish deposit insurance.  Eliminate rules that cash transactions larger than $10,000 must be reported to the government.  Replace the income tax with a consumption tax. Obviously, these dramatic changes are unlikely to occur in the near future.  But nothing else is likely to work.  If we are not willing to address the root causes of debanking, then we need to accept that fact that debanking will continue, and indeed become an even greater problem over time.  PS.  Caitlin Long has an excellent twitter thread illustrating the complexity of the debanking problem. (0 COMMENTS)

Economic Freedom in Hong Kong The Fraser Institute’s 2024 Economic Freedom of the World (EFW) report,1 its most recent edition, ranks Hong Kong as the world’s freest economy in 2022. Since the first report in 1995, Hong Kong has invariably ranked first, with a rare occasional drop to second. The EFW report explains its methodology for ranking economic freedom. Its five general categories include (1) Size of Government, (2) Legal System and Property Rights, (3) Sound Money, (4) Freedom to Trade Internationally, and (5) Regulation. Each of the five categories consists of several measures, which are weighted, and then combined into one comprehensive number. Before examining Hong Kong’s ranking, let’s review the history of the EFW rankings. I wrote the original papers for the conceptual and measurement foundations for a Liberty Fund conference held in July 1988, published as Chapters 2 and 4 in Economic Freedom: Toward a Theory of Measurement, (Fraser Institute,1991).2 The Fraser Institute EFW annual report, now prepared in conjunction with the Cato Institute and a global network of institutions, is the bible of economic freedom rankings. Now let’s turn to Hong Kong. Hong Kong was founded as a free port British Crown Colony in 1841 until its transfer of sovereignty to China on July 1,1997, and today is a Special Administrative Region (SAR) of China. The expiration of the British lease on Hong Kong’s New Territories, with the implication that Hong Kong would revert to China in 1997, required a new set of governing laws to replace the Letters Patent and Royal Instructions that had served as Hong Kong’s colonial constitution. Shortly after the Sino–British Joint Declaration was signed in 1984, the National People’s Congress set up the Basic Law Drafting Committee (BLDC) in 1985, whose task was to draft a new constitution, a Basic Law, for Hong Kong’s governance beginning July 1, 1997, as stipulated in the Joint Declaration. In June 1985, the Standing Committee of the National People’s Congress (NPCSC) approved the membership of the BLDC, which consisted of 36 members from China and 23 members from Hong Kong, chaired by Chinese diplomat Ji Pengfei. Twelve of the 23 members from Hong Kong were connected to the city’s business and industrial sectors. In addition, a Basic Law Consultative Committee (BLCC) consisting of Hong Kong community leaders was established to collect views in Hong Kong on the draft law. The BLCC was also dominated by business and professional elites. Under the “one country, two systems” arrangement for the incorporation of Hong Kong into China, the socialist system and policies of China are not be practiced in Hong Kong, and the capitalist system and way of life before the handover are to remain for 50 years, until 2047. The first draft of the Basic Law was published in April 1988, followed by a five-month public consultation. The second draft was published in February 1989, with another consultation period ending in October 1989. The Basic Law was promulgated on April 4, 1990, by the National People’s Congress. Chapter V of the Basic Law provides the basis for the Fraser Institute ranking Hong Kong the freest economy in the world.3 It is the best free market set of rules, an economic constitution as it were, adopted anywhere in the world. It largely remains intact 27 years after 1997. Articles 105-116 specify the legal and institutional rules for Hong Kong’s free market economy. It is worth reviewing the details of Hong Kong’s free market constitution. Article 105. The Hong Kong Special Administrative Region shall, in accordance with law, protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property. Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay. Article 106. The Hong Kong Special Administrative Region shall have independent finances. The Hong Kong Special Administrative Region shall use its financial revenues exclusively for its own purposes, and they shall not be handed over to the Central People’s Government. The Central People’s Government shall not levy taxes in the Hong Kong Special Administrative Region. Article 107. The Hong Kong Special Administrative Region shall follow the principle of keeping the expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance, avoid deficits and keep the budget commensurate with the growth rate of its gross domestic product. Article 108. The Hong Kong Special Administrative Region shall practice an independent taxation system. The Hong Kong Special Administrative Region shall, taking the low tax policy previously pursued in Hong Kong as reference, enact laws on its own concerning types of taxes, tax rates, tax reductions, allowances and exemptions, and other matters of taxation. Article 109. The Government of the Hong Kong Special Administrative Region shall provide an appropriate economic and legal environment for the maintenance of the status of Hong Kong as an international financial center. Article 110. The Government of the Hong Kong Special Administrative Region shall, on its own, formulate monetary and financial policies, safeguard the free operation of financial business and financial markets, and regulate and supervise them in accordance with law. Article 111. The Hong Kong dollar, as the legal tender in the Hong Kong Special Administrative Region, shall continue to circulate. The authority to issue Hong Kong currency shall be vested in the Government of the Hong Kong Special Administrative Region. The issue of Hong Kong currency must be backed by a 100 per cent external reserve fund. Article 112. No foreign exchange control policies shall be applied in the Hong Kong Special Administrative Region. The Hong Kong dollar shall be freely convertible. Markets for foreign exchange, gold, securities, futures and the like shall continue. The Government of the Hong Kong Special Administrative Region shall safeguard the free flow of capital within, into and out of the Region. Article 113. The Exchange Fund (eternal reserves that provide 100% backing of the Hong Kong dollar) of the Hong Kong Special Administrative Region shall be managed and controlled by the government of the Region, primarily for regulating the exchange value of the Hong Kong dollar. Article 114. The Hong Kong Special Administrative Region shall maintain the status of a free port and shall not impose any tariff unless otherwise prescribed by law. Article 115. The Hong Kong Special Administrative Region shall pursue the policy of free trade and safeguard the free movement of goods, intangible assets and capital. Article 116. The Hong Kong Special Administrative Region shall be a separate customs territory. As a specialist on Hong Kong’s economy,4 I was invited to participate in the deliberations of the Basic Law Consultative Committee (BLCC) focused on the economy. I prepared a paper entitled “Economic Liberties and the Basic Law” for a Symposium organized by the BLCC held in Hong Kong on September 18-20, 1989, a month before the end of the second consultative period. The paper was translated into Chinese. I emphasized the importance of retaining the free-market principles practiced under British administration. In two books I coauthored with Bruce Bueno de Mesquita and David Newman, Forecasting Political Events: The Future of Hong Kong (1985) and Red Flag Over Hong Kong (1996), we used Bueno de Mesquita’s highly accurate political forecasting model to explore this and other questions. The results indicated a relatively quick move away from Hong Kong’s “high degree of autonomy” for personal freedom stipulated in the Joint Declaration and Basic Law. In contrast, slightly over halfway to 2047, the Hong Kong SAR Government has kept to the principles, institution, and policies of Hong Kong as a free-market economy embodied in Chapter 5 of the Basic Law, exactly as forecast in Red Flag Over Hong Kong (pp. 114-117). Will those principles remain intact as 2047 draws closer? That’s anyone’s guess. Maybe current leader Xi Jinping will accelerate the economic union of Hong Kong and China by imposing China’s economic institutions and policies before he leaves the scene. Maybe China will liberalize its economy to better resemble Hong Kong. Maybe a financial scare, with investors and locals moving their money out of Hong Kong well before 2047 will force China to declare its firm support for “one country, two systems.” If, how, and when this happens will increasingly occupy the international business community with major operations in Hong Kong, and whether local residents sit tight or pack their bags as many did before the 1997 handover from Britain to China. Hong Kong Is Falling Fast in Personal Freedom “Economic freedom remains in the top spot, but personal freedoms have sharply fallen in recent years.” Several years ago, the Fraser Institute, in conjunction with the Cato Institute, added personal freedom variables to its measure of economic freedom to produce a more comprehensive Human Freedom Index.5 The 2023 report lists 41 personal freedom and 45 economic freedom variables that go into the HFI. On this broader measure, Hong Kong fell to 46th place, down seventeen places from its 2020-2021 rank. Its fall reflects a decline in measures of personal freedom. Economic freedom remains in the top spot, but personal freedoms have sharply fallen in recent years. The decline in personal freedoms is consisted with the forecasts that appear in our two previously cited books. Freedom House also reports a decline in Hong Kong’s civil liberties and political freedoms.6 In its 2024 report, Hong Kong shows the seventh largest decline in the world over the past ten years, minus 26 points in its aggregate score of freedom (page 7). No amount of Hong Kong government spin will improve its score as the territory is increasingly brought under the control of China’s communist leadership. In the future, Hong Kong’s civil liberties and political freedom, guaranteed in the Basic Law but disregarded in practice, will disappear as the territory becomes just another Chinese city, governed under the rules and policies of mainland Communist China. The number of Hong Kong residents with memories of British Hong Kong diminishes every year. Those currently under 27 years of age, born after the handover, have no experience living under British administration. Those aged 28-45 include students up through secondary school graduation, who were adolescents under British administration. Many harsh critics of Hong Kong’s current SAR Government have left the country. Others have been arrested, prosecuted, and imprisoned. Few dare speak of the freedoms they enjoyed under British rule. In a report dated March 29, 2024, The U.S. State Department cited measures taken by the Hong Kong Government that have eroded freedom in Hong Kong:7 During the covered period, Hong Kong authorities, under the supervision of the PRC central government, used the central government-imposed 2020 National Security Law (NSL) to further erode the rule of law in Hong Kong and the human rights and fundamental freedoms of people in Hong Kong, as well as to harass and intimidate individuals outside of its borders.  In July and December, the Hong Kong Police Force issued bounties on overseas democracy advocates, attempting to enforce the NSL outside of Hong Kong’s borders.  Within the special administrative region, authorities undermined the rights of defendants in cases designated as involving national security. Hong Kong authorities arrested and prosecuted people for peaceful political expression critical of the local and central governments, including for posting and forwarding social media posts.  Hong Kong and PRC authorities continued to target civil society groups, activists, media companies and journalists, political parties, labor unions, academics, student groups, and other people and organizations that the government accused of being connected to Hong Kong’s pro-democracy movement or otherwise critical of the local or central government.  Hong Kong authorities undermined media freedom by continuing the prosecutions of journalists and restricting access to information. PRC authorities denied people in Hong Kong a meaningful role in the city’s governance, administering new rules that significantly limited the number of directly elected District Councilors and introducing a new nominating process that effectively barred independent and non-establishment candidates from running for office. China’s Communist rulers have shown that words and guarantees of civil liberties and political freedoms have no meaning when it comes to Hong Kong. Allowing Hong Kong to keep its economic freedoms, for the time being, may be more a pragmatic economic decision than a hard rock statement of principle. For more on these topics, see Economic Freedom, by Robert A. Lawson. Concise Encyclopedia of Economics. Neil Monnery on Hong Kong and the Architect of Prosperity. EconTalk. “The Market for Liberty in Ancient China,” by Roderick T. Long. Online Library of Liberty, June 4, 2024. Alvin Rabushka on the Flat Tax. EconTalk, April 23, 2007. I’ve seen both sides of the Sweet and Sour of Hong Kong, sweet in economic freedom, sour in personal liberty. I first went to Hong Kong to study Chinese in 1963. Over the years I wrote two books and co-authored two others, along with a myriad of pamphlets, articles, and media interviews. I have witnessed the best of time under British administration and am now watching a downward spiral to the worst of times for Hong Kong. Footnotes [1] Economic Freedom of the World: 2024 Annual Report. October 16, 2024. [2] “Economic Freedom: Toward a Theory of Measurement.” Proceedings of an International Symposium. Walter Block, Ed. The Fraser Institute, 1991. PDF file. [3] The Constitution of the People’s Republic of China. BasicLaw.gov.hk. PDF file. [4] See Alvin Rabushka, Value for money: The Hong Kong budgetary process. The Hoover Institution, 1976. [5] The Human Freedom Index: 2023. Fraser Institute. PDF file. [6] Countries and Territories. FreedomHouse.org [7] 2024 Hong Kong Policy Act Report. U.S. Department of State, March 29, 2024. *Alvin Rabushka is the David and Joan Traitel Senior Fellow, Emeritus at the Hoover Institution. (0 COMMENTS)

A Liberty Classic Book Review of Cost and Choice: An Inquiry in Economic Theory, by James M. Buchanan.1 In less than one hundred pages, James Buchanan excoriates economists—classical and modern—for their unrecognized confusions about cost. More than an insular academic debate, Cost and Choice: An Inquiry in Economic Theory develops a biting set of logical tools people—economists, philosophers, students, and laymen—can use to better understand human behavior in private and public settings. Buchanan’s writing can be dense, but studying the book is well worth your time. The upshot of sorting these confusions is that we might derive better connections between prices, costs, and values. Economists study these concepts in developing myriad scientific theories—the nature of cost is a key tool to derive predictions of human behavior. In a competitive market, for example, prices might converge to the marginal cost of production. Laymen make use of these concepts every day, often without knowing it. For example, people tend to sell their labor services in exchange for something they value at least as much as their foregone opportunity. As the nature of cost runs deep throughout economic science, Cost and Choice implies there are many branches of economics where greater scrutiny is warranted. Faulty notions of cost abound; economists and policymakers, unaware of such deficits, might then encourage perverse policies and stifle human flourishing. Let’s get to it. In Cost and Choice, Buchanan does not merely develop the notion of opportunity costs; Adam Smith recognized opportunity costs were important (but he failed to recognize their marginal and subjective nature). Children recognize these issues implicitly when asked to choose between going to an ice cream or a toy store. Part of Buchanan’s contribution is that our definitions and assumptions about opportunity costs have logical implications that shape economic science and our views of the world. Making such definitions and assumptions explicit, Buchanan argues, goes a long way in resolving any confusion. Unfortunately, economists are more often than not sloppy in their definitions and assumptions about costs. Adam Smith, for example, implicitly assumes an objective kind of opportunity cost—one’s time spent on labor, which indicates cost is measurable and observable. The upshot, for Smith, is that this common denominator of value allowed him to connect production costs and relative prices, which served his purposes to explore the nature of value. With Smith’s classical connection, anyone might then be able to count the number of lines of code written or the number of pages read per hour. With such data, we can derive objective opportunity costs. If we can write twenty lines of code in one hour or read forty pages in one hour, the objective opportunity cost of writing a single line of code is reading two pages. If these goods were marketable, more importantly, we would expect a convergence between objective opportunity costs and relative prices. That is, we would expect people to exchange their service of writing code for nothing less than the service of reading two pages. Just as I would be more willing to sell my line(s) of code to people willing to pay me more than two pages (or more), I would be less willing to sell as people offer less than two pages. Yet, prices might not converge towards objective opportunity costs. As demand for lines of code rises, for example, people are willing to pay more for that code regardless of the objective opportunity cost, i.e., the time one could have spent reading. That is, the exchange value of a line of code can remain above its objective opportunity cost as long as demand remains elevated. With such a divergence in what the building blocks of economics predict, perhaps there can be no predictive science of economics. Or, perhaps, there are inefficiencies within the nature of individual trading partners or in markets themselves, e.g., monopolies, that explain when costs and prices diverge. Rather than bemoan this finding, critique the unscientific nature of economics, and advance notions of inefficiencies, Buchanan reviewed centuries of discourse on value and cost—from Adam Smith and David Ricardo to Carl Menger, Phillip Wicksteed, and Alfred Marshall and from Frank Knight to scholars in the “London Tradition”, such as Lionel Robbins, F.A. Hayek, Ronald Coase, and George Thirlby (and Ludwig von Mises). With this review, Buchanan sets the stage for his big reveal. He argues that our confusion over costs rests in the selection—consciously made by individual economists—of particular objective measures of opportunity costs at the expense of the more genuine nature of value and opportunity cost, namely that it is subjective. “This approach is profound because it generates a more genuine science of choice grounded in choosing individuals, and it maintains the logical notions of cause and effect that facilitates prediction.” Following the London Tradition, Buchanan argues costs are subjective. This approach is profound because it generates a more genuine science of choice grounded in choosing individuals, and it maintains the logical notions of cause and effect that facilitates prediction. Just as people have myriad goals, they have myriad subjective evaluations of foregone opportunities. With such goals in mind, we can now better understand—and predict—how people might behave in response to changing (subjective) opportunity costs. The overall problem for Buchanan is that in their attempts to make more tractable models about values, costs, and prices, economists ignored individuals, their values, choices, and the real costs individuals perceive. Buchanan’s resolution is a framework of subjective opportunity costs, which are primarily choice-influencing costs. Such costs imply the following (p. 41): costs are only borne by an individual; they are subjective in that they exist in the mind of an individual; costs are based on expected future states of the world; costs necessarily follow choice; costs can only be measured by an individual; and costs are dated at the moment of choice. These points are more biting when Buchanan returns to a brief discussion on the nature of market equilibrium. With reference to the “subjectivist economics” of Hayek, he states, “[Equilibrium] is attained when the plans of participants in the economic interaction process are mutually satisfied. Although prices continue in this equilibrium to bear some relationship to costs, such costs carry no objective meaning and cannot, therefore, be employed as criteria for determining prices in some welfare or efficiency sense” (48). Thus, Buchanan urges economists to consistently apply the notion of subjective opportunity costs, which implies that notions of market equilibrium—among other concepts—depend on the subjective experiences and values of choosing individuals. With this primary confusion resolved, Buchanan then tackles subsidiary confusions that rely on faulty notions of cost. Overall, Cost and Choice is about the inappropriate application of models of cost economists use—mistakenly—in their attempts to describe real-world behavior. For example, the logic of choice-influencing costs implies that public expenditures do in fact have opportunity costs, even when resources are underemployed. Commentators might claim that public projects are relatively inexpensive given workers are underemployed or that they have a relatively low opportunity cost, perhaps as during the Great Depression. According to Buchanan, however, such claims are based on a narrow version of opportunity costs, namely an objective measure of market wages. Yet, the choice-influencing costs of makework projects—like building post offices—refer to the value of projects that could have been advanced. Policymakers might not greenlight such projects if they considered the relevant choice-influencing costs. The logic of choice-influencing costs also has implications for cost-benefit analyses. Buchanan cautions against the use of cost-benefit analyses—especially in public, governmental settings—that are typically used to favor some projects over others. Such analyses, Buchanan argues, are either unconnected from the values individual choosers have, or they are motivated by the normative values of different economist-observers. If either is true, it becomes more difficult to claim these analyses genuinely reflect the options people and groups face, let alone how to choose. Buchanan states, “The cost-benefit expert cannot have it both ways. He cannot claim ‘scientific’ precision for his estimates unless he restricts himself rigidly to objectively observable magnitudes. But if he does this, he cannot claim that his estimates reflect reasonable norms upon which ‘social’ choices should be based.” And there are implications for standard Pigovian welfare analysis, the kind of economics typically used to justify government tax/subsidy policies to address externalities. If a tax, for example, is meant to correct behaviors that lead to externalities, what are policymakers to do if they cannot adequately measure costs—as only individuals bear costs at the moment of choice—or if individuals are more responsive to alternative kinds of opportunity costs—costs which only individual choosers are aware of? Buchanan states the problem succinctly: “Observed money outlays need not reflect choice-influencing costs, the genuine opportunity costs that the decision-maker considers” (71). Later on, Buchanan also notes that the Pigovian logic fails once people develop other-regarding norms—typical in civil society—which likely alters the divergence between private and social costs. Buchanan sets his sights on the notion of market equilibrium too—a cornerstone of modern neoclassical economics. Supply and demand analysis, the bane of many economics 101 students, is a kind of equilibrium analysis. While individual rational choosers behave according to expected costs and benefits, this implies they are at an equilibrium as they choose. Yet, this does not imply the larger group of market participants are at equilibrium, given costs are impediments to choices related to the higgling of a market. Rather, it implies markets are more likely characterized by disequilibrium, whereby participants act and interact with others, which constantly changes market conditions. Buchanan also explores several other topics where choice-influencing costs alter standard conclusions. He argues, for example, that the foregone opportunities of military service vary, which makes it difficult impossible for military planners to measure the genuine costs of staffing a military. He argues the costs of criminal activity—and thus any punishments we might want to impose as a deterrence—depend on choice-influencing costs criminals perceive, e.g., their norms about harming victims. He also revisits the socialist calculation debate to suggest that while generally correct, Mises, Hayek, and Robbins underemphasized the choices individuals faced, which would have strengthened their arguments. Socialist economic planning can only work, according to Buchanan, if individuals are transformed to ignore their subjective opportunity costs in favor of the values of planners. Buchanan then notes, again, that the heart of the matter is a confusion in the nature of costs: Only if costs can be objectified can they be divorced from choice, and only if they are divorced from choice can the institutional-organizational setting that the chooser inhabits have no influence on costs. In the socialist scheme of things, costs are derived from physical relations among inputs and outputs. These may be externally measured, and these measurements can provide the basis for the rules that are laid down for managers of enterprises. Valuation enters the calculus only as the consuming public, through their behavior, establish demand prices, which become objective realities once established. The subjective valuation that must inform every choice is neglected. (89) All in all, Cost and Choice takes stock of the widening gap in modern economics because of the failure to recognize the nature of choice-influencing costs. For economists, policymakers, and laymen interested in advancing cost-benefit analyses, estimating the net benefits of public projects—whether it is infrastructure spending or staffing a military—extolling the virtues of government intervention, developing equilibrium-based models of market activity, assigning efficient punishments—for criminals or on externalities—Cost and Choice is a thorn in their side. Buchanan argues their assumptions about costs are flawed and any conclusions should be taken with big grains of salt because they poorly represent the choices real people face, as well as their subjective evaluations of foregone opportunities. To be more biting for modern readers, Buchanan would cease all cost-benefit analyses unless they were advanced by individual choosers; no more reports from consulting, advocacy, or governmental groups advancing a new project. Such reports are often afforded a scientific status or authority, which are used to justify behavior whereas they are often entirely unconnected to individual decision making. Buchanan would be the first to yell that the emperor wielding such studies has no clothes, no logical basis to justify future expenditures. Public expenditures, which seem increasingly frequent, also come under indictment. Cost and Choice suggests that governments often understate the costs of such expenditures. Annual expenditures on Social Security, healthcare, defense, infrastructure, education, and so on—major components of government expenditures—necessarily fail to account for the fuller costs when choice-influencing costs are ignored. Such costs refer to the value—defined by individual choosers—of foregone activities. Recognizing such higher costs, it is likely citizens would encourage their elected representatives to care more about such matters. Such considerations would likely limit the size and scope of government. For more on these topics, see Opportunity Cost, by David Henderson. Concise Encyclopedia of Economics. Don Boudreaux on Buchanan. EconTalk. “What Should Economists Do? An Appreciation,” by Donald J. Boudreaux. Library of Economics and Liberty, March 4, 2019. Cost and Choice: An Inquiry in Economic Theory is one of Buchanan’s epic critiques of economic science and his attempt to redress the wrongs implied by faulty notions of opportunity costs. In doing so, the book remains a classic work in economics, but it also provides a key to better understand myriad individual behaviors: opportunity costs to individual choosers depend on the choices they face. Any other notion of opportunity cost is devoid of meaning and provides negligible predictive content when divorced from choice. Footnotes [1] James M. Buchanan, Cost and Choice: An Inquiry in Economic Theory. Foreword by Hartmut Kliemt. Liberty Fund, Inc. First published 1969. Free online at Cost and Choice: An Inquiry in Economic Theory. *Byron “Trey” Carson is an Associate Professor of Economics and Business at Hampden-Sydney College in Virginia, where he teaches courses on introductory economics, money and banking, health economics, and urban economics. Byron earned his Ph.D. in Economics from George Mason University in 2017, and his research interests include economic epidemiology, public choice, and Austrian economics. (0 COMMENTS)

So we have a way of telling which political activists actually care about society and which are merely trying to portray themselves as caring: The ones who actually care will exert significant effort to make sure that their beliefs are correct. —Michael Huemer, Progressive Myths,1 p. 212 Michael Huemer believes that some important components of progressive ideology rest on flimsy empirical foundations. By exposing these as myths, he hopes to guide truth-seekers away from the misguided elements of progressivism. But he is not optimistic. It takes a lot more time and effort to thoroughly debunk a myth than it does to spread it to a receptive audience. Most people who have consumed political myths are not particularly interested in having their beliefs corrected, so they are not going to read a book like this one. p. 215 Huemer, a professor of philosophy, is careful to define terms and to anticipate counter-arguments. He defines a progressive myth as i. an empirical, factual claim, which ii. is believed by many progressives, iii. seems to obviously, strongly support an element of progressive ideology, and yet iv. is demonstrably false or highly misleading (p.2) Progressives believe that racism is a significant problem in contemporary America. Huemer points out that a number of myths bolster this belief. For example, he examines the cases of Trayvon Martin and Michael Brown, who according to the mythology of Black Lives Matter, were killed solely because they were black. Careful investigation shows that purported witnesses were not present and/or lied, so that the details that many BLM supporters believe are false. Why do progressives perceive racism as so important? Huemer says that the Civil Rights movement of the 1960s, which he praises, could not let go of the need to have a cause. They ramped up their demands, and they developed increasingly sensitive racism detectors and increasingly sophisticated accounts of how one facet or another of American life… was really a form of “white supremacy” or other bigotry. p. 197 I disagree with the diagnosis that the Civil Rights movement was too filled with righteous pride to declare victory and go home. As I interpret the history, people expected that once discrimination became illegal, racial tension would vanish and racial inequalities would fade. Instead, we had urban riots from 1965-1968, and gaps persist between the black and white population in the United States with respect to average educational attainment, income, and wealth. If we are not seeing the outcomes that were expected when racism ended, then progressives infer that racism has not ended. Progressives bolster the theory of systemic racism by arguing that there is no significance to research showing differences in average IQ between blacks and whites. Progressives assert that such IQ research has been debunked. Huemer does not touch that myth, which I suspect is more important than the myths he does go after. Huemer also examines progressive myths concerning gender relations, science, and economics. He quotes prominent progressive media stars and politicians articulating these myths, and then he proceeds to counter with facts. For example, there is the myth that there is little economic mobility in America, and wealth mostly comes from inheritance. Instead, Huemer writes, A survey of 10,000 millionaires conducted in 2017-2018 found that 79% of millionaires had received no inheritance. Only 3% had inherited over $1 million. p. 145-146 “Regardless of one’s ideology, Huemer would bid us to become truth-seekers rather than seek esteem on the basis of membership in an ideological tribe.” Regardless of one’s ideology, Huemer would bid us to become truth-seekers rather than seek esteem on the basis of membership in an ideological tribe. The main thing we should do is to be a lot more skeptical. When you hear some politically relevant information, ask yourself whether this is the kind of information that plays to a particular ideological orientation. p. 234 I like to say that people decide what to believe by deciding who to believe. Huemer offers advice on identifying reliable public intellectuals. They will cite evidence that a neutral party could reasonably be expected to agree with…. They will say that something is probably the case, or almost always true, rather than definitely always true… end to acknowledge reasons pointing in different directions, particularly about controversial matters… tend to discuss objections to their arguments… do not always agree with one of the standard political orientations… are not overly emotional… cite academic studies, government reports, court documents, and so on… will lead you through logical lines of thought… are clear p. 238 For more on these topics, see “Systemic Racism in Education and Healthcare,” by Ramon P. DeGennaro, et al. Online Library of Liberty. October 4, 2022. Roland Fryer on Race, Diversity, and Affirmative Action. EconTalk. “A Fictional Progressive Gets Mugged,” by Arnold Kling. Library of Economics and Liberty, May 2, 2022. Similarly, I would advise people who express opinions to show your work, giving the sources for your claims and the logic of your thought process; and debate fairly, showing an awareness of the weaknesses in your position and the best points that could be made by the other side. Throughout the book, Huemer models these behaviors. That may be the best reason to recommend reading it. Footnotes [1] Michael Huemer, Progressive Myths. Independently published, 2024. *Arnold Kling has a Ph.D. in economics from the Massachusetts Institute of Technology. He is the author of several books, including Crisis of Abundance: Rethinking How We Pay for Health Care; Invisible Wealth: The Hidden Story of How Markets Work; Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy; and Specialization and Trade: A Re-introduction to Economics. He contributed to EconLog from January 2003 through August 2012. Read more of what Arnold Kling’s been reading. For more book reviews and articles by Arnold Kling, see the Archive. As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

A Book Review of Democracy for Busy People, by Kevin J. Elliott.1 Kevin J. Elliott’s 2023 book, Democracy for Busy People, is for anyone interested in liberal democratic politics. The book is worthwhile for classical liberals in particular because it handles topics often passed over by classically liberal democratic commentators and takes opportunity cost seriously. The introduction begins by explaining “busyness” and its relevance to democratic politics. In Part I, Elliott argues for a realistic minimum level of democratic participation. In Part II, he discusses institutional reform for a more inclusive democracy. Busyness to Elliott is not limited to the demands of a high-powered career that plagues only some people. It affects everyone. Marginalized groups navigating discrimination are busy. Immigrants establishing social networks are busy. People are busy with caretaking, working, commuting, keeping house, maintaining and managing relationships, having hobbies, maintaining health and wellbeing, and more. Busyness affects how much time and effort people devote to politics. It does not, and should not, affect how entitled people are to democratic equality. There’s more to life than politics. That should matter for politics. Unequal busyness can’t be eliminated. Even in a world of superabundance, some people will (for example) choose to care for their family themselves rather than splitting the job with professional caregivers. This choice leaves less time for politics, just as it leaves less time for other pursuits. Liberal democracy’s ability to be truly democratic depends on its ability to incorporate all voices. If people are too busy for politics, their voices will be missed. What does democracy demand? Elliott believes that democracy needs citizen participation to work. He insists that we have a right to other priorities. So he argues that while people have a duty to participate in democracy, they are also entitled to minimally demanding citizenship. (p. 83-84) Demandingness is a going concern for democratic theory (Elliott provides helpful summaries of relevant work), but it’s also an old one. Benjamin Constant in The Liberty of the Ancients Compared to that of the Moderns worried about it two centuries ago.2 Constant said that the concerns of modernity—”peaceful enjoyment and private independence”—compete for time and attention with the ancient (think Greek and Roman) ideas of liberty-as-participation in governance, the “active and constant participation in collective power.” He worried that modern people would be tempted to give up the job of governing themselves, handing the task to a dictator. In this book, Elliott is more worried about an “aristocracy of activists” (p 94) than a modern-day Napoleon. Activists have the time, resources, and interest to make politics a big part of their lives. People whose lives are dedicated to politics are not representative of average people, and certainly not representative of people too busy for politics. People with this wealth of time, resources, and interest are some of the foremost enthusiasts for democratic reforms that would add additional demands to democratic participation. “The opportunity cost of political participation should be lowered to make it easier to meet the obligations of liberal democracy.” Less-demanding democracy addresses Elliott’s current concern and Constant’s old one. The opportunity cost of political participation should be lowered to make it easier to meet the obligations of liberal democracy. It can also improve the relative influence of the average citizen. Elliott rejects the claim that democracy requires as little as simply obeying the law. (p 17) But he also denies that it requires people to assume extraordinary duties (national service) or take on specialized roles (activists or journalists). Elliott’s proposed model of democratic citizenship is based on a floor of what is needed from and possible for ordinary citizens. He aims not to try to make everyone participate at a high level, but to bring the democratic participation among the least engaged citizens up to a minimum level. Elliott calls his minimum standard “stand-by citizenship”, and it has three parts. (p. 100) Voters must (1) pay critical attention to politics and (2) have the “civic skills” needed for participation. Attention and civic skills allow stand-by citizens to practice (3) “upward flexibility”—to ramp up their involvement when needed. Citizenship for busy people Critical attention means that citizens should be aware of the major issues and actors in politics. This awareness is necessary for building civic skills and ramping up participation when needed. (p. 100) Elliott is concerned about politically “unsocialized” citizens, who do not know what is going on or how to participate. A lack of political socialization is not merely a personal failing to Elliott. He claims unsocialized citizens create externalities. They are more susceptible to undemocratic arguments that discount democracy’s benefits or make promises democratic institutions can’t fulfill. Politically unsocialized citizens are the most at risk of endorsing Constant’s Bonapartist despots. Besides that, they are unable to see, respond to, and avoid participating in injustices in their communities. Elliott grants that citizens can ethically decide not to participate in politics.3 But he demands they make that decision critically, which requires at least some attention. Elliott’s civic skills are knowing when and how to vote and understanding democratic institutions and what they can (or can’t) accomplish. These skills lower the cost of future participation, increasing citizen readiness. They also help inoculate citizens against demagoguery. Non-participation doesn’t excuse citizens from needing civic skills. Without civic skills, those who decide to opt-out of politics will not be ready to ramp up their involvement if they are “mugged by reality” (p. 113) into noticing political action is needed. “Upward flexibility” matters when citizens notice that something requires more action than usual. This might be the case when there is a genuine crisis of democracy, or just when an issue becomes too pressing to be ignored. Critical attention is needed to know that more work is called for. Civic skills are needed to do that work. Upward flexibility is critical for making democracy less demanding. It allows citizens to “stand down” in normal times, paying attention to political issues and cycles without always dedicating the time and attention to politics that crisis calls for. Focus on inclusive institutions Elliott is interested in how institutions might encourage (or discourage) stand-by citizenship. Part II of his book considers the costs and benefits of different institutional designs with busyness in mind. This is valuable for all who take Constant’s concerns about modern citizens neglecting their participation in governance to heart. Elliott introduces a topic early in the book called the “paradox of empowerment.” (p. 6) It is best illustrated with an example: Democratic enthusiasts who are concerned by a lack of participation try to fix the problem by introducing more opportunities to participate, such as mini-publics that invite citizens to deliberate over difficult issues, more local public meetings, or more direct voting on policy. The theory behind these new institutions is that they create new avenues to enter politics. But unless the barriers to entry for participation are also lowered, the same people who were too busy to participate in existing democratic institutions are still too busy. These new avenues for participation will thus be dominated by those already participating, intensifying their influence on the democratic system. Instead of adding institutions, Elliott argues for institutions that “make participation cheap and easy and that make politics understandable.”4 Elliott focuses on elections, and they can illustrate how he thinks about institutions. Elections are a near-universal political experience. Because nearly everyone participates (even if only by discussing them), they tend to accompany a period of shared social awareness that makes it easier for people to get up to speed through ordinary social interaction—literal political socialization. Elections are also a time when activists don’t only pursue particular interests, but provide a general public service by educating other voters about how, when, and where to vote. Activists may also lower the cost of voting, for example, by providing rides to the polls. During elections, parties and candidates can be encouraged by self-interest to inform voters about what they will do if elected. They can also check their opponent’s claims and promises. They can, in these ways, inform voters. Elections can do these things. But they don’t necessarily—often they don’t in practice. Elliott details how uncompetitive elections encourage parties or candidates to speak only to their base, or even work to demobilize their opposition. Electoral processes that make voter registration or casting a ballot hard can also push out busy people. One thing elections always do is give equal influence in making the ultimate decision: one vote. One-person-one-vote levels political participation in a way that more intensive democratic reforms simply cannot. Whatever else can be said against elections, this benefit remains. That isn’t to say that all of Elliott’s proposed reforms5 will please classical liberals. To take one example, we disagree about the empirical evidence and legality of mandatory voting, even where (as in Elliott’s proposal) opting out is cheap and easy. For more on these topics, see Opportunity Cost, by David Henderson. Concise Encyclopedia of Economics. “Can Liberalism Survive in a Democracy?” by Anthony de Jasay. Library of Economics and Liberty, December 7, 2015. “Democracy is a Means, Not an End,” by Michael Munger. Library of Economics and Liberty, January 10, 2005. But these disagreements feel more satisfying than the discussion of democracy has often felt in classical liberal circles. Too often, we point out ways that democracy falls short of perfection and stop there, failing to push the point. This has led some to conclude that classical liberals as a bloc are opposed to democracy, when many of us are not. Elliott’s interest in improving democracy should attract the attention of classical liberals who care about Constant’s modern liberty, and democratic peace, inclusion, and equality. Perfection is not an option, but improvement might be. Footnotes [1] Kevin Elliott (2023). Democracy for Busy People. University of Chicago Press, 2023. [2] The Liberty of Ancients Compared with that of Moderns (1819), by Benjamin Constant. Online Library of Liberty. [3] Elliott, pp. 54–57. Justifiable apathy can be reflective (carefully considered) or a temporary, salutary break from politics. Either way, it is incompatible with complete inattention to politics. [4] This phrase is not from Elliott’s book but a lecture on the book that can be found here: RGCS Lecture: Kevin Elliott (Yale), “Democracy for Busy People.” March 14, 2024. YouTube. [5] Elliott discusses institutions that encourage participation (mandatory voting, easy voter registration, flexible voting times, predictable election dates), make politics understandable (clear lines of accountability, political parties) and improve competitiveness (proportional representation, open ballot access). Elliott’s reasoning in each case provides evidence and arguments classical liberals who are not democratic theorists may be unaware of. *Janet Bufton is an educational consultant and copy editor in Ottawa, Ontario, working primarily on projects involving Adam Smith, trade and regulatory policy, and Indigenous and labour market economics. As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)

What does it take to translate a 900-page Russian novel written before the fall of the Soviet Union? For a start, it means learning what the Soviet censor cut and changed in the Russian original. It also means living in a seaside cottage for four months to immerse yourself completely in the characters’ lives and meet your publisher’s deadline. Listen as Robert Chandler, […] The post Translating Life and Fate (with Robert Chandler) appeared first on Econlib.