Co-blogger Pierre Lemieux’s recent post “Can a Constitution Limit the State?” (July 21, 2025) poses an important question, one political theorists have wrestled with for millennia.  In the comments section of that post, I linked to a recent paper in the Journal of Institutional Economics by Jacek Lewkowicz, Jan Falkowski, Zimin Lou, and Olga Marut (henceforth LFLM) that makes the case the wording of a constitution will affect how governments comply with their restrictions (“Watch out for Words: Wording of Constitution and Constitutional Compliance,” Journal of Institutional Economics, 20:e35).  Readability (that is, avoiding highly complex and technical jargon) makes it more obvious whether a government official violates the constitution, which in turn can increase pressure on him from the electorate.  Conversely, if a constitution is highly technical and difficult to read, its enforcement falls to those specially trained in its interpretation, making it harder to enforce. Thus, making the constitution (and subsequently laws) understandable to the vast majority of people has benefits. But some readers may recall my post from April, “Colloquial Law.”  In that post, I quoted Lon Fuller on the Soviet legal experiment to make laws so easy to understand that every worker could understand them.  In the process, the law lost all consistency and the law’s application by judges became “capricious and less predictable.”  Note that this is the same effect predicted by overly technical constitutions as well. How to explain this apparent contradiction?  It could be that the relationship between readability and compliance is not monotonic.  The readability of a constitution has marginal benefits, but these marginal benefits are subject to diminishing returns.  At some point, the net benefits go negative.  Indeed, this could also explain the finding in LFLM that the precision of language gives mixed results. It could also be that other factors swamp readability.  In a large democracy like the US, the ability of any one voter (or, for that matter, any one representative or senator) to punish those who violate the Constitution is quite limited.  Your typical collective action problems come into play.  Smaller democracies may have more luck in enforcement. There are many interesting ways to answer this question.  I am sure constitutional scholars have already considered them.  Regardless, how effective constitutions are remains an important question. (0 COMMENTS)

The FT has an interesting story on the British government’s attempt to boost capital gains tax revenue: The UK’s efforts to increase revenues from capital gains tax have backfired, with receipts plummeting in the wake of big cuts in allowances. The government’s CGT take fell 18 per cent from the previous year to £12.1bn in the 2023-24 fiscal year, even as the annual tax-free allowance was halved from £12,300 to £6,000, according to data released by HM Revenue & Customs on Thursday. Separate provisional figures — calculated using a different methodology and published earlier in the week by HMRC — indicated a further 10 per cent drop in CGT receipts in 2024-25. . . . The slashing of allowances by the previous Conservative government in 2023-24 made an additional 87,000 taxpayers potentially liable for CGT, taking the total number exposed to the tax to 378,000. The tax-free allowance was halved again to £3,000 a year in 2024-25. Reeves also increased CGT rates in her Budget last October to between 18 and 32 per cent — up from the previous rates of between 10 and 28 per cent. Defenders of the tax increase might point to the fact that the revenue drop merely represents a decision by investors to delay the realization of capital gains.  In the long run, the higher tax rates may yield more revenue than the previous lower rates: Several tax experts said they expected tax revenues to rise briefly in 2024-25 — which covers the period before last October’s Budget, Labour’s first since returning to office — and then decline. Hollands said: “Given the rife speculation that preceded that Budget of even steeper rises and even a potential alignment with income tax rates, we certainly saw evidence of clients crystallising gains ahead of the event.” That outcome is certainly possible, but it’s worth thinking about the implications of this argument.  Supporters of higher capital gains taxes are implicitly saying something to the effect that, “The revenue intake was disappointing because people respond to incentives when deciding when to sell assets.”  Yes, but unfortunately for the UK Treasury, people respond far more powerfully to incentives (in all sorts of ways) in the very long run than in the medium term.  Thus higher tax rates in the UK may lead to more income gradually being shifted to lower taxed areas such as Ireland. More broadly, I believe that the current malaise in the European economy partly reflects the long run effects of various tax and spending policies, which have slowly eroded the tax base.  European countries that did not opt for a big government model, such as Switzerland, are doing better than their more highly taxed neighbors.  When countries increase their capital gains taxes, I see three effects: Lower revenue in the short run, due to the timing of asset sales. Somewhat higher revenue in the medium term, as assets are eventually sold. Disappointing revenue in the very long run, as individuals and business rearrange their affairs in such a way as to reduce their tax liability. (1 COMMENTS)

This is the fourth part of my exploration of Musa al-Gharbi’s We Have Never Been Woke. (Part 1, Part 2, Part 3). As we’ve seen, al-Gharbi spends a good deal of time establishing the demographic of people who are most likely to end up being “woke” as he described the term. And that group is overwhelmingly skewed toward highly educated white liberals: This is not just a function of baseline U.S. population characteristics: relative to other American workers, symbolic capitalists are disproportionately likely to be white. They nearly unanimously possessed at least a BA. Politically and ideologically, they are overwhelmingly Democratic and liberal. All said, the lion’s share of symbolic capitalists are highly educated white liberals, and Americans who happen to be highly educated whites liberals are quite likely to be symbolic capitalists. If this is where we are, how did we get here? To answer that question, al-Gharbi examines the history of the symbolic professions – their rise in prominence and power, and how the dynamics that created that rise also influenced the ideology most attractive to this new group of elites. While the jobs that make up the symbolic professions have always existed in one form or another, they rose in prominence during the decades bracketing the First World War. The disorder and chaos of the era created a strong sense that civilization needed to be changed on a fundamental level: Into this milieu stepped the Progressives. Secularizing the social gospel movement, they promised to help America transcend its divides, redeem its soul, and experience unprecedented peace and prosperity by leveraging science and reason to maximize human flourishing in a way that laissez-faire capitalism never could. They promised a world where robber barons would be restrained by technocrats, where corruption, nepotism, exploitation, and unjust discrimination would be replaced by meritocracy and professionalization. The poor and the unfit would be cared for and gradually eliminated through a combination of aid, education programs, expanded rules and regulations (and intensified enforcement), and eugenics programs. Political partisanship, ethnic and religious conflict, and other forms of tribalistic struggles would be settled by objective and disinterested experts committed to the greater good. Class struggle would be eliminated, not because inequality was vanquished, but because people across the social strata would be made to see that the prosperity and economic dynamism unleashed by free markets could benefit everyone—so long as the wealthy and powerful could be persuaded to entrust a share of their wealth and authority to symbolic capitalists to manage the economy and society writ large. The symbolic professions arose in the service of this project. As the Progressive movement consolidated political power, members of the symbolic professions worked to administer the goals of Progressivism in both state and private institutions. Through the use of symbolic capital, the symbolic capitalists would lead through expertise, driven by data, and pull levers of policy to achieve desired ends. This caused the various professions of the symbolic capitalist class to more strongly formalize their trade – one example is Harvard creating the Harvard Business School and becoming “the first institution in the world to offer a master of business administration (MBA) degree.” Education, too, became more formalized as a profession: Progressives simultaneously spearheaded the proliferation of secondary schools and successfully lobbied for mandatory attendance laws, with the aim of assimilating (“civilizing”) ethnic or religious minorities…In order to train the needed army of instructors in how to educate students the “correct” way, teachers’ colleges were established around the country (evolved from “normal schools”), and many colleges and universities established departments or schools of education. As this new class of elites arose, they also sought to consolidate political power into their own hands: In order to justify their positions, increase their compensation, and expand their influence, they sought to take more and more decisions out of the realm of democratic contestation by redefining them as matters of expert judgment. It would be for them, the experts, to discern not only what the public did want but what it should want. They would likewise determine the best way to achieve particular goals and officially evaluate progress toward those goals. This formalizing of the new professional class was accompanied by the heavy use of gatekeeping to keep the riffraff out. As members of the new class took the reins of technocratic power in the state, the establishment ensured only those with the proper symbolic capital would be able to wield that power: In order to help ensure these jobs ended up being filled by the “right” people, Woodrow Wilson authorized African Americans to be cut from the civil service on the basis of their race and, post-1914, required pictures with job applications to facilitate racial discrimination henceforth. Later, under Franklin D. Roosevelt (and to a lesser extent Harry S. Truman), immigrants and minorities would also be disqualified in various ways from taking advantage of New Deal and Fair Deal job opportunities or benefiting from associated government wealth-building programs. In the private sector, members of the new professional class created their own barriers to entry through regulatory capture, creating an explosion of licensing and certification requirements, also with the intention of keeping out the “wrong” kind of people: There were moves to restrict access to journalism jobs to those possessing professional degrees. Teacher certification requirements increased dramatically. New licensing, testing, certification, and degree requirements likewise proliferated for medicine (and derivative fields such as dentistry, pharmacology, nursing, and psychiatry), law, social work, the information professions, and beyond. Scientists (in the natural or social sciences) increasingly required advanced degrees in order to be taken seriously or even officially work as scientists. These measures were taken somewhat explicitly to ensure the “right” kinds of people (upper-middle-class WASPs) ended up in these jobs while the “wrong” kinds of people (ethnic and religious minorities) were filtered out. The American Medical Association, the American Bar Association, and many other professional organizations explicitly restricted membership to whites and denied accreditation to most of the schools that arose to train immigrants and minorities in the professions. Even when these barriers weren’t officially explicit in their purpose to keep out the wrong kinds of people, they were often consciously adjusted in order to ensure the desired results were created: Colleges and universities increasingly began awarding scholarships and admission on the basis of “merit.” However, when too many of the “wrong” people (i.e., Jewish people) started qualifying for meritocratic admission and aid, universities shifted to a “holistic” decision-making process that would allow them to discreetly cut “undesirables” who otherwise qualified on the basis of grades and exam scores. Overall, the system of credentialism, licensing, certification, and other barriers to entry created by the new symbolic capitalist class was extremely profitable for them. Citing the work of the sociologist Randall Collins, al-Gharbi notes (ellipsis in original), Indeed, Collins’s research shows that although the symbolic professions and the credentialing system were ushered in under the auspices of transferring wealth and opportunity from those at the top to those that were needy and desperate, in fact the primary wealth transfer that actually occurred during this period was from the upper class to the upper-middle class. Symbolic capitalists took from the rich and gave…primarily to themselves. Yet while the symbolic professions gained wealth and power for themselves, the whole raison d’être of the Progressive movement they supported was supposed to be about improving the conditions of the poor and vulnerable. Thus, it’s critically important for symbolic capitalists to portray their technocratic power, and the institutional barriers they erect and maintain to protect their status, as being motivated by a concern for the good of society in general and of the poor in particular, because if they “are perceived to be selfish or myopic, as serving elite interests at the expense of the broader public, or as parasitic on society rather than advancing the greater good, their authority and job security can be severely undermined.” This creates an arms race within members of the symbolic professions: This mode of legitimation also sets the stage for a unique form of status competition within the symbolic professions: those who are perceived to be more effective or committed to promoting the common good and (especially) helping the vulnerable, marginalized, and disadvantaged are generally perceived to be more worthy of prestige, deference, autonomy, and so on. Meanwhile, those who are successfully portrayed as possessing values, priorities, and behaviors that seem unworthy of their profession will often find their jobs and social status in a precarious position. And when times get hard, symbolic capitalists grow even more aggressive in trying to preserve or enhance their social position by demonstrating that their peers and rivals have never been woke. This aggressive competition is what gives rise to “Awokenings.” While that term was only recently coined to describe “the Great Awokening” among symbolic capitalists post-2010, al-Gharbi argues that this is only the most recent instance of a recurring event. There have been many Awokenings, all driven by members of the symbolic professions. But when al-Gharbi says this happens “when times get hard,” it’s a particular kind of hardship he has in mind. In the next post, we will look at al-Gharbi’s argument about what kinds of conditions lead to Awokenings, as well as what eventually causes their abatement. (0 COMMENTS)

When we communicate with one another, how we say things can sometimes be as important as what we actually say. Words matter, which is even more true when we exchange ideas and try to convince others to embrace our viewpoints. Ideological rhetoric, then, merits some thought on the part of libertarians. Of course, libertarians uphold first and foremost the idea of expanding individual liberty. We want people to be free. But most of the time, non-libertarians say something like this: ‘Well, who doesn’t want freedom? The problem is that freedom can create inequality.’ When this happens, the discussion comes dangerously close to an end: It does not matter that we contextualize such a statement or that we contest it. The urge for some sort of equality, whatever it means, seems unavoidable. But what if libertarians could provide meaning to the ‘equality’ that a significant portion of the public longs for? What if libertarians could also be egalitarians? There is certainly one recent, powerful attempt to tackle these issues: Deirdre McCloskey’s work on the concept of ‘equality of permission.’ According to her, this kind of equality is in fact the basis of libertarianism itself. She implicitly restates libertarians’ main goal to be the creation of a society where everyone is equally allowed to ‘enter in the race as an adult,’ or more simply to live their lives as they see fit. If everybody is allowed to do the same things, which is the same as to say that nobody enjoys any special privileges, then we have a libertarian society. By equating the concept of equality of permission with ‘liberalism’ (in the classic sense of the word), McCloskey provides an eloquent allegory for libertarians to use when debating others. When asked ‘What about equality?,’ libertarians can now say that they also care, that they are also egalitarians. The tension between freedom and equality can finally be bridged. But some of the readers may ask at this point: ‘What about equality before the law? Didn’t we already embrace equality as libertarians?’ This is a great question. Indeed, the idea of ‘equality before the law’ can certainly be conceived as equivalent to the idea of ‘equality of permission.’ The problem is it need not be. ‘Equality before the law’ has a long history, one that goes back to the birth of classical liberalism itself. For most of that history, the law seemed more certain and general in scope than it seems today. But the end of the 19th century and all of the 20th century saw a dangerous trend (identified by Bruno Leoni) of equating ‘law’ with ‘legislation,’ while at the same time the latter became more and more tied to special interests. Thus, to talk about equality before the law can confuse the general public, who instead of thinking we should all be permitted to do the same things could potentially think that we are all entitled to the same privileges that different pieces of legislation award to different interest groups. The latter, from a libertarian standpoint, would be disastrous both in terms of economic and moral damage. As libertarians, we can choose to fight reality or adapt ourselves to it. We can surely try to educate the public regarding the importance of the Constitution, the difference between law and legislation, the problems of crony capitalism, and many other topics. But to advance our most basic goal of liberating ourselves from the oppression of current legislation, we can also probably present our ideas in the simplest way we can think of. ‘Equality of permission’ seems straightforward. ‘Equality before the law’ seems less so. In the end, as libertarians we all want to convey the same ideas to the general public. To do that, and in a context that is skewed against libertarianism, we need a new approach. Perhaps the concept of equality of permission can be as convincing as it is morally strong. It can’t hurt to try.   Marcos Falcone is the Project Manager of Fundación Libertad and a regular contributor to Forbes Argentina. His writing has also appeared in The Washington Post, National Review, and Reason, among others. He is based in Buenos Aires, Argentina. (0 COMMENTS)

The answer may surprise you. In so much of the discussion of tax cuts, whether of the recent one or previous tax cuts,  we hear that the highest-income people got the biggest tax cuts. Of course, they did. They pay a disproportionately high percent of overall federal taxes. So it shouldn’t be surprising that they get the biggest tax cuts in absolute terms. But that doesn’t mean that the highest-income people got the highest percentage tax cut. Reporters have generally not done a good job of making that point. Surprisingly, reporters for the Wall Street Journal last week pointed out that the lowest income quintile received the largest percentage decrease in taxes. Why do I say surprisingly? Isn’t the Wall Street Journal the kind of newspaper that, of course, would point that out? The editorial page, certainly. But not the news pages. I’ve read the Journal multiple times a week for 52 years and I’ve always noticed the split between the conservative/sometimes libertarian editorial page and the left-of-center news pages. Indeed, the UCLA economist and now George Mason University economist Tim Groseclose established in his 2011 book, Left Turn: How Liberal Media Bias Distorts the American Mind, that WSJ reporters are among the most left-wing of all reporters for the major media. I reviewed his book here and briefly cited his evidence about the Journal. Here’s what WSJ reporters Richard Rubin and Karen Dapena pointed out in their July 28 news story. The average change in federal taxes paid in 2026, due to the new tax law will be: -15.1% for the lowest quintile -14.9% for the second quintile -12.6% for the middle quintile -11.1% for the fourth quintile -9.2% for the 80-90 percentile -9.5% for the 90-95 percentile -11.2% for the 95-99 percentile -7.1% for the top 1%. (0 COMMENTS)

The relationship between accounting identities and economic model is frequently misunderstood.  An accounting identity is an equality that must be true, by definition.  It is tautology.  It is meant to categorize and organize relationships between variables.  For example Assets = Liabilities is an identity.  Regardless what “assets” equals, “liabilities” must be the same amount.  We have defined it this way.  There is nothing causal about this statement.  It tells us nothing about the behavioral relationship between the various factors. Furthermore, an identity is not testable and falsifiable.  It is always and necessarily true.  We cannot test to see if an increase in consumption increases GDP; it always and everywhere will.  If an increase in consumption decreases GDP, then you made a math mistake. Conversely, economic models describe causal, behavioral relationships.  Rather than being defined a certain way, models take simplifying assumptions and observed behaviors to posit cause and effect.  Take a simple model of demand: Quantity demanded = 10–2P.  This is a model of the causal, behavioral relationship between quantity demanded and price: as price falls, quantity demanded rises by 2 (and vice versa).  Quantity demanded does not equal 10–2P by definition.  That is based on observed behavior and various simplifying assumptions. Quantity demanded could be quadratic, it could be locally upward-sloping, it could take on many different shapes!  This is a relationship that was discovered and is limited to this use. Furthermore, a model is testable and falsifiable.  We can test to see if a change in price influences quantity demanded by 2.  Say, we observe that instead, a marginal change in price changes quantity demanded by 3.  Our model is falsified! The misunderstanding might come from the fact that identities and models look similar.  They are both mathematical equations.  But to properly appreciate what they tell us, one must understand the difference.  A model describes a theoretical causal relationship.  An identity is a description, a definition.  Further, an accounting identity only tells us what happened in the past. Michael Pettis, a Carnegie Fellow and professor of finance at Peking University in Beijing, is perhaps the most prominent (though not the only) offender who confuses the two, since he writes often in large, international outlets.  Brian Albrecht, chief economist at the International Center for Law & Economics, has an excellent blog post in which he shows how a little Econ 101 reasoning exposes the weaknesses, contradictions, and hidden assumptions in Pettis’s arguments.[1]  (My co-blogger Scott Sumner has similar comments.) Pettis frequently argues that mercantilist policies of other governments, in particular China, force America to run a trade deficit.  His argument falls out of the accounting identity that, in a closed economy, Savings = Investment.  If planet Earth is a closed economy (and it is, at least until we uncover sentient alien life), then a nation like China increasing savings must mean that another nation is investing more, leading to a trade deficit. Taking Pettis’s argument on its own terms betrays a fundamental misunderstanding of how accounting identities work.  Accounting identities are not mind control.  They are a record of transactions.  In other words, they tell us what has occurred, not what will occur.  Only transactions that have occurred show up in the accounts.  Accounting is only a description of what has occurred. The accounting of past events tell us nothing about future transactions. Take the simplified accounting identity Assets = Liabilities.  If a firm buys an asset on credit, the firm’s assets go up and the firm’s liabilities go up by the same amount.  As the firm pays off the debt, its assets go down, and so do the liabilities by the same amount.  That must be true because that’s simply the purpose of these categories.  But the changes in assets and liabilities reflect transactions that have occurred, not future transactions.  As a matter of course, when a purchase occurs both assets and liabilities adjust—if the transaction occurs.  If the transaction does not occur, it never appears in the ledger. To bring this to the international stage, the accounting identity Investment = Savings – Balance of Trade is merely accounting for (describing formally) transactions that occurred in the previous time period.  If some investment occurred, it must have been funded by some combination of domestic and international savings.  But it does not track the countless investments (and savings) that did not occur because they didn’t make sense at the available interest rate.  Because they didn’t happen, they can’t be described, and so those transactions do not show up at all!  Again, the accounting identity only tells us what has occurred, not what will occur. For another example, say you have an extra $200,000 and decide to save it.  You open a Certificate of Deposit savings account at the local bank and deposit the money there.  The bank’s assets have risen (its reserves increased by the amount you deposited) but so have its liabilities (account holders can demand their deposits back).  The deposited funds are now available for investment, but nothing about your deposit says investment must rise.  No one wakes up the next day and says, “I must buy a house and borrow $200,000 now!”  The bank will try to entice borrowers with interest rates, but there is no compulsion going on, and nothing about the definition says it has to happen.  Indeed, if the bank cannot lend out the money, it stays in bank reserves and never shows up in GDP at all.  Even though a savings account has increased, without corresponding investments, the transaction does not appear in GDP. Once we understand that accounting identities record transactions that have occurred and have no power to compel future transactions, the logic of Pettis’s (and other mercantilists’) argument falls apart.  Increasing Chinese savings does not compel Americans to run a trade deficit.  Of course, all else held equal, increased savings (loanable funds) would reduce interest rates, which in turn would increase the quantity demanded of loans, increasing US GDP (through increased consumption, investment, or government spending) and the trade deficit, it is true.  But that does not follow from the accounting identity, but from Econ 101 supply-and-demand framework.  If there were no appetite to borrow, no mutually beneficial transactions to occur, then no amount of increased savings will compel Americans to borrow.   — [1] As Brian points out, Pettis would argue that Econ 101 doesn’t apply. But that’s just another weakness in his argument.  If you have to toss out scientific laws to make your case, your case isn’t very good. (0 COMMENTS)

The previous post in this series touched on Musa al-Gharbi’s identification of a class of people as “symbolic capitalists,” his contention that wokeness is the dominant ideology of this group, and that members of this group tend to be most predisposed to amplifying woke ideas. There are multiple “alternative names for symbolic capitalists” used by other writers, such as “the professional-managerial class, the new class, the creative class, the aspirational class,” among others. But regardless of the term one uses, what is a symbolic capitalist, exactly? According to al-Gharbi, symbolic capitalists are professionals who traffic in symbols and rhetoric, images and narratives, data and analysis, ideas and abstraction (as opposed to workers engaged in manual forms of labor tied to physical goods and services). For instance, people who work in fields like education, science, tech, finance, media law, consulting, administration, and public policy are overwhelmingly symbolic capitalists. If you’re reading this book, there’s a strong chance you’re a symbolic capitalist. I am, myself, a symbolic capitalist. That is to say, the world of symbolic capitalists is more about ideas, data, and intangible outputs, compared to workers whose work is focused on physical, tangible outputs. At one point in the book, he uses this as a way of distinguishing medical practitioners from symbolic capitalists: The amount of money symbolic capitalists take home every year is higher than for virtually anyone else in society. The only competitive nonsymbolic occupational group is “health-care practitioners and technicians”… Even though medical professionals are a highly educated, high status group, and the work they do requires substantial knowledge, they generally don’t fall into the category of symbolic capitalists because their work involved efforts to “directly intervene on physical bodies.” (Recently, I had a doctor inject a large amount of cortisone into a tendon sheath on my wrist – I can confirm that the work this doctor did was not in any sense a form of symbolic output.) As the name symbolic capitalist suggests, the stock and trade of such people is symbolic capital. Following the work of the sociologist Pierre Bourdieu, al-Gharbi says, In contrast with more traditional resources associated with wealth, material assets, and so on, Bourdieu defined symbolic capital as the resources available to someone on the basis of honor, prestige, celebrity, consecration, and recognition…According to Bourdieu, the roles people are assigned to on the basis of their symbolic capital (or lack thereof) may actually be more important that more conventional economic forces in determining how power is arranged within a society. Symbolic capitalists, according to Bourdieu, make their living by “three forms of symbolic capital: cultural, academic, and political.” These are very valuable social assets, al-Gharbi says: Collectively, these different forms of symbolic capital serve as the basis for defining others as insiders or intruders, experts or amateurs, leaders or brutes, authentic or posers, geniuses or hacks, sincere or cynical, worthy or unworthy, and so forth. Each of these forms of symbolic capital is defined. First, political capital: Political capital includes the trust, goodwill, relationships, and institutional authority that can be used to mobilize others in the service of particular goals. One’s formal title within an organizational hierarchy, one’s perceived credibility, reliability, efficacy, experience, and virtue – these are all resources that can be drawn on to convince others to throw their lot in with someone, to trust their vision, to run with their plan, to pursue their priorities. Next is academic capital: Academic capital, on the other hand, is about getting others to defer to one’s judgment based on special knowledge, intellect, skill, or expertise. Academic capital is mainly derived from one’s credentials, degrees, formal training, and such. Lastly, we have cultural capital: Finally, cultural capital is about demonstrating oneself as interesting, cool, sophisticated, charismatic, charming, and so on. People reveal their cultural capital through how they talk, how they carry themselves, their dress, their manners, their tastes and expressed opinions – all of which provides strong cues as to one’s level of education, socioeconomic background, ideological and political alignments, place of origin, and so forth. Of these three main forms of symbolic capital, it is cultural capital that is least accessible to nonelites. Cultural capital is key in another way – because it’s the biggest barrier keeping the “normies” distinguished from the elites, “wokeness has become a key source of cultural capital among contemporary elites – especially among symbolic capitalists.” And this helps explain why the activities, perceptions, priorities, and policy preferences of woke social justice activists seem so disconnected from the people these activists claim to be representing: The idiosyncratic understanding of social justice and attendant dispositions and modes of engagement colloquially referred to as being “woke” are popular almost exclusively among people like us. Those who are genuinely vulnerable, marginalized, disadvantaged, or impoverished don’t think or talk in these ways. And that’s part of the point. Among symbolic capitalists, wokeness has come to serve as a sign that someone is of an elite background or well-educated. Through espousing woke beliefs, symbolic capitalists (and aspirants to the symbolic professions) demonstrate that they are the kind of people who “play ball” – they are aware of, and are willing and able to competently execute, the appropriate scripts in response to various cues. That is, wokeness is increasingly a means of identifying who is part of “the club” – and it provides a basis for deeming those who are not part of the club unworthy of symbolic capital (i.e., people who fail to embrace elite conceptions of “social justice” are held to be undeserving of honor, fame, prestige, deference, etc.). By expressing concern for the well-being of the poor and powerless in a particular way, one also distinguishes oneself from the poor, powerless, and vulnerable, and demonstrates oneself to be a member of the elite in good standing. This is why on the one hand, surveys have found that among Black Americans who live in low-income areas, the overwhelming majority wanted the level of police presence in their neighborhood to be at least as high as it currently is or even higher. On the other hand, among members of the highly educated, wealthy, mostly white elites living in gated communities protected by private security, it was a great display of cultural capital to express enthusiasm for defunding or even abolishing the police. By expressing your concern for the poor and downtrodden in a way completely separate from the actual ideas or desires of that group, you signal the fact that you are wealthy, well-educated, and culturally sophisticated – you shouldn’t be mistaken for one of the plebs. However, al-Gharbi points out that symbolic capitalists are not a pure monolith in political leanings: All said, contemporary symbolic capitalists are overwhelmingly and increasingly aligned with the Democratic Party and the “cultural left.” However, there is a right wing among them. They amount to a relatively small share of symbolic capitalists overall yet exert a disproportionate impact in virtue of being highly organized, well funded, and quite skilled at eliciting strong (outraged) reactions both from mainstream symbolic capitalists and against mainstream symbolic capitalists—often in alliance with “anti-woke” peers. Yet the actively anti-woke segment of symbolic capitalists isn’t so much the opposite of the woke. They just have a different focus: What generally separates these symbolic capitalists from most others is that they are symbolically conservative: patriotic, religious, nondisdainful toward U.S. history, culture, and traditions. On the one hand, these are significant differences—ones that align right-leaning symbolic capitalists more closely with most other Americans… The primary grievance of these symbolic capitalists in the “culture wars” is that the abstractions they cherish are being denigrated, villainized, marginalized, and neglected as a result of their peers’ widespread embrace of an alternative symbolic paradigm—one that purports to unsettle the symbolic boundaries between men, women, nature, humanity, and God. Yet they share with mainstream symbolic capitalists a sense that this fight over language, ideas, history, and cultural artifacts is of deep importance—world-historical importance even—to the point where more practical problems that most “normies” confront in their day-to-day lives should take a back seat. Despite these differences, the modes of analysis al-Gharbi applies to woke symbolic capitalists also apply to anti-woke symbolic capitalists: Anti-wokes share mainstream symbolic capitalists’ worldview with the importance of the symbolic struggles: this is what gives their own campaigns perceived urgency and meaning. Materially speaking, they do similar types of work, and live similar lifestyles in similar places, relative to their woke peers. Consequently, virtually everything that follows applies just as much to the anti-woke as to mainstream symbolic capitalists. For our purposes, there is no significant difference between them. Because symbolic capitalists are vastly more likely to be woke and progressive, al-Gharbi places most of his focus on that group: This book will be focused intensively on the Left because symbolic capitalists are overwhelmingly aligned ideologically with the Left and politically with the Democratic Party. But granting that symbolic capitalists are likely to be progressive and woke, what made wokeness the dominant philosophy among symbolic capitalists? This isn’t mere happenstance, says al-Gharbi. Yet it’s not a result of the woke coming to these views as a result of deeply studying the academic literature – as al-Gharbi has mentioned, the views they espouse are often somewhere between unrelated to or the exact opposite of the actual contents of the scholarship they cite as inspiration. Nor is it due to a heightened awareness of the values and preferences of the downtrodden communities they claim to support – again, because the policy preferences of the woke tend to be out of step with of the expressed views of those very people. So what, then, explains the tendency of the elites to embrace wokeness? Or, perhaps more precisely, how did wokeness come to signal one is a member of the elite? We’ll look at al-Gharbi’s answer to that question in the next post. (0 COMMENTS)

A deal is an agreement to exchange something for some consideration, but different sorts of deals exist. A deal is not necessarily a free exchange and a free exchange is not necessarily a free-market exchange. The gold standard of all deals is a free-market exchange: a voluntary exchange where alternative demanders and suppliers exist. The free market does not need to be perfectly competitive, but alternatives are available at costs that are not too high. This qualification is illustrated by the dehydrated traveler lost in the desert who arrives at an oasis and is offered a glass of water for $10,000. “And I have a POS device for your credit card.” Whether the traveler accepts or declines, and whether the oasis owner is led or not to lower his price to get a deal (“better $500 than my customer dropping dead”), we still have a free exchange, because either party is free to accept or decline the trade; but it is not a free-market exchange. Many people are uncomfortable with this extreme case. A free exchange in this sense may be unjust. Extreme cases do not necessarily provide good tests of a theory. Moreover, an unjust exchange may still be better for the “weakest” party than a diktat forbidding him to do what is still in his best interest, as judged by himself, compared to no exchange (see Michael Munger, “What Does ‘Voluntary’ Actually Mean?” The Daily Economy, June 25, 2019). In a free society, such exchanges with limited alternatives would be rare anyway—as can be estimated from their frequency of occurrence in more-free-than-unfree countries and mostly-unfree ones. And then, there are deals that are unambiguously unfree and unjust, at least for some of the parties involved. A free exchange requires that a party who declines be not subject to punishment, that is, to the active removal of a previously recognized or exercised right or liberty. Fining or jailing a smuggler can hardly be called a free exchange between the smuggler and the punisher. We may call this sort of exchange a Berlin Wall deal: if you jump the wall, you will be shot; if you stay on our side, there is no shooting. Close to the Berlin-Wall deal, we encounter the kidnapper’s deal, which is not a free exchange either. You are kidnapped and imprisoned. Your kidnapper offers you a deal: a ransom of $100,000 or death. If you accept, it is an exchange (“a deal”) in the sense that both parties benefit relative to the new, coerced starting point imposed by the kidnapper, but it is not a free exchange considering the whole situation. Note that a deal can be a one-sided free exchange: free for one party, who is not coerced by a third party (say, his government), and unfree for the other contracting party, who is coerced or coercively restricted by another third party (say, by his own government). “I made a good deal on my Lenovo ThinkPad” unambiguously denotes a free and even free-market exchange for me, at least if I did not have to pay a cut (a tariff) to my own government, regardless of whether the seller is coerced by his own government. If Lenovo were not a private company (which it mostly is) or were not shackled to a certain extent by the Chinese Leviathan (which it certainly is), the free purchaser, on his side, would still be making a free-market exchange. A theory or classification that deemed any exchange unfree because some other individuals in the world are unfree would not be very useful. It is not because North Koreans are not free to participate in the world dating market that this market is unfree for Americans—even if the wider the free market, the better everyone is. Another sort of deal, which includes elements of the Berlin Wall deal and the kidnapper’s deal, is the rulers’ deal, made by rulers on behalf of their subjects and imposed on them: “Here is your deal. Enjoy, or else!” Two rulers striking a rulers’ deal benefit or think they will benefit; otherwise, one of them would decline. Obviously, it is not necessarily true for all (and perhaps most of) their subjects. At the limit, imagine two slave masters striking a deal involving their slaves: “Your slaves shall work for me in such or such circumstances, in return for my slaves working for you in such or such circumstances.” For example, your subjects will work to produce stuff for (export stuff to) my subjects, while my subjects will work to produce stuff for (export stuff to) your subjects. (It is too easy to claim that being a slave of the majority is not slavery.) These categories are not airtight and do not capture all the complexities of the social world. They do not, for example, account for conventional or accepted rules, à la de Jasay or à la Buchanan, but I suggest they are a first step in understanding and evaluating social and political realities—including “trade deals.” ****************************** Forthcoming deal between a kidnapper and his victim, by ChatGPT (2 COMMENTS)

After months of debate, and substantial changes along the way, this summer Congress successfully enacted a landmark package of tax and spending cuts, a key component of Donald Trump’s legislative agenda. Trump’s “big beautiful bill” (HR 1) will reduce taxes by around $4.5 trillion while also cutting roughly $1.5 trillion in federal spending. It is very likely the most important bill this Congress will take up, arguably the most important bill in decades. And while there are many provisions in the sprawling 1,000-page proposal, much of the discussion is focused on the tax reduction. Tax cuts are a perpetual debate in contemporary American politics. Last time the GOP controlled both chambers and the White House during Trump’s first term, they succeeded in enacting a similarly large tax reduction package. In fact, the “big beautiful bill” makes many of the 2017 tax cuts permanent. Before Trump’s election in 2016, a unified Republican Congress passed two rounds of tax cuts—in 2001 and 2003—during George W. Bush’s administration. Going back even further, Ronald Reagan achieved the same feat in both 1981 and 1986 when Republicans controlled the Senate for six years. Over this 45-year time span, the debate over taxes has tended to focus on a single issue: the policy implications of reducing taxes that will disproportionately go to high-income Americans. For example, conservative economists in the 1980s proposed that cutting the top marginal tax rate (70% at that time) would generate greater government revenue, not less, due to increased production and employment. George H.W. Bush called this theory, known as the Laffer Curve, “voodoo economics” when he ran against Reagan in the 1980 GOP primary (for an overview see Domitrovic 2021 on the emergence of supply-side economics). As far as the recently enacted legislation, Trump echoes these arguments, calling it the most “pro-growth” and “pro-worker” law in American history (White House 2025). Critics of these claims abound, mostly among left-leaning economists. For example, Joseph Stiglitz has argued that the post-World War II experiment with “trickled-down economics” failed to achieve its primary policy objectives (Stiglitz 2015). Others argue that the sharp reduction in the top marginal tax rate has led to greater income inequality rather than a universal “rising tide” (Piketty and Saez 2007). A more recent article by David Hope and Julian Limberg (2022) supports these two claims—across eighteen OECD nations over the last fifty years, reduced tax progressivity has caused greater income inequality while having no discernable effect on economic growth or employment. “Simply put, whether one wants high-income Americans to pay more or less in taxes hinges on whether they view the rich in positive or negative terms.” I want to sidestep these policy debates and instead focus on a neglected part of the discussion: what the American public thinks about tax cuts. Specifically, why do Americans support or oppose tax cuts that primarily go to the wealthy on a per dollar basis? If there is one core argument in this piece, it is that the American public has complex and often contradictory views about progressive taxation. A key aspect of this claim is my research showing that Americans’ preferences for raising or lower taxes on the rich are largely informed stereotypes about “the rich” as a group (Ragusa 2015, 2017). Simply put, whether one wants high-income Americans to pay more or less in taxes hinges on whether they view the rich in positive or negative terms. What do Americans think about taxing the rich? Although a lot depends on question wording, surveys consistently show that Americans want the rich to pay more in taxes. For example, the 2024 Cooperative Election Study (CES) asked if “taxes on individuals earning $400,000 should rise.” A sizable majority of 69% said they support such a proposal. A recent poll by the Hoover Institution produced a nearly identical estimate despite differences in question wording—66% support having “high-income earners pay a larger share of federal income taxes.” Data from Pew show majorities support raising taxes on wealthy households as well. On a recent survey, 58% said “tax rates on household income over $400,000 should be raised” while only 19% said these households should pay less in taxes. It should be noted that support for increasing taxes on the rich is a relatively recent phenomenon. Gallup data from 1939, at the end of the Great Depression, showed that large majorities opposed “redistributing wealth” by levying “heavy taxes on the rich.” Sixty years later in 1998 when Gallup asked the same question, a majority of Americans continued to oppose such a proposal, albeit somewhat narrowly (51% to 45%). However, the most recent Gallup polls (in 2013, 2015, 2016 and 2022) show majorities support increasing taxes on the rich to redistributive wealth. But why do so many Americans today support raising taxes on high-income households? On its face, this seems like a rather simple question. Economic self-interest, ideology, and views on income inequality are all intuitive answers. And yet these explanations are either incomplete or wrong. A logical starting point is to consider raw economic self-interest. It stands to reason that high income Americans, who constitute a small share of the public, want their taxes to decrease, while low- and middle-income Americans want taxes on the rich to go up (presumably to pay for greater social services). Although certainly logical, there is mixed evidence on this hypothesis. For example, an often-cited review essay by Sears and Funk (1990) aptly titled “the limited effect of economic self-interest on the political attitudes of the mass public” found that attitudes towards taxation are shaped by economic self-interest only when the size of the tax reduction is substantially large and obvious. In most cases, self-interest is a moderate to poor predictor of Americans views on economic policies, according to Sears and Funk. I found a similar result in one of my papers on this subject—a measure of income was a poor predictor of whether Americans said they wanted taxes on the rich to go up or down (Ragusa 2015). Digging deeper into the CES data cited above, only one income bracket in 2024—those making over $500,000 per year—opposed a hypothetical plan to increase taxes on individuals earning over $400,000 per year. For respondents in the second highest income bracket—Americans earning between $350,000 and $499,999 per year—a majority supported a tax increase on high-income earners even though many of these respondents would see their taxes increase. Conversely, there are many in the lowest CES income brackets that say they want high-income earners to pay less in taxes. As far as why income is at best a modest correlate of views on taxing the rich, one answer is that a complex set intersecting ideals mute the effect of economic self-interest. Compared to citizens in many European nations, Americans report a stronger commitment to ideals like individual liberty, upward mobility, and equality of opportunity (Hochschild 1981). Recent research supports this contention. For example, a survey experiment by Ballard-Rossa, Martin and Scheve (2017) found that respondents who said one’s economic success is explained more by “hard work” rather than “luck” had less progressive views on taxation. A study by Hope, Limberg, and Weber (2023) found a similar result—wealth obtained from an inheritance reduces support for tax cuts that benefit the rich. Critically, however, in the Ballard-Rossa, Martin and Scheve study, even those who cited “hard work” as the source of a person’s economic success had progressive preferences on balance. A second possibility is that ideological considerations supersede economic self-interest. Although counterintuitive, a substantial body of work shows that Americans have “sociotropic,” or other focused, views that override their “pocketbook” motivations. In simple terms, low-income conservatives may prefer a less progressive tax structure for ideological reasons (e.g., limited government and individual liberty) while high-income liberals may prefer a more progressive tax structure (e.g., to promote equality). Public opinion polling confirms that Americans have ideologically motivated tax policy attitudes. For example, the Pew survey digs into this issue by providing crosstabs by both party and income. For Democrats, support for taxing the rich increases with income. In other words, Democrats in the highest income bracket are the most supportive of raising taxes on wealthy households. For Republicans it is the opposite—low-income Republicans are among the most opposed to taxing the rich. (A likely explanation for this counter intuitive finding is the effect of education on tax policy preferences.) Academic studies show similar ideological and partisan results (Ballard-Rossa, Martin, and Scheve 2017). An unresolved question remains, however: why do so many Americans support raising taxes on the rich, including many self-proclaimed conservatives? On the Cooperative Election Study (CES) survey, a whopping 44% of self-described “conservative” and 34% of self-described “very conservative” respondents say they support raising taxes on the rich. Simply put, ideology, on its own, is a strong but imperfect explanation for Americans tax policy preferences. A third possibility is that opinions on taxing the rich are not explained by an overarching ideology, which many Americans do not possess in the first place (Converse 1964), but by a specific set of policy objectives. For example, Americans often say they are concerned about the income gap between the rich and poor, so perhaps many want to raise taxes on the rich to alleviate inequality and increase government spending (while those who are unconcerned about inequality want the rich to pay less in taxes). Although there is disagreement in the literature, academic research has tended to refute this hypothesis, however. A famous study by Bartels (2005) concluded that many Americans have what he termed “unenlightened self-interest” (though see the Hope, Limberg and Weber 2023 study). Although Bartels found that there was a relationship between support for the two Bush era tax cuts and one’s perceived tax burden, attitudes were unrelated to broader views on income inequality in Bartels’ study. For example, those who said they were concerned about inequality were just as likely to say they supported the repeal of the estate tax, which increased the wealth gap. Bartels concluded that public attitudes were “ill-informed [and] incentive to some of the most important implications of the tax cuts” (page 15). What about socioeconomic stereotypes? In summary, economic self-interest and one’s policy views are imperfect explanations of Americans (rather complex) views on taxing the rich. My research suggests another factor plays a key role: socioeconomic stereotypes. A lengthy literature documents that stereotypes about groups affected by a policy powerfully shape how citizens think about that policy. In the economic realm, studies have shown that stereotypes about targeted groups shape attitudes toward welfare (see Fox, 2004 and Gilens, 1996, 1999) and social security (see Winter 2006) for example. From a theoretical standpoint, stereotypes operate as heuristics that simplify one’s thinking about a complex policy matter. In this literature, deservingness stereotypes are found to be particularly powerful. In brief, the concept of deservingness captures whether one thinks the targeted group has “earned” some beneficial policy outcome from the government. I examined this possibility with survey data that asked Americans to describe the rich in an open-ended format (Ragusa 2015). As you might imagine, the survey elicited a range of responses—some of the most frequent descriptions of the rich ere “highly educated,” “hard working,” “good job,” “arrogant,” “inheritance,” “luck,” “political influence,” and “drive expensive cars.” My analysis shows that these stereotypes powerfully shape views on taxing the rich (controlling for ideology, income, education, and a range of other factors). From a statistical standpoint, the analysis indicates that socioeconomic stereotypes have a similar effect size as ideology. As you might expect, respondents who described the rich using positive terms were much more likely to say they should pay less in taxes while those who described the rich using negative terms wanted the rich should pay more in taxes. All in all, Americans stereotype the rich—like other groups in society—and these stereotypes help reconcile seemingly contradictory views about the merits of raising or lowering taxes on high-income Americans (e.g. why support is so high in the abstract and why many self-described conservatives want taxes on the rich to go up). Indeed, the survey showed that most people have at least one negative stereotype about the rich, while a follow up study showed that modern media framing has increasingly focused on the rich as a group (Ragusa 2017). Not all stereotypes are the same, however. Respondents who described the rich using dispositional and prosocial terms were the most likely to say taxes on them should go down. In the literature “dispositional” refers to whether a targeted group is responsible for their circumstance (e.g. the rich became wealthy because of hard work) while the term “prosocial” is about whether the group is a net benefit to society (e.g. the rich are job creators). Conversely, Americans with situational and antisocial views of the rich (e.g., the rich became wealthy as a result of inherited wealth and are selfish) are those most in favor of having the rich pay more in taxes. Implications An overarching conclusion that emerges from the above is that Americans have a mix of complex, irrational and often ill-informed views on tax policy. Bryan Caplan’s excellent book The Myth of the Rational Voter (2008) studies this issue in far greater detail and makes a convincing case as to Americans’ inability to make sound economic decisions. In brief, Caplan argues that a downside to representative democracy is that voters often get what they want—that is, unenlightened policy outcomes. It isn’t just that people are uninformed. Rather, Caplan documents that people form their policy opinions on a mix of ideology, emotion, and biased thinking rather than fundamental economic principles. One piece of Caplan’s book that does not seem to fit taxing the rich specifically is his suggestion that voters’ biased decision-making leads to popular but economically unwise policies that pass. After all, cutting taxes on the rich is unpopular yet was recently enacted by Congress (just like the last time Trump was president in 2017). How can we reconcile this apparent inconsistency? I think there are two answers. First, Caplan argues there isn’t a perfect “1-1” relationship between what the public wants and what the public gets. Issue salience is a key moderating variable. When the public holds strong beliefs, the people are more likely to get their preferred outcome (even if it is irrational or ill informed). But when voters hold weak beliefs, lawmakers have greater flexibility and those policies are less likely to pass. Given everything cited above, I think it is fair to say voters have highly malleable and thus weak positions when it comes to taxing the rich. A second possibility is that Americans actually don’t want the rich to pay more in taxes. In fact, you could argue the opposite. Although popular when asked about in the abstract, surveys that force Americans to select an appropriate level of taxation often show far less support for raising taxes on high-income individuals and households. For more on these topics, see Bryan Caplan on the Myth of the Rational Voter. EconTalk. Redistribution, by Dwight R. Lee. Concise Encyclopedia of Economics. “Do the Poor Vote Their Self-Interest?” by Dwight R. Lee. Library of Economics and Liberty, August 5, 2013. For example, the Hoover Institution data cited earlier purported to show that 66% want high-income Americans to pay a larger share of federal incomes taxes. And yet a follow-up question revealed that 73% want a top tax rate that was less than what high-income earners currently pay. Ballard-Rosa, Martin and Scheve’s (2017) study found a similar result— although people prefer a more progressive tax structure in the abstract, when forced to set hypnotical tax rates, Americans’ answers don’t differ very much from current tax rates. In conclusion, Americans opinions on taxing high-income earners are complex and often contradictory, despite the strong opinions on the side of raising taxes on the rich in the abstract. Given the central role that taxation plays in domestic politics, this is cause for concern as it suggests the public is ill equipped to perform one of their basic duties. References Ballard-Rossa, C, Martin, L., & Scheve, K. 2017. “The Structure of American Income Tax Policy Preferences.” The Journal of Politics, 79, 1-16. Bartels, L. M. 2005. “Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind.” Perspectives on Politics, 3, 15–31. Caplan, B. (2008). The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Pinceton, NJ: Princeton University Press. Converse, P. E. 1964. The Nature of Belief Systems in Mass Publics. In D. E. Apter (Ed.), Ideology and Discontent, London: Free Press of Glencoe. Cooperative Election Study. 2025. CES 2024 Data. Accessed July 2, 2025: https://tischcollege.tufts.edu/research-faculty/research-centers/cooperative-election-study Domitrovic, B. 2021. The Emergence of Arthur Laffer: The Foundations of Supply-Side Economics in Chicago and Washington, 1966-1976. London, UK: Palgrave Macmillan. Fox, C. 2004. The Changing Color of Welfare? How Whites’ Attitudes Toward Latinos Influence Support for Welfare. American Journal of Sociology, 110, 580-625. Gallup. 2022. Average American Remains OK With higher Taxes on Rich. Accessed July 2, 2025: https://news.gallup.com/opinion/polling-matters/396737/average-american-remains-higher-taxes-rich.aspx Gilens, M. 1996. Race Coding and White Opposition to Welfare. American Political Science Review, 90, 593-604. Gilens, M. 1999. Why Americans Hate Welfare: Race, Media, and the Politics of Antipoverty Policy. Chicago, IL: The University of Chicago Press. Hochschild, J.L. 1981. What’s Fair? American Beliefs About Distributive Justice. Cambridge, MA: Harvard University Press. Hoover Institution. 2025. New Poll: What Americans Need to Know About the Trump Tax Cuts. Accessed July 2, 2025: https://www.hoover.org/news/new-poll-what-americans-need-know-about-trump-tax-cuts Hope, D. & Limberg, J. 2022. “The Economics Consequences of Major Tax Cuts for the Rich.” Socio-Economic Review, 20, 539-559. Hope, D., Limberg, J. & Weber, N. 2023. “Why Do (Some) Ordinary Americans Support Tax Cuts for the Rich? Evidence from a Randomized Survey Experiment.” European Journal of Political Economy, 78, 1-15. Pew Research Center. 2025. Most Americans Continue to Favor Raising Taxes on Corporation, Higher-Income Households. Accessed July 2, 2025: https://www.pewresearch.org/short-reads/2025/03/19/most-americans-continue-to-favor-raising-taxes-on-corporations-higher-income-households/ Piketty, T. & Saez, E. 2007. “How Progressive is the U.S. Federal Tax System? A Historical and International Perspective.” Journal of Economic Perspectives, 31, 3-24. Ragusa, J. M. 2015. “Socioeconomic Stereotypes: Explaining Variation in Preferences for Taxing the Rich.” American Politics Research, 43, 327-59. Ragusa, J. M. 2017. “Do the Rich Deserve a Tax Cut? Public Images, Deservingness, and Americans’ Tax Policy Preferences.” In Bart Meuleman, Femke Roosma, Tim Reeskens, and Wim van Oorschot (Eds.), The Social Legitimacy of Targeted Welfare, London: Edward Elgar Press. Stiglitz, J. E. 2015. “Inequality and Growth.” The Political Quarterly, 86, 134-155. Sears, D. O., & Funk, C. L. 1990. “The Limited Effect of Self-Interest on the Political Attitdues of the Mass Public.” Journal of Behavioral Economics, 19, 247-271. White House. 2025. Myth vs. Fact: the One Big Beautiful Bill. Accessed July 2, 2025: https://www.whitehouse.gov/articles/2025/06/myth-vs-fact-the-one-big-beautiful-bill/. *Jordan Ragusa is a professor in the political science department at the College of Charleston. His research focuses on several intersecting topics: American and South Carolina politics, the Congress, political parties, elections, political economy, and statistical methods for the social sciences.  He is the author of two books: Congress in Reverse: Repeals from Reconstruction to the Present and First in the South: Why the South Carolina Presidential Primary Matters. For more articles by Jordan Ragusa, see the Archive. This article was edited by Features Editor Ed Lopez. (0 COMMENTS)

Book Review of: Why Nothing Works: Who Killed Progress–and How to Bring It Back by Marc J. Dunkelman,1; and Abundance by Ezra Klein and Derek Thompson.2 Vera Coking and the Cost of Progress In 1961, Vera Coking and her husband purchased a home in Atlantic City, New Jersey. They paid $20,000 for the modest three-story house, or about $215,000 in 2025 dollars. Coking was looking for a summertime home, not an investment. But if she had been looking to make money, she would have been hard pressed to do better. Twenty years later, Coking received an offer of one million dollars from Bob Guccione of Penthouse who wanted the land for a casino he was developing. She turned it down. Then, in 1993, another casino developer tried to buy the land to use as a limousine parking lot. Once again, Coking refused the offer. This time, however, the developer refused to take “no” for an answer. Since a voluntary exchange wasn’t going to work, the developer went to the state instead. Specifically, he turned to the state’s Casino Redevelopment Agency, which sought to use the power of eminent domain to kick Coking out of her house against her will. A new parking lot, the developer argued, would better serve the public interest than an old, single-family home. And if it happened to serve the developer’s private financial interest along the way, well, that was just a one of those happy accidents along the road to progress. Luckily for Coking, her case attracted the attention of the public interest law firm, The Institute for Justice. With their help, Coking was able to secure a modest victory in court. She kept her house, not because the court rejected the principle of eminent domain altogether, but because in this particular case, the state’s plan put “no limits” on what the developer could do with the land, in the words of Superior Court Judge Richard Williams. The developer, one Donald J. Trump, would have to park his customers’ limousines somewhere else. Markets, Government, and the Barriers to Abundance I was reminded of the Coking case while reading two recent books, both of which argue persuasively that America has made it too difficult to build new things, and that making building easier again could unleash a new wave of prosperity and growth. Those books, Marc Dunkelman’s Why Nothing Works and Ezra Klein and Derek Thompson’s Abundance, are noteworthy in many respects, but not least because of their rather surprising political orientation. Klein, Thompson, and Dunkelman all identify as progressive liberals, and their books are aimed at convincing the center-left to adopt the kind of pro-growth position that is more often associated with the political right. To a liberalism that has devoted much of its energies to arguments about how to divide the economic pie more equitably, Klein, Thompson, and Dunkelman seem to suggest that we focus instead on how to make that pie bigger for everyone. That suggestion—which I should stress is only implicit in the two books—echoes a point that has long been made by conservatives, classical liberals, and libertarians. And, indeed, there is much else in these books for such readers to appreciate. As the authors demonstrate with a vast range of specific examples, a big part of the reason why Americans haven’t built as much as we could and should have is that government has gotten in the way. Left to their own devices, free markets are generally amazing in their capacity to discover innovative, efficient, and scalable ways to produce the things that people want. But when government rules impede markets’ ability to build new housing, we wind up with a crisis of affordability and homelessness. When government puts up barriers to the development and marketing of new pharmaceuticals, we wind up waiting decades for cures that could have been delivered in years or months. In these and a host of other similar cases, unleashing abundance means cutting back on the size and scope of government and letting the creative destruction of free markets rip. However, cutting back on government regulation of the market, according to the authors, is merely a necessary step toward abundance. It is not a sufficient one. The problem is not merely that government has hobbled markets; it is that government has also hobbled itself. A variety of factors, including the “rights revolution” of the second half of the twentieth century and an increasing emphasis on rigid proceduralism, have left government crippled in its ability to get things done. However well-intentioned these developments may have been, their effect was to establish a host of new “veto gates,” each capable of bringing projects to a grinding halt. And thus we find ourselves in a situation where extending subway lines in New York City takes decades and winds up costing twenty times as much as similar projects in other cities around the world, where the projected costs of a clean energy project in Maine almost doubled seven years after its approval without a single mile of line ever being built, and where California has been struggling to even start a functioning high speed rail line that was first approved in 1982. “If we want to start building again, something must change.” If we want to start building again, something must change. But what, exactly? Economic growth is a tremendous good, but as the case of Vera Coking shows, we don’t necessarily want economic growth at any cost. So, what sort of framework do these books offer for understanding the nature of our problem, and for distinguishing good growth from bad? The Jeffersonian Trap and Procedural Paralysis For Dunkelman, much of the problem can be traced to the rise of “Jeffersonianism,” a philosophy of governance driven by a skepticism of large, centralized institutions, and which seeks to protect individuals from overbearing authority by pushing state authority down and out. It is this Jeffersonian philosophy which supported the creation of a vast new array of rights over the course of the 20th century, rights designed to protect individuals, communities, and the environment against the oppressive power of both big government and big corporations alike. Some such protections are necessary, Dunkelman concedes, but a central claim of the book is that Jeffersonianism has been carried too far, and what is needed now is a corrective swing back toward a more “Hamiltonian” philosophy of centralized, expert authority. Dunkelman’s distinction captures two broad public attitudes toward political authority, but those public attitudes fall well short of the coherence we might expect from rigorous philosophical systems. And this limits their utility in understanding—let alone guiding—political decision making. For example, Dunkelman recounts how, in the 1970s, progressives and police unions during joined forces to limit the discretionary power of police chiefs. The goal of the movement was to protect officers from various abuses of power, which sounds Jeffersonian. But by limiting the discretionary power of police chiefs, the reforms wound up increasing the discretion of beat cops, thereby leaving ordinary citizens more vulnerable to the unchecked authority of the police. A similar pattern can be found in many other Jeffersonian reforms. Laws enacted to protect the natural environment from exploitation by big corporations necessitate the creation of large new government bureaucracies to define, adjudicate, and enforce those rights. In each case, we can describe the change as decentralizing power in a sense. But often, attempts to abolish power simply redistribute it, and the framework of Jeffersonianism vs Hamiltonianism doesn’t tell us much about the net power wielded over individuals. Nor does it provide a useful guide for thinking about how power ought to be distributed in order to promote either economic growth or the other values we might wish to pursue. Klein and Thompson offer less in the way of an overarching theoretical framework than does Dunkelman. But one theme that runs clearly throughout their book is the idea that abundance has been thwarted by an overemphasis on proceduralism. Proceduralism, in this context, means the conviction that governmental legitimacy is to be earned by compliance with an “endless catalog of rules and restraints.” Laws and regulations prove their merit by surviving notice-and-comment sessions, environmental reviews, court challenges, and so on. These procedural constraints are designed to serve two legitimate goals—legitimacy and accountability. But the actual result, according to legal scholar Nicholas Bagley, on whose work Klein and Thompson draw, has been a system that “frustrate[s] the very government action that progressives demand to address the urgent problems that now confront us.”3 Instead of focusing on procedures, Klein and Thompson argue, we should focus instead on what actually matters to people—outcomes. No one cares how many reports were written in the process of approving the construction of a new bridge. What they care about is whether the bridge gets built, safely, cheaply, and quickly. All this sounds like common sense, except for one big problem: governments have no way of directly selecting outcomes. Governments can create institutions; they can create laws; they can create taxes and subsidies. And they can hope and intend that these creations will ultimately generate certain outcomes. But whether those outcomes materialize or not is a matter that depends on a whole host of factors, the vast majority of which are outside of government’s direct control. Consider an analogy. I might want my son to become a talented runner. But he won’t make much progress toward that goal by simply focusing on the outcome. (“To-do today—become a great runner!”) It simply isn’t actionable. A good coach will break the outcome down into concrete steps or procedures. Focus on your form, control your breath, and put in the miles. Trust the process. A good process doesn’t guarantee a good outcome. But it makes that outcome more likely by making clear the steps you need to take to get there. The same is true for government. Procedures are a way of focusing the government’s attention on the things that are under its control, in order to make the outcome which is not under its control more probable. Procedures are not only helpful, but they’re also unavoidable. The only way to achieve an outcome is through some kind of process. The only question is whether we’re going to clearly and carefully define that process or leave it up to chance and the discretion of the parties involved. Ill thought-out procedures will not only make the desired outcome less likely; they also create opportunities for the process to be captured and manipulated by groups seeking to promote their own special interest at the expense of the common good. Capture, Cronyism, and Government Failure All this leads to one of the most surprising omissions of the two books. For all their focus on the failures of government policy—either to build things itself, or to properly incentivize and support market actors in doing so—there is shockingly little discussion of the field of study which has developed the most systematic account of the nature and causes of government failure: public choice theory. With the exception of Klein’s brief discussion of Mancur Olson’s classic, The Rise and Decline of Nations, there is precious little discussion of rent-seeking, agency capture, or the underlying structural incentives that generate the many pathologies that Dunkelman, Klein, and Thompson observe. And without a clear diagnosis of the problem, the authors struggle to provide a cure that is clear, compelling, and politically realistic. Many of the core findings of public choice theory were usefully summarized in Peter Schuck’s 2014 book, Why Government Fails So Often: And How It Can Do Better.4 Schuck draws particular attention to the problems of information and incentives that bedevil so many government undertakings. In brief, government officials often lack the detailed, context-specific, and rapidly changing knowledge necessary to produce socially desirable outcomes and often are under-incentivized to pursue those outcomes anyway, even if they knew how to do so. Moreover, these defects are not temporary or easily corrected. They are, according to Schuck, rooted in an “inescapable, structural condition: officials’ meager tools and limited understanding of the opaque, complex social world that they aim to manipulate.” Schuck’s concerns especially apply to Klein and Thompson’s call for a more expansive government role in fostering innovation. Klein and Thompson claim that the popular idea that government is “lousy at picking winners” is a myth that “bears little resemblance to history.” Drawing heavily on the work of Mariana Mazzucato, they argue that the American government has in fact played an expansive role in developing many of the technologies and conveniences that shape our modern world.5 From the iPhone to shale drilling to federally subsidized mortgages, there is hardly any aspect of our lives that is untouched by government “picking.” But the story told by Mazzucato is not without its critics. A greater familiarity with the public choice literature, or with Alberto Mingardi and Deirdre McCloskey’s detailed criticism of Mazzucato’s book, might have led Klein and Thompson to at least take these criticisms seriously.6 Unfortunately, there is little in the way of acknowledgement of these objections, let alone critical engagement with them. It is shocking, for instance, that the words “cronyism” or “rent-seeking” do not appear a single time in the pages of Abundance. If government is to be in the business of identifying and subsidizing potential “winners” in the economy, we will of course hope that it will do so based on the best available scientific and economic insight. But both theory and ample experience (do we still remember Solyndra?) show that this is far from certain. Government favors will often be awarded not to the most deserving but to the most politically well-connected. And the bigger the prize, the fiercer will be the competition to forge those connections. The outcome of such a competition will almost certainly not be favorable to the poor, the small, or the outsiders. Innovation is a process of trial and error, and both markets and governments will produce plenty of failures. But there are massively important differences between the nature of these failures. Private businesses are gambling with their own money, giving them an important incentive to carefully balance risk and reward; when governments invest, they’re playing with other people’s money. Private businesses fail in a way that tends to be small and localized; government failures occur on a much larger scale. Finally, and perhaps most importantly, the failures of private businesses are temporary—failing firms are driven out of the market by the ruthless process of market competition. Government failures, in contrast, face no such screening process. Even the most abject failure of a government program tends to benefit some small, concentrated interest group, and that interest group has much stronger incentives to fight for the preservation of that program than anyone else does to end it.7 Abundance and Comparative Political Economy The point of these criticisms is not to discredit the abundance agenda. To the contrary, the overall vision offered by Dunkelman, Klein, and Thompson is grand and inspiring. It is an agenda that has the potential to unite progressive liberalism’s traditional concern for advancing the interests of the poor with classical liberalism’s emphasis on the creative power of free, competitive markets—a brilliant adaptation of what Brink Lindsey called the “liberaltarian” agenda.8 It is, moreover, an agenda that channels our energies in a positive-sum direction, one that yields compounding dividends over the long term.9 For more on these topics, see Richard Epstein on Property Rights, Zoning, and Kelo. EconTalk. Arthur Diamond on Openness to Creative Destruction. EconTalk. Marianna Mazzucato on The Value of Everything. EconTalk. For introducing and popularizing this agenda, the authors of these two books deserve our praise. Where they fall short is in the question of how—what are the concrete steps we can take from here to meaningfully and sustainably promote abundance?10 Answering this question will require a deeper engagement with the methods of comparative political economy—methods advanced by scholars like Peter Boettke, Mark Pennington, and others.11 Many difficult questions and challenges lie ahead. But if we are lucky, the abundance movement is just getting started. Footnotes [1] Marc J. Dunkelman. Why Nothing Works: Who Killed Progress–and How to Bring It Back. Feb. 2025. [2] Ezra Klein and Derek Thompson. Abundance. Mar. 2025. [3] Nicholas Bagley, “The Procedural Fetish.” Niskanen Center, 7-Dec-21 [4] Peter Schuck, Why Government Fails So Often: And How It Can Do Better (Princeton: 2014). [5] See Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths (Anthem, 2013). [6] See Alberto Mingardi and Deirdre McCloskey, The Myth of the Entrepreneurial State (AIER, 2020). [7] See, for discussion, Jonathan Rauch, Demosclerosis (Three Rivers Press, 1994). [8] See Brink Lindsey, “Liberaltarians”. Cato Institute, 04-Dec-06. In an interview with Lindsey, Steve Teles describes the connections between the abundance movement and liberaltarianism. See “Steve Teles on Abundance: Prehistory, Present, and Future,” 11-Jun-25. [9] As such, the abundance movement has natural affinities with the “longtermist” branch of effective altruism. On longtermism, see William McAskill, What We Owe the Future (Basic Books, 2022). On the overriding long-term importance of economic growth, see Tyler Cowen, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals (Stripe, 2018). [10] The sympathetic critic Noah Smith makes a similar point. See his “Progressives Take their Best Shot at Abundance (But It Falls Short),” 17-Jun-25. [11] See Peter Boettke, “The New Comparative Political Economy,” 12-Dec-05; and Mark Pennington, Robust Political Economy: Classical Liberalism and the Future of Public Policy (Edward Elgar, 2011). *Matt Zwolinski is a political philosopher at the University of San Diego who teaches and writes about issues at the intersection of philosophy, politics, economics and law. He is director of USD’s Center for Ethics, Economics, and Public Policy, co-director of USD’s Institute for Law and Philosophy, and a Senior Fellow at the Niskanen Center. As an Amazon Associate, Econlib earns from qualifying purchases. (0 COMMENTS)