TGIF: Damn Consumers!

Global free trade is about individual, not national, freedom—for consumers and producers who import raw materials, tools, and semi-finished products.

Aside from its role as an aspect of personal liberty, free trade's efficiency benefits have been well-established since the early 19th century. In this respect, domestic and global trade are the same. Trade restrictions disrupt the productive process, making it less efficient and hence less beneficial to consumers. "All that a tariff can achieve," Ludwig von Mises wrote in Human Action, "is to divert production from those locations in which the output per unit of input is higher to locations in which it is lower. It does not increase production; it curtails it." But people's interests are in expanded, not curtailed, production.

Unfortunately, free trade does not enjoy wide support today. Both major parties oppose it. They don't even pay lip service to it. They think buyers, especially consumers, buy the wrong things from the wrong people. Consumers are an unruly and capricious bunch. They prefer less-expensive, high-quality foreign-made products over more-expensive, lower-quality American-made products. What's overlooked is that they also upset American businesses and workers for reasons other than foreign competition, such as innovation and changing tastes. Also overlooked is that if we can get a better deal from abroad, American labor and resources are freed up for other things.

Government policy favors producers (including workers) over consumers and intermediate buyers. This is idiotic since, as Adam Smith pointed out: "Consumption is the sole end and purpose of all production." This doesn't mean that the government should favor consumers. It means laissez faire.

No one has argued for the wisdom of unfettered international exchange than Henry George. In his 1886 book, Protection or Free Trade, George wrote: "Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do."

This runs contrary to the view of the two major parties, which believe that individual liberty should be tolerated only if it conforms to the "national interest" as they define it.

George added:

If Americans did not want to buy foreign goods, foreign goods could not be sold here even if there were no tariff. The efficient cause of the trade which our tariff aims to prevent is the desire of Americans to buy foreign goods, not the desire of foreign producers to sell them…. It is not from foreigners that protection preserves and defends us; it is from ourselves. [Emphasis added.]

Then comes the killer line: "What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war." 

How does the protectionist respond to that? Any response would repudiate Adam Smith's wisdom. The major point of The Wealth of Nations is that well-being consists not of piles of gold in government vaults but rather of access to goods. Biden, Trump, and the anti-economists they rely on want you to forget that.

A tariff is a tax. But unlike other taxes, the aim is not to raise revenue. The purpose of a protective tariff is to raise prices and limit choice in the domestic market. That's supposed to punish the foreigner and help domestic competitors, but it's an odd way to do it because many other Americans are harmed. Even the intended beneficiaries are harmed. Many imports are not consumer products. They are inputs that American manufacturers need to make consumer products. The tariff raises producers' costs, drives marginal firms out of business, disemploys workers, and degrades the surviving firms' competitiveness internationally. Even the workers in protected industries then face higher consumer prices, offsetting the benefits they expected from the tariff.

As the British free traders used to say: incomes buy more under free trade. That means incomes buy less under protectionism.

Protectionism squanders scarce resources, restricts individual freedom, and hampers the pursuit of happiness. "This is the crux of the matter," Mises wrote. "All the subtlety and hair-splitting wasted in the effort to invalidate this fundamental thesis are vain."

Restricting Production

"At the bottom of the interventionist argument there is always the idea that the government or the state is an entity outside and above the social process of production, that it owns something which is not derived from taxing its subjects, and that it can spend this mythical something for definite purposes. This is the Santa Claus fable raised by Lord Keynes to the dignity of an economic doctrine and enthusiastically endorsed by all those who expect personal advantage from government spending. As against these popular fallacies there is need to emphasize the truism that a government can spend or invest only what it takes away from its citizens and that its additional spending and investment curtails the citizens’ spending and investment to the full extent of its quantity.

"While government has no power to make people more prosperous by interference with business, it certainly does have the power to make them less satisfied by restriction of production."

Ludwig von Mises, Human Action

"Capitalism" Is about Freedom, Not Capital

 "Why 'capitalism'? Words have an unfortunate tendency to confuse. Free market capitalism is not really about capital, it is about handing control of the economy from the top to billions of independent consumers, entrepreneurs and workers, and allowing them to make their own decisions about what they think will improve their lives. So careless talk about 'taking control of capitalism' actually means that governments take control of citizens.

"But it doesn't sound like it, does it? One of my intellectual heroes, Deirdre McCloskey, complains that the word capitalism gives the misleading impression that it is about the rule of capital, rather than liberating people to make their own economic decisions, which is really what the free market is about: 'Capitalism' is a scientific mistake compressed into a single word, a dramatically misleading coinage by our enemies, and still used by the sadly misled among out friends.' So why do I use it? Because, no matter what we think of it, and no matter which word we would prefer for a system of private property and free markets, this is the word that has become inextricably linked to it, and if its supporters don't fill that word with meaning, its opponents will."

--Johan Norberg, The Capitalist Manifesto, 2023

TGIF: The Populist Trap

If you care about individual freedom and general prosperity, you'll want to avoid all shades of populism like the plague. It is economic illiteracy proudly proclaimed and writ large. As an alternative to libertarianism, it is bad in its own right—freedom is not on its agenda—but it is bad also because it is wedded to nationalism. That is, it treats the nation-state—not individuals and their projects—as the fundamental unit. It's ours against theirs. Disregard the hosannas to persons, families, and local communities. It's the nation that matters. 

Don't believe me? Then why do populists always want to interfere with people's right to trade as they wish regardless of borders? Never mind that protectionism holds the seeds of economic and military conflict and that unmanaged global trade is global cooperation.

I'm tempted to say that basically, the populist believes that scarcity is a capitalist plot. (There's some unwitting vulgar Marxism in that.) Populism presents itself as the politics of grievance: "working people" are fed up with an elite conspiracy of elected officials, bureaucrats, and "corporate" cronies who enrich themselves at the expense of ordinary people.

Bailouts and subsidies give the grievance some credence, but it's exaggerated. The unnamed culprit is market dynamism—or freedom. Entrepreneurship, innovation, and consumer sovereignty bring change in the demand for goods, which understandably makes people nervous. The bias favors the status quo. Blacksmiths and assembly-line workers are no longer wanted.

Anyway, since coercive government power is the only way to grab privileges at other people's expense, power itself should be—but never is—the villain. Greedy "Big Business" is the target. No distinction is made between bigness achieved through successful service to consumers and bigness achieved through anticompetitive government interference with market relations.

What is the populists' alternative? They say they want a government that serves working people. Never mind that people produce to consume, not vice versa. How do they intend to get the government and economy they want? Through democracy, though they ignore the elitism inherent in any political system. Politicians in a democratic republic need to cobble together majorities to get elected and reelected, but when in office they have elbow room to set the agenda for the one-size-fits-all program that they decide best serves the people's needs. Since people don't understand economics and are biased against markets and foreigners, the program brings tariffs (which hurt American consumers and workers by raising prices and provoking retaliation), bailouts, and deficit spending financed through the hidden inflation tax. Fiscal restraint is not a priority. Every penny of the budget has a constituency behind it.

We find populist agitation within what is misleadingly called the "right-wing" and "left-wing." On the left, the populists try to counterbalance inane identity politics, which in their view has pushed class politics off the agenda. They seem not to realize that class politics is an earlier form of identity politics; it holds, wrongly, that an inherent and irreconcilable conflict exists between haves and have-nots, between employers and employees, that can only be rectified by making the state more powerful than it is today. Never mind that mass production must come before mass consumption, and markets have wiped out much poverty worldwide. The headline-rich "inequality" red herring will keep everyone distracted.

When a Republican populist (say, J. D. Vance) hears the term economic freedom, he is likely to envision unilateral scope for the sovereign state: specifically, a strong leader who wields tariffs, trade quotas, sanctions, antitrust prosecution (which protects inferior competitors, not consumers), and more in his crusade to strengthen the "U.S. economy" by increasing exports (by muscle if necessary), blocking imports, saving or restoring "American jobs," and punishing businesses that provide superior consumer service. What he doesn't envision is free individuals trading goods, services, and labor with whomever they want, including new immigrants who seek a better life without government permission.

The populist can't tolerate individual freedom because, in his view, that would be chaos. He rejects consumer sovereignty, so he goes with the only thing left: the state. He has yet to learn what has been known at least since the Scottish Enlightenment of the late 1700s: that the best kind of social order is spontaneous order, the order that results from free, cooperative, commercial human interaction, not central planning or industrial policy.

The populists, "left" and "right" point to people's economic hardship, but it never occurs to them that government intervention, of which there is no shortage, could be at fault. Are housing prices too high? They blame immigrants (who improve our lives along with their own), not the myriad government building restrictions. Are supermarket prices rising? Blame corporate greed and ignore the money-creating Federal Reserve. This blindness to government intervention is on display with every issue. The populists never see the straitjacketed markets, only too little democracy. But democracy can't get us out of the mess it's got us into. Virtually everything the government does affects market relations. Yet voters know nothing about economics. They don't even know that prices fall when supply rises.

The populists find industrial policy more to their liking than freedom. That's central planning—economic and social engineering, "picking winners"—without nationalization. It's subtle socialism, and it has the same flaws. No one can know enough to plan the economic interactions of billions of people. Anyone delusional enough to think he and some "experts" could manage that task should be laughed off the stage. Aside from the knowledge problem, the incentive problem will always plague us. We know what Lord Acton said about how power corrupts. But power also attracts the already corrupted.

But aren't the populists at least antiwar? Sometimes. They tend to oppose U.S. participation in the Ukraine-Russia war—now. But they can't be relied on. They tend to favor arming Israel in its Gaza onslaught. As nationalists, they always present a potential for conflict, these days with China and Iran. We saw that in Trump's term as president. He cannot be counted on to dismantle the trip-wire alliance system, and he's enthusiastic about the de facto alliances with Israel and Saudi Arabia. Think of the arms sales! That's good for American workers, right?

Let's not forget the link between border security, which populists demand, and the drug war, which they also love. That link offers populist leaders many opportunities for bloody intervention south of the border. One more thing we can be sure of: the populists do not see global trade as a peace-maker, or trade restrictions as a source of conflict. Globalization, even without a government role, is a dirty word. I see no reason for comfort here.

Even when the populists oppose wars (did Trump oppose any?), it is not so that the taxpayers can keep their money and spend it as they like. No, the populists stand with progressives: they want to transfer the money from the Pentagon and CIA to domestic departments. Details may differ, but that's all.

The best reason to oppose war and the preparation for it, aside from the obvious one, is that they require a bloated, intrusive government, battalions of bumbling bureaucrats, and the diversion of scarce resources from consumers to military contractors. Populists just want to redistribute the bloat.

It may be that the "right-wing" populist leaders are phonies and don't mean what they say. Some in the "left-wing" tribe say that about Trump and his running mate, Vance. Maybe that's true. But if they are liars who stand for something else, we can be certain they don't stand for shrinking the state and expanding individual liberty. That's not on the menu these days.

Tariffs Violate Freedom

Debate goes on over who suffers from U.S. tariffs. Biden and Trump, for example, think U.S. tariffs on Chinese goods hurt China, not Americans. This is nonsense. Even if they hurt Chinese producers (who can sell their goods elsewhere), the tariffs still hurt Americans. Whatever the Chinese do, prices in America for the relevant consumer and producer goods, imported and domestic, will rise—that's the point of the tariff—and choice will shrink. Here's what Henry George had to say in Protection or Free Trade:

If Americans did not want to buy foreign goods, foreign goods could not be sold here even if there were no tariff. The efficient cause of the trade which our tariff aims to prevent is the desire of Americans to buy foreign goods, not the desire of foreign producers to sell them.... It is not from foreigners that protection preserves and defends us; it is from ourselves.

He also wrote:

Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war. [Emphasis added.]

 

TGIF: Culture without Romance

"The entire history of the human race, the rise of man from the caves, has been marked by transfers of cultural advances from one group to another and from one civilization to another."

So said economist, social philosopher, and historian Thomas Sowell in a 1990 speech titled "Cultural Diversity." (Watch it here. I also recommend this lecture by Nigel Biggar.) By cultural diversity Sowell did not mean the still-fashionable sense of that term. He has in mind what might be called culture without romance, echoing James Buchanan and the Public Choice school's economics without romance. What does Sowell mean?

Paper and printing, for example, are today vital parts of Western civilization–but they originated in China, centuries before they made their way to Europe. So did the magnetic compass, which made possible the great ages of exploration that put the Western Hemisphere in touch with the rest of mankind. Mathematical concepts likewise migrated from one culture to another: Trigonometry from ancient Egypt and the whole numbering system now used throughout the world originated among the Hindus of India, though Europeans called this system Arabic numerals because it was the Arabs who were the intermediaries through which these numbers reached medieval Europe. Indeed, much of the philosophy of ancient Greece first reached Western Europe in Arabic translations, which were then re-translated into Latin or into the vernacular languages of the West Europeans.

That shines a different light on how many people think of Western culture. It is something that the cultural anti-immigrationists seem completely ignorant of. Setting out to protect from change a culture that is a product of centuries of unplanned and spontaneous cultural imports seems strange indeed.

Sowell's point is also a blow to the woke warriors. In light of what he's saying, we have no choice but to pronounce the purported crime of cultural appropriation pernicious nonsense. As someone said, the history of man is a history not of cultural appropriation but rather of cultural appreciation. Thank goodness for that.

"Much that became part of the culture of Western civilization," Sowell continued, "originated outside that civilization, often in the Middle East or Asia." (Emphasis added.) Imagine that!

The game of chess came from India, gunpowder from China, and various mathematical concepts from the Islamic world, for example. The conquest of Spain by Moslems in the eighth century, A.D., made Spain a center for the diffusion into Western Europe of the more advanced knowledge of the Mediterranean world and of the Orient in astronomy, medicine, optics, and geometry. The later rise of Western Europe to world pre-eminence in science and technology built upon these foundations, and then the science and technology of European civilization began to spread around the world, not only to European offshoot societies such as the United States or Australia, but also to non-European cultures, of which Japan is perhaps the most striking example.

Sowell then drew an inference that today gets him in trouble with some people: "The historic sharing of cultural advances, until they became the common inheritance of the human race, implied much more than cultural diversity. It implied that some cultural features were not only different from others but better than others." (Emphasis in original.)

Better? Oh my! Are you allowed to say that? Won't that hurt some people's feelings, especially those of some prominent well-paid Western intellectuals? Sowell then showed what a good praxeologist he is by employing the tools of purposeful human action:

The very fact that people—all people, whether Europeans, Africans, Asians, or others—have repeatedly chosen to abandon some feature of their own culture, in order to replace it with something from another culture, implies that the replacement served their purposes more effectively...."

Example: "Arabic numerals are not simply different from Roman numerals; they are better than Roman numerals." How can we know this?

This is shown by their replacing Roman numerals in many countries whose own cultures derived from Rome, as well as in other countries whose respective numbering systems were likewise superseded by so-called Arabic numerals.

It is virtually inconceivable today that the distances in astronomy or the complexities of higher mathematics should be expressed in Roman numerals. Merely to express the year of American independence–MDCCLXXVI–requires more than twice as many Roman numerals as Arabic numerals. Moreover, Roman numerals offer more opportunities for errors, as the same digit may be either added or subtracted, depending on its place in the sequence. Roman numerals are good for numbering kings or Super Bowls but they cannot match the efficiency of Arabic numerals in most mathematical operations—and that is, after all, why we have numbers at all.

But doesn't "our" culture—out of respect for our ancestors—deserve preservation by the state? Tradition! Sowell isn't buying it.

Cultural features do not exist merely as badges of “identity,” to which we have some emotional attachment. They exist to meet the necessities and forward the purposes of human life. When they are surpassed by features of other cultures, they tend to fall by the wayside, or to survive only as marginal curiosities, like Roman numerals today. [Emphasis added.]

He elaborates:

Cultures exist so that people can know how to get food and put a roof over their head, how to cure the sick, how to cope with the death of loved ones, and how to get along with the living. Cultures are not bumper stickers. They are living, changing ways of doing all the things that have to be done in life. [Emphasis added.]

It's common sense: "Every culture discards over time the things which no longer do the job or which don’t do the job as well as things borrowed from other cultures. Each individual does this, consciously or not, on a day to day basis." (Emphasis added.)

Languages take words from other languages, so that Spanish as spoken in Spain includes words taken from Arabic, and Spanish as spoken in Argentina has Italian words taken from the large Italian immigrant population there. People eat Kentucky Fried Chicken in Singapore and stay in Hilton hotels in Cairo.

But in 1990, like today, "This is not what some of the advocates of 'diversity' have in mind."

They seem to want to preserve cultures in their purity, almost like butterflies preserved in amber. Decisions about change, if any, seem to be regarded as collective decisions, political decisions. But that is not how any cultures have arrived where they are. Individuals have decided for themselves how much of the old they wished to retain, how much of the new they found useful in their own lives. In this way, cultures have enriched each other in all the great civilizations of the worlds.

De-romanticizing culture could be a big step toward junking illiberal and demoralizing identity politics and so-called social justice.

TGIF: On the Pursuit of Happiness

The most remarkable phrase in the Declaration of Independence, whose anniversary we just celebrated, is the pursuit of happiness. Looking back 248 years, that phrase may strike the modern ear as strange for a political document. But it apparently did not seem that way to Americans in 1776. The second paragraph told the world:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The term among these indicates that Thomas Jefferson and the Second Continental Congress did not think that life, liberty, and the pursuit of happiness were our only unalienable rights. But the pursuit of happiness made the brief enumeration, which speaks volumes.

The first thing to note is that Jefferson did not write that we had a right to happiness, but only the right to pursue it. Legal scholar and historian Carli N. Conklin of the University of Missouri School of Law states in "The Origin of the Pursuit of Happiness":

[T]he pursuit of happiness is not a legal guarantee that one will obtain happiness, even when happiness is defined within its eighteenth-century context. It is instead, an articulation of the idea that as humans we were created to live, at liberty, with the unalienable right to engage in the pursuit.

Through historical investigation, Conklin shows that contrary to common belief, the phrase was no "glittering generality" (in Carl Becker's phrase) back them but rather was a term of substance.

I trust no one will take seriously that the omission of property from the list of examples means that Jefferson et al. thought property unimportant. Of course, it did not mean that. We know that the people behind the Declaration understood the deep importance of private property to life, liberty, and the pursuit of happiness. A possible reason for not listing it is that property was often used differently from the way we use it today. While we say, "That's my property," an 18th-century person might say, "I have a property in that," although today's usage was hardly unknown back then. James Madison, who was not a member of the Continental Congress but who had a lot of say about property, used the word both ways. However, here are examples of what he called "the larger and juster meaning" of the word:

[A] man has a property in his opinions and the free communication of them. [Emphasis added.]

He has a property of peculiar value in his religious opinions, and in the profession and practice dictated by them.

He has a property very dear to him in the safety and liberty of his person.

He has an equal property in the free use of his faculties and free choice of the objects on which to employ them. [Emphasis added.]

In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights.

It's widely known that Jefferson and other founders were deeply influenced by John Locke, the 17th-century philosopher who did so much intellectually to usher in the age of liberalism. Locke, who himself was inspired by the ancient Greek philosophers' focus on happiness, or eudaimonia, invoked the pursuit of happiness. Already, the term had a long and esteemed pedigree.  (Jefferson was also influenced directly by the Greeks. He wrote in a letter, "I too am an Epicurean.") Locke's Essay Concerning Human Understanding (1690; Book II, chapter XXI, section 52) says this: 

As therefore the highest perfection of intellectual nature lies in a careful and constant pursuit of true and solid happiness; so the care of ourselves, that we mistake not imaginary for real happiness, is the necessary foundation of our liberty. The stronger ties we have to an unalterable pursuit of happiness in general, which is our greatest good, and which, as such, our desires always follow, the more are we free from any necessary determination of our will to any particular action, and from a necessary compliance with our desire, set upon any particular, and then appearing preferable good, till we have duly examined, whether it has a tendency to, or be inconsistent with our real happiness: and therefore till we are as much informed upon this inquiry, as the weight of the matter, and the nature of the case demands; we are, by the necessity of preferring and pursuing true happiness as our greatest good, obliged to suspend the satisfaction of our desires in particular cases.

But a puzzle arises. In his influential Two Treatises of Government, Locke referred to "life, liberty, and estate," that is, property, and not the pursuit of happiness. Why Jefferson, without a challenge, switched to "the pursuit of happiness" has been much discussed by scholars over the years. I am certainly not qualified to render a verdict. On why Jefferson made the switch, Carli Conklin writes,

The most persistent explanation offered is that Jefferson was
uncomfortable enough with slavery to want to avoid perpetuating a
property ownership in slaves by including an unalienable right to property in the Declaration.

If that is so, we might wonder if Jefferson's immortal phrase all men are created equal was his way of assuring the future demise of slavery. He had included a condemnation of slavery in the Declaration but had to remove it to make the Declaration acceptable to the Southern colonies. We also can see from his Notes on the State of Virginia that he knew slavery was wrong: "I tremble for my country when I reflect that God is just: that his justice cannot sleep for ever."

Finally, we surely can chalk up a point for Ayn Rand, the novelist/philosopher who made the rational pursuit of happiness—self-interest—the foundation of her Objectivist ethics and politics. She has been a lone voice in this endeavor. People who find the free market repugnant—and most who do not—never tire of equating self-interest with "selfishness," that ugly-sounding word that Rand herself used in a book title just for its shock value. The equation, however, is invidious. It suggests that other people necessarily are impediments to one's happiness and thus one should sacrifice one's happiness at least to some extent. But why would anyone believe that "selfishness"—making the most of one's life by holding it as one's ultimate value—entails the disvaluing of other people? It's crazy on its face. Rand, like the ancient Greeks, understood that he who cares about only himself demonstrates that he doesn't care enough.

A belated Happy Fourth of July!

David Tennant: Pompous, Rude Ignoramus

British actor David Tennant showed his pompous, rude ignoramus side recently when he, in accepting an award from an “LGBT” organization, told black female Conservative government minister Kemi Badenoch to “shut up.” That was right after he said he looked to the day that Badenoch ceased to exist. Nice.

Badenoch’s offense is believing that women and children are endangered by the so-called “trans” ideology movement. Her claim hardly seems far-fetched. Allowing men who pretend to be women into real women’s bathrooms, changing rooms, shelters, and prisons is obviously dangerous for those women. And sterilizing and mutilating confused children, most of whom are same-sex-attracted (or autistic or both), is an obvious crime against humanity. It’s also conversion therapy by another name.

So between Tennant and Badenoch, it’s clear who should do the shutting up.

Tennant said on that awards night, "Everyone has the right to be who they want to be and live their life how they want to live it as long as they're not hurting anyone else…." He’s only half-right. Indeed, everyone should be free to live as he or she wants (that exhausts the third-person singular pronouns except for it) as long as he or she respects everyone else’s rights.

But there can be no right to “be who they want to be” because no one can be whoever they want to be. You cannot be a visitor from the future; he cannot be an extraterrestrial; and I cannot be a world-renowned concert pianist or all-star baseball player. So no rights claim is relevant. By the same token, a man cannot be a woman, and a woman cannot be a man. Reality sets limits, no matter how much someone resents it. You have the right to pretend to be all sorts of things, and other people have the right not to pretend along with you—even if it hurts your feelings. But to repeat, none of us can be anything. Full stop.

Is Tennant so blinded by compassion that he cannot see the most basic facts? Or is he engaging in fashionable virtue signaling? His crude dismissal of an accomplished woman (with whom I probably would have many disagreements) has not been well-received in Britain. That’s good.

Why Limit Trans to Sex?

"The 'transsexual male' [that is, transgender woman--SR] is indistinguishable from other males, save by his desire to be a woman.... If such a desire qualifies as a disease, transforming the desiring agent into a 'transsexual,' then the old person who wants to be young is a 'transchronological,' the poor person who wants to be rich is a 'transeconomical,' and so on and on." 

--Thomas Szasz, writing in 1979

TGIF: No Cheers for Decolonization(R)

How can a libertarian oppose decolonization? Colonization not only oppressed conquered peoples, as the staunchest early classical liberals never tired of pointing out, but also burdened the taxpayers of the home country, who were forced to pay through the nose for massive a military establishment, which subsidized the profits of the politically privileged few. Imperialism stunted economic growth by depriving entrepreneurs of resources they would have invested to benefit consumers. Adam Smith showed this in The Wealth of Nations (1776), but he was later echoed by Richard, Cobden, Herbert Spencer, and, in America, William Graham Sumner.

So if colonization is bad, how can decolonization also be bad? Very simply. The people who use this term today—I'll call the current usage Decolonialism®—do not mean only that occupying powers should leave conquered people to manage their own affairs, which began happening after World War II. That was literal decolonization, and it was good if incomplete, although too often the exit was followed by tribal warfare, massacres, expulsions, dictatorship, and grievances in Africa and Asia that endure to this day.

In contrast, Decolonialism­® is something else. It insists that all vestiges, whether real or imagined, of colonization—no matter how objectively good they may be—should be purged from everything everywhere precisely because the colonial powers may have imported them. Some protestors have this in mind when they call for a "global intifada" (uprising).

It is important to understand that Decolonialism­® is just one application (along with race, sex, and more) of the Critical Theory metanarrative, according to which everyone is either an oppressor or a victim of oppression. Oddly, nonbinary thinking is impermissible in this case. The goal is to overthrow classical liberalism, private property, and the market economy by sowing doubt about almost everything people justifiably believe, such as that sex is binary, immutable, and important, and not a "social construct." The metanarrative is a form of gaslighting, a term that comes from the title of an old movie in which a conniving husband makes his wife doubt her sanity so he can commit her to a mental institution and control her wealth.

Decolonialism­® would mean removing or massively suppressing so-called Western themes from school curricula, art museums, and orchestral programs, but that's small potatoes compared to what some people have in mind. Why? Because Western civilization is seen as rotten to the core, the source of all evil, with nothing worth salvaging.

Think of what that would mean. Hardly any spot on earth would be exempt, certainly not the Western Hemisphere. Whole societies would have to be uprooted—it's sometimes called "the great reset." Never mind that parts of colonial legacy, whatever the intention, have been good for colonized peoples. (See the scene "What have the Romans ever done for us?" in the brilliant movie Monty Python's Life of Brian.)

Slated for deletion would be the English legal tradition (including the rule of law, the presumption of innocence, and the state's burden of proof), roads and other infrastructure, reason (logic, universality, and objectivity), the scientific method, written language, linear thinking, individualism, property, the profit motive, the division of labor, trade, middle-man activity—in a phrase, Enlightenment classical liberalism (precursor of libertarianism), the product of a thousand-year struggle on the ground in Europe. All of this could be, and in many cases has been, stigmatized as "Western," "white supremacist," "patriarchal," and "colonial," although some of these great customs were indigenous.

As Helen Pluckrose and James Lindsay write in Cynical Theories: How Activist Scholarship Made Everything about Race, Gender, and Identity―and Why This Harms Everybody, "[D]ecolonial narratives frequently attack rationality, which postcolonial scholars see as a Western way of thinking."

Advocates of Decolonization® would uproot philosophy originating in ancient Greece, despite its universalism, and not simply refute it. "That is," Pluckrose and Lindsay write, "it is not enough to add other philosophical approaches to the field one wishes to decolonize. Postcolonial Theorists insist European philosophy must be entirely rejected—even to the point of deconstructing time and space as Western constructs." These intellectuals push four themes, the authors write: "the blurring of boundaries [for instance, between male and female], the power of language, cultural relativism, and the loss of the universal and individual in favor of group identity.... These themes are explicitly central to the postcolonial Theory mind-set and decolonize movement." The authors provide ample quotations to support that claim.

On the other hand, some indigenous customs abolished by the colonial powers presumably would have to be restored, such as suttee in India, which the British abolished. Suttee, or sati, was "the act or custom of a Hindu widow burning herself to death or being burned to death on the funeral pyre of her husband." I guess cultural relativists would have no problem with its restoration.

Would abolishing everything associated with the West help formerly colonized people seeking Western living standards? Some Asians and Africans think not. Rather, they see Decolonization® as condescending and harmful. Imagine being told that reason, science, intellectual rigor, the division of labor, and material progress were not meant for you and your kind but rather were straight white male social constructs invented to keep you subjugated. (See Pluckrose and Lindsay for details.)

Moreover, could these "vestiges of colonialism" be abolished without violence? I wouldn't bet on it. It is Jacobinism, and where you find Jacobinism, a Robespierre with a guillotine is nearby.

We should add that the West is not even close to being uniquely guilty of conquering and enslaving people. No one has any cause to feel superior on this count. Conquest, murder, and enslavement occurred everywhere throughout history, including pre-Columbian North America, sub-Saharan Africa, and the Arab and Muslim world up until a few centuries ago. Yet anti-slavery does seem to have been uniquely Western. It was the British navy that stopped the slave trade on the high seas.

Why is it always fashionable to criticize the West for its crimes but strangely impolite even to mention that the same or worse crimes were committed by non-Westerners? Is it because woke progressives have low expectations for non-Westrners? If so, how dare they call anyone else racist!

Movements such as Decolonization®, part of the larger Social Justice® cause, began in the universities, but what starts there doesn't stay there. Students are taught this insidious nonsense and then go out in the world to become popular authors, activists, politicians,  bureaucrats, and public school teachers, counselors, and administrators. (Exiting the schools is a good idea.)

In closing, we might ask: who are the true radicals, the Decolonizers® or we libertarians? That depends on what we mean by radical. We libertarians don't want to pull society up by the roots and start over, as the Decolonizers® wish to do. On the contrary, we want people to rediscover and adore those roots—reason and the rights to life, liberty, property, and the pursuit of happiness—which were never fully honored and then were smothered by the progressive weed.

If that makes the Decolonizers® more radical than libertarians, so what? They can have the word. We'll take liberty, reason, and peace.

The Law of Identity is Rubbish

Not that law of identity. A is A is not rubbish. It's still good. I'm talking about a new law of identity: each of us has an inner "gendered" spirit that might or might not be changeable at will and might be at odds with one’s body or sex. It’s the law of gender identity that is rubbish, a myth. “Trans” ideology is a fraud because there is no “trans.”

When you hear a person say he (or she) "identifies as a woman (or man)," think how Yoda might respond, "No. Be or be not. There is no ‘identify as.’" Why wouldn’t the person just say, "I am a woman (or man)"? That question needs to be asked. It might be because a man who said, "I am a woman," couldn't help but realize that he is uttering a fiction. "Identify as" is a cushion between the speaker and the truth. "I am a woman" can be falsified (or verified). "I identify (or see myself) as a woman" cannot. That’s a clue to the con going on.

While it often seems that “trans” ideologues don’t wish to question the reality of sex, we might ask, then, why they insist that sex is “assigned” rather than identified at birth. At any rate, the ideologues treat sex as unimportant. It is not: consult any biology or evolution textbook.

Maybe it's all about feelings--then again, maybe it's not. When a man says he feels he's a woman, is he not actually expressing a preference rather than a feeling? (As a kid, if I said, "I feel like an apple," my father would quip, "But you don't look like an apple.") "I prefer to see myself as a woman" is not equivalent to "I feel like a woman." After all, what does it mean for someone to feel like a woman (or man, boy, or girl)? How would a person know? Do all women (etc.) feel the same? The person has never been anything but what he or she is. What’s the objective standard by which one identifies a feeling as manness or womanness?

This question applies to areas other than sex. (The vague word gender contributes nothing to the discussion.) What does it mean to feel like a Christian, a Jew, a Muslim, or an atheist? How would a person know that a particular feeling corresponds to Christianness, Jewishness, Muslimness, or atheismness and not to something else? He may imagine that’s what a feeling means, but that's all it is: something imagined. He is not an infallible observer of the source of his feelings. He could be wrong, no matter how certain he claims he is. We’ve all felt, say, anxiety without being entirely sure why. Is it the upcoming dental appointment, the job interview, or a first date? That takes some sorting out. On the other hand, one’s interpretation of chest pain as a heart attack can be falsified or verified by a doctor and an EKG. The person might be experiencing indigestion and not a heart attack. The feeling itself does not contain its own explanation. All he knows is that he is in pain.

The same thing could be said of people who claim they feel like a man or a woman, a white or black person, a Christian, Jew, Muslim, or atheist,  etc.

Note what I am not saying. I am not saying that one cannot feel good or bad, content or uncomfortable about being one thing or another. I am saying that feeling good (or bad) about being, say, an atheist or a man is not the same thing as feeling that one is an atheist or man. (The song “I Enjoy Being a Girl,” from the 1958 musical Flower Drum Song, is about feeling joy not girlness.)

But isn’t there another problem when a man says that feeling like a woman means he prefers wearing dresses and makeup or doing any number of other things he associates with womanhood? Doesn’t the strict equation of womanhood with dresses and makeup revive unreasonable and passé rigid sexual stereotypes? Are women who prefer pants suits and no makeup lesser women? Of course not.

This is not to say that all sexual stereotyping is unreasonable. Males and females on average differ in all sorts of physical and psychological ways. Many cross-cultural studies confirm this. However, this does not justify legal disabilities for women. Enlightened thinkers have worked hard to loosen the connection between temperaments and preferences on the one hand and sex on the other. A girl who prefers toy trucks to dolls is still a girl, we used to be told--correctly. And a boy who prefers a toy kitchen set to toy soldiers is still a boy. Similarly, a competitive woman is nevertheless a woman, and a cooperative man is nevertheless a man even if the average for each sex differs. What is the case for regressing in this matter?

One tip-off that a man who says he sees himself as a woman  (or vice versa) may not really do so is his demand that others also see him that way. Why would a confident person need others to affirm his identity claim? The demand turns dark when it takes the form of insisting that other people believe what is demonstrably untrue: that men can become women and women can become men. It's as if respect and compassion require that we take on other people's fantasies in defiance of all that we have understood and observed all our lives. It does not. The demand involves gaslighting, that is, efforts to make people doubt what they know.

The demand goes darker still when the government is lobbied for measures designed to force others to behave and even use pronouns in certain ways. This includes laws that require that men who "identify as" women be allowed to enter women's hitherto safe spaces, such as bathrooms, shelters, locker rooms, and prisons. At that point, the quest for identity becomes intolerable identity politics and violates other people’s rights.

We all should be free to see ourselves in any way we please. Moreover, within the limits of objective reality we should strive to create the persons we want to be. People can genuinely say, “I know who I am,” only by deliberating about what is important to them individually and then acting to achieve their values. In a social context, this can mean pleasing others as well as oneself, such as providing goods and services in the marketplace. Note that the focus is primarily outward not inward. If you want to call the resulting emotional satisfaction a “sense of identity,” no problem. But there is no identity spirit, gender or otherwise, floating in and possibly mismatched with the body. We are not in our bodies (and so cannot be in the wrong bodies). We are our bodies, integrated conscious and self-conscious -- reasoning -- material beings.

Identity is a two-way street. We may see ourselves differently from how others see us. A person may think he is modest, while his acquaintances think he’s a braggart. While people have a right to see themselves in any way they wish, they have no right to have others see them that way. No one has the right to other people's eyes or minds.

TGIF: What Free Market in Health Care?

Federal Health-Care Industry Lobbying Leads the Pack

Contrary to a popular article of faith, America has no free market in health care—far from it. Consider this: the largest lobby in Washington, D.C., is—wait for it—the health care and health insurance industries. Last year, they spent 5.8 times the amount the "defense" contractors spent on lobbying: $800 million versus less than $200 million.

This may have many explanations, but the fact remains: a free market in health care would not see massive lobbying. Based on what Congress and regulatory agencies do, we can be sure that the health care and insurance industries are not by and large lobbying for less government. If so, they are doing a rotten job.

Michael F. Cannon, the Cato Institute's director of health policy studies, wrote a book last year showing just how much of a free market in health America does not have. To call our system a free market is a bad joke, not to mention cruelly dishonest. The details—in addition to the lobbying data—are eye-opening. It's like calling Sweden a socialist country. Wrong again, Bernie Sanders.

Cannon writes (PDF here):

In the United States ... countless state and federal laws block innovations that would improve health care access and quality. Without exception, lawmakers enact these laws in the hope of reducing costs and improving quality. Without exception, they do extraordinary and irreversible harm to patients.

This book explains how state governments prevent medical professionals and entrepreneurs from offering higher-quality, lower-cost care. It explains how Congress denies consumers both control of trillions of dollars of their own earnings and the right to make their own medical decisions. It explains how Congress makes health care increasingly less affordable, jeopardizes patient health by promoting low-quality care, and makes health insurance work against the sick.

Cannon’s work is more than a diagnosis of the sickly U.S. health care system. It's a regimen for moving America toward a "healthy" free market. The sooner we get started the better. For ages health care has been strangled by politicians, bureaucrats, regulators, and private-sector rent-seekers. They all need to be sent packing. We badly need entrepreneurship; free, flexible, private enterprise; and the profit motive—yes, the profit motive, the despised thing that has bestowed incredible wealth on so many people worldwide.

"In corners of the U.S. health sector where market forces have had room to breathe," Cannon writes, the American system has achieved astounding innovations in diagnostics, service delivery, drugs, treatments, devices, and even insurance. But it fails on many counts thanks to government preemption of private market-based efforts. A good part of the reason Americans pay more for health care than anyone else in the world is government intervention. No surprise there if you understand how governments and markets work.

Cannon writes:

Among advanced nations, the United States ranks near the top in terms of government control of health spending. The Organisation for Economic Cooperation and Development (OECD) collects data on 38 economically advanced nations. The OECD reports that in the average member country, 76 percent of health spending is compulsory. That is, rather than allow consumer preferences to allocate those funds, government requires residents to allocate those funds according to the government's preferences or face penalties. In the United States, government controls a significantly larger share of health spending than the OECD average: 85 percent of U.S. health spending is compulsory.

The OECD country with the highest percentage of compulsory spending, the Czech Republic, beats the United States by only three points.

Government controls a larger share of health spending in the United States than in 30 other advanced nations, including Canada (75 percent) and the United Kingdom (83 percent), which have explicitly socialized health systems.

Some free market! Government dictates how 85 cents of every health care dollar is spent.

"Control over health spending and government-imposed barriers to accessing medication," he goes on, "are just two ways government blocks the market forces of individual choice, innovation, and competition that would otherwise make health care better, more affordable, and more secure."

Not all action is at the national level, of course. State governments heavily regulate health care and insurance. All these regulations, including licensing and the tax exclusion for employer-sponsored medical insurance, must go if Americans are to have a world-class free market in health care. Patients must be placed at the center so they can exercise what Ludwig von Mises called "consumer sovereignty."

"Day after day," Cannon concludes, "U.S. patients suffer the consequences of a century of mounting government failures. American health care is worse, more dangerous, more expensive, and less secure than what a market system would deliver." People have to rethink their moral and aesthetic biases against profit-motivated, mutually beneficial market relations. It really is a matter of life and death.

It's a Crazy World

What's to be said about people who grieve over the deaths of Palestinian children in Gaza at the hands of the U.S.-backed Israeli military while simultaneously cheering the Mengele-style wrecking of children's lives in America and elsewhere at the hands of "transgender" fanatics? And vice versa.

TGIF: "We Have Met the Enemy and He Is Us"

The famous line "We have met the enemy and he is us" is from Walt Kelly's comic strip, Pogo. Kelly adapted the line from a U.S. naval commandant who, during the War of 1812 against Great Britain, reported to his superior, “We have met the enemy and they are ours.” Kelly did the parody for the first Earth Day in 1970, a pro-state, antimarket, antihuman occasion.

More constructively, we can apply Kelly's slogan to a bigger matter, namely, who's to blame for the bad policies that representative democracy turns out? Is the culprit an elite group of politicians, bureaucrats, and Big Business/Big Labor cronies, that is, a ruling class that conspires against the public interest? Or is the culprit " us," or, more precisely, the voters?

Most libertarians, like most progressives, would reply "ruling class," although David D. Friedman, a leading libertarian free-market anarchist, has been a major exception. (See The Machinery of Freedom: Guide to Radical Capitalism, 3rd ed., ch. 38, free online.) So too is economist and anarcho-capitalist Bryan Caplan.

Two important libertarian thinkers, Frédéric Bastiat (1801-1850) and Ludwig von Mises (1881-1973), also dissented from the common view that democracy is routinely hijacked. "One striking feature of the Bastiat-Mises view," Caplan writes, "is that politicians are actually tightly constrained by public opinion. On their account, democratic competition keeps elected officials in line; if they deviate from majority preferences, they lose elections and their jobs."

In his classic work The Law, Bastiat, the fantastic French classical-liberal political-economic essayist, pointed out that in a democracy with universal suffrage, the main potential threat to liberty and property would come not from a ruling elite but from the voters, who previously had no voice in the government. If voters know nothing about economics and are antimarket to boot, watch out! They will want the politicians to interfere with market relations, not realizing that intervention is harmful because it has significant opportunity costs: all the good things that would have been produced had the government not engaged in "legal plunder." The benefits of free markets are counterintuitive, and understanding requires knowledge, which the voters lack. So they favor import restrictions, business and farm subsidies, regulations, heavy spending, and other apparently free benefits.

Since the politicians want to be elected and reelected, they will cater to the voters' preferences, even if the politicians know that those preferences are harmful. Democracy supplies poison because voters demand poison. The voters' will is not substantially throttled by special interests.

Bastiat wrote:

Up to now, legal plunder has been exercised by the minority over the majority as can be seen in those nations in which the right to pass laws is concentrated in just a few hands. However, it has now become universal and equilibrium is being sought in universal plunder. Instead of the injustice existing in society being rooted out, it has become generalized.

In another place (Selected Essays on Political Economy, chap. 9), he wrote that "public opinion, whether enlightened or misguided, is nonetheless mistress of the world."

And again (Economic Harmonies, chap. 4): “Political power, the law-making ability, the enforcement of the law, have all passed, virtually, if not yet completely in fact, into the hands of the people, along with universal suffrage.”

H. L. Mencken, that keen observer of America in the first half of the 20th century, might have read Bastiat: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

Caplan confirms Bastiat's view. In various writings he explains that while most social scientists, including public-choice economists, believe that special interests do thwart the voters, it is untrue. 

The "point is not that no unpopular policies exist," Caplan and Edward Stringham write after scouring the data (citation below). "But bona fide examples are hard to come by, and quantitatively significant ones are scarcer still." Time delays and "frictions" may put the politicians and voters out of sync—but only temporarily.

Voters can afford to be, in Caplan's words, "rationally irrational." In any election, each person can costlessly vote according to his antimarket biases since no single vote is decisive and the total cost of a candidate's bad policies will be shared by all.  (See The Myth of the Rational Voter: Why Democracies Choose Bad Policies and the articles linked below.)

Caplan points out that Ludwig von Mises took a position similar to Bastiat's. In Theory and History, Mises wrote:

A statesman can succeed only insofar as his plans are adjusted to the climate of opinion of his time, that is to the ideas that have got hold of his fellows’ minds. He can become a leader only if he is prepared to guide people along the paths they want to walk and toward the goal they want to attain. A statesman who antagonizes public opinion is doomed to failure… [T]he politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire.

I found that quote, like the Bastiat quotes above, in the first of two Caplan blog posts: Mises and Bastiat on How Democracy Goes Wrong, Part I, and Part II. (For more, see Caplan and Edward Stringham's "Mises, Bastiat, Public Opinion, and Public Choice.")

We might resist the claim that the people, not a ruling class, are to blame. But if we have a ruling class, it must be damned incompetent. The United States has the most progressive income tax in the West. The bottom half of income taxpayers pays only a tiny fraction (2.3 percent) of the national government's revenue from the tax. The top 1 percent pays over 45 percent. Big businesses face myriad regulations, often with exemptions for small firms. New restrictions are proposed almost every day. Antitrust prosecution always looms for the successful. Businesses and farmers get subsidies and other favors, but most people support them as socially beneficial.

Moreover, privileges granted to one industry impose higher costs on others. Tariffs for U.S. steelmakers burden steel-using companies, making them less competitive in the global market. If this ruling class is so fragmented and ineffective, maybe the concept is so imprecise that it is misleading.

When well-connected interests (who include not only business people) influence policy, Caplan writes, it's at the margin and, if anything, waters down what the majority wants. Caplans notes that more-educated people tend to understand economics better than less-educated people. Without "elite" influence, tariffs and minimum wages might be more destructive than they are.

Well, if the state is not "the executive committee of the ruling class," as Marx claimed, what is it? It's a bazaar where candidates offer goodies to blocs of economically illiterate citizens. The currency is the vote. To gain power, politicians need to win a majority—repeatedly. Yes, the people are propagandized, but just as businesses fail when enough consumers exercise skepticism about a product, regardless of advertising, so voters can exercise skepticism about the politicians' claims. People are not robots, and they encounter competing sources of propaganda/information. The joint that connects official propaganda to popular opinion is, to say the least, loose. If people are gullible, who's to blame?

What's the bottom line? No one can triumph in a struggle without first identifying the adversary. If the adversary is a shady, manipulative, nearly omnipotent ruling class, that would require one strategy. But if the adversary is the public's economic illiteracy and, as Mises repeatedly put it, its failure to grasp its "rightly understood (i.e., long-run) interest" in the free market, that's another matter entirely. Since that is indeed the case, freedom advocates should act accordingly.

The battleground is human understanding and nothing else, not even institutions, Mises says. As he wrote in Human Action, using 1930s monetary policy as an example (emphasis added):

"Whatever the constitutional state of affairs may be, no government could embark upon 'raising the price of gold' if public opinion were opposed to such a manipulation. If, on the other hand, public opinion favors such a step, no legal technicalities could check it altogether or even delay it for a short time."

David Boaz, an Anecdote

When my second daughter, Emily, was born some years ago, a friend of the family gave her a gift: a stuffed blue bear. That's it up there. That friend was David Boaz, the pivotal libertarian author, editor, and administrator who died yesterday well before his time. A few months ago, when I heard that David was seriously ill, I messaged Emily to ask if she remembered the stuffed blue bear. I wasn't sure she did. Who remembers their toys from that age? She immediately responded: "Yes. From David Boaz." She had not seen him in years, and she was just a little kid then. How could she know that? Moments later she texted me the picture you see. She had just take it with her phone. The bear was right at hand! Emily then told me that her niece and nephew, my grandchildren, Cruz and Cass, often play with "blue bear"! So David's gift was being enjoyed by the next generation! I email him about it. I hope it brought a smile to his face. I know it brought tears to my eyes.

David Boaz (1953-2024)

With great sadness I note the passing of David Boaz today, June 7, 2024, at age 70. He had been ill for some time.

He was a good man and a giant of the libertarian movement. Very much because of David's influence and example, libertarian organizations not only embraced a rigorous dedication to individual liberty, private property, free markets, and peace, but also a commitment to professionalism. He is one big reason libertarianism moved from amateur status to the big league. The value of his multifaceted work, predominantly for the Cato Institute for over 40 years, can not be overstated. Whether they know it or not, libertarians owe much to David Boaz.

I knew David as both a friend and a colleague all that time. For better or worse, I turned pro as a libertarian in part, maybe even principally,  because of him. I had been a newspaper reporter in the Philadelphia area in the 1970s and then a writing teacher for a corporate consulting firm. I had left reporting because I wanted to be a full-time liberty advocate. On a trip to San Francisco in 1978, I briefly met David while visiting the barely-year-old Cato Institute. I had no idea it would be so consequential a meeting.

In the spring of 1979 I received a phone call from a very wealthy libertarian businessman, who asked if I'd be the research director of a brand-new libertarian business organization in Washington, D.C., the Council for a Competitive Economy. Its executive director was David Boaz. I can't help but believe he recommended me for the job. At that point David was the sole staff member. A president would be hired later. (That would be Richard Wilcke, a good friend who died last year.) I proposed testing out the job in the summer (when I would be off work) before deciding whether to move permanently from my home in Delaware. My suggestion was accepted, and I moved to D.C. I loved the work. In the fall my job became permanent. For more than a year I worked day in and day out with David Boaz. Thanks to him, I learned a lot about organizations, publications, etc. We were also part of the same libertarian social circle. What a great time! We were living liberty!

And we were on a mission—promoting individual liberty and capitalism. We had fun despite our lack of success in swaying opinion in our direction. These were heady days for libertarians. Milton Friedman's PBS television series, Free to Choose, was being broadcast. Other good signs had been evident since F. A. Hayek and Milton Friedman won the Nobel Prize in economics in 1974 and 1976 respectively. Things were happening. We knew our task wouldn't be easy, but we were energized and optimistic. David personified much of the libertarian movement.

When Cato moved to D.C. in 1981, David became the vice president for public policy. I eventually went on to several other movement organizations. (CCE closed shop long ago.) Now David could add foreign policy and civil liberties to his portfolio.

We became co-workers again in 1991 when I joined the Cato Institute as its senior editor. In that job I also produced Cato's first cable-TV series, The Cato Forum, which David often hosted. I recall long conversations in his office about political philosophy, economics, day-to-day politics, and how Cato could address the most important issues of the time. In those early days we had lunch together regularly, during which our libertarian conversation continued uninterrupted. I'll never forget those days.

I can attest that David was involved in every aspect of Cato's work. Content and appearance had to be of the highest quality. He saw to it. This ethic was instilled in the staff and countless interns. It was obvious in Cato's product. 

The libertarian movement was much richer for his presence. It will be much poorer without it.

David's final speech from a few months ago is here.

TGIF: Freedom or Power

Eugen von Böhm-Bawerk, the Austrian-school economist who learned from Carl Menger and taught Ludwig von Mises, speaks to the ages. We ignore his lessons to our peril. One hundred ten years ago, in a journal article titled "Control or Economic Law," he wrote:

[J]ust as natural phenomena are governed by immutable eternal laws, quite independent of human will and human laws, so in the sphere of economics there exist certain laws against which the will of man, and even the powerful will of the state, remain impotent; and that the flow of economic forces cannot, by artificial interference of societal control, be driven out of certain channels into which it is inevitably pressed by the force of economic laws.

In other words, contrary to what politicians say, we as a society cannot do anything "if only we have the will." Böhm-Bawerk went on:

Such a law, among others, was considered to be that of supply and demand, which again and again had been observed to triumph over the attempts of powerful governments to render bread cheap in lean years by means of “unnatural” price regulations, or to confer upon bad money the purchasing power of good money. And inasmuch as in the last analysis, the remuneration of the great factors of production—land, labor, and capital—in other words, the distribution of wealth among the various classes of society, represents merely one case, although the most important practical case of the general laws of price, the entire all-important problem of distribution of wealth became dependent upon the question of whether it was regulated and dominated by natural economic laws, or by the arbitrary influence of social control.

Böhm-Bawerk was not saying that economic laws were invulnerable to political and social interference or institutions—far from it. The government distorts the market all the time. That's why his lesson is so important. We'd hardly need to be taught about the importance of economic laws if intervention bounced off market participants like bullets off of Superman.

Price controls bring forth not an abundance of low-priced goods to help the poor but shortages of wanted products. Today many people suffer the hardship of government suppression of the building of new houses and apartments. (See Bryan Caplan's Build, Baby, Build: The Science and Ethics of Housing Regulation.)

In any given case, how much influence market forces and nonmarket control have is not an easy question. It takes study rather than dogmatism. However, even political intervention must operate within the law of price. Repeated efforts to abolish interest on loans (usury) have failed because lenders and borrowers eagerly found ways around the prohibition. Markets—bargaining based on subjective marginal utility—will operate despite the formidable obstacles rulers place in their way. That's true for all prices. Thank goodness for that. But consumers will be harmed, and the state's ostensible objectives won't be achieved. 

Böhm-Bawerk notes that the most "selfish" single-seller in the market (assuming no government protection) must contend with the economic laws: "Generally speaking, the fear of outside competition forms perhaps the greatest safeguard against too unscrupulous a use of monopolies preying on the general public." Nothing invites competition like abnormally high prices and profits. That's why would-be monopolists turn to the government for help. Their dreams of power are doomed without it. (Antitrust law is a fraud. It protects inferior companies, not consumers.)

The same is true in a labor market where only one buyer of labor services (employer) is active. If he pays too much or too little under market conditions, economic forces will let him know -- if the government stays out. Profit or loss, success or bankruptcy? That is the question. 

Böhm-Bawerk would understand what's happening with fast-food restaurants in California, where the government has mandated a large increase in the minimum wage:

If an entrepreneur is induced, through the motive of self-interest, to select the “minor evil,” and permits a wage increase exacted from him, then an analogous motive of self-interest will urge him to reorganize the various factors of production by means of which he produces his goods. If the factor of production called “labor” has become more expensive than before, in comparison with the other factors of production, through an extorted wage increase, then it is almost unthinkable that the same relative apportionment of the various factors of production would remain the most rational in an economic sense....

California fast-food joints are closing, substituting machines for human beings, or raising prices. It's happened many times all over the country.

[T]he most imposing dictate of power ... can never effect anything in
contradiction to the economic laws of value, price, and distribution; it must always be in conformity with these; it cannot invalidate them; it can merely confirm and fulfill them.

Mises picked up his teacher's theme. As Israel Kizner writes in his book Ludwig von Mises: The Man and His Economics, quoting from his teacher's Epistemological Problems of Economics,

Mises saw the emergence of economic understanding in the eighteenth and early-nineteenth centuries as introducing a genuinely revolutionary insight into man's understanding of the conditions within which society exists.... With the advent of economic science, [Mises wrote,] "Now it was learned that in the social realm too there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success, in precisely the same  way as they must take into account the laws of nature."

Society does not face a choice between control and economic law. Rather, the choice is between unhampered consumer-enhancing economic law and economic law twisted against consumers by bureaucrats. That is because, as Mises wrote in Omnipotent Government: The Rise of the Total State and Total War, "economic laws are inexorable, and ... government interference with business cannot attain its ends but must result in a state of affairs which—from the point of view of the government and the supporters of its policy—is even less desirable than the conditions which it was designed to alter."

What Inequality?

According to research conducted by Phil Gramm, the late Robert Ekelund, and John Early, documented in The Myth of American Inequality: How Government Biases Policy Debate and summarized in this video:

• The bottom 20 percent of households have an average annual income of $13,000, according to the Census Bureau. However, according to the Bureau of Labor Statistics, those households consume an average of $26,000 worth of goods each year. How can that be?
• In the standard computations of inequality that are used to justify more government spending, the incomes of the rich include taxes paid while the incomes of the poor exclude two-thirds of government benefits, including the Earned Income Tax Credit, food stamps, and Medicaid. (There are more than a hundred transfer programs.) The rich artificially appear richer, and the poor artificially appear poorer. It's a statistical illusion.
• When inequality is adjusted to count taxes paid by the rich and cash and noncash benefits received by the poor (net of government admin costs), measured income inequality between the top and bottom quintiles drops from 16.7:1 to 4:1. Real income inequality is a quarter of what it is said to be.
• Compared to 1967 and using inflation-adjusted dollars, two-thirds of Americans are in the top income quintile.
• People in the middle quintile have about the same income as the people in the bottom quintile, though only about a third in the bottom work.

That shines a different light on things, doesn't it?

Immigration Talk

I talk about immigration with Michael Liebowitz of The Rational Egoist.

Language, Race, and Man

"Man belongs neither to his language nor to his race; he belongs to himself." --Ernest Renan