Wednesday , November 22 2017
Home / Don Boudreaux
Don Boudreaux

Don Boudreaux

He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

Articles by Don Boudreaux

Some Links

14 hours ago

Bryan Caplan’s important idea of the ideological Turing test is featured in this excellent new video from Learn Liberty.
Richard McKenzie clarifies much confusion about the corporate income tax.  A slice:
The corporate tax is, effectively, a means of taxing people hidden “behind trees,” which is one of its chief attractions to politicians interested in garnering additional tax revenues for the government. They don’t have to admit that the corporate tax is a disguised tax hit on median and low-wage workers and low-income consumers and not on just the rich Trumps, Bill Gates, and Warren Buffets of the world. The exact size of the various hits felt by all income classes are literally unknown and unknowable (although many econometricians feign that their statistical equations reveal

Read More »

Fingleton 1; Strawman 0

1 day ago

Here’s a letter to The American Conservative:
Eamonn Fingleton’s long essay “There is No Such Thing as ‘Free Trade’” (Nov. 20th) is a cavalcade of confusions – confusions clarified countless times, in countless ways, by countless people.  Having neither the space nor the time to clear up yet again each of the many confusions that constitute Mr. Fingleton’s essay, I focus only on the first of the alleged “myths” that he lists about the case for free trade – namely: “Myth 1. America’s major trading partners are in principle sincerely committed to free trade and are doing their best to open their markets to U.S. exports.”
I challenge Mr. Fingleton to find a single passage in the writings or speeches of any serious, pro-free-trade scholar in which it is said, or even implied, that the

Read More »

Quotation of the Day…

1 day ago

… is from pages 207-208 of the final (2016) volume – Bourgeois Equality – of Deirdre McCloskey‘s great trilogy on the essence of bourgeois values, on their transmission, and on their essential role in modern:
In [Adam] Smith’s time, and now again in the regulatory state, few believed that a masterless society would be possible.  The haunting fear by governing elites supported by worried citizens stirred up by an antitrade clerisy was then, and still is, that ordinary people will do bad things if left alone.  Unless overawed by the threat of state violence in police or planning or regulation, ordinary people, especially the lower classes, will spurn priests, stop paying their rents and taxes, not save enough for old age, kill each other, not buy enough insurance, speak against the

Read More »

Any Differences?

2 days ago

What are the economically relevant differences between the hypothetical proposal summarized in the indented passage below and the tariffs and other import restrictions so beloved by protectionists?
On December 31st of each year the U.S. government shall randomly select some small percentage – say, five percent – of active workers from each of the 840 occupations that are detailed by the Bureau of Labor Statistics in its Standard Occupational Classification system and prohibit these workers from working at those occupations during the upcoming year.
There might well be economically relevant differences that separate the effects of this hypothetical proposal from the effects of the actual proposals of protectionists, but, if so, I don’t see them.
Comments

Read More »

Some Links

2 days ago

Bob Higgs explains why knowledge of the income or wealth ‘distribution’ is worse than worthless.  A slice:
They say that a little knowledge is a dangerous thing. About certain things, however, any knowledge at all is dangerous and potentially fatal. One such piece of purported knowledge pertains to the size distribution of income and wealth. This knowledge serves no good purpose; it is wholly unnecessary for defensible government policy or action. It serves only as fuel for economic misunderstanding and demagoguery. It feeds envy and provokes public mischief. If such knowledge were completely unknown, no decent project would be harmed, and a multitude of destructive policies and actions would be rendered more difficult to initiate or carry out.
Also on income differences is Richard

Read More »

Quotation of the Day…

3 days ago

… is from page 98 of an excerpt from the great Richard Overton‘s 1646 An Arrow Against All Tyrants and Tyranny, shot from the Prison of Newgate into the Prerogative Bowels of the Arbitrary House of Lords and All Other Usurpers and Tyrants Whatsoever, as this excerpt appears in the superb 2015 reader, Individualism, edited by George H. Smith and Marilyn Moore:
Mine and thine cannot be, except this be: No man hath power over my rights and liberties, and I over no man’s.
DBx: Indeed so.
Of all of Richard Epstein’s many excellent books, my favorite remains his 1995 volume, Simple Rules for a Complex World.  No such rule is more essential to a thriving civilization than the one articulated above by Overton.
(For more on Overton, see this 1980 article by Carl Watner.)
Comments

Read More »

Repeating a Key Point about the Non-uniqueness of International Trade

3 days ago

Here’s a letter to a college student who “can’t understand [my] zealotry” for free trade:
Mr. Evan Dunlap
Mr. Dunlap:
You ask why I insist that there are no losers from international trade.  Your question is fair, for such an insistence does, I confess, emit the odor of what you call “zealotry.”  But I stand by my insistence.  Let me repeat here one of the key justifications for my stand; it’s a justification that takes seriously the impact that language has on our understanding of reality.
To say – as many say – that “international trade has losers” conveys the impression that what are called the “losses” from international trade are unique to such trade.  Yet this impression of the uniqueness of international-trade’s downsides is false in at least two related ways.
First,

Read More »

Some Links

3 days ago

Mark Perry highlights one good reason why we Americans should be thankful this coming Thursday.
Here’s the video that opened this past Wednesday’s annual Mercatus Center dinner.  (Jeff Holmes, the mastermind behind this video, is a genius, especially considering the limited talent that’s in front of the camera.)
Richard Rahn is right about tax cuts.  A slice:
The problem is not a lack of tax revenue, but over-centralization, duplication and mismanagement of the revenue the government already collects. Both the House and Senate tax bills are incomplete steps in the right direction and should yield substantially higher growth. Other countries have shown that it is possible to have a prosperous economy, a high degree of liberty, and the people well protected with much lower levels of

Read More »

Quotation of the Day…

3 days ago

… is from page 242 of Georgetown University law professor Randy Barnett’s excellent 2016 book, Our Republican Constitution; just before this quotation, Randy quotes Justice William Douglas’s poor excuse in Williamson v. Lee Optical (1955) for U.S. courts to grant near-blanket approval to all legislative regulations of business-consumer interactions:
Traditionally, a law that was not “logically consistent with its aims” was literally irrational and therefore unconstitutional.  Now it was perfectly constitutional.  In this way were courts deprived of the means by which they could assess whether a statute was within the just powers of a legislature to enact, and to do so without needing to carefully identify and circumscribe a “fundamental right.”  Gone now was an enforceable requirement

Read More »

Price Theory at Its Best

4 days ago

This post by my colleague Alex Tabarrok on passengers tipping Uber drivers – and on Uber pricing – is a specimen as fine as you’ll find anywhere of price theory at its best.  This is economics as done well, beautifully, and usefully.  Here’s Alex’s concluding paragraph:
Uber is a great service for riders and it’s also great for people who need a source of flexible earnings. The fact that Uber drivers earn less than some people think is appropriate is a function of the wider job market and not of Uber policy. Indeed, Uber can’t increase take-home pay by raising fares and if we require them to do so we will simply hurt consumers and waste resources without improving the welfare of drivers.
Comments

Read More »

Abolish the CFPB

4 days ago

No society with any pretenses of being truly free can tolerate within its midst a state agency such as the Consumer Financial Protection Bureau.
[embedded content]
Comments

Read More »

Quotation of the Day…

4 days ago

… is from page 99 of my late Nobel-laureate colleague James Buchanan’s Fall 1975 Reason Papers article, “Boundaries on Social Contract,” as this article is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan (original emphasis):
[T]o the extent that existing rights are held to be subject to continuous redefinition by the State, no one has an incentive to organize and to initiate trades or agreements.  This amounts to saying that once the body politic begins to get overly concerned about the distribution of the pie under existing property-rights arrangements and legal rules … we are necessarily precluding and forestalling the achievement of potential structural changes that might increase the size of the pie for all.

Read More »

Bonus Quotation of the Day…

5 days ago

… is from page 253 of my late Nobel-laureate colleague James Buchanan’s Fall 1991 Cato Journal paper, “The Minimal Politics of Market Order,” as this paper is reprinted in Choice, Contract, and Constitutions (2001), which is volume 16 of The Collected Works of James M. Buchanan:
A market economy is relatively more efficient for three reasons: It makes the incentives of participants compatible with the generation of economic value; it exploits fully the localized knowledge available only to participants in separated decentralized circumstances; and it allows maximal scope for the creative and imaginative talents of all participants who choose to act as potential entrepreneurs.
Comments

Read More »

Some Links

5 days ago

Nancy MacLean’s calamity of book Democracy in Chains did not win the 2017 National Book Award, despite the travesty of it being a finalist in that competition.  Here’s a slice from an essay on this matter by Jibran Khan:
Democracy in Chains, which has been thoroughly debunked by left, right, libertarian, and center, is no good-faith critique. It features fabricated quotes, ellipses to flip the meaning of actual quotes, and invents ‘facts’ out of whole cloth.
George Will is correct: Roy Moore is an embarrassment.
Here are Steve Moore’s thoughts on tax reform.
And here’s my intrepid Mercatus Center colleague Veronique de Rugy on corporate taxes.
My colleague Pete Boettke explains why populists love big government.
Tim Worstall notes the reality of trade-offs.
Comments

Read More »

Quotation of the Day…

6 days ago

… is from page 209 of David Boaz’s 2015 book, The Libertarian Mind:
Enthusiasts for the market process sometimes refer to “the magic of the marketplace.”  But there’s no magic involved, just the spontaneous order of peaceful, productive people freely interacting, each seeking his own gain but led to cooperate with others in order to achieve it.  It doesn’t happen overnight, but through years and centuries the market process has brought us from a society characterized by backbreaking labor to achieve bare subsistence and an average life expectancy of twenty-five years to today’s truly amazing level of abundance, health, and technology.
Comments

Read More »

Further Evidence of the Absurdity of Nancy MacLean’s “Democracy in Chains”

6 days ago

Here’s a hot-off-the-press new paper by Phil Magness, Art Carden, and Vincent Geloso – a paper that further exposes the egregious errors in Nancy MacLean’s absurd and fabulist tale, Democracy in Chains.   The title of the paper is “James M. Buchanan, Public Choice, and the Political Economy of Desgregation.”  Here’s the abstract:
Recent historical works, most notably Democracy in Chains, advance the claim that 1986 Nobel Laureate James M. Buchanan developed his formative contributions to political economy amidst the segregationist response to the Brown v. Board of Education decision. This argument accordingly holds that the research agenda of public choice economics emerged from an opportunistic alliance with Virginia’s “Massive Resistance” to school integration, and should be

Read More »

Quotation of the Day…

7 days ago

… is from page 236 of my late Nobel-laureate colleague Jim Buchanan‘s 1985 paper “Political Economy and Social Philosophy,” as this paper is reprinted in Moral Science and Moral Order (2001), Vol. 17 of The Collected Works of James M. Buchanan:
Markets should never have been evaluated primarily and instrumentally for their ability as institutions to maximize pleasure over pain, or indeed to maximize anything else that is interpersonally comparable.
DBx: Yes.  Markets are what emerge when individuals voluntarily exchange with each other.  Markets succeed or not depending upon how well or how poorly they allow individuals to discover and to take advantage of mutually advantageous opportunities for exchange.  Markets are not about money, greed, materialism, or “maximizing social welfare”

Read More »

Paid to?

7 days ago

Here’s a screenshot of part of an e-mail that I received today from the Niskanen Center.  (And here’s the link that you see there.)

My post here is not about climate science or about Jerry Taylor and the Niskanen Center.  Instead, my post is about this line in this Mother Jones report about Jerry Taylor: “He [Taylor] got paid to go on television to decry the science behind global warming ….”  Later in the Mother Jones story that is there linked, we read that “Taylor is the only known paid skeptic to change his tune.”
Mother Jones‘s writer Nathalie Baptiste here is highly misleading.  She gives the false impression that Jerry Taylor was a mercenary – that he expressed skepticism about climate science simply because he got paid to do so – that his appearances in the media were the

Read More »

Quotation of the Day…

7 days ago

… is from page 14 of Herbert Spencer’s 1891 “Introduction” to A Plea for Liberty (Thomas Mackay, editor, 1891); the page number is to Liberty Fund’s 1981 edition of this collection:
For as fast as the régime of contract is discarded the régime of status is of necessity adopted.  As fast as voluntary co-operation is abandoned compulsory co-operation must be substituted.  Some kind of organization labour must have; and if it is not that which arises by agreement under free competition, it must be that which is imposed by authority.
Comments

Read More »

Yet More Deficient Analysis

7 days ago

Here’s a letter to the Weekly Standard:
Irwin Stelzer’s November 13th essay “There Is Nothing ‘Free’ About Our Trade With China” is chockablock with faulty analysis.  His most egregious error is to imply that something is amiss because the U.S. has with China (quoting Mr. Stelzer) a “$347 billion-and-growing goods trade deficit.”
First, a deficit in the trade of goods is completely insignificant.  Only 20 percent of U.S. private-sector output is goods (as distinct from services) while nearly 50 percent of China’s output is goods.  Therefore, to insinuate that the Chinese are playing some nefarious game by selling to Americans more goods than Americans sell to the Chinese makes no more sense than to insinuate that, say, tailors are playing some nefarious game by selling more goods to

Read More »

Quotation of the Day…

8 days ago

… is from page 232 of Randy Simmons’s 2011 Revised Edition of his and the late William Mitchell’s excellent 1994 volume, Beyond Politics:
Creating government schools violates basic principles of economics.  First, it violates the notion of consumer sovereignty.  Parents are told where their children are to go to school, what the curriculum will be, how many days the child must attend school each year, and which holidays will be observed.  The unit of society patronized by government is the school, not the consumers of education.  Schooling may be “free” but parents are not free to choose.
Comments

Read More »

Some Links

9 days ago

GMU Econ doctoral candidate Jon Murphy expands nicely upon one of my criticisms of Ian Fletcher’s stated reasons for denying the reality that trade deficits can be – and typically are – good for Americans.
Sheldon Richman explains that free markets reduce consumption inequality.
Also from Sheldon Richman is this gem of a warning against government efforts to protect us from misinformation.  A slice:
To grow up is to cultivate methods of separating the wheat from the chaff in what we see and hear. Early on we learn to discount—if not disbelieve—the claims we hear in television commercials because we understand the role interest plays in describing goods and services. We also learn (one hopes) to treat the claims of politicians, the traditional targets of American ridicule, the same

Read More »

Tell Me Again Why A Net Inflow of Capital Into America Makes Americans Poorer

9 days ago

Mark Perry used data to construct this revealing graph that makes a point very much like one of the points that I made in my debate last week at Hillsdale College with Ian Fletcher – namely, a rising U.S. trade deficit U.S. capital-inflow surplus does not mean that Americans are losing net wealth.  Quite the opposite, as reality turns out.

Comments

Read More »

Bonus Quotation of the Day…

9 days ago

… is from page 202 of my late Nobel-laureate colleague Jim Buchanan‘s 1994 paper “Politicized Economies in Limbo” as this paper is reprinted in Ideas, Persons, and Events (2001), which is volume 19 of The Collected Works of James M. Buchanan:
Now, here, is the normative contradiction that does confront anyone who takes a classical liberal position.  Margaret Thatcher, as you recall, was roundly chastized for her statement that there is no society as such.  Her intent in that statement was to suggest that only individuals offer loci of value and evaluation.  But taken literally, there could then exist no national interest, not national purpose, no national vision – whether for Germany, the United States or any other nation-state or group thereof.  Yet almost all commentators – academic

Read More »

Some Links

9 days ago

Shikha Dalmia explains how immigration crackdowns in American screw-up the lives of many Americans.
Lenore Skenazy and Jonathan Haidt explore the causes of the emotional fragility of today’s young people.  A slice:
This magnification of danger and hurt is prevalent on campus today. It no longer matters what a person intended to say, or how a reasonable listener would interpret a statement—what matters is whether any individual feels offended by it. If so, the speaker has committed a “microaggression,” and the offended party’s purely subjective reaction is a sufficient basis for emailing a dean or filing a complaint with the university’s “bias response team.” The net effect is that both professors and students today report that they are walking on eggshells. This interferes with the

Read More »

Quotation of the Day…

10 days ago

… is from page 19 of the Daniel Boorstin’s magnificent 1973 volume, The Americans: The Democratic Experience:
Without benefit of law, ranchers had divided the range among themselves by a system that was informal, that had no standing in court, but was enforced by the cattlemen themselves.
DBx: Boorstin here, discussing post-U.S. Civil War western cattle raising, identifies one of the now-more-famous examples of spontaneous law-making.  My only gripe is with the quotation’s fourth word.  That word should instead be “legislation,” for the rules that the ranchers developed among themselves, without the direction or even the help of the state, are indeed law.  I will insist until my dying day that one of the greatest errors about the nature of society – namely, that law is that which the

Read More »

An Open Letter to Cafe Hayek Commenter Craig Walenta

10 days ago

Mr. Walenta:
You read on my blog that I’ll soon defend, in a debate in New York City, the proposition that Americans would be best served by a policy of free trade regardless of whether or not other countries follow such a policy.  In the comments section of my blog you wrote in response that “If actually reciprocal I vote for that any day.  Without reciprocity, I’m just not interested.”
So you believe that as long as other governments keep their peoples poorer than those peoples would otherwise be, Uncle Sam should keep us Americans poorer than we’d otherwise be.  Given your logic, I assume that if your neighbor stubbornly engages in economically imprudent practices – say, spends his money frivolously, or buries all of his earnings in a hole in his backyard – that you, too, will

Read More »

SoHo Forum Debate on Trade

10 days ago

This Monday (November 13th) I’ll defend free trade against Americans for Limited Government’s Rick Manning at the SoHo Forum in New York City.  Specifically, I’ll defend this proposition:
The U.S. government should unilaterally abolish all tariffs and duties on imports and all subsidies to exports, thereby making all reciprocal trade agreements with other countries unnecessary.
Comments

Read More »

With Apologies to Bastiat

11 days ago

Here’s a letter to the Wall Street Journal:
You correctly point out that Pres. Trump’s ignorance of trade leads to policies that reduce American exports (“Trump’s Pacific Trade Tear,” Nov. 11).  But an even deeper problem with such policies is that they reduce American imports.  This truth cannot be too often repeated: exports are costs incurred in order to receive benefits called “imports.”
If Trump were correct that exports are benefits and imports are costs, we Americans could become fabulously wealthy simply by loading all of our production onto ships and then sinking the ships in mid-ocean.  Getting nothing from us, foreigners will send nothing to us.  In fact, of course, as even a six-year-old child would recognize, such a trade policy would ensure our impoverishment.
Yet the

Read More »