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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

Bonus Quotation of the Day…

15 hours ago

… is from page 236 of Jason Kuznicki’s review of What Is Classical Liberal History? (a 2017 volume edited by Michael J. Douma and Phillip W. Magness) (original emphases):
[H]istorians should approach capitalism not as a system of exploitation, which it clearly is not, but as a system of access. In the bad old days, only a tiny few had any access at all to large accumulations of capital or to the benefits that such accumulations could produce. Under capitalism, a revolutionary thing has occurred: anyone at all can get access to a share of the returns on capital. From the perspective of world and comparative history, this is an utterly momentous development, one whose implications have not yet been adequately explored owing to the discipline’s wasteful intellectual diversions, first to

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Is the World Going Mad?

19 hours ago

Upon returning home from campus late last night I opened an e-mail from one Ms. Leah Grant. I don’t know her, but she is quite angry with me. (I was unaware that “apologetisies” is a word.) Here’s my response to her:
Ms. Grant:
You are “nauseated” by this column of mine from January in which I argue that soaking the rich reduces the amount of goods and services available for everyone to consume. And you single out the following paragraph for special scorn, calling what I here wrote “pitiful dead white male apologetisies”:
Of course, in reality the material goods and services that are so abundant in our society are not rained down randomly on us from the heavens. These things must be produced by us. And to produce them requires human creativity, risk-taking, saving and work effort. The

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Some Links

20 hours ago

Here’s more wisdom from the ever-wise Bruce Yandle. A slice:
We’re facing a series of related choices between private and public decisions, permitting or breaking up big businesses, and encouraging today’s largely market-based system versus building a future with significantly more federal regulation. In making each choice, we must ask whether our elected officials are really brighter and more ethical, on average, than the people they represent.
My intrepid Mercatus Center colleague Veronique de Rugy looks at the Trump administration’s fiscal forecast.
George Will recommends Thomas Mallon’s new novel, which is about the second presidential term of George W. Bush. Here’s a priceless passage that Will quotes from a 2016 essay that Mallon published in the New Yorker:
“As we got deep into

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Empirical Research Idea

23 hours ago

The following paragraph is from a National Review essay whose author supports “the Child Rearing and Development Leave Empowerment (CRADLE) Act, the latest conservative effort to develop a paid-leave policy that enables parents to stay home with their newborns”:
The budget-neutral plan borrows from a policy paper by Kristin Shapiro of the Independent Women’s Forum and mirrors a similar bill that Senator Marco Rubio (R., Fla.) proposed last Congress, with the backing of Ivanka Trump. It would amend the Social Security Act to allow parents to take up to three months off from work by drawing on their retirement benefits early in exchange for delaying their benefits after retiring. Both natural and adoptive parents could choose to collect benefits while taking time off from work for

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Quotation of the Day…

1 day ago

… is from page viii of the 1978 reprint of James Buchanan’s brilliant little 1969 book, Cost and Choice:
My working hypothesis is that many economists rush headlong into the intricacies of analysis while overlooking certain points of elementary economic logic. Clarification at the conceptual level may be irrelevant for particular applications, and those who are anxious to get on with solving the world’s ills may scoff at my insistence on methodological purification.
DBx: Buchanan’s Acknowledgements section for this volume is dated March 1969 – 50 years ago this month. Cost and Choice, barely longer than 100 pages, is amongst the most theoretically profound and important books has ever been written in economics. Its important lesson – including Buchanan’s insistence on thinking

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Bonus Quotation of the Day…

2 days ago

… is from page 288 of Kristian Niemietz’s 2019 book, Socialism: The Failed Idea that Never Dies:
This is, in essence, the fallacy that socialists commit in their definition of real socialism. They define ‘real’ socialism in terms of outcomes they would like to see. When a socialist experiment does not produce those outcomes, it retroactively becomes unreal. Since socialism never produces those outcomes, all socialist experiments sooner or later become unreal. This is the deeper meaning behind the old adage that ‘real socialism has never been tried’.
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Home-Country Tariffs Are Punitive Taxes on Purchases Made by Fellow Citizens

2 days ago

Here’s a letter to the Wall Street Journal:
Editor:
A headline at your website this afternoon reads “Trump Says Tariffs on Chinese Goods Will Stay for ‘Substantial Period of Time’.”
May I petition you to change the headline only slightly but in a way that would make it far more accurate and revealing? – to wit: “Trump Says Punitive Taxes on Americans Who Buy Chinese Goods Will Stay for ‘Substantial Period of Time’.”
Sincerely,Donald J. BoudreauxProfessor of EconomicsandMartha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus CenterGeorge Mason UniversityFairfax, VA 22030
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Some Links

2 days ago

My intrepid Mercatus Center colleague Veronique de Rugy calls for a policy of more-open immigration.
In this op-ed, Hane Crevelari and I tell a tale of protectionism in Brazil. A slice:
Protectionist measures, such as tariffs and quotas, partially explain why buying an iPhone X in Brazil costs more than flying from Rio de Janeiro to Miami, purchasing the phone there, and then flying back to Brazil.
Here’s Art Carden on the folly of rent control.
And writing on the folly of the minimum wage is Tim Worstall.
My GMU Econ colleague Bryan Caplan writes wisely on judging poverty.
How satisfied are people with the subsidies doled out by their governments? Chris Edwards reports.
Why does anyone older than the age of two months take David Sirota seriously? (The same question, of course, can be

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Quotation of the Day…

2 days ago

… is from pages 4-5 of Richard Epstein’s September 2018 essay, The Intellectual Poverty of the New Socialists:
Competition leaves people with choices. But under the New Socialism, people will really discover what it means to be unfree when they only have this choice: work for the state and spend your falling wages on government supplied goods – or starve. And to whom does the unhappy citizen turn when there is only one healthcare provider, one landlord, and one education system? The state monopolies under socialism offer a kind of subjugation and submission far greater than that in competitive markets. The faceless corporate decision makers that trouble professor [Corey] Robin are far less sinister than government bureaucrats who can block all exit options.
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Bonus Quotation of the Day…

3 days ago

… is from page 5, of the original edition, my late colleague James Buchanan’s brilliant 1973 paper “Introduction: L.S.E. cost theory in retrospect,” which serves as the Introduction to the 1973 collection, edited by Buchanan and G.F. Thirlby, L.S.E. Essays on Cost:
The theory of social interaction, of the mutual adjustment among the plans of separate human beings, is different in kind from the theory of planning, the maximization of some objective function by a conceptualized omniscient being.
DBx: Human beings are not chess pieces to be moved about by a master, and human society neither presents a ‘problem’ that has a unique ‘solution’ nor is a mechanism that can be engineered.
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Comparative Advantage is Not an Engineering Project

3 days ago

Here’s a follow-up letter to Daniel Schwartz:
Mr. Schwartz:
Thanks for your response.
In my earlier note I should have made the following point stronger and more distinctly: even if government officials are not motivated by their own narrow interests, and even if these officials are singularly prescient about what are ‘the industries of the future,’ they cannot possibly engineer an economy to have a ‘better’ comparative advantage without overriding many of the freely made choices of legions of ordinary men and women.
A simple example will reveal my meaning. Suppose that you, as an adult, wish to earn your living writing poetry despite your parents’ wish that you become a neurosurgeon. You’re aware that poets earn less than do neurosurgeons, but your desire to work as a poet is so

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Some Links

3 days ago

My GMU Econ colleague Bryan Caplan, writing in Time, reflects wisely on the recent college-admissions scandal. Here’s his conclusion:
As a college professor, I’ve spent years blowing the whistle on the wasteful system that employs me. When the FBI went public with this case, many of my Twitter friends declared victory on my behalf. Yet truth be told, this salacious scandal proves next to nothing. It just illustrates the obvious. Though we casually talk about our “institutions of higher learning,” little learning is going on. Sure, college is an intellectual banquet for the rare students with a passion for ideas and the energy to locate the also-rare professors with a passion for teaching. The vast majority, however, come in search of a stamp on their foreheads that says grade a — and

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Quotation of the Day…

3 days ago

… is from page 283 of the late Richard Pipes’s excellent 1999 book, Property and Freedom:
The main threat to freedom today comes not from tyranny but from equality – equality defined as identity of reward. Related to it is the quest for security.
DBx: Of course, to artificially attempt to bring about the material or monetary equality demanded by the political left – and, increasingly, by some on the political right – requires at least some measure of tyranny, even if it is less beastly than that which stalked the Soviet Union, and China beneath the heel of Chairman Mao.
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Bonus Quotation of the Day…

4 days ago

… is from John Pollexfen’s 1697 tract, A discourse of trade, coyn, and paper credit, as quoted on page 95 of Jacob Viner’s brilliant 1937 collection, Studies in the Theory of International Trade:
[M]ost of the laws that have been made relating to trade, since the Act of Navigation, may be presumed were calculated rather for particular interests than public good; more to advance some tradesmen than the trade of the nation.
DBx: Thus it was and so it shall always be.
Protectionists of course attempt to camouflage their predations as great services rendered unto the people of the nation. But any person above the age of four and of reasonably good sense understands that the predator who proclaims his devotion to his victims’ welfare is, in addition to being a predator, also a fraud.

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Some Links

4 days ago

Do minimum wages reduce crime? No – in fact, the opposite seems to be the case. (HT my intrepid Mercatus Center colleague Veronique de Rugy) Here’s the abstract from a new paper by Zachary S. Fone, Joseph J. Sabia, and Resul Cesur:
An April 2016 Council of Economic Advisers (CEA) report advocated raising the minimum wage to deter crime. This recommendation rests on the assumption that minimum wage hikes increase the returns to legitimate labor market work while generating minimal adverse employment effects. This study comprehensively assesses the impact of minimum wages on crime using data from the 1998-2016 Uniform Crime Reports (UCR), National Incident-Based Reporting System (NIBRS), and National Longitudinal Study of Youth (NLSY). Our results provide no evidence that minimum wage

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In Free Markets, ‘Balls’ and ‘Strikes’ are Called Only by Consumers

4 days ago

Rogers Hornsby, who averaged .400 over five years, was facing a rookie pitcher who threw three pitches that he thought were strikes but that the umpire called balls. The rookie shouted a complaint to the umpire, who replied: “Young man, when you throw a strike, Mr. Hornsby will let you know.”
The above passage about the great St. Louis Cardinals’ hitter of a century ago, Rogers Hornsby, is from this 2007 column by George Will. It is one of the few sports stories that I dare to use as a metaphor for markets.
In markets, producers make offers to consumers – offers that consumers are free to accept or to reject. If offerings made by a producer are liked by consumers well enough to prompt them to pay prices high enough for what that producer is offering, that producer profits and prospers

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Quotation of the Day…

4 days ago

… is from page 358 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1997 essay “Reform without Romance: First Principles in Political Economy”:
The simple system of natural liberty, to use Adam Smith’s own designation, or as we would say, the market organization of economic activity, serves two functions simultaneously. Resources are directed by private owners into the most productive activities, as determined by the demands of final consumers, who get, in turn, the largest bundle of goods, again as measured by individuals’ own evaluations. At the same time, however, over and beyond this economic or efficiency-enhancing function, the market reduces or eliminates the need for collective or political choices to be

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Bonus Quotation of the Day…

5 days ago

… is from a speech delivered by Richard Cobden in Manchester on January 15, 1846; the speech – titled “Free Trade With All Nations” – was delivered to an audience sympathetic to free trade:
I don’t intend to go into an argument to convince any man here that protection to all must be protection to none. It takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket, and if that goes on in a circle through the whole community, it is only a clumsy process of robbing all to enrich none, and simply has this effect, that it ties up the hands of industry in all directions.
DBx: Any particular protectionist policy sits somewhere on a spectrum. At one end of the spectrum is a scheme of protectionism in which government officials have

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Government Is At a Comparative Disadvantage – Big Time

5 days ago

Here’s a letter to someone in Pittsburgh who, as he described to me his and his friends’ attitude, “completely distrust[s] laissez faire”:
Mr. Schwartz:
Thanks for your feedback on my column discussing Chinese and U.S. industrial policy.
You believe that “we need the government to direct us to obtain as a nation the comparative advantage which will best serve us.”
I disagree.
Comparative advantage does not exist at the level of the nation; it exists only at the level of the individual producing unit – that is, at the level of the worker, the entrepreneur, and the firm. A nation, therefore, has within it not one comparative advantage but, rather, countless comparative advantages.
It’s true that a nation’s geography, culture, institutions, and existing pattern of economic activities

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Some Links

5 days ago

Here’s an ungated version of David Henderson’s excellent tribute, from the Wall Street Journal, to the late, great Harold Demsetz. A slice:
He was also an early defender of gay rights. At the September 1978 Mont Pelerin Society meeting in Hong Kong, he decried a California ballot initiative that would have banned homosexuals from teaching in public schools, ignoring snickers from some in the crowd. The initiative went down to a well-deserved defeat, helped by the opposition of Demsetz’s fellow Californian Ronald Reagan.
In 1963, when Demsetz was on the UCLA faculty, a University of Chicago economist named Reuben Kessel asked him if he was happy there. Demsetz, sensing an offer in the works, answered, “Make me unhappy.” Chicago did just that, and Demsetz spent eight very productive

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Quotation of the Day…

5 days ago

… is from page 412 of the splendid 1978 collection, edited by Eric Mack, of Auberon Herbert’s writings, The Right and Wrong of Compulsion by the State; specifically, it’s from Herbert’s 1897 essay “The Principles of Voluntaryism and Free Life”:
Every trade restriction is war declared upon other trades. All attempts of one class of workers to restrict their own special industry are treason against their fellow workers, because every restricted trade implies the effort to get an artificial or heightened price for the product of such trade, while the workers in it enjoy the product of other unrestricted trades at free trade (or unrestricted) prices. They are, therefore, guilty in the great exchange of the world of taking more and giving less, and so far as they temporarily benefit

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Bonus Quotation of the Day…

6 days ago

… is this comment that my emeritus colleague and Nobel laureate Vernon Smith left earlier this week on a Facebook posting of this superb recent Medium essay by Russ Roberts; I cannot now find Vernon’s comment on-line, but I do have a screen-shot of it:
The minimum wage is the great destroyer of entry level work opportunities so important for on-the-job training. Ultimately even its cruel supporters realized this, but instead of repeal created the trainee category exception and special program to run what did not need running!
DBx: Vernon accurately describes minimum-wage supporters as “cruel.” They are indeed.
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A Protectionist is Someone Who…

6 days ago

… must be terribly confounded by the fact that so few people seek to live in isolation from humanity. After all, if the protectionist is correct in his belief that genuine wealth is the need to work, then maximum possible wealth is achievable only by an individual living in utter isolation. That self-sufficient individual would have to struggle mightily merely to avoid starving to death. With such an abundance of work, that isolated individual would be in protectionist nirvana!
Yet I am also among those who are terribly confounded, for I do not understand why no protectionist voluntarily lives in isolation from humanity. Any protectionist who really understands and believes what he says should at this very moment, in gleeful anticipation, be making tracks for his own desert island or

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Quotation of the Day…

6 days ago

… is from a July 1908 entry into his Autobiography by Mark Twain; the “it” to which Twain here refers is the U.S. presidency, which Twain feared – more than a century ago! – had gathered unto itself powers so excessive that it was a virtual monarchy (original emphasis):
By a system of extraordinary tariffs it has created a number of giant corporations, in the interest of a few rich men, and by most ingenious and persuasive reasoning has convinced the multitudinous and grateful unrich that the tariffs were instituted in their interest!
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Some Links

6 days ago

My intrepid Mercatus Center colleague Veronique de Rugy and co-author Jack Salmon rightly decry Uncle Sam’s fiscal imprudence.
Jeffrey Tucker exposes the evil ideology of the monster who unleashed mass murder in New Zealand.
My GMU Econ colleague Alex Tabarrok has some data on how much time criminal convicts really spend in prison.
Wall Street Journal columnist Dan Henninger wisely advises us to laugh at – and to fear – the socialism that is now all the rage among so many Americans. A slice:
This means the next Democratic administration, and that would include a Biden administration, will sit to the left of the Obama presidency, which itself was a distinct ideological break from all the party’s left-of-center presidencies since World War II.
The Obama administration was managed

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Protectionism and Vandalism

7 days ago

Here’s a letter to someone who “can no longer keep silent in the face of” my [Boudreaux’s] “ivory tower theories about trade”:
Mr. Walney:
Thanks for your e-mail.
You say that it “is only common sense” that “protecting American workers from the need to compete against low wage foreign workers makes America richer.”
I disagree.
First, another name for low-wage foreign workers is “low-productivity foreign workers.” Foreigners whose wages are lower than are Americans’ wages are foreigners who, for whatever reasons, are less productive than are American workers. If you replace, in your e-mail, “low wage” with “low productivity,” you’ll immediately see the error of your claim.
Second, if it’s “common sense” that Americans are enriched by protectionism, is it also common sense that

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Shame on Maryland Legislators

7 days ago

Here’s a letter to Maryland state senator Cory McCray (D):
Mr. McCray:
After you and a majority of your fellow state senators voted to raise Maryland’s hourly minimum wage to $15, you said – as reported today on WTOP radio – that you “have never been as proud to be a part” of that chamber as you are now that it voted to raise the minimum wage.
Although your intentions are undoubtedly excellent, the actual effects of this minimum-wage hike will be no cause for pride.
Workers who are unable to produce each hour at least $15 of value for employers in Maryland will be rendered unemployable in your state. Not only will these workers lose current incomes, they will lose what for many, or perhaps most, of them is something of even greater value – namely, the opportunity to get on-the-job

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Bonus Quotation of the Day…

7 days ago

… is this recent Facebook post by Bob Higgs:
Progressives have the chutzpah to represent themselves as great friends of the poor and of unskilled and low-skilled workers while passing laws that will price these people out of legal employment. With friends like that, the unskilled workers need no enemies.
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Industrial Policies Pave Paths to Economic Decay

7 days ago

In my latest column for the Pittsburgh Tribune-Review I argue that Americans have nothing to fear from Chinese industrial policy. A slice:
History is filled with dire warnings of this or that powerful government using extensive controls to propel its economy to a new level of wow. What history is not filled with are actual examples of economies being so propelled. Quite the opposite.
Whenever genuine and sustained economic growth has occurred in reality, that growth was rooted in free, competitive markets combined with respect for private property and a toleration for innovation and change.
Government economic planning undermines these vital institutions and attitudes. Industries that receive subsidies and protection are those that are politically prominent or fashionable. They’re

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