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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…

21 hours ago

… is from page 4 of the original edition of my late colleague James M. Buchanan’s insightful 1967 book, Public Finance in Democratic Process:
The omniscient and benevolent despot does not exist, despite the genuine love for him sometimes espoused, and, scientifically, he is not a noble construction. To assume that he does exist, for the purpose of making analysis agreeable, serves to confound the issues and to guarantee frustration for the scientist who seeks to understand and to explain.
DBx: Although these words from Buchanan likely seem, read here in isolation, to be too trivial to feature, they are, in fact, relevant. Nearly all proposals for this or that government action rest on the implicit assumption that the government is godlike – that the flesh-and-blood human beings who

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Please, People, Learn Some Basic Economics

1 day ago

Here’s a letter to the editor of Law & Liberty:
Editor:
Because I’m no expert on the works of Edmund Burke, I can only trust that Gregory Collins is correct that “the idea that trade can, and should, be used as an instrument of leverage and power against hostile foreign countries – such as those, like China, that wage economic warfare and cyberwarfare against you – was not anathema to Burke’s economic thought” (“Burke’s Political Economy Reconsidered,” November 21). But having some expertise in economics, I am justified in issuing a warning against any such use of protectionism.
First, history – which Burke correctly understood to be an excellent teacher – teaches that protectionist policy is almost never carried out scientifically and with the aim of promoting the public welfare. In

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Pittsburgh Tribune-Review: “Let Louisiana rebuild her levees”

1 day ago

In my July 21st, 2006, column for the Pittsburgh Tribune-Review, I argued that the rebuilding of the levees in Louisiana, following hurricane Katrina, was best left to the State government and not to the national government.
You can read the column beneath the fold.

Let Louisiana rebuild her levees
It’s no secret that Uncle Sam failed my hometown of New Orleans. Some blame the White House, others blame Congress and yet others blame the Army Corps of Engineers. Everyone blames FEMA.
I’m sure that each of these branches and agencies of government is blameworthy. I’m sure also that pointing fingers and banging fists and rolling some heads will do nothing to solve the fundamental problem:
Washington is too distant from ordinary Americans, and has saddled itself with far too many

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So-Called “Market Failures” Are Profit Opportunities

1 day ago

The point has been made, in many different ways, repeatedly by economists of an Austrian bent (whether they wear that label or not). Philip Wicksteed, Ludwig von Mises, Joseph Schumpeter, F.A. Hayek, Ronald Coase, Armen Alchian, Yale Brozen, James Buchanan, Donald Dewey, Vernon Smith, Israel Kirzner, Harold Demsetz, Elinor Ostrom, Dominick Armentano, and Deirdre McCloskey are among some of the more notable economists who understand that part of the very essence of markets is the entrepreneurial search for ways to profit from arranging for markets to work better.
Unfortunately, although the full list of such economists is longer than the one offered above, it’s not long enough, not by a long shot. Far too many economists simply do not understand the market process.
Here, however, is a

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Quotation of the Day…

1 day ago

… is from page 215 of Deirdre Nansen McCloskey’s 2019 volume, Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All (footnote deleted):
Read Adam Smith, slowly, both his books, and try to return our spirits to that dawn of 1776 in which the radical idea was not nationalism or socialism or national socialism, but “the obvious and simple system of natural liberty,” allowing all men and women to pursue their interests in their own ways.
It was a strange but very, very good idea.
Comments

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Some Links

2 days ago

My intrepid Mercatus Center colleague Veronique de Rugy is rightly unhappy about Congressional inability even to modestly reform for the better – not to mention abolishing – that great geyser of cronyism, the U.S. Export-Import Bank. Here’s Vero’s opening:
When the U.S. House of Representatives voted to reauthorize the Export-Import Bank last week, special interests got their way in the swamp that is Washington. While advocates for the nation’s official export credit agency pretend it supports small businesses, grows exports and sustains growth, the reality is quite different. Ex-Im Bank is better described as a vessel for corporate welfare, mostly for the benefit of large domestic and foreign manufacturers.
George Will is an elite thinker. A slice:
“History,” said the sociologist

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Just to Clarify…

2 days ago

Duke University economist Ed Tower is on a private list of people to whom I send by e-mail my letters-to-the-editor. And so Ed received my letter today to the New York Times that I mention here (but that I cannot yet post publicly).
Here’s the bulk of an e-mail that Ed sent to me after he received my letter; I share it with Ed’s kind permission:
Don, I think a casual reader of today’s letter could reasonably conclude that you would favor US protection if Mexican workers were paid one tenth of what American workers are paid if the Mexicans were equally productive. You seem to defend free trade on the grounds that Mexican labor is less productive. But Paul Krugman in his “What do Undergraduates Need to Know About Trade” argues that higher productivity abroad does not affect the US

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Homer Simpson Nods

2 days ago

Earlier today I sent a letter to the New York Times in response to an atrociously bad op-ed by Sandy Levin and Harley Shaiken. (I’ll wait several days before posting the letter here because the NYT will not even consider it for publication if it is shared publicly anywhere else.)
But after pondering my letter, I believe that I made there an analytical error. I’ve since revised the letter; hopefully the Gray Lady will publish the revised version.
Specifically, after offering some (I still believe valid) evidence against Levin’s and Shaiken’s claim that the productivity of workers in Mexico is equivalent to the productivity of workers in the United States, I argued, further, that this measured productivity difference is even greater than it appears. The reason (said I) is that Mexico

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Pittsburgh Tribune-Review: “Selling organs; two alternate plans”

2 days ago

In my Pittsburgh Tribune-Review column of July 10th, 2006, I continued to press the argument for liberalizing the market for transplantable human body organs – this time by recommending a proposal by GMU law professor Lloyd Cohen.
You can read the column beneath the fold.

Selling organs; two alternate plans
In previous columns I argued that adults should be allowed to buy and sell kidneys. The upside of permitting a free market in kidneys is vast: thousands of lives saved each year and thousands more delivered from the misery and indignity of dialysis. The downside is almost nonexistent.
Many of the arguments against a free market in kidneys spring from merely the egocentric objections of those who thoughtlessly — or selfishly — elevate their own aesthetic objections to such commerce

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Quotation of the Day…

2 days ago

… is from page 25 of my friend and teacher Randall Holcombe’s superb 1995 book, Public Policy and the Quality of Life:
The fundamental principle behind the market mechanism is voluntary exchange; the fundamental principle behind government policies is coercion. Because nobody is forced to trade in markets, exchange takes place only when all parties to the exchange believe that they benefit. Thus, participants in exchanges have an incentive to make what they have to exchange be as valuable to others as possible. If all parties to a potential exchange do not agree that everyone benefits, then no exchange will take place. The government, however, enacts policies and then forces individuals to comply. Thus, whereas market participants want to create as much value for others as they can

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Pittsburgh Tribune-Review: “Kidneys for sale”

3 days ago

In my June 28th, 2006, column for the Pittsburgh Tribune-Review I argued for liberalization of the market for human kidneys. You can read the column beneath the fold.

Kidneys for sale
When I was in law school in the early 1990s I suggested to a classmate that government should not prevent kidney donors from bargaining for and being paid market prices for their donated kidneys. Her initial reply was a look of horror. When finally she composed herself in the wake of this gruesome revelation, she said “But, but, but … poor people will be exploited!”
“How?” I asked.
“How?! How do you think? They’ll sell their kidneys to rich people. When they can’t pay the rent or the car note, they’ll sell their kidneys. The poor will become kidney farms for the rich.”
I learned that my classmate’s

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Quotation of the Day…

3 days ago

… is from page 419 of George Will’s important 2019 volume, The Conservative Sensibility:
The largest and most lethal eruptions of irrationality have occurred in the name of reason.
DBx: Reason is indispensable for human flourishing. It is an essential tool for gaining understanding and even wisdom. Yet reason itself reveals the unreasonableness of treating artifactual abstractions as if these are concrete realities – artifactual abstractions ranging from large and often ominous, such as “the will of the American people” and “the white race,” to smaller yet still-pregnant-with-mischief notions such as “the steel industry,” “Italy’s national income,” and “the elasticity of demand for low-skilled workers.” None of these things has a concrete reality independent of the particular ways

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Kota’s and Mahoney’s Very, Very Bad Idea

4 days ago

Here’s a letter to the Wall Street Journal:
Editor:
Sridhar Kota’s and Tom Mahoney’s case for U.S. industrial policy is an avalanche of assertions ranging from the simply naïve to the deeply fallacious (“Innovation Should Be Made in the U.S.A.,” Nov. 16). Just to list them all would require a long essay. So let’s ignore, for example, their unwarranted assumption that politically appointed bureaucrats, when allocating resources, would somehow be impervious to political pressures.
Instead focus on Kota’s and Mahoney’s fundamental error of presuming that the amount of innovation in particular industries is determined by the amount of capital invested in those industries. In fact, it’s the other way ‘round: capital accumulation is not the cause of innovative ideas; it’s the result. As

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Industrial Policy 2.0 Is Just as Lousy as Industrial Policy 1.0

4 days ago

In my most-recent column for AIER I offer only a handful of the many criticisms that are appropriately leveled against the truly horrendous piece by Sridhar Kota and Tom Mahoney endorsing such government intervention. (It’s especially distressing that this gawdawful piece appears in the opinion pages of the Wall Street Journal.) A slice:
Third and more fundamentally, when and to the extent that trade and markets are free, Americans benefit from innovation no matter where it occurs. Kota and Mahoney seem blind to the reality that if Lee in Shanghai figures out how to produce steel at a lower cost, Americans who are free to buy steel unimpeded on global markets reap the benefits of the resulting lower price of steel no less than if this innovation were done by Lou in Youngstown.
Fourth

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Quotation of the Day…

4 days ago

… is from page 261 of Deirdre McCloskey’s 2019 book, Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All (original emphasis):
The more complex and specialized and spontaneously bettering an economy is, the less it can be planned, the less a central planner however wise and good can know about the trillions of preferences and plans for consumption and production and betterment. A household or your personal life might possibly be plannable, though anyone who believes it with much confidence has not lived very long. But a big, modern economy has vastly too much going on to plan.
DBx: Precisely so. To dispute Deidre’s point is to suffer what Hayek called, in 1976, “The New Confusion About ‘Planning’” (available here, free of charge, by

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Pittsburgh Tribune-Review: “Don’t fear the market”

5 days ago

In my June 20th, 2006, column for the Pittsburgh Tribune-Review I argue for a liberalization of the market for transplantable human body organs. You can read the column beneath the fold.

Don’t fear the market
As Dr. Sally Satel reported recently in The New York Times, every 90 minutes an American waiting for a kidney transplant dies.
No one questions the humanity of eliminating the shortage of transplantable kidneys, but there’s a great deal of dispute over the best way to do so. I proposed in a previous column that donors be allowed to be paid market prices for their donated organs. The quantities of organs supplied for transplant will thus increase. And I’m hardly alone. Scholars more wise and knowledgeable than I am — such as the University of Chicago’s Richard Epstein, my George

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Quotation of the Day…

5 days ago

… is from page 175 of Geoffrey Brennan’s and Loren Lomasky’s profoundly important 1993 book, Democracy & Decision: The Pure Theory of Electoral Preference:
[B]ecause voting is virtually cost free, it is likely to prove conducive to extremes of expression, both altruistic and malicious and that at least under prevailing conditions of secrecy, the malicious extreme might be differentially encouraged.
DBx: Indeed so.
Here’s what Brennan and Lomasky mean by voting being “virtually cost free”: Because every voter understands that his or her vote in a political election will not determine the outcome of the election, each voter, by casting a ballot for X, does not thereby prevent himself or herself from enjoying Y or any other option that would be available to him or her had the vote been

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Free the Market for Transplantable Body Organs

6 days ago

Twenty years ago, Adam Pritchard – my UVA Law (’92) classmate, dear friend, co-author, and (then as now) professor of law at the University of Michigan – and I penned a piece for the Mackinac Center for Public Policy, in Michigan, urging liberalization of the market for transplantable body organs. (My strong recollection is that a version of this piece ran as an op-ed in the Detroit Free Press, but I can find no evidence on-line to give credence to my recollection.)
Here’s the text of the version as published by the Mackinac Center:
Organ Donation: Saving Lives through Incentives
by Donald J. Boudreaux and A. C. Pritchard
Michigan patients suffer from a critical shortage of transplantable human organs. Although the number of organ donors has increased from 534 in 1996 to 825 in 1998,

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Bonus Quotation of the Day…

6 days ago

… is from page 127 of Deirdre McCloskey’s 2019 volume, Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All:
Our leaders, such as the Chinese Communist Party with its illiberal projects of high-speed rail and unprofitable state-owned enterprises, buy their power and prestige with our money. They “create jobs” that shouldn’t have been, and that make us poorer, not richer.
Comments

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Pittsburgh Tribune-Review: “Crystal-ball truths”

6 days ago

In my Pittsburgh Tribune-Review column for May 12th, 2006, I make some predictions, which you can read beneath the fold.

Crystal-ball truths
Economists often are asked to predict — predict tomorrow’s price of gold, the future course of the Dow Jones industrial average, next month’s unemployment rate and on and on.
My honest answer to everyone who asks my predictions of such things is: “Your guess is as good as mine.”
I can’t answer such questions because people want specific numbers such as, “Next July the price of gold will be $752 per ounce.” Such specifics are unpredictable, not only by me but even by those who confidently offer such predictions.
I can and do, however, make what the late Nobel economist F.A. Hayek called “pattern predictions.” For example, if the Federal Reserve

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Quotation of the Day…

6 days ago

… is from page 224 of George Will’s excellent 2019 book, The Conservative Sensibility:
Leon Trotsky once said that the problem with capitalist society is that every person thinks of himself and no one thinks of everyone. But beginning with the Soviet regime that Trotsky helped to found, the most hideous political oppressions have flowed from governments that have claimed to be able to, and to have a duty imposed by History to, think of everyone.
Comments

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Pittsburgh Tribune-Review: “Money isn’t all that matters”

7 days ago

In my April 21st, 2006, column for the Pittsburgh Tribune-Review I took aim at the myth that economists believe that money is all that matters. You can read the column below the fold.

Money isn’t all that matters
Contrary to popular misconception, economists do not believe that money is all that matters.
I remember during the 1979 gasoline shortage that many Americans opposed getting rid of the government-imposed price ceiling on oil and gas prices because, these people thought, lifting this ceiling would raise the cost of gasoline. Economists explained again and again that while lifting the price ceiling would raise the price charged at the pump, the full price of gasoline would in fact fall.
By bringing forth greater supplies of oil and gasoline, lifting the price ceiling would

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Some Links

7 days ago

GMU Econ alum and Institute for Humane Studies President Emily Chamlee-Wright explores the socialist propaganda surrounding the Berlin Wall, and laments the fact that the lessons of Iron Curtain socialism have so quickly been forgotten. A slice:
For those of us who still believe in the liberal concept of human freedom — that is, freedom from coercion, freedom to engage others as they voluntarily choose to engage with us, and the freedom to think for oneself — any attempt to define “freedom” as something entirely different will always ring false.
Here is a difficult truth about liberalism: It does not promise that there will be no problems. But the problem-free social order is not on the menu of options.
James Pethokoukis reminds Elizabeth Warren – and everyone else who is smitten with

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Quotation of the Day…

7 days ago

… is from page 315 of Dugald Stewart’s 1793 “Account of the Life and Writings of Adam Smith, L.L.D.,” as this series of lectures appears at the end of Liberty Fund’s 1982 collection of Smith’s Essays on Philosophical Subjects (a collection originally published by Cadell and Davies, in London, 1795); here Stewart summarizes a key insight that ran through Smith’s writings:
[T]he most effectual plan for advancing a people to greatness, is to maintain that order of things which nature has pointed out; by allowing every man, as long as he observes the rules of justice, to pursue his own interest in his own way, and to bring both his industry and his capital into the freest competion with those of his fellow-citizens. Every system of policy which endeavours, either by extraordinary

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Smile: Life In Modern America Is Actually Very Good

8 days ago

In my most-recent column for the Pittsburgh Tribune-Review, I play a role most unpopular these days: bringer-of-good-news. The world ain’t perfect (duh) – and no future is guaranteed – but compared to the past (even the relatively recent past), life in these United States today is, for most Americans, wonderful.
Here’s my opening, after which I go on to recommend Max Roser’s Our World in Data, and Marian Tupy’s HumanProgress.org:
To encounter the news today is to encounter an America verging on destruction. Global warming will soon incinerate us, but not before income inequalities turn ordinary Americans into the slaves of oligarchs. And as these ghastly fates unfold, those of us who somehow escape being raped, robbed and cheated out of employment by immigrants — and who aren’t

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Bonus Quotation of the Day…

8 days ago

… is from page five of a book that is among the most insightful and significant that I have ever read: Geoffrey Brennan’s and Loren Lomasky’s 1993 volume, Democracy & Decision: The Pure Theory of Electoral Preference (original emphasis):
Economists have always insisted that social ethics should be informed by a proper sense of scarcity. Extrapolating from their account of individual choice behavior, they see ethics as a matter of choosing among alternative feasible states of the world.
DBx: Of course, in reality no one chooses states of the world. Each of us chooses almost always (and incessantly) only our own next steps and usually only in small matters – peas or beans; white or red; sleep another 30 minutes or not; buy the new Camry or the used Cadillac; say yes or no to Jack’s

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Pittsburgh Tribune-Review: “Joking aside, less severe punishments deter murders”

8 days ago

In my April 12th, 2006, column for the Pittsburgh Tribune-Review, I did my best to explain why we punish murderers more harshly than we punish armed robbers and rapists.
You can read the column beneath the fold.
(For some reason, all but two of my Trib columns from late December 2005 through mid April 2006 are unavailable on-line. They appeared only in print. I thank the editors of the Trib for sending to me the texts of these columns.)

Joking aside, less severe punishments deter murders
I suffer from a self-inflicted curse. Having a J.D. in law and a Ph.D. in economics, I’m a member of two of America’s most joked-about professions. Cocktail-party acquaintances use the fact that I’m educated well beyond my abilities to regale me with endless jokes involving scurrilous lawyers

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Some Links

8 days ago

Joakim Book identifies a key flaw in notions held by far too many self-styled “environmentalists”: a persistent refusal to look beyond the most immediate and visible consequences. A slice:
What angers most people about climate activists is not their goals, but their elaborate system of doublethink, their profound cognitive dissonance, and the truly fascinating ability to rationalize their own behavior; they ignore their own seriously harmful actions while praising themselves for the meager and largely inconsequential benefits of their climate activism.
Jonah Goldberg highlights a hidden danger lurking in schemes, such as that of Elizabeth Warren, to soak the rich. A slice:
But the more important part is the democratic disincentive. Think of the old golden rule: Whoever has the gold

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Quotation of the Day…

8 days ago

… is from page 415 of George Will’s insightful 2019 book, The Conservative Sensibility:
Wishes are potent fathers of thoughts.
Comments

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