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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

Open Letter to Matt Yglesias

22 hours ago

Mr. Yglesias:
You recently tweeted:
I guess if you have the Brussels/Frankfurt aversion to fiscal stimulus you end up in the same place as the Republicans and forced into the view that people need to die for “the economy.”
I can’t speak for Republicans, for I’m not (and never have been) one. But I can speak for myself, and I think also for many other lockdown opponents, when I decry your thoughtless mischaracterization of the motives and understanding of many of us who oppose continuation of the coercive suspensions of regular human commerce and engagement.
Specifically, we take offense at the impression you convey when you accuse us of believing that “people need to die for ‘the economy.’”
The economy is people – people producing, trading, cooperating, and consuming. Yet your wording

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Some Covid Links

1 day ago

Jeffrey Tucker rightly bemoans the new feudalism that is among the results of the deranged overreaction to Covid-19. A slice:
The politicians and intellectuals who put this new feudalism in place tossed out all normal concerns over freedom, justice, equality, democracy, and universal dignity in favor of the creation of a strict caste system. So much for Locke, Jefferson, Acton, and Rawls. The medical technocracy cared only about conducting an unprecedented experiment in managing the social order as if it consisted entirely of lab rats.
(DBx: I say again: If humanity ever escapes the consequences of its current derangement, the hysterical overreaction to Covid-19 will come to be ranked among the gravest mistakes ever committed on a mass scale – and our species has committed many

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Quotation of the Day…

1 day ago

… is from pages 73-74 of the 2016 Third Edition of James D. Gwartney’s, Richard L. Stroup’s, Dwight R. Lee’s, Tawni H. Ferrarini’s, and Joseph P. Calhoun’s excellent Common Sense Economics:
In a world of uncertainty, mistaken investments are a necessary price that must be paid for with fruitful innovations in new technologies and products. Such counterproductive projects, however, must be recognized and brought to a halt. In a market economy, the capital market performs this function. If a firm continues to experience losses, eventually investors will terminate the project and stop wasting their money.
Given the pace of change and the diversity of entrepreneurial talent, the knowledge required for sound decision-making about the allocation of capital is far beyond the scope of any

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Get Real About Covid-19 – and About Government

2 days ago

In my latest article for AIER I express genuine mystification at many people’s gullibility for the use of unprecedented government powers to combat Covid-19. A slice:
Why this faith? The proffered answer, of course, is that Covid-19 is unusually dangerous and, therefore, we have no choice but to put faith in government officials. This answer is bizarre, for it insists that we must now trust with unprecedented power people who regularly act in ways that prove them to be unworthy to hold lesser amounts of power. My head explodes….
Moving on, and without pausing to explore just what is meant here by “unusually,” let’s grant that Covid-19 is indeed unusually dangerous. But also unusually dangerous is arbitrary government power. Is it unreasonable for those of us who fear this power to

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Some Links

2 days ago

Stacey Rudin applauds the anti-lockdowners. A slice:
Proponents of the competing narrative [that is, the narrative opposing the lockdowns], on the other hand, must stand up to massive social forces simply to make their arguments, which are not radical: they support a return to classic pandemic management tools, the same ones used by Sweden and other states and countries which did not lock down for COVID19, which resulted in average mortality for 2020. They do not believe this pandemic warrants a complete overhaul of the economic, social, and educational systems. They believe that every human being should be empowered with truthful information about risk and how to best care for personal health, and to make his or her own choices.
David Henderson pushes back against Tyler Cowen’s

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Quotation of the Day…

2 days ago

… is from page 103 of the May 9th, 2020, draft of the important monograph – forthcoming this month jointly from the Adam Smith Institute and AIER – by Deirdre N. McCloskey and Alberto Mingardi, The Myth of the Entrepreneurial State:

[T]he economy is composed of people, and is not a machine. It is like the English language, not like an English steam engine. The people are motivated in varying proportions by prudence, temperance, courage, justice, faith, hope, and love, with the corresponding vices. By way of such principles of motion, they pursue their endlessly diverse projects, knitting and model railroading…. Let them do it, laissez faire. Such an arrangement takes people to be liberated and equal and increasingly competent adults, as against the stolid peasants or helpless

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Is the Orchard Really Sentient and Is the Sky Really Filled with Flying Monkeys?

3 days ago

Recently I came upon – I forget where and in what context – a reference to the talking trees and flying monkeys in The Wizard of Oz. And I still quite vividly recall the terror that these movie scenes injected into me as a young child watching that film.
The world to me today – or, rather, my sense of it – is usefully explained with reference to those scary scenes. Specifically, one or the other of the following realities is true, but both cannot be so.
(1) Covid-19 truly does threaten humanity with evil of the sort that young children sense when first watching those scenes in The Wizard of Oz. I see most people – many of them very smart and rational and learned – reacting to covid as young children react to those scenes. But because these people aren’t children, we humans must now

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GMU Econ Proud

3 days ago

With his great 1982 book, The State Against Blacks, my GMU Econ colleague Walter Williams was, along with Thomas Sowell, far out in front in explaining how illiberal policies hurt blacks. The obstacles and snares Walter then identified are now mostly worse: the war on drugs war on people who choose to ingest certain products continues; housing and land-use restrictions are worse than ever; the government-school system is a calamity disproportionately for blacks; and of course the minimum wage remains as a barrier to so many young black men and women wishing to enter the labor market.
Walter has been active in speaking out against the new illiberal measures flying under the banner of “anti-racism,” “inclusiveness,” and the like. Here’s one recent column on “Diversity, Equity, and

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Insight from Sheldon Richman

3 days ago

In two short Facebook posts Sheldon Richman conveys more insight and wisdom than is today found in any randomly chosen selection of 1,000,001 op-eds, columns, editorials, blogposts, tweets, and speeches.
Here:
How interesting that the people most worried about Trump’s authoritarian personality demand draconian government responses to the pandemic.
And here:
Lockdown doesn’t cripple “the economy.” It cripples people who are trying to live.
Hear! Hear!
Comments

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Some Links

3 days ago

George Will explains that America has already been injected with a large dose of socialism, and the dosage of this poison is increasing. A slice:
Wading waist-deep into political policies, the Fed is adopting, Eberstadt says, “the role of managing and even micromanaging the American economy through credit allocation, potentially lending vast sums not only to financial institutions but also directly to firms it judges suitable for government support. The Fed already dominates the markets for U.S. Treasury debt and mortgage debt as a result of previous, lesser crises. It is by no means inconceivable that the current crisis will propel it to a comparably dominant position in domestic commercial credit.” If socialism is government allocation of economic resources (and hence of

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Quotation of the Day…

3 days ago

… is from page 170 of Roger Koppl’s important – and (I repeat) especially relevant – 2018 book Expert Failure; (the quotations within this quotation are from Alfred Schutz) (link added; original emphasis):
Each of us has a different place in the division of labor. Therefore, each of us knows different things and has different sensibilities to events around us. We have different stereotypes and recipes to guide us in us in our daily lives. Each person’s “prevailing system of interests” determines which elements of his “stock of knowledge” are relevant to him.
DBx: Yep. This truth is another that is completely lost on proponents not only of full-on socialism, but also of industrial policy. Proponents of such schemes think, mistakenly, that reality is no more complex than is the array of

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Quotation of the Day…

4 days ago

… is from page 30 of Edwin G. West’s 1990 book, Adam Smith and Modern Economics:
According to Adam Smith (and later to Hayek) information about which new industries have the greatest promise cannot be accumulated in a political body, let alone in the head of a single government functionary or planner. Such knowledge is dispersed throughout the land, and is often discovered in unexpected quarters.
DBx: Although proponents of industrial policy don’t realize this fact, the fact is that they fancy themselves as possessing god-like knowledge of the future. (Their failure to realize this fact is itself a telling fact!)
If a person were openly to consult a crystal ball and, after rubbing that ball, inform the the general public and government officials that these particular products (or

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Specifically, Leave Us Be

5 days ago

Here’s a response to a recent comment by Thomas Hutchison:
Mr. Hutchison:
Commenting on a blog post in which I link to several essays that argue against covid-19 lockdowns, you write “All have good points, but all seem to fall short in not being specific enough about what to have done/to do instead.”
With respect, to oppose the lockdowns is to endorse leaving individuals free to choose their own levels of prevention, both for themselves and their loved ones. Individuals differ in their risk preferences, in their and their loved-ones’ vulnerabilities, and in many other personal and family circumstances that require the making of trade-offs – trade-offs that will and should be made differently by differently situated people. Therefore, to criticize those who oppose government-imposed

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Bonus Quotation of the Day…

5 days ago

… is from page 275 of the late Werner Troesken’s 2002 Review of Austrian Economics article, “The Letters of John Sherman and the Origins of Antitrust“:
Sherman’s letters reveal that he was more concerned with protecting the interests of small and inefficient businesses than with protecting the interests of consumers.
DBx: Indeed. Antitrust policy was born as a scam to suppress competition in favor of politically influential producers and other rent-seekers, it has always been used in this noxious manner, and it continues to be such a scam.
Comments

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“There is simply no excuse for imprisoning the population”

5 days ago

Indeed there is not, as explained here by pathologist John Lee. (HT Sheldon Richman)
[embedded content]
DBx: Again I put this question to my classical-liberal and libertarian friends who think the lockdowns justified: Why do you trust with the awesome power to obstruct everyday life – work, school, worship, leisure (including family gatherings) – the same individuals (politicians), operating in the same institution (government), who you do not trust with the power to impose tariffs, grant subsidies, and mandate occupational licenses? Why do you suppose that these same political individuals who haven’t the courage, prudence, or long-term vision to balance governments’ budgets during booming economic times are acting courageously, prudently, and with a long-term vision in response to

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Some Covid-19 Links

5 days ago

Today’s Wall Street Journal features a favorable write-up, by Tunku Varadarajan, of an interview with Martin Kuldorff and Jay Bhattacharya, two of the three authors of the Great Barrington Declaration. A slice:
Lockdown policies are not only “regressive,” with their disparate impact on the poor and minorities; they reflect, Dr. Bhattacharya says, a “sort of monomania.” The world “panicked in March, and the focus came to just be on Covid control and nothing else.” People saw pictures from Wuhan, China, and Bergamo, Italy, and concluded that they had to do “something very, very drastic in order to address this drastic thing that’s happening.” There was “an action bias that led to the adoption of lockdowns as a form of contagion itself.” (There is an academic paper that models the

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Quotation of the Day…

5 days ago

… is from page 119 of Frank Easterbrook’s brilliant 1989 paper “Ignorance and Antitrust,” which first appeared in published form in Thomas M. Jorde and David J. Teece, eds., Antitrust, Innovation, and Competitiveness (1992) (footnote deleted):
The hallmark of the Chicago approach to antitrust is skepticism. Doubt that we know the optimal organization of industries and markets. Doubt that government could use that knowledge, if it existed, to improve things, given the ubiquitous private adjustments that so often defeat public plans, so that by the time knowledge had been put to use the world has moved on. Efforts to improve markets through law aim at a moving target, with a paradox: if an economic institution survives long enough to be studied by scholars and stamped out by law, it

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Leave Google Alone

6 days ago

Mr. Lewis e-mailed me twice in the past 24 hours, each time to express his “relief” that I’m not an economist working for the DOJ or FTC. (This fact is a relief also to me!)
Mr. Lewis:
You correctly infer that I oppose antitrust action against Google, but you incorrectly think that my opposition comes from “simpleminded econ 101 theories with zero friction and perfect information.” And contrary to your suggestion, I’m aware that “Google’s customers can’t switch to alternatives without sustaining significant costs.”
If you read my blog you’ll discover that I’m among the last people on earth to assume zero friction and perfect information. In fact, my understanding of markets requires the existence of friction and imperfect information. These apparent bugs in markets are, in a real way,

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Some Links

6 days ago

Nick Gillespie talks with the great t.v. and documentary producer Bob Chitester.
My GMU Econ colleague Bryan Caplan writes insightfully about how to adjust prevention to differences in levels of danger. A slice:
Should we infer, then, that the War on COVID is prudent after all?  Hardly.  Sure, non-linearity makes sense when you raise a high risk.  But approximate linearity still makes sense when you raise a low risk.  If you disvalue a 1% risk of death at $100,000, would you really require far more than $110,000 for a 1.1% risk?  Would you really require far less than $90,000 for a .9% risk?  Remember, non-linearity is symmetric: If X increases faster than linearly, X should also fall faster than linearly.
Remember, moreover, that you face a long list of risks.  They add up to a scary

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Quotation of the Day…

6 days ago

… is from page 69 of Roger Koppl’s important – and today especially relevant – 2018 book, Expert Failure; within this passage Roger quotes Bill Easterly (reference removed; link added):
Free development leverages epistemic diversity to find solutions to human problems. The “tyranny of experts,” by contrast, has very little epistemic diversity and limits feedback from the people to the expert. Expert schemes imposed on the people don’t allow for the heterogeneity naturally emergent from free development. It is usually one size fits all. Nor do they entail the ceaseless local searching and experimentation of free development. Top-down planning cannot equal “the vast search and matching process” of free development. Thus, Easterly views experts as fundamentally unreliable.
DBx: Yes.

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Unreal Assumptions

7 days ago

Here’s another letter to this student of economics:
Mr. Mendoza:
Thanks for your e-mail.
You write that it’s “extremely uninformed” of me “to compare today’s sophisticated justifications of protectionism with the disproven Ptolemaic theory of our solar system.” “There are,” you insist, “sound and proven theoretical exceptions to free trade.”
I disagree.
There are logically coherent tales of how raising tariffs here and subsidizing exports there can, under certain circumstances, cause national income to rise. But these tales are irrelevant to reality. They work only on white boards. To work as advertised in reality, such tariffs and subsidies would have to be administered by government officials who are both apolitical and in possession of superhuman amounts of knowledge. The belief,

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Pittsburgh Tribune-Review: “Inflation 101”

7 days ago

In my column for the February 16th, 2011, edition of the Pittsburgh Tribune-Review I wrote about inflation. You can read my column beneath the fold.

Inflation 101
In 1977, the year I took my first economics course, I could buy two McDonald’s Quarter Pounder hamburgers — with cheese — and a small order of fries for exactly $2. But if the dollar had been worth then what it’s worth today, that very same meal would have set me back $7.28.
The unhappy fact is that, over the past 34 years, the dollar has lost 73 percent of its value to inflation.
Inflation was once defined as an increase in the money supply, and the result of any such increase was understood to be a lower value of each currency unit. Just as the value of diamonds would fall significantly if a strange meteorological event

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Some Links

7 days ago

Brad DeVos is understandably dismayed by the covid-lockdowns’ destruction of third places – that is, places for human beings to gather other than home and work. A slice:
Lockdown supporters dismissed concerns from their neighbors with dismissive and privileged statements. “Just work out at home.” “Make your own coffee and avocado toast.” “You can go a few months without your hairstylist.” On and on they went, dismissing people crying out for help as their depression grew.
It’s true we can make toast and do jumping jacks at home. This is obvious and misses the point. We depend on third places for our mental health. A widow sits at the coffee shop counter each morning because it could be her only social interaction of the day. A father goes to the gym to burn off stress. A mother goes

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Quotation of the Day…

7 days ago

… is from pages 65-66 of David Friedman’s superb 1996 book, Hidden Order:
Most public discussions of trade issues are based on a system of ideas that disappeared from economics about a hundred years after the Copernican revolution eliminated Ptolemy’s system from astronomy. It is rather as if the New York Times had carried editorials worrying about how the Apollo expedition was going to avoid crashing into the first of the crystalline spheres – the one at the orbit of the moon.
DBx: Yes. And so matters remain nearly a quarter century after Friedman wrote these words. As we enter the third decade of the 21st century, prominent discussions of trade policy continue to be grounded in medieval ignorance.
Donald Trump, Peter Navarro, Joe Biden, Chuck Schumer, Bernie Sanders, Oren Cass – the

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No, In the Late 19th Century Oil and Steel Prices Were Not Monopolistically High

8 days ago

Here’s a letter sent several days ago to the Washington Post:
Editor:
Reporting on Google, Rachel Lerman writes that “U.S. antitrust laws were initially written in 1890 in an era where Standard Oil and, soon after, U.S. Steel, dominated their industries. They controlled so many aspects of the market that small companies had no choice but to work with them, driving up prices” (“Government kept to the sidelines as Google got big. Now regulators have the chance to rein the company back in.” Oct. 12).
Her claim about prices is mistaken. When Rockefeller founded Standard Oil in 1870, kerosene – that firm’s principal output – sold for 26 cents per gallon. By 1885, as Standard continued to grow because of Rockefeller’s unusual skill at achieving production and distribution efficiencies, the

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Some Links

8 days ago

With his usual great thoroughness, Phil Magness reports on lockdown denialism. A slice:
A quick aside: does anyone remember all those stories from over the summer, up to and including Dr. Anthony Fauci’s congressional testimony in August, in which the lockdowners lavished praise on Europe for supposedly shutting down the “right way” in the spring and successfully beating back the virus? Or how that experience supposedly showed that the United States did not lock down hard enough or that it reopened too soon? Those stories were shown to be utter nonsense at the time also – the U.S. lockdowns matched several European countries in stringency, and generally lasted 1-2 months longer than their European counterparts. But Europe’s new Covid case patterns have now vastly overtaken the same

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State Control of Private Parties’ Communications is Censorship

8 days ago

Here’s an open letter to EconLog commenter “David F”:
Mr. F:
Objecting to David Henderson’s refusal to call the content decisions and other rules made by private companies such as Google and Facebook “censorship,” you comment:
I think the founders would be amazed to discover that the biggest threat to free speech came not from the government but from corporations. I bet they would have crafted the first amendment accordingly if they had been able to foresee the likes of Twitter and Facebook.
I could not disagree more with your dismaying and unintentionally ironic argument.
By calling the communications choices made by private companies “censorship” and then summoning the state to prevent this so-called “censorship,” the long-standing and wholly justified liberal hostility to state

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Quotation of the Day…

8 days ago

… is from page 130 of the late, great Hans Rosling’s 2018 book, Factfulness:
Never, ever leave a number all by itself. Never believe that one number on its own can be meaningful. If you are offered one number, always ask for at least one more. Something to compare it with.
Be especially careful of big numbers. It is a strange thing, but numbers over a certain size, when they are not compared with anything else, always look big. And how can something big not be important?
DBx: Indeed. I wish more people would take this sound counsel to heart when hearing reports about Covid-19.
Comments

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Explicable and Inexplicable Ignorance

9 days ago

In my latest column for AIER, I distinguish explicable ignorance from inexplicable ignorance. A slice:
Equally inexplicable is the widespread trust that people put in politicians. How, for example, can anyone who watched senators questioning Supreme Court nominee Amy Coney Barrett come away with an impression other than that these elected officials – Democrats and Republicans alike – are either stupendously stupid or monstrously Machiavellian?
Or consider this report by Peggy Noonan on a recent exchange between the Speaker of the House, Nancy Pelosi, and CNN anchor Wolf Blitzer; the subject was yet another proposed covid-19 “stimulus” bill:

He [Blitzer] said it’s not about him but people in food lines. Mrs. Pelosi: “And we represent them. And we represent them. And we represent them.

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