Wednesday , April 8 2020
Home / Pierre Lemieux

Pierre Lemieux

Articles by Pierre Lemieux

“Public Health” Is Not What Most People Think

4 hours ago

There is a difference between, on the one hand, fighting epidemics of contagious diseases and, on the other hand, what is called “public health.” In reality, public health is basically a political movement that aims at increasing government intervention in the health area as well as in other areas of life.
I provide a few examples of this in a comment on the Reason Foundation’s website (“Public Health Officials Far Too Often Ignore the Costs and Trade-Offs Involved In Policy Decisions,” April 7, 2020). Three short excerpts, even if other parts of the article are also, I think, very relevant to the current Covid-19 crisis:
The humongous failures of public health organizations such as the Centers for Disease Control and Prevention (CDC), Food and Drug Administration

Read More »

When Free-Market Prices Are Banned

7 days ago

One would think that basic economics and economic history, including a century of communist experiments, have demonstrated one thing: when prices are forbidden to adjust, shortages are created, the allocation of goods by government becomes a nightmare, and black markets develop. It would seem that especially in times of emergency, whatever government does, it should leave prices alone.
Prices of medical products related to the current epidemic (face masks, disinfecting products, medical gowns and gloves, ventilators, and such) just like prices of common consumer goods were already capped by states’ “price gouging” laws triggered by the governors’ emergency declarations. Price controls have been further tightened by President Trump’s March 23 Executive Order on

Read More »

Let Decadent Airlines Go Bankrupt

15 days ago

Raymond Aron, the French liberal-conservative philosopher, wrote a book titled In Defense of Decadent Europe (Plaidoyer pour l’Europe décadente, Paris, 1977) where, if my memory serves, he took “decadent” as a badge of honor vis-à-vis the authoritarian and austere communist dictatorships of his time. Hic et nunc, we can take the word in its pejorative sense to describe the sort of decadent, crony quasi-capitalism that seems more and more to be replacing the free market.
Another illustration may have been provided by a report in yesterday’s Wall Street Journal. Apparently, plans are under discussions for either “a potential voluntary shutdown of virtually all passenger flights across the U.S.” or simply a federal government’s order: “U.S. Domestic Passenger Flights

Read More »

The Future, as Things Are Going

17 days ago

The way things are going, it may not be that difficult to predict the future, even admitting that it certainly hides new surprises. In 650 words, here are some predictions informed by economics (and birds’ entrails), whether the epidemic itself is being exaggerated or not.
The shortages—real shortages, not “smurfages”—created by government price controls (the state governments’ “price gouging” laws and whatever may come from the federal government) illustrate many crucial facts about economic and social life. Black markets will develop because of the self-interest of both sellers and buyers: many people prefer to have toilet paper at $4 a roll than not have it at all, even if its theoretical price (the one capped by government price controls) is $1 but the thing is

Read More »

Government Failure on a Grand Scale

19 days ago

Any person or organization can make mistakes, including governmental organizations and the state itself. And, as the popular saying goes, it’s easy to criticize. The problem, however, is that governmental mistakes have much worse consequences than any individual error. It appears that the US government, just like the Chinese government, totally botched the initial response to the coronavirus epidemic, albeit in different ways.
It is now admitted that the repeated failure of the federal government to provide testing kits or (due to stifling regulations) let private laboratories manufacture them has played a major role in the skyrocketing of infections and deaths in America. Yesterday’s Wall Street Journal reports (“America Needed Coronavirus Tests. The Government

Read More »

Four Books for Social Distancing

22 days ago

You are headed for your cabin in the woods and, like Indiana Jones at the beginning of Raiders of the Lost Ark, you have thrown your revolver in your travel bag. You still have room for four books to provide stimulation and, in more than one sense, assist in social distancing. What to choose? Here are my recommendations.
First, I strongly suggest that you read or reread Anthony de Jasay’s The State (Liberty Fund, 1997 [1985]). Written by a creative economist and philosopher, this book will, I believe, be recognized as a major work of the 20th century. Its basic idea is that, since individuals are different, the state’s interventions cannot but help its clients while harming the rest of the population. I have a review of this crucial book on Econlib, but there is

Read More »

Rothwell Si, Piketty No!

24 days ago

I haven’t read the famous economist Thomas Piketty’s new book, but I hope to have time to do so in the future. My reader will also forgive, I hope, the “cultural appropriation” of a Cuban Revolution slogan in the title of this post. For now, I have read a review of Piketty’s book in The Economist (“A Bestselling Economist Sets Out the Case for Socialism,” March 5, 2020). From what I gather there, the book naively defends the sort of hard socialism that we would instead expect to find in the dreams of some befuddled French sociologist.
The Economist quotes the incipit of the book, where Piketty pontifies:
Every human society must justify its inequalities.
I checked on Amazon that it is a faithful translation of the French original:
Chaque société humaine doit

Read More »

You Will Never See the World as Before

26 days ago

When, a few minutes ago, I read that the Italian government has announced a temporary suspension of mortgage payments (“Mortgage Payments Suspended Across Italy Amid Coronavirus Outbreak,” March 12, 2020), I quickly pulled the Twitter trigger:
Lenders are humans too and the virus, contrary to the state, does not discriminate on the basis of balance sheet. Moreover, bankrupt states may direly need more lenders soon.
The mortgage lenders include the pleb’s pension funds, but the proletarians don’t see this. The state is not going to tell them by waging a propaganda campaign. There are more borrowers than lenders, at least consciously.
This reminded me of one of Anthony de Jasay’s deep reflections. (His work is full of such deep reflections.) Once you have understood

Read More »

At Least Two Ongoing Pandemics

27 days ago

This short post is a crowd-sourcing inquiry. In its story on the World Health Organization declaring Covid-19 a pandemic (“Coronavirus Declared Pandemic by the World Health Organization,” March 11, 2010), the Wall Street Journal, usually a serious, prudent, and skeptical newspaper, writes:
The WHO generally defines a pandemic as a disease that has become widespread around the world, with an impact on society. The term has been applied to only a few diseases in history—a deadly flu in 1918, the H1N1 flu in 2009 and HIV/AIDS among them.
Perhaps the Journal was just echoing some WHO apparatchik? The truth is that the WHO itself has been, and is currently, fighting another terrible pandemic. Its Thirty-Ninth World Health Assembly declared in 1985:
Deeply concerned by

Read More »

Rationing: Assume Government Is Benevolent

March 7, 2020

Let’s make two assumptions: (1) the state (any level of government) really cares for the poor; (2) it is minimally efficient to reach this objective. What then would it do in case of large and sudden price increases caused by a natural or man-made catastrophe?
Create a shortage by capping price increases? Certainly not, for the poor are the ones least able to get ahead of waiting lines. They often don’t have the necessary contacts and are less able to physically move to places where shortages are less stringent. They can’t wait out the emergency at a far away Hilton and or use their private planes to take refuge under better skies.
What the state would do given our assumptions may be to ban the sale of “essential” supplies without ration coupons (on top of previous

Read More »

Don’t Confuse Shortage and Smurfage

March 6, 2020

In a sense, there is a shortage of everything, for everything is more expensive than we would like. To consume anything, one must forego more of something else than he would prefer. Sure, the producer or the shopkeeper regrets that what he sells does not fetch a higher price but he could argue that this is because his inputs are also too expensive: there is a shortage of them too.
This concept of shortage, however, is very misleading because it confuses two things that are useful to distinguish: a high price on the one hand and, on the other hand, the impossibility of obtaining something at the market price—that is, at a mutually agreed price with a seller. If people insist on using “shortage” in the sense of “too expensive,” we would need another word to label the

Read More »

Flower Children or Techno-Tyranny?

March 3, 2020

Some people seem to think that there exist only two political alternatives: techno-tyranny or flower-children delusion. This may not be what Margaret Sullivan meant in her Washington Post column of yesterday (“Trump Is Pushing a Dangerous, False Spin on Coronavirus—and the Media Is Helping Him Spread It,” March 2, 2020), but I thought about that when I read her:
Trump’s tendency to spin out assertions untethered from reality becomes a recipe for disaster when combined with his disdain for scientists, medical experts, intelligence officials, journalists and others who deal in fact-based reality.
The flower children of the glorious 1960s were not very realistic (Che Guevara was not exactly a supporter of anarchy), but populist intuitions are not either. I suggest

Read More »

Three Cheers for the Coronavirus

February 27, 2020

I don’t propose to cheer for the death, financial loss, or other impairment of anybody (sorry if I weep less for rulers), but I do find a silver lining in three benefits of the current Covid-19 epidemic or pandemic. These benefits are not net benefits and certainly not net benefits for everybody: only public goods, by definition, provide net benefits to everybody.
First, the epidemic illustrates the benefits of free speech, even for a tyrant such as president Xi Jinping and the Chinese state. The Economist published an obituary of Li Wenliang, the Wuhan ophthalmologist who tried to alert people to the new epidemic and later caught the virus and died (“Li Wenliang Died on February 7th,” February 13, 2020). It is worth reflecting on what happened just before he

Read More »

Arguments for Compulsory Vaccination

February 17, 2020

The Connecticut legislature wants to abolish the last non-medical exception for the compulsory vaccination of children, following in the steps of five other state governments (“Connecticut Lawmakers Brace for Public Hearings on Vaccination Bills,” Wall Street Journal, February 15, 2010). Two serious economic arguments can be made in favor of this measure. (It wouldn’t protect against the coronavirus, for which there is yet no vaccine, but this epidemic is certainly a motivation or an excuse for strengthening compulsory vaccination.)
The first argument is a public good argument, which can be summarized as follows. Everybody potentially benefits from other individuals being vaccinated, the main beneficiary being those whose age or state of health precludes

Read More »

Markets Against the Mob’s Purpose

February 15, 2020

Caleb Brown of the Cato Institute reminds us that yesterday would have been the 201st birthday of Frederick Douglass, a slave who escaped Maryland in 1838, thereby valiantly breaking the law.  The Economist of January 25 contains two articles apparently unrelated, but illustrating, each one in a different way, an important feature of free markets. This feature is known to economists since Gary Becker’s work.
One of the Economist’s articles is about brands: “It Has Never Been Easier to Launch a New Brand.” It shows how a brand has a value for consumers (which, in turn, gives the brand its monetary value), but can be displaced by new brands. It observes that the new brands now often feel obliged to have a “brand purpose,” which can be interpreted as a social purpose.

Read More »

Conservatives Make SJWs Happy

February 9, 2020

Founded in England 197 years ago, The Lancet is a venerable medical, public-health, and social-justice-warrior journal. It just expressed its contentment in the fact that “after a hiatus of more than two decades, Congress and President Donald Trump agreed to add funding for gun violence research to the federal budget in December” (“Decisions To Be Made on US Gun Violence Research Funds,” February 8, 2020). It apparently foresees that the new research, to be commissioned by the National Institutes of Health and the Centers for Disease Control and Prevention, will justify increased gun controls and challenge the right of ordinary people to own and carry guns.
A good argument can be made that gun violence—as well as many other problems or phenomena—should be the

Read More »

MMT Gospel: Is This Time Different?

February 3, 2020

“Modern Monetary Theory” or MMT comes in two broad versions, the economic version and the political-gospel version. It is not easy to distinguish them.
The economic version claims that a national state can finance its interventions, or some of them, by using unemployed resources or, at full employment, by diverting (that is, grabbing) employed resources through deficits financed by money creation. If inflation ensues, the theory continues, it can be countered by more visible ways of grabbing resources such as higher taxes, wage and price controls, capital controls, rationing, and such. The few economists who defend MMT invoke bits and pieces of economic theories that are not exactly “new,” those of John Maynard Keynes or Abba Lerner, for example, but their claims

Read More »

Why Would a Rational Being Say That?

February 1, 2020

A few months ago, the New Republic reported on a conference, the Third Modern Monetary Theory Conference, of which it was a sponsor (Osita Nwanevu, “Spreading the Gospel of Modern Monetary Theory,” October 3, 2019). One of the participants, affiliated with the Real Progressives website, declared:
Wages are the way they are because corporations have control.
She probably did not mean to opine that wages are too high. But then, if corporations set wages, why aren’t they setting them at subsistence level, or at most, in order to avoid jail, at the government-imposed minimum wages. In America, 2.1% of all hourly-paid workers are paid the federal minimum wage or less (according to the Bureau of Labor Statistics). Adding the higher state or local minimum wages, the

Read More »

Funny Things About the Epidemic

January 30, 2020

We don’t yet know whether the spread of the Wuhan virus is a real crisis or not, but as Rahm Emmanuel would have said, we should not let it go to waste. The World Health Organization (WHO) just declared a Public Health Emergency of International Concern—a PHEIC in its jargon. One funny thing is that it comes on top of another global epidemic WHO also declared.
Just a few months ago, WHO launched a “new report” on what it has been calling for decades “the global tobacco epidemic.” (“WHO Launches New Report on the Global Tobacco Epidemic,” WHO, July 26, 2019). Shouldn’t there be two different words for a communicable-disease epidemic—the protection against which can be viewed as a public good, with many caveats—and an individual’s choice of a personal pleasure? On

Read More »

Hiring a Research Assistant or a Cowboy

January 29, 2020

“I need a research assistant at $5 an hour,” he said. “But they are hard to find. In fact, I can’t find one on the market.” This is not exactly the complaint that The Economist reports from Wisconsin dairy farmers, but it would have served equally well to illustrate a common economic confusion. The magazine writes (“Business Has Gone Sour in America’s Dairy Capital,” January 23, 2020):
Farmers complain it is getting hard to find labor, even as wages rise.
It is never hard to find labor on a (at least relatively) free market: it just depends on the price you are willing to pay. It is not only difficult but impossible to find labor below the going wage rate. But at that rate, it is usually easy. If it isn’t, it is because the going rate is below the market

Read More »

A Simple Argument Against Ex-Im

January 21, 2020

Ex-Im’s mandate in financing American exports has been reconducted by Congress with the blessing of President Donald Trump, who first appeared to be against but changed his mind because, apparently, exports are important and cannot be left to the market. The law’s intigators won by “tucking it into a large must-pass spending package,” to use the terms of the Wall Street Journal, making sure that it would not be debated by the glorious representatives of the people. Here is a simple case against Ex-Im.
If Ex-Im increases American exports and if that is good, why not boost the agency’s subsidies enough for exports to increase until the whole American GDP is exported? (Whatever Americans needed for subsistence or more would be imported.) If the answer to this question

Read More »

Ah, If H.L. Mencken Were Back!

January 15, 2020

A common form of state policy, if not a natural strategy, is to handicap some people and then come back on a white horse to save them in return for their support. The practice is not new and comes in many shapes. We had an illustration yesterday when President Donald Trump took on to Twitter to reinforce the bullying of his Attorney General who wants to force Apple to help decrypt its iPhones or, better, to offer a permanent backdoor to the government (and to other hackers).
The president tweeted:
We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements.
The caps on “trade” are from the president himself. Obviously, “the United States” is being

Read More »

Manufacturing: An Example of Industrial Policy

January 13, 2020

Recent data and analysis show two interesting facts: (1) American manufacturing output has been falling for a year; (2) the Trump administration’s tariffs have reduced manufacturing employment. One chart and one new econometric study will help understand. As a bonus, we’ll also see that, as dangerous as a central bank is, an independent one has a major benefit that is too easily overlooked.
Of course, there is nothing sacred in manufacturing. Whether what is produced is a manufactured gadget or a doctor visit doesn’t matter except for the fact that the consumer got it who wanted it and was ready to pay for it. Note also that manufacturing employment does not matter as such. If people don’t work in manufacturing, they will work in whatever industry can provide

Read More »

The Simple Economics of Comparative State Lying

January 10, 2020

As rumors of war smoulder, the question becomes even more important: Between two states who issue contradictory statements, which one is it safer to believe? The economic answer is, of course, the one that has the lowest incentives to lie. Keep in mind that states don’t lie, only their rulers do, and we know that it is often in their interest to, but the question remains. Answering it is not difficult, at least in some cases.
In a free or just open society, the incentive for rulers to lie is much lower, because the probability that the liar will be denounced and perhaps punished is higher.
The first reason for this is the free press and all the journalists chasing a Pulitzer prize. Partisans often forget that a free press is not one that says what they want, but

Read More »

The United States Killed Soleimani, Right?

January 4, 2020

Everybody seems unanimous, from the Left to the Right. MSNBC wrote: “Iran Will Retaliate for U.S. Killing of Soleimani.” The Wall Street Journal: “Tensions Rise in the Middle East After U.S. Killing of Iranian Military Leader.” Time: “Iran Has Vowed Revenge Against the U.S. for Killing Qasem Soleimani.” Fox News: “Trump Warn Iran: US has targeted “52 Iranian Sites”.” Al Jazeera: “US Kills Iran’s Qassem Soleinani in Air Strike.” NPR: “Was It Legal for the U.S. to Kill a Top Iranian Military Leader?” And so forth.
The unanimity is about the presumed fact that there is something or somebody called “the US” who killed Soleimani, and that there is something or somebody called “Iran” who will retaliate. But are the US and Iran big organisms of which citizens are the mere

Read More »

Four Economic Lessons from the Nativity

December 25, 2019

My exegetic knowledge of the New Testament is not up to academic standards, but I find in Luke 2:1-7 four economic lessons of the Nativity: (1) Leviathan is not a piece of cake; (2) technology matters; (3) institutions matter even more; (4) wealth matters. The readers of this blog, not to speak of my co-bloggers, can no doubt find more lessons.
The Gospel says (Luke 2:1-3, quoted from the King James Bible):
And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed. …And all went to be taxed, every one into his own city.
I understand “taxed” to mean counted in a census. There is a long-running academic debate over whether it is the Roman emperor or another political authority who ordered the census. But

Read More »

Another War on Drugs and on Certain Citizens

December 20, 2019

“U.S. Raises Tobacco Buying Age to 21,” ran a Wall Street Journal title yesterday. This implies that a large chunk of American citizens are children, or that voting does not count. Or perhaps worse. (Forget that “tobacco” does not legally mean tobacco anymore, but whatever the Federal Drug Administration says the word means, such as e-cigarettes.)
Regarding the first alternative, it is absurd for the Public Health State to treat all individuals between 18 and 21 as children. As I wrote in a recent Reason Foundation paper,
The FDA calls indistinctly “youth,” “adolescent,” “child” or “kid” anybody from 12 through 17, but this group is not homogeneous. A 17-year-old, who can enroll in the army with his parents’ permission and is on the verge of having the right to

Read More »

Is the Fall of Unemployment Good?

December 12, 2019

Is it good news or bad news that the rate of unemployment in the United States has gone back to a 50-year low of 3.5%? It depends on what caused it. Discussing this question will lead us to look at numbers that some may find surprising.
Figure 1 and Figure 2 show the evolution of the unemployment rate and of total (non-farm) employment under the previous and current administration. There appears to be little difference. If we calculate the average (compounded) quarterly growth of employment between, on the one hand, the first quarter of 2009 and the first quarter of 2017 (the Obama administration) and, on the other hand, the first quarter of 2017 and the third quarter of 2019 (the Trump administration thus far), we get a quite small difference with respectively

Read More »

Public Health, Parens Patriae, and Sex

December 1, 2019

In a Thursday post about public health, I mentioned the parens patriae legal principle, which justifies the state to act toward citizens like a parent toward his or her children. One of the readers who commented, JK Brown, quoted a 1910 book, Popular Law Making, by Harvard law professor Frederic Jesup Stimson:
You can have regulation of the hours of labor of a woman of full age in general employments, by court decision, in three States (Massachusetts, Oregon, and Illinois) … The Oregon case, decided both by the State Supreme Court and by the Federal Court in so far as the Fourteenth Amendment was concerned, after most careful and thorough discussion and reasoning, reasserted the principle that a woman is the ward of the state, and therefore does not have the full

Read More »

The State as Our Father (or Loving Mother)

November 28, 2019

Current attacks on the Food and Drug Administration for not regulating e-cigarettes enough remind us of an inconvenient truth. In the mind of public health activists and many medical experts, the state is to adult citizens what parents are to their children. This fiction has even been consecrated by a century-old old legal principle.
The Wall Street Journal of yesterday (“Researchers Say FDA Has Fallen Down on E-Cigarette Testing”) reports that the current attacks against the FDA are of two sorts:
The Food and Drug Administration has come under fire for not moving quickly to address the health risks of e-cigarettes, but outside the public spotlight it is also under attack for not prioritizing study of whether those vaping products may well be an important way to

Read More »