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Pierre Lemieux

Articles by Pierre Lemieux

American Opinion from a Hayekian Viewpoint

December 21, 2021

A recent opinion poll by the Wall Street Journal reveals that 50% of Americans support President Biden’s Covid-19 vaccine requirements for private-sector employers, while 47% oppose them. Other opinion polls over the past few decades and perhaps especially over the past few years have suggested, although perhaps not unambiguously, that American opinion has been shifting away from individual liberty and towards more power to political authority (see also my Econlog post “Many Americans Don’t Like Free Speech”).
Are we observing bumps in fickle public opinion about politics or instead witnessing a shift in long-term “opinion” taken in the more abstract sense of what the general public considers just? Like many classical liberals, Friedrich Hayek considered opinion in

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The National Greatness Fraud

December 13, 2021

On the Versailles Palace, transformed into a museum in the 1830s by the “King-Citizen” Louis Philippe, stands the inscription À toutes les gloires de la France (“To All the Glories of France”). Many rulers in history have illustrated, some more savagely than others, a truth that American conservatives seem to ignore: “national greatness” is a propaganda device for subjecting individuals to the reigning power.
On Law & Liberty, our sister website, James Patterson described a “conflict of vision within conservatism” that transpired from a conference held by the Intercollegiate Studies Institute. Although some conferees defended libertarianism and classical liberalism, it appears that most stood for a statist, interventionist, and European sort of conservatism.

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Erdogan and Countervailing Institutions

December 8, 2021

The inflationary policies of Turkish president Recep Tayyip Erdogan confirm two standard economic predictions. First, increasing the money supply, other things being equal, causes inflation. Second, the weakening of independent countervailing institutions by a dictator or would-be dictator will lead to policies entirely focused on the latter’s self-interest.
Erdogan’s central bank has been buying assets with newly created money in order to push interest rates down. (Other policy instruments may also have been used.) Erdogan wants low interests because, like Trump, he believes that they boost the economy and, thus, his popularity with voters. He apparently also wants to signal his Islamic colors by following this religion’s prohibition of usury. Not surprisingly,

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Walt Disney and the Chinese State

November 30, 2021

According to the Wall Street Journal, the Chinese government has censored one episode of “The Simpsons” from Walt Disney’s streaming service in Hong Kong or, we don’t know, it may be the company itself that self-censored (Dan Strumpf, “Disney’s Missing ‘Simpsons’ Episode in Hong Kong Raises Censorship Fears,” November 29, 2021):
Yet one episode is missing from “The Simpsons” lineup: Titled “Goo Goo Gai Pan,” the episode from season 16 centers on a trip to China by the show’s namesake family. Along the way they encounter a plaque at Tiananmen Square in Beijing that reads: “On this site, in 1989, nothing happened.” …
It isn’t known if Disney removed the episode under pressure, or whether it decided itself to leave the episode out of its lineup when it launched the

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Christmas Gifts: Cash Is Not Necessarily Optimal

November 26, 2021

Economists are often suspicious of gifts in kind, arguing that the same money value in cash provides more “utility” to the recipient (puts her in a more preferred situation) because she can use the cash to buy what is on top of her preference scale (her “utility function” in economics). If you don’t buy the gift that she would have bought for herself, your gift is worth less to her than what you paid for. (See Joel Waldfogel, “The Deadweight Loss of Christmas,” American Economic Review 83[5] [1993].)
There are many objections or qualifications to this idea. In certain circumstances, a gift in kind will provide more utility to the recipient. If you know your recipient enough to have a good intuition of her preference scale, you may be able to approximate what she

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What’s Wrong With Social Mobility

November 25, 2021

In and of itself, social mobility is far from ambiguously good. Imagine a society of 10 individuals ranked by income from the poorest, No. 1, to the richest, No. 10. Assume that a good government (the one you would prefer) jacks up the income of No. 3 to between that of No. 6 and No. 7, putting its favorite in the 6th income slot. No. 3 has now become No. 6; No. 4, No. 5, and No. 6 have all fallen down one slot. The government could increase social mobility more if, from the same starting point, it moved each odd-numbered individual one rank up and, consequently, each even-numbered individual fell one rank down: half the population would have been mobile up and half mobile down.
Relative social mobility up is necessarily accompanied by social mobility down. Few

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The Latest James Bond plus Buchanan and Tullock

November 14, 2021

Inspired by Graham McAleer’s review of the new James Bond, No Time to Die, I streamed the film from Amazon Prime Video. Ever since with my young sons decades ago I watched James Bond films, I have always liked them for the action and the guns, although I now find Jason Bourne more congenial and more realistic. On Law and Liberty, our sister website, philosopher McAleer writes under the title “James Bond, Christian Knight”:
During the Enlightenment, David Hume sought to replace the ideal of the Christian knight with that of the gallant. He was sure that a military with baggage trains stocked with champagne would prevail against enemies with less refined tastes. Rustic soldiers, minds stuffed with superstitions, should be supplanted by the scientific soldier, the

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Infrastructure All the Way Down

November 9, 2021

I have argued on this blog that the best practical definition of infrastructure is “whatever the government wants to pay for because it benefits from the expenditure.” The adoption by the House of a $1-trillion bipartisan infrastructure bill reinforces this argument. (See Gabriel T. Rubin and Eliza Collins, “What’s in the Bipartisan Infrastructure Bill? From Amtrak to Roads to Water Systems,” Wall Street Journal, November 6, 2021.)
The standard argument for public infrastructure is that it is an investment that will yield a high rate of return in terms of future economic growth. But there are many caveats. The returns may be lower than those of the private investments displaced by government financing of infrastructure. (See Josh Mitchell, “Infrastructure Law Seen

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Some Arguments for Insensitive Speech

November 5, 2021

Insensitive speech is productive if by “productive” we mean conducive to individual liberty, economic prosperity, and human flourishing. I take “insensitive” in Merriam-Webster’s definition of “lacking feeling or tact.”
There are at least three arguments in defense of insensitive speech. First, insensitivity is largely in the eye of the listener. This is demonstrated by the wide variation of what was considered insensitive in different societies and historical periods, and by what is now considered insensitive among different groups of people in the same society, especially in advanced societies. Some insensitivity is thus an unavoidable consequence of free speech. And free speech is an essential condition for the search of truth and thus for the intellectual and

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Is This Error Just Amusing?

November 1, 2021

Errare humanum est and I don’t want to cast the first stone lest I be lapidated immediately. But an error I just noticed is so amusing that it is difficult to keep it for myself. I was skimming through a book I thought I should read: Gerry Mackie’s Democracy Defended (Cambridge University Press, 2003). Mackie, a political scientist, defends democracy against social choice ideas according to which the political aggregation of individual preferences results in collective choices that are either irrational or dictatorial. See my review of a classic book by William Riker, who, with the help of social choice theory, deflated the pretensions of democracy to represent some sort of “will of the people” and who is one of Mackie’s favorite targets.
On page 443, I stumbled on

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Is Powell Right About Inflation?

October 25, 2021

If we believe what its chairman is saying, the Fed does not seem to know what inflation is. The Wall Street Journal of Friday wrote (Nick Timiraos, “Powell Says Supply-Side Constraints Have Worsened, Creating More Inflation Risk,” October 22, 2021):
“Supply-side constraints have gotten worse,” Mr. Powell said Friday at a virtual conference. “The risks are clearly now to longer and more-persistent bottlenecks, and thus to higher inflation.”
The economic definition of inflation is a sustained or persistent (not transitory)  increase in the general price level as the Journal hinted to just before the quote above, but it is not clear if it was paraphrasing Mr. Powell. What is pretty sure is that inflation cannot be caused by mere “supply-side constraints,” except if

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The Simplicity of Our System of Government

October 18, 2021

An interesting essay in Saturday’s Wall Street Journal suggests, if we go farther than the author, that “the simplicity of our system of government,” although a worthy ideal, has become a mere historical memory if not a propaganda tool for the democratic Leviathan. The story is about Andrew Jackson who, before his death, refused to be buried in a marble sarcophagus believed to have once contained the remains of a Roman emperor. The idea had been advanced by U.S. Navy commodore Jesse D. Elliot. (See Mary Beard, “A Tomb Not Fit for a President,” WSJ, October 16, 2021.)  Jackson’s reaction, Beard writes, stood
as a symbol of the down-to-earth essence of American republicanism and its distaste for the vulgar bric-a-brac of monarchy or autocracy. …
Jackson was 77 years

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Give Leviathan an Inch…

October 14, 2021

In his 1651 book Leviathan, Thomas Hobbes argued that, in order to protect its subjects, the state—“Leviathan”—need to be all-powerful. The problem, others noted and history showed, is that a non-democratic Leviathan is a recipe for tyranny. But a democratic state will respect every citizen’s interests because we love ourselves. The democratic Leviathan loves you because he is you. This theory took many forms up to the present day.
James Sensenbrenner, a former congressman who was instrumental in the adoption of the “Patriot” Act of 2001, is part of the legions who implicitly support this theory. In a Wall Street Journal op-ed, he complains that this Hobbesian law now threatens parents who object to the teachings of public schools (“The Patriot Act Wasn’t Meant to

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Authoritarian Left, Authoritarian Right

October 13, 2021

The Biden administration is intent on forcing large private businesses to have their employees vaccinated against Covid-19 or to produce weekly test results. The governor of Texas issued an executive order forbidding private businesses from mandating the vaccine for their employees. (See Eric Boehm, “Texas Gov. Greg Abbott Bans Private Businesses from Mandating Vaccines for Workers,” Reason Magazine, October 12, 2021.)
This illustrates a trend that has been developing for some time whereby anything affected by a so-called “public interest” is either banned or compulsory. In the process, what was deemed private becomes public.
Note that the process has no built-in stopping mechanism. On the contrary, as more areas of life become matters of dirigiste democratic

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The Continuum Between Liberalism and Anarchism

October 11, 2021

In a private comment on my Regulation review of Acemoglu and Robinson’s The Narrow Corridor, George Mason University professor Daniel Klein challenges the continuity I see between (classical) liberalism and anarchism. The contentious point was summarized in the last paragraph of my review:
An improved and more useful study of the narrow corridor would, in my opinion, switch the normative positions of anarchy and the state. Instead of looking at how the state can protect “society” against anarchy, it would ask how the state can protect feasible anarchy—that is, whatever level of anarchy is possible. The normative primacy should go to anarchy, not to Leviathan.
Dan wrote to me (and allowed me to share it):
I think that we ought to be talking up liberalism, and

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Saule Omarova and Friedrich Hayek

October 4, 2021

Three-quarters of a century ago, Friedrich Hayek warned that the West was on “the road to serfdom.” President Biden’s nomination of Ms. Saule Omarova as Comptroller of the Currency is another illustration that the peril has not receded.
A graduate of Moscow State University in 1989 on the Lenin Personal Academic Scholarship, Omarova has not apparently understood that the state cannot run the economy without tightly—and in fact, savagely—controlling individual lives. In the 2oth century, Communism gave what we would think was a definitive illustration. Other sorts of totalitarianism came close: at the forefront was National Socialism, which was both nationalist and socialist as its name confirmed. Hayek saw all that, as you can see in my review of The Road to

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Contra Gensler and the Chinese Mirror

September 27, 2021

Gary Gensler, the chairman of the Securities and Exchange Commission, may be everything a classical liberal wants to avoid. I will take him as representative of the federal bureaucracies that want to control cryptocurrencies and the emerging decentralized finance (“DeFi”) markets. (See Andrew Ackerman, “Stablecoins in Spotlight as U.S. Begins to Lay Ground for Rules on Cryptocurrencies,” Wall Street Journal, December 25, 2021.)
In an instructive article, The Economist evoked the breath-taking potentialities of DeFi: cryptocurrencies, blockchains technologies, fungible or non-fungible tokens, etc. (“Adventures in DeFi Land,” The Economist, September 18, 2021). A few quotes:
Piece by piece a new kind of economy is being built through applications on various

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Avoiding Biases: Lessons from Michael Huemer

September 23, 2021

The featured image of this post is a photograph I took two weeks ago less than a mile from my home in Maine. It is only illustrative but, I think, powerfully illustrative.
In evaluating the truth, objectivity requires one to check one’s own biases. It is not absolutely impossible that in an advanced society with multiple independent officials and checks against election fraud (as opposed to a banana republic), the government’s party steals an election. It is not absolutely impossible either that the opposition steals the election, as some claim happened in the 2020 federal elections. It is however very unlikely. This remains true if one—like your humble blogger—does not like the party that actually won.

In his recent introduction to philosophy for college

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The Elementary Basics of Inflation

September 20, 2021

It is always surprising how even the financial press is confused about inflation. I am not speaking of complex conflicting theories on the causes of inflation but of the very basic distinction between inflation and changes in relative prices.
For example, The Economist just wrote:
America’s annual inflation rate stood at 5.3% in August, down slightly from the 13-year highs of the previous two months. There was some evidence that inflationary pressures may be levelling off, such as an easing of prices for used cars, which have driven some of this year’s inflation. [my emphasis]
An increase in the price of used cars cannot generate or “drive” inflation for a simple reason: it works the other way around. Inflation, which is defined as a continuous and sustained

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“Just Read the Instructions”

September 17, 2021

Except perhaps for some psychopaths, everybody hopes that the four members of the Inspiration4 mission (watch a video) will safely return to earth. One remarkable thing is how, just a few years ago, most people would have not believed that a crew of civilians would soon orbit the earth in an adventure financed by a billionaire (Jared Isaacman) on a reusable and already-used spacecraft built by the company of another billionaire (Elon Musk). That only military missions flew to space in the past half-century illustrates how our societies are militarized.
We cannot know in advance what new and unexpected possibilities individual liberty and entrepreneurship will open, just as we may not know which ones have been foreclosed by government regulation and standardization.

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Rent-Seeking in Slightly Different Words

September 13, 2021

We—we, economists and supporters of individual liberty—owe it to Mr. Trump to have reminded us how a powerful state and crony capitalism are dangerous. In fact, state power and cronyism are the two faces of the same Janus. A powerful state has a lot to give and much power to take, so that “capitalists” come to it for privileges (for example, subsidies or tariffs) or to avoid restrictions.
Speaking of Mark Zuckerberg and other tech executives, Trump just declared on Fox News (watch the video) in his usual way of speaking:
People are sick. You know, Zuckerberg … used to come to the White House to kiss my ass.
(The rare politician who is also a Latinist will no doubt recall what Livius, in Ab Urbe Condita (2, 32), said of the way Menenius Agrippa addressed the

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Removal of Government Statues

September 10, 2021

The government of Virginia just removed the statue of Confederate general Robert E. Lee, erected in Richmond during the Jim Crow era. Contrary to today’s ruling intelligentsia and government, their precursors were not perfect.
But let’s be serious: Jim Crow governments were certainly despicable. So was the federal government, which long promoted policies that favored discrimination. So would be a pure woke government who would simply discriminate against new hated groups, discrimination being the central business of the unconstrained Leviathan. (See also my post “Jim Crow: More Racist than the Railroads,” Econlog, December 18, 2020.)
This being said, one should not applaud governments removing monuments that happen to go against current ideological fads. The

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The Word “Societal”

September 7, 2021

The current issue of The Economist challenges “the illiberal left.” Among other related phenomena, “the espousal of new vocabulary … is affecting ever more areas of American life. It has penetrated politics and the press.” The magazine observes, perhaps a bit late, that “it is starting to spread to schools.” How can the wokes succeed in changing common terms to advance their ideological agenda? Governments certainly help with their indirect subsidies to universities if not their open support of woke causes.
In an appendix to his novel 1984 (published in 1949), George Orwell wrote, somewhat prophetically:
The purpose of Newspeak was not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc [English Socialism],

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No World Sugar Shortage Expected

September 3, 2021

No shortage of sugar is expected despite the decrease in world supply caused by unusually cold weather in Brazil, the largest producing country. the Wall Street Journal reports  (“Sugar Prices Soar After Brazil Cold Snap,” September 3, 2021):
There is no prospect of a sugar shortage, traders and analysts say. Rather, higher prices are likely to draw sugar out of India and into the world market.
Note however that the story ignores the impact of higher prices on lowering quantity demanded compared to what it would otherwise have been.
On a free market, an increase in demand (the whole schedule of quantities demanded and prices) or a decrease in supply (the whole schedule of quantities supplied and prices) brings a price increase, not a shortage. A shortage is the

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The State as it Is, Not as it Should Be

September 1, 2021

Many people think that the state is benevolent and wise or, if not, that it would be if it were run by people like them or, more exactly, like the person expressing this opinion. This is “politics with romance,” to paraphrase economist James Buchanan. Although a government sometimes succeeds in doing something with apparent efficiency, it usually fails by its own standards and, irrespective of its success, creates as much discontent as contentment.
One problem is that the state is made of, and influenced by, many persons with different interests, opinions, preferences, and values. Another problem is that an electorate is demonstrably irrational. Still another problem is that the state suffers from built-in inefficiencies due to the politicians’ and bureaucrats’

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Afghanistan and Incentives

August 16, 2021

Except for a few heroes or fanatics, nobody wants to be the last one to fight when his comrades (or perhaps foreign allies) have stopped shooting, abandoned their position, or surrendered. And every soldier knows that every one of his comrades is having the same thought about where his self-interest lies. So when they think the wind is about to turn, it has already turned and the whole battalion or army lays down its arms. This explains Afghanistan last week.
The prospect of 72 virgins in the afterlife counts of course, but more mundane incentives too.
Game theory has formalized this sort of problem as the famous Prisoner Dilemma. It may be in the common interest of all to continue fighting, but if every individual thinks it is in his own interest to stop, he will.

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Is “Governing” Good for the Governed?

August 12, 2021

It is a tired cliché to say that the government should govern. But is it true? What does “governing” mean? Consider the following illustration: on Tuesday, when announcing his resignation, New York Governor Andrew Cuomo repeated the cliché. He said:
The best way I can help now is if I step aside and let government get back to governing.
We are again dumbstruck by Cuomo’s selfless devotion to the public good, which is, as we know, characteristic of all politicians’ altruism. But my question here is different: Is “governing” so obviously good?
The first chapter of Anthony de Jasay’s seminal book The State is titled “The Capitalist State” and presents a minimal state whose role is precisely not to govern, that is not to favor some individuals at the cost of harming

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Climate Agnosticism

August 10, 2021

I am rather agnostic toward “climate change” or “global warming” as it was called before the expression mutated for reasons that may be known only to our loving intelligentsia. I must say I was impressed by Tyler Cowen’s argument for (government) combatting climate change but, having now escaped his spell, the reasons for my agnosticism triumph again. The Economist’s story on the United Nations sixth report on climate change comforts me (“The IPCC Delivers its Starkest Warning about the World’s Climate,” August 9, 2021):
The oncoming dread registers yet more clearly than it did in the IPCC’s previous major assessment, AR5, published in 2013-14. The Earth has warmed over a tenth of a degree since then; it is now approximately 1.1ºC (2ºF) hotter than it was in the

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Andrew Cuomo and Politics Without Romance

August 6, 2021

Whether New York Governor Andrew Cuomo is guilty as charged, the statement he made in his defense illustrates what public choice theory has taught economists: as James Buchanan wrote, we must study “politics without romance.”
At about 12:50 in the video (well worth watching), Cuomo declared:
My job is not about me. My job is about you. What matters to me at the end of the day is getting the most done I can for you. And that is what I do every day.
Perhaps we can find politicians genuinely devoted to doing good for their electors, who selflessly sacrifice themselves to that task, and who don’t realize that the benefits they provide to some (“you”) are at the cost of harming others (those who don’t agree or see their own opportunities reduced). Perhaps we can even

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Intelligentsia Fetishes

August 5, 2021

The questions we ask or the passing comments we make depend on the explicit or implicit theories we hold about the world, including normative theories and values. This is not to say that anything is as true as anything else or that any value is as defensible as any other, but that one’s theories and values should be examined. What one says can also be motivated by virtue signaling, that is, showing one’s good standing with the group one wants to endear or persuade.
Unexamined passing comments are often influenced by the intelligentsia’s intellectual fetishes. I found a few examples in a book that is otherwise serious and challenging: Daron Acemoglu and James A. Robinson, The Narrow Corridor: Sates, Society, and the Fate of Liberty (Penguin, 2019). I will have a

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