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Pierre Lemieux

Articles by Pierre Lemieux

Total Government à la Irving Fisher Is Not Ideal

3 days ago

A major issue at the confluence of economics, political science, and political philosophy is, What is morally or economically better, the state (formal and centralized coercive authority), anarchy, or something in between? Ignorance of this question, which parallels the alternative between collective choices and individual choices, mars most political debates.
In 1941, progressive economist Irving Fisher said before the Yale Socialist Club (quoted in Mark Thorton, The Economics of Prohibition [University of Utah Press, 1991], p. 17):
I believe [William Graham Sumner] was one of the greatest professor we ever had at Yale, but I have drawn far away from his point of view, that of the old laissez faire doctrine. I remember he said in his classroom: “Gentlemen, the

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Economic Questions About the “Temple of Democracy”

9 days ago

Is it true, as House Speaker Nancy Pelosi claimed, that Congress is a temple of democracy (“U.S. Capital Police Officer Brian D. Sicknick, who died after assault on Capitol, Protected With a Kind Touch,” Washington Post, January 8, 2021)? She said:
The violent and deadly act of insurrection targeting the Capitol, our temple of American Democracy, and its workers was a profound tragedy and stain on our nation’s history.
This invites a reflection on how Congress, democracy, and the state work. Any moral value attached to these institutions must be consistent with, although not limited to, their likely functioning and consequences.
Anthony de Jasay is one of the many economists who, over the last eight decades of so, have tried to understand the state (the whole

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No “Will of the People” in the Election

10 days ago

Writing about the final (with some luck) fireworks of the Trump presidency, Wall Street Journal columnist Holman Jenkins proposes many interesting or challenging insights, up to and including a final contradiction (“Don’t Expect Police to Shoot at Crowds,” January 8, 2021). The penultimate sentence states a deep and science-based idea that you don’t meet often in the press, even the serious press. Writes Jenkins:
Elections should strive to be above reproach in accuracy and lawfulness but they can’t manifest the “will of the people” when there is no unambiguous will to manifest.
I have tried to explain this idea in a few Econlog posts and, along the same lines, I have a forthcoming, more elaborate article in The Independent Review, titled “The Impossibility of

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Criminal Incentives: A Horrible Illustration

14 days ago

Samuel Little, a man who confessed killing 93 women over four decades, died in a California prison in late December” (Hannah Knowles, “Deadliest Serial Killer in American History Dies at 80, with Police Still Searching for his Victims,” Washington Post, December 30, 2020). He illustrated in a horrible way what Nobel-winning economist Gary Becker taught us: criminals are rational in the sense that they respond to incentives; those who are not rational don’t stay long on the market.
Becker was awarded the 1992 Nobel Prize in economics for “having extended the domain of economic theory to aspects of human behavior which had previously been dealt with—if at all—by other social science disciplines such as sociology, demography and criminology.” The higher the cost for a

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U.S. Tariffs Are Not “More Punishing to China”

17 days ago

The world would be a different place, more rational and convivial, if all politicians, journalists, and editors had some clear notions of supply and demand as well as of the history of economic thought—if, for example, they had read David Hume, Adam Smith, Jean-Baptiste Say, James Mill, and John Stuart Mill. As an illustration, consider a sentence in yesterday’s Wall Street Journal (“Trump’s Trade War Will Be Left for Biden to Win,” January 3, 2021—my emphasis):
[Mr. Biden] has already said he wouldn’t immediately lift the tariffs, which should prove more punishing to China than the U.S., as its economy generally depends more on exports.
It is not clear whether the explanation I have emphasized is the journalist’s paraphrase of Mr. Biden’s thinking or the

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Free Enterprise: A Daring New Year Wish

21 days ago

A December 28 report in the Wall Street Journal illustrates (again) how a wish for free enterprise in America is not like carrying coals to Newcastle (see Charles Passy, “New York to Penalize Health-Care Providers $1 Million for Covid-19 Vaccine Fraud“). For Mr. Cuomo, who drinks at the zeitgeist of our times, “fraud” simply means what the government does not like. A few excerpts:
New York Gov. Andrew Cuomo said Monday he will sign an executive order to penalize health-care providers that administer the Covid-19 vaccine without following state prioritization protocols. … Mr. Cuomo, a Democrat, said that providers that ignore this will face fines of up to $1 million and a revocation of all state licenses. …
State Health Commissioner Dr. Howard Zucker said over the

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New Year Wish: Political Wars of Religion?

23 days ago

Consider political wars of religion, which I define as confrontations about whose preferences and values will be imposed on other individuals. They are not what any friend would wish you for 2021! President-elect Joe Biden does not seem to understand this as he declared (quoted by Deanna Paul, “Republican Electors Cast Unofficial Ballots, Setting Up Congressional Clash,” Wall Street Journal, January 28, 2020):
Respecting the will of the people is at the heart of our democracy, even if we find those results hard to accept.
First, the United States (or perhaps more exactly, the US government) is not a democracy, but a republic, as John Grove argued in his article “Numerical Democracy or Constitutional Reality?” (Law and Liberty, November 12, 2020).  Indeed, the

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Open Letter to Voters: Political Sunk Costs

28 days ago

Considering sunk costs in one’s decisions is a cognitive limitation that behavioral economists may underestimate. If you, dear voter, have already lost $100,000 in a project that you are sure will continue to bring you net losses, you will just lose more money by putting more into it. Your previous cost is sunk and won’t be reimbursed to you just because you lose more money. As the dictum goes, don’t throw good money after bad money!
The sunk-cost fallacy is at work in political partisanship too. Suppose you have “invested,” if only emotionally, in politician X. You have followed him for years, applauding his good deeds and forgiving his bad ones: “he just said that to be elected,” “he did not have a choice,” “consider how politician W would be worse,” etc. Perhaps

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Jim Crow: More Racist than the Railroads

December 18, 2020

It is not always understood how governments and the public sector are more inclined to bow to popular discriminatory bigotry than private businesses, because of the incentives of their respective actors. As Gary Becker argued, private businesses have to pay the cost of their discrimination. Only if their owners, or perhaps a large number of their customers, have a “taste for discrimination” will they engage in it—but competitors will then rush in, with higher prices if necessary, to satisfy the unfulfilled demand of the victims of discrimination.
Starting around 1880, Jim Crow laws prevented this discrimination in the South. Historian Leon Litwack writes:
Although blacks had previously experienced segregation in various forms, the thoroughness of Jim Crow laws made

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Generally Accepted Rules and the Election

December 16, 2020

To a large extent, people do what is generally expected from them, simply because it simplifies their lives in society. This is how and why rules develop that facilitate social coexistence. The danger is that these rules turn out to be stifling and economically inefficient, which means that they impede trade, innovation, and prosperity. Primitive tribes provide an extreme example. The opportunity is that some social rules—and institutions, which are sets of rules—may allow a large measure of both individual liberty and social regularity.
A long tradition of (classical) liberal thinkers, often economists, from David Hume to Friedrich Hayek, has emphasized the benefit of evolved social conventions, as opposed to diktats from political authority. Such conventional

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Similarity Between Socialism and Fascism: An Illustration

December 9, 2020

Fortunately, socialism and fascism are not the only two political alternatives, for neither is attractive. Moreover, a well-kept secret is how similar the two ideologies are. Substituting socialism for fascism in many statements from fascists would bring instant approval from socialists. Many antifa agitators would be surprised to realize that they are doing fascism unknowingly, just as Mr. Jourdain was doing prose without being aware of it.
The following quotes come from The Coming American Fascism (Harper & Brothers, 1936) by Lawrence Dennis, a well-known American fascist of the time:
Fascism does not accept the liberal dogmas as to sovereignty of the consumer or trader in the free market. It does not admit that the market ever can or should be entirely free. (p.

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Elections Are Not a Ruler’s Toy Nor a Sacred Panacea

November 23, 2020

Some Republican leaders have, at last, started to blame Mr. Trump for burning the bridges behind him after being fired by the electorate or, perhaps more exactly (nothing is grandiose in that presidency), for breaking what he thinks are his toys after he felt scolded. (Will he also scratch graffiti on the oval office desk?) This is more or less what the Wall Street Journal, a newspaper that tried to like Trump, argues, although more prudently, in two pieces: “A Bogus Dispute Is Doing Real Damage,” November 19, by columnist Peggy Noonan; and Lindsay Wise, “Some Republicans Call for Trump to Back Up Claims of Fraud,” November 20, 2020.
Yesterday, the Wall Street Journal reported on weekend tweets of Mr. Trump attacking the Republicans who have asked him to stop

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The Populists and Napoléon

November 19, 2020

One of the many fascinating observations in Charles Postel’s The Populist Vision (Oxford University Press, 2007, p. 164) is the sweet spot that American populists of the late 19th century generally had for emperor Napoléon Bonaparte, the French dictator at the beginning of the century:
In the 1890s, a Napoleon revival spread in the United States, as many Americans hoped for a strong man to deliver the nation from its multiple ills. Reporting on the so-called “Napoleon craze,” Century magazine reported that “the interest in Napoleon has recently had a revival that is phenomenal in its extent and intensity.” Muckraking journalist Ida M. Tarbell and Princeton Professor William Milligan Sloane contributed serialized Napoleon biographies in the Century and McClure’s

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Why a Vast Election Fraud is Highly Implausible

November 16, 2020

Consider a wide definition of a conspiracy as a secret plan between two parties or more to do something, legal or illegal, that hurts somebody else’s interest for the purpose of furthering their own mutual interests. This definition is close to the dictionary’s (“A secret plan by a group to do something unlawful or harmful”), although it focuses less on secrecy. For instance, a firm is a general conspiracy to wage competition against other firms’ interests and it manages small conspiracies, only some of which are secret. Government actors are the masters of conspiracies.
The problem is to distinguish good from bad conspiracies, and plausible from implausible conspiracies (or “conspiracy theories,” as specific conspiracy claims are often called). A bit of economics

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188 Years After the Death of Jean-Baptiste Say

November 12, 2020

Sunday November 15 will mark the 188th anniversary of the death of Jean-Baptiste Say (1767-1832), author of the Traité d’économie politique, whose first edition appeared in 1803. The 4th edition (1819) was translated in English and published as A Treatise on Political Economy (1821). I recently directed a Liberty Fund conference of this great economist, mainly known as the discoverer of Say’s Law (supply creates its own demand), against which John Maynard Keynes more or less conceived his 1936 General Theory of Employment, Interest and Money.
Among his many ideas that preceded today’s economics by one or two centuries, Say explained that the middlemen between the producer and the final consumer play an efficient role by moving goods to where the consumer can

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The Liberal Solution

November 6, 2020

American voters (those who, in the electorate, actually vote) are split into two halves, each of which hates the other and wants to impose its preferences and values on others (assuming that each half is homogeneous). A Twitter follower of mine suggested that breaking up  the country into smaller pieces may be a solution.
It would still not be possible to gerrymander the country into homogeneous parts except with a very large number of pieces. I replied (in not perfect English) with another solution:
The other solution is to shrink the federal government to the point where it doesn’t matter much who is elected–except that voters keep the option of kicking out any elected ruler who turns [out] to be a liar and fraudster (or a dangerous ignorant).
This is the

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Zoom and the Society of Meddlers

November 5, 2020

One potent argument for free markets is that they make individual liberty and autonomy possible. To use an example from Milton Friedman’s 1962 book Capitalism and Freedom, it is unlikely that both the Wall Street Journal and the Daily Worker would have equal access to newsprint if paper were allocated by government instead of markets. Same for other means of communication. But is it true that free markets always work in the impersonal, non-discriminatory way implied by this argument?
One problem is the following. If society is populated by meddlers—busybodies who are intent on interfering with other people’s preferences and choices—even free markets may fail to respond to some individual preferences. Businesses could be led, by their own self-interest, to obey the

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From Democracy to Populist Rallies

November 2, 2020

In his 1945 book On Power, Bertrand de Jouvenel wrote:
Democracy, then, in the centralizing, pattern-making, absolutist shape which we have given to it is, it is clear, the time of tyranny’s incubation.
Sometimes, democracy in America looks a bit like the South American version.
In general, democracy as we know it works differently than what Christopher Achen and Larry Bartels call its “folk theory” version. In their book Democracy for Realists, they describe the folk conception of democracy:
In the conventional view, democracy begins with the voters. Ordinary people have references about what their government should do. They choose leaders who will do those things, or they enact their preferences directly in referendums. In either case, what the majority wants

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Counterfactuals: What If Clinton Had Won in 2016?

October 27, 2020

Some historians like counterfactuals. In his book Escape from Rome (Princeton University Press, 2019), Walter Scheidel analyzes counterfactual scenarios about how the Roman empire could have aborted earlier or could have been later succeeded by another European empire. In general, counterfactuals are inseparable from rational understanding. To identify a cause is to know what would have happened if, ceteris paribus, this cause had been absent.
Take economics, for example. The law of demand—when the price increases, quantity demanded will decrease—implies that without that price increase, the decrease in quantity demanded (on the same demand curve) would not have occurred. Or consider the economic concept of “opportunity cost,” which is the net benefit  (if

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Imports as a “Drag on the Economy”

October 20, 2020

A Wall Street Journal story of last week, “The Verdict on Trump’s Economic Stewardship, Before Covid and After,” makes many good points. It also falls into some popular economic errors. Here is an obvious one:
Trade itself turned out to be a drag on the economy. U.S. export growth slowed starting in 2018 as Mr. Trump’s tariff battles ramped up. The U.S. trade deficit, reflecting an excess of imports over exports, grew to $577 billion in 2019 from $481 billion in 2016.
We are told that imports or a trade deficit necessarily constitute “a drag on the economy.” This elementary error stems from the misunderstanding of a national-accounting identity: GDP = C + I + G + X – M. This identity is often misunderstood as meaning that M (imports) constitutes a “drag” on GDP

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Facebook’s Decision about the Holocaust

October 13, 2020

The vast majority of people, including your humble blogger, have never done any serious research on the Holocaust. In this case, our main reason to believe it happened is that, in most relatively-free countries, anybody who had the opposite opinion has been free to defend it and that, obviously, it did not survive the shock of free debates. For the same reason, most of us non-physicists believe in quantum entanglement.
What will be the consequence of the legal bans on Holocaust denialism (often through so-called “hate laws”) that have spread in so-called free countries (but not in America)? And what will be the results of Facebook’s decision not to allow the discussion of this topic (“Facebook Bans Content Denying the Holocaust on Its Platforms,” Wall Street

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Zico and Ammo under Price Controls

October 8, 2020

In the current shortage economy, why are some goods are in shortage (in the economic sense: none available at the on-going price), others are simply not produced (intensifying the shortage), and some others (I’ll consider the case of ammunition) are produced as needed and sold at higher prices in violation of the states’ “price gouging” laws or the federal Defense Production Act?
To answer this question, it is necessary to understand the economic concept of shortage, as opposed to a blob intuition (I call it “smurfage”) encompassing all situations where somebody does not have something that he would like to have, but not necessarily more than something else.
In another post, I mentioned many ways in which producers—incentivized by consumers who bid up prices

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Zico and Ammo under Price Controls

October 8, 2020

In the current shortage economy, why are some goods are in shortage (in the economic sense: none available at the on-going price), others are simply not produced (intensifying the shortage), and some others (I’ll consider the case of ammunition) are produced as needed and sold at higher prices in violation of the states’ “price gouging” laws or the federal Defense Production Act?
To answer this question, it is necessary to understand the economic concept of shortage, as opposed to a blob intuition (I call it “smurfage”) encompassing all situations where somebody does not have something that he would like to have, but not necessarily more than something else.
In another post, I mentioned many ways in which producers—incentivized by consumers who bid up prices

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A Story of Love and Hate

October 3, 2020

One of my book reviews in the Fall issue of Regulation is about Philip Coggan’s More (The Economist, 2020) and has the same title as this post. In the article, I explain what my love and hate story is about:
I am certainly not the only one to have a love–hate relationship with The Economist, the venerable magazine created in 1843 to defend free trade. At least over the past 10 years, the magazine seems to have become more tolerant of Leviathan, but it remains a source of serious information and it keeps me up to date on what intelligent social democrats think.
I had the same feeling reading Philip Coggan’s new book … The fact that Coggan is a journalist at The Economist may have something to do with this.
What I love in More’s book is explained in the review, and

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COVID Reality: From POTUS to NOTUS

October 2, 2020

There is such a thing as external reality, of which any moral ideal, political goal, or action must take due notice. The revelation today that POTUS has been infected by the coronavirus provides an example. One should want to preserve individual liberty during a pandemic or another natural or man-made catastrophe, but reality must still be acknowledged in a logically consistent way.
Restraints to trade are like pandemics: it is important to understand how they work and what are the trade-offs involved. Trade wars are not “good, and easy to win,” as POTUS tweeted on March 2, 2018. An exception would be if “good” means good for special interests (such as domestic steel or washing machines manufacturers) and for the politicians’ interest. And they are not “easy to

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Impoverishing Economic Illiteracy

September 28, 2020

Last week, for the Nth time, the Wall Street Journal had a story about shortages of Covid-19 tests ( “Covid-19 Testing Is Hampered by Shortages of Critical Ingredient,” September 25). An important topic. The journalist notes:
According to a survey last month by the American Association for Clinical Chemistry, which represents commercial, hospital and public-health laboratories, 67% of labs are having issues getting both reagents and test kits—the highest level since the group started querying labs in May.
Shortages of test kits have persisted for seven months. And there is apparently no explanation in sight. The president of the Riverside Health System in Virginia, Dr. Michael Dicey, echoes the general puzzlement:
This is a big country, and we still haven’t been

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The Failures of the CDC and its Political Bosses

September 23, 2020

Last Friday, the CDC (U.S. Centers for Disease Control and Prevention) changed its guidelines concerning the ways the Covid-19 virus spreads; on Monday, one business day later, the government agency changed again and reverted to its previous guidelines (see “CDC Removes Guidelines Saying Coronavirus Can Spread from Tiny Air Particles,” Wall Street Journal, September 21, 2020). Who will believe these politically-tainted public health bureaucrats?
Mistrust is justified not only by the catastrophic performance of governments in the Covid-19 crisis, mirroring the general failure of central planners in economic history, and the constant turnarounds of public health agencies, but also by the fact that for several decades, public health experts and activists have been

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Is Modern Democracy So Modern and How?

September 18, 2020

The Decline and Rise of Democracy, a new book by David Stasavage, a political scientist at New York University, reviews the history of democracy, from “early democracy” to “modern democracy.” I review the book in the just-out Fall issue of Regulation. One short quote of my review about the plight of modern democracy in America:
[Stasavage] notes the “tremendous expansion of the ability of presidents to rule by executive order.” Presidential powers, he explains, “have sometimes been expanded by presidents who cannot be accused of having authoritarian tendencies, such as Barack Obama, only to have this expanded power then used by Donald Trump.” We could, or course, as well say that the new powers grabbed by Trump will likely be used by a future Democratic president

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The Logic of Protectionist Nationalists

September 16, 2020

It seems that economics and logic were not the strong fields of protectionist nationalists in college—or at least this is the case with the three lieutenant governors who published an op-ed in The Hill at the beginning of the Summer. In the just-published Fall issue of Regulation (the electrons are still hot and the paper version has not yet hit the newsstands), I write:
The USMCA, the authors glowingly wrote, will “increase U.S. annual agricultural exports by $2.2 billion.” This crowing claim comes just a few lines after the statement that “agriculture is what puts food on the table, literally and metaphorically.” They better  take their “metaphorically” very literally because exported agricultural products actually take food away from American tables in order to

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One Thing Rationally Ignorant Voters Don’t Know

September 14, 2020

A Twitter follower of mine just praised president Trump for saving money by donating his salary back to government departments:
“He takes a ZERO salary from the american people. How much did americans paid for Obama, Biden, Pelosi, Schumer, etc?”
Is this a significant saving for “the American people,” that is, American taxpayers? To check that, the voter must do some simple calculations. But even among those voters who can easily find the data sources and do the calculations, “rational ignorance” (as public choice economists say) will prevent most from doing it. Rational ignorance is the fact that the voter remains rationally ignorant of politics because he or she, individually, has no impact. It’s not as when he buys a car: he pays the money and gets the car he

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