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Pierre Lemieux

Articles by Pierre Lemieux

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

12 days ago

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

16 days ago

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

19 days ago

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

23 days ago

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

28 days ago

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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What Is Populism? The People V. the People

September 11, 2020

“Populism” has received many definitions and historical interpretations. Some analysts take it simply as a more active form or stretch of democracy, but this may underplay the existence of very different theories and practices of democracy. One analytically useful definition of populism was given by political scientist William Riker in his 1982 book Liberalism Against Democracy. He defines the essence of populism as a political ideal in which the will of the people ought to be public policy: “what the people, as a corporate entity, want ought to be social policy.”
“The people” and “the will of the people” have long been invoked by populists of the right and populists of the left. Carlos de la Torre (University of Florida) summarizes the history of populism in Latin

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The Failure of Government Command-and-Control

September 7, 2020

If another example was necessary to confirm that government command-and-control allocation of resources is far inferior to market allocation by prices, the continuing shortage of Covid-19 tests could be one. Yesterday’s Wall Street Journal (Scott Patterson and John Simons, “Labs Struggled With Surge in Covid-Testing Demand; How One Made it Through,” September 6) reports:
Labs have competed for limited supplies of plastics and chemicals used to run tests, struggled to understand how federal supplies were allocated, and scrambled to come up with workarounds.
“Scrambled to come up with workarounds” instead of just paying the market price as free enterprises do on a free market.
Not only are private companies dependent on approvals from the FDA or the CDC, but their

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The Sanford Pastor and Individual Liberty

September 6, 2020

From deep Maine comes the story of the pastor of Calvary Baptist Church in Sanford who is reportedly at the source of the Covid-19 infection of 120 people. He held religious services in Sanford and officiated a marriage ceremony in the Katahdin area (of Thoreau fame). He does not encourage wearing masks and many of his flocks didn’t. His sermons apparently have political tones, which are not those of the Scottish Enlightenment. He warns against any future coronavirus vaccines, claiming they will contain “aborted baby tissue.” He believes that only God can control epidemics. Source: “Sanford Preacher Linked to Outbreak Tells Followers to Put Faith in God, Not Government,” WGME, September 2, 2020.
Their website is currently down. Your blogger risked life and limb to

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Repression of Economic Freedom: The Case of Eggs

September 2, 2020

There exist some people, usually called “economists,” who have a theory that explains why price ceilings create shortages. Most other people believe that there is no relation between prices and whether shelves are bare or fully stocked. Within this last category, there are those who insist that prices should be prevented from rising when supply decreases or demand increases.
In a recent post (“Why Shortages Are Not More Widespread,” August 17), I wondered why, despite the “price gouging” laws on the books in more than two-thirds of American states (including virtually all the largest ones), shortages were not more widespread; and why prices of meat, poultry, fish, and eggs had been allowed to rise, thereby preventing shortages of them. I wondered if farmers are

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Economics: Prices, Pri-ces, P.R.I.C.E.S.

August 24, 2020

It is impossible to understand the economy—that is, the economic consequences of individual actions—without understanding the role that prices play or are prevented from playing. This was a crucial scientific discovery of modern times. For that very reason, microeconomic theory used to be called “price theory.” So it is troubling to observe that many of our contemporaries and even many financial journalists ignore that discovery. Even economists tend to forget it when their moral values or virtue signaling is at stake.
An illustration of the problem was given by a Wall Street Journal feature of August 21 titled “Why Are There Still Not Enough Paper Towels?” The role of prices and price controls is nowhere mentioned. The very word “price” only appears twice, mainly

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Bannon’s Nationalist Adventure: Natural Justice?

August 23, 2020

Economists assume that each individual has his own preferences that guide his actions. The moral problem starts when an individual wants to force his preferences on other individuals’ choices. If, for this kind of moral sin, God had wanted to strike Steve Bannon off his horse on the road to Damascus and perhaps punish him with a nervous breakdown, He would have done exactly what He did on August 20: get Bannon arrested by federal agents on a Coast Guard boat.
Bannon is the former executive chairman of Breitbart News and Trump adviser. A believer in providential or natural justice (which is of course something different from economics) might think that Bannon’s arrest was a wake-up call or punishment for his protectionist crimes, that is, conspiring to impose his

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Mencken’s 100-Year-Old Prediction Realized, Twice

August 19, 2020

I raised before the question of the limits of civil conversation, the point at which it is legitimate to just laugh at a stupid idea that lacks any serious rational support or is backed by no argument at all, a point at which perhaps even the ad hominem temptation is not totally forbidden. Call a crank a crank. This is a difficult question but we can at least recognize the frequent benefits of free speech from those who step outside those limits while, of course, accepting the right of others to do likewise. Castigat ridendo mores—Correcting mores with laughter—says the motto of the Comédie-Française, an old theatre and theater company.
For the purpose of this post, let me define a moron as an individual who satisfies one of the two following conditions: he thinks

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Why Shortages Are Not More Widespread

August 17, 2020

Many grocery items are still in shortage in the sense that they are absent from the shelves even if some buyers would be willing to pay more to have them available. The Wall Street Journal asked the question last week, “Why Are Some Groceries Still So Hard to Find During Covid?” The newspaper’s big-data analysis concludes that at least half the grocery shortages persist:
During the peak shopping spree at the end of March, stores ran out of 13% of their items on average. Now, roughly 10% of items remain out of stock, compared with a normal range of 5% to 7% before the pandemic.
The WSJ story does not explain why that happens. It also happens in many other sectors of the economy. A few days ago, for example, the same newspaper had a story titled, “Why Is It Hard to

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Good Government Greed, Bad Economic Freedom!

August 12, 2020

When the Treasury auctions government bonds (more than $100 billion per week these days), its goal is to obtain the highest possible prices (pay the lowest interest rate): that’s why a seller holds an auction. But private individuals are forbidden to hold auctions of goods deemed important in an emergency; they are forbidden to charge what the market will bear. Sanctimonious officials defend it and the populace often applauds.
In the sort of announcement that has become familiar in the current crisis, the Attorney General of Iowa, Tom Miller, announced a second lawsuit against a Brenda Kay Noteboom who had auctioned toilet paper and sanitizing products on eBay, and sold them at prices judged excessive by the state’s “price gouging” law. The majority of American

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Flaaen et al. on Washing Machine Tariffs in the A.E.R.

August 10, 2020

Trump’s early 2018 tariffs on washing machines are costing American consumers $1.5 billion a year in higher prices, even after deducting the meager $82 million in customs revenues. The whole tariff was paid by American consumers in higher prices—in fact, even more than the whole tariff if we consider that dryers, a complement good, also increased in price. The total cost to American consumers amounts to more than $800,000 a year for each of the 1,800 jobs created in America by the tariff.
These are the main results of an econometric study by three economists, Aaron Flaaen (Federal Reserve), Ali Hortaçsu (University of Chicago and NBER), and Felix Tintelnot (same affiliations as the latter). Their article was published in the latest issue of the American Economic

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US Government Punishing Americans Again

August 7, 2020

Many people must be puzzled. What’s the point of international sanctions? Why should the Chinese owners of TikTok or WeChat obey sanctions imposed by the US government? Chinese nationals are not bound to obey American laws and decrees. Here’s the thing: US government’s sanctions are obeyed because they order AMERICANS to stop dealing with the foreign entities officially targeted. The sanctions are perhaps not officially directed towards Americans but it is only because they indirectly target them that they are obeyed; if anybody is prosecuted and goes to jail, it will be Americans.
I explained that in a previous post: “American Sanctions: Why Foreigners Obey,” Econlog, October 1, 2019). The cases of TkiTok and WeChat provide as clear a confirmation as possible. The

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