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Pierre Lemieux

Articles by Pierre Lemieux

No Mystery in the Current Used-Car Market

4 days ago

Consider a story in Monday’s Wall Street Journal regarding the current market for used cars, “Looking to Buy a Used Car? Expect High Prices, Few Options (May 10, 2021).” Financial press reporters are usually more reliable than their colleagues in the general media because they have a knowledge of supply-demand analysis acquired from economic classes or at least on-the-job training. But it is not always true and finding errors in the financial press is a good exercise and an easy hunt. Similarly, to use a formula from the late Financial Times columnist Samuel Brittan, “businessmen are paid to operate the system rather than understand or expound it” (Capitalism and the Permissive Society, Macmillan, 1973).
The WSJ report contains some useful information provided it

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Saying Just About Anything

13 days ago

Yesterday, I pointed out the flimsiness of President Joe Biden’s economics as expressed in his speech of last week before Congress. What he said in the same speech comparing the First and the Second Amendments does not make more sense. It confirms one conclusion of the economics of politics: for a politician, the cost of saying just about anything or of plain lying is low.
In arguing for still more gun controls, he explicitly invited a comparison between the limits of the First Amendment with those he wants for the Second Amendment:
This [gun control reform] shouldn’t be a red or blue issue. And no amendment to the Constitution is absolute. You can’t yell “Fire!” in a crowded theater.
If there is no fire in a theater, one does not have a First Amendment right to

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Tabula-Rasa Economics in Biden’s Speech to Congress

14 days ago

A good exercise for economics students is to find instances of economic nonsense in a politician’s speech. In his speech of last Wednesday before Congress, President Joe Biden provided good course material. The proverbial Martian landing on Earth would have thought that Biden’s goal was to emulate his immediate predecessor.
Even some elements of style—the interrupted and hanging sentences, and the repeated words, for example—look like an imitation. By the way, render unto Caesar what is Caesar’s: it’s all to the honor of the White House to have reproduced multiple misspeaking events in the official transcript; refreshing honesty, it seems! But this is not what I want to focus on; I will give instead three substantive illustrations of Biden’s “economics.”
On free

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The Slippery Slope of Anti-Discrimination Laws

19 days ago

Non-discrimination can easily come to mean discrimination. Suppose a law bans discrimination against individuals of Group 1. If that means the interdiction of imposing special obstacles or constraints on individuals of Group 1, it is pretty clear what non-discrimination means. But suppose that non-discrimination against Group 1 means giving privileges (in terms, say, of affirmative action) to individuals who are part of that group. The consequence is to directly harm individuals of Group 2, who will resent being discriminated against for non-discrimination reasons. With this slip in the meaning of non-discrimination, discrimination has just been shifted from Group 1 to Group 2: the latter is now discriminated against in the name of non-discrimination against the

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Mrs. Grundy Against Ryan Anderson’s Book

20 days ago

I used to say, half-jokingly, that the ACLU reduced life and freedom to what happened between the waist and the knees. It is true, though, that the venerable association was defending free speech, so I should have said “between the upper lip and the knees.” They were also defending the 4th and 5th Amendments. That kept me a due-paying member for a number of years. The woke movement and its LGBTQ+ wing, which are in many ways the successors of the ACLU,  reduce life to what happens between the chest and the knees (due account being taken of the skin color).

The delisting by Amazon of Ryan Anderson’s book When Harry Became Sally (Encounter Books, 2018) is revealing. As a private company, of course, Amazon has and should have the right to refuse to bake Anderson’s

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That Time Was Different?

25 days ago

Economic theories of politics sound warnings against oppression and tyranny. The prospect may seem abstract and theoretical, but history provides many examples of idealized political leaders who turned out to be self-interested tyrants and betrayed the power that naive citizens had granted them. Here is a telling one.
At the end of the 19th century, many considered Germany to be the most advanced country in the world. It was at the first ranks of public health and the welfare state. Frederic C. Howe, an Ohio politician later associated with the FDR administration, “portrayed Germany as the world’s most advanced scientific state.” Many young economists who founded the American Economic Association in 1885 had studied there. (See Thomas C. Leonard, Illiberal

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The Problem in Bertrand de Jouvenel

27 days ago

At Law and Liberty, Daniel Mahoney has an interesting and often challenging article on Bertrand de Jouvenel. Mahoney, like Jouvenel, tries to reconcile the danger of the state (“the Minotaur” in Jouvenel’s terms) with the ancient philosophical ideal of a “common good” that political authorities are supposed to protect.
My own reading of Jouvenel, specifically of his book On Power, has been mainly classical-liberal or libertarian, although I have emphasized the contradictions that professor Mahoney claims to resolve.
One fundamental problem, which Mahoney does not discuss in his Law and Liberty article, is: What is the “common good”? Can you find many trade-offs or values on which everyone in society agrees? If not, who does the agreeing, who makes the choice?

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Hitler’s Version of MMT

April 15, 2021

I am well aware we should never make any comparison between today’s well-meaning statists and Adolf Hitler. But the latter’s “table talk,” his table monologues to inner-circle guests, recorded by shorthand writers, are sometimes instructive. On October 15, 1941, for example, he explained his monetary theory (Hitler’s Table Talk, 1941-1944, Enigma Books, 1953, pp. 65-66). By happenstance, they show some resemblance with so-called Modern Monetary Theory, perhaps even more in what would likely be MMT’s political consequences.
He starts by confusing a definition and a causal theory: inflation is not caused by money creation but by an increase in prices. His reported statement is:
Inflation is not caused by increasing the fiduciary circulation. It begins on the day when

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A Better Solution: Tax Rocks or Churches

April 9, 2021

The Biden administration may be realizing that a corporate minimum tax is inconsistent with the multitudinous tax preferences that Leviathan himself gives corporations in order that they do what he wants them to do. Here is another idea to finance the $2.3 billion of proposed “infrastructure” or whatever pleases Leviathan: tax rocks instead.
The proposal is succinctly explained in my article “Joe Biden’s Economic Agenda: An Early Appraisal,” in the Spring issue of Regulation:
However, corporations don’t pay taxes any more than, say, rocks do: if the government were to tax rocks, the actual incidence of the tax would fall on some flesh‐and‐blood individuals. In the case of corporations, those individuals are some combination of shareholders, employees, and

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Should Karl Marx Be Canceled?

April 5, 2021

There are good arguments to the effect that nobody should be “canceled”; but if somebody should, it would be Karl Marx. For all we know, he was a bigot and a racist who even used the N-word, something worse for the current dominant culture than what many did who were canceled or will soon be. One of economist Walter Williams’s columns was titled “The Ugly Racism of Karl Marx.”
The main economic argument against the cancel culture is that of John Stuart Mill in On Liberty: freedom of speech is necessary in the search for any sort of truth. Not only do mobs historically and literally lynch unpopular individuals, but the fear of the mob also reduces the incentives to look for the truth and turns many people into wimps. Anybody can make youth errors but they are easily

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Externalities and Our Children

April 1, 2021

The reason why things don’t work properly is that the right people are not in politics. Of course, what you think are the right people is not necessarily what your neighbor thinks, so ultimately the problem is a lack of national unity. What is needed is that we share the same values under democratic political leadership. And even this is not enough. Every voter must spend at least as much time studying every major political issue as he spends buying a new car. Add inclusivity to all this, and the proliferation of externalities would become solvable. If we are one, there cannot be anything external to us (reminder: the main characteristic of externalities is that they are external to the market). With more Alexandria Occasio-Cortezs and more Sidney Powells in

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Privileges and Privacy for the Rulers

March 29, 2021

Recent journalistic investigations revealed that the family and friends of New York governor Andrew Cuomo benefited from nomenklatura privileges at the time when ordinary people had problems getting Covid-19 tests and timely results. These state-privileged people could be tested rapidly, often at home and many times if they wished. Their tests were often rushed to laboratories by state troopers and treated in priority. Liz Wolfe of Reason Magazine writes:
There was limited testing if you thought you’d been exposed, and long wait times if you did manage to nab one of those precious few tests.
But not if your last name starts with a C and ends with an uomo! …
The Albany Times Union reported last night that Democratic Gov. Andrew Cuomo directed the state’s top health

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Public Health Is Not What Many Think It Is

March 24, 2021

Many people seem to think that that “public health” is a scientific white knight. For sure, many medical experts in the public health movement do have real scientific knowledge, but the science stops there. The rest is essentially a political movement.
The Reason Foundation just published my primer on public health: “Public Health Models and Related Government Interventions: A Primer.” A few excerpts:
“In many respects,” says a major textbook of public health, “it is more reasonable to view public health as a movement than as a profession.”
With its wide definition, ideology, and scope, public health is as much as, or more of, a political movement than a field of scientific inquiry. Elizabeth Fee agrees with “the idea that public health is not just a set of

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Individual and Collective Choices in Cars

March 22, 2021

There appears to be something basic that most people in most of human history don’t understand. Or is it me (along with a lot of economists)? Here is the argument.
It would be better if our car were chosen democratically. A democratic referendum could ask voters to choose which car will be available to consumers. (How individual purchases would be financed, either with private money or by government, does not matter at this point.) Assume the voting system is the one you prefer and that the number of choices or write-in options is also what you think is most democratic. The voters are asked to vote for the single brand and model of car to be produced or imported. Each individual has one vote, however “one vote” is defined in your preferred voting system. The

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Did Price-Gouging Laws Increase Covid Deaths?

March 19, 2021

An interesting working paper was published this month by economists Rik Chakraborti (Christopher Newport University) and Gavin Roberts (Weber State University), “How Price-Gouging Regulation Undermined COVID-19 Mitigation: Evidence of Unintended Consequences.”
These price controls created shortages, which, according to economic theory, would have been more severe in the 42 states that already had price-gouging laws on the books or (inexplicably for an economist) rushed to legislate them after Covid hit. The federal Defense Production Act, invoked by Donald Trump, added more biting price controls on pandemic-related supplies (such as personal protection equipment) but is not considered in the Chakraborti-Roberts paper.
The authors used a database of

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Logical and Praxeological Impossibilities

March 17, 2021

The use of logical impossibilities makes rational discourse impossible. A and non-A cannot both be true. Everybody cannot have an income higher than the median or the average. Nobody can consume if nobody produces (including do-it-yourself). Everybody cannot consume more if everybody produces less. You can’t be inclusive without admitting the non-inclusive in your inclusive set. And so on.
There also exist praxeological impossibilities which make any rational discourse about society impossible. I take “praxeology” to mean the logic of human action in relation to individual incentives. For example, you cannot consume something that you want but cannot produce yourself, except if somebody else is motivated to produce it for you through exchange or out of

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The Pandemic in Europe and America

March 13, 2021

The pandemic evolution now appears to be more worrying in Europe than in America, as illustrated by the graph below reproduced from yesterday’s Wall Street Journal (Marcus Walker, Bertrand Benoit, and Stacy Meichtry, “Europe Confronts a Covid-19 Rebound as Vaccine Hopes Recede,” March 12, 2021). In France, for example, after two very long and restrictive (even tyrannical) national lockdowns, ICUs are close to 80% capacity. The Wall Street Journal explains:
Europe’s efforts continue to suffer from the EU’s slowness in procuring and approving vaccines, production delays at vaccine makers, and bureaucratic holdups in injecting available doses.

The “production delays at vaccine makers” are most likely due to the fact that the EU government has not purchased them in

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The President and the Good King Dagobert

March 5, 2021

It is suggested that the good President Biden called off one air strike in Syria after being told in extremis that a woman and a couple of children were near the planned impact (Gordon Lubold et al., “Biden Called Off Strike on a Second Military Target in Syria Last Week,” Wall Street Journal, March 4, 2021), just the opposite of what happened in the movie Eye in the Sky. I suspect that Joe Biden is, in private life, a decent human being. But he has some potential, prefigured in his previous politician’s life, to be a monster in politics. Jason Brennan argues in Against Democracy (Princeton University Press, 2016) that “politics makes us worse.”
But there are two related lessons of the aborted Syria strike that are perhaps less immediately obvious.

The first one

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Is Amazon a Corporate Mother Teresa?

March 3, 2021

Amazon is in many ways a fascinating company and deserves to be defended against most of its mainstream critics. However, it would be simplistic to explain its campaign for a $15 federally-imposed minimum wage by identifying it with a corporate Mother Teresa. Its more obvious reasons to preach for minimum wages are not defendable.
I will not repeat all the arguments against the minimum wage, summarized in a good article by Cato Institute’s Ryan Bourne (“The Case Against a $15 Federal Minimum Wage: Q&A”). My co-blogger David Henderson has also defended many of the standard economic arguments. There exist some disagreements among economists about the employment effect of minimum wages, but they mainly relate to the size and victims of the negative effect (see

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Will Joe Biden Be a Dictator?

February 16, 2021

This might look like a ridiculous question to ask about a soft-looking near-octogenarian who signals his virtue by repeating the inclusiveness mantra. But not so much if you define “dictator” as a political ruler who imposes on the whole population some shared preferences of the minority who brought him or keeps him in power. A more inclusive definition would replace “minority” by “majority short of unanimity.”
Biden was elected by 51% of the American voters. If, to be inclusive indeed, we include the third of the electorate (that is, of Americans of voting age) who did not vote, Mr. Biden’s support shrinks to 34% (51% × 66%). Now, consider that many who voted for him probably did so only or mainly because they thought that his adversary, Donald Trump, was even

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Vaccine Adventures

February 10, 2021

Following up on information that Covid-19 vaccines were available there, I walked into the small Maine pharmacy. I saw nobody inside, not even at the cash register. I continued to the back of the store: nobody manned the two counters of the pharmacist’s hideout. I stood in front of one. After just a few minutes, an employee appeared on the other side.
“Could I see the pharmacist?” I asked.
The pharmacist came.
“I have been told that you have Covid vaccines,” I said.
“We have a waiting list,” she replied.
I asked to be put on it but she would not, or could not, tell me when they were likely to phone me for an appointment. I recognized something like the Canadian health system, under which I lived for decades.
“Is it a matter of days, weeks, months, or years,” I

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The Economics of Violence: A Short Introduction

February 9, 2021

The simplistic declarations about violence heard after the “insurrection” of January 6 at the Capitol invite a reflection on the economics of violence. The economist’s starting point is that an individual uses violence when it is in his personal interest to do so—when, given his circumstances and constraints (including subjective moral constraints or the lack thereof), he finds the net expected benefit of violence greater than the net expected benefit of peaceful exchange for him. This is a positive observation about what is, not a normative statement about what ought to be, an important distinction to always keep in mind.
As the late UCLA professor Jack Hirshleifer argued, we must not overlook “the dark side of the force” (of the force of self-interest), which

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An 18th-Century Revolution, With Current Examples

February 4, 2021

One of the greatest discoveries of the 18th century did not come from physics or astronomy but from the nascent science of economics. It is the theory that if individuals independently and freely pursue their ordinary self-interest, the resulting social order will be efficient, that is, will allow virtually all these individuals—or at least their vast majority, given their starting points in life—to better satisfy their own preferences.
Adam Smith is, among the first modern economists, the one who, in his 1776 The Wealth of Nations, best formulated the idea:
The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only

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The Mittens of Mr. Sanders: Economic Lessons

January 25, 2021

The mittens that Bernie Sanders wore at the inauguration of the new president have been a big hit in the media and in cyberspace. And we now know where the famous mittens came from, although most people miss the economic lessons of the story. The mittens were sown from recycled materials by a Vermont teacher called Jen Ellis, who moonlights in this artisanal hobby (Travis M. Andrews, “The Handwarming Story of How Bernie Sanders Got his Inauguration Mittens,” Washington Post, January 21, 2021).
Remember Adam Smith’s pin factory. In the second part of the 18th century, the division of labor allowed 10 men working together to each make the equivalent of 4,800 pins a day, while a single man working alone could only make 20 at most and perhaps not more than one pin (The

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Biden’s Endearing but Collectivist Inaugural Speech

January 21, 2021

If Donald Trump were not (alas) so ignorant, he would envy the quality of Joe Biden’s inaugural speech pronounced earlier today. But there is a deep question to ask: Why are political rulers so insistent on “unity.” It was the main theme of Biden’s speech, where the word appears eight times. It was also a constant theme with Trump—but muffled as time went on. Remember his remarkable 2016 campaign ad, which is well worth listening to:
I will unify and bring our country back together. … We will be unified, we will be one, we will be happy again.
The reason for the rulers’ obsession is simple: unity makes people easier to rule. If the multitude of individuals with different preferences and circumstances were united like a single individual, governing would be easy:

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Why Is the Vaccine Distribution So Difficult?

January 19, 2021

Imagine if food were allocated and distributed by the government. Wouldn’t this prevent hunger and famines, which have certainly killed more people than epidemics in the history of mankind? Most students of economics should have a ready answer. The opposite approach—that government allocation is more efficient than the anarchy of the market—is illustrated by the story of the Russian official who, shortly after the collapse of the Soviet Union, asked British economist Paul Seabright, “Who is in charge of the supply of bread to the population of London?” (recalled by Philip Coggan in his recent book More).
There is somebody in charge of the supply of Covid-19 vaccines in the United States, and that is precisely the problem. (That both the federal government and

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Total Government à la Irving Fisher Is Not Ideal

January 18, 2021

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”

January 11, 2021

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

January 10, 2021

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

January 7, 2021

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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