Monday , December 11 2017
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Cafe Hayek

Cafe HayekCafe Hayek – where orders emerge

() TweetTo Cafe Hayek’s much-appreciated patrons: Each year at this time I impose on your generosity by asking you to consider including George Mason University Economics in your end-of-year giving plans.  A financial contribution to GMU Economics – through the Mercatus Center at GMU – helps not only to maintain, but to strengthen, the great bastion of sound economic thinking, teaching, research, scholarship, and public engagement that is uniquely GMU Econ in close and fruitful partnership...

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Wrong Ross

Here’s a letter to the Wall Street Journal: Commerce Secretary Wilbur Ross boasts that the Trump administration will escalate what you describe as its “fight against ‘dumped’ goods” (“The Coming Aluminum War,” Dec. 4).  Well.  Forget that the bureaucratic process for determining if imports are “dumped” in America is notoriously biased in favor of a finding of “dumping.”  Instead note two features of this Trumpian battle. First, because imported goods are inanimate and come to America...

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Bonus Quotation of the Day…

… is from page 91 of Frank Knight‘s 1956 collection On the History and Method of Economics; specifically, it is from Knight’s 1928 essay “Historical and Theoretical Issues in the Problem of Modern Capitalism” (citation excluded; emphasis added): It is not at all to the point to say, as [Werner] Sombart and the Germans regularly do, that no one could be so stupid as not to know the difference between money and wealth, that the ancient fable of Midas is enough to dispel this illusion from...

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Some Links

Alberto Mingardi wrestles with the question of why intellectuals hate free markets: here, here, and here. More broadly, Hal Gershowitz and Stephen Porter lament the demise of the respect for truth.  (HT Steve Hardy) Diane Coyle likes the new biography of the under-appreciated Edith Penrose.  (HT Tyler Cowen) Dan Mitchell explains that the U.S. government’s greed for tax revenues is a royal pain. Tom Grennes continues to fight the good fight against the cronyist and protectionist Jones...

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Quotation of the Day…

… is from page 153 of the late Wesleyan University economic historian Stanley Lebergott’s superb 1984 book, The Americans: An Economic Record: Tariffs proved wonderfully attractive to those who benefitted from them.  Farmers who grew wool were protected against the harsh wind of foreign competition.  So were planters who grew cotton.  Both thereby increased their profits.  Capitalists and workers in the iron industry, as in pottery, coal, vinegar, candy, and paper production, enjoyed...

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Gulled by Pronouns

Here’s a letter to my frequent, pro-economic-nationalism correspondent Nolan McKinney: In your most recent e-mail you accuse me of being “gullible” for endorsing Milton Friedman’s plea for the United State to practice unilateral free trade – that is, to practice free trade regardless of the trade policies of other governments.  Your accusation, however, rests on the mistaken premise that the chief economic reason for endorsing a policy of unilateral free trade is that such a policy would...

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Quotation of the Day…

… is from pages 73-74 of the 40th Anniversary Edition of Milton and Rose Friedman’s classic 1962 volume, Capitalism and Freedom: I believe that it would be far better for us to move to free trade unilaterally, as Britain did in the nineteenth century when it repealed the corn laws…. There are few measures that we could take that would do more to promote the cause of freedom at home and abroad.  Instead of making grants to foreign governments in the name of economic aid – and thereby...

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Bonus Quotation of the Day…

… is from page 178 of the 2007 Definitive Edition (Bruce Caldwell, ed.) of F.A. Hayek’s classic 1944 volume, The Road to Serfdom: Perhaps the most alarming fact is that contempt for intellectual liberty is not a thing which arises only once the totalitarian system is established but one which can be found everywhere among intellectuals who have embraced a collectivist faith and who are acclaimed as intellectual leaders even in countries still under a liberal regime. DBx: People –...

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Trying to Create Out of C. Smith an A. Smithian

Here’s a follow-up letter to Mr. Chris Smith who wrote in response to my earlier letter that he didn’t get the relevance of my analogy. Mr. Smith: Thanks for your reply.  I apologize for being unclear in my earlier letter to you.  Let me here try a different approach. Suppose that you’re given the opportunity to select Option A or Option B.  If you select Option A, you get an amount of money equal to the full value of Bill Gates’s net worth ($90 billion).  You can take your $90 billion...

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Money Is Not Wealth

Below is a letter to a college sophomore, Chris Smith, from Indiana.  This young man tells me that he once, when still in high school, “naively believed in free trade” but “now see[s] the numerous weaknesses” in the case for free trade.  I’m dismayed to report that he says also that he “regularly read[s]” Cafe Hayek – a fact that tells me that I have in this blog done a poor job explaining the case for free trade. Mr. Smith: Thanks for your e-mail.  You ask why I deny that we Americans...

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