Tuesday , June 19 2018
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Cafe Hayek

Law, Legislation, and the Trump Administration’s Cruelty

Regular readers of Cafe Hayek are aware of the importance that I attach to the distinction between legislation and law. “Legislation” is the name for the commands issued by the state. “Law” is the name for the rules of behavior that evolve undesigned and unplanned in society – rules that better enable us gregarious human beings to live peacefully along side each other and that are part of the expectations that we carry around in our minds and hearts about the behavior our others as well...

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Quotation of the Day…

… is from page 226 of Douglas Irwin’s superb 1996 book, Against the Tide: An Intellectual History of Free Trade: Consequently, despite the abundant and repeated criticisms that have been made about the theoretical case for free trade, the broad presumption behind free trade has not been substantially undercut, but has remained intact. DBx: Indeed so. And Doug’s point is no less true in 2018 than it was when he published these words in 1996. The reason is not difficult to find: free trade...

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Some Links

Dan Ikenson looks at the numbers and concludes that the negative economic effects of Trump’s tariffs punitive taxes on Americans who buy imports could very well exceed the positive economic effects of the cuts in other taxes. Bret Swanson points us favorably toward research that shows that the conventional means still used to measure countries’ economic performance are not up to adequately capturing the gains bestowed on ordinary people by today’s technologies. (HT David Levey) Here’s my...

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A Protectionist is Someone Who…

… when he encounters a correct and clear description of his protectionist position, or of undeniable implications of that position, accuses the person offering the description or implications of creating a straw man. Yet the free trader need never create a straw man when arguing with the protectionist, for the protectionist’s argument is a spoof on itself. In short, the creator and champion of the straw man is none other than the protectionist himself. He is simply too uninformed or...

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Quotation of the Day…

… is from paragraph 3, Book 1 of Aristotle’s Nicomachean Ethics: [I]t is the mark of an educated man to look for precision in each class of things just so far as the nature of the subject admits; it is evidently equally foolish to accept probable reasoning from a mathematician and to demand from a rhetorician scientific proofs. DBx: It is likewise foolish to demand of an economist involved in public-policy discussions – or, indeed, of anyone who analyzes and proposes government policies...

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A Protectionist is Someone Who…

… believes that adding together numbers all of which are positive yields a sum that is negative. How else do protectionists reach the conclusion that domestic citizens as a whole are made worse off as a result of a series of trades in which each domestic citizen who is party to any of these trades is made better off with each of these trades? (Protectionists who know economic jargon, but who do not really know economics, will respond by shouting “negative externalities!” This shout...

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Quotation of the Day…

… is from page xiv of Martin Wolf’s 2004 book, Why Globalization Works: [Robert] McNamara was a man of ferocious will, personal commitment to alleviating poverty and frighteningly little common sense. By instinct, he was a planner and a quantifier. DBx: Pictured here is McNamara – a perfect poster-boy for the economist’s insistence that intentions are not results, or, alternatively, for Hayek’s fatal conceit. Comments

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An Open Letter to AEI’s James Pethokoukis

Mr. Pethokoukis: You are generally spot-on in your analyses. But when you write that trade deficits “should be viewed as a sign the US isn’t saving enough, especially given future obligations” you unintentionally feed one of the worst myths about trade deficits. It’s true, as you note, that U.S. government budget deficits are a problem. It’s also true that purchases by foreigners of U.S. treasuries increase the U.S. trade deficit. But it is emphatically not true that trade deficits...

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Some Links

Gerald Gayou recounts a fateful decision from the 1970s for the United States government to report what are economically meaningless balance-of-payments numbers. These economically meaningless numbers, however, are ready fuel for the demagoguery of special-interest groups and economically ignorant, power-mad politicians. Bryan Riley clarifies the true nature and consequences of tariffs punitive taxes on fellow citizens who purchase imports. Eric Boehm assembles more evidence of Trump’s...

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Quotation of the Day…

… is from Jim Powell’s November 20th, 1990, essay, “Why Trade Retaliation Closes Markets and Impoverishes People“: Yet despite frequently repeated claims, it is hard to find a single significant case in which trade retaliation or retaliatory threats have forced open a foreign market. Examination of a large number of recent and historical cases of trade retaliation reveals that when retaliation-related market openings did occur, they were small. In many cases, countries responded to...

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