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Tag Archives: Adam Smith

Quotation of the Day…

… is from my emeritus colleague Vernon Smith’s profound 2002 Nobel Prize lecture, “Constructivist and Ecological Rationality in Economics”: People are not required to be selfish; rather the point of [David Hume, Adam Smith and other of] the Scottish philosophers was that people did not have to be good to produce good. Markets economize on information, understanding, rationality, numbers of agents, and virtue. DBx: Yes. And when anything that is scarce is economized on, it is used to...

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Some Links

“The World Needs Innovators, Not Lectures From Teens, to Solve Climate Change.” Speaking of the hysterical visions and outlandish fears of the likes of St. Greta of Stockholm, Mark Perry offers this wise quotation from Rich Lowry. Jeffrey Tucker writes that maybe it’s a good thing that most people believe that politicians are corrupt. A slice: Private-sector markets are fixable in a way that politics is not. This is precisely what makes these convoluted times of political upheaval so...

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Some Links

My intrepid Mercatus Center colleague Veronique de Rugy rightly bemoans Trump’s trade lunacies. A slice: The president’s profound misunderstanding of what victory looks like is particularly visible in his multifront attack on trade and globalization. All in the name of putting America first, he withdrew from the Trans-Pacific Partnership, treated our trade partners like enemies, forced a renegotiation of NAFTA with no clear idea of whether the new deal (the United States-Mexico-Canada...

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Rationalizing Rank Ignorance

Here’s a letter to the New York Sun: Editor: In defense of Trump’s tariffs, Ira Stoll accuses tariff critics of failing “to consider fully some significant aspects of the story” (“Why Democrats Fail To Attack Trump’s Tariffs,” Sept. 9). This accusation is unwarranted. Serious critics of Trump’s trade policy justly challenge his tariffs by evaluating the arguments for these tariffs offered by Trump himself. Contrary to what readers likely infer from Mr. Stoll’s column, Trump doesn’t sell...

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Bonus Quotation of the Day…

… is from page 280 of Kristian Niemietz’s 2019 book, Socialism: The Failed Idea That Never Dies (original emphasis; reference deleted): Before the advent of industrial capitalism, virtually the whole of the world’s population lived in abject poverty. Before the mid nineteenth century, it would not even have made sense to measure poverty, because such a measure would not have shown anything interesting. Its long-term average would have been close to 100 per cent, and it would only have...

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Donald Trump versus Adam Smith

The three quotes above give two opposite views of a country’s trade deficit. According to the first two, by Donald Trump, the U.S. trade deficit is a major problem that must be fixed. According to the third quote, by 18th-century economist Adam Smith, the idea of a balance of trade is absurd. Who’s right? I won’t keep you in suspense. President Trump is wrong and Adam Smith is right. But what matters crucially is why Trump is wrong and Smith is right. First, the U.S....

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Bonus Quotation of the Day…

… is from page 133 of the 2000 Liberty Fund edition of Frederic William Maitland’s profound 1875 dissertation at Trinity College, Cambridge, A Historical Sketch of Liberty and Equality (emphasis added): The main argument of the Wealth of Nations remains to this day a valid reason for leaving trade free, and the main argument is that interference only makes bad worse. This has been forcibly repeated by post-Malthusian economists, who have argued that our present system of private...

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Quotation of the Day…

… is from page 645 of Armen Alchian’s and William Allen’s Universal Economics (2018; Jerry Jordan, ed.); this volume is an updated version of Alchian’s and Allen’s magnificent earlier textbook, University Economics (original emphasis): The [minimum-wage] law specifies only the money wage component. The unintended consequence is that to get or retain jobs at the higher imposed wage rates, job applicants will tolerate less pleasant and stricter working conditions, less vacation, less...

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Some Links

Jeffrey Tucker wisely counsels that to fight hate, celebrate capitalism. Jeff Jacoby exposes the fallacies that lead people to believe that human population growth is a scourge. While I disagree with some parts of this Hill essay by AEI’s Desmond Lachman, it’s very much worth a read. And here’s Eric Boehm on more of the idiocy of Trump’s protectionism. Pierre Lemieux examines through Adam Smithian lenses Trump’s cavalier assertion about trade wars. The great Richard Vedder offers yet...

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Are Trade Wars “Good and Easy to Win”?

“Trade wars are good and easy to win,” President Donald Trump famously tweeted on March 2, 2018. (His circumstantial qualifications do not matter because they are based on a trade-balance fetish.) Anybody with reasonable knowledge, or perhaps even just a good intuition, of economic theory and history would beg to differ. Adam Smith knew something about economics and economic history. In fact, he knew more than nearly all his contemporaries and more than Mr. Trump and...

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