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Tag Archives: subsidies

Quotation of the Day…

… is from page 101 of Randy Holcombe’s insightful 2018 book, Political Capitalism: How Economic and Political Power is Made and Maintained (footnote deleted): Tariffs create a trade barrier that raises the cost of imports and therefore allows domestic sellers to charge more – a transfer from buyers to the sellers of domestic goods who are protected by the tariff that raises the price of competing imports. Tariffs interfere with voluntary market exchanges, reducing productivity and...

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Bonus Quotation of the Day…

… is from page 79 of my former professor Randy Holcombe’s 2018 book, Political Capitalism: How Economic and Political Power is Made and Maintained: In the abstract, people can hope that the government always acts in the public interest, but even casual observation indicates that the elite who make public policy do so with their own interests in mind. Externalities exist when the activities of some impose costs on third parties. Because government can force some to bear the costs of...

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Quotation of the Day…

… is from page 109 of my late Nobel laureate colleague Jim Buchanan’s 1980 paper “Rent Seeking and Profit Seeking” as this paper is reprinted in volume 1 of The Collected Works of James M. Buchanan: The Logical Foundations of Constitutional Liberty: Rent-seeking activity is directly related to the scope and range of governmental activity in the economy, to the relative size of the public sector. DBx: And, therefore, the larger the government, the larger are rent-seeking’s distortions and...

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Some Links

Richard Ebeling rightly warns of the new totalitarians. A slice: Theirs is a collectivism of social class, race, and gender. They are the ideological offspring of the communists and fascists of the 20thcentury. They blend together a synthesis of Marxism and Nazism into the new world of political correctness and identity politics. They view themselves as radical “progressives,” determined to overthrow and abolish the capitalist, racist and sexist sins of the past, and put in its place an...

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Proponents of Industrial Policy and Protectionism Know No Economics

In my latest column for AIER I do my best to expose more of the economic fallacies that infect the case made by Daniel McCarthy and other ‘conservative nationalists’ against a policy of free trade. A slice: From Adam Smith forward, economists and market liberals have explicitly addressed – patiently, repeatedly, and in countless different ways – the incessant protectionist assertion that the home country will suffer if it doesn’t impose tariffs on imports from countries whose governments...

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My Intrepid Mercatus Center Colleague Veronique de Rugy

I’m often asked why I regularly refer to Veronique de Rugy as “my intrepid Mercatus Center colleague.” The answer is that she is just that. Never have I met anyone as dogged as is Vero at exposing the economic fallacies and factual errors that are always to be found at the root of cronyism and fiscal irresponsibility. My moniker for Vero occurred to me about five or six years ago when she, with remarkable determination, led the charge that nearly succeeded in permanently plugging that...

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Let’s Really Have Political Realism

Here’s a comment left at the site Law & Liberty: Among the justifications that Daniel McCarthy offers for protective tariffs is the claim that tariffs can be used to keep prices of goods over time lower (“Economic Nationalism as Political Realism,” Jan. 22). For example, if today’s low-priced U.S. imports bankrupt American firms, foreign firms tomorrow will gain monopoly power which they’ll then exploit to raise prices to monopolistically high levels. By preventing predatorily low...

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A Simple Argument Against Ex-Im

Ex-Im’s mandate in financing American exports has been reconducted by Congress with the blessing of President Donald Trump, who first appeared to be against but changed his mind because, apparently, exports are important and cannot be left to the market. The law’s intigators won by “tucking it into a large must-pass spending package,” to use the terms of the Wall Street Journal, making sure that it would not be debated by the glorious representatives of the people....

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Quotation of the Day…

… is from page 139 of Peter Bauer’s penetrating 1969 article “Dissent on Development,” as it is reprinted in the original 1972 edition of Bauer’s invaluable collection of the same name (Dissent on Development): The collection of resources for government financed or sponsored investment often has a substantial disincentive effect on saving, effort and enterprise, because of the taxation or controls imposed for this purpose. These disincentive effects can easily offset, or more than...

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Quotation of the Day…

… is from page 170 of my colleague Richard Wagner’s superb 2017 intellectual biography of Jim Buchanan, James M. Buchanan and Liberal Political Economy (typo corrected): This [classical] liberal system means there are no sheltered positions in society where a prosperous enterprise can be protected from competition that would erode that wealth. The creator of a successful business cannot call upon political authorities to prevent competition from other enterprises. For a successful...

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