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Bonus Quotation of the Day…

… is from page 210 of the 1969 Revised Edition of Lon Fuller’s profoundly important 1964 book, The Morality of Law:

Furthermore, if the law is intended to permit a man to conduct his own affairs subject to an obligation to observe certain restraints imposed by superior authority, this implies that he will not be told at each turn what to do; law furnishes a baseline for self-directed action, not a detailed set of instructions for accomplishing specific objectives.

DBx: Far too many people ignore the vital distinction between “thou shalt not” and “thou must.” A free society is one in which the governing authority relies overwhelmingly on “thou shalt not”; the government in such a society seldom commands its citizens to perform particular actions. Yet both kinds of rules are called “law,” and this name-sharing of two categorically different kinds of rules causes dangerous confusion.

If the government largely limits itself to enforcing “thou shalt not” rules, most of the particular social and economic arrangements that arise in society are spontaneous. They are not planned or intended or even predictable in their particulars. Yet individuals with a legal-positivist mindset – and individuals who refuse to think carefully about government and law – will nevertheless mistake that which emerges under a set of “thou shalt not” constraints as being every bit as much the conscious product of government as would be the arrangements that emerge from a bevy of “thou must” commands. From this mistake it’s a short step to the faulty, fatal conclusion that society and economy are necessarily the conscious products of government decision-making. The distinction between “thou shalt not” and “thou must” is lost.

It would be bad enough if the “thou must” commands came to be treated as ethically and epistemically identical to the “thou shalt not” restrictions. Yet in fact, when this distinction is lost, the “thou must” commands inevitably come to be seen as superior, ethically and epistemically, to the “thou shalt not” commands. The thinking seems to be that if all social and economic outcomes are the product of government design and intent, then government should be serious about exercising its powers, which means abandoning the lazy approach of enforcing only “thou shalt not” constraints and becoming an active issuer of “thou must” commands.

There’s a faux sophistication that individuals who miss this distinction fancy themselves as possessing. But in reality such individuals are social creationists, no more correct or insightful in their views about society than are creationists who deny the reality of natural selection in the biological world.

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Some Links

The Editorial Board of the Wall Street Journal reports on the cronyism that infects the U.S. government’s protection of American steel producers. Two slices:

President Biden and the self-styled populists in Congress claim to represent the common man, but what they actually stand for is corporate and union rent-seeking. Cleveland-Cliffs CEO Lourenco Goncalves last week exposed the contradiction as he crowed about killing Nippon Steel’s bid to buy U.S. Steel.

“I’m not surprised. We have been in total contact with the administration, so I know what’s going on,” Mr. Goncalves boasted to Bloomberg News after Mr. Biden on Thursday issued a statement opposing Nippon Steel’s $14.1 billion acquisition. It’s nice if you know the king.

Mr. Goncalves added: “The contact is about making it abundantly clear between me and [United Steelworkers union president] Dave McCall that the only buyer the union accepts for the union-represented assets is Cleveland-Cliffs.” The United Steelworkers, which represents workers at Cleveland-Cliffs and U.S. Steel, has backed a merger between the American steel giants.
…..
Mr. Goncalves also said he’ll scoop up U.S. Steel’s assets on the cheap after the Nippon deal collapses. U.S. Steel’s stock price has fallen 16% since Mr. Biden issued his statement. Congratulations, Mr. President, for devaluing an American business and rewarding the swampiest example of corporate-insider political favoritism in many a year.

Arnold Kling reflects insightfully on Steve Levitt’s insightful reflections on modern mainstream economics.

Randy Holcombe offers a thought about the politics of inflation.

Here’s the abstract of a new working paper by Melanie Wallskog, Nicholas Bloom, Scott Ohlmacher, and Cristina Tello-Trillo:

Combining confidential Census worker and firm data, we find three key results. First, employees at more productive firms earn higher pay at all earnings levels. Second, this pay-productivity relationship strengthens with seniority, doubling from an elasticity of 0.07 for pay on productivity for the median-paid employee to 0.15 for the top-paid employee. Consequently, more productive firms have higher within-firm inequality. Our data suggests this is driven by their greater adoption of aggressive performance-pay bonus and management schemes. Finally, the magnitude of this pay-performance slope suggests rising productivity can explain 40% of the rise in within-firm inequality since 1980.

[DBx: There are several take-aways from these findings, not the least important of which is that policies that protect less-productive firms at the expense of more-productive firms reduce pay at all earnings levels. People who are tempted to embrace protectionism as a means of increasing worker pay might wish to consider this reality.]

Mike Munger applauds how apps such as Uber commoditize excess capacity.

The Wall Street Journal‘s Editorial Board writes about Murthy v. Missouri, the censorship case to be heard today by the United States Supreme Court. Two slices:

In Murthy v. Missouri, states and individuals whose posts on Covid were censored sued federal officials for violating the First Amendment. Lower courts ruled for the plaintiffs based on copious evidence that government officials pressured social-media platforms to suppress their posts.

Former White House director of digital strategy Rob Flaherty and Covid adviser Andy Slavitt flagged posts for removal to social-media employees and berated them if they didn’t follow orders. Facebook is “hiding the ball” on its efforts to combat vaccine “borderline content,” Mr. Flaherty wrote in one email.

Mr. Flaherty also blamed Facebook for the Jan. 6, 2021, riot and said it would be blamed for Covid deaths if it didn’t increase censorship. “I care mostly about what actions and changes you are making to ensure you’re not making our country’s vaccine hesitancy problem worse,” Mr. Flaherty wrote.

Officials reinforced these private lashings with public threats. Former White House press secretary Jen Psaki said platforms could face “legal consequences” if they didn’t censor vaccine “misinformation.” White House officials floated antitrust action and eliminating Section 230 liability protections.

…..

A bedrock constitutional principle holds that government can’t coerce private parties to do what government cannot do on its own. The High Court on Monday can reaffirm this emphatically.

Writing at Free Press, Joe Nocera reminds us of the wisdom – suddenly and tragically forgotten in early 2020 – of the late epidemiologist Donald A. Henderson. Two slices:

In 2006, ten years before his death at the age of 87, the legendary epidemiologist D.A. Henderson laid out a plan for how public health officials should respond to a major influenza pandemic. It was published in a small journal that focused mainly on bioterrorism—and was quickly forgotten.

As it turns out, that paper, titled “Disease Mitigation Measures in the Control of Pandemic Influenza,” was Henderson’s prescient bequest to the future. If we had followed his advice, our country—indeed, our world—could have avoided its disastrous response to Covid.

This month marks the four-year anniversary of lockdowns on a global scale. And though the pandemic has passed, its consequences live on. The lockdowns embraced by the U.S. public-health establishment meant that millions of young people had their education and social development disrupted, or left school for good. Mental health problems rose substantially. So did incidents of domestic violence and overdose deaths.

It didn’t have to be that way.

Last year, Dr. Francis Collins, the director of the National Institutes of Health during the pandemic, said at a conference, “If you’re a public health person, you have this narrow view of what the right decision is. . . . you attach infinite value to stopping the disease and saving a life. You attach zero value to whether this actually totally disrupts people’s lives [or] ruins the economy. This is a public health mindset.

Dr. Anthony Fauci, the chief medical adviser to the president during much of the pandemic, was asked in the fall of 2022 whether he regretted his advocacy of lockdowns. He said, “Sometimes when you do draconian things, it has collateral negative consequences. . . on the economy, on the schoolchildren.” But, he added, “the only way to stop something cold in its tracks is to try and shut things down.”

It’s no secret that Fauci’s draconian recommendations did nothing to stop the virus, nor did closing schools save children’s lives. And the idea asserted by Collins and Fauci that public health is about a single metric—stopping a disease, no matter the unintended consequences—was an inversion of the principles espoused by D.A. Henderson.

…..

Second, Henderson believed in targeted protection for the ill and medically vulnerable, and that overreacting, in the form of shutting down society, would bring enormous harm that could be worse than the virus.

[DBx: I hope against hope that everyone who dismissed the Great Barrington Declaration as unscientific, baseless, ideological, or otherwise unwise have rethought their opposition and, at least in their hearts, have come to regret their serious error.]

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Quotation of the Day…

… is from page 37 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and important 1937 book, The Good Society:

The generation to which we belong is now learning from experience what happens when men retreat into a coercive organization of their affairs. Though they promise themselves a more abundant life, they must in practice renounce it; as the organized direction increases, the variety of ends must give way to uniformity. This is the nemesis of a planned society and of the authoritative principle in human affairs.

DBx: Yes.

There is much that is wrong, positively and normatively, with schemes to replace market-direction of resources with political-bureaucratic direction. Not the least of these evils is that the more we rely for resource allocation on politicians and bureaucrats, the fewer are the individual peaceful ends that can in practice be pursued with any prospect of success. To turn the responsibility for allocating resources over to government is to compress and narrow the set of human ends that are possible to pursue – and, also, of the human means that are possible to use in pursuit of those ends that can be pursued. Ends and means favored by the planners are imposed; ends and means preferred by the plannees but not among those favored by the planners are suppressed – all, of course, for the good of the plannees (so insist the planners).

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Bonus Quotation of the Day…

… is a short e-mail that was sent to me by my Nobel-laureate emeritus colleague, Vernon Smith, after he read my letter of this morning; I share this e-mail here with Vernon’s kind permission:

The pathway for women is to oppose and seek to remove the obstructions that limit their earnings, not find political solutions that override the market which is everybody’s friend.

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Here’s a letter to the Wall Street Journal:

Editor:

Prof. Anne York insists that much of the gender pay gap is caused by economically unjustified discrimination, insufficient employment opportunities for women, and lack of information (Letters, March 17). If she’s correct, Prof. York – herself flush with this valuable information – has identified a golden opportunity for profit. She can start a business and, by paying underpaid women a bit more than they currently earn, attract teams of productive workers at wages that would yield her a handsome profit as she raises women’s earnings. She would also demonstrate to other entrepreneurs the value of hiring underpaid women and simultaneously bankrupt the knuckle-dragging employers who, stubbornly refusing to pay women what their labor is worth, would be unable to adequately staff their firms.

Prof. York might protest, confessing to have no business skills. No problem. Now that she’s revealed in the pages of America’s premier business publication the reality of an economically unjustified pay gap – the existence of a bonanza of underpriced assets – the profit-hungry readers of your pages, many of whom are quite skilled at business, will surely leap to take advantage of this outstanding profit opportunity.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Some Links

The great Texas A&M economist Tom Saving has died.

My GMU Econ colleague Pete Boettke writes about our late colleague Jim Buchanan and Buchanan’s archives. Here’s Pete’s conclusion:

In August 2012, I attended a lecture by my former professor – James M. Buchanan.  At the time he was 93 and would turn 94 that October.  After his talk, we were casually chatting and I simply asked him, “Jim, how are you doing?”  Never one for small talk, he just looked at me and said, “Well, I am not happy with that paper I just gave.  I need to go home and do some revising.” With that he walked away to no doubt go home and do some revising.  93 years old, still thinking, still working on his craft as a writer, still revising to improve his thinking and his prose.  This unquenchable thirst for knowledge, and his lifelong learning is evident throughout this archive.  He was an inspired thinker, and an inspiring teacher, scholar, and academic entrepreneur. And he offers a unique window into our discipline that is so fascinating to peer through.

Pat Lynch writes that the late, great Gordon Tullock would find the new series Slow Horses, starring Gary Oldman, agreeably realistic. A slice:

Those bureaucratic wars, skillfully crafted by creator Mick Herron, are important in explaining the appeal of the show. All espionage tales have the great inherent attraction of peeking into the shadowy world of cloak and dagger and witnessing the deadly battles between competing systems of governance. But Slow Horses has something else. Intelligence and security agencies are large impersonal bureaucracies just like the DMV. Herron has humanized his characters and placed them in a world where individuals are susceptible to both traitorous temptations and the basic human instincts of self-interest and ambition that play out in the politics of bureaucratic institutions—whether it’s getting the corner office or murdering a loyal agent to cover up a scandal. At a time when the West faces multiple security threats from terrorists, dictators, hackers, and extremists and is also experiencing explosive growth in unchecked bureaucratic autonomy and authority, Herron has made the well-worn spy thriller even more relatable to his audience.

Jennifer Huddleston warns against letting E.U. bureaucrats design American tech. A slice:

Many Americans first experienced the impact of the European regulatory approach in May 2018, when they started noticing more click-through requirements to accept cookies and updated privacy policies. All those annoying security pop-ups and repeated notice of updates to terms of service on websites were the direct result of General Data Protection Regulation (GDPR), an E.U. policy that required companies to adopt specific practices around interactions with user data and users’ rights related to those data.

Gary Galles describes what property taxation and rent control have in common with each other.

The Wall Street Journal reports – surprise! – that New York City’s ‘crackdown’ on AirBnBs is causing hotel rates to rise. A slice:

Several major destinations, facing housing shortages, are watching the fallout. Christian Klossner is executive director of New York City’s Office of Special Enforcement, which oversees the short-term-rental regulations. His said his office’s main goal is to uphold laws that protect housing, as well as residents and travelers.

In addition to hotels, one clear winner in the Big Apple battle is New Jersey, where Airbnb units in Manhattan-adjacent Jersey City and Hoboken are attracting travelers.

Should Americans who drink tea now worry?!

People who need emergency health care in the U.K. should indeed worry.

Australians are now a bit more free and have higher purchasing power.

David Henderson has a Substack; it’s titled “I Blog to Differ.”

Vinay Prasad warns against the fear-mongering now afoot about long covid in children.

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Quotation of the Day…

… is from page 142 of F.A. Hayek’s 1941 Liberal Review essay, “The Economics of Planning,” as reprinted as chapter four of the 1997 collection, edited by Bruce Caldwell, Socialism and War:

The second important point which is often not realized is that what is the best method of producing a given thing is not simply a technical fact. It depends on what amounts of the various skills, implements, and materials happen to be available at a given time and place. There is no unique answer to the question: What is technically the best way of supplying the people of Oxford with boots or the people of Australia with cameras? There are any number of possible combinations of resources which might produce the desired result; and even if evidently wasteful ones are ruled out there remain a very large number of ways, each of which might be best in different circumstances. The presence or absence of all the different skills, implements, and materials and all their potential uses, not only at the place in question but in every other place from which the product might be brought, as well as the expenditure of transporting them, have to be taken into account. To choose intelligently here it is not sufficient to be informed about available supplies in generic terms, as they can be easily summarized in statistics. Small differences in quality, in the state of preservation or in the location of implements or materials, or of the skill and number of the people available at the particular time and place can be of greatest importance. All this would have to enter the master plan – as it enters into the calculations of the entrepreneurs in our present [pre-war] economy.

DBx: The reality described here by Hayek cannot be emphasized too often, for it’s a reality that is universally overlooked not only by advocates of full-on socialism, but also by advocates of industrial policy. These advocates of replacing market-directed allocations of resources with political or bureaucratic allocations of resources have no good answer to this question: From where will the government planners get the information and knowledge they must have if their allocations are to be superior to the pattern of resource allocation that arises from the market-governed price system?

I suspect that industrial policyists ignore this question because they presume that resource allocation is as simple a business in reality as it appears in textbooks and in the press releases of politicians. The presumption apparently is that there are a handful of industries (such as “manufacturing,” “services,” and “agriculture”), a handful of inputs (such as “labor,” “capital,” and “land”), and a handful of types of economic actors (such as “consumers,” “business,” “labor,” and “government”) each of which reveals itself with sufficient fullness in statistics. The forces believed to give rise to these statistics are then thought to be easily manipulated in order to rearrange the statistical outcomes so that these become more pleasing to the industrial policyists.

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Again, Trade Is a Technique of Production

Here’s a letter to the Wall Street Journal:

Editor:

Andrew Duehren reviews some of legal and political problems plaguing the Trump-Biden rejection of open global markets (“On TikTok and Steel, U.S. Retreats Further From Free-Trade Consensus,” March 16). Also worthy of mention is the economic ignorance that fuels this rejection. When Biden national security advisor Jake Sullivan complained, Mr. Duehren’s words, that “freewheeling global trade helped lower consumer prices, but at the expense of U.S. workers,” one wonders why we never hear Messrs. Sullivan and Biden (and Trump) complain about freewheeling innovation. After all, not only does innovation lower consumer prices, it regularly destroys far more particular jobs than does trade.* In a 2015 study (updated in 2017) economists Michael Hicks and Srikant Devaraj found that “almost 88 percent of job losses in manufacturing in recent years can be attributable to productivity growth” rather than to imports.**

As the economist David Friedman points out, trade is a technique of production. We can produce, say, more steel here at home directly, or we can produce additional steel by growing more corn, put that corn into machines called “cargo ships,” and allow the cargo ships to transform that corn into steel that’s unloaded on our docks. Protectionists’ proposals to obstruct trade are proposals to obstruct the use of what are often the lowest-cost techniques of production. How such obstruction enriches the nation is anyone’s guess.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

* Donald J. Boudreaux, “Trade Is Not a Job Killer,” New York Times, March 28, 2018.

** “The Myth and the Reality of Manufacturing in America,” Ball State University, April 2017.

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Some Links

Scott Atlas, Steve Hanke, Philip Kerpen, and Casey Mulligan have just published an excellent study the title of which is descriptive: “COVID Lessons Learned: A Retrospective After Four Years.” Three slices from the Executive Summary:

Lesson #1: Leaders Should Calm Public Fears, Not Stoke Them

Conventional wisdom pre-COVID was that communities respond best to pandemics when the normal social functioning of the community is least disrupted. During COVID, the public health establishment followed the opposite principle: they intentionally stoked and amplified fear, which overlaid enormous economic, social, educational, and health harms on top of the harms of the virus itself.

Non-COVID excess deaths from lockdowns and societal panic are estimated at about 100,000 per year in the United States and zero in non-lockdown Sweden.

Lesson #2: Lockdowns Do Not Work to Substantially Reduce Deaths or Stop Viral Circulation

Most lockdown measures were realized around the time when hospitalizations peaked, which due to the time- lag between infection and severe disease, necessarily occurs well after the infective peak. They were timed to claim credit for declining waves, but rarely had any discernible causal impact.

A comprehensive literature review was conducted by Herby, Jonung, and Hanke and published in an authoritative, peer-reviewed book by the Institute of Economic Affairs in London. The Herby-Jonung-Hanke Johns Hopkins research found: “lockdowns in the spring of 2020 had a negligible effect on COVID-19 mortality. This result is consistent with the view that voluntary changes in behavior, such as social distancing, did play an important role in mitigating the pandemic.”

A much wiser strategy than issuing lockdown orders would have been to tell the American people the truth, stick to the facts, educate citizens about the balance of risks, and let individuals make their own decision about whether to keep their businesses open, whether to socially isolate, attend church, send their children to school, and so on.

…..

Lesson #9: Protect the Most Vulnerable

One of the most striking features of the earliest COVID morbidity and mortality data was a profound differential in risk between the old and the young.

When specific populations are known to have a high risk for death or serious illness, a strategic use of resources to heighten their protection and awareness should be employed. Specific steps might include: prioritized testing to nursing homes and senior centers; high-frequency testing of all nursing home staff and visitors; extra infection control standards in nursing homes, in alliance with hospitals; frequent monitoring and alert outreach to high-risk seniors in communities and nursing homes when infections are high.

Jay Bhattacharya talks with Canadian physician Kulvinder Kaur.

Martin Kulldorff tweets:

On Monday 3/18, the Supreme Court will hear our 1st amendment case on whether the government may pressure social media to censor content they don’t like.

About this case that the Court will hear on 3/18, George Will writes “government has no business bullying social media platforms on speech.” A slice:

Biden administration officials from the White House, FBI, Centers for Disease Control and Prevention and other federal entities persistently contacted social media platforms in attempts to influence the platforms’ dissemination of various posts expressing views the government disliked or that it mincingly deemed “problematic.” Many concerned the pandemic and involved supposed “disinformation” (about lockdowns, masks, vaccines, etc.) that turned out to be not merely debatable but true.

In 2023, the U.S. Court of Appeals for the 5th Circuit upheld a district court’s injunction against certain federal officials coercing, or too powerfully importuning, social media platforms to delete or otherwise disfavor certain constitutionally protected speech. The Biden administration asked the Supreme Court to disallow these “unprecedented limits on the ability of the President’s closest aides to use the bully pulpit to address matters of public concern” and on the FBI’s and CDC’s abilities to perform their missions.

Something certainly is unprecedented. Government attempts to shape the discourse on social media platforms are as new as the platforms. But government attempts to enlarge its reach are as old as government.

Clarity is elusive concerning when attempts at “persuasion” become “coercive.” And when “jawboning” or “cajoling” become impermissible pressure on the platforms. The common problem is government pressure to make the platforms’ “content moderation” policies — deciding what and who they will delete or downgrade — reflect government’s preferences.

Social media platforms are private entities that express, through those policies, their editorial preferences. When government interferes with these, the platforms suffer a First Amendment injury.

Vance Ginn explains that “taxing unrealized capital gains on property, stocks, and other assets is not just a bad idea, it’s an economic fallacy that undermines economic growth and personal liberty.” A slice:

The tax undermines personal liberty by infringing on individuals’ property rights and financial privacy. It gives the government unprecedented control over people’s assets and creates a powerful disincentive for individuals to save and invest. This is particularly troublesome in an era of increasing government surveillance and intrusion into private affairs.

Scott Bessent makes the case that Sam Bankman-Fried’s arrogant altrusism is no justification for a lighter prison sentence. Two slices:

He acted as if he were above the law. He played fast and loose with customers’ assets because he thought he knew better. He lied to customers about the safety of their assets, lent them to himself to speculate with in his hedge fund, and concealed the resulting losses by “borrowing” still more from his unwitting clients. This is the stuff of garden-variety Ponzi schemes.

…..

By arguing that he deserves a lighter sentence because his motives were supposedly altruistic, Mr. Bankman-Fried’s legal team is asking Judge Lewis A. Kaplan to endorse the same twisted moral calculus that led the defendant into criminal activity in the first place.

It doesn’t matter if you agree with Mr. Bankman-Fried about how to make the world better, whether you support his veganism, his global-warming alarmism or his priorities for spending his ill-gotten gains. History teaches us that the greatest crimes are committed by those who believe they are mankind’s benefactors.

Eric Boehm is correct: “The U.S. Steel/Nippon deal should be none of Joe Biden’s business.” A slice:

Indeed, being bought by Nippon would potentially benefit everyone involved, from U.S. Steel’s shareholders and executives all the way down to the workers in its plants. Nippon has announced plans to invest $1.4 billion n reviving U.S. Steel—potentially doing something that neither former President Donald Trump’s tariffs nor Biden’s blue-collar schtick has been able to accomplish.

“In many ways, the deal is a victory for Biden’s attempts to revive American manufacturing,” explains The Wall Street Journal. “U.S. Steel would receive an injection of capital and technology. The U.S. and Japan would together take on China’s dominance in the global steel market.”

Biden’s opposition to the deal is partially about performative politics—about using these companies, their employees, their shareholders, their employees, and their customers, as pawns in an attempt to gain a marginal advantage in a contest for power: November’s election. That’s embarrassing.

It’s also a decision likely swayed by cronyism. As the Journal notes, Ohio-based Cleveland Cliffs made an unsuccessful bid to buy U.S. Steel last year, and the company has been lobbying hard to get federal officials to block the U.S. Steel/Nippon deal so it can have another shot at making the purchase. That’s gross.

Scott Lincicome decries government-imposed restrictions on the cottage-food industry.

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Quotation of the Day…

… is from pages 180-181 of my friend and former professor Randy Holcombe’s superb 2019 book, Liberty in Peril: Democracy and Power in American History:

Wage and price controls [during WWII] rapidly brought with them shortages because with prices held down, purchasers wanted to buy more of almost everything than sellers wanted to sell. The result was a potentially inequitable allocation of goods as merchants saved items for their friends and allocated them in other ways besides selling them to whomever placed the highest value on them. As a result, the OPA [Office of Price Administration] began rationing a number of necessities and organized the rationing program by establishing thousands of local boards to administer the allocation of artificially scarce items. Despite substantial regulations and red tape, this program merely transferred the authority to sell from the sellers to a board, and the results were generally unsatisfactory. The price controls had eliminated market prices as signals of how to allocate resources, and the economy increasingly became chaotic as a result.

DBx: Prices determined in markets with people spending their own, and only their own, money are the only source of information on the relative scarcity of various outputs and inputs. Interfere a bit with the pricing system, and the result is a bit – perhaps an undetectable bit – of resource misallocation (meaning waste which results in less prosperity). Interfere more with the pricing mechanism, and the result is more misallocation. Every interference with the pricing mechanism replaces with false ‘information’ the most accurate information available about how to best allocate those outputs or inputs whose prices are distorted by the interference.

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