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WordPress – the platform for Cafe Hayek – continues to change the (I’m unsure what to call them) procedures, or mechanics, for me to write and share posts at Cafe Hayek. Being poor and impatient with technology, I’m considering closing Cafe Hayek.

I’ll try Substack. I hope you’ll read there what I write. The Substack’s name is Cafe Hayek.

Because Cafe Hayek is more than 22 years old, and because it has been such an important and cherished part of my daily life for nearly one-third of my entire life, I can’t bring myself today to reach a final decision to shut it down. Perhaps I’ll keep it going in some form, but the more likely result is that within a month or two, there will be no new posts on Cafe Hayek.

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George Will disagrees with the U.S. Supreme Court ruling in Mullin v. Doe. A slice:

Three days after Noem terminated TPS for Haitians and Syrians, she recommended “a full travel ban on every damn country that’s been flooding our nation with killers, leeches, and entitlement junkies” who “slaughter our heroes” and “suck dry our hard-earned tax dollars.” She refrained from echoing Trump’s assertion about kitten-cooking Haitians in Springfield, Ohio. This marks her as a MAGA moderate. JD Vance spread the pet-eating fiction because he said creating “stories” (his word) makes the media notice Americans’ suffering.

Surely justices are not required to ignore such rhetoric? And although thoughtful people disagree about whether, or how much, justices should consider the downstream consequences of their rulings, Kagan writes:

One of the Haitian plaintiffs, an Alzheimer’s researcher, has Type 1 diabetes, which can be easily treated in America but can be a “death sentence” in Haiti “given that country’s collapsed health-care infrastructure.” And a Syrian plaintiff will have to return with her 17-year-old daughter, who has lived here most of her life and “will have no future in Syria because she speaks little Arabic.”

Time and freshening breezes will cleanse Washington, dissipating the legacies of appointees like Noem, and of the president who chose them. The court’s mistaken ruling she provoked will be more lasting.

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… is from Samuel Gregg’s brilliant July 2024 paper, “A Free, Prosperous and Secure America”:

Even if a subsidized industry appears to have developed a technology that gives State A military advantages over State B, that does not mean that the government assistance which accompanied this goal was effective or worth the cost from either an economic cost or national security perspective. One must ask whether the breakthrough might have happened regardless of subsidy or protection, and also what might have happened to those industries that did not receive help or benefits. It may well be that the industrial policy actually directed resources away from other companies that may have produced even better technology in more cost-effective ways.

DBx: So true. Yet how many people who scream “national security!” to justify protectionism ever bother to consider such possibilities? In my experience, almost none.

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Scott Lincicome tells of Europeans visiting the U.S. for the World Cup and being awestruck by American abundance. Four slices:

As briefly mentioned in my last column, World Cup tourists’ repeated astonishment with everyday American abundance has become a viral sensation—and in a very good way. Seemingly not a day goes by without some happy foreign soccer fan raving on social media or to the press about quintessentially “American” things—free drink refills, bottomless chips and salsa, ginormous sports stadiums, fancy cars, big houses, ranch dressing, frigid air conditioning, shiny hospitals, etc.—that we consider relatively mundane features of daily life in the United States. (Buc-ee’s, Costco, and Texas Roadhouse have been particularly big hits, and for good reason.)

These viral posts have delighted American onlookers and captured endless media commentary on how the foreigners’ innocent—and often hilarious—observations have helped unite a divided U.S. and remind us locals of just how good we have it. In an era of endless grousing about the U.S. economy—reflected in various surveys of American “sentiment” and sometimes even justified—the ongoing episode has been a welcome, optimistic change of pace and a loud, folk-libertarian reminder that a nation’s capital, policies, and political class are most definitely not the same as its communities and citizens.

The scenes have also raised several noteworthy economic policy points—some good, some ominous—that deserve more attention.

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For starters, the amazement of relatively wealthy foreigners—you don’t take weeks off touring America if you’re dirt poor—at relatively middle-class American environments is real-world evidence of our nation’s immense everyday wealth.

The timing couldn’t be better (and, no, I’m not talking about the A/C-less heatwave in Europe).

As The Economist just documented, earlier this year Nobel laureate Paul Krugman and several other elite economists got into a heated (and very wonky) online debate about whether Americans’ living standards really were zooming ahead of those of our European counterparts.  The main point of contention was how to measure individuals’ purchasing power in both places, with one approach showing an increasing wealth gap and the other (Krugman’s) a relatively steady one. You can see the difference in the chart below: Using a constant “purchasing power parity” adjustment shows France’s GDP per capita—a standard way to measure individual wealth—to be declining versus that of the U.S., while using a “current PPP” adjustment shows little long term change, and thus a different wealth narrative…. Hilariously enough, thousands of European World Cup tourists—along with ones from Japan and other countries, too—have performed just that test, mere days after the economists proposed it. And the result is an absolute rout for Team America.

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Admittedly, the World Cup visitor story isn’t all wine and roses, and there are—as noted—some less-optimistic policy lessons buried in here, too. For one thing, all these visitors are a stark reminder of the economic and geopolitical value of foreign tourism—and its recent, policy-driven decline here in America.

As we discussed last year, one of the more interesting and unfortunate results of Trump’s tariff wars, deportations, and related overseas antagonism (threatening to invade Greenland, calling Canada the “51^st state,” etc.) has been foreigners’ independent retaliation against U.S. goods and services. And tourism—a U.S. services export—has been the trend’s most conspicuous victim. According to a May 2026 Congressional Research Service report, in fact, international visits were down in 10 of 12 months last year, with the only increases coming before Trump took office (January) and due to an abnormally late Easter (April).

This drop, in turn, hurt lots of American businesses and likely reduced U.S. economic growth last year by billions of dollars:

According to the U.S. Bureau of Economic Analysis, in 2023, travel and tourism (both domestic and international) accounted for approximately 3% of U.S. gross domestic product (GDP). According to the World Travel and Tourism Council (WTTC), a nonprofit organization that advocates for and researches global tourism, international visitor spending in the United States was approximately $176 billion in 2025, a 4.6% decrease from 2024. WTTC further noted that GDP for the travel and tourism sector increased 4.1% globally in 2025 from 2024 but grew 0.9% for the United States.

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Relatedly, all these good vibes are a nice reminder of one of the ways that trade—in this case both foreign tourism and global sports entertainment—can help encourage peace. As I documented in a 2020 paper, a wide body of research finds that heightened foreign trade can meaningfully reduce (but not eliminate) the chances of armed international conflict through several channels.

Also writing about foreign visitors’ pleasant surprise at American abundance and generosity is Peggy Noonan. Two slices:

However many [visitors] there are, we are hearing from the young ones as they fan through the country to venues down South, out West, in Texas and Utah. They are seeing an America they never imagined and have made now-famous videos about how shocked they are—in the most positive sense. They expected a dark and brooding nation; they discovered a sun-filled magnificence. It’s so big, so spacious, has such wondrous shops, the best food and absolutely wonderful people. The videos have flooded TikTok, Instagram and X, and they speak with the wonder of 18th-century explorers who discovered an unknown indigenous people on a brilliant new continent.

They couldn’t stop talking about it. Texas barbecue, ranch dressing, endless refills—in England, asking for a refill is like “asking for a second mortgage” said one video—huge portions, 24-hour gyms, Buc-ee’s, Costco, Chick-fil-A. Football stadiums, air conditioning, the sheer variety—all the hot sauces, and 50 states with different rules. Strangers smile and ask how ya doin’. Among my favorites: seeing them delight in yellow school buses, which they thought only existed in movies.

A young man in his 20s, with wonder: “I would trade my Canadian passport for American citizenship without hesitating a single second. Some states have no state income tax.” Here, he said, a young person can compete and succeed. A British woman about 20, driving through a suburb, asked to be adopted “by anyone in the USA as soon as possible.” With Britain’s housing crisis, you “have to live in a cardboard box for your first house.” She’s driving past homes here, finding their prices on websites, is staggered by the bang for the buck.

One video has a German tourist telling CNN’s Jake Tapper that back home he’d gotten “a lot of negative views about the Americans in the last five years,” but had discovered “the people are amazing, so welcoming, the culture is amazing.”

A young Englishman in his 30s: “The media portrays Americans as rude, lazy, all of the above, and it’s further from the truth. . . . The amount of hospitality and kindness . . . and pride Americans hold is truly like no other country I’ve been to.”

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Why have the visitors’ views mattered so much to so many of us?

First, there’s a funny thing about America: We’ve never not cared about the approval of other nations, and in this are unlike other nations.

Second, when you live inside something—a country, a way of life—you inevitably stop seeing it. Walk by the same work of art for 30 years, you won’t really “see” it each day. The young European arriving at a Dallas Costco or a California In-N-Out Burger sees a small marvel of organization, scale, of possibility. For you it’s just Tuesday. You’re used to it. They made us see it again.

“AI’s biggest impact may be making workers more valuable” – so argues Mark Jamison. A slice:

Consider the technologies that transformed the American economy during the past century. Railroads expanded markets. Telephones and then the internet accelerated and expanded communications. Electricity revolutionized production. Bar-code scanners transformed retailing. Each innovation altered the nature of work. But their most important contribution was making people more productive.

Artificial intelligence appears to be following a similar path.

Across industries, companies are using AI to handle routine tasks while enabling employees to focus on higher-value activities. Telecommunications companies are deploying AI to monitor networks, identify cybersecurity threats, and improve customer service. Utilities are using AI to inspect infrastructure, predict equipment failures, and improve safety. Transportation firms employ AI to identify maintenance needs before breakdowns occur and to reduce accidents caused by human error.

In finance, AI is increasingly becoming basic infrastructure. AI is competing with Bloomberg terminals, which once transformed how financial professionals gathered and analyzed information. AI helps workers process enormous quantities of data, identify patterns, and evaluate alternatives more quickly than ever before.

Arnold Kling agrees with Bryan Caplan’s impressions of UATX.

Reflecting on the reflecting-pool debacle, Nick Gillespie writes that Trump “is forcing his biggest supporters to choke down his incompetence and delusions like so much algae.”

Joseph Mikowitz, from Toronto, has this letter in today’s Wall Street Journal:

As a Canadian living in a democratic socialist country, I envied the true democratic nature of America. Its Founding Fathers created a unique entity, a land of human expression, freedom, creativity and individuality. Yet as America is about to celebrate its 250th anniversary, the Founders’ creation is at risk of being destroyed. Socialism and America’s independence are mutually exclusive by definition, practice and ethos. Socialism sets out to impart the governing body’s rules on society, and, consequently, nonconformists are deemed deplorable. That’s exactly what America broke away from in 1776.

My intrepid Mercatus Center colleague, Veronique de Rugy, reminds us of the inescapable destructiveness of a wealth tax. A slice:

[Gabriel] Zucman wants a coordinated global minimum tax on billionaire wealth, designed explicitly so that there’s nowhere left for the superrich to move. He admits frankly that the whole point of his international coordination plan is to defeat the mobility problem. If wealth taxes are global, the thinking goes, they finally work as intended.

Not so fast. It’s easy to count up lost tax revenue after taxpayers move away. There is also a less visible, but no less real, behavior change from people who stay home (by choice or because there’s no better option).

The effect showed up in Denmark, where decades of tax records—covering people who by and large stayed put during its wealth-tax era—show dwindling levels of wealth accumulation when more of it is taxed away. Nobody had to leave the country for the effect to show up; the incentive to save and build wealth in the first place had simply shrunk.

Inside the businesses of the wealthy, there’s an avoidance channel that requires no moving van. When a wealth-tax bill comes due, the owner of a closely held company will often pull out a larger dividend to cover it. Once that money has left the company, it doesn’t go back into payroll or business expansion.

Make no mistake, the non-wealthy will suffer from this tax too. As wealth taxes diminish saving and reinvestment, the capital stock that workers depend on for tools, equipment, and business expansion stops growing as quickly as it should. Wages rise when there’s more capital for each worker to use, so the slower buildup eventually means smaller paychecks for people who would never pay a wealth tax. This effect compounds for decades, so a modest annual drag turns into a substantial gap by the time anyone notices it in the data.

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… is from page 75 of Richard Epstein’s magnificent 1995 volume, Simple Rules for a Complex World:

The desire for more is one of the few features that is indispensable for human progress and advancement. The right question to ask is not why we want more. It is how are we prepared to go about getting the more that we all want.

DBx: Please, let’s have here no snooty proclamations that ‘real’ human beings don’t always prefer more to less.

The “more” is not a specific thing or phenomenon (or set of phenomena). The “more” for you, a real human being, refers to whatever it is that you value. You might value only sensual gratification, in which case you want more rather than less such gratification. You might value only time spent with your family, in which case you want more rather than less such time. You might value the unchanging look and feel of your hometown’s downtown and residential areas, in which case you want more security, rather than less security, that that unchanging look and feel will be maintained.

And, of course, that which you want more of might or might not be that which I want more of. In the former case, we might nevertheless still disagree about what are the best means of obtaining more of what we both want. In the latter case, we must somehow compromise with each other (and countless other of our fellow human beings) to decide how much more you will get of what you want more of and how much more I will get of what I want more of.
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There’s a slight yet significant imprecision in what I wrote above. So let’s be precise: It’s never accurate to say that “you might value literally only more of X, Y, or Z.” No one values anything in such a way. We instead value ‘at the margin.’ Given your situation now, you will value some additional amount of X more than you value the increments of Y and Z that you must forego in order to obtain that additional amount of X. And when you obtain that additional amount of X, the value to you of yet more X will be less than was the value you expected to obtain from that first additional amount of X. At some point, you’ll prefer more incremental units of Y and Z than more units of X – although you very likely then still would prefer more units of X if obtaining more units X were less costly.

A final point: Being mortal, you will always have some desires – wishes – demands – goals – hopes – that are not fully fulfilled. This reality is no less true for trillionaires than it is for desperately poor persons. In this earthly vale, there will always be more of something(s) that you want. Always.

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Michael Saltsman, of the Employment Policies Institute, congratulates Oklahoma voters for wisely rejecting a proposed hike in that state’s minimum wage. A slice:

A recent survey of U.S. economics professionals, released by my organization, found nearly 3 in 4 believe a $15 minimum wage will reduce employment among young workers and increase automation. This concern doesn’t always resonate with voters who perceive an immediate benefit in a higher hourly rate for low-income workers.

Scott Lincicome and Chad Smitson write insightfully about Trump’s hostility to a trade agreement that Trump himself engineered and once praised: the USMCA (that is, the 2020 modified NAFTA agreement). A slice:

Thus, somewhat absurdly, the agreement that President Trump helped to create and is threatening to kill has become the primary way for North American supply chains to survive his tariff agenda.

The USMCA certainly has some faults, and perhaps forthcoming reviews will address some of them. Overall, however, it’s been a net benefit for American manufacturers and the US economy, and—contra Trump’s words—it’ll likely be here after he’s gone.

For a discussion of these issues (and plenty more), you can join us at Cato’s event this Thursday (6/25) or watch online at the same link.

Pierre Lemieux is correct: “Speaking precisely is useful.”

The Cato Institute’s Colin Grabow spoke out against the cronyist U.S. sugar program.

George Will describes Cuba as “a threadbare museum of Marxism.” A slice:

In March, a mob sacked a Communist Party headquarters in central Cuba. This spark of insurrection was aberrant and fleeting. Totalitarianism always has one foundational objective, which it has achieved in Cuba. The population is a dust of wary individuals, easily blown about. Their capacity for collaboration — for politics — has atrophied. A smooth democratic transition is a chimera.

Larry Ciolorito’s letter in today’s Wall Street Journal is excellent:

Barton Swaim’s plea for less government activism “Please, No More New Deals” (Unruly Republic, June 18) is reminiscent of an exchange from the movie “Lawrence of Arabia.” An officer says to Gen. Allenby, “Look, sir, we can’t just do nothing”, to which the general replies, “Why not? It’s usually best.”

The Editorial Board of the Wall Street Journal shares the finding of a new Mackinac Center report that shows – surprise! – that “corporate welfare is a bad economic bet.” A slice:

Michigan’s Democratic Gov. Gretchen Whitmer just finished a jaunt to Europe to attract business to her state, and if only she could be counted on to lure them with good policy instead of taxpayer money. A new report on business subsidies in Michigan during her tenure adds to the evidence that corporate welfare is a bad economic bet.

Gov. Whitmer has authorized nearly $7 billion in business subsidies during her two terms, says the report by James Hohman of the Mackinac Center for Public Policy. Mr. Hohman focuses on eight of the biggest projects, which put $2.7 billion of taxpayer money on the line. Some $1.8 billion has been paid out, and “none of these deals have delivered what was originally announced,” he writes.

Of 20,595 jobs promised from these deals, only 602 have been created—a mere 3%, estimates Mr. Hohman. The under-deliveries include $109 million in 2019 for Fiat Chrysler to upgrade plants and create 6,433 jobs in Warren and Detroit. Fiat Chrysler has added some jobs, says Mr. Hohman, but his evaluation of state reports suggests that’s no thanks to the state incentives, which were canceled.

Another dud: $125 million authorized in 2022 for Gotion to build an electric-vehicle battery plant employing 2,350 people that was never built. A $200 million deal in 2023 to upgrade a paper mill in Billerud was canceled. In 2024 the state touted a $250 million deal to bring semiconductor manufacturer Sandisk to Flint and create 7,400 jobs, but the company pulled out. “The result is a big empty field” and “one school demolished,” says the report.

Nick Gillespie warns against increased government regulation of AI.

Jeffery Degner recounts the sordid history and purpose of the 1936 Robinson-Patman Act.

Jonah Goldberg mulls the miasma on the Mall. A slice:

The man who vowed to “drain the swamp” of D.C.’s corrupt cronyism used figurative swampy means to deliver literal swampy ends.

Another familiar aspect of the pool fiasco: A project Trump touted as proof of his genius and expertise becomes proof of unpatriotic enemies undermining him when it flounders. Without any evidence, Trump claimed that the only reason the Reflecting Pool’s paint is peeling and algae blooming is because anti-American “vandals” sabotaged it with a “300-foot long gash.”

How vandals evaded park police, security cameras and his own National Guard deployment remains unknown. Never mind how they put a 300-foot gash in a paint job Trump described as “So very strong. You couldn’t, if you had a knife — I don’t want to give anybody ideas — if you had a knife, you can’t even cut it. So strong, so powerful.”

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… is from page 6 of historian Frank Trentmann’s 2008 book, Free Trade Nation: Commerce, Consumption, and Civil Society in Modern Britain:

Free Trade in Britain meant that there were no tariffs at all that discriminated against foreign imports in order to assist any branch of industry or agriculture. Customs duties were for revenue only. To prevent any protectionist effect, they were always matched by an excise tax on equivalent domestic goods. Britain stuck to Free Trade irrespective of the protectionist measures of other countries.

DBx: On this date, June 25th, in 1846 Parliament repealed Britain’s protectionist corn laws and moved Britain far down the road to being a Free Trade nation – a nation in which the government does not restrict the economic freedom of its citizens in order to enrich politically powerful special-interest groups at the greater expense of the general public.

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Phil Magness reveals just how Quinn Slobodian misrepresents Ludwig von Mises. Four slices:

Academic works on “neoliberalism” almost invariably share three characteristics. First, they portray neoliberalism as the dominant paradigm of the global economy since the mid-twentieth century. Second, they treat that development as harmful, attributing a long list of social ills to its rise. Third, they rarely explain what “neoliberalism” actually means. Nevertheless, the term has become one of academia’s favorite buzzwords, generating tens of thousands of books and journal articles purporting to document its corrosive effects on society.

Boston University Professor of International History Quinn Slobodian ranks among the most visible figures in this burgeoning genre of “neoliberalism studies.” His 2025 book Hayek’s Bastards: Race, Gold, IQ, and the Capitalism of the Far Right won the National Book Critics Circle Award for Criticism. He holds various elite academic honors, including a Guggenheim Fellowship, visiting stints at Harvard and Brown, and six-figure grants from a Hewlett Foundation program, which funds research opposing neoliberalism. All evince a strong adversarial stance toward the subject of his research.

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Intrigued, and taken aback, by these unfamiliar arguments, I decided to examine Slobodian’s evidence more closely. My worst suspicions were quickly confirmed. Slobodian had not, in fact, uncovered the much-touted “parenthetical openings” to racism and colonialism in Mises’s writings. Instead, I found a pattern of contextomy: selectively edited quotations in which phrases were clipped from sentences and adjoining passages omitted, all to shoehorn Mises’s interwar-era words into Slobodian’s own twenty-first-century political interpretations.

A revealing example appears below. Slobodian quotes a passage from Mises that seems to rationalize the violent history of European colonialism by appealing to its net economic benefits. In reality, he simply omits the second half of the sentence, where Mises explicitly disavows the very position that Slobodian uses the first half to attribute to him.

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In another example, Slobodian accuses Mises of drawing a distinction between persecuted white European minorities and nonwhite racial groups. Yet a review of the full paragraph reveals that he simply misrepresented its argument. Mises was describing Nazi efforts to identify purportedly “Jewish” ancestry among other white Europeans through facial features and bodily characteristics. Slobodian then spliced this discussion into an unrelated passage about differences in black and white skin color. Contrary to his claim, the second quotation appears nowhere near the argument to which he attributes it.

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In the passage at issue, Mises was once again arguing against the scientific validity of efforts to link intellectual capacity to race or ethnicity. And once again, Slobodian was “bastardizing” the text—rearranging quotations, splicing together unrelated excerpts, and constructing a false version of Mises’s position that conveniently reinforced the political narrative of Hayek’s Bastards.

Steve Swedberg explains that government limits on credit-card interchange fees harms consumers and small businesses.

Iain Murray – recalling the British East India Company – warns against the U.S. government taking ownership shares in private companies. A slice:

What Trump and Sanders have in common is that neither is calling for outright nationalization in the public interest (although Ezra Klein has done so, proposing a “public option” large language model). Instead, they favor different mechanisms for embedding public power within private enterprise. Both cloak the idea in the language of “sharing the gains,” but both are equally clear about the importance of state direction. Intel’s own press release described the equity stake as an $8.9 billion government investment tied to “key national priorities.” Sanders says his public ownership model would “give the public a direct role in determining the future of this technology.”

Smith’s indictment of the East India Company focused heavily on its role as the governing power over large parts of India. The Company possessed territorial authority, military power, the ability to raise taxes, and political protection at home. At the same time, it distorted trade, prices, and capital allocation throughout Britain. In many respects, the Company’s vices stemmed from its position as an arm of the British state.
Obviously, neither Intel nor AI companies possess territorial power, but the underlying confusion of roles is similar. While the firm remains formally private, its fortunes become politically significant to the state, which simultaneously acts as regulator, funder, and investor.

Alas, as reported here by the Cato Institute’s Tad DeHaven, the Trump administration continues to have the U.S. government take equity stakes in private companies.

Writing in the Washington Post, Jim Geraghty writes about how “foreign soccer fans marvel at features of U.S. life we take for granted.” A slice:

Note that almost all the World Cup tourists are, by nearly any standard, quite well-off. The cheapest World Cup tickets theoretically start at about $140 each and go way, way higher, now starting at about $900 on resale sites. Flying to the U.S. from a foreign country was never inexpensive, and that was before all the higher jet-fuel costs drove up airfares even more. It also doesn’t count the costs of staying in a hotel, local transportation, food, souvenirs, etc. And yet these tourists marvel at how wealthy America is, which appears to give us an answer to the question of why Americans think Europe feels richer when the statistics say the poorest U.S. states have a per capita gross domestic product significantly higher than European states. Our wealth is visible in ways that are mundane and ordinary to Americans.

American wealth manifests in some expected ways — larger houses, more spread-out suburbs, bigger cars, wider highways — but also in unexpected ways, such as ubiquitous water fountains and free public restrooms, nearly universal air conditioning, free glasses of ice water when you sit down at a restaurant, complimentary chips and salsa at Mexican eateries. Europe has its own convenience stores attached to gas stations; it just doesn’t have anything like Buc-ee’s.

And on a collectivism-saturated island just 90 miles from the United States are a people who, because of that island’s collectivism, cannot adequately feed and house themselves – as Mary Anastasia O’Grady makes clear. Two slices:

The confiscation of farms, haciendas and ranches triggered an immediate contraction of the food supply. By 1960 there was a meat shortage, according to Jorge Salazar-Carrillo and Andro Nodarse-León, authors of “Cuba: From Economic Take-Off to Collapse Under Castro” (2015). “Per capita consumption of meat in 1958 was 112 pounds per year. The collectivization of the cattle industry created such disruption that not even a meager ration of 0.75 pounds of meat per week (39 pounds per year) could be met. This also applied to dairy products such as milk, butter, and cheese.” The authors cite “lack of organization and inefficient production” on agricultural lands converted into “the People’s Farms.” The government couldn’t “depend on collectivized production.”

Ms. [Alma] Guillermoprieto witnessed Castro’s absurd effort to reverse the decline in sugar output with the order of a “10-million ton” harvest. Voluntary brigades worked alongside those forced into compulsory service. The plan failed and the diversion of resources from other industries increased dependency on Soviet borrowing.

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By the mid-2000s the lack of investment in infrastructure was compounding the high cost of central planning. “In June 2005 the national electricity system (SEN) was working at half capacity and blackouts lasted from 7 to 12 hours daily,” the prominent economist Carmelo Mesa-Lago explained in a 2005 paper for the Association for the Study of the Cuban Economy. “Instead of blackouts, Cubans jokingly refer to periods when electricity was available as ‘light-ins.’”

Most of the thermoelectric plants were 25 to 35 years old, Mr. Mesa-Lago wrote, and sourcing parts was “extremely difficult.” The plants used crude “heavy with high sulfur content that requires frequent maintenance,” and “many electric poles are rotten.” Some “1.9 million breakers must be replaced, and distribution leaks are estimated to waste 17-18% of electricity generated.”

Twenty years later the system has collapsed and the country has been plunged into darkness. It’s not that the regime hierarchy doesn’t know what it’s doing. It has gotten rich off this way of life, and it doesn’t want the party to end.

Wall Street Journal columnist Jason Riley rightly applauds the Trump administration’s attempt to eliminate “disparate impact” theory. A slice:

Earlier this month the Justice Department moved to rein in the EEOC’s use of “disparate impact,” or racially disproportionate results, to determine whether an employer has run afoul of civil-rights statutes. “Although the Constitution now guarantees equal treatment, it has never guaranteed equal results,” Justice’s Office of Legal Counsel said in an opinion that describes the agency’s Title VII rules and guidance as unconstitutional and inconsistent with recent Supreme Court decisions.

“Despite trying to promote equality, EEOC’s disparate impact liability interpretation under Title VII actually fosters the very discrimination its guidelines seek to address,” acting Attorney General Todd Blanche said in a statement. “This opinion will now allow businesses to hire based on performance, restoring equal opportunities in the American workplace.”

The straightforward intent of Title VII was to outlaw racial discrimination in the labor force, where blacks were being kept out of jobs and denied promotions. The act stated in plain English that it “shall be an unlawful employment practice” to “fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

Jessica Riedl tweets: (HT Scott Lincicome)

For those seeking clarification – yes, according to the Social Security actuaries, eliminating the tax cap (even without earning benefit credits) keeps Social Security out of annual deficits for just 4 years.

Bob Graboyes looks at the early Alan Greenspan.

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… is from pages 70-71 of Frank Knight’s 1944 paper “Economics, Political Science, and Education“:

A rational, common-sense approach to the subject matter of political economy begins with the fact that the economic problem for any individual or group is to make the best of what it has, through comparison, selection, and combination of competing alternative ends and procedures in the use of means. All practical problems arise out of conflicts of interest and differences of opinion. Economic problems arise out of conflicts due to limitation of resources in relation to total needs or wants, and these are social problems when the ends are those of diferent people. But human nature is clearly averse to such rational comparison. Men seize on particular aims or courses of action and treat them as absolute. Our whole moral tradition, sanctioned by our religious tradition, stresses disdain for the counting of costs. It is anti-intellectual; it teaches that if the heart is right, in relation to emotional or transcendental values, all concrete problems will be solved automatically. In this connection, it is the failure of men’s professions to carry over into practical thinking and action which saves them from disaster instead of causing it. Even “scientific” economics has slowly and as yet imperfectly come around to the comparative point of view, to recognition that the only cost which makes sense is a sacrificed alternative.

DBx: Yes.

It is commonplace, to the point of being tiresome, for people who don’t understand economics to pompously criticize economists for being narrowly obsessed with “efficiency.” These people mistake what economists mean by “efficiency.”

By “efficiency” we don’t mean that all that matters for human beings – or all that should matter for human beings – is money or that which is or can be exchanged for money. Nor do we mean that human beings do or should care only about material or sensual gratifications. Instead, we mean the achievement of one’s ends, whatever these ends might be, in that way that enables as many as possible other human ends also to be achieved.

The saintly caregiver who uses more resources (including time) than is necessary to provide some level of comfort to Mr. Jones is thereby rendered unable to supply that same level of comfort to Ms. Smith and Mr. Williams. In this case the saintly caregiver acts no less inefficiently than she would act were she instead a sybarite who carelessly overpays for a bottle of champagne.

And all we mean by “consumption,” is the fulfillment of ends whatever these ends might be.

Sound economic analysis is an analytical acid that, when properly applied, dissolves the dreams and hopes of those who refuse to acknowledge that resources are scarce and that different adults have different, often conflicting ends (as well as different assessments about the best ways to achieve any set of given ends). And so the many social reformers – left, center, and right – who offer up their utopian schemes are unhappy when economists expose these schemes as unworkable. But rather than rationally reassess the practicality of their schemes, these social reformers typically resort to issuing ignorant criticisms of economics and of economists – such as ‘economists are obsessed with efficiency, unaware that real human beings care about more than efficiency. Pay no attention to economists!’

Such statements about economics and economists are uninformed. Yet they are widely believed.