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… is from page 77 of Jerry Z. Muller’s 1993 book, Adam Smith In His Time and Ours [original emphasis]:

Smith did not believe that there was a natural harmony of interests in society. He believed that the public interest would be best served if every man channeled his self-interest through the market. But he realized that from the point of view of the individual producer or group of producers it was most beneficial to circumvent the competitive market with its attendant risks, and use all available means to prevent competition, in order to obtain the highest possible price for their wares.

DBx: Yep. And as Smith understood, no scheme to circumvent market competition in order to enable the few to profit at the larger expense of the many is more pernicious than protectionism.

…..

Smith died on this date – July 17th – in 1790.

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Here’s a letter to the Wall Street Journal.

Editor:

Brandon Farris’s defense of steel tariffs is defective (Letters, July 16). He cites a 2023 U.S. International Trade Commission study, but that study analyzed the 25% tariff then in effect, not the 50% rate imposed since then. It cannot vouch for today’s tariffs

The study also undercuts, rather than supports, Mr. Farris’s argument. Prices of final goods did rise only modestly. But the report found near-complete pass-through: foreign exporters barely cut their prices. American importers and the manufacturers and consumers downstream of them — not foreigners, as the administration claims — bore almost the entire cost.

The Commission found that “for downstream industries, the effects are largely negative…. The average annual decrease in production values for these industries was $3.4 billion during 2018–21.” Even so, the report calls its own findings incomplete, as it “focuses on short-term effects during 2018–21 and does not address long-term effects,” omitting consequences such as the drag on U.S. exporters from foreign retaliation, which it notes occurred but are not measured. Significantly, yet ignored by Mr. Farris, the report adds that it “is not an assessment of the complete, economy-wide impacts of the tariffs.”

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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George Will documents the “endlessly pliable” J.D. Vance’s many politically convenient changes in his ‘principles.’ Three slices:

JD Vance has an aptitude for conversions. His have involved politics, economics, history and religion, so far. Whatever his next one is will probably not be his last.

…..

When interviewed concerning his book “Communion” about his religious conversion, Vance recalled that when he was a senator, his son, during a flight, dropped a cookie and said “shit.” Vance worried that people might think “I am apparently a terrible father because I’ve raised my kids, my 3-year-old, to use that language.”

Five months ago this column listed examples of Vance’s many public vulgarities, as when he denounced a “dipshit” critic, and others who can“eat shit.” Five months is, however, plenty of time for a Vance conversion, this time to decorousness. In “Communion,” his new delicacy causes him to obscure the adjective “p***y.” So, presumably, he will not again talk of tech corporations telling a “bullshit story” about the need for more foreign workers.

Christianity, Vance says, “is America’s creed.” His Christianity often dovetails with MAGA commandments. He says a “Christian statesman” must preserve “social cohesion.” This is code for restricting immigration. Something already has, Vance says, made America a place where “you don’t have to apologize for being White anymore.”

Especially if you are properly descended. “I think,” Vance says, “the people whose ancestors fought in the Civil War have a hell of a lot more claim over America.” More “claim” (whatever that means) than most of today’s Americans, whose descendants arrived too late to fight. What conversion convinced Vance of this?

…..

“I’ve always liked” Nixon, Vance said, because Nixon, like Vance, was a young senator, then a young vice president, who wrote books and was “hated by the media.” This narcissism as a rationale for historical revisionism did not impress National Review’s Dan McLaughlin, who says celebrating Nixon is part of Vance’s “ongoing effort to downplay the political success of Ronald Reagan.”

Disparaging Reagan is a prerequisite for running in 2028 as Trumpism’s second wind. The political left, like the Trump-Vance administration, favors wielding uncircumscribed executive power to erase the distinction between public and private economic sectors. This administration has made the federal government an investor in 30 companies. And the administration’s Kulturkampf, Vance believes, has not gone far enough. He wants to “seize the endowments” of universities that he thinks are politically incorrect.

The Washington Post‘s Editorial Board decries New York governor Kathy Hochul’s hostility to data centers. A slice:

But Hochul is sending a loud market signal that New York is not a smart place for companies to make long-term investments in AI infrastructure. It doesn’t matter that the moratorium would last only a year, because companies will allocate resources elsewhere. Other states are racing ahead and will reap the sizable tax benefits.

Why is foreign tourism to the U.S. declining under Trump? Eric Boehm has some answers.

Scott Lincicome explains what shouldn’t – but, alas, what always does – need explaining: An economy becomes more resilient the freer is its trade. A slice:

Shortly before Independence Day, President Donald Trump suspended US tariffs on fertilizer from Morocco after declaring that threats to domestic supplies of the product constituted a “national emergency.” As Bloomberg News reported at the time, the action was intended to help farmers and consumers worried about Iran-related price hikes. The Department of Agriculture estimates that lifting the duties will reduce phosphate fertilizer prices by 22%, saving farmers more than $1.8 billion this year – savings they’d presumably pass on to consumers.

In isolation, the tariff-happy Trump administration’s fertilizer decision is a comical footnote in a lamentable Iran war saga – a mundane, albeit legally dubious, government move to alleviate a sliver of the war’s inflationary effects and to placate an important political constituency before the Fall midterms.

Yet this is no one-off. Instead, it’s the latest in a long string of US trade actions that no one in an increasingly protectionist Washington is eager to acknowledge: Seemingly every time domestic supplies of essential goods – and politicians’ standing with voters – are at risk, the government lets imports ride to the rescue.

Philip Klein reports this happy reality: “Black voters keep putting the brakes on the socialist revolution.” A slice:

In last year’s mayoral primary in New York City, Zohran Mamdani lost black voters to Cuomo among first-choice voters, but once all votes were tallied in the ranked-choice system, it ended up 50–50 among that demographic. Yet a closer look at the age breakdown showed a stark age gap. Cuomo won the over-60 crowd by 28 points (64–36), while Mamdani won black voters under 50 by 42 points (71–29).

The Democratic mayoral primary electorate in New York City is obviously a lot different than the presidential primary electorate in South Carolina and, it seems, in Michigan. So I am still skeptical. Flipping deep blue districts from progressive to socialist is a lot different than putting together a successful national campaign.

GMU alum Tom Savidge reviews Romina Boccia’s and Ivane Nachkebia’s Reimagining Social Security.

Gale Pooley explains that “the time price of air conditioning has fallen 98.6 percent since 1952. That ordinary luxury saves lives every summer.”

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… is from page 363 of the late Gordon Wood’s great 1991 book, The Radicalism of the American Revolution:

Yet the [Jeffersonian] Republicans did have a criterion for determining who was right and who was wrong, and it was the opinion of the whole people. Their arguments in favor of freedom of speech rested on the assumption that opinions about politics, like opinions about other subjects, were no longer the monopoly of the educated and aristocratic few. Not only were all opinions equally to be tolerated but everyone and anyone in the society should be equally able to express them. Truth was actually the creation of many voices and many minds, no one of which was more important than another and each of which made its own separate and equally significant contribution to the whole.

DBx: Such admirable support for freedom of speech and the press does not, of course, imply that every voice is equally well-informed or responsible. When speech and press are free, the ignorant, the childish, the venal, and the cunning have just as much right to express themselves as do the informed, the mature, the public-spirited, and the honest. But freedom of speech and the press do not imply any right to be heard or heeded. Nor do these freedoms imply a right to be free of criticism; quite the opposite.

And yet, while freedom of expression doesn’t guarantee that light (or even the better arguments) will triumph over darkness, such freedom provides the best prospects of moving in that happy direction.

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Wishing Boston Globe columnist – and my friend – Jeff Jacoby the very best as he struggles with some health issues. A slice from Jeff’s most-recent column:

AS SOME of you know, I am on medical leave from my job at The Boston Globe and have not been able to write my regular op-ed columns or my Arguable newsletter. For several months I have been contending with a number of worrying and seemingly unconnected symptoms — everything from unplanned weight loss to increased clumsiness to difficulties with speech to muscle atrophy. These symptoms are all the more distressing since my doctors so far can’t explain what is causing them or why they should suddenly have appeared.

All of which means that instead of spending my days trying to write opinion pieces that are interesting, timely, and thoughtful, I have instead been devoting my hours to blood draws and CT scans, to being examined by specialists, to getting prescriptions filled and dosages adjusted, and to navigating the maze of “patient portals” that even doctors tell me they find maddening.

I’m also spending time reflecting on what this experience can teach me and how I can use those insights to be a better person. One of the great sages of the Talmud, Rabbi Tarfon, said more than 1,900 years ago: “The day is short, and the work is very great.” The meaning of those words has always seemed straightforward to me. Only now am I struck by their urgency.

Which isn’t to say that I’m not paying attention to the world around me! I haven’t stopped following the news or instinctively thinking about what I want to write — especially on the issues that matter most.

Like immigration.

Though I wish the Supreme Court’s ruling in Trump v. Barbara, the birthright citizenship case, had been unanimous, I always knew it was inconceivable that a majority of the justices would let this president — or any president — shatter one of the most sublime promises of the nation that declared its independence 250 years ago this month. From the very beginning of our history as a sovereign country, the rule has been clear: Children born on American soil begin life as equals. That is America at its best.

I wish I had been well enough to pen a fresh column as soon as the court handed down its decision last week. It’s a subject I have followed for years, since long before this litigation began. My first column on the topic, which I wrote in 2010, made no mention of Donald Trump, who was still years away from launching a bid for the White House.

Here’s the abstract of a new paper by William Cline: (HT Scott Lincicome)

Proposed tariffs of 10 to 12.5 percent under the forced labor provisions of Section 301 of the Trade Act of 1974 would be more than forty times the magnitude that could be warranted on the basis of US exports lost and US imports increased as a consequence of trade in goods produced using forced labor. The basic reason is that in economic terms, global forced labor is small, accounting for an estimated 5.5 million workers in tradable goods, compared to almost 2 billion workers in these sectors globally. As a consequence, the forced-labor provisions do not constitute a credible basis for replacing the reciprocal tariffs ruled illegal by the Supreme Court.

Colin Grabow introduces the Jones Act Waiver Tracker.

The Editorial Board of the Wall Street Journal reports on yet another instances of the regressiveness of so-called “progressives.” A slice:

New York’s ban on fracking for oil and gas has been an act of monumental self-sabotage. Now Gov. Kathy Hochul is making a similar blunder by imposing a one-year (yeah, right) pause on new large AI data centers. Why are Democrats so intent on blocking development that would benefit their citizens?

Ms. Hochul announced the moratorium Tuesday in an executive order that suspends permitting for data centers while her administration works on a “regulatory framework.” “As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” she said.

Translation: It’s an election year. Polls show voters turning against data centers, largely owing to misconceptions fueled by climate activists. Ms. Hochul is trying to get ahead of the backlash and shift blame for her state’s rising electric rates caused by its climate policies.

Democrats in Albany have shoveled billions of dollars on projects to boost economic growth upstate. So it’s strange that Ms. Hochul is spurning data centers, which could generate thousands of jobs and more tax revenue. Teachers in Louisiana’s Richland Parish recently received annual bonuses of up to $50,000 thanks to increased tax revenue from construction of Meta’s massive AI data center.

Also writing about this regressive New York state policy on data centers is Tosin Akintola.

Kevin Gentry talks about higher education with Joshua Hall.

GMU Econ alum Jeremy Horpedahl isn’t favorably impressed by “Trump Accounts.”

Tyler Cowen predicts that the future belongs to “AI maniacs.” A slice:

I also believe that immigrants are especially likely to be AI maniacs. Immigrants have fewer channels to rise through credentials, family connections, and establishment modes of thinking and doing. They are more willing to try something new, they tend to be younger than average, and, because they were willing to switch countries, they tend to have higher levels of energy, courage, and ambition.

Recently I was giving some talks in England, and I contrasted the AI maniacs with the Oxbridge elite. Very often the Oxbridgers end up with high-paying jobs in law, consulting, finance, or perhaps the life sciences, typically in or near London. They are very smart and hardworking, and they know how to chart their advancement through social and professional systems. They have helped to create a very prosperous London. Yet in the next two decades they are likely to face very serious competition from the AI maniacs, who will try to provide services at lower cost from much smaller start-up companies.

Chelsea Follett encourages Europeans to put a higher value on life and install air-conditioning. A slice:

Air conditioning is one of modern civilization’s most important yet underappreciated inventions. One study from the National Bureau of Economic Research estimated that the spread of air conditioning in the United States led to a roughly 75 percent decline in heat-related deaths during the 20th century. But policymakers in Europe have discouraged this technology through taxes, regulations and a stubborn refusal to admit its benefits.

The consequences have been tragic. Heat waves kill more than 175,000 Europeans every year, according to the World Health Organization. Eighty percent of the continent’s population does not have AC. In the United States, almost 90 percent does.

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… is from page 26 of the late Tom Wolfe’s brilliant 1981 book, From Bauhaus to Our House:

In fact, here was the great appeal of socialism to architects in the 1920s. Socialism was the political answer, the great yea-saying, to the seemingly outrageous and impossible claims of the compound architect, who insisted that the client keep his mouth shut. Under socialism, the client was the worker. Alas, the poor devil was only just now rising out of the ooze. In the meantime, the architect, the artist, and the intellectual would arrange his life for him. To use Stalin’s phrase, they would be the engineers of his soul.

DBx: Collectivists of whatever stripe are marked by their arrogance, by their imagined superiority to ordinary people. They, the collectivists, know how income should be distributed. They, the collectivists, know just what kinds of jobs ordinary people should hold. They, the collectivists, know how best to provide schooling for the children of ordinary people. They, the collectivists, know what is the minimum hourly monetary wage ordinary people should be allowed to accept in exchange for labor services. They, the collectivists, know how political campaigns should be funded. They, the collectivists, know what goods and services, and in what quantities, are best for ordinary people to purchase from foreigners. They, the collectivists, know which medicines and medical devices peaceful people should be prevented from consuming. They, the collectivists, know what are ‘the industries of the future’ and how best to ensure that the domestic economy has a comparative advantage in those industries. They, the collectivists, know how best to arrange for the provision and payment of health care.

They, the collectivists, are nothing if not arrogant.

……

Although Ayn Rand’s The Fountainhead is no brief for collectivism, I must say that I’ve never liked that novel. I first read it only after learning economics. And so the architect Howard Roark’s refusal to design a building according to the preferences of the persons who pay for his services and for the building immediately struck me as arrogant. The fictional Mr. Roark and his real-world counterparts certainly have a right to regard themselves as brilliant artists who never stoop to satisfy the tastes of hoi polloi and to refuse to design anything except that which they – the architects – fancy. But it’s a darn good thing that the profit motive is powerful enough to enable people spending their own money to get supplied with whatever peaceful goods and services they desire.

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Here’s a letter to a commenter at my Facebook page.

Mr. Beveridge:

In a comment on this Facebook post of mine – a post in which I criticize Trump’s tariffs – you write that my post “seems to ignore the fact that we are tariffed to the max by other countries. What gives, sir?”

Other readers’ several responses to your comment do much to remedy your misunderstanding – for example, by noting that we are not, and we were not, “tariffed to the max by other countries.”

But another point is worth making. If (also contrary to fact) Trump and his fellow protectionists are correct to incessantly insist that free trade harms the American economy by “hollowing out” our industrial base and making us dangerously dependent for supplies on foreign countries, then other countries would do us a great favor by tariffing us “to the max.”

Extremely high tariffs abroad would dramatically reduce demand for American exports. This reduced demand for American exports would, in turn, reduce the global demand for U.S. dollars. As a result, the value of the dollar against other currencies would fall. As the dollar’s value falls, it takes more dollars to buy any given amount of foreign currency – meaning that, as the dollar’s value falls, foreign goods would become more expensive for Americans to purchase. Americans would import less.

In short, as American exports fall, so too do American imports.

Being tariffed to the max by other countries would achieve Mr. Trump’s and other protectionists’ goal of reducing America’s imports and her ‘dependence’ on foreign countries for supplies. It’s unclear, therefore, why protectionists complain about (what they falsely believe to be) differentially very high foreign tariffs.

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

P.S. For a more comprehensive treatment of the connection between imports and exports, see here. I also recognize that my conclusion assumes that extremely high tariffs abroad would not raise foreigners’ demand to invest in America by so much as to offset the foreign-tariffs’ depressing effect on the value of the dollar. If this assumption were to prove unjustified in reality, however, the other Trumpian bête noire – U.S. trade deficits – would grow even more bête noire-ish.

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The Editorial Board of the Washington Post explains what shouldn’t – but, alas, what today nevertheless does – need explaining: U.S. tariffs are taxes on Americans. A slice:

Many American companies are asking for exemptions from President Donald Trump’s latest round of tariffs. That’s because, even though the administration insists otherwise, American businesses bear the burden of the president’s taxes on trade.

Trump said in his State of the Union address this year that tariffs are “paid for by foreign countries.” Commerce Secretary Howard Lutnick has said businesses and foreigners “eat the tariff.” Treasury Secretary Scott Bessent has even claimed that tariffs aren’t taxes at all.

Despite their insistence that Americans benefit from tariffs, it is U.S. companies lining up to petition the government to ease them.

When the Supreme Court heard the challenge to Trump’s invocation of the International Emergency Economic Powers Act, it wasn’t foreign exporters who said they were injured by Trump’s actions. The cases were brought by American small businesses.

John Early’s letter in today’s Wall Street Journal is excellent:

Crystal FitzSimons’s letter “Fewer People on Food Stamps Isn’t Good News” (June 23) claims that SNAP lifts 3.6 million out of poverty. That is impossible because the Census Bureau refuses to count $1.6 trillion in government subsidies, including SNAP, as income. No matter how much the government might give poor families, the official measure of poverty would remain unchanged.

Ms. FitzSimons’s claim uses an experimental poverty measure that counts SNAP as income while omitting $1 trillion in other welfare, arbitrarily subtracts some spending, and capriciously raises the income defining poverty thresholds.

The $100 billion spent on SNAP in 2024 added nothing to national well-being. It merely redistributed it. If left with the original earners, it would either be consumed with the same effects, or it would be saved and invested, creating additional well-being, which it wouldn’t with SNAP.

While decrying the minimal adjustments to SNAP to prevent abuse, Ms. FitzSimons ignores the 60% of food stamp recipients who aren’t poor, even by the overstated Census metric.

Christopher Freiman explains that government funding of research does not give government a claim on the fruits of private companies. A slice:

Suppose you’re an entrepreneur in the beverage industry trying to create a new soda. One day, a rogue food scientist bursts into your office and demands money for his flavor research. He doesn’t ask politely or offer you a contract; he points a gun at you and takes your money. Years later, he develops a delicious new synthetic flavor. You discover it, add it to your soda, and your company takes off, making you a multimillionaire.

Does the food scientist now own part of your company because you used his flavor? Of course not. There’s no doubt your business benefited from his research. Without the flavor he created, your soda might never have existed. But the scientist has already been paid — and it’s worth remembering that he obtained that payment by force. The idea that he’s entitled to additional compensation because you successfully used his research is absurd. Contributing an input does not automatically confer ownership over everything built with that input. Likewise, the fact that government-funded research contributed to AI development does not automatically give the government ownership rights in AI companies.

In fact, the “government investment” argument fails even in a friendlier scenario that doesn’t involve coercion. Imagine that you voluntarily hire the food scientist to develop a new flavor. You agree to pay him $100,000 for his research, and he accepts. You then use the flavor he creates to launch a highly successful soda company.

Again, the food scientist does not own part of your company merely because he contributed to its success. He is entitled to whatever compensation the agreement specifies — nothing more and nothing less. If the contract grants him an equity stake, he has a claim to it. If it doesn’t, he doesn’t. That’s how market exchange generally works. Suppliers of inputs do not automatically acquire ownership of outputs. If the government wants to fund research in exchange for equity, it can try to negotiate those terms in advance. But that’s very different from claiming, after the fact, that successful companies partly belong to the government because some of the knowledge they relied upon emerged from government-funded research.

If merely contributing to a business entitled someone to partial ownership, every business would face endless competing claims from the countless people who helped make it possible.

Sam Gregg is favorably impressed by Pope Leo’s humanity, but not so much with Pope Leo’s economics. A slice:

Yet wealth inequalities are not unjust in themselves. For instance, some people are wealthier than others because they worked harder than others or chose to take risks that others declined to take. Such people are surely in an entirely different category than, for instance, the individual whose wealth proceeds from being the president of a country that he has systematically looted

Then there are important features about the nature of wealth in modern economies that MH [Magnifica Humanitas] does not recognize. For instance, very little of the wealth possessed by the “billionaires and trillionaires” regularly denounced by politicians of all stripes is actually consumed by such people. A great deal of this wealth takes the form of stock. That means it is not easily turned into liquid cash. It also reflects the market value of companies in which many immensely wealthy—and countless numbers of far less wealthy people—have invested, or, in the case of someone like Elon Musk, played an indispensable role in creating and then scaling. Many of these companies are also able to provide employment and, therefore, work and income for millions of people, precisely because they possess so much wealth. Small and medium-sized businesses cannot perform this function on anything like the same scale.

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… is from page 431 of Rick Atkinson’s remarkable 2025 book, The Fate of the Day: The War for America, Fort Ticonderoga to Charleston, 1777-1780, which is the second volume of Atkinson’s Revolution Trilogy:

Yet prosperity was slow to return to Philadelphia. Before the war, a coaster carrying merchandise arrived in port almost daily; now it was closer to monthly. Royal Navy cruisers and loyalist privateers dominated the Delaware capes, paralyzing trade…. “Goods are exceedingly scarce here,” a trader reported, “and will sell at any price a man’s conscience will let him take.”

DBx: If protectionists are correct to assert that a country becomes wealthier when a government restricts its citizens’ access to goods from other countries, the British would have unintentionally done the American revolutionaries a favor by restricting Americans’ access to imports. Reports from Philadelphia would have noted the growing abundance of goods and the fall in their prices. But the opposite happened.

Now, if only there were some body of knowledge to explain why Philadelphians were made poorer by having their access to imports restricted.