The Latest from Cafe Hayek

(Don Boudreaux)

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Here’s a letter that I sent on September 10^th to the New York Times:

Editor:

National Institutes of Health director Francis Collins testified yesterday that the decision to approve a covid-19 vaccine will be determined by “science and science alone” (“N.I.H. Director Has ‘Cautious Optimism’ for Covid-19 Vaccine by End of 2020,” Sept. 10). This claim, alas, is unscientific.

Science of course should play a major role. Only it can determine a vaccine’s likely medical effectiveness and side effects. But science cannot possibly determine what is the acceptable amount of risk to be traded off against reward. Should approval be given to a vaccine that’s 98 percent effective but which carries a 0.05 percent chance of causing serious and possibly fatal illness? What about a vaccine that’s 90 percent effective but which carries a 0.002 percent chance of causing seriously illness or death?

The need to answer such questions is unavoidable. And so given government’s role in the drug-approval process, any and all decisions to approve or disapprove must, inevitably, be made politically.

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

(Don Boudreaux)

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… is from page 130 of the 1985 (3rd) edition of the late Ralph Raico’s translation of Ludwig von Mises’s great 1927 book, Liberalism:

The theoretical demonstration of the consequences of the protective tariff and of free trade is the keystone of classical economics. It is so clear, so obvious, so indisputable, that its opponents were unable to advance any arguments against it that could not be immediately refuted as completely mistaken and absurd.

DBx: And so the matter remains to this day. There is no argument – not one – that purports to show that protectionism promotes economic prosperity for ordinary people better than does free trade that a competent economist cannot squash as easily as someone with a fly-swatter can squash an obese housefly.

The difference, sadly, is that the will to believe in the efficacy of protectionism is so potent that many people will gaze upon the motionless, flattened insect and insist that it remains not only alive and vibrant, but also is as beautiful as a butterfly, as powerful as an eagle, and as majestic as Pegasus.

(Don Boudreaux)

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… is from page 279 of Kristian Niemietz’s marvelous 2019 book, Socialism: The Failed Idea That Never Dies:

We take it for granted that living standards rise over time. For most of history, they did not. This trend only really began with the advent of industrial capitalism, which was a game changer in world history.

(Don Boudreaux)

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Here’s Dan Griswold’s and my hot-off-the-press paper, “A Fresh Start for US Trade Policy: Unilateral Trade Liberalization through a Tariff Reform Commission.”

It’s a darn good paper. I can offer this assessment truthfully yet without immodesty because the great bulk of the paper was written by Dan.

Here’s the paper’s abstract:

The US tariff code stands as a barrier to reviving the US economy as it begins to recover from the coronavirus shutdown. Mounting evidence shows that statutory tariffs and the tariffs imposed by the Trump administration since 2018 are compounding the economic damage caused by the COVID-19 virus and are complicating the efforts of consumers and healthcare providers to access medical supplies. Executive action can mitigate some of the harm, but the US Constitution and the scope of the problem require congressional action. Such action should be taken unilaterally by the US government in its own national interest regardless of what actions other nations pursue. This paper recommends the establishment of a Tariff Reform Commission to enable Congress to overcome special-interest opposition to trade liberalization. The commission would be patterned after the successful Base Realignment and Closure process and Miscellaneous Tariff Bill process. It would follow the proven path taken by other nations that have unilaterally liberalized their trade policies.

…..

A sole-authored paper by me on the analytics of unilateral free is forthcoming from Mercatus (likely in a month or so).

(Don Boudreaux)

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In the pages of the Wall Street Journal, Phil Gramm and GMU Econ alum Jerry Ellig rightly bemoan the misguided antitrust attack on successful tech companies. A slice:

Progressives want to use the antitrust laws to break up big tech companies because they believe that bigness is bad and leads to a host of other evils, including malign political influence. Conservatives want to use antitrust as a club to get social-media companies to curb their alleged political bias.

While there is a long and rich history of using antitrust laws to try to implement policies that proponents can’t enact into law, both parties would be wise to focus on consumer welfare, which has defined recent antitrust jurisprudence. No one can seriously challenge the hard evidence that big tech companies have delivered enormous consumer benefits. You don’t have to look any further than online shopping, smartphones and social networking.

Announcing the end of his long-running column for the Washington Post, Robert Samuelson decries the fiscal imprudence unleashed by majoritarian politics. A slice (original emphasis):

One of the pleasures of journalism is that you get to learn lots of new “stuff.” I have learned much from economists. With some exceptions, most are intelligent, informed, engaged and decent. In my experience, this truth spans the political spectrum. But it’s not the only truth.

Another is this: Economists consistently overstate how much they know about the economy and how easily they can influence it. They maintain their political and corporate relevance by postulating pleasant policies. Presidents claim the good and repudiate the bad. There are practical limits to how much economic growth and living standards can be accelerated and sustained.

Pierre Lemieux notes the reality of rational ignorance.

Jeffrey Tucker reports on the continuing scare-bias of the media.

Arnold Kling details the flaws that he sees in ‘critical’ theory.

Christian Britschgi reports on a U.S. District Court in Pennsylvania ruling that Pennsylvania’s lockdown order is unconstitutional. And here’s Stacey Rudin on the same. A slice from Rudin’s piece:

Thank you, Judge Stickman, for recognizing our predicament, and for taking the first step towards restoring our freedom today by reminding those with authoritarian leanings that “governors cannot be given carte blanche to disregard the Constitution for as long as the medical problem persists.” The response to an emergency cannot undermine our system of constitutional liberties, or the system of checks and balances protecting those liberties. Liberty before “governor-guaranteed safety” — this is the American way, famously stated by Benjamin Franklin: “Those who would give up essential liberty, to purchase a little temporary safety, deserve neither liberty nor safety.”